Power, policy, and top income shares

2017 ◽  
Vol 17 (2) ◽  
pp. 231-253 ◽  
Author(s):  
Evelyne Huber ◽  
Jingjing Huo ◽  
John D Stephens
Keyword(s):  
Tertiary Education ◽  
Union Density ◽  
Wealth Accumulation ◽  
Tax Rates ◽  
Policy Changes ◽  
Top Incomes ◽  
Top Managers ◽  
Top Income Shares ◽  
Export Competitiveness ◽  
Knowledge Intensive

Abstract The rise of the super-rich has attracted much political and academic attention in recent years. However, there have been few attempts to explain the cross-national along with the temporal variation in the rise of top incomes. Drawing on the World Wealth and Income Database, we study the income share of the top 1% in current postindustrial democracies from 1960 to 2012. We find that extreme income concentration at the top is a predominantly political phenomenon, not the result of increasing marginal productivity of top managers in markets of increasing size. Top income shares are largely unrelated to economic growth, increased knowledge-intensive production, export competitiveness, financialization and wealth accumulation, though they are related to stock market capitalization. Instead, they are closely associated with political and policy changes such as union density and centralization, secular-right governments, top marginal tax rates and investment in public tertiary education.

scholarly journals Top Incomes in Germany, 1871–2014

2019 ◽  
Vol 79 (3) ◽  
pp. 669-707 ◽  
Author(s):  
Charlotte Bartels
Keyword(s):  
United States ◽  
Trade Unions ◽  
The United States ◽  
Tax Rates ◽  
Turn Of The Millennium ◽  
Top Incomes ◽  
The United Kingdom ◽  
Top Income Shares ◽  
New Evidence ◽  
Income Concentration

This study provides new evidence on top income shares in Germany from industrialization to the present. Income concentration was high in the nineteenth century, dropped sharply after WWI and during the hyperinflation years of the 1920s, then increased rapidly throughout the Nazi period beginning in the 1930s. Following the end of WWII, German top income shares returned to 1920s levels. The German pattern stands in contrast to developments in France, the United Kingdom, and the United States, where WWII brought a sizeable and lasting reduction in top income shares. Since the turn of the millennium, income concentration in Germany has been on the rise and is today among the highest in Europe. The capital share is consistently positively associated with income concentration, whereas growth, technological change, trade, unions, and top tax rates are positively associated in some periods and negative in others.

scholarly journals Do Rising Top Incomes Lift All Boats?

2011 ◽  
Vol 11 (1) ◽  
Author(s):  
Dan Andrews ◽  
Christopher Jencks ◽  
Andrew Leigh
Keyword(s):  
Gdp Growth ◽  
Tax Rates ◽  
Total Income ◽  
Systematic Relationship ◽  
Top Incomes ◽  
Top Income Shares ◽  
Negative Effect ◽  
The Mean ◽  
Developed Nations ◽  
Positive Effect

Abstract Pooling data for 1905 to 2000, we find no systematic relationship between top income shares and economic growth in a panel of 12 developed nations observed between 22 and 85 years. After 1960, however, a one percentage point rise in the top decile’s income share is associated with a statistically significant 0.12 point rise in GDP growth during the following year. This relationship is not driven by changes in either educational attainment or top tax rates. If the increase in inequality is permanent, the increase in growth appears to be permanent. However, our estimates imply that it would take 13 years for the cumulative positive effect of faster growth on the mean income of the bottom nine deciles to offset the negative effect of reducing their share of total income.

scholarly journals The role of SMEs in innovation-oriented economic development

2017 ◽  
pp. 95-99
Author(s):  
Tamás Köpeczi-Bócz ◽  
Mónika Lőrincz
Keyword(s):  
Rural Areas ◽  
Tertiary Education ◽  
National Level ◽  
Business Environment ◽  
The Other ◽  
Sectoral Structure ◽  
Other Hand ◽  
Knowledge Intensive ◽  
The One

Both at European and national level tertiary and quaternary sectors are concentrated in the metropolitan centre. In the rural areas only the sites of such sectors can be found the premises of which temporarily transform the sectoral structure of these areas, but from the regional development aspect they did not prove to be an effective strategy.The European Commission is now focusing on growth from innovation, which could become the driving force behind productivity growth and the economy’s long-term trend. The innovation-oriented economic development’s key players are on the one hand the knowledge-intensive enterprises, on the other hand the universities. Tertiary education can play a role – among others – in shaping and creating the development of knowledge intensive business environment and conditions, on the other hand it can assist the development of network contacts – another precondition of employment growth.

