This dissertation considers two of the most pressing concerns of the current time, income inequality and exposure to pollution, and provides evidence that these two concerns may in fact be causally linked. In order to do this, I assemble novel datasets on income inequality and pollution exposure, and propose an strategy for causally identifying the effect of the former on the latter. In the first substantive chapter, I develop a new dataset on income inequality measured at the US state and metropolitan area level. I compare the trends in income inequality measured using different income definitions. In general, pre-tax, pre-transfer income inequality has increased in most states since 1980, but post-fiscal income inequality has seen slow or no growth since about 2000. I conduct inference on how income inequality has changed using a semi-parametric bootstrap method, and consider potential correlates with state-level income inequality. I find that de-unionization is perhaps the most important factor driving rising inequality. In the second substantive chapter, I leverage satellite-derived remote sensing data on ground-level concentrations for two important pollutants (NOx and PM2.5) to measure the distribution of pollution exposure. I propose a dashboard approach to measuring environmental inequality and environmental justice, proposing and applying several candidate measures to the satellite datasets. I find that environmental inequality has largely decreased since 1998, as has average exposure. I consider potential correlations between neighborhood demographics and the distribution of exposure, but find inconclusive results. In the third substantive chapter, I attempt to resolve this ambiguity by considering whether rising income inequality within metropolitan areas (the subject of the first chapter) might causally affect the distribution of exposure across people (the subject of the second). Using a simulated instrumental variables identification strategy designed to address potential endogeneity due to locational sorting, I find that income inequality decreases the average level of exposure, but increases environmental inequality. I argue this is consistent with the benefits of pollution reduction accruing to the most advantaged, and provide evidence that this may work through the political system: inequality increases the responsiveness of politicians to the environmental demands of the rich.

Rising inequality affects the dynamics of macroeconomic variables both at home and abroad. Abroad, rising inequality causes an over-accumulation of foreign assets, creating persistent current account deficits. Inequality leads to rises in government transfers, and if raising tax revenue through a progressive income tax system is increasingly costly, sovereign nations could accumulate on debt and increase their default risk. At home, rising inequality in income increases household debt accumulation, which increases the probability of a household default crisis. This thesis examines the mechanisms behind the relationship between rising inequality and the above macroeconomic variables, and offers some policy recommendations. In the first chapter, I examine the relationship between top income inequality and the current account. Using panel error correction methods I observe a long-run relationship between rising top income shares and falling current account conditional on highly progressive income tax systems. Since tax revenues rise with top income inequality if marginal income taxes are progressive, the negative conditional relationship appears either if fiscal revenues are transferred to households who become more avid consumers, or if government expenditure increases along the inequality trend. I incorporate these findings into a dynamic general equilibrium model to study the effects of the top and bottom income tax cuts on the current account and fiscal balance. As the income share at the top rises, a tax cut at the margin to them improves the current account, since top income households are generally savers, but hurts the fiscal balance through revenue reduction. On the other hand, a bottom tax cut lowers the current account balance but does not have much of an adverse impact on the fiscal balance. In the second chapter, I examine how inequality increases the probability of sovereign default by studying the Latin American default episodes of the early 1980s. The sovereign borrows for the purposes of redistribution and to cover government expenditure. Default on sovereign bonds occur when the one time increase in utility of poor households due to higher transfers outweighs the risk of remaining in autarky for an extended period of time, and the resource cost of raising revenue through a more progressive income tax system becomes too high. In the third chapter, I examine how accumulation of household debt contributes to the probability of household crisis, which leads to an initial decrease in inequality but a persistent rise afterwards. Idiosyncratic increases in the income of impatient households increase their borrowing due to the rise in consumption of durable goods, but act as a pecuniary externality on other impatient households by driving up the interest rate. As a result the risk of an economy wide crisis rises. Inequality in income and wealth has significant implications for the dynamic decision making of households and governments, and widening inequality often leads to the accumulation of debt for households and governments alike. Knowing the mechanisms behind these relationships is important for the design of policies both for institutions that oversee the redistribution of wealth, as well as for institutions that oversee the financial markets of a country.

