Income Effect

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Martin Ravallion - One of the best experts on this subject based on the ideXlab platform.

  • Journal of Econometrics, forthcoming. An Econometric Method of Correcting for Unit Nonresponse Bias in Surveys
    2016
    Co-Authors: Anton Korinek, Johan A. Mistiaen, Martin Ravallion, Jel C
    Abstract:

    Abstract: Past approaches to correcting for unit nonresponse in sample surveys by re-weighting the data assume that the problem is ignorable within arbitrary subgroups of the population. Theory and evidence suggest that this assumption is unlikely to hold, and that household characteristics such as Income systematically affect survey compliance. We show that this leaves a bias in the re-weighted data and we propose a method of correcting for this bias. The geographic structure of nonresponse rates allows us to identify a micro compliance function, which is then used to re-weight the unit-record data. An example is given for the US Current Population Surveys, 1998–2004. We find, and correct for, a strong household Income Effect on response probabilities

  • the journal’s editor and anonymous referees. Anton Korinek gratefully acknowledges financial support from the Austrian Academy of Sciences, DOC Fellowship.
    2016
    Co-Authors: Anton Korinek, Johan A. Mistiaen, Martin Ravallion
    Abstract:

    Abstract: Past approaches to correcting for unit nonresponse in sample surveys by re-weighting the data assume that the problem is ignorable within arbitrary subgroups of the population. Theory and evidence suggest that this assumption is unlikely to hold, and that household characteristics such as Income systematically affect survey compliance. We show that this leaves a bias in the re-weighted data and we propose a method of correcting for this bias. The geographic structure of nonresponse rates allows us to identify a micro compliance function, which is then used to re-weight the unit-record data. An example is given for the US Current Population Surveys, 1998 – 2004. We find, and correct for, a strong household Income Effect on response probabilities

  • a micro decomposition analysis of the macroeconomic determinants of human development
    PSE-Ecole d'économie de Paris (Postprint), 2007
    Co-Authors: Martin Ravallion, Sylvie Lambert, Dominique Van De Walle
    Abstract:

    We show how differences in aggregate human development outcomes over time and space can be additively decomposed into a pure mean Income (growth) component, a component attributed to differences in the distribution of Income, and components attributed to 'non-Income' factors and differences in the model linking outcomes to Income and non-Income characteristics. The Income Effect at the micro level is modelled non-parametrically, so as to flexibly reflect potentially complex distributional changes. Our proposed method is illustrated using data for Morocco and Vietnam, and the results offer some surprising insights into the observed aggregate gains in schooling attainments.

  • an econometric method of correcting for unit nonresponse bias in surveys
    Journal of Econometrics, 2005
    Co-Authors: Anton Korinek, Johan A. Mistiaen, Martin Ravallion
    Abstract:

    Past approaches to correcting for unit nonresponse in sample surveys by re-weighting the data assume that the problem is ignorable within arbitrary subgroups of the population. Theory and evidence suggest that this assumption is unlikely to hold, and that household characteristics such as Income systematically affect survey compliance. The authors show that this leaves a bias in the re-weighted data and they propose a method of correcting for this bias. The geographic structure of nonresponse rates allows them to identify a micro compliance function, which they then use to re-weight the unit-record data. An example is given for the U.S. Current Population Surveys, 1998-2004. The authors find, and correct for, a strong household Income Effect on response probabilities.

  • an econometric method of correcting for unit nonresponse bias in surveys
    2005
    Co-Authors: Anton Korinek, Johan A. Mistiaen, Martin Ravallion
    Abstract:

    Past approaches to correcting for unit nonresponse in sample surveys by re-weighting the data assume that the problem is ignorable within arbitrary subgroups of the population. Theory and evidence suggest that this assumption is unlikely to hold, and that household characteristics such as Income systematically affect survey compliance. We show that this leaves a bias in the re-weighted data and we propose a method of correcting for this bias. The geographic structure of nonresponse rates allows us to identify a micro compliance function, which is then used to re-weight the unit-record data. An example is given for the US Current Population Surveys, 1998 - 2004. We find, and correct for, a strong household Income Effect on response probabilities.

Anton Korinek - One of the best experts on this subject based on the ideXlab platform.

