Found 22 article(s) for author 'Income'

Do Americans really need to be more thrifty?

Do Americans really need to be more thrifty? Lawrence Summers, January 7, 2020, Opinion, “Few economic virtues are more universally applauded than thrift. Going back at least to Ben Franklin, Americans have equated greater thriftiness with greater worthiness. Progressives decry the limited saving and wealth accumulation of middle-income families and express alarm over the widely reported “fact” that 40 percent of Americans cannot come up with $400 in an emergency. Conservatives applaud thrift as an aspect of self-reliance and propose ideas such as health-savings accounts to help families prepare for emergencies. Moderates believe universal social insurance programs such as Social Security and Medicare, which they label as entitlements, should be modest or even curtailed out of fiscal prudence.Link

Tags: , , , ,

Compensation, Austerity, and Populism

Compensation, Austerity, and Populism. Jeffry Frieden, December 6, 2019, Paper, “The existence of comprehensive social policies to compensate those who might be harmed by integration is widely seen as an important precondition for public support for economic and political integration in western Europe. However, many western European countries reduced spending on income maintenance after 1990. In countries hard hit by the sovereign debt crisis, there have also been significant cuts to social services. We evaluate the impact of levels of social spending on public support for populist parties. We also evaluate the impact of austerity measures on support for such parties. We examine a panel of 187 elections from 1990-2017 and analyze pooled cross-sectional data from eight waves of the European Social Survey. We find evidence that populist parties fare worse where countries spend more on social support, and where spending has not been reduced from historical levels. On the other hand, where countries spend less on income maintenance, and/or have decreased spending from earlier levels, populist vote shares are consistently higher, and the likelihood of supporting populist parties greater. This relationship holds when controlling for a range of individual and macroeconomic factors, including occupational and educational characteristics, unemployment, economic growth, and immigration rates. The growing strength of populist political parties is rooted in long-term economic and cultural changes, but appropriate social policies may moderate their appeal.Link

Tags: , , , , , , ,

Income Inequality Affects Donations Only for High-Income People Who Feel Financially Insecure and Distrust Others

Income Inequality Affects Donations Only for High-Income People Who Feel Financially Insecure and Distrust Others. Ashley Whillans, 2019, Paper, “There is a growing debate about whether high-income individuals are more or less generous when income inequality is high. We advance this ongoing conversation by analysing a large and comprehensive data set with approximately one million respondents from 140 countries. In this data set, higher-income individuals who live in countries with greater income inequality are less likely to donate money to charity and are more likely to volunteer than their lower-income counterparts. Higher-income individuals who feel financially insecure or show distrust of others are especially unlikely to donate money to charity under high income inequality. These moderators do not influence rates of volunteering. Together, these results advance the debate regarding whether and when inequality shapes prosocial behaviour.Link

Tags: , , , , ,

Creating Moves to Opportunity: Experimental Evidence on Barriers to Neighborhood Choice

Creating Moves to Opportunity: Experimental Evidence on Barriers to Neighborhood Choice. Raj Chetty, Nathaniel Hendren, Lawrence Katz, August 2019, Paper, “Low-income families in the United States tend to live in neighborhoods that offer limited opportunities for upward income mobility. One potential explanation for this pattern is that families prefer such neighborhoods for other reasons, such as affordability or proximity to family and jobs. An alternative explanation is that they do not move to high-opportunity areas because of barriers that prevent them from making such moves. We test between these two explanations using a randomized controlled trial with housing voucher recipients in Seattle and King County. We provided services to reduce barriers to moving to high-upward-mobility neighborhoods: customized search assistance, landlord engagement, and short-term financial assistance. The intervention increased the fraction of families who moved to high-upward-mobility areas from 14% in the control group to 54% in the treatment group.Link

Tags: , , , , ,

To Serve the People: Income, Region and Citizen Attitudes towards Governance in China (2003–2016)

To Serve the People: Income, Region and Citizen Attitudes towards Governance in China (2003–2016). Edward Cunningham, Anthony Saich, April 11, 2019, Paper, “Through use of a unique, multi-year public opinion survey, this paper seeks to measure changes in self-reported governmental satisfaction among Chinese citizens between 2003 and 2016. Despite the persistence of vast socio-economic and regional inequalities, we find evidence that low-income citizens and residents living in China’s less-developed inland provinces have actually reported comparatively greater increases in satisfaction since 2003. These results, which we term the “income effect” and “region effect” respectively, are more pronounced at the county and township levels of government, which are most responsible for public service provision. Our findings also show that the satisfaction gap between privileged and more marginalized populations in China is beginning to close, in large part owing to efforts by the Hu Jintao and Xi Jinping administrations to rebalance the gains of economic growth and shift resources towards the populations most overlooked during China’s first few decades of reform.Link

