Tag: Great Gatsby Curve

How to think about “think” tanks

~ MilesCorak ~ 11 Comments

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.

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

~ MilesCorak ~ 5 Comments

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

~ MilesCorak ~ 7 Comments

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!

Who’s Your Daddy? Some feedback from the top 1% on my New York Times article

~ MilesCorak ~ 20 Comments

Among the readers of an opinion piece I wrote in the New York Times on July 21st, Who’s Your Daddy? Job Opportunities for the children of the top 1 percent,  are two top 1 percenters who kindly took the time to email me their thoughts.

One of the goofiest most nonsensical things I have ever seen filled with
contradictions as you twist opposite conclusions to fit your thesis of
inequality. Just bizarre.

Sent from my iPad

My article was based on a soon to be published paper, Income Inequality, Equality of Opportunity, and Intergenerational Mobility , so I would hope that it has some logic to it.

The following comments are from another top 1 percenter who offers a more nuanced view on my logic, such as it is. Continue reading “Who’s Your Daddy? Some feedback from the top 1% on my New York Times article” →

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.]

Continue reading “Income Inequality, Equality of Opportunity, and Intergenerational Mobility” →

Inequality and Opportunity: a presentation to the Ottawa Economics Association

~ MilesCorak ~ 2 Comments

Here is the presentation called “Inequality and Opportunity” that I am pleased to make to a luncheon meeting of the Ottawa Economics Association. The paper upon which it is based is called “How to Slide Down the Great Gatsby Curve.”