  • Journal of Econometrics, forthcoming. An Econometric Method of Correcting for Unit Nonresponse Bias in Surveys
    2016
    Co-Authors: Anton Korinek, Johan A. Mistiaen, Martin Ravallion, Jel C
    Abstract:

    Abstract: Past approaches to correcting for unit nonresponse in sample surveys by re-weighting the data assume that the problem is ignorable within arbitrary subgroups of the population. Theory and evidence suggest that this assumption is unlikely to hold, and that household characteristics such as Income systematically affect survey compliance. We show that this leaves a bias in the re-weighted data and we propose a method of correcting for this bias. The geographic structure of nonresponse rates allows us to identify a micro compliance function, which is then used to re-weight the unit-record data. An example is given for the US Current Population Surveys, 1998–2004. We find, and correct for, a strong household Income Effect on response probabilities

  • the journal’s editor and anonymous referees. Anton Korinek gratefully acknowledges financial support from the Austrian Academy of Sciences, DOC Fellowship.
    2016
    Co-Authors: Anton Korinek, Johan A. Mistiaen, Martin Ravallion
    Abstract:

    Abstract: Past approaches to correcting for unit nonresponse in sample surveys by re-weighting the data assume that the problem is ignorable within arbitrary subgroups of the population. Theory and evidence suggest that this assumption is unlikely to hold, and that household characteristics such as Income systematically affect survey compliance. We show that this leaves a bias in the re-weighted data and we propose a method of correcting for this bias. The geographic structure of nonresponse rates allows us to identify a micro compliance function, which is then used to re-weight the unit-record data. An example is given for the US Current Population Surveys, 1998 – 2004. We find, and correct for, a strong household Income Effect on response probabilities

  • an econometric method of correcting for unit nonresponse bias in surveys
    Journal of Econometrics, 2005
    Co-Authors: Anton Korinek, Johan A. Mistiaen, Martin Ravallion
    Abstract:

    Past approaches to correcting for unit nonresponse in sample surveys by re-weighting the data assume that the problem is ignorable within arbitrary subgroups of the population. Theory and evidence suggest that this assumption is unlikely to hold, and that household characteristics such as Income systematically affect survey compliance. The authors show that this leaves a bias in the re-weighted data and they propose a method of correcting for this bias. The geographic structure of nonresponse rates allows them to identify a micro compliance function, which they then use to re-weight the unit-record data. An example is given for the U.S. Current Population Surveys, 1998-2004. The authors find, and correct for, a strong household Income Effect on response probabilities.

  • an econometric method of correcting for unit nonresponse bias in surveys
    2005
    Co-Authors: Anton Korinek, Johan A. Mistiaen, Martin Ravallion
    Abstract:

    Past approaches to correcting for unit nonresponse in sample surveys by re-weighting the data assume that the problem is ignorable within arbitrary subgroups of the population. Theory and evidence suggest that this assumption is unlikely to hold, and that household characteristics such as Income systematically affect survey compliance. We show that this leaves a bias in the re-weighted data and we propose a method of correcting for this bias. The geographic structure of nonresponse rates allows us to identify a micro compliance function, which is then used to re-weight the unit-record data. An example is given for the US Current Population Surveys, 1998 - 2004. We find, and correct for, a strong household Income Effect on response probabilities.

  • survey nonresponse and the distribution of Income
    Social Science Research Network, 2005
    Co-Authors: Anton Korinek, Johan A. Mistiaen, Martin Ravallion
    Abstract:

    The paper examines the distributional implications of selective compliance in sample surveys, whereby households with different Incomes are not equally likely to participate. Poverty and inequality measurement implications are discussed for monotonically decreasing and inverted-U compliance-Income relationships. We demonstrate that the latent Income Effect on the probability of compliance can be estimated from information on response rates across geographic areas. On implementing the method on the Current Population Survey for the United States we find that the compliance probability falls monotonically as Income rises. Correcting for nonresponse appreciably increases mean Income and inequality, but has only a small impact on poverty incidence up to poverty lines common in the United States.

Susan Pozo - One of the best experts on this subject based on the ideXlab platform.

  • remittance receipt and business ownership in the dominican republic
    The World Economy, 2006
    Co-Authors: Catalina Amuedodorantes, Susan Pozo
    Abstract:

    Using household-level data from the Dominican communities in the Latin American Migration Project (LAMP-DR7), we examine the links between remittance receipt and business ownership. We find that while the existence of a family business attracts remittance inflows, these monetary funds are associated with a reduced likelihood of business entrepreneurship. These results are consistent with various hypotheses regarding remittances and business investments. First, remittances may be motivated by the availability of investment opportunities in the home community. Second, remittances may respond to a bequest motive on the part of the emigrant, who may wish to lay claim on family assets when returning home. Lastly, remittances may cause an Income Effect that reduces family labour force participation and, correspondingly, the likelihood of family-run business investments.

