Bryan Caplan and David Henderson

Income Distribution

A Category Archive (385 entries)

The Inanity of the Welfare State

Cost-benefit Analysis
Bryan Caplan
When most people stare at this table (courtesy of Greg Mankiw), they see strong evidence that the U.S. tax system is highly progressive.If you calmly peruse the table, however, a stranger pattern emerges - a pattern neither liberals nor conservatives... MORE

The Piketty Path to Riches

Income Distribution
Scott Sumner
This post is meant to be a sort of opening inquiry into what might become an important issue in the 21st century. I don't have strong views on the question. You may recall that Thomas Piketty assumed that savers can... MORE

Erin Ade, on RT (previously called Russia Today), which is funded by the Russian government, does another good interview of me. It seems strange. Other than John Stossel, no other electronic interviewer asks me such good questions. And, as I... MORE

Henderson on Piketty, Part 5

Books: Reviews and Suggested Readings
David Henderson
For Piketty and, presumably, Solow to calmly countenance the possibility of stagnating real wages just to keep capital's share from increasing, they would have to see some large problems with increasing inequality. Solow does not point out any such problems,... MORE

DeLong on How Income Has Grown in all Quintiles

Income Distribution
David Henderson
In a post entitled "Material Well Being in America Since 1979," Brad DeLong points out that average real income in all quintiles has grown since 1979. He quotes data from the Congressional Budget Office. Here's his quote: [American] real after-tax... MORE

Henderson on Piketty, Part 4

Income Distribution
David Henderson
Here's the next installment from "An Unintended Case for More Capitalism," my long review in Regulation of Thomas Piketty's Capital in the Twenty-First Century: How does Piketty handle this serious problem? [The problem that his proposed tax on capital would... MORE

Henderson on Piketty, Part 3

Income Distribution
David Henderson
More excerpts from my recently published review of Thomas Piketty's Capital in the Twenty-First Century. For those who are worried about growing wealth inequality because their own wealth is not growing, there is a simple solution: save more and invest... MORE

Housing and poverty

Regulation
Scott Sumner
The traditional definition of poverty in America has been criticized for ignoring factors such as government benefit programs and regional variation in the cost of living. Now the Census Bureau has released new estimates of poverty, which account for various... MORE

Henderson on Piketty, Part 2

Books: Reviews and Suggested Readings
David Henderson
In Piketty's view, if someone's share of wealth stays constant, he cannot be better off, even if wealth has increased. Yesterday I highlighted the opening of my lengthy published review of Thomas Piketty's Capital in the Twenty-First Century. Here's the... MORE

Henderson on Piketty, Part 1

Books: Reviews and Suggested Readings
David Henderson
My long review of Thomas Piketty's Capital in Twenty-First Century is finally out. It is titled "An Unintended Case for More Capitalism." Over the next few days, I'll be highlighting various parts of my review. Here's the first highlight: Unlike... MORE

Unclear Thinking About Income Inequality

Income Distribution
David Henderson
I wanted to let you know that on Wednesday, October 22, Intelligence Squared US will hold a debate on the motion "Income Inequality Impairs The American Dream of Upward Mobility." This is the opening sentence of a note I received... MORE

A certain laxity in word choice

Finance
Scott Sumner
Matt Yglesias is normally my favorite progressive blogger, but today I have two bones to pick. The first is perhaps a bit picky, as I object to a single word: On the other hand, one can make the case that... MORE

Tolerance Before Empathy

Economic Philosophy
Bryan Caplan
Suppose you have a ne'er-do-well cousin.  A long-term alcoholic and drug addict, he's been arrested about thirty times - though never convicted of a felony.  One day he comes to your door, and tells you a largely accurate history of... MORE

Our Poverty and Theirs

Behavioral Economics and Rationality
Bryan Caplan
I regularly praise Nicholas Kristof's courageous essay on Third World poverty.  While First World immigration policies and Third World economic policies cause enormous harm, the global poor exacerbate their woes with grotesquely irresponsible behavior.  Kristof:[I]f the poorest families spent as... MORE

The power of wishful thinking?

Income Distribution
Scott Sumner
Here's Paul Krugman in 2013: Joe Stiglitz has an Opinionator piece arguing that inequality is a big factor in our slow recovery. Joe is an insanely great economist, so everything he says should be taken seriously. And given my political... MORE

A few notes on utilitarianism

Income Distribution
Scott Sumner
As I expected, my post on utilitarianism generated a bit of controversy. In the comment section, konshtok wondered: what am I missing? from a utilitarian pov killing one person and using the organs to save the lives of others... MORE

Economics is all about consumption

Wealth distribution
Scott Sumner
Or at least it should be. And it was when I studied economics in grad school. In recent posts I've complained that the Piketty debate has focused on the wrong variables, income and wealth. These variables do not measure what... MORE

Piketty on "merit"

Wealth distribution
Scott Sumner
One thing I noticed while reading Thomas Piketty's new book was the topics that were not covered; progressive consumption taxes, Singapore (or indeed any of the 4 Asian "tiger economies"), and the link (if any) between ethnicity and great wealth.... MORE

Unpersuaded

Income Distribution
Scott Sumner
I recently completed reading Thomas Piketty's new book entitled Capital in the Twenty-First Century. Piketty explains why the distribution of capital is becoming increasingly unequal, why we need higher tax rates on upper income individuals, and also a wealth tax... MORE

Arnold Kling on Well-Being Over Time

Income Distribution
David Henderson
When I was a young assistant professor at the University of Rochester business school in the late 1970s, I had a picture on my desk of a cute dog saying, "I've been rich and I've been poor. Rich is better."... MORE

Let's think about (left) liberalism over the last 50 years. By the 1960s, income had become relatively equally distributed. Liberal economists grew increasingly skeptical of labor unions. When the UAW demanded higher wages, the money seem to come out of... MORE

The Daily Hell of the War on Drugs

Economics of Crime
David Henderson
It's an urgent situation, because Professor Goffman's book shows clearly that the microeconomics of a life on the run are grim indeed. This is the closing paragraph of Tyler Cowen's excellent piece, "The Financial Hazards of a Fugitive Life," New... MORE

