On the characterisation and measurement of the welfare effects of income mobility from an ex-ante perspective

The paper employs a rank-dependent formulation of the social welfare function with time-separable utilities to evaluate the economic consequences of income mobility from an ex-ante perspective. The resultant class of measures can be decomposed not only in terms of structural and exchange mobility but also in terms of vertical and horizontal mobility, thereby encompassing two of the main approaches in the literature. We illustrate our measurement framework by comparing mobility in the USA and Germany using data from the Cross-National Equivalent File 1980-2005. We find that the pattern of income mobility in the USA was both less pro-poor and more horizontally inequitable than in Germany, but that the latter did not translate into higher levels of exchange mobility given higher levels of absolute inequality and the vertical stance of the growth process.

Income stratification and the measurement of interdistributional inequality between multiple groups

This paper proposes a new class of stratification indices that measure interdistributional inequality between multiple groups. The class is based on a conceptualisation of stratification as a process that results in a hierarchical ordering of groups and therefore seeks to capture not only the extent to which groups form well-defined strata in the income distribution but also the scale of the resultant differences in income standards between them, where these two factors play the same role as identification and alienation respectively in the measurement of polarisation. The properties of the class as a whole are investigated as well as those of selected members of it: zeroth and first power indices may be interpreted as measuring the overall incidence and depth of stratification respectively, while higher power indices members are directly sensitive to the severity of stratification between groups. An illustrative application provides an empirical analysis of global income stratification by regions in 1993.

Tracking cost savings from competitive tendering in the short and long run

A major initiative of the Thatcher and Major Conservative administrations was that public sector ancillary and professional services provided by incumbent direct service organisations [DSOs] be put out to tender. Analyses of this initiative, in the UK and elsewhere, found costs were often reduced in the short run. However, few if any studies went beyond the first round of tendering. We analyze data collected over successive rounds of tendering for cleaning and catering services of Scottish hospitals in order to assess the long term consequences of this initiative. The experience of the two services was very different. Cost savings for cleaning services tended to increase with each additional round of tendering and became increasingly stable. In accordance with previous results in the literature, DSOs produced smaller cost reductions than private contractors: probably an inevitable consequence of the tendering process at the time. Cost savings from DSOs tended to disappear during the first round of tendering, but they appear to have been more permanent in successive rounds. Cost savings for catering, on the other hand, tended to be much smaller, and these were not sustained.