IDEAS home Printed from https://ideas.repec.org/p/cdl/indrel/qt6jx7h62v.html
   My bibliography  Save this paper

Effects of Government Policies on Income Distribution and Welfare

Author

Listed:
  • Wu, Ximing
  • Perloff, Jeffrey M.
  • Golan, Amos

Abstract

A parametric and a semiparametric model produce qualitatively similar estimates of government policy 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.

Suggested Citation

  • Wu, Ximing & Perloff, Jeffrey M. & Golan, Amos, 2002. "Effects of Government Policies on Income Distribution and Welfare," Institute for Research on Labor and Employment, Working Paper Series qt6jx7h62v, Institute of Industrial Relations, UC Berkeley.
  • Handle: RePEc:cdl:indrel:qt6jx7h62v
    as

    Download full text from publisher

    File URL: http://www.escholarship.org/uc/item/6jx7h62v.pdf;origin=repeccitec
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jeffrey T. LaFrance, 1999. "Inferring the Nutrient Content of Food With Prior Information," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(3), pages 728-734.
    2. Golan, Amos & Judge, George & Perloff, Jeffrey M, 1996. "Estimating the Size Distribution of Firms Using Government Summary Statistics," Journal of Industrial Economics, Wiley Blackwell, vol. 44(1), pages 69-80, March.
    3. David Neumark & Mark Schweitzer & William Wascher, 2005. "The Effects of Minimum Wages on the Distribution of Family Incomes: A Nonparametric Analysis," Journal of Human Resources, University of Wisconsin Press, vol. 40(4), pages 867-894.
    4. N. Eissa & H. W. Hoynes, "undated". "The Earned Income Tax Credit and the Labor Supply of Married Couples," Institute for Research on Poverty Discussion Papers 1194-99, University of Wisconsin Institute for Research on Poverty.
    5. Cowell, Frank A & Victoria-Feser, Maria-Pia, 1996. "Robustness Properties of Inequality Measures," Econometrica, Econometric Society, vol. 64(1), pages 77-101, January.
    6. 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, January.
    7. David Neumark & Mark E. Schweitzer & William L. Wascher, 1999. "The effects of minimum wages throughout the wage distribution," Working Paper 9919, Federal Reserve Bank of Cleveland, revised Feb 2000.
    8. Liebman, Jeffrey B., 2000. "Who Are the Ineligible EITC Recipients?," National Tax Journal, National Tax Association, vol. 53(4), pages 1165-1186, December.
    9. Nada Eissa & Jeffrey B. Liebman, 1996. "Labor Supply Response to the Earned Income Tax Credit," The Quarterly Journal of Economics, Oxford University Press, vol. 111(2), pages 605-637.
    10. 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.
    11. Leonesio, Michael V, 1988. "In-Kind Transfers and Work Incentives," Journal of Labor Economics, University of Chicago Press, vol. 6(4), pages 515-529, October.
    12. Lee Soltow, 1969. "Six Papers on the Size Distribution of Wealth and Income," NBER Books, National Bureau of Economic Research, Inc, number solt69-1, January.
    13. Freeman, Richard B, 1996. "The Minimum Wage as a Redistributive Tool," Economic Journal, Royal Economic Society, vol. 106(436), pages 639-649, May.
    14. Janice F. Madden, 2000. "Changes in Income Inequality within U.S. Metropolitan Areas," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number cii.
    15. Golan, Amos & Judge, George G. & Miller, Douglas, 1996. "Maximum Entropy Econometrics," Staff General Research Papers Archive 1488, Iowa State University, Department of Economics.
    16. Bruce D. Meyer & Dan T. Rosenbaum, 1999. "Making Single Mothers Work: Recent Tax and Welfare Policy and its Effects," JCPR Working Papers 152, Northwestern University/University of Chicago Joint Center for Poverty Research.
    17. Thurow, Lester C, 1970. "Analyzing the American Income Distribution," American Economic Review, American Economic Association, vol. 60(2), pages 261-269, May.
    18. Meyer, Bruce D. & Rosenbaum, Dan T., 2000. "Making Single Mothers Work: Recent Tax and Welfare Policy and Its Effects," National Tax Journal, National Tax Association, vol. 53(4), pages 1027-1062, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alesina, Alberto & Di Tella, Rafael & MacCulloch, Robert, 2004. "Inequality and happiness: are Europeans and Americans different?," Journal of Public Economics, Elsevier, pages 2009-2042.
    2. Leigh, Andrew, 2008. "Estimating the impact of gubernatorial partisanship on policy settings and economic outcomes: A regression discontinuity approach," European Journal of Political Economy, Elsevier, vol. 24(1), pages 256-268, March.
    3. Wu, Ximing & Perloff, Jeffrey M. & Golan, Amos, 2004. "Government Policy Effects on Urban and Rural Income Inequality," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt863448h5, Department of Agricultural & Resource Economics, UC Berkeley.
    4. 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, Cambridge University Press, vol. 37(01), pages 187-208, April.
    5. Łukasz Rawdanowicz & Eckhard Wurzel & Ane Kathrine Christensen, 2013. "The Equity Implications of Fiscal Consolidation," OECD Economics Department Working Papers 1013, OECD Publishing.
    6. Craig Gundersen & James Ziliak, 2004. "Poverty and macroeconomic performance across space, race, and family structure," Demography, Springer;Population Association of America (PAA), vol. 41(1), pages 61-86, February.
    7. Minoiu, Camelia & Andres, Antonio Rodriguez, 2008. "The effect of public spending on suicide: Evidence from U.S. state data," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(1), pages 237-261, February.
    8. Andrew Leigh, 2005. "What’s the Difference Between a Donkey and an Elephant? Using Panel Data from US States to Estimate the Impact of Partisanship on Policy Settings and Economic Outcomes," CEPR Discussion Papers 504, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    9. Kalenborn, Christine & Lessmann, Christian, 2014. "Regional Income Inequality lowers Life Satisfaction: Evidence from OECD Countries," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100561, Verein für Socialpolitik / German Economic Association.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cdl:indrel:qt6jx7h62v. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lisa Schiff). General contact details of provider: http://edirc.repec.org/data/irucbus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.