The First Fundamental Law of Capitalism

Income Distribution
Scott Sumner
Suppose that I made the following claim: The formula M*V = P*Y is a pure accounting identity. It can be applied to all societies in all periods of history, by definition. Though tautological, it should nevertheless be regarded as the... MORE

Piketty on Kuznets

Income Distribution
Scott Sumner
I've started reading Thomas Piketty's now-famous Capital in the Twenty-First Century. Over at MoneyIllusion.com I have some observations on the opening chapter (which is all I have read so far.) Here I'd like to focus on one section of the... MORE

The Fungible Kidney

Economics of Health Care
Bryan Caplan
After I made my animated case for a free market in human kidneys, Zac Gochenour - my co-author and soon-to-be assistant professor at Western Carolina University -  originated a rather clever argument.  Quick version: Suppose you're now poor and healthy. ... MORE

The middle class is doing fine

Income Distribution
Scott Sumner
When I start reading an article there are a few red flags I look out for. If the writer starts discussing income inequality data as if it tells us something useful about economic inequality, I know I can pretty much... MORE

Has Medicaid succeeded?

Economics of Health Care
Scott Sumner
Fifty years ago America spent about 8% of GDP on "national defense" and 0% of GDP on Medicaid. By 2015 spending on both programs is forecast to be about 3% of GDP (roughly $540 billion--including the state portion of the... MORE

The Improvident Rich

Economic History
Bryan Caplan
From Larry Summers' review of Piketty:When Forbes compared its list of the wealthiest Americans in 1982 and 2012, it found that less than one tenth of the 1982 list was still on the list in 2012, despite the fact that... MORE

"Hollowing Out": A Global Perspective

Economic History
Bryan Caplan
Stagnationists often complain about the "hollowing out" of the economy: Well-paid middle-income jobs are disappearing.  Normally, they only look at the United States and other developed countries.  As a cosmopolitan, however, I'd rather discover what's been happening to incomes at... MORE

The Great Grandson Also Rises

Growth: Causal Factors
David Henderson
Our former co-blogger, Arnold Kling, has an excellent review on Econlib of Gregory Clark's latest book, The Son Also Rises. The review is titled "The Heritability of Social Status." You may have noticed that Clark, an economist historian at UC... MORE

The correct reason to oppose high MTRs

Tax Reform
Scott Sumner
In a recent post I suggested that relatively high marginal tax rates on consumption of the ultra-rich might be justified as part of a tax reform package that abolished the personal income tax, and also abolished the corporate income tax,... MORE

Consumption is the bedrock upon which essentially all of economics is built. We assume that all economic activity is aimed at creating consumption (defined broadly to include the value of leisure time, and non-market factors such as clean air.) Of... MORE

Robert Solow on Piketty

Books: Reviews and Suggested Readings
David Henderson
According to Solow, if Piketty gets his way, real wages will stagnate. My copy of Thomas Piketty's Capital in the Twenty-First Century finally arrived and now I face a tradeoff between reading it and reading many reviews of it. I'm... MORE

I Agree with Barbara Ehrenreich

Income Distribution
David Henderson
On a flight home from Las Vegas last night, I found the April 14 issue of Time magazine. I hadn't read it in years. On the last page was a feature called "10 Questions." They were 10 questions to "activist,... MORE

Inequality among doctors

Income Distribution
Scott Sumner
The following graph perked my interest: I notice that the inequality of Medicare payments mirrors the overall income inequality in American society. (Which is ironic as Medicare is a socialist program beloved by pundits like Paul Krugman.) I don't know... MORE

Pikkety and Inequality: My Reply to Commenters

Income Distribution
David Henderson
In response to my recent post on the New York Times interview with Thomas Piketty, a number of people commented relatively late in the game. For that reason, few regular readers will likely see their comments and so I'm choosing... MORE

Milton and Rose Friedman on Inequality

Income Distribution
David Henderson
Last week my group of students who work their way through readings had our last formal meeting. Good news: they decided over drinks afterwards that they want to continue the meetings informally next quarter and one of them suggested calling... MORE

Piketty's Dodge on Inequality

Income Distribution
David Henderson
New York Times economics columnist Eduardo Porter recently interviewed economist Thomas Piketty on his work on income and wealth inequality. Piketty, in case you haven't followed, has been documenting the increase in income and wealth inequality in the richer countries,... MORE

Being Sendhil Mullainathan

Economic Philosophy
Bryan Caplan
Harvard's Sendhil Mullainathan has a remarkable life story.  From a profile in Forbes:Born in a small farming village in India, Mullainathan lived there for seven years while his father moved to the U.S. to go to graduate school. On his... MORE

Is Outrage at the Top 1% Distracting Us?

Income Distribution
David Henderson
I worry about growing income inequality. But I worry even more that the discussion is too narrowly focused. I worry that our outrage at the top 1 percent is distracting us from the problem that we should really care about:... MORE

Poverty: The Stages of Blame Applied

Economic Philosophy
Bryan Caplan
What do my stages of blame imply about real-world poverty policy?1. As I've argued in detail here, poor healthy adults in the First World are largely undeserving.  Indeed, few are even objectively poor; just look at the many luxuries the... MORE

Poverty: The Stages of Blame

Economic Philosophy
Bryan Caplan
I've repeatedly argued that there's a connection between (a) how deserving the poor are, and (b) how the poor ought to be treated.  Unfortunately, as soon as I make this deliberately vague claim, many readers rush to ascribe specific, silly... MORE

The Happiness of the Richest

Behavioral Economics and Rationality
Bryan Caplan
Over lunch, Justin Wolfers mentioned a hard-to-believe fact: In a data set with an unusually high maximum income category, 100% of the richest people were "very happy."  I decided to track down the data.  Despite my incredulity, Justin's description was... MORE

The Minimum Wage vs. Welfare: Band-Aid or Salt?