Tags: , , , , , ,

Birds of a Feather: Estimating the Value of Statistical Life from Dual-Earner Families

Birds of a Feather: Estimating the Value of Statistical Life from Dual-Earner Families. Joseph Aldy, March 2019, Paper, “Economists have long employed hedonic wage analysis to estimate income-fatality risk trade-offs, but some scholars have raised concerns about systematic measurement error and omitted variable bias in the empirical applications of this model. Recent studies have employed panel methods to remove time-invariant individual-specific characteristics that could induce bias in estimation. In an analogous manner, this paper proposes to exploit assortative matching on risk attitudes within married couples to control for worker characteristics that are unobserved to the econometrician. I develop and implement a modified hedonic wage estimator based on a within-coupled differenced wage equation for full-time working married couples with the Current Population Survey Merged Outgoing Rotation Group over 1996-2002. The key assumption builds on the findings in the assortative matching literature that individuals often marry those who have common traits across many dimensions, including those that may influence worker wages and are correlated with observed occupational fatality risks.Link

Tags: , , , , ,

Falling Behind: The Role of Inter- and Intragenerational Processes in Widening Racial and Ethnic Wealth Gaps through Early and Middle Adulthood

Falling Behind: The Role of Inter- and Intragenerational Processes in Widening Racial and Ethnic Wealth Gaps through Early and Middle Adulthood. Alexandra Killewald, July 13, 2018, Paper, “Whites’ wealth advantage compared to blacks and Hispanics is vast and increases with age. While prior research on wealth gaps focuses primarily on wealth levels, we adopt a life-course perspective that treats wealth as a cumulative outcome and examine wealth accumulation across individuals’ lives. We test to what extent intergenerational disadvantage and disparities in achieved characteristics explain accumulation disparities. We hypothesize that disparities in wealth determinants, like income and education, family and household characteristics, and homeownership and local context, increase through early and middle adulthood, widening wealth accumulation gaps.Link

Tags: , , , , , , , ,

Good Credit and the Good Life: Credit Scores Predict Subjective Well-Being

Good Credit and the Good Life: Credit Scores Predict Subjective Well-Being. Ashley Whillans, 2018, Paper, “Can money buy happiness? To examine this question, research in economics, psychology, and sociology has focused almost exclusively on examining the associations between income,
spending or wealth and subjective well-being. Moving beyond this research, we provide the first empirical evidence that credit scores uniquely predict happiness. Across two samples, from the United Kingdom (N=615) and the United States (N=768), credit scores predicted life satisfaction even after controlling for a range of financial covariates, including income, spending, savings, debt, and home-ownership. Respondents with higher credit scores felt more optimistic about their future, promoting happiness.Link

Tags: , , , , , , ,

Redistribution Without a Median Voter: Models of Multidimensional Politics

Redistribution Without a Median Voter: Models of Multidimensional Politics. Torben Iversen, May 2018, Paper, “Most work on redistribution in democracies is anchored in long-standing unidimensional models, notably the seminal Meltzer-Richard-Romer model. When scholars venture outside the security of unidimensionality, many either abandon theoretical rigor or miss the full consequences of adding more dimensions (whether ideological or economic). There is now a substantial literature on redistributive politics in multidimensional policy spaces, but it tends to be very technical and frequently misinterpreted, if not ignored. This purpose of this article is to review this relatively new literature using simple graphical representations,Link

Tags: , , , , , , , , , ,

Race and Economic Opportunity in the United States: An Intergenerational Perspective

Race and Economic Opportunity in the United States: An Intergenerational Perspective. Raj Chetty, Nathaniel Hendren, March 2018, Paper, “We study the sources of racial and ethnic disparities in income using de-identified longitudinal data covering nearly the entire U.S. population from 1989-2015. We document three sets of results. First, the intergenerational persistence of disparities varies substantially across racial groups. For example, Hispanic Americans are moving up significantly in the income distribution across generations because they have relatively high rates of intergenerational income mobility. In contrast, black Americans have substantially lower rates of upward mobility and higher rates of downward mobility than whites, leading to large income disparities that persist across generations.Link

Tags: , , , , , ,