Causes and Consequences of Income Inequality


Book Description

This paper analyzes the extent of income inequality from a global perspective, its drivers, and what to do about it. The drivers of inequality vary widely amongst countries, with some common drivers being the skill premium associated with technical change and globalization, weakening protection for labor, and lack of financial inclusion in developing countries. We find that increasing the income share of the poor and the middle class actually increases growth while a rising income share of the top 20 percent results in lower growth—that is, when the rich get richer, benefits do not trickle down. This suggests that policies need to be country specific but should focus on raising the income share of the poor, and ensuring there is no hollowing out of the middle class. To tackle inequality, financial inclusion is imperative in emerging and developing countries while in advanced economies, policies should focus on raising human capital and skills and making tax systems more progressive.




Poverty and Inequality


Book Description

This is a collection of essays from leading public intellectuals that identifies major conceptual problems in the analysis of poverty and inequality and advances strategies for reducing poverty and inequality that are consistent with these new conceptual and methodological approaches.




Social Mobility in Developing Countries


Book Description

Social mobility is the hope of economic development and the mantra of a good society. There are disagreements about what constitutes social mobility, but there is broad agreement that people should have roughly equal chances of success regardless of their economic status at birth. Concerns about rising inequality have engendered a renewed interest in social mobility—especially in the developing world. However, efforts to construct the databases and meet the standards required for conventional analyses of social mobility are at a preliminary stage and need to be complemented by innovative, conceptual, and methodological advances. If forms of mobility have slowed in the West, then we might be entering an age of rigid stratification with defined boundaries between the always-haves and the never-haves-which does not augur well for social stability. Social mobility research is ongoing, with substantive findings in different disciplines—typically with researchers in isolation from each other. A key contribution of this book is the pulling together of the emerging streams of knowledge. Generating policy-relevant knowledge is a principal concern. Three basic questions frame the study of diverse aspects of social mobility in the book. How to assess the extent of social mobility in a given development context when the datasets by conventional measurement techniques are unavailable? How to identify drivers and inhibitors of social mobility in particular developing country contexts? How to acquire the knowledge required to design interventions to raise social mobility, either by increasing upward mobility or by lowering downward mobility?




Toxic Inequality


Book Description

From a leading authority on race and public policy, a deeply researched account of how families rise and fall today Since the Great Recession, most Americans' standard of living has stagnated or declined. Economic inequality is at historic highs. But inequality's impact differs by race; African Americans' net wealth is just a tenth that of white Americans, and over recent decades, white families have accumulated wealth at three times the rate of black families. In our increasingly diverse nation, sociologist Thomas M. Shapiro argues, wealth disparities must be understood in tandem with racial inequities -- a dangerous combination he terms "toxic inequality." In Toxic Inequality, Shapiro reveals how these forces combine to trap families in place. Following nearly two hundred families of different races and income levels over a period of twelve years, Shapiro's research vividly documents the recession's toll on parents and children, the ways families use assets to manage crises and create opportunities, and the real reasons some families build wealth while others struggle in poverty. The structure of our neighborhoods, workplaces, and tax code-much more than individual choices-push some forward and hold others back. A lack of assets, far more common in families of color, can often ruin parents' careful plans for themselves and their children. Toxic inequality may seem inexorable, but it is not inevitable. America's growing wealth gap and its yawning racial divide have been forged by history and preserved by policy, and only bold, race-conscious reforms can move us toward a more just society. "Everyone concerned about the toxic effects of inequality must read this book." -- Robert B. Reich "This is one of the most thought-provoking books I have read on economic inequality in the US." -- William Julius Wilson




Meritocracy and Economic Inequality


Book Description

Most Americans strongly favor equality of opportunity if not outcome, but many are weary of poverty's seeming immunity to public policy. This helps to explain the recent attention paid to cultural and genetic explanations of persistent poverty, including claims that economic inequality is a function of intellectual ability, as well as more subtle depictions of the United States as a meritocracy where barriers to achievement are personal--either voluntary or inherited--rather than systemic. This volume of original essays by luminaries in the economic, social, and biological sciences, however, confirms mounting evidence that the connection between intelligence and inequality is surprisingly weak and demonstrates that targeted educational and economic reforms can reduce the income gap and improve the country's aggregate productivity and economic well-being. It also offers a novel agenda of equal access to valuable associations. Amartya Sen, John Roemer, Robert M. Hauser, Glenn Loury, Orley Ashenfelter, and others sift and analyze the latest arguments and quantitative findings on equality in order to explain how merit is and should be defined, how economic rewards are distributed, and how patterns of economic success persist across generations. Moving well beyond exploration, they draw specific conclusions that are bold yet empirically grounded, finding that schooling improves occupational success in ways unrelated to cognitive ability, that IQ is not a strong independent predictor of economic success, and that people's associations--their neighborhoods, working groups, and other social ties--significantly explain many of the poverty traps we observe. The optimistic message of this beautifully edited book is that important violations of equality of opportunity do exist but can be attenuated by policies that will serve the general economy. Policy makers will read with interest concrete suggestions for crafting economically beneficial anti-discrimination measures, enhancing educational and associational opportunity, and centering economic reforms in community-based institutions. Here is an example of some of our most brilliant social thinkers using the most advanced techniques that their disciplines have to offer to tackle an issue of great social importance.