Inequality: traditional drivers and the role of union power

2019 ◽  
Vol 72 (1) ◽  
pp. 25-58 ◽  
Author(s):  
Florence Jaumotte ◽  
Carolina Osorio Buitron
Keyword(s):  
Instrumental Variable ◽  
Technological Progress ◽  
Union Density ◽  
Tax Rates ◽  
Net Income ◽  
Omitted Variables ◽  
Financial Deregulation ◽  
Advanced Economies ◽  
Marginal Tax Rates

Abstract We examine the factors explaining the increase in gross and net income inequality in advanced economies since the 1980s. Our results support the view that globalization, technological progress, financial deregulation and lower top marginal tax rates are associated with higher inequality, and we find that the relation between the decline in union density and the rise in top decile income shares—a phenomenon which labour economists have long been discussing—is widespread across advanced economies. The influence of union density on top income shares appears to be causal, as evidenced by our instrumental variable estimates and the inclusion of potentially omitted variables.

scholarly journals How weaknesses in home country location advantages can constrain EMNE growth

2016 ◽  
Vol 24 (3) ◽  
pp. 249-278 ◽  
Author(s):  
Rajneesh Narula ◽  
Tiju Prasad Kodiyat
Keyword(s):  
Emerging Economies ◽  
Multinational Enterprises ◽  
Home Country ◽  
Competitive Advantages ◽  
Policy Changes ◽  
Systems Of Innovation ◽  
Content Type ◽  
Knowledge Infrastructure ◽  
Knowledge Intensive

Purpose This paper aims to discuss the opportunities and limitations that the location-specific advantages of the home country represent for infant multinational enterprises (MNEs). The systemic weaknesses of the home country can constrain the long-term competitiveness of its firms and, ultimately, the competitiveness of its MNEs. Many emerging countries have a constrained set of location-specific (L) assets from which their firms are able to develop ownership-specific assets. Design/methodology/approach The authors examine data for the case of India, an economy regarded as having considerable potential to expand to knowledge-intensive sectors, using a “systems of innovation” framework, merged with an analysis of L advantages. Findings At the macro level, India’s performance is not different from countries of similar economic structure, and its current pockets of excellence are a reflection of its L assets. The analysis suggests that the failure to foster and upgrade the L assets of emerging economies is likely to stunt the growth of their domestic firms and, ultimately, any new MNE activity in the long-term. Research limitations/implications In the case of India, systemic policy changes are needed to upgrade the knowledge infrastructure and institutions to support a shift in the competitive advantages to new sectors outside existing pockets of excellence. Indian firms are unlikely to be able to rely on the knowledge infrastructure of their home economy and will “exit” the Indian milieu because of weaknesses in L assets, as much as to seek markets and customers elsewhere. There will be few opportunities for new generations of firms to venture abroad from a position of strength, rather than as a means to overcome their home country disadvantages. Originality/value The evidence would suggest that – like other emerging economies – Indian firms are unlikely to be able to rely on the knowledge infrastructure of their home economy and are “exiting” the Indian milieu because of its weaknesses in L assets, as much as to seek markets and customers elsewhere. Most importantly, India faces a potential shortage of skilled human capital in the medium term.

Zipf's Law, Pareto's Law, and the Evolution of Top Incomes in the United States

2017 ◽  
Vol 9 (3) ◽  
pp. 36-71 ◽  
Author(s):  
Shuhei Aoki ◽  
Makoto Nirei
Keyword(s):  
United States ◽  
Income Distribution ◽  
The United States ◽  
Zipf’S Law ◽  
Tax Rates ◽  
Firm Level ◽  
Productivity Shocks ◽  
Zipf's Law ◽  
Top Incomes ◽  
Pareto’S Law

We construct a tractable neoclassical growth model that generates Pareto's law of income distribution and Zipf's law of the firm size distribution from idiosyncratic, firm-level productivity shocks. Executives and entrepreneurs invest in risk-free assets, as well as their own firms' risky stocks, through which their wealth and income depend on firm-level shocks. By using the model, we evaluate how changes in tax rates can account for the evolution of top incomes in the United States. The model matches the decline in the Pareto exponent of the income distribution and the trend of the top 1 percent income share in recent decades. (JEL D31, H24, L11)

scholarly journals The Corporate Innovation in Europe

2021 ◽  
Author(s):  
Alberto Costantiello ◽  
Lucio Laureti ◽  
Leogrande Angelo
Keyword(s):  
Research And Development ◽  
Tertiary Education ◽  
Value Added ◽  
Entrepreneurial Activity ◽  
High Tech ◽  
High Tech Product ◽  
Firm Investments ◽  
Intellectual Assets ◽  
Education Design ◽  
Knowledge Intensive

Abstract In this article we investigate the political and industrial determinants of firm investment in Research and Development. We use data from the European Innovation Scoreboard of the European Commission for 36 countries in the period 2000-2019. We found that firm investments in Research and Development are positively associated with “Linkages”, “Innovation Index”, “International Co-publications”, “Medium and high-tech product exports”, “Non-R&D innovation expenditure”, “Turnover share large enterprises”, “Human Resources”, “Intellectual Assets”. Firm investments in Research and Development are negatively associated to “Foreign doctorate students”, “Knowledge-intensive services exports”, “Private co-funding of public R&D expenditures”, “Basic-school entrepreneurial education and training (SD)”, “New doctorate graduates”, “Trademark applications”, “Tertiary education” “Design applications”, “Lifelong Learning”, “Foreign-controlled enterprises – share of value added (SD)”, “Total Entrepreneurial Activity (TEA) (SD)”.

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