In Praise of Snapshots

The conventional justification for moving from income distribution to intergenerational mobility analysis is that the movie encompasses the snapshot and is normatively superior as the basis for assessing policy. Such a perspective underpins many an argument for shifting the focus from income redistribution, which is said to equalize outcomes, to equalizing opportunity by increasing mobility through education policy such as equal provision of public education. This chapter argues that this perspective can be misleading. It shows that normative evaluation of income mobility in any event often falls back on a snapshot perspective. Further, the snapshot itself often contains the seeds of the movie, as posited in the Great Gatsby Curve. Income redistribution can itself improve mobility even if that is the only objective. The chapter thus speaks in praise of snapshots.

INCOME INEQUALITY AND RELATIVE POVERTY IN RUSSIAN HOUSEHOLDS: IS THERE A LINK TO ECONOMIC GROWTH?

The analysis of the relationship between indicators of economic growth, inequality and poverty in dynamics from the beginning of the 90s of the last century to the present is carried out, it is shown that the economic growth that began in the 2000s resulted in a steady downward trend in the level of inequality and poverty in Russia. Based on the Ravallon-Dutt decomposition method, the effects of growth and income redistribution on changes in the level of relative poverty and inequality between 2000 and 2017 are calculated. The presented approach allows us to identify problem areas of social policy and indicate the directions for their elimination.

Redistribution and beliefs about the source of income inequality

Previous literature demonstrates that beliefs about the determinants of income inequality play a major role in individual support for income redistribution. This study investigates how people form beliefs regarding the extent to which work versus luck determines income inequality. Specifically, I examine whether people form self-serving beliefs to justify supporting personally advantageous redistributive policies. I use a laboratory experiment where I directly measure beliefs and manipulate the incentives to engage in self-deception. I first replicate earlier results demonstrating that (1) people attribute income inequality to work when they receive a high income and to luck when they receive a low income and (2) their beliefs about the source of income inequality influence their preferences over redistributive policies. However, I do not find that people’s beliefs about the causes of income inequality are further influenced by self-serving motivations based on a desire to justify favorable redistributive policies. I conclude that, in my experiment, self-serving beliefs about the causes of income inequality are driven primarily by overconfidence and self-image concerns and not to justify favorable redistributive policies.

Welfare implications of mitigating investment uncertainty

This study explores the welfare implications of mitigating investment uncertainty in the context of Easley and O’Hara (Rev Financ Stud 22:1817–1843, 2009) While one may expect welfare gains by encouraging participation in financial markets by ambiguity-averse investors, we formally show that it hurts other investors and thus is not Pareto-improving without appropriate income transfers. We also examine the welfare effects of income redistribution among heterogeneous investors and government spending on investor education.

Immigration and the Future of the Welfare State in Europe

We analyze the effect of immigration on attitudes toward income redistribution in twenty-eight European countries over the period 2002 to 2012, before the “refugee crisis.” We find that native workers lower their support for redistribution if the share of immigration in their country is high. This effect is larger for individuals who hold negative views regarding immigration but is smaller when immigrants are culturally closer to natives and come from richer-origin countries. The effect also varies with native workers’ and immigrants’ education: more educated natives support more redistribution if immigrants are also relatively educated. Overall, our results show that the negative effect of immigration on attitudes toward redistribution is relatively small and is counterbalanced among skilled natives by positive second-order effects for the quality and diversity of immigration.