Category Archives: Income Inequality/Gap

Cumulative Advantage and Disadvantage: Across the Life Course, Across Generations

Source: Public Policy & Aging Report, Volume 26, Issue 2, 2016
(subscription required)

From the introduction:
….[M]ost of the attention surrounding “making an issue of income inequality” has focused on the hardships facing working-age and younger people as they struggle to put food on the table and find a place for themselves in the world of work. Receiving less attention in these analyses is the fate of millions of older adults who struggle in both similar and different ways from inequality’s effects. This absence results in part from the cross-sectional view commonly taken of older people: They are there, however they got there, and “God bless them.” But beyond this homogenizing stereotype is the more pernicious and misleading assumption that government programs—Social Security and Medicare in particular—have a major leveling effect on well-being in old age. That these programs are universal—with all the salutary consequences associated with that status—is conflated with assumptions about cross-class redistribution within them of which there is in fact very little. ….

Articles include:
Cumulative Advantage and Disadvantage: Across the Life Course, Across Generations
Robert B. Hudson

Late-Life Inequality in the Second Gilded Age: Policy Choices in a New Context
Stephen Crystal

Frames Matter: Aging Policies and Social Disparities
Renée L. Beard and John B. Williamson

Societal Legacies of Risk and Protection in the Reproduction of Health Disparities
Melissa Hardy

Race, Gender, and Senior Economic Well-Being: How Financial Vulnerability Over the Life Course Shapes Retirement for Older Women of Color
Laura Sullivan and Tatjana Meschede
Cumulative Advantage and Retirement Security: What Does the Future Hold?
Richard W. Johnson

Unequal Aging: Lessons From Inequality’s End Game
Corey M. Abramson

The Inequality Multiplier

Source: Mauro Gallegati, Simone Landini, Joseph E. Stiglitz, Columbia Business School Research Paper No. 16-29, April 18, 2016

From the abstract:
That of the multiplier is a largely debated issue. Several studies propose estimates for it. This paper answers the question of how inequality affects the value of the multiplier. The proposed formulation is analytically derived from the Lorenz curve of income by means of Zanardi asymmetry index. Since the relationship between inequality and multiplier is found to be negative, it can be argued that greater inequality has depressive effects on GDP.

Special Issue on Race and Wealth

Source: Race and Social Problems, Volume 8, Issue 1, March 2016

From the prologue:
…This RASP special issue on race and wealth puts front and center the intersection of race and wealth, providing depth to our understanding of how the racial wealth gap plays out over the life course. Adults experience quite dramatic fluctuations in wealth streams and utilization from young adulthood through retirement and old age. A life-course perspective on wealth typically sees childhood and young adulthood as investment periods for human capital and often low earnings. Earnings and wealth usually rise until just prior to retirement. Wealth scholars often examine the how wealth and life-course events, such as marriage, children, divorce, unemployment, impact one another. This life-course perspective does not always play out in the same way for white families and families of color. Teasing out the differences in an individual or family’s relationship with wealth at different points in the life course is critical if we are to understand how best to implement policy solutions to address the racial wealth gap.

In this issue of RASP we bring together some of the cutting-edge research on race and wealth, with several of the contributions combining a policy and social movement slant. These scholars provide new perspectives and analyses on race and wealth delving not just into the empirics but into stages of the life course significantly impacted by race and wealth. The issue opens with two papers that examine the wealth gap for families of color at two different geographic levels….

Articles include:
Wealth Inequality in Black and White: Cultural and Structural Sources of the Racial Wealth Gap
Cedric Herring, Loren Henderson

Inequality in the “Cradle of Liberty”: Race/Ethnicity and Wealth in Greater Boston
Tatjana Meschede, Darrick Hamilton, Ana Patricia Muñoz

Diverging Fortunes: Racial/Ethnic Inequality in Wealth Trajectories in Middle and Late Life
Tyson H. Brown

Young Adults’ Race, Wealth, and Entrepreneurship
Terri Friedline, Stacia West

Young, Black, and (Still) in the Red: Parental Wealth, Race, and Student Loan Debt
Fenaba R. Addo, Jason N. Houle, Daniel Simon

Wealth Mobility of Families Raising Children in the Twenty-First Century
Tatjana Meschede, Hannah Thomas, Alexis Mann, Allison Stagg

Who and What You Know: Social and Human Capital in Black Middle-Class Economic Decision-Making
Scott Wm. Bowman

Race, Wealth and Incarceration: Results from the National Longitudinal Survey of Youth
Khaing Zaw, Darrick Hamilton, William Darity Jr.

The Color of Debt: An Examination of Social Networks, Sanctions, and Child Support Enforcement Policy
David J. Pate Jr.

