20 June 2013
, Markus Hahn
, and Roger Wilkins
point out one of the problems with using income tax-based data to measure the share of income held by top income groups. They show that comprehensive tax reform legislation in Australia in 1985 substantially altered the top income series there, especially for individuals who did not separate out taxable realized capital gains from their other taxable income. They conclude that tax reforms that expand the tax base to include income sources such as capital gains and dividends, which are disproportionately held by top income groups, can increase the reported share of income received by those groups.
19 June 2013
and Matthew Rhodes-Kropf
examine many years of data on the investment performance of individual venture capitalists and analyze the results over time and as the VCs move between firms. They find differences in skill and style, even among partners investing at the same VC firm at the same time. They estimate that a partner’s human capital -- education, experience, skill -- is much more important than the VC firm’s organizational capital in explaining the firm's investment performance.
18 June 2013
In an experiment in the Oklahoma City Public Schools, students were provided with free cellular phones and then received daily text messages about how getting an education is linked to a better future. Roland Fryer
finds that receiving this information via text message is reported to have influenced the students’ beliefs about the value of education and encouraged them to be more focused and to work harder in school. However, these cell phone messages did not lead to measurable changes in attendance, behavior, or test scores.
17 June 2013
In various studies, U.S. income has been measured as the market income of tax units based on tax return data from the IRS, the pre-tax but post-transfer cash income of households, and a combination of both of those data that also includes taxable realized capital gains. Philip Armour
, Richard Burkhauser
, and Jeff Larrimore
start their analysis with a comprehensive definition of income that incorporates accrued capital gains, and thus measures yearly changes in wealth, rather than focusing on the realized taxable capital gains that appear in IRS tax return data. Using this approach reduces the previously observed growth in income inequality and, in particular, the rise in top-end income since 1989.
14 June 2013
Given a sample of randomized interest rates offered across 80 regions by Mexico’s largest microlender, Compartamos, Dean Karlan
and Jonathan Zinman
find that a 10 percent increase in the cost of borrowing leads to a 19 percent decline in the demand for loans over the long run. However, they find no evidence of crowd-out of one lender over another. They confirm that lower borrowing prices bring in substantial numbers of new borrowers who do not differ with respect to income or education from existing borrowers. But the lower interest rates do not increase profits, because the costs of servicing additional clients offset any increase in revenues.