Title of article :
Politico-economicconsequencesofrisingwageinequality$
Author/Authors :
Dean Corbae، نويسنده ,
Issue Information :
روزنامه با شماره پیاپی سال 2008
Abstract :
This paperusesadynamicpoliticaleconomymodeltoevaluatewhethertheobserved
rise inwageinequalityanddecreaseinmediantomeanwagescanexplainsomeportion
of therelativeincreaseintransferstolowearningsquintilesandrelativeincreasein
effectivetaxratesforhighearningsquintilesintheU.S.overthepastseveraldecades.
Specifically,weassumethathouseholdshaveuninsurableidiosyncraticlaborefficiency
shocks andconsiderpolicychoicesbyamedianvoterwhicharerequiredtobe
consistent withasequentialequilibrium.Wechoosethetransitionmatrixtomatch
observedmobilityinwagesbetween1978and1979inthepanelstudyofincome
dynamics(PSID)datasetandthenevaluatetheresponseofsocialinsurancepoliciestoa
new transitionmatrixthatmatchestheobservedmobilityinwagesbetween1995and
1996andisconsistentwiththeriseinwageinequalityandthedecreaseinmedianto
mean wagesbetween1979and1996.Wedealwiththeproblemthatpolicyoutcomes
affecttheevolutionofthewealthdistribution(andhenceprices)byapproximatingthe
distributionbyasmallsetofmoments.Wecontrastthesenumberswiththosefroma
sequentialutilitarianmechanism,aswellasmechanismswithcommitment
Keywords :
Median votermodelIncomplete marketsWageinequalityTaxpolicyRedistribution
Journal title :
Journal of Monetary Economics
Journal title :
Journal of Monetary Economics
