Recent research consistently reports that persistent poverty has more detrimental effects on IQ, school achievement, and socioemotional functioning than transitory poverty, with children experiencing both types of poverty generally doing less well than never-poor children. Higher rates of perinatal complications, reduced access to resources that buffer the negative effects of perinatal complications, increased exposure to lead, and less home-based cognitive stimulation partly account for diminished cognitive functioning in poor children. These factors, along with lower teacher expectancies and poorer academic-readiness skills, also appear to contribute to lower levels of school achievement among poor children. The link between socioeconomic disadvantage and children's socioemotional functioning appears to be mediated partly by harsh, inconsistent parenting and elevated exposure to acute and chronic stressors. The implications of research findings for practice and policy are considered.

Socioeconomic disadvantage and child development

This paper presents new homogeneous series on top shares of income and wages from 1913 to 1998 in the United States using individual tax returns data. Top income and wages shares display a U-shaped pattern over the century. Our series suggest that the large shocks that capital owners experienced during the Great Depression and World War II have had a permanent effect on top capital incomes. We argue that steep progressive income and estate taxation may have prevented large fortunes from fully recovering from these shocks. Top wage shares were flat before World War II, dropped precipitously during the war, and did not start to recover before the late 1960s but are now higher than before World War II. As a result, the working rich have replaced the rentiers at the top of the income distribution.

/pdf/income-inequality-in-the-united-states-1913-1998-4ul5oyqb6u.pdf

Income Inequality in the United States, 1913–1998

vogue. Both in the industrialized and in the developing world, nations are turning to devolution to improve the per- formance of their public sectors. In the United States, the central government has turned back significant portions of federal authority to the states for a wide range of major programs, including wel- fare, Medicaid, legal services, housing, and job training. The hope is that state and local governments, being closer to the people, will be more responsive to the particular preferences of their con- stituencies and will be able to find new and better ways to provide these ser- vices. In the United Kingdom, both Scot- land and Wales have opted under the Blair government for their own regional parliaments. And in Italy the movement toward decentralization has gone so far as to encompass a serious proposal for the separation of the nation into two in- dependent countries. In the developing world, we likewise see widespread inter- est in fiscal decentralization with the ob- jective of breaking the grip of central planning that, in the view of many, has failed to bring these nations onto a path of self-sustaining growth. But the proper goal of restructuring the public sector cannot simply be de- centralization. The public sector in nearly all countries consists of several different levels. The basic issue is one of aligning responsibilities and fiscal in- struments with the proper levels of gov- ernment. As Alexis de Toqueville ob- served more than a centuty ago, "The federal system was created with the in- tention of combining the different ad- vantages which result from the magni- tude and the littleness of nations" (1980, v. I, p. 163). But to realize these "dif- ferent advantages," we need to under- stand which functions and instruments are best centralized and which are best placed in the sphere of decentralized levels of government. This is the sub- ject matter of fiscal federalism. As a subfield of public finance, fiscal feder- alism addresses the vertical structure of the public sector. It explores, both in normative and positive terms, the roles of the different levels of government and the ways in which they relate to one another through such instruments as intergovernmental grants.2

/pdf/an-essay-on-fiscal-federalism-10yjc9cqdb.pdf

An Essay on Fiscal Federalism

What We Know and Don't Know About Corporate Social Responsibility: A Review and Research Agenda

We consider 3 questions regarding the effects of economic deprivation on child development. First, how are developmental outcomes in childhood affected by poverty and such poverty correlates as single parenthood, ethnicity, and maternal education? Second, what are the developmental consequences of the duration and timing of family economic deprivation? And, third, what is the comparative influence of economic deprivation at the family and neighborhood level? We investigate these issues with longitudinal data from the Infant Health and Development Program. We find that family income and poverty status are powerful correlates of the cognitive development and behavior of children, even after accounting for other differences--in particular family structure and maternal schooling--between low- and high-income families. While the duration of poverty matters, its timing in early childhood does not. Age-5 IQs are found to be higher in neighborhoods with greater concentrations of affluent neighbors, while the prevalence of low-income neighbors appears to increase the incidence of externalizing behavior problems.

/pdf/economic-deprivation-and-early-childhood-development-784ioay3nq.pdf

Economic Deprivation and Early Childhood Development

http://www.sba.muohio.edu/davisgk/growth%20readings/17.pdf

Tax structure and economic growth

In a Federal system of government, each unit of government decides independently how much of each type of public good to provide, and what types of taxes, and which tax rates, to use in funding the public goods. In this paper we explore what types of problems can arise from this decentralized form of decision-making. In particular, we describe systematically the types of externalities that one unit of government can create for nonresidents, through both its public goods decisions and its taxation decisions. The paper also explores briefly what the central government might do to lessen the costs of decentralized decision-making.

/pdf/an-optimal-taxation-approach-to-fiscal-federalism-2fuzy0rc2o.pdf

An Optimal Taxation Approach to Fiscal Federalism

The evidence on international capital immobility is extensive, including the lack of international portfolio diversification, real interest differentials across countries, and the high correlation between domestic savings and investment. The authors develop a model with asymmetric information between countries that helps rationalize all the above observations and then examine the implications of this model for optimal domestic tax policy. Without asymmetric information, past work showed that small open economies should not impose corporate income taxes. With asymmetric information, the optimal policy instead involves government subsidies to capital imports. Some omitted factors that argue against subsidizing capital imports are explored briefly. Copyright 1996 by American Economic Association.

/pdf/why-is-capital-so-immobile-internationally-possible-wmm3jwfdbr.pdf

Why is Capital so Immobile Internationally?: Possible Explanations and Implications for Capital Income Taxation

https://www.nber.org/system/files/working_papers/w11267/w11267.pdf

Tax structure in developing countries: many puzzles and a possible explanation

Two well-noted phenomena of recent decades are the increasing concentration of personal income and the declining rate of corporate profitability This paper investigates to what extent these two trends have a common explanation extent these two trends have a common explanation-shifting of income to the personal tax base from the corporate tax base caused by the generally declining difference between personal tax rates and corporation income tax rates This paper presents evidence that a substantial amount of income shifting has in fact occured since 1965, based on time-series regression analyses that reveal that an increase in corporate tax rates relative to personal rates resulted in an increase in reported personal income and a drop in reported corporate income, even after controlling for corproate use of debt finance and for the amount of corporate assets We focus on one mechanism for shifting--changing the form of compensation for executives and other workers, such as between wage compensation and greater use of stock options The potential importance of income shifting requires a reinterpretation of both the efficiency and distributional consequences of of changes in the tax structure

/pdf/are-real-responses-to-taxes-simply-income-shifting-between-ykip8h9gu1.pdf

Roger H. Gordon

Papers

Tax structure and economic growth

An Optimal Taxation Approach to Fiscal Federalism

Why is Capital so Immobile Internationally?: Possible Explanations and Implications for Capital Income Taxation

Tax structure in developing countries: many puzzles and a possible explanation

Are "Real" Responses to Taxes Simply Income Shifting Between Corporate and Personal Tax Bases?