Inequality, life chances, and public policy

Lecture series Inequality and Miles Corak European Investment Bank Luxembourg

We should care about inequality because it has the potential to shape opportunities for the next generation. My presentation at the European Investment Bank offers a framework for thinking about this relationship, and for understanding why the adult outcomes of children are more closely tied to their family background—with the poor raising the next generation of poor adults, and the rich more likely to see their children to be rich in adulthood—in countries with greater inequality.

Differences in families, labour markets, and public policy all play a role in understanding why the United States and the United Kingdom have relatively less social mobility than many other countries.

Feel free to download the presentation, which will also soon be posted online by the University of Luxembourg.

An inclusive society seeks to eliminate child poverty

Wellington New Zealand

My meeting with senior Treasury officials began with the nonchalantly stated advice “In the event of an earthquake we like to get under the tables and hold on to the legs so that they don’t get away from us.”

As a Canadian, albeit one who has visited New Zealand three times in the past decade, I naively took this as a metaphor for the earth-shattering ideas the public service expects from its consultations with outside experts.

I assure you that the dozen or more participants gathered to discuss how the government might contribute to building “a more inclusive New Zealand” offered advice that was far from ground breaking.

How possibly could they?

Continue reading “An inclusive society seeks to eliminate child poverty”

Building a more inclusive society requires a conversation about inequality

[ 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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How to think about “think” tanks

Kady O'Malley Tweet on Think Tanks 1

It is sometimes said that think tanks are good for democracy; indeed the more of them, the better. If there are more ideas in the public arena battling it out for your approval, then it’s more likely that the best idea will win, and that we will all have better public policies. But intuitively many of us have trouble believing this, have trouble knowing who is being truthful, and don’t know who to trust.

This battle of ideas, studies, and statistics has the potential to make many of us cynical about the whole process, and less trusting of all research and numbers. If a knowledgeable journalist like the Canadian Kady O’Malley expresses a certain exasperation that think-tank studies always back up “the think-tank’s existing position,” what hope is there for the rest of us? A flourishing of think tanks just let’s politicians off the hook, always allowing them to pluck an idea that suits their purposes, and making it easier to justify what they wanted to do anyways.

Maybe we shouldn’t be so surprised that think tanks produce studies confirming their (sometimes hidden) biases. After all this is something we all do. We need to arm ourselves with this self-awareness. If we do, then we can also be more aware of the things in a think tank’s make-up that can help in judging its credibility, and also how public policy discussion should be structured to help promote a sincere exchange of facts and ideas.

Continue reading “How to think about “think” tanks”

“Inequality, Life Chances, and Public Policy,” watch the presentation I made at Millersville university

I was very pleased to speak at the 2014 International Policy Conference on the theme “Inequality: Defining our Time?” held at Millersville University on November 6th and 7th, 2014. I spoke on the very kind invitation of Professor Ken Smith and the Department of Economics at Millersville University.

My talk was called “Inequality, Life Chances, and Public Policy: How to Slide Down the Great Gatsby Curve,” and you can watch it here if you have an interest.

These are the associated slides: Inequality Life Chances and Public Policy how to Slide Down the Great Gatsby Curve for Millersville University International Policy Conference

The source for this presentation is an article I published in the Journal of Economic Perspectives called “Income Inequality, Equality of Opportunity, and Intergenerational Mobility

The discussant, who begins speaking at about 47 minutes into the talk, is Professor Antonio Callari of Franklin and Marshall College. He offered some interesting remarks about how the theme of the talk relates to developments in Lancaster PA, where the conference was held.

[ One silly grammatical error that I wish I could take back occurs when I say “the more statistically significant among you,” when my intention was “the more statistically savvy among you.” ]

Why should we care about inequality? Tim Harford nails it in this Financial Times column

Tim Harford nails it in an article called “How the wealthy keep themselves on top.

I set out two reasons why we might care about inequality: an unfair process or a harmful outcome. But what really should concern us is that the two reasons are not actually distinct after all. The harmful outcome and the unfair process feed each other. The more unequal a society becomes, the greater the incentive for the rich to pull up the ladder behind them.

The noted Financial Times columnist, and author of The Undercover Economist, does a great service to readers by pulling a major theme from the series of articles on inequality and the top 1% published in the summer 2013 issue of the Journal of Economic Perspectives.

First, he states that while the “idea that the fat cats simply stole everyone else’s cream is emotionally powerful; it is not entirely convincing.” Then he goes on to note that:

In a well-functioning market, people only earn high incomes if they create enough economic value to justify those incomes. But even if we could be convinced that this was true, we do not have to let the matter drop.

This is partly because the sums involved are immense.

We should care about inequality because of the outcomes. But also because outcomes influence process.

At the very top of the scale, plutocrats can shape the conversation by buying up newspapers and television channels or funding political campaigns. The merely prosperous scramble desperately to get their children into the right neighbourhood, nursery, school, university and internship – we know how big the gap has grown between winners and also-rans.

This is what sticks in the throat about the rise in inequality: the knowledge that the more unequal our societies become, the more we all become prisoners of that inequality. The well-off feel that they must strain to prevent their children from slipping down the income ladder. The poor see the best schools, colleges, even art clubs and ballet classes, disappearing behind a wall of fees or unaffordable housing.

This is exactly what I hoped would be the main message of my article “Income Inequality, Equality of Opportunity, and Intergenerational Mobility” in the Journal of Economic Perspectives symposium, and it is very satisfying to witness a talented journalist articulate these and related ideas with such clarity and precision!