Cost-benefit Analysis
Bryan Caplan
Peter Thiel entertains what economists would call a "second-best" argument in favor of raising the minimum wage:"In theory, I'm against it, because people should have the freedom to contract at whatever wage they'd like to have. But in practice, I... MORE

Why Income Mobility is Larger in the Middle

Income Distribution
David Henderson
Whenever we talk about income mobility, we should never forget that we're talking about mobility in each direction. One can move down the income scale as well as up. Indeed, if we measure income mobility of households by movement from... MORE

How Rival Marriage Is

Family Economics
Bryan Caplan
Last month, I observed:If you share your home with a spouse, you don't have as much space for yourself as a solitary occupant of the same property.  But both of you probably enjoy the benefits of more than half a... MORE

Confusion about Income Inequality

Income Distribution
David Henderson
My Econlog co-blogger, Scott Sumner, on his own blog, The Money Illusion, writes that G.I.'s (he thinks this is Greg Ip) post on The Economist blog is a "wonderful post." My view: it's good in some ways and not in... MORE

Why so glum?

Income Distribution
Scott Sumner
America's pretty much the same place as it was 6 years ago. If you drive around the country you see the same sorts of neighborhoods you saw 6 years ago. Incomes haven't changed very much. But Kevin Drum has a... MORE

Poverty and Income Inequality are Separate Issues

Income Distribution
David Henderson
"One reason that action to limit growing income inequality in the United States is difficult is that the growth in inequality is not a simple picture. Old-line leftists, if there are any left, would like to make it a single... MORE

Friday Evening Video: Henderson on Fox News Channel

Upcoming Events
David Henderson
If all goes according to plan, an interview I did with Jim Angle will air on Fox News Channel today: 6:00 p.m. EST and 3:00 p.m. PST. It started out as an interview on this study I wrote for the... MORE

In a post earlier this month, I reported on a Brief Analysis I did for the National Center for Policy Analysis, drawing on a journal article by Sabia and Burkhauser, showing that a hypothetical increase in the minimum wage from... MORE

Imagine there's no economic inequality

Income Distribution
Scott Sumner
Now let's see why there would still be enormous income inequality. 1.  Suppose everyone had identical lifetime wage income and inherited no money.  Also assume all investments were risk-free.  Incomes would still vary greatly due to different preferences regarding... MORE

The Prudence of the Poor

Behavioral Economics and Rationality
Bryan Caplan
Ari Fleisher in the WSJ:Given how deep the problem of poverty is, taking even more money from one citizen and handing it to another will only diminish one while doing very little to help the other. A better and more... MORE

John Cochrane Views the World

Taxation
David Henderson
One of the big advantages of having been an economist for a long time and having been at the Council of Economic Advisers 30 years ago is that I've gotten to know and follow a lot of people and their... MORE

Economists Joseph J. Sabia and Richard V. Burkhauser examined the effects of state minimum wage increases between 2003 and 2007 and reported that they found no evidence the increases lowered state poverty rates. Further, they calculated the effects of a... MORE

Robert Frank's Confusions

Income Distribution
David Henderson
Cornell University economist Robert Frank has become the Johnny One Note of economics. His one note: how bad wealth and income inequality (he often doesn't distinguish between the two although he should) are, along with his particular reasoning about why... MORE

How Rival Is Your Marriage?

Family Economics
Bryan Caplan
Two childless singles, each earning $50,000 a year, marry.  Both keep working, living by the old-school principle of "share and share alike."  What happens to their material standard of living?  If all depends on how rivalrous their consumption bundle is.If... MORE

Noah Smith on Redistribution

Income Distribution
David Henderson
If you read blogs much, which, presumably, you do, you know two things: (1) bloggers are often rude to each other, and (2) bloggers often talk past each other or refuse to answer each other's questions. That's why I think... MORE

Is Average Over?: Two Equivocal Graphs

Economic History
Bryan Caplan
Here are the unredacted graphs from "Tell Me What 'Average Is Over' Looks Like."Graph #1 is from 1978:Graph #2 is from 2008:What's equivocal?  Although the 2008 graph definitely has more inequality, the 2008 labor market consistently offers more continuous rewards... MORE

Tell Me What "Average Is Over" Looks Like

Books: Reviews and Suggested Readings
Bryan Caplan
Here are two graphs of lifetime male income distribution broken down by educational attainment.  One is for 1978, the other from 2008.  I deliberately redact the years and dollar values to preserve the mystery.Graph #1:Graph #2:Now you tell me: Without... MORE

Grow the Respect Pie

Behavioral Economics and Rationality
Bryan Caplan
I second David's praise for Noah's piece on respect.  But why talk about "redistributing respect" rather than "showing more respect"?  In econ jargon, why not increase the size of the respect pie instead of squabbling over the size of the... MORE

How the Welfare State Promotes Nativism

Labor Mobility, Immigration, Outsourcing
David Henderson
Two of the best writers in economics, and among the best thinkers, are Alan Blinder and his mentor, Robert Solow. They seem to share a common view of justice. It's a distributive view whereby the government takes from the well-to-do... MORE

Rising Male Non-Employment: Supply, not Demand

Income Distribution
Bryan Caplan
Tyler recently approvingly quoted Brad DeLong paraphrasing Larry Summers:My friend and coauthor Larry Summers touched on this a year and a bit ago when he was here giving the Wildavski lecture. He was talking about the extraordinary decline in American... MORE

When you leave out major sources of income, surprise, surprise, you estimate that income is lower than it really is. What about the "other 99 percent," whose income supposedly rose by only 0.4 percent from 2009 to 2012? Piketty and... MORE

Oppression is a Negative-Sum Game

Income Distribution
Art Carden
Oppression is nothing new, and it has caused suffering that echoes across generations. That one group was oppressed does not mean that members of the oppressing group--or at least their descendants--benefited from it. In a post with which I largely... MORE

College football season has started. I plan to go to a few Samford games and I'll keep up with my beloved Alabama Crimson Tide, but this is yet another year when I'm going to try to dial back my enthusiasm... MORE

