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This dissertation examines the effects of micro-level inequality on political preferences and voting behavior.

This paper investigates the effects of international trade in a general equilibrium model with heterogeneous firms where a welfare state redistributes income. We look at a very stylised progressive non-distortionary redistribution scheme. We show that for a given tax rate international trade increases income per capita, but also leads to higher income inequality. Two aspects of income inequality are examined. First, inter-group inequality between managers and workers is considered. Second, intra-group inequality within the group of managers is investigated. For a given tax rate the size of the welfare state and therefore the transfer per capita increases when going from autarky to trade. This second-round effect counteracts the primary increase in inequality, yet cannot outweigh it. Since the redistribution scheme is non-distortionary, it is possible to decrease trade-induced inequality by increasing the tax rate without jeopardising the gains from trade.

This paper examines the distributional effects of international trade in a general equilibrium model with heterogeneous agents and a welfare state redistributing income. The redistribution scheme is financed by a progressive income tax and gives the same absolute transfer to all individuals. Ceteris paribus, international trade leads to an increase in income per capita but also to higher income inequality on two fronts. Inter-group inequality between managers and workers increases, and intra-group inequality within the group of managers goes up as well. We show that for constant tax rates, there is an endogenous increase in the size of the welfare state that works against the increase in inequality, yet cannot offset it. The paper also sheds light on the conditions under which trade can actually lead to a Pareto improvement.

This thesis investigates the effects of fiscal consolidations on income inequality. Although fiscal consolidations have become a popular economic research topic, their effects on income inequality, which itself has gained broad popularity lately, are relatively unexplored. Therefore, this thesis econometrically assesses the development of Gini coefficients during and after austerity measures. The paper applies regression analysis with panel data techniques using a sample of 17 high-income countries during the period of 1978 - 2009. It finds that a consolidation, measured by a deliberate improvement of the primary budget balance significantly increases income inequality of the referring country. In detail, an improvement of the primary budget balance about one percent of GDP is associated with an increase in market income inequality of 0.6% and a smaller increase in net income inequality in the year after. Moreover, this thesis explores the discretionary effect of different consolidation compositions. To do so, it introduces a novel approach to differentiate between consolidations that are either exclusively undertaken through spending cuts, tax increases or a combination of both. Thereby, it is found that especially tax-only consolidations tend to be equality-friendly but also rather small in size...

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An interdisciplinary approach to policy and governance recognizes that many social welfare problems are interrelated, and policy-makers have long recognized a need to address the root causes of these problems. There is much evidence that income inequality is one of these root causes but research suggesting the effect of income inequality is mediated by social capital has complicated the relationship, as have theories of causality that take different approaches. This study takes an ecological approach to these issues to test the relationship between income inequality, social capital and selected adverse outcomes proposed by the relative income hypothesis. The relative income hypothesis posits that the impact of income inequality on adverse outcomes is mediated by social capital. The study used a retrospective cross-sectional design to analyze county-level data for the year 2000 with a structural equation model composed of three constructs: income inequality, modeled by four common measures; a social capital construct based on a model developed by Rupasingha, Goetz and Freshwater (2006); and an adverse outcomes construct designed as a parsimonious measure of social outcomes in four public affairs disciplinary areas. The test of the path presumed by the relative income hypothesis revealed both a direct effect of income inequality and indirect effect of inequality through social capital. However, the direct effect of income inequality on outcomes was significantly larger than the indirect effect, indicating the relationship is moderated, rather than mediated, by social capital. Since the impact of social capital on the selected adverse outcomes was relatively small, and the final model failed to achieve statistical significance, the relative income hypothesis that income inequality exerts its primary effect on outcomes through social capital was rejected.

