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Tony Atkinson has died

anthony-atkinson

Tony Atkinson has died.

Tony Atkinson is a great economist because he is a master at all the challenges defining the subject.

He is a theorist of the first order.

And his theory informs measurement.

And better measurement guides the search for, the gathering of, and the presentation of better information.

And theory, measurement, and information are in the service of better public policy, better social decisions for the least advantaged … in his country, and across the globe.

Tony Atkinson is a great economist, and he was a great human being.

Kind.

Generous.

Without ego.

Full of empathy.

And I am grateful to have learned, and to be able to continue to learn, so much from his writings and example.

And I am grateful to have crossed his path.

tony-atkinson-inscribes-my-copy-of-his-book-inequality

Tony Atkinson’s inscription in my copy of his last book, Inequality: What can be done?

[ If you want to know more about this great economist, start with this post which will also direct you to his website.

Beatrice Cherrier has written a lovely tribute to Professor Atkinson, paying respect to his fundamental contributions to public economics: “Remembering Tony Atkinson as the architect of modern public economics.”

Thomas Piketty has done the same, paying respect to his empirical work on income inequality: “Passing of Anthony B. Atkinson.”

Andrew Leigh offers both a professional and a touching personal sketch of the man: “Tony Atkinson is the economist who had the measure of inequality.”

Tony’s most recent contribution—continuing a long line of work on poverty—-is a World Bank report known as the Atkinson Report. Read Francisco Ferreira’s blog post: “Tony Atkinson (1944-2017) and the measurement of global poverty.”

And read this, from his colleagues at the London School of Economics: Tony Atkinson 1944-2017.

The Financial Times published an obituary on January 2nd, 2017 called “Sir Tony Atkinson, economist and campaigner; 1944-2017;” The New York Times on January 3rd, 2017, “Anthony B. Atkinson, Economist Who Pioneered Study of Inequality, Dies at 72;” and The Economist on January 7th, Anthony Atkinson, a British Economist and expert on inequality, died on January 1st . ]

I’ve been blogging for five years, and here are my 10 favourite posts

With the New Year approaching, permit me the opportunity to wish you and yours peace and prosperity.

The end of 2016 marks the fifth year of my blog, and I’m grateful to my students and readers for making it worthwhile, and particularly to those who have taken the time to reblog, comment on, or otherwise share one of my 148 posts.

Rather than offer you the usual top ten most popular posts, here are links to my favourite posts written at some point since I started blogging in November 2011. They are not necessarily the most viewed, but I like them because they best illustrate the principles motivating my writing:

  1. Write about what you know, and give readers the opportunity and resources to learn more.
  2. Focus on what is relevant—what people want to read, and what contributes to a constructive conversation about public policy.
  3. Do this in a professional way that uses the principles of economics.

Here are links to my ten favourite posts of the last five years.

Read more…

Can you change your mind about inequality? Read my just published paper

The Pope has strong views about inequality because he has a theory, and doesn’t need data.

pope-francis-tweet-inequality-is-the-root-of-social-evil

One of Canada’s most prominent pundits has strong views about inequality because he has data, and doesn’t need theory.

andrew-coyne-tweet-november-24-2016-inequality-is-an-utter-crock

I’ll probably never convince either of them to change their views, but maybe I can convince you with both theory and data.

Give me the chance by reading my just published paper, Inequality is the root of social evil,’ or Maybe Not? Two Stories about Inequality and Public Policy.”

I tell two stories about inequality. The first is from the perspective of those who feel it is not a problem worth the worry, and the second from the perspective of those who see it as “the defining challenge of our time.” I tell these stories to clarify their underlying logic, but also to clarify both the challenges facing Canadians and our understanding of what public policy should do about them.

But I have another motive. I would like you to appreciate the value of economic theory and statistical methods to a public policy discussion of this sort. It seems to me that without an appreciation of some basic elements of theory and measurement, it is too easy for the policy conversation to go astray.