Deirdre McCloskey: Julian Simon Award Winner

Economic History
Art Carden
Tonight, I'm introducing Deirdre McCloskey at the Competitive Enterprise Institute's annual dinner, where she will be recognized with the Institute's 2013 Julian Simon Award. Professor McCloskey is a most deserving recipient and one of the worthy intellectual heirs of Julian... MORE

Reynolds on Krugman and DeLong

Income Distribution
David Henderson
Alan Reynolds has posted two excellent responses to criticisms of him by Paul Krugman and Brad DeLong. They are "Imaginary Squabbles Part 3: Krugman and DeLong's Changing Theories and Missing Facts" and "Imaginary Squabbles Part 4: Krugman and DeLong on... MORE

Rector, Poverty, and Immigration

Cost-benefit Analysis
Bryan Caplan
Robert Rector and Jason Richwine's new Heritage report on the fiscal effects of immigration has been widely criticized (see here, here, and here for starters).  I'm honestly surprised that the report is not worse.  Rector and Richwine may get a... MORE

Scott Winship on Inequality

Income Distribution
David Henderson
The idea that our economy is held back by inequality is echoed in the claims of some of the nation's most prominent economists. Princeton professor (and Nobel laureate) Paul Krugman and David Card of the University of California, Berkeley, contend... MORE

The Duty to Give Away Everything You Don't Need

Economic Philosophy
Bryan Caplan
Many moral philosophies seem to imply a duty to give away everything you don't need.  Consider this statement by Nicole Hassoun over at Cato Unbound:I do not have property rights that extend so far that they allow me to withhold... MORE

The Rights of the World's Poor

Economic Philosophy
Bryan Caplan
Over at Cato Unbound, philosopher Nicole Hassoun prompted me to sketch the main argument I plan to make in Part II of Poverty: Who To Blame.  Namely: We should view people in the Third World as victims of First World... MORE

The GiveWell-Clemens Brainstorm

Cost-benefit Analysis
Bryan Caplan
Call it the nobility summit: The noble charity evaluator GiveWell brainstorms with the noble immigration researcher Michael Clemens.  The highlight for me (Clemens speaking):CITA is a non-profit organization in Yuma, AZ founded by Janine Duron, which aims to match Mexican... MORE

Tim Kane and Means-Testing

Behavioral Economics and Rationality
Bryan Caplan
Whenever an economist or libertarian opposes means-testing of Social Security and Medicare, I immediately ask: "So should we extend all currently means-tested programs to the entire population?"  Listeners often admit that it's a persuasive challenge.  At our last lunch, however,... MORE

Citing an OECD study, Yglesias notes:...America has the highest-paid general practitioners in the world. Why is this?  Presumably American MDs are great at using credentialism to restrict the supply of labor, but there's another possible reason that deserves your attention. Really, a... MORE

The Thriving Middle Class

Growth: Consequences
David Henderson
Don Boudreaux and Mark Perry have an excellent piece in the Wall Street Journal today, "The Myth of the Stagnant Middle Class." They cover a lot of interesting ground on how standards of living are rising even in the last... MORE

...the welfare state as social insurance.  After all, if you know how your kids are going to turn out, what's there to insure against?  Sure, you'd like to grab resources from other people--the raiding party has a long history--but it's only... MORE

Why didn't 19th and early 20th century empires massively raise productivity per worker in their colonies?  Why have the big improvements in productivity almost always happened after the imperialists either left or genuinely turned over power to the locals?  This... MORE

Malcom's Purge, Second Thoughts, and Murder (Chapters 16-19, plus Haley's Epilogue)SummaryBy the early 60s, Black Muslim leader Elijah Muhammad's health is failing, and internal resentment against Malcolm's success is starting to build.  He refuses publicity to calm the jealousy -... MORE

Single Parenthood: The Reason Matters

Family Economics
Bryan Caplan
Susan Mayer's What Money Can't Buy concludes by tossing out a fun fact I've often heard repeated.  (I even repeated it myself once in an exchange with Charles Murray).Both low income and single parenthood may in fact be correlated with... MORE

Hedengren's Dog

Behavioral Economics and Rationality
Bryan Caplan
Two decades ago, economists started taking intelligence seriously.  Now economists are starting to take conscientiousness seriously.  Unfortunately, most existing data sets don't contain personality tests.  Even when they do, personality tests are only self-reports. Wouldn't it be great if we... MORE

In an excellent Singapore econ-travelogue, Scott Sumner writes:My theory is that leftists don't really mind a place where income is unequal, they don't like places where income looks unequal. This is close to what pioneering blogger Mickey Kaus has been pushing... MORE

The Coming Tax Increases

Fiscal Policy
David Henderson
Remember when critics of the Romney tax plan claimed that under his plan, the middle class would face tax increases of about 2,000 per family? [Here's just one of many examples.] Well, unless state and local government plans for their... MORE

Escaping Poverty: Your Friendly Advice

Behavioral Economics and Rationality
Bryan Caplan
Suppose a 15-year-old from a poor family in the First World asked you an earnest question: "What can I do to escape poverty?"  How would you answer?Responses from progressives, liberals, moderates, and left-libertarians are especially welcome.... MORE

True by Definition: Redistribution and Economic Freedom

Cross-country Comparisons
Bryan Caplan
My main complaint about Scott Sumner is that he still hasn't joined the faculty of George Mason's Economics Department.  But I'm also unhappy about the distinction he frequently makes between "size of government" (or "redistribution") and "market freedom."  The latest... MORE

Malcolm and the Nation of Islam (Chapters 11-15)SummaryAt the urging of his siblings, imprisoned Malcolm writes a letter to Elijah Muhammad, leader of the Nation of Islam.  Elijah Muhammad responds, and before long Malcolm is not just a true believer,... MORE

Krugman Discovers Life Cycles

Income Distribution
David Henderson
I was about to write a post on Paul Krugman's excellent recent post on taxes, but commenter Matthew Lesich on Steven Landsburg's blog beat me to it. Still, comments often get lost and so I'll make the point anyway. In... MORE