This study examines the effects of political representation on economic inequality across western industrialized democracies. I explore an explanation of increases in economic inequality as a consequence of less representative democratic institutions. Explaining economic inequality in this manner is a shift from to the Transatlantic Consensus that attributes increased economic inequality to globalization. I expect to find that more representative electoral and governments institutions will be associated with lower levels of economic inequality. The analysis takes place across twenty-three countries of the Organization for Economic Co-operation and Development (OECD) over the past forty years using a cross-sectional longitudinal model. Variables used to operationalize the level of representation of democratic institutions include a novel variable of the representative ratio, the effective number of parties, an index of institutional constraints, presidential system, single member districts, and judicial review. Voter turnout, the percentage of seats held by women, gross domestic product per capita, unemployment, and the size of the industrial sector are used as control variables. The findings support the main hypothesis: as political representation increases, economic inequality decreases.

Expanding on a general equilibrium model of offshoring, we analyze the effects of a unilateral emissions tax increase on the environment, income, and inequality. Heterogeneous firms allocate labor across production tasks and emissions abatement, while only the most productive can benefit from lower labor and/or emissions costs abroad and offshore. We find a non-monotonic effect on global emissions, which decline if the initial difference in emissions taxes is small. For a sufficiently large difference, global emissions rise, implying emissions leakage of more than 100%. The underlying driver is a global technique effect: While the emissions intensity of incumbent non-offshoring firms declines, the cleanest firms start offshoring. Moreover, offshoring firms become dirtier, induced by a reduction in the foreign effective emissions tax in general equilibrium. Implementing a BCA prevents emissions leakage, reduces income inequality in the reforming country, but raises inequality across countries.

經濟效率與經濟公平，是經濟學中最具爭議性的議題之一。俄羅斯自1992年開始由計劃經濟轉型為市場經濟，政府的首要目標就是追求經濟效率的提升，相較而言對於經濟公平的問題較不重視，因此，在轉型的過程中社會所得分配差距持續擴大，最終導致兩極化分配結果。 本文透過文獻整理和統計數據對比分析論證方法探究1992至1997年間俄羅斯轉型政策對其所得不均惡化之影響。首先，藉由俄羅斯轉型前、後所得不均指標之對比，以及其與同時期其他中所得國家和轉型國家之比較，暸解俄羅斯所得不均情況，證明俄國轉型後所得分配惡化程度。其次，由私有化政策、自由化政策、穩定化政策以及社會救助政策等四個層面，分析俄羅斯轉型政策如何影響其所得分配。最後，說明已經是市場經濟體且被譽為金磚四國之一的俄羅斯，其近年來亮麗的經濟成長表現和普欽總統之社會救助政策，對其所得不均皆尚未產生改善效果，故1998年後的俄國所得分配狀況仍値得改以市場因素和相關政策等方面作為觀察重點，進行後續研究。 關鍵詞：俄羅斯、所得不均、私有化、自由化、穩定化、社會救助政策 / Economic efficiency and equity have always been one of the most controversial issues in the economics. Russia began the transformation from a planned economy to a market economy since 1992, and during the process of transformation, the primary objective of the Russian government was to enhance economic efficiency, by contrast, the economic equity was less emphasized. Therefore, the inequality of income distribution had become more and more serious. At the end, it led to the polarization of income distribution. In this study, literature review, comparative analysis and statistical data analysis methods will be used to explore how Russian transformation policies had resulted in the aggravation of income inequality between 1992 and 1997. First of all, in order to clarify the income inequality in Russia, some income inequality indexes of Russia before and after the transformation will be compared, and by the comparison with other mid-income and transformation countries in the same era, we can identify the aggravation of income distribution after the transformation. Secondly, how Russian transformation policies had influenced income distribution will be analyzed from four aspects: privatization policy, liberalization policy, stabilization policy, and social assistance policies. Finally, author interpret that although Russia has moved towards a market economy and become one of the BRICs (Brazil, Russia, India and China) countries in recent years, its brilliant economic performance with Putin’s social assistance policies have not yet improved the situation. Therefore, author suggests that the further research on Russian income distribution after 1998 is better to focus on market factors and related economic policies. Keyword: Russia, Income Inequality, Privatization, Liberalization, Stabilization, Social Assistance Policy