  • Migration, remittances, and male and female employment patterns
    The American Economic Review, 2006
    Co-Authors: Catalina Amuedo-dorantes, Susan Pozo
    Abstract:

    Little is known about the labor market impacts of workers’ remittances, despite their magnitude in countries with considerable outmigration. Reports that families receiving international remittances severely curtail their work efforts are fairly common in the popular press (e.g., Robert Frank, 2001). Yet, we lack rigorous analyses of how male and female labor supplies respond to increases in remittance Income to either support or refute these anecdotal observations. According to the neoclassical model of labor-leisure choice (Mark R. Killingsworth, 1983), remittances—a source of nonlabor Income—may lift budget constraints, raise reservation wages, and, through an Income Effect, reduce the employment likelihood and hours worked by remittance-receiving individuals. The receipt of remittances is usually preceded by the out-migration of working-aged household members, however, which may induce changes in the labor supply of nonmigrating household members in order to compensate for forgone Income or to defray migration-related expenses. Distinguishing the disruptive Effect from the Income Effect of remittance inflows is problematic, as most surveys do not contain detailed information on household outmigration and remittance receipt. To the extent that these two Effects are expected to have opposite impacts on labor supply, however, we can assess which Effect dominates. The impact of remittances on the decision to work has been previously examined by Edgard Rodriguez and Erwin R. Tiongson (2001) in Manila and by Edward Funkhouser (1992) in Managua. Without accounting for the endogeneity of remittances with respect to labor supply, they conclude that remittances reduce employment. Funkhouser also finds that remittances slightly increase self-employment. While informative, these studies focus on the decision to work and do not consider that, without altering employment rates, remittances may change the hours worked and/or the type of work performed in the receiving economy. Furthermore, the impact may be different on male and female labor supplies and responsiveness to remittance Income may vary from rural to urban areas. Using data from Mexico—a country with a large and growing remittance inflow—we address the following questions: How does the employment status and hours worked by men and women vary owing to international remittances? Do male and female labor supplies differ across various types of employment in rural versus urban areas due to higher remittance inflows?

Alexander M Gelber - One of the best experts on this subject based on the ideXlab platform.

  • the Effect of disability insurance payments on beneficiaries earnings
    Research Papers in Economics, 2016
    Co-Authors: Alexander M Gelber, Timothy Moore, Alexander Strand
    Abstract:

    A crucial issue in studying social insurance programs is whether they affect work decisions through Income or substitution Effects. We examine this in the context of U.S. Social Security Disability Insurance (DI), one of the largest social insurance programs in the U.S. The formula linking DI payments to past earnings has discontinuous changes in the marginal replacement rate that allow us to use a regression kink design to estimate the Effect of payment size on earnings. Using Social Security Administration data on all new DI beneficiaries from 2001 to 2007, we document a robust Income Effect of DI payments on earnings. Our preferred estimate is that an increase in DI payments of one dollar causes an average decrease in beneficiaries’ earnings of twenty cents. This suggests that the Income Effect represents an important factor in driving DI-induced reductions in earnings.

  • the Effect of disability insurance payments on beneficiaries earnings
    Social Science Research Network, 2016
    Co-Authors: Timothy Moore, Alexander M Gelber, Alexander Strand
    Abstract:

    A crucial issue in studying social insurance programs is whether they affect work decisions through Income or substitution Effects. We examine this in the context of U.S. Social Security Disability Insurance (DI), one of the largest social insurance programs in the U.S. The formula linking DI payments to past earnings has discontinuous changes in the marginal replacement rate that allow us to use a regression kink design to estimate the Effect of payment size on earnings. Using Social Security Administration data on all new DI beneficiaries from 2001 to 2007, we document a robust Income Effect of DI payments on earnings. Our preferred estimate is that an increase in DI payments of one dollar causes an average decrease in beneficiaries’ earnings of twenty cents. This suggests that the Income Effect represents an important factor in driving DI-induced reductions in earnings.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Wojciech Kopczuk - One of the best experts on this subject based on the ideXlab platform.

  • incentive Effects of inheritances and optimal estate taxation
    National Bureau of Economic Research, 2013
    Co-Authors: Wojciech Kopczuk
    Abstract:

    I consider nonlinear taxation of Income and bequests with a joy-of-giving bequest motive and explicitly characterize the estate tax rate structure that maximizes social planner's welfare function. The solution trades off correction of externality from giving and discouraging effort of children due to Income Effect generated by bequests. The analysis shows that optimality of a positive tax on bequests in this context rests on the strength of the Effect of bequests on behavior of future generations, and suggests that inheritance rather than estate tax is better suited to implement the corresponding policy.

  • incentive Effects of inheritances and optimal estate taxation
    The American Economic Review, 2013
    Co-Authors: Wojciech Kopczuk
    Abstract:

    I consider optimal nonlinear taxation of Income and bequests with a joy-of-giving bequest motive and explicitly characterize the optimal estate tax rate. The optimal formula trades off correction of externality from giving and discouraging effort of children due to Income Effect generated by bequests. The analysis shows that optimality of a positive tax on bequests rests on the strength of the Effect of bequests on behavior of future generations. The analysis also suggests that inheritance, rather than estate tax, is better suited to implement the optimal policy.