The Autobiography of Malcolm X Book Club, Part 2

Economic History
Bryan Caplan
Malcolm's Life of Crime (Chapters 6-10)SummaryWaiting tables at Small's Paradise Bar is Malcolm's school of crime:Some of the ablest of New York's black hustlers took a liking to me, and knowing that I was still green by their terms, soon... MORE

Thoughts on Dickens

Economic Philosophy
David Henderson
Bill, that is, not Charles. Both co-blogger Bryan (here) and many of his commenters (here and here) have done a nice job of handling Bill Dickens' major criticisms of Bryan's views on poverty and the poor. I have a few... MORE

Reply to Bill Dickens on Poverty: Part 1

Behavioral Economics and Rationality
Bryan Caplan
Since Bill Dickens' last reply to me is essay-length, my plan is to write a series of relatively short replies, and spread them out over the next month.  Here's Part 1.  By default, Bill's in blockquotes, I'm not.You subscribe to... MORE

Household Incomes Declined During Recovery

Income Distribution
David Henderson
My guess is that many readers have already seen the articles and blog posts about the study of household incomes done by a firm named Sentier Research. Here's a sample post. The study shows that real median household income declined... MORE

Bill Dickens Responds on Poverty

Behavioral Economics and Rationality
Bryan Caplan
A few weeks ago Bill Dickens and I argued about poverty: see here and here for previous rounds.  Now Bill's written a lengthy response to my last post.  Italics indicate that Bill's quoting me.  Enjoy! Normal 0 MicrosoftInternetExplorer4 /* Style... MORE

I plan to do my first Autobiography of Malcolm X Book Club post on Friday, August 24.  Hope you're reading along!... MORE

Hans Rosling and the Washing Machine

Growth: Consequences
David Henderson
Here's a fantastic 9-minute video by Hans Rosling on how the washing machine revolutionized living standards. A personal note: I returned on Saturday from my cottage in Minaki, Canada. My grandfather built it in 1922 when he was 67 years... MORE

The Great Factor Substitution

Growth: Causal Factors
Arnold Kling
The New York Times reports, Even as Foxconn, Apple's iPhone manufacturer, continues to build new plants and hire thousands of additional workers to make smartphones, it plans to install more than a million robots within a few years to supplement... MORE

Coming Apart Watch

Income Distribution
Arnold Kling
Timothy Taylor points to a Pew study of housing segregation by income class. Not surprisingly, it is on the rise. the authors calculate what they call a Residential Income Segregation Index, which comes from "adding together the share of lower-income... MORE

Brink, Me, and Human Capitalism

Income Distribution
Bryan Caplan
Brink Lindsey replies to my comments on an earlier draft of his new book, Human Capitalism.  Highlights and brief rejoinders follow.  Brink's in blockquotes, I'm not:Thanks to Bryan I dove into that literature and found that it does indeed offer... MORE

Human Capitalism: Comments on Brink Lindsey's Draft

Books: Reviews and Suggested Readings
Bryan Caplan
Brink Lindsey sent me a draft of his just-released Human Capitalism (now available for purchase) back in February.  Here's what I told him then, reprinted with his permission.  From what I understand, Brink took some of my suggestions to heart,... MORE

Autobiography of Malcolm X Book Club?

Book Club
Bryan Caplan
I first read The Autobiography of Malcolm X in high school, and just re-read it for the fourth time.  It may sound like an eccentric choice, but I'm thinking of starting a new EconLog book club on this work.  AMX... MORE

Landsburg on Median Income

Income Distribution
David Henderson
Steve Landsburg has an excellent post today showing that to know what has happened to incomes of various groups, you have to look behind the median. Of course, anyone who has used statistics carefully knows this, but it's amazing how... MORE

Bill Dickens on Me on Poverty: A Rejoinder

Behavioral Economics and Rationality
Bryan Caplan
One of my great privileges is to have a mentor and critic as good as Bill Dickens.  And truth be told, the best criticism of a project is early criticism.  Here's my reaction to his initial critique of Poverty: Who... MORE

Enrico Moretti on Mobility

Growth: Causal Factors
Arnold Kling
Interviewed by Nick Schulz, he says, In total, almost half of college graduates move out of their birth states by age 30. Only 27 percent of high school graduates and 17 percent of high school dropouts do so. It is... MORE

Bill Dickens on Me on Poverty

Behavioral Economics and Rationality
Bryan Caplan
The noble Bill Dickens responded on Facebook to my recent posts on poverty.  Reprinted with his permission.  My rejoinder is coming shortly.@Bryan Before you get too heavily into this new book, what happens in countries with more generous social welfare... MORE

Brink Lindsey's New eBook

Books: Reviews and Suggested Readings
Arnold Kling
It is called Human Capitalism. It might be called The Age of Abundance* (*for some people). Brink is trying to thread the needle between those who view the poor as victims and those who apparently don't. (Bryan read an earlier... MORE

The Fallacy of Dulling the Pain of Poverty

Behavioral Economics and Rationality
Bryan Caplan
Why are the poor more likely to abuse drugs and alcohol?  As a matter of dollars and cents, substance abuse should rise, not fall, with income.  These habits are expensive, both directly and indirectly.  Directly: Drugs and alcohol cost money. ... MORE

Poverty and Behavior: Generalizing Yglesias

Behavioral Economics and Rationality
Bryan Caplan
Last week, Matt Yglesias had an extremely insightful critique of the view that unemployment remains high because "we are not as wealthy as we thought we were": It is both true that we are not as wealthy as we... MORE

Avent and Yglesias Reinforced

Income Distribution
Arnold Kling
By Peter Ganong and Daniel Shoag. They write, population is no longer flowing to richer states...in recent years (1) the real returns to migration to productive places have fallen dramatically for low-skilled workers but have remained high for high-skilled workers,... MORE

Financial Advisor

Finance
David Henderson
NOTE: This post is NOT financial advice. Rather, it's my relating of some interesting stories that my tax accountant told me. Every March I have my annual meeting with my tax accountant. The meeting lasts 30 minutes. In the first... MORE