After Piketty


Book Description

A Foreign Affairs Best Book of the Year “An intellectual excursion of a kind rarely offered by modern economics.” —Foreign Affairs Thomas Piketty’s Capital in the Twenty-First Century is the most widely discussed work of economics in recent years. But are its analyses of inequality and economic growth on target? Where should researchers go from there in exploring the ideas Piketty pushed to the forefront of global conversation? A cast of leading economists and other social scientists—including Emmanuel Saez, Branko Milanovic, Laura Tyson, and Michael Spence—tackle these questions in dialogue with Piketty. “A fantastic introduction to Piketty’s main argument in Capital, and to some of the main criticisms, including doubt that his key equation...showing that returns on capital grow faster than the economy—will hold true in the long run.” —Nature “Piketty’s work...laid bare just how ill-equipped our existing frameworks are for understanding, predicting, and changing inequality. This extraordinary collection shows that our most nimble social scientists are responding to the challenge.” —Justin Wolfers, University of Michigan




The Privileged Poor


Book Description

An NPR Favorite Book of the Year “Breaks new ground on social and educational questions of great import.” —Washington Post “An essential work, humane and candid, that challenges and expands our understanding of the lives of contemporary college students.” —Paul Tough, author of Helping Children Succeed “Eye-opening...Brings home the pain and reality of on-campus poverty and puts the blame squarely on elite institutions.” —Washington Post “Jack’s investigation redirects attention from the matter of access to the matter of inclusion...His book challenges universities to support the diversity they indulge in advertising.” —New Yorker The Ivy League looks different than it used to. College presidents and deans of admission have opened their doors—and their coffers—to support a more diverse student body. But is it enough just to admit these students? In this bracing exposé, Anthony Jack shows that many students’ struggles continue long after they’ve settled in their dorms. Admission, they quickly learn, is not the same as acceptance. This powerfully argued book documents how university policies and campus culture can exacerbate preexisting inequalities and reveals why some students are harder hit than others.




Getting Ahead


Book Description

Adapted in part from the "Opportunity in America" series of policy briefs, this volume focuses on social and economic mobility in the United States. Class or family background has a strong effect on individual success, the authors find. They examine the possible reasons for this relationship; how it has changed over the past century; and the role of the economy, the welfare system, and education in opening up opportunities for the less fortunate.




Globalization and Poverty


Book Description

Over the past two decades, the percentage of the world’s population living on less than a dollar a day has been cut in half. How much of that improvement is because of—or in spite of—globalization? While anti-globalization activists mount loud critiques and the media report breathlessly on globalization’s perils and promises, economists have largely remained silent, in part because of an entrenched institutional divide between those who study poverty and those who study trade and finance. Globalization and Poverty bridges that gap, bringing together experts on both international trade and poverty to provide a detailed view of the effects of globalization on the poor in developing nations, answering such questions as: Do lower import tariffs improve the lives of the poor? Has increased financial integration led to more or less poverty? How have the poor fared during various currency crises? Does food aid hurt or help the poor? Poverty, the contributors show here, has been used as a popular and convenient catchphrase by parties on both sides of the globalization debate to further their respective arguments. Globalization and Poverty provides the more nuanced understanding necessary to move that debate beyond the slogans.




The Return of Inequality


Book Description

A pioneering book that takes us beyond economic debate to show how inequality is returning us to a past dominated by empires, dynastic elites, and ethnic divisions. The economic facts of inequality are clear. The rich have been pulling away from the rest of us for years, and the super-rich have been pulling away from the rich. More and more assets are concentrated in fewer and fewer hands. Mainstream economists say we need not worry; what matters is growth, not distribution. In The Return of Inequality, acclaimed sociologist Mike Savage pushes back, explaining inequality’s profound deleterious effects on the shape of societies. Savage shows how economic inequality aggravates cultural, social, and political conflicts, challenging the coherence of liberal democratic nation-states. Put simply, severe inequality returns us to the past. By fracturing social bonds and harnessing the democratic process to the strategies of a resurgent aristocracy of the wealthy, inequality revives political conditions we thought we had moved beyond: empires and dynastic elites, explosive ethnic division, and metropolitan dominance that consigns all but a few cities to irrelevance. Inequality, in short, threatens to return us to the very history we have been trying to escape since the Age of Revolution. Westerners have been slow to appreciate that inequality undermines the very foundations of liberal democracy: faith in progress and trust in the political community’s concern for all its members. Savage guides us through the ideas of leading theorists of inequality, including Marx, Bourdieu, and Piketty, revealing how inequality reimposes the burdens of the past. At once analytically rigorous and passionately argued, The Return of Inequality is a vital addition to one of our most important public debates.