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Effects of Government Policies on Income Distribution and Welfare

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Author Info
Ximing Wu (University of California, Berkeley)
Jeffrey Perloff (University of California, Berkeley, and Giannini Foundation)
Amos Golan (American University)

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Abstract

A variety of parametric and semiparametric models produce qualitatively similar estimates of government policies' effects on income distribution and welfare (as measured by the Gini, standard deviation of logarithms, relative mean deviation, coefficient of variation, and various Atkinson indexes). Taxes and the Earned Income Tax Credit are an effective way to redistribute income to the poor and raise welfare. The minimum wage lowers welfare. Social insurance programs have little effect except for Supplemental Security Income, which raises welfare. Transfer programs (AFDC/TANF and food stamps) either have no statistically significant effect or lower welfare.

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Publisher Info
Paper provided by Department of Agricultural & Resource Economics, UC Berkeley in its series Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series with number 950.

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Date of creation: 01 Feb 2002
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Handle: RePEc:cdl:agrebk:950

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Coen N. Teulings, 1998. "The Contribution of Minimum Wages to Increasing Wage Inequality," Tinbergen Institute Discussion Papers 98-093/3, Tinbergen Institute. [Downloadable!]
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  2. David Neumark & Mark Schweitzer & William Wascher, 1998. "The Effects of Minimum Wages on the Distribution of Family Incomes: A Non-Parametric Analysis," NBER Working Papers 6536, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  3. Moffitt, Robert, 1992. "Incentive Effects of the U.S. Welfare System: A Review," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 1-61, March. [Downloadable!] (restricted)
  4. Simon Kuznets & Elizabeth Jenks, 1953. "Shares of Upper Income Groups in Income and Savings," NBER Books, National Bureau of Economic Research, Inc, number kuzn53-1.
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  5. Richard V. Burkhauser & Kenneth A. Couch & David C. Wittenburg, 1996. "Who gets what from minimum wage hikes: A re-estimation of Card and Krueger's distributional analysis in "Myth and Measurement: The New Economics of the Minimum Wage."," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 49(3), pages 547-552, April.
  6. Freeman, Richard B, 1996. "The Minimum Wage as a Redistributive Tool," Economic Journal, Royal Economic Society, vol. 106(436), pages 639-49, May. [Downloadable!] (restricted)
  7. Frank A Cowell, 2006. "Inequality: Measurement," STICERD - Distributional Analysis Research Programme Papers 86, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE. [Downloadable!]
  8. Bruce D. Meyer & Dan T. Rosenbaum, 2000. "Making Single Mothers Work: Recent Tax and Welfare Policy and its Effects," NBER Working Papers 7491, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  9. David Neumark & Mark Schweitzer & William Wascher, 2000. "The Effects of Minimum Wages Throughout the Wage Distribution," NBER Working Papers 7519, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  10. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September. [Downloadable!] (restricted)
  11. Nada Eissa & Hilary Williamson Hoynes, 1998. "The Earned Income Tax Credit and the Labor Supply of Married Couples," NBER Working Papers 6856, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  12. Fraker, Thomas & Moffitt, Robert, 1988. "The effect of food stamps on labor supply : A bivariate selection model," Journal of Public Economics, Elsevier, vol. 35(1), pages 25-56, February. [Downloadable!] (restricted)
  13. T. Paul Schultz, 1969. "Secular Trends and Cyclical Behavior of Income Distribution in the United States: 1944-1965," NBER Chapters, in: Six Papers on the Size Distribution of Wealth and Income, pages 75-106 National Bureau of Economic Research, Inc. [Downloadable!]
  14. Leonesio, Michael V, 1988. "In-Kind Transfers and Work Incentives," Journal of Labor Economics, University of Chicago Press, vol. 6(4), pages 515-29, October. [Downloadable!] (restricted)
  15. Thurow, Lester C, 1970. "Analyzing the American Income Distribution," American Economic Review, American Economic Association, vol. 60(2), pages 261-69, May. [Downloadable!] (restricted)
  16. Cowell, Frank A & Victoria-Feser, Maria-Pia, 1996. "Robustness Properties of Inequality Measures," Econometrica, Econometric Society, vol. 64(1), pages 77-101, January. [Downloadable!] (restricted)
  17. Jeffrey B. Liebman, 2000. "Who are the Ineligible EITC Recipients?," JCPR Working Papers 131, Northwestern University/University of Chicago Joint Center for Poverty Research.
  18. Golan, Amos & Judge, George & Perloff, Jeffrey M, 1996. "Estimating the Size Distribution of Firms Using Government Summary Statistics," Journal of Industrial Economics, Blackwell Publishing, vol. 44(1), pages 69-80, March. [Downloadable!] (restricted)
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  19. Eissa, Nada & Liebman, Jeffrey B, 1996. "Labor Supply Response to the Earned Income Tax Credit," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 605-37, May. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. El-Osta, Hisham S. & Mishra, Ashok K., 2005. "Dimensions of Wealth Dispersion Among Farm Operator Households: An Assessment of the Impact of Farm Subsidies," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 37(01), April. [Downloadable!]
  2. Ximing Wu & Jeffrey Perloff & Amos Golan, 2004. "Government Policy Effects on Urban and Rural Income Inequality," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series 976, Department of Agricultural & Resource Economics, UC Berkeley. [Downloadable!]
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