To explain and challenge the growing level of income inequality in organisations, this thesis collected and analysed corpora of texts about pay in UK universities from the press, remuneration committees and trade unions. Deploying the methodology of critical discourse analysis, it describes the contents of arguments as discourse types, interprets the reasoning behind arguments as genres of organisation theories and explains the common-sense assumptions ordering arguments as ideological values. Seeking answers, the analysis groups 30,038 data fragments into 74 first-order discourse types, 7 aggregate genres of organisation theories and 9 ideological values across three corpora of texts. Finding from the press suggested that actors drew upon the same set of organisation theories regardless of whether they were discursively challenging or defending the legitimacy of income inequality. This made it unfeasible to halt the level of income inequality because the underlying ideological values of competition, quantification and economic rationality only required the organisations to conform to unclear methodological processes. Thus, it is only possible to challenge the legitimacy of income inequality by proposing new members' resources, which objectified the exact contingencies for when it was appropriate. This insight lead to the creation of a new genre of organisation theory, which proposed paying employees relative to their comparative sacrifices. Findings from remuneration committees suggested that their members drew upon organisation theories to legitimise income inequality, which related to the ideological values of economic science, individualism and capitalistic hierarchy. However, how these ideological values constructed the legitimacy of their decisions lacked a substantiate rationality because the neoliberal model of capitalism was a source of legitimacy within itself. As such, the foundations of legitimacy were critiqued and a 2x2 matrix consisting of a process-outcome axis and pragmatic-moral axis was introduced. Applying this matrix to this corpus of text meant that none of these genres of organisation theories reasoned based on outcomes. Therefore, a new genre of organisation was proposed which focused on the income distribution shape for organisations. Findings from trade unions suggested that their representatives drew upon the same set of organisation theories to reinforce their own legitimacy in addition to interrogating the legitimacy of universities. These organisational theories were then related to the ideological values of performativity, exchange relations and freedom that hegemonically legitimised income inequality. Meanwhile, it was interpreted that trade unions relied on the neoliberal model of capitalism for their existence and were encouraging employees to participate in markets that only served the interests of employers. Therefore, a new members' resource was proposed, which conceptualised why sacrifice was a moral and pragmatic process for distributing pay to employees in comparison with other macro-economic frameworks. The findings from these three corpora of texts explained and challenged the social practices that were creating income inequality growth. Essentially, the ideological values of neoliberalism ordered discourse so that there was no reason to reduce the level of income inequality according to the dominate members' resources. Therefore, to change these social practices three new discourses were proposed which challenged the level of income inequality by illustrating the false consciousness embodied within their reasoning.

Using data from the American National Election Studies from 1968 to 2016, I explore the historical relationship between voter income, other demographic factors, and political polarization. I find that while having a higher income and a better education generally correlates with increased Republican political preference, though the relationship between higher income and increased Republican preference does not hold in lower income groups. Race is by far the most significant indicator of political preference, with whites and blacks on opposite ends of the political spectrum, and Hispanics as well as other races somewhere in between the two. In addition, I analyze the data from 20th century elections separately from 21st century elections and discover key differences in how each factor influences political preference.