Teen Pregnancy

Income Distribution
Arnold Kling
Timothy Taylor's post is based on an article by Melissa S. Kearney and Phillip B. Levine in the journal Taylor helps to edit. The cause-and-effect evidence here suggests that for many women who give birth as teenagers, their life outcomes... MORE

Diamond Age Watch

Income Distribution
Arnold Kling
Timothy Taylor writes, Orazio Attanasio, Erik Hurst, and Luigi Pistaferri provide evidence that inequality of consumption has risen as well. But here, I want to focus on another one of their arguments: the rise in inequality of leisure. But there's... MORE

The Top 0.1 Percent

Human Capital: Returns to entrepreneurs, skills, etc.
David Henderson
Paul Krugman has a post today linking to an article in the New York Times magazine about a wealthy man named Edward Conard. In the second line of his post, Krugman writes: Because, you see, they don't spend all their... MORE

The Bottom One Percent

Income Distribution
David Henderson
I gave a short talk yesterday at a mixer of the Monterey County Libertarian Party, Libertarians for Peace, and Seaside Taxpayers' Association. I always try to come up wth something a little new that I haven't said before, so I... MORE

Alternative to Charles Murray

Income Distribution
Arnold Kling
Bo Winegard and Ben Winegard write, A thirtysomething Wal-Mart cashier cannot reasonably expect that his hard work will be rewarded with consistent raises and promotions, terminating, perhaps, in a solid management job. Thus the new lower class is deprived of... MORE

Brief Notes from Kansas City

Income Distribution
Arnold Kling
Here is Tyler Cowen in cartoon form. At lunch, at our table we were talking about the question of why redistributive policies are not more popular with voters. Brink Lindsey said that voters prefer to affiliate with successful people than... MORE

If Coming Apart is right, what should we do?  Charles Murray already proposed one frankly bizarre set of solutions in the NYT.  Now he offers a rather different set of solutions in the WSJ.  Or to be precise, one solution. ... MORE

Inequality and Status

Income Distribution
Arnold Kling
Jason Collins discusses the view that inequality is good because rich consumers stimulate innovation. I allude to this theory in my Khan-Academy style take on inequality for a forthcoming panel.... MORE

Losing Ground, The Bell Curve, and Coming Apart: A Reconciliation

Behavioral Economics and Rationality
Bryan Caplan
During Arnold's video conference on Coming Apart, Brink Lindsey pointed out the curious fact that Charles Murray wrote three different books about poverty, each with a different explanation.*  Losing Ground says that the welfare state gives the poor perverse incentives. ... MORE

My Beautiful Bubble

Economics and Culture
Bryan Caplan
Unlike many readers of Coming Apart, you don't have to convince me that I live in a Bubble.  I've known it for decades.  In fact, I think my 3-out-of-20 score on the "How Thick Is Your Bubble?" quiz greatly overstates... MORE

Discussing Charles Murray

Books: Reviews and Suggested Readings
Arnold Kling
I organized a video conference to discuss Coming Apart. Participants were Brink Lindsey, Bryan Caplan, Megan McArdle, Reihan Salam, and Ross Douthat. There was not much discussion of the findings in the book, because everybody seemed to accept them. However,... MORE

The Solutions Murray Should Have Proposed

Income Distribution
Bryan Caplan
I'm fan of Coming Apart.  But I'm baffled by the policy "solutions" Charles Murray proposes in today's NYT.  Impose a minimum wage on internships?  Ban the SAT in favor of achievement tests?  Switch to socioeconomic affirmative action?  Forbid the use... MORE

Charles Murray Watch

Income Distribution
Arnold Kling
From Esquire, August 29, 1978: THE DANGEROUS ARROGANCE OF THE NEW ELITE by David Lebedoff -- For the first time, the author contends, there is emerging in America an intelligent elite that genuinely mistrusts the basic tenets of democracy. The... MORE

Charles Murray Watch

Economics of Education
Arnold Kling
Helen Ladd writes, when first measured in the early 1940s, the gap in reading achievement between children from high and low income families was about 0.60 standard deviations. It subsequently more than doubled to 1.25 standard deviations by 2000. These... MORE

Life Among the Thetes

Income Distribution
Arnold Kling
Matt Yglesias writes, stagnating real working-class wages are calculated by using a meaningless overall average rate of price inflation. Some things--college tuition, apartments in Manhattan, health care--have gotten more expensive much faster than average. This means that people who buy... MORE

Segregation

Income Distribution
Arnold Kling
The indispensable Timothy Taylor writes, Take the two most common measures of residential segregation, the "dissimilarity index" and the "isolation index" (both explained further in a moment). Apply them to the 10 largest American cities using Census data The pattern... MORE

Krugman, Human Weakness, and Desert

Behavioral Economics and Rationality
Bryan Caplan
Krugman makes fascinating concessions to David Brooks:David says,I don't care how many factory jobs have been lost, it still doesn't make sense to drop out of high school.True enough. But suppose we apply the same logic to another problem, say... MORE

Being Single Is a Luxury

Family Economics
Bryan Caplan
I'm baffled by people who blame declining marriage rates on poverty.  Why?  Because being single is more expensive than being married.  Picture two singles living separately.  If they marry, they sharply cut their total housing costs.  They cut the total... MORE

Murray, Frum, and the Hurricane Analogy

Books: Reviews and Suggested Readings
Bryan Caplan
David Frum's critique of Charles Murray's Coming Apart begins with an analogy:To understand what Murray does in Coming Apart, imagine this analogy: A social scientist visits a Gulf Coast town. He notices that the houses near the water have all... MORE

Who Cares About the Poor?

