Tag Archives: inequality

How racially segregated are America’s schools?

David Kirp’s opinion piece in the New York Times argues that (1) efforts to racially de-segregate America’s schools have been abandoned, perhaps since 1974, and (2) this is bad for education policy outcomes, because integrated schools have been associated with better outcomes for black students.

But I’m more interested in the premise–is it the case that America’s public schools are still racially segregated? Are they more or less segregated than in 1974? 1954?

As they sometimes do, the Times followed up on the post with a “Room for Debate” feature. The discussion is, as far as I can tell, is about Kirp’s claim (2) above, but the introductory paragraph has links to a couple articles about segregation in two cities, New York and Charlotte, N.C.

“Dissenting” views on income inequality

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James Q. Wilson, “Angry about inequality? Don’t blame the rich,” the Washington Post–argues that income inequality is increasing, but that it’s not something to worry about, partly due to social mobility.

Tax Foundation, “Income Inequality Is Lower Now Than It Was Under Clinton“, via Paul Caron–arguing that inequality has been decreasing.

Does the Federal Reserve collect data on charitable giving?

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I was reading this New York Times article “Among the Wealthiest 1 Percent, Many Variations” the other day, and came across this sentence:

The top 1 percent of earners in a given year receives just under a fifth of the country’s pretax income, about double their share 30 years ago. They pay just over a fourth of all federal taxes, according to the Tax Policy Center. In 2007, they accounted for about 30 percent of philanthropic giving, according to Federal Reserve data. They received 22 percent of their income from capital gains, compared with 2 percent for everybody else.

As far as I can tell, the Fed does not collect data on philanthropic giving. The Times unfortunately provides no specific source and does not give a link.

Does anyone know what data set the “30 percent” figure is from?

Rich folk in Congress, political scientists in the news

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Two big articles on economic disparities between members of Congress and their constituents appeared on December 27th, one in the New York Times and one in the Washington Post. (Not sure if there is anything behind the coincidence).

The Times article is more about how members of Congress (MC’s) have been relatively sheltered from the economic downturn. It includes a brief discussion of whether MC’s use their insider connections to benefit in the stock market, including a reference to a paper by Jens Hainmueller and Andrew Eggers:

While the housing collapse nationwide has hurt many Americans, lawmakers still find the real estate sector the most popular place to park their money, statistics from the Center of Responsive Politics show, and members of Congress continue to profit from their investments there. Perhaps the most tantalizing but hotly debated factor in the rising wealth of Congress is lawmakers’ performance in the stock markets — and the question of whether they are using their access to confidential information to enrich themselves.

In a study completed this year, Mr. Ziobrowski at Georgia State and his colleagues found that House members saw the stocks they owned outperform the market by 6 percent a year. Their research from several years ago found that senators did even better, at 12 percent above average. The researchers attributed the performance to a “significant information advantage” that lawmakers hold by virtue of their positions and the fact they are not bound by insider-trading law.

However, a separate study last year by researchers at Yale and the Massachusetts Institute of Technology found that the portfolios of lawmakers actually performed somewhat worse than average investors. It found that members did do better when investing in companies in their home districts or associated with campaign donors — suggesting that they benefited from their political connections — but still not as well as the average investor.

The Post article is more about the absolute level of wealth of MC’s versus their constituents, and includes a quote from Duke political scientist Nicholas Carnes:

A representative’s occupation before being elected influences how liberal or conservative he or she is in voting, according to an analysis of more than 50 years of congressional votes by Duke University professor Nick Carnes.

In order from most conservative to most liberal: farm owners; businesspeople such as bankers or insurance executives; private-sector professionals such as doctors, engineers and architects; lawyers; service-based professionals such as teachers and social workers; politicians; and blue-collar workers, according to the analysis, which is being published in Legislative Studies Quarterly.

Carnes said that while party affiliation is the strongest determinant of voting records, “the differences between legislators of different occupational backgrounds are pretty striking. People tend to bring the worldview that comes with their occupation with them into office,” he said.

The Post article has almost 5,000 comments; the Times article about 250, as of this writing.

Has the Occupy movement made inequality more salient? (continued)

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Apropos of my earlier post, Larry Bartels has written a blog post on Bill Moyers web site (linked to on the Monkey Cage) asking whether the Occupy movement has made inequality salient in public opinion. The short answer: nope. Here’s the key table, but it’s definitely worth reading the whole post.

Of course, maybe people don’t connect their own concerns about inequality with specific policy programs. They might care about inequality more because of OWS, but not see the link to the Bush tax cuts.

In fact, this is what Bartels himself argued in his paper Homer Gets a Tax Cut, right?

Update: It turns out Pew found a 19 point jump in the percent of respondents who see a conflict between rich and poor, between 2009 and 2011. See here and here. Main graph reproduced below.

Unfortunately there doesn’t seem to be many questions like this asked over time, so it’s not clear how much this can be credited to the Occupy protests.

Why is there more inequality?

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Lawrence Summers in the Washington Post:

Why has the top 1 percent done so well relative to the rest? The answer lies substantially in changes in technology and in globalization. When George Eastman revolutionized photography, he did very well, and because he needed a large number of Americans to carry out his vision, the city of Rochester, N.Y., had a thriving middle class for two generations. When Steve Jobs revolutionized personal computing, he and Apple shareholders did very well, but those shareholders are all over the world, and a much smaller benefit flowed to middle-class American workers, both because production was outsourced and because the production of computers and software was not terribly labor-intensive.

