Tag: Council of Economic Advisors

Income Inequality, Equality of Opportunity, and Intergenerational Mobility

~ MilesCorak ~ 29 Comments

The summer issue of the Journal of Economic Perspectives will feature a collection of articles on inequality and the top 1%, some of which are now being circulated by the authors.

The paper by Tony Atkinson and his coauthors, “The top 1 percent in international and historical perspective,” is available in this post, and “The Pay of Corporate Executives and Financial Professionals as Evidence of Rents in Top 1 Percent Incomes,” by Josh Bivens and Lawerence Mishel, is available on the Economic Policy Institute website.

Greg Mankiw has also posted a copy of his paper, “Defending the One Percent“, on his blog.

My contribution to the collection is based on the notion that the inequality literature has paid little attention to the intergenerational consequences of increasing top income shares, and it can be read as a counterpoint to Mankiw’s piece, or at least to his claim that inequality of opportunity is not a reason to worry about the top 1%.

Here is the final draft: Income Inequality, Equality of Opportunity, and Intergenerational Mobility. But if you just want a quick read, an excerpt from the conclusion follows. Either way, feedback is—as always—welcomed.

[NOTE added December 10, 2013: the published version of this paper is available from the American Economics Association website for the Summer 2013 issue of the Journal of Economic Perspectives, as is the table of contents for the entire issue.]

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My summer reading list was about inequality and opportunity; you might like some of these books

~ MilesCorak ~ 14 Comments

If there is a thread running through the books I read this summer I suppose it is inequality: its causes and consequences; the real life and not so real life—but no less true—experiences of living these causes and experiencing the consequences; and what can—or for that matter can’t—be done about it.

The original ad in the Princeton University newspaper announcing the publication of F. Scott Fitzgerald’s novel. Fitzgerald had been a student at the university. Source: The Daily Princetonian, April 18 1925 .

Inequality in earnings and incomes has been a very hot topic in labour economics for the last two decades, but the relevance of this research and its use in public policy discussion has now become strikingly clear.

My last academic year was dominated by the rise of inequality on the public and public policy radar screen, and I have been so tied up in these discussions that I was carried, as if on a train leaving the station, right along throughout the entire summer.

I re-read a speech President Obama made on the topic. Last December he spoke about a type of inequality that “hurts us all”, and made a link between equality of outcomes and equality of opportunities.

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Social mobility and inequality in the UK and the US: How to slide down the Great Gatsby Curve

~ MilesCorak ~ 3 Comments

In a speech given this morning to announce an update on the government’s Strategy for Social Mobility, Nick Clegg, the Deputy Prime Minster of the United Kingdom, said that “We need an open society where people choose their place”; he said that “The effect of social class and class attitudes on Social Mobility are the ghost in the machine.”; and, in summary, he said that “We are a long distance from being a classless society”.

Yet in the same breath, he also said that it is a myth to suggest that reducing inequality will promote social mobility.

This is surely an inappropriate representation of the role of inequality in determining opportunity.

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Inequality and social mobility

~ MilesCorak ~ 9 Comments

[These are the opening remarks I made to the Senate Standing Committee on Social Affairs, Science and Technology of the Parliament of Canada. I appeared as a witness at the May 2nd meeting of the Committee dealing with Social inclusion and cohesion in Canada to address the topic of inequality. These remarks do not substitute for the official transcripts that will be produced by the Standing Committee.]

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“Are We Headed toward a Permanently Divided Society?”

~ MilesCorak ~ 8 Comments

This is the question Isabel Sawhill of the Brookings Institution asks in a tightly written discussion of the factors relating inequality with opportunity.

Sawhill’s answer: “at current levels of inequality in the U.S. it likely does. However, this answer is qualified in several ways.”

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Inequality begets inequality, according to the Economic Report of the President

~ MilesCorak ~ 5 Comments

On a warm evening last spring I found myself at a dinner party in the lush suburbs of a small Ivy League town not far from New York City.

The main concern of a fellow economist was the trouble his son was having raising his new family: that would be the son living in Manhattan, the one making $10 million a year.

It appears there is a bidding war for spaces in good kindergartens and, as we all know, prices skyrocket when demand outstrips supply.

And demand has been rising. We also know that.

So the most striking claim in the Economic Report of the President for 2012 is not that the share of earnings accruing to the top 1%—a share that was about 8% during the early 1980s—stands at close to 20%. After all, this is old news, the stuff of Occupy Wall Street.

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