Examining the process of job mobility and its effect on earnings, the authors find that this particular labour market is characterised by a high incidence of specific…
Examining the process of job mobility and its effect on earnings, the authors find that this particular labour market is characterised by a high incidence of specific training, that upward mobility is largely experienced within the same organisation and is mainly of the osmotic type. It is felt that a technique must be devised to measure osmotic mobility accurately.
Recent studies have examined tax policy issues using labour supply models characterised by a discretised budget set. Microsimulation modelling using a discrete hours…
Recent studies have examined tax policy issues using labour supply models characterised by a discretised budget set. Microsimulation modelling using a discrete hours approach is probabilistic. This makes analysis of the distribution of income difficult as even for a small sample with a modest range of labour supply points the range of possible labour supply combinations over the sample is extremely large. This paper proposes a method of approximating measures of income distribution and compares the performance of this method to alternative approaches in a microsimulation context. In this approach a pseudo income distribution is constructed, which uses the probability of a particular labour supply value occurring (standardised by the population size) to refer to a particular position in the pseudo income distribution. This approach is compared to using an expected income level for each individual and to a simulated approach, in which labour supply values are drawn from each individual’s hours distribution and summary statistics of the distribution of income are calculated by taking the average over each set of draws. The paper shows that the outcomes of various distributional measures using the pseudo method converge quickly to their true values as the sample size increases. The expected income approach results in a less accurate approximation. To illustrate the method, we simulate the distributional implications of a tax reform using the Melbourne Institute Tax and Transfer Simulator.
This paper examines the question of the extent to which redistribution can be achieved using a structure of consumption taxes with differential rates and exemptions. A…
This paper examines the question of the extent to which redistribution can be achieved using a structure of consumption taxes with differential rates and exemptions. A local measure of progression, that of liability progression (equivalent to the revenue elasticity) is examined. Results are obtained for the Australian indirect tax structure. These are compared with structures in which only commodity groups with total expenditure elasticities greater than 1 are taxed. Comparisons are also made using equivalent variations, and inequality measures of a money metric welfare measure are reported.
This article is not the work of an expert on the period in question (see Robinson, 1971; Rheinwald, 1977); rather it is a commentary on a book whose half‐century has just…
This article is not the work of an expert on the period in question (see Robinson, 1971; Rheinwald, 1977); rather it is a commentary on a book whose half‐century has just passed almost unnoticed. In a sense the argument involves a further visit to what J.A. Schumpeter once described as the “lumber room” of historical knowledge, although this particular visit is prompted neither by nostalgia nor piety, but rather by the conviction that Chamberlin still has much to teach those interested in the theory of the firm and in the wider area of industrial economics. The article is also prompted by the conviction that the conventional textbook accounts of Chamberlin's work have introduced misleading simplifications in pursuing the qualities of coherence and precision in the presentation of ideas.
A dynamic microsimulation model of cohort labour earnings based on the Australian population aged between 20 and 55 years is described. Care has been taken to specify the model, subject to the limited data that were available for estimation. Despite the restrictive specifications used, the model closely reflects the data used for calibration, and is shown to bear a close relation to alternatives considered by the literature.
The last 20 years have seen a significant evolution in the literature on horizontal inequity (HI) and have generated two major and “rival” methodological strands, namely…
The last 20 years have seen a significant evolution in the literature on horizontal inequity (HI) and have generated two major and “rival” methodological strands, namely, classical HI and reranking. We propose in this paper a class of ethically flexible tools that integrate these two strands. This is achieved using a measure of inequality that merges the well-known Gini coefficient and Atkinson indices, and that allows a decomposition of the total redistributive effect of taxes and transfers into a vertical equity effect and a loss of redistribution due to either classical HI or reranking. An inequality-change approach and a money-metric cost-of-inequality approach are developed. The latter approach makes aggregate classical HI decomposable across groups. As in recent work, equals are identified through a non-parametric estimation of the joint density of gross and net incomes. An illustration using Canadian data from 1981 to 1994 shows a substantial, and increasing, robust erosion of redistribution attributable both to classical HI and to reranking, but does not reveal which of reranking or classical HI is more important since this requires a judgement that is fundamentally normative in nature.
It has long been recognised that cohort and cross‐sectional age‐earnings profiles differ. A standard procedure, which is quite reasonable in the absence of more…
It has long been recognised that cohort and cross‐sectional age‐earnings profiles differ. A standard procedure, which is quite reasonable in the absence of more information, is to obtain a cohort profile by simply adding the general rate of growth of real earnings to the growth of earnings associated with age, as shown by cross‐sectional data. Indeed, this would seem to be supported by the observation that cross‐sectional earnings profiles for a number of different years show a great deal of stability in their general shape. The main question considered here is whether cohort profiles can in fact be estimated in this simple way. A basic statistical model of age‐earnings profiles is described in the next section. The model is then applied to several groups of professional scientists, chemists and physicists in Britain and Australia, in the third section. The data were obtained from special surveys of career histories and are described briefly in the Appendix. A feature of the surveys is that sufficient data were collected to enable separate analyses of male and female scientists to be carried out.