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New research guidelines for living standards, consumer baskets, and prices in Madrid and Mexico

Listed author(s):
  • Andrés Calderón-Fernández
  • Héctor García-Montero
  • Enrique Llopis-Agelán

This paper provides a detailed empirical assessment of the evolution of income inequality and the redistributive effects of the tax and transfer system following the 2007-2008 crisis. It focuses on the US case, drawing on data from the Current Population Survey for the period 2007-2012. Contrary to most existing studies, it uses of a wide range of inequality indicators and looks in detail at several sections of the income distribution, allowing for a clearer picture of the heterogeneous consequences of the crisis. Furthermore, it analyses the contribution of different types of taxes and transfers, beyond the overall cushioning effect of the system, which allows for a more refined assessment of its effectiveness. Results show that although the crisis implied income losses across the whole income distribution, the burden was disproportionately born by low to middle income groups. Income losses experienced by richer households were relatively modest and transitory, while those experienced by poorer households were not only strong but also highly persistent. The redistributive system had a crucial role in taming the increase in income inequality in the immediate aftermath of the crisis, and during the GR years, particularly cash transfers. After 2010, however, its effect became weaker and income inequality experienced a new surge. The findings of this paper contribute to a better understanding of the distributional consequences of aggregate crises and the role of tax and transfer policies in stabilising the income distribution in a crisis aftermath.

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File URL: ftp://ftp.dondena.unibocconi.it/WorkingPapers/Dondena_WP097.pdf
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Paper provided by "Carlo F. Dondena" Centre for Research on Social Dynamics (DONDENA), Università Commerciale Luigi Bocconi in its series Working Papers with number 097.

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Length: 44 pages
Date of creation: Jan 2017
Handle: RePEc:don:donwpa:097
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  1. Schneider, Eric B., 2013. "Real wages and the family: Adjusting real wages to changing demography in pre-modern England," Explorations in Economic History, Elsevier, vol. 50(1), pages 99-115.
  2. R. C. Allen & J. L. Weisdorf, 2011. "Was there an ‘industrious revolution’ before the industrial revolution? An empirical exercise for England, c. 1300–1830," Economic History Review, Economic History Society, vol. 64(3), pages 715-729, August.
  3. Drelichman, Mauricio & González Agudo, David, 2014. "Housing and the cost of living in early modern Toledo," Explorations in Economic History, Elsevier, vol. 54(C), pages 27-47.
  4. Allen, Robert C. & Murphy, Tommy E. & Schneider, Eric B., 2012. "The Colonial Origins of the Divergence in the Americas: A Labor Market Approach," The Journal of Economic History, Cambridge University Press, vol. 72(04), pages 863-894, December.
  5. Roderick Floud & Robert W. Fogel & Bernard Harris & Sok Chul Hong, 2011. "The Changing Body: Health, Nutrition, and Human Development in the Western World since 1700," NBER Books, National Bureau of Economic Research, Inc, number foge10-1, November.
  6. Arroyo Abad, Leticia & Davies, Elwyn & van Zanden, Jan Luiten, 2012. "Between conquest and independence: Real wages and demographic change in Spanish America, 1530–1820," Explorations in Economic History, Elsevier, vol. 49(2), pages 149-166.
  7. Robert Allen, 2013. "Poverty Lines in History, Theory, and Current International Practice," Economics Series Working Papers 685, University of Oxford, Department of Economics.
  8. Uebele, Martin & Pfister, Ulrich & Riedel, Jana, 2012. "Real wages and the origins of modern economic growth in Germany, 16th to 19th centuries," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62076, Verein für Socialpolitik / German Economic Association.
  9. Allen, Robert C. & Murphy, Tommy E. & Schneider, Eric B., 2015. "Una De Cal Y Otra De Arena: Building Comparable Real Wages In A Global Perspective," Revista de Historia Económica, Cambridge University Press, vol. 33(01), pages 61-75, March.
  10. Lvarez-Nogal, Carlos & Prados De La Escosura, Leandro, 2007. "The decline of Spain (1500 1850): conjectural estimates," European Review of Economic History, Cambridge University Press, vol. 11(03), pages 319-366, December.
  11. Paolo Malanima, 2013. "When did England overtake Italy? Medieval and early modern divergence in prices and wages," European Review of Economic History, Oxford University Press, vol. 17(1), pages 45-70, February.
  12. Van Zanden, Jan Luiten, 2009. "The skill premium and the ‘Great Divergence’," European Review of Economic History, Cambridge University Press, vol. 13(01), pages 121-153, April.
  13. Robert W. Fogel & Nathaniel Grotte, 2011. "An Overview of The Changing Body: Health, Nutrition, and Human Development in the Western World Since 1700," NBER Working Papers 16938, National Bureau of Economic Research, Inc.
  14. Allen, Robert C. & Bengtsson, Tommy & Dribe, Martin (ed.), 2005. "Living Standards in the Past: New Perspectives on Well-Being in Asia and Europe," OUP Catalogue, Oxford University Press, number 9780199280681.
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