Income Distribution
Arnold Kling
Scott Winship writes, Whether politicians ignore the poor and pander to the middle class or scare the middle class into thinking they are as bad off as the poor, the result is likely to be the same. Most of our... MORE

Segregation

Economics of Education
Arnold Kling
One of the issues that I have been thinking about since reading Coming Apart is segregation. 1. Where Bryan sees college as a useful signaling device for those who are cognitively gifted, I see it as a useful segregation device... MORE

"How Deserving Are the Poor?": My Opening Statement

Economic Philosophy
Bryan Caplan
Thanks to everyone who attended last night's debate, and especially to Karl Smith for being such a good sport.  In the near future, I'll put up a webpage of debate resources, including full video.  For now, here's my opening statement... MORE

Kling on Charles Murray

Books: Reviews and Suggested Readings
Arnold Kling
So, I downloaded Coming Apart. I am not disappointed. It is well argued. In 1963, there just wasn't that much difference between the lifestyle of a highly influential attorney or senior executive of a corporation and people who were several... MORE

David Brooks on Charles Murray

Books: Reviews and Suggested Readings
Arnold Kling
He writes, The truth is, members of the upper tribe have made themselves phenomenally productive. They may mimic bohemian manners, but they have returned to 1950s traditionalist values and practices. They have low divorce rates, arduous work ethics and strict... MORE

The Bubble Quiz

Income Distribution
Arnold Kling
We've been discussing Charles Murray's Coming Apart, and now there is a quiz you can take to find out if you are living in an elitist bubble. My score was reported as "between 5 and 8," which is weird, since... MORE

A Different Mr. Negative

Income Distribution
Arnold Kling
Mark Thoma writes, I hate to be Mr. Negative today, but I'm less than fully convinced that we are anywhere near embarking on a path that places the welfare of the middle class at the forefront of economic decisions. One... MORE

Next week, I'm going to debate Modeled Behavior's Karl Smith on "How Deserving Are the Poor?"  Logistics:Date: Wednesday, February 1Time: 6:00-9:00 PMLocation: Johnson Center Meeting Room A, George Mason University (Fairfax Campus)My strategy, as usual, is to use an uncontroversial... MORE

Murray's Blind Spots

Books: Reviews and Suggested Readings
Bryan Caplan
I'm an admirer of Charles Murray's Coming Apart.  But two big blind spots stand out:1. Drugs.  Murray chronicles the massive increase in the U.S. prison population without mentioning, much less condemning, the War on Drugs.  [S]urveys on drug use wouldn't... MORE

An Optimist's Take on Charles Murray's Coming Apart

Income Distribution
Bryan Caplan
On Friday, I read Charles Murray's new book, Coming Apart: The State of White American, 1960-2010, cover to cover.  Murray's given the world another social science page turner, written with earnest eloquence and full of fascinating information.  His main claim:... MORE

No Comment

Income Distribution
Arnold Kling
Richard Bookstaber writes, I believe we are seeing the twilight of the era of conspicuous consumption. Jessica Wakeman writes, Beyoncé's Birthing Suite Is Nicer Than My Apartment Pointers from Tyler Cowen and Glenn Reynolds, respectively.... MORE

How Egalitarianism Increases Inequality

Income Distribution
Bryan Caplan
All else equal, people in respected professions make less money.  The mechanism is simple:1. People like to be respected.2. People know that if they enter a respected profession they will personally enjoy more respect.3. This increases the supply of people... MORE

Worth Reading

Finance: stocks, options, etc.
Arnold Kling
The latest issue of National Affairs has a number of interesting articles. Scott Winship challenges the claim that economic life has become more risky. Note that this is separate from Winship's article on income mobility, which also is worth a... MORE

The Bell Curve or The Bimodal Distribution?

Income Distribution
Arnold Kling
Charles Murray writes, As recently as half a century ago, Americans across all classes showed only minor differences on the Founding virtues. When Americans resisted the idea of being thought part of an upper class or lower class, they were... MORE

Kahneman, Greed and Success

Income Distribution
Bryan Caplan
I just finished Daniel Kahneman's Thinking, Fast and Slow.  The book is a masterpiece.  Most popular science books are 10% substance, 90% fluff.  Kahneman reverses those percentages - yet remains a breezy joy to read.  Thinking taught me much about... MORE

Trends to Watch, Updated

Growth: Causal Factors
Arnold Kling
Following up on last year's post on long-term trends (which in turn followed up on a post from 2005: 1. Productivity growth has tailed off in recent quarters. It varies so much on a year-to-year basis that it takes quite... MORE

Megan McArdle is a Vicky

Income Distribution
Arnold Kling
She writes, If you're like, well, almost everybody, you're not saving enough. 15% of each paycheck into the 401(k) is the bare minimum you can get away with If I were to channel my inner David Graeber, I would say... MORE

Income Distribution Policy

Income Distribution
Arnold Kling
Timothy Taylor has a must-read post. (I could say that almost every day, but today I am going to provide additional commentary.) It's long, but here is a brief excerpt. On the tax side, the U.S. tax code is already... MORE

News Item: Half of American Families are Below the Median

Income Distribution
David Henderson
The title of this post should have been the title of my post yesterday. As one of the commenters, Zach Pruckowski, pointed out, the new poverty measure that the U.S. Census Bureau uses does include food stamps. My bad. But... MORE

How Food Stamps Increase Measured Poverty

Income Distribution
David Henderson
The leading story in the Monterey County Herald this morning is titled, "Nearly half in U.S. near poverty or low-income." It is Hope Yen's Associated Press item, and the leading two paragraphs are: Squeezed by rising living costs, a record... MORE

Inside the New Poverty Measure

Income Distribution
Arnold Kling
Robert Lerman looks at how the sausage got made. the SPM threshold is a relative concept. It equals what a family with two children at the 33rd percentile of spending devote to food, clothing, housing, and utilities plus another 20%... MORE

Random Family and Inequality

Income Distribution
Arnold Kling
Greg Mankiw posts a video of Harvard colleagues discussing the issue of inequality. It's very long, so I did not watch all of it, but I skipped around. The one person on the panel who was new to me was... MORE

A Pithy Sentence

Income Distribution
Arnold Kling
from Larry Summers. A general posture for government of standing up for capitalism rather than particular well-connected capitalists would also serve to mitigate inequality. Pointer from Mark Thoma.... MORE

Shorter Diamond Age

Income Distribution
Arnold Kling
That is how I would describe Tyler Cowen's latest column. higher income inequality will increase the appeal of traditional mores -- of discipline and hard work -- because they bolster one's chances of advancing economically Reading that, I could not... MORE

In a blog post today, Mark Thoma shows a graph giving the poverty rate with and without "the safety net," the euphemism for government welfare programs. It is from the Center on Budget and Policy Priorities. The Center looks at... MORE

Is the Government an Efficient Charity?

