T.W. Schultz (1975) proposed that returns to human capital were highest in economic environments where technology, price or production shocks were common and managerial skills to adapt resource allocations to those shocks were most in need. We hypothesize that variation in returns to human...

Aid is good for the poor. This paper uses detailed aid data spanning 60 developing countries over the past two decades to show that social aid significantly and directly benefits the poorest in society, while economic aid increases the income of the poor through growth. This new and unequivocal...

This paper examines support for reducing inequality and for income redistribution to specific groups in Europe and Central Asia. The paper uses the Life in Transition Survey to analyze cross-country differences in redistributive preferences and the determinants of individual-level differences in...

This paper presents a new methodology to measure inequality that optimally combines household survey information and tax records to construct a complete income distribution. Combining the two data sources is necessary because, on the one hand, household surveys do not accurately represent the...

Price and income elasticities estimated from a country's export demand function are used both to predict and to prescribe effective export strategies. But the focus on elasticities has led to the neglect of an important empirical regularity: a strong persistencein the growth rate of a country's...

The author provides theoretical and empirical evidence of a negative association between income inequality and real exchange rates. First, he builds a theoretical model showing the transmission mechanism from inequality to real exchange rates. Second, using cross-country data, he demonstrates...

The authors provide an empirical evaluation of the impact of infrastructure development on economic growth and income distribution using a large panel data set encompassing over 100 countries and spanning the years 1960-2000. The empirical strategy involves the estimation of simple equations for...

The median voter hypothesis is important to endogenous growth theories because it provides the political mechanisms through which voters in more unequal countries re-distribute a greater proportion of income and thus (it is argued), by blunting incentives, reduce the country's growth rate. But...

The authors compare three approaches to linking representative-household macro models with micro household income data in terms of their implications for measuring the poverty and distributional effects of policy shocks. These approaches are a simple micro-accounting method, an extension of that...

Policy recommendations to reduce the growth of public spending are haunted by the inevitability of two factors. First Wagner's law, the hypothesis that with economic development an increasing share of GDP is devoted to public spending, and secondly, Baumol's effect, that as economies develop,...