Category: inequality

The main messages of “Too Many Children Left Behind,” a book published by the Russell Sage Foundation

~ MilesCorak ~ 1 Comment

Here are the slides for the presentation “Too many children left behind: The U.S. Achievement Gap in Comparative Perspective”, which I gave to the conference “Causes and Consequences of Inequality and Social Mobility: What Can Be Done?”

Click to access corak_too_many_children_left_behind_sapienza_rome_2015.pdf

The conference was held at the Faculty of Economics, Sapienza University of Rome on September 25th and 26th, 2015, and you can see the full program here: http://www.eticaeconomia.it/ee/wp-content/uploads/2015/09/Evento-n28_pdf.pdf

More social protection, affordable child care, and entrepreneurship will promote inclusive growth

~ MilesCorak ~ 1 Comment

“What are the areas of policy and institutional strength that have a particularly strong bearing on social participation in the process (productive employment) and outcomes (median household income) of economic growth?”

In other words, what promotes inclusive growth?

This is the question that animates a report released by the World Economic Forum, which suggests that three policies appear to be holding back the process in Canada: limited social protection, particularly an inappropriately designed and not terribly generous Unemployment Insurance program, the lack of affordable child care, and lackluster entrepreneurship.

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Who are the middle class?

~ MilesCorak ~ 10 Comments

slice of pieOne economist recently suggested that there are as many as 156 definitions of the middle class. If this statistical potluck isn’t complicated enough, pollsters also tell us that a very large fraction of the population describe themselves as “middle class.”

You can see why politicians have made the “middle class” an election issue, but also why they might hesitate to answer the question: “Who are the middle class?”

It isn’t a contradiction for many people to feel they are in the “middle” even if their incomes are well above average or well below. There’s a certain truth to this because most Canadians share a set of common concerns that go beyond just their incomes.

You are “middle class” if you aspire to a better tomorrow, and have a hope for growth and progress in your circumstances; you are “middle class” if you are struggling with uncertainty, and worried if you and your family will be able to weather the storms that tomorrow will surely bring; and you are “middle class” if you have an expectation that your children should be treated fairly once you have done all you can to help them.

But while many people share these three concerns, their circumstances and capacities to manage them differ, something that is the result of growing inequality in access to secure and well-paying jobs.

Ninety percent of the population may belong to the “middle class”, but that doesn’t mean there is a one-size-fits-all-policy.

One way to get our heads around this is to let the answer to “Who are the middle class?” fall out of an answer to another question: “How is the economic pie divided?”

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Inequality may be complex, but that doesn’t mean we can’t make sense of it

~ MilesCorak ~ 2 Comments

The Fraser Institute has weighed in on the income inequality debate with a report called “Income inequality: measurement sensitivities” that reviews the statistical measurement of income inequality in Canada.

The report quite rightly points out that there are many nuances in the measurement of income, and income inequality, and that the results vary substantially depending upon how economists and statisticians deal with them. Is income measured by earnings, or by total income that includes not just business and investment income but also government transfers? Should it be measured before or after taxes? And should we be looking at total family income or try to represent this as individual income by accounting for family size?

The analysis is carefully done and clearly presented, and though it covers ground that is pretty well standard for many economists working in this area, it helps to clarify the issues for a broader audience.

But the study concludes, in the words of the screaming press release, that there is “No income inequality crisis in Canada when it’s properly measured.”

That is the wrong inference to be making. What the study is missing is a coherent understanding of the link the different measures it so accurately calculates. As a result it misses important policy lessons.

Continue reading “Inequality may be complex, but that doesn’t mean we can’t make sense of it” →

Building a more inclusive society requires a conversation about inequality

~ MilesCorak ~ 4 Comments

[ This post is based on the opening address I gave on the invitation of the New Zealand Treasury to the “A More Inclusive New Zealand Forum” held in Wellington, New Zealand on July 27th, 2015. ]

I would like to open this gathering with a statement of admiration for both its content, and its process. The organizers have asked us to deliberate on “inclusion”, and to do so through conversation.

As a part of my contribution to this conversation I would ask you to consider four major messages, all four of which revolve around the question: What does inclusion mean?

I use “mean” in the sense of how we define inclusion, and “mean” in the sense of its implications for policy.

What does “inclusion” mean, and how can we give it enough precision to inform public policy?

My four messages are:

  1. an inclusive society means that all children can become all that they can be;
  2. an inclusive society seeks to eliminate child poverty;
  3. income inequality has the potential to erode inclusion;
  4. public policy must address many dimensions of inequality.

 

A More Inclusive New Zealand Forum

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Two stories about inequality

~ MilesCorak ~ 5 Comments

In many rich countries the “hard” facts describing the income distribution are easily available. Yet, discussions about inequality are animated by two different stories with very different public policy implications.

You can listen to a caricature of these points of view in this pair of interviews on CBC radio: http://www.cbc.ca/radiowest/2015/01/21/two-different-takes-on-the-worlds-wealthiest-one-per-cent/

I offer more detail on the way Canadians have framed these stories as a part of a presentation to the School of Policy Studies at Queen’s university.

Here is Story 1 in pictures

(click on an image to start the slideshow and press Escape to return to this page).

Here is Story 2 in pictures

(click on an image to start the slideshow and press Escape to return to this page).

My presentation argued that context—rooted in economic theory and the appropriate use of statistics—is needed to understand the truth behind these stories, and to turn them into a conversation useful for public policy.

Here is the full set of slides I used.

Corak_Two_Stories_about_Inequality_and_Public_Policy_presentation_to_Queens_University_February_5_2015