Income Distribution
Arnold Kling
Tyler Cowen agrees with me that the most interesting sentence in Shikha Dalmia's essay is in 1979, households in the bottom quintile received more than 50 percent of all transfer payments. In 2007, similar households received about 35 percent of... MORE

Mobility and Marriage

Income Distribution
Arnold Kling
Bryan picked up on the fact that what we call intergenerational "economic mobility" (or lack thereof) is very much a cultural phenomenon. I would like to add that marriage patterns play a role, too. If economic classes become more endogamous... MORE

From Mobility to Misanthropy

Economic Philosophy
Bryan Caplan
Scott Winship's written a good piece on ingenerational income mobility... with one highly objectionable passage.  Ponder the underlying philosophy here:[R]educing the number of unplanned pregnancies would unquestionably reduce the number of children experiencing divorce and other disadvantages. Since it is... MORE

Politically Correct Employment

Income Distribution
Arnold Kling
Kenneth Anderson writes, Even more frightening is the young woman who graduated from UC Berkeley, wanting to work in "sustainable conservation." She is now raising chickens at home, dying wool and knitting knick-knacks to sell at craft fairs. Her husband... MORE

Student Loans

Income Distribution
Arnold Kling
Mike Konczal writes, Because of legal choices we've made in how to set up this relationship, it stays forever, is virtually impossible to discharge under hardship, churns fees when it goes bad, and creditors can get to anything, including Social... MORE

Lifted from the Comments

Income Distribution
Arnold Kling
John Nye writes on this post, precisely because the West is much richer, positional or status goods are consequently more important. The struggle over status goods can be masked when you have rapid growth and a lot of mobility. But... MORE

The Myth of the Median Worker

Macroeconomics
Arnold Kling
Russ Roberts continues to engage with Tyler Cowen on whether there has been stagnation. A lot of the argument is over what has happened to the median worker. But that may not be a useful construct. Let us continue to... MORE

The Top 1 Percent Includes You

Growth: Consequences
David Henderson
But if you take a wider and longer view, you reach a striking conclusion: virtually every American who has heard John Kerry or Al Gore speeches is in the top one percent. This includes the middle-class family from Indiana, the... MORE

Bruce Meyer on Income Distribution

Income Distribution
Arnold Kling
Outstanding podcast with Russ Roberts. I did not expect to listen to much of it, but I wound up listening to all of it. Important tidbits include the fact that poor people tend to under-report income in surveys. This makes... MORE

Single Motherhood and Poverty: A Few More Replies

Economic Philosophy
Bryan Caplan
Lots of good comments on my critique of Marsh.  Some quick replies:PrometheeFeu: A lot of women either do not know about birth-control or more commonly do not know how to obtain or use it. Also, some disastrous education policies have... MORE

When to Wash Your Hands

Economic Philosophy
Bryan Caplan
John Marsh replies to my critique of his most outrageous passage:Bryan thinks single-motherhood is a choice, I think it is more or less a given. In other words, if, like me, you wanted to reduce levels of poverty in the... MORE

Marsh vs. A Simple, Effective Way to Avoid Poverty

Income Distribution
Bryan Caplan
I genuinely like John Marsh's Class Dismissed.  But now it's time to attack the most outrageous passage in the entire book.  Here's Marsh's take on the view that "increased poverty rates owe to an increase in single-parent homes":Nearly two-thirds of... MORE

Russ Roberts vs. the Great Whatever

Income Distribution
Arnold Kling
He writes. So my challenge to Tyler is to tell me what he thinks the stagnation in median income signifies. Has there been a change in the returns to education or creativity? Or is it mostly a statistical artifact? Whichever... MORE

30 Million Non-Poor Americans Have Been Mislaid

Income Distribution
David Henderson
Because, today, we are no longer counting those who are in poverty after we've helped them. Today we are counting the number who are in poverty before we've helped them. Tim Worstall explains the weird way in which the federal... MORE

The Great AI Shift?

Growth: Consequences
Arnold Kling
Jaron Lanier says, If you had talked to anyone involved in it twenty years ago, everyone would have said that the ability for people to inexpensively have access to a tremendous global computation and networking facility ought to create wealth.... MORE

How I Fought Envy, Part 3

Economic Philosophy
David Henderson
Here's the third installment (for the first two, see here and here) in how I have fought my envy over the years (taken from The Joy of Freedom: An Economist's Odyssey.) The third thing that helps me when I feel... MORE

How I Fought Envy, Part 2

Economic Philosophy
David Henderson
I promised in my post two days ago to tell the other two steps I used, and, truth be told, still occasionally must use, to fight my envy. Here's the next passage from my book, The Joy of Freedom: An... MORE

How I Fought Envy

Economic Philosophy
David Henderson
I totally agree with Bryan Caplan's post on envy. Well done, Bryan. And I can say from personal experience that I fought it in myself. Some excerpts from my chapter, "Whose Income, Who's Distributing?" in my The Joy of Freedom:... MORE

Stop Coddling Warren Buffett

Income Distribution
Arnold Kling
He writes, Last year my federal tax bill -- the income tax I paid, as well as payroll taxes paid by me and on my behalf -- was $6,938,744. That sounds like a lot of money. But what I paid... MORE

Gender and the New Commanding Heights

Growth: Consequences
Arnold Kling
Don Peck writes, As recently as 2001, U.S. manufacturing still employed about as many people as did health and educational services combined (roughly 16 million). But since then, those latter, female-dominated sectors have added about 4 million jobs, while manufacturing... MORE

Recommendations on Income Distribution

Income Distribution
Arnold Kling
1. Hispanics have lost wealth proportionately more than whites. I