This paper studies the optimal behavior of a democratic government in its use of fiscal policies to redistribute income. I present a stochastic dynamic general equilibrium model with heterogeneous agents to analyze (1) the differences between the effects on the optimal tax rate of permanent and...

Labor force outcomes after an involuntary job loss tend to differ systematically between men and women, with women experiencing a lower probability of finding another job, a longer average duration of nonemployment, and larger losses in hours given reemployment. This study examines the role of...

This paper examines the determination of the rate of growth in an economy in which two political parties, each representing a different social class, negotiate the magnitude and allocation of taxes. Taxes may increase growth if they finance public services but reduce growth when used to...

The rise in income inequality in developing countries after trade liberalization has been a puzzle for trade theory, which predicts the opposite effect. The authors present a model with imported intermediate goods in which the relative wages of skilled labor can rise due to higher imports of...

In recent years, Bolivia has experienced a series of economic and political transformations that have directly affected the labor markets, particularly the salaried urban sector. Real wages have shown strong increases across the distribution, while also presenting a decrease in inequality. Using...

Recentered influence functions (RIFs) are statistical tools popularized by Firpo, Fortin, and Lemieux (2009) for analyzing unconditional partial effects on quantiles in a regression analysis framework (unconditional quantile regressions). The flexibility and simplicity of these tools has opened...

Ajit Zacharias, Thomas Masterson, and Fernando Rios-Avila update the Levy Institute Measure of Economic Well-Being (LIMEW) for US households for the period 2000-13. The LIMEW - which comprises base income, income from wealth, net government expenditures, and the value of household production -...

The Great Recession had a tremendous impact on low-income Americans, in particular black and Latino Americans. The losses in terms of employment and earnings are matched only by the losses in terms of real wealth. In many ways, however, these losses are merely a continuation of trends that have...