The economic theory of regulation and inequality

被引:0
作者
Dustin Chambers
Colin O’Reilly
机构
[1] Salisbury University,Department of Economics and Finance
[2] Creighton University,Institute for Economic Inquiry, Department of Economics and Finance
来源
Public Choice | 2022年 / 193卷
关键词
Income inequality; Regulation; Regressive effects; Entrepreneurship; Dynamism; Barrier to entry; D31; J38; K20;
D O I
暂无
中图分类号
学科分类号
摘要
Stigler (Bell J Econ Manag Sci 2:3–21, 1971) proposed that regulation benefits politically influential interest groups rather than advancing the public interest. The Stiglarian perspective predicts that regulation raises barriers to entry that limit competition and creates economic rents for incumbents. Apart from the direct economic harm of such policies, regulation generates additional consequences. One hypothesized consequence ushered by anticompetitive rules is the widening of income disparities. This article therefore surveys the growing empirical literature that studies whether regulation ultimately exacerbates income inequality. Beginning with the literature on entry and start-up regulation, we find that these rules, as predicted by Stigler, limit entry and dampen entrepreneurship. Moreover, recent studies also indicate that these regulations are associated with higher income inequality. We also review the literature on occupational licensure. Consistent with Stigler (Bell J Econ Manag Sci 2:3–21, 1971), the literature chronicles widespread use of barriers to entry in labor markets, which have documented regressive effects on the distribution of income. Finally, we review research on financial regulation, in which studies have shown that some financial regulations are associated with less entrepreneurship and higher income inequality. Taken together, the recent empirical literature buttresses and extends the implications in Stigler (Bell J Econ Manag Sci 2:3–21, 1971). Regulation tends to benefit incumbents by limiting entry of economic participants, be it firms or workers, and exacerbates income inequality.
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页码:63 / 78
页数:15
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