Closing the Racial Wealth Gap: Establishing and Sustaining an Initiative
Kilolo Kijakazi

Firm-Level Monopsony and the Gender Pay Gap

Source: Douglas A. Webber, Industrial Relations: A Journal of Economy and Society, Volume 55 Issue 2, April 2016
(subscription required)

From the abstract:
This study uses linked employer–employee data to estimate firm-by-gender specific labor supply elasticities. Using a dynamic model of labor supply, I find evidence that females face a greater degree of search frictions than males. However, the majority of the gender gap in labor supply elasticities is driven by across-firm sorting rather than within-firm differences. I find that males face a labor supply elasticity 0.15 points higher than females, which leads to 3.3 percent lower earnings for women. Sixty percent of the elasticity differential can be explained by marriage and child penalties faced by women but not men.

The Gender Wage Gap by Occupation 2015 and by Race and Ethnicity

Source: Ariane Hegewisch, Asha DuMonthier, Institute for Women’s Policy Research (IWPR), IWPR #C440, April 2016

From the abstract:
Women’s median earnings are lower than men’s in nearly all occupations, whether they work in occupations predominantly done by women, occupations predominantly done by men, or occupations with a more even mix of men and women. Data for both women’s and men’s median weekly earnings for full-time work are available for 119 occupations. Across occupations the gender earnings ratio of women’s median weekly earnings to men’s ranges from just 52.5 percent (women at the median making about half as much as men who are ‘securities, commodities, and financial services sales agents’ ) to 111.2 percent (women making more than men as ‘wholesale and retail buyers, except farm products’). There is only one occupation—‘bookkeeping, accounting, and auditing clerks’–where women have the same median weekly earnings as men.

US housing crunch: The price isn’t right

Source: Jessica Mendoza, Christian Science Monitor, April 24, 2016

How higher home prices are forcing the middle class out of major American cities. ….

….The great reverse migration back into cities, coupled with rising construction costs and a dearth of places to build, has conspired to drive housing costs to historic highs.

And in many cases the squeeze has fallen hardest on the working middle class. True, low-income residents and immigrants – often priced out of neighborhoods they have lived in for generations – bear much of the burden for the platinum mortgages and rent bills, as they have in such housing cycles throughout history. But public-service workers, police, teachers like Slavicek, and other middle-income residents – lacking the welfare support and housing assistance of the very poor – are being hit particularly hard. They are increasingly being forced to make a fundamental choice: keep the jobs they have and settle for interminable commutes and smaller living spaces, or relocate to more affordable cities altogether….

Indicators of Higher Education Equity in the United States — 2016 Historical Trend Report

Source: Margaret Cahalan, Laura Perna, Mika Yamashita, Roman Ruiz, Khadish Franklin, Pell Institute for the Study of Opportunity in Higher Education, 2016

From the summary:
Report Shows Family Income is a Major Indicator in College Entrance, Selection, Graduation

On April 19, 2016, the Pell Institute for the Study of Opportunity in Higher Education held an event at the National Press Club to announce the release of the Indicators of Higher Education Equity in the United State — 2016 Historical Trend Report. The report, by the Pell Institute and the University of Pennsylvania’s Alliance for Higher Education and Democracy examines trends in post-secondary enrollment in the U.S. by family income, race/ethnicity, and family socioeconomic status. It uses data from the Current Population Survey (CPS), the National Center for Education Statistics (NCES) Beginning Postsecondary Study, the NCES high school longitudinal studies, and other public sources.

The report shows that while bachelor’s degree attainment rates have increased for all family income quartiles, the distribution of bachelor’s degree attainment between family income levels has remained relatively constant since 1970. The top two family income quartiles together accounted for 72 percent of the total bachelor’s degrees attained in 1970 and 77 percent of the bachelor’s degrees in 2014. It indicates that students from higher and lower income quartiles enroll in different types of colleges and universities with varying rates of college success.

City and metropolitan inequality on the rise, driven by declining incomes

Source: Alan Berube and Natalie Holmes, Brookings Institution, January 14, 2016

The issue of high and rising income inequality continues to influence policy and political debates at all levels of government. Local officials, such as mayors and county executives, are increasingly finding themselves at the center of those debates given a federal government hamstrung by partisan gridlock and budget constraints.

Money Supply, Class Power, and Inflation: Monetarism Reassessed

Source: Ho-fung Hung, Daniel Thompson, American Sociological Review, Published online before print April 20, 2016
(subscription required)

From the abstract:
Recent sociological work shows that pro-market neoliberal policies across advanced capitalist countries are due to distributional struggle between classes in the 1970s and 1980s. The orthodox monetarist view, alternatively, sees neoliberal reform as a nonpolitical attempt to end the stagflation crisis of the 1970s. From this perspective, monetary and fiscal expansions brought high inflation, and central bank discipline and government austerity is the solution; but the recent trend of low inflation despite accelerating money growth and government spending contradicts this view. Analyses of time-series cross-section data for 23 OECD countries from 1960 to 2009 support the thesis that the rise and fall of inflation is more about distribution of power between labor and capital than about monetary and fiscal discipline. Inflation in the 1970s originated from a strong working class and hurt capital more than it did workers, while neoliberal repression of workers’ power has kept inflation low from the 1980s onward. Disempowerment of labor created rising inequality and economic imbalances that fueled a financial boom underlying the global financial crisis of 2008. Re-empowering labor is a remedy to such imbalances and the subsequent deflationary pressure.