For a contrasting view, see this paper (and book) by political scientists Jacob Hacker and Paul Pierson:

The dramatic rise in inequality in the United States over the past generation has occasioned considerable attention from economists, but strikingly little from students of American politics. This has started to change: in recent years, a small but growing body of political science research on rising inequality has challenged standard economic accounts that emphasize apolitical processes of economic change. For all the sophistication of this new scholarship, however, it too fails to provide a compelling account of the political sources and effects of rising inequality. In particular, these studies share with dominant economic accounts three weaknesses: (1) they downplay the distinctive feature of American inequality —namely, the extreme concentration of income gains at the top of the economic ladder; (2) they miss the profound role of government policy in creating this “winner-take-all” pattern; and (3) they give little attention or weight to the dramatic long-term transformation of the organizational landscape of American politics that lies behind these changes in policy. These weaknesses are interrelated, stemming ultimately from a conception of politics that emphasizes the sway (or lack thereof) of the “median voter” in electoral politics, rather than the influence of organized interests in the process of policy making. A perspective centered on organizational and policy change —one that identifies the major policy shifts that have bolstered the economic standing of those at the top and then links those shifts to concrete organizational efforts by resourceful private interests —fares much better at explaining why the American political economy has become distinctively winner-take-all.

As per usual, explanations for why a problem happened color the proposed solutions. But actually, both Summers and H&P are pretty vague. Summers for example says we need “pro-fairness, pro-growth tax reforms.” Hacker and Pierson talk about…well, I’m not sure really.

Has Occupy Wall Street made inequality salient?

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The Washington Post reports:

More than six in 10 Americans see a widening gap between the wealthy and the less well-off in this country, and about as many want the federal government to try to shrink the divide, according to a new Washington Post-ABC News poll.

Democrats and independents largely support government policies to reduce the wealth gap, while most Republicans oppose such action. The issue cuts even more sharply along a new political fault line, with tea party supporters and those backing the fledgling Occupy Wall Street movement on opposite sides of the question.

I’ve heard lots of chatter lately about how the Occupy movement has succeeded in getting inequality on the policy agenda. Polls like this could be evidence of that. Or it could be that people have always cared about inequality. To see if this is true, I created the following figure using survey data from the General Social Survey. Since the late 70s the GSS has asked the following question:

Some people think that the government in Washington ought to reduce the income differences between the rich and the poor, perhaps by raising the taxes of wealthy families or by giving income assistance to the poor. Others think that the government should not concern itself with reducing this income difference between the rich and the poor. Here is a card with a scale from 1 to 7. Think of a score of 1 as meaning that the government ought to reduce the income differences between rich and poor, and a score of 7 meaning that the government should not concern itself with reducing income differences. What score between 1 and 7 comes closest to the way you feel?

The figure below plots the proportion of respondents favoring government action to reduce income differences (below the midpoint; solid line), those against (above the midpoint; dashed line), and those replying with the midpoint on the scale (dotted line).

Note that the “reduce income differences” category has always had a plurality, though never a majority. Could differences in the way the question is worded account for the apparent 20% jump between the GSS in 2010 and the Washington Post result in 2011?

Do taxes lead to redistribution?

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Hm, silly question perhaps? Turns out that the New York Times thinks it is interesting enough to feature it on its “Room for Debate” feature, including a contribution from political scientist Larry Bartels.

Not surprisingly, the Times and its contributors don’t really answer the question. The way they ask it is curious, though: “Do Taxes Narrow the Wealth Gap?” It’s curious because taxes–really, “tax policy”, which can mean imposing or taking away a tax that is either regressive or progressive or “flat”–in theory could redistribute in either direction.

For example, this working paper (via TaxProf Blog) argues that different tax reforms in the US over the past fifty years have had heterogeneous effects on income inequality in the US. One thing to keep in mind is that these authors are using simulations to imagine what the counterfactual income distribution would look like under different tax regimes. These simulations come with what might be hard to swallow assumptions–but there surely better than the Times’ back and forth.

But it turns out there is loads of variation in tax policy in the real world, so observational data combined with quasi-experimental designs could yield some real insights on this question. For example, I recently read that nearly 5,000 local jurisdictions in the US impose a local income tax (also on the TaxProf Blog).

My impression is that there are vast quantities of theoretical work on taxation and redistribution in both economics and political science, but very little data and very few people who study the real effects of tax policy. This is something of a troubling disconnect.

Labor’s decline and inequality

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Title borrowed from this New York Times blog post says it all.

The decline in organized labor’s power and membership has played a larger role in fostering increased wage inequality in the United States than is generally thought, according to a study published in the American Sociological Review this month.

The study is by sociologists Bruce Western and Jake Rosenfeld in the American Sociological Review.

Medicaid and Getting an Appointment

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Sixty-six percent of those who mentioned Medicaid-CHIP (Children’s Health Insurance Program) were denied appointments, compared with 11 percent who said they had private insurance, according to an article being published Thursday in The New England Journal of Medicine.

From an article in today’s New York Times. For once I have no objections.