This thesis provides an integrated overview on the historical and contemporary literature dedicated to the study of within-country income inequality in Latin America. The central hypothesis of this report is that there are underlying factors that drive the persistent levels of high within-country inequality experienced by Latin American countries. We study two countries, Brazil and Bolivia, through the process of reform and growth, and note the effects on the labor markets. Using all available statistics and the wealth of knowledge compiled since the early 1980s, this study identifies those trends, and the factors that cause them to reappear in numerous cases across South America. Focusing on periods of recession and post-stabilization growth in countries with rising or consistently unequal distributions of wealth, this report identifies viable trends in unemployment, linking them to external events and the social climate of Latin America. Employing case-study methodology (see Chapters 6 and 7) this thesis builds a framework with which to study national and regional inequality, then applies it to two cases: Brazil and Bolivia. This thesis’ main findings are that the political and economic reforms and restructurings during the crisis in the 1980s, and the post-1980 era of stabilization and growth, generally perpetuated or worsened the levels of income inequality for countries in Latin America. Further analysis concludes that unsustainable external debt, boom-and-bust cycles, more deeper-seated cultural factors cannot be overlooked. Low government spending on social and educational development is the unfortunate consequence of copious external debt and public interest payments in Latin America; instead of promoting long-term growth, Latin American regimes are instead forced to focus on high interest rates and protecting wildly volatile currencies. Ethnic composition, entrenched class-structure, and cultural norms each play significant roles in income disparity, the extent of which varies by case. The limitations of this research are firstly, that regression analysis is inconclusive; no strong correlation between growth and inequality can be observed, even within the highly unequal region of Latin America.. Further, tax data, which provides the basis for measurements of income inequality, varies from country to country, making cross-country statistical meta-analysis difficult. Lastly, data was not collectible until the early 1980s, and has missing observations, further complicating the task of statistical analysis. Thus, this study bases its findings on empirical evidence, data, and basic economic theory, in explaining the factors and causes of inequality.

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This paper investigates the impact of income inequality on grand total crime, larceny and violent crime by using the dynamic panel data of 20 cities and counties in Taiwan during 1998 to 2010. The empirical results show that income inequality has a significant positive impact on grand total crime, larceny and violent crime, but unemployment rate and the proportion of the population between 15 and 64 years old both have no significant influence on three kinds of crimes. Moreover the effect of the other explanatory variables is significant on at least one kind of crimes. The empirical results also support that the criminal expected utility theory, social anomic, disorganization, conflict and strain theories are helpful to explain the criminal behavior of Taiwan.

This research project examines variations in inequality in individual earned incomes across U.S. metropolitan areas. The main analysis includes thirteen explanatory variables from three major perspectives - the political economy perspective, the demand-side perspective and the labor force supply-side perspective. In addition, I applied path models to explain causalities between some independent variables and used the decomposition of the Theil index to show the between-group effects. The results indicate that most demand-side and supply-side factors significantly contribute to variances in metropolitan income inequalities, while the impact of political economic factors are very limited. The paper is organized in the following manner: Chapter I is the introduction; Chapter II reviews literature focusing on the level of earning inequality and its predictors; Chapter III describes data and measures of variables; Chapter IV introduces statistical methods (including OLS regression model, path analysis, and decomposition of the Theil index); Chapter V presents the results of OLS regression model and its explanations; Chapter VI explains path analysis and decomposition analysis and their results; and finally, Chapter VII discusses the current research project and its implications for future studies.

Billions of dollars in development aid are sent to developing countries every year. Weak institutions in recipient countries are the main impediments often discussed to prevent aid from reaching the intended targets. At the same time, they also hinder aid effectiveness in improving the lives of the people. This dissertation argues that the impact of aid on income distribution and human welfare in recipient countries differs by their institutional quality. Institutions encompass many different dimensions. This dissertation focuses on: corruption in government, quality of bureaucracy, and the rule of law. This study explores the impact in two essays. The first essay investigates the role of institutions in aid distribution. In particular, we examine the interplay between aid and institutions on income shares of different population groups (measured by income quintiles), and on the gap between the rich and the poor (measured by the Gini coefficient). The study uses Principal Component Analysis to construct an institutional index from the three components: corruption, bureaucratic quality, and the rule of law. Employing Two-Stage Least Squares (2SLS) methodology on a panel data of 85 countries from 1960 to 2004, this study finds that an increase in aid as a percentage of Gross Domestic Product (GDP) decreases the income shares of the poor (quintile 1 and quintile 2), but increases that of the rich (quintile 5), thereby widening the gap between the rich and the poor (Gini coefficient). Contrary to our main hypothesis, though, recipient countries’ institutions do not play any role in aid distribution. Similarly, the second essay also focuses on the importance of recipient institutions, but it assesses aid effectiveness in improving human welfare. The study considers five human development indicators: the Human Development Index (HDI), the health index, the infant mortality rate, the education index, and the average years of schooling. The study empirically tests the hypothesis by utilizing the same methodology as in the first essay, but on a panel of 80 countries from 1980 to 2004. The findings suggest that human welfare in recipient countries improves as aid increases. The improvement appears to be driven more by the health than the education sector. Furthermore, aid is more effective in countries with poorer institutional quality, which is contrary to the hypothesis. However, the results are not consistent when taking into account government’s pro-poor public expenditure.

The goal of this dissertation is to contribute to the new field of happiness economics which over the past several decades has substantially enhanced our understanding of cognitive judgment, human behavior, and the nature of happiness. Chapter 1 starts with a discussion of the subjective approach to measuring well-being and lays the foundation for the empirical work that follows in chapters 2 and 3. This approach has a strong appeal because ancient and modern cultures, and a long tradition in philosophy, view achieving happiness as the ultimate goal of human existence. It also recognizes that humans are the best judges of their own condition. In this first chapter, I discuss some common ambiguities related to the term happiness and outline some of the most common ways in which subjective well-being (SWB)data is measured. Next, I discuss how reliable subjective well-being data is and what are some of its strengths and weaknesses in the context of economic research. Some major insights from the growing literature on happiness economics are also provided and alternative approaches to measuring quality of life (and well-being) are suggested in the last section. One puzzle in the happiness economics literature has been that although real incomes have substantially improved over the past 40 years, happiness levels in the United States have stagnated. In chapter 2, I show that the rising level of income inequality in the United States since the 1970s can explain the stagnating happiness levels of Americans. First, using subjective well-being data from the General Social Survey, I estimate the concavity of the utility function within a neo-utilitarian framework of welfare analysis and calculate the Atkinson index of inequality. Although the estimates suggests that Americans have become increasingly more inequality-averse over time, the results suggest that the concavity of the utility function alone cannot explain the happiness patterns observed in the past several decades. Once I account for the negative external cost from economic inequality, however, the empirical analysis implies that economic growth has not been sufficient to compensate for the loss of subjective well-being associated with the rising level of inequality. This is consistent with the findings of several different surveys on subjective well-being. Finally, I evaluate the equality-efficiency trade-off in the US, and discover a small and positive trade-off. Chapter 3 considers another important policy topic in recent years -- the increasing cost of college tuition and the scrutinized value of higher education. Using subjective well-being data, I show that higher education has a large non-monetary (happiness) return that goes beyond the benefit of finding a better paid and more satisfying job. A person with a high school degree, for instance, would have to earn \$41,683 more per year to be equally as happy as somebody with a college degree that has a similar socio-economic background. This large non-monetary return is associated with better marriage, health, and parenting choices, and stronger social networks that translate into higher levels of interpersonal trust. The lion's share of this non-monetary return is earned in college while the majority of the returns from graduate school are associated with higher salary. This return varies among the different subgroups of the population. Women, for example, benefit twice as much from a college education as men, and this non-monetary return has slightly increased over time. This may explain, at least partially, the increase in demand for college education over the past 30 years, and the unprecedented rise in the price of college tuition. It is hypothesized that one way in which education works is to change the attitudes, values, and behavior of students. Higher education, for example, makes students more open-minded, tolerant, and risk-averse. Evidence in support of this hypothesis is found by estimating the coefficient of risk (and inequality) aversion. Finally, using subjective well-being data from the European Value Study, the average non-monetary return from higher education is also calculated for Europeans and compared to that in the United States. Although higher education is also found to have a positive effect on happiness in Europe, the non-monetary returns are much larger in the United States. Furthermore, contrary to the United States, the direct effect of education on happiness in Europe is substantial, while the indirect effect is negligible.