CEBI Research

• 2018.08.13

  Wealth Inequality in Chilhood and Beyond: New Danish Evidence

  Even in famously egalitarian Denmark, there are people who enter adulthood with substantial wealth amassed from transfers throughout childhood. What’s more, this childhood wealth is a very strong predictor of wealth in adulthood nearly three decades later. These are among the findings of research by Simon Halphen Boserup, Wojciech Kopczuk and Claus Thustrup Kreiner, published in the July 2018 Economic Journal. Their study also shows that there are important differences in Denmark even among families with the same level of wealth. Children from families that promote wealth accumulation early on are most likely to end up at the top of the wealth distribution in adulthood. … »

• 2018.06.27

  Top Incomes in Scandinavia: Recent Developements and the Role of Capital Income

  Over the past decades, we have witnessed a substantial increase in the focus on income inequality both among academics and in the public in general. In particular, the focus has been on the so-called top one percent income share, which measured the share of total income in the economy that goes to the one percent of the population with the highest incomes. For people, who have followed the debate on inequality in Scandinavia, this particular focus might appear narrow, and it is quite natural to ask, why should we focus on top income shares, when we have other standard inequality measures such as the Gini coefficient that captures changes in the entire income distribution? … »

• 2018.05.09

  Stimulus Policy: Why Not Let People Spend Their Own Money?

  How is it possible to stimulate the economy when traditional monetary and fiscal policy instruments are exhausted? Using an unprecedented policy tool the Danish government allowed people in 2009 to prematurely withdraw pension funds that were previously collected into individual accounts through a government mandate, thereby letting people spend their own money while leaving the government budget unaffected. Such a policy will have significant effects on spending if people are liquidity constrained. Evidence from a new study by Kreiner, Lassen and Leth-Petersen confirms this conjecture. … »

• 2018.04.25

  3 Personality Traits Affect What You Earn - but Only After Age 40

  We often hear about the power of personality, and how some traits are beneficial for our careers while others are more harmful. For example, we know that being more conscientious (hard-working, driven, reliable, and organized) is associated with better job performance, and that being nice (more agreeable) does not pay off in wages. But it is less clear when these personality traits matter most for our careers (are they more important earlier on, or in the middle?) and who benefits most from them. … »

• 2018.02.28

  Tax Evasion and Inequality

  Who evades taxes in developed economies? The question is fascinating in its own right and matters a great deal for the study of inequality because scholars typically rely on tax records for distributional information about income and wealth. If tax evasion is equally prevalent among the rich and the poor, it will not affect measured inequality. If the rich dodge taxes more than others, tax records will underestimate inequality. … »

• 2018.01.31

  Children and Gender Inequality. Evidence from Denmark

  Despite considerable gender convergence over time, substantial gender inequality persists in all countries. Using Danish administrative data from 1980-2013 and an event study approach, we show that most of the remaining gender inequality in earnings is due to children. The arrival of children creates a gender gap in earnings of around 20 percent in the long run, driven in roughly equal proportions by labor force participation, hours of work, and wage rates. Based on these estimates, we show that the fraction of gender inequality caused by child penalties has increased dramatically over time, from about 40 percent in 1980 to about 80 percent in 2013. … »

• 2017.11.06

  How does a financial crisis spread to the real economy?

  Was the most recent financial crisis transmitted to the household sector through a reduction in the credit supply? The tightening of credit by banks in financial distress is one among several possible explanations why households slashed consumption in the aftermath of the financial crisis. … »

• 2017.10.27

  Family labor supply responses to health shocks

  The focus of this study is the extreme shock of the death of a spouse. We show that widows, who tend to be secondary earners and face large income losses when their husbands die, increase their labor force participation by more than 11%. In contrast, widowers, who tend to be primary earners and need to financially support one fewer person when losing their wives, decrease their labor supply. Importantly, female and male survivors exhibit similar sensitivity to comparable changes in household income. … »

• 2017.10.13

  Do bequests increase wealth inequality?

  Our answer to this question is both “yes” and “no”: To understand how bequests might affect different measures of inequality, let us consider an example where everyone receives a bequest proportional to their wealth. In that case, the variance of the wealth distribution increases, while wealth shares remain constant. Thus, absolute inequality increases and relative inequality is unchanged. … »