Download a free copy from the publisher’s website—Canadian Public Policy, December 2016—and tell me what you think.

 

How The Great Gatsby Curve got its name

Great Gatsby Curve

On January 4th, 2012 The New York Times published an article called “Harder for Americans to Rise from Lower Rungs.” I had spent a considerable amount of time during the New Year’s holidays talking with Jason DeParle about the comparative literature on intergenerational income mobility, and was pleased to see his article on the front page.

So pleased that I emailed Alan Krueger, the Princeton University economist who at the time was the Chairman of the Council of Economic Advisors, to draw his attention to it, though I don’t know why I imagined that Krueger and his staff in the White House would not be reading The Times.

That is how “The Great Gatsby Curve” was born.

Read more…

Sons of low-income parents are more likely to grow up to be poor than daughters

Children of low-income parents are more likely than not to grow up to be low-income adults. This is true for both boys and girls, but more so for boys.

the-intergenerational-cycle-of-low-income-for-boys-and-girls

(Click on the image to enlarge.)

This figure shows the rankings of children from low-income Canadian families, what fraction stand on each of the 100 rungs defined to equally divide the population across their adult income distribution. Their parents stood on exactly the bottom 5th rung of their income ladder, and the likelihood of them not advancing very much or even falling lower is clearly evident.

If adult incomes were completely independent of family income background, then we would expect 1 percent of these children to be on each of the 100 divisions of their income distribution. If this were the case children of low-ranking parents would be as likely to rise to middle incomes, or even to the very top, as they would be to stay on the same rung as their parents, or fall lower.

But in fact, this cohort of Canadians (those born in the 1960s) are much more likely to be the low-ranking adults of the next generation and are more likely to repeat the experiences of their parents.

This inter-generational cycle of low-income is more likely for boys. Although there is considerable upward rank mobility among these children, men raised by parents who were outranked by 95 percent of their counterparts are most likely to fall even lower, to be outranked by 99 percent of their cohort. Their chances of falling to the bottom 1 percent are more than 4 percent.

They are most likely to remain in the bottom 10 percent of the income distribution. Although an intergenerational cycle of low-income is also the most likely outcome for women, the chances are significantly lower, hovering in the neighbourhood of 2 percent for each of the rungs up to about the 10th.

[ This post is an edited excerpt from a forthcoming paper I have written called “‘Inequality is the root of social evil,’ or maybe not? Two stories about inequality and public policy”, which is published in the December 2016 issue of Canadian Public Policy. If you have any feedback please feel free to let me know in the comments section. ]

Should we worry about the top 1%, or praise them?

Every Statistics Canada data release on the share of the economic pie going to the top 1% elicits strong opinions, the most recent being no exception. Do top earners elicit rather dishonourable sentiments such as envy that should be given little weight? Or do they challenge our need for community and inclusion, influencing the way we live our lives in more fundamental ways? Should we praise the top 1% or worry about them?

It depends. We would be in a better position to answer this question if we put aside questions of merit and just deserts and focused more on the sources of social mobility and the capacity to conduct policy to support it in an era of higher inequality.

Earnings mobility for children from the very broad middle—parents whose income ranges from the bottom 10 percent all the way to the cusp of the top 10 percent—is not tied strongly to family income. These children tend to move up or down the income distribution without regard to their starting point in life. This may be one element of insecurity among the middle class: in spite of their best efforts, their children may be as likely to lose ground and fall in the income distribution as they are to rise.

the-intergenerational-transmission-of-priviledge

Children raised by parents in the top 1% are most likely to grow up to be the next generation of top earners

The situation is very different for children raised by top-earning parents, as the above figure illustrates. It shows the intergenerational cycle of privilege, the percentile rank in adulthood of children raised by top-1-percent parents. This playing field is clearly not level. If it were, all the points in the figure would be the same, all lining up along the dashed horizontal line drawn for reference at 1 percent.

Read more…

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