Tue. January 6, 2009
The Distribution of Income and Wealth
Economic inequality has been a prominent and perennial concern in economics and public policy. The rise in inequality that occurred during the 1970s and early 1980s stimulated interest in the study of its causes and consequences. Experience from the 1990s suggests that economic growth and prosperity no longer dramatically reduce economic inequality. The persistent inequalities within nations and across nations raise several key issues that demand scholarship and innovative policies to aid in their resolution.
Recognizing this, the Levy Institute has maintained, since its inception, an active research program on the distribution of earnings, income, and wealth. Research in this area includes studies on the economic well-being of the elderly, public and private pensions, well-being over the life course, the role of assets in economic well-being, and the determinants of the accumulation of wealth.
It is widely recognized that existing official measures of economic well-being need to be improved in order to generate accurate cross-sectional and intertemporal comparisons. The picture of economic well-being can vary significantly depending on the measure used. Alternative measures are also crucially important for the formulation and evaluation of a wide variety of social and economic policies. The Levy Institute Measure of Economic Well-Being and related research is aimed at bridging this gap.
Program
The Levy Institute Measure of Economic Well-Being (LIMEW)
Research Group: James K. Galbraith, Edward N. Wolff, Dimitri B. Papadimitriou, Ajit Zacharias, Selcuk Eren, Thomas Masterson, Barry Bluestone, Robert Haveman, Christopher Jencks, Susan E. Mayer, Branko Milanovic, Jacques Silber, Barbara Wolfe
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Program Publications |
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Working Papers | May 2008 Statistical Matching Using Propensity Scores This paper summarizes the background, type, logic, and working procedure of the statistical matching used in the Levy Institute Measure of Economic Well-Being (LIMEW) project to combine the various data sets used to produce the synthetic data set with which the LIMEW is constructed. The authors use the match between the 2001 Survey of Consumer Finances and the Annual Demographic Survey of the Current Population Survey data sets to demonstrate the procedure and results of the matching. [more] Working Paper No. 535 |
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Working Papers | November 2007 Earnings Functions and the Measurement of the Determinants of Wage Dispersion This paper extends the famous Blinder and Oaxaca (1973) discrimination in several directions. First, the wage difference breakdown is not limited to two groups. [more] Working Paper No. 521 |
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Working Papers | October 2007 What Are the Relative Macroeconomic Merits and Environmental Impacts of Direct Job Creation and Basic Income Guarantees? There is a body of literature that favors universal and unconditional public assurance policies over those that are targeted and means-tested. Two such proposals—the basic income proposal and job guarantees—are discussed here. [more] Working Paper No. 517 |
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Working Papers | September 2007 Inequality of Life Chances and the Measurement of Social Immobility This paper begins by proposing two cardinal measures of inequality in life chances. Using as its database a matrix in which the lines correspond to the social category of parents and the columns to the income distribution of their children, it then highlights the importance of the marginal distributions when comparing social immobility within two populations. [more] Working Paper No. 513 |
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Working Papers | June 2007 Recent Trends in Household Wealth in the United States I find here that the early 2000s witnessed both exploding debt and the middle-class squeeze. While median wealth grew briskly in the late 1990s, it fell slightly between 2001 and 2004, while the inequality of net worth increased slightly. [more] Working Paper No. 502 |
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Working Papers | May 2007 Economic Perspectives on Aging The aging of the American population will be a critical public policy issue in the years ahead. This paper surveys the recent literature on the economics of aging, with a special emphasis on government spending on the aged. [more] Working Paper No. 500 |
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Working Papers | January 2007 Class Structure and Economic Inequality Existing empirical schemas of class structure do not specify the capitalist class in an adequate manner. We propose a schema in which the specification of capitalist households is based on wealth thresholds. [more] Working Paper No. 487 |
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Book Series | December 2006 International Perspectives on Household Wealth The contributors to this comprehensive book compile and analyze the latest data available on household wealth using, as case studies, the United States, Canada, Germany, Italy, Sweden, and Finland during the 1990s and into the 21st century. The authors show that in the United States, trends are highlighted in terms of wealth holdings among the low-income population, along with changes in wealth polarization, racial differences in wealth holdings, and the dynamics of portfolio choices. [more] Book Series, December 2006 |
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Working Papers | November 2006 Net Intergenerational Transfers from an Increase in Social Security Benefits When the age of death is uncertain, individuals will leave bequests–even if they have no desired bequests–simply because they will hold wealth against the possibility of living longer. Bequests are accidental. [more] Working Paper No. 482 |
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Working Papers | November 2006 European Welfare State Regimes and Their Generosity toward the Elderly This paper examines the generosity of the European welfare state toward the elderly. It shows how various dimensions of the welfare regimes have changed during the past 10 to 15 years and how this evolution is related to the process of economic integration. [more] Working Paper No. 479 |
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Working Papers | August 2006 The Adequacy of Retirement Resources among the Soon-to-Retire, 1983-2001 A central issue confronting soon-to-retire workers (those aged 47–64) is whether they will have command over enough resources (both private and public) to maintain a decent standard of living in retirement. Typically, the adequacy of projected retirement income is judged in relation to some absolute standard (for example, the poverty threshold) and preretirement income (“replacement rate”). [more] Working Paper No. 472 |
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Working Papers | August 2006 Population Forecasts, Fiscal Policy, and Risk This paper describes how stochastic population forecasts are used to inform and analyze policies related to government spending on the elderly, mainly in the context of the industrialized nations. The paper first presents methods for making probabilistic forecasts of demographic rates, mortality, fertility, and immigration, and shows how these are combined to make stochastic forecasts of population number and composition, using forecasts of the U. [more] Working Paper No. 471 |
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Working Papers | August 2006 Global Demographic Trends and Provisioning for the Future The world's population is aging. Virtually no nation is immune to this demographic trend and the challenges it brings for future generations. [more] Working Paper No. 468 |
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Working Papers | August 2006 Net Government Expenditures and the Economic Well-Being of the Elderly in the United States, 1989-2001 We examine the economic well-being of the elderly, using the Levy Institute Measure of Economic Well-Being (LIMEW). Compared to the conventional measures of income, the LIMEW is a comprehensive measure that incorporates broader definitions of income from wealth, government expenditures, and taxes. [more] Working Paper No. 466 |
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Working Papers | July 2006 Differing Prospects for Women and Men Although elderly men and women share many of the same problems as they age, their lives are likely to follow different courses. Women are more likely than men to live into old old-age and are more likely to spend part of their young old-age caring for husbands or parents. [more] Working Paper No. 464 |
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Working Papers | July 2006 Working for a Good Retirement The choice of retirement age is the most important portfolio choice most workers will make. Drawing on the Urban Institute's Dynamic Simulation of Income model (DYNASIM3), this report examines how delaying retirement for nondisabled workers would affect individual retiree benefits, the solvency of the Social Security trust fund, and general revenues. [more] Working Paper No. 463 |
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Working Papers | July 2006 Wage Growth and the Measurement of Social Security's Financial Condition Government spending on the elderly is projected to increase rapidly as the American population becomes older. As a result, many policymakers and budget analysts are concerned about the continued viability of entitlement programs such as Social Security. [more] Working Paper No. 461 |
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Book Series | July 2006 The Distributional Effects of Government Spending and Taxation This book focuses on the distributional consequences of the public sector. It examines and documents, both theoretically and empirically, the effects of government spending and taxation on personal distribution, that is, on families and individuals. [more] Book Series, July 2006 |
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Policy Notes | July 2006 The Burden of Aging Demographers and economists agree that we are aging—individually and collectively, nationally and globally. An aging population results from the twin demographic forces of fewer children per family and longer lives. [more] Policy Note 2006/5 |
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Working Papers | June 2006 How Does Household Production Affect Earnings Inequality? Although income inequality has been studied extensively, relatively little attention has been paid to the role of household production. Economic theory predicts that households with less money income will produce more goods at home. [more] Working Paper No. 454 |
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Working Papers | May 2006 Time and Money Time and money are basic commodities in the utility function and are substitutes in real terms. To a certain extent, having time and money is a matter of either/or, depending on individual preferences and budget constraints. [more] Working Paper No. 451 |
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Working Papers | May 2006 The Temporal Welfare State: A Cross-national Comparison Welfare states contribute to people’s well-being in many different ways. Bringing all these contributions under a common metric is tricky. [more] Working Paper No. 449 |
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Working Papers | May 2006 Household Wealth and the Measurement of Economic Well-Being in the United States The standard official measure of household economic well-being in the United States is gross money income. The general consensus is that such measures are limited because they ignore other crucial determinants of well-being. [more] Working Paper No. 447 |
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Working Papers | May 2006 Feminist-Kaleckian Macroeconomic Policy for Developing Countries This paper reviews evidence of the gender effects of globalization in developing economies. It then outlines a set of macroeconomic and trade policies to promote gender equity. [more] Working Paper No. 446 |
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Working Papers | February 2006 Government Effects on the Distribution of Income This paper is the overview chapter of an edited volume on “The Distributional Effects of Government Spending and Taxation.” The paper offers the author’s perspective on the government’s role as a redistributive agent. [more] Working Paper No. 442 |
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Working Papers | February 2006 Parental Child Care in Single Parent, Cohabiting, and Married Couple Families This study uses time diary data from the 2003 American Time Use Survey and the United Kingdom Time Use Survey 2000 to examine the time that single, cohabiting, and married parents devote to caring for their children. Time spent in market work, in child care as a primary activity, and in child care as a passive activity are jointly modeled using a correlated, censored regression model. [more] Working Paper No. 440 |
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Working Papers | February 2006 Where Do They Find the Time? Parents who undertake paid work are obliged to spend time away from their children, and to use nonparental childcare. This has given rise to concern that children are missing out on parental attention. [more] Working Paper No. 439 |
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Working Papers | January 2006 Enhancing Livelihood Security through the National Employment Guarantee Act The National Rural Employment Guarantee Act of 2005 is a major development in the history of poverty reduction strategies and rural development policies in India. Though the successful passage of the Act is due to the long struggle by NGOs, academics, and some policymakers, its successful implementation is a much bigger challenge. [more] Working Paper No. 437 |
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Working Papers | January 2006 Time to Eat Eating requires the raw food materials that make up meals and also the time devoted to buying food, preparing meals and eating them, and cleaning up afterwards. Using time-diary and expenditure data for the United States for 1985 and 2003, I examine how income and time prices affect both time and goods input into this household-produced commodity. [more] Working Paper No. 434 |
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Working Papers | December 2005 All Types of Inequality Are Not Created Equal Evidence of an increase in various forms of inequality since the 1970s has motivated research on its relationship to growth and development. The findings of that research are contradictory and inconclusive. [more] Working Paper No. 433 |
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Working Papers | March 2005 Is the Equalizing Effect of Retirement Wealth Wearing Off? Retirement wealth is often viewed as a great equalizer, offsetting the inequality in standard household net worth. One of the most dramatic changes in the retirement income system over the last two decades has been a decline in traditional Defined Benefit (DB) pension plans and a sharp rise in Defined Contribution (DC) pensions. [more] Working Paper No. 420 |
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Working Papers | January 2005 Occupational and Industrial Mobility in the United States 1969–93 Using the Panel Study of Income Dynamics, we investigate occupational and industrial mobility of individuals over the 1969–80 and 1981–93 periods in the United States. We find that workers changed both occupations and industries more frequently in the later period. [more] Working Paper No. 416 |
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Working Papers | November 2004 Household Wealth Distribution in Italy in the 1990s This paper describes the composition and distribution of household wealth in Italy. First, the evolution of household portfolios over the last 40 years is described on the basis of newly reconstructed aggregate balance sheets. [more] Working Paper No. 414 |
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Public Policy Briefs | June 2004 The War on Poverty after 40 Years Twenty to 25 years ago, a debate was under way in academe and in the popular press over the War on Poverty. One group of scholars argued that the war, initiated by Presidents Kennedy and Johnson, had been lost, owing to the inherent ineffectiveness of government welfare programs. [more] Public Policy Brief No. 78, 2004 |
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Public Policy Brief Highlights | June 2004 The War on Poverty after 40 Years Twenty to 25 years ago, a debate was under way in academe and in the popular press over the War on Poverty. One group of scholars argued that the war, initiated by Presidents Kennedy and Johnson, had been lost, owing to the inherent ineffectiveness of government welfare programs. [more] Public Policy Brief Highlights No. 78A, 2004 |
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Book Series | June 2004 What Has Happened to the Quality of Life in the Advanced Industrialized Nations? Throughout the 1990s the United States expanded its lead over other advanced industrial nations in terms of conventionally measured per capita income. However, it is not clear that welfare levels in America have grown concomitantly with per capita income, nor that Americans are necessarily better off than citizens of other advanced countries. [more] Book Series, June 2004 |
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Working Papers | May 2004 Changes in Household Wealth in the 1980s and 1990s in the U.S. I find that despite slow growth in income over the 1990s, there have been marked improvements in the wealth position of average families. Both mean and median wealth grew briskly in the late 1990s. [more] Working Paper No. 407 |
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Public Policy Brief Highlights | April 2004 Asset Poverty in the United States Economic growth and a rising stock market in the 1990s gave the impression that everyone was accumulating wealth and asset poverty rates were declining. The impression was supported by the official, income-based poverty measure, which exhibited a sharp decline. [more] Public Policy Brief Highlights No. 76A, 2004 |
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Working Papers | April 2004 The "War on Poverty" after 40 Years Hyman Minsky is best known for his work in the area of financial economics, and especially for his financial instability hypothesis. In recent years, some authors have also recognized his advocacy of the "employer of last resort" as part of his "big government" intervention to help maintain stability. [more] Working Paper No. 404 |
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Public Policy Briefs | April 2004 Asset Poverty in the United States Economic growth and a rising stock market in the 1990s gave the impression that everyone was accumulating wealth and asset poverty rates were declining. The impression was supported by the official, income-based poverty measure, which exhibited a sharp decline. [more] Public Policy Brief No. 76, 2004 |
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Working Papers | January 2004 Inequality of the Distribution of Personal Wealth in Germany 1973–1998 This paper reports on trends in inequality of the distribution of household disposable wealth in West Germany from 1973 to 1998, and compares the changes in the size distribution of household disposable wealth in West and East Germany between 1993 and 1998. The empirical findings are based on several cross sections of the Income and Consumption Survey (ICS), which is conducted every five years by the German Federal Statistical Office. [more] Working Paper No. 398 |
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Working Papers | November 2003 The Evolution of Wealth Inequality in Canada Using data from the Assets and Debts Survey of 1984 and the Survey of Financial Security of 1999, the authors document the evolution of wealth inequalit |