The Consequences of Economic Inequality: Health, Well-Being, and Intergenerational Mobility
Saturday, Jan. 7, 2017 7:30 PM – 9:30 PM
Hyatt Regency Chicago, Plaza B
- Chair: Joseph E. Stiglitz, Columbia University
Top Incomes and Human Well-Being Around the World
AbstractThe share of income held by the top 1 percent in many countries around the world has been rising persistently over the last 30 years. But we continue to know little about how the rising top income shares affect human well-being. This study combines the latest data to examine the relationship between top income share and different dimensions of subjective well-being. We find top income shares to be significantly correlated with lower life evaluation and higher levels of negative emotional well-being, but not positive emotional well-being. The results are robust to household income, individual’s socio-economic status, and macroeconomic environment controls.
The Decline in Intergenerational Mobility After 1980
AbstractWe document a pronounced decline in intergenerational mobility that corresponds to a major inflection point in inequality. Specifically we estimate an intergenerational rank-rank slope in income of around 0.26 for cohorts in the NLS66 who entered the labor market during the 1970s. We contrast this with an estimate of around 0.4 for cohorts in the NLSY79 who entered the labor market during the 1980s and 1990s. This rise in rank persistence over time is the equivalent of moving from the 38th most mobile city in the US to the 338th most mobile city based on Chetty et al. (2014). We find similar time patterns when we use a group-based estimator of the intergenerational elasticity (Aaronson and Mazumder, 2008) using Census data.
Inequality, Relative Income and Newborn Health
AbstractA major concern over rising inequality is its potential to reduce intergenerational mobility, leading to even greater inequality in the next generation. We estimate the impact of rising inequality over the period 1970-2010 on offspring health at birth, a measure of human capital that has been shown to be highly correlated with future education, IQ and income. We define inequality both at the aggregate level and at the individual level: as a group-level measure (the Gini coefficient for each state or county), and as individual level measures of relative income (relative deprivation, rank, and relative income distance). We document a strong negative relationship between the Gini and newborn health in the cross section, but find that including a modest set of controls, or limiting variation to changes in inequality over time within an area, or instrumenting for inequality eliminates the relationship between the Gini and newborn health completely. However, this null result likely reflects heterogeneity in the effect of rising inequality. When we estimate the impact of relative income on newborn health, we find negative and significant effects of having relatively less income than one’s neighbors on birth weight, even after controlling for area fixed effects and instrumenting for differences in the income distribution.
University of Nevada-Las Vegas
University of California-Berkeley
Federal Reserve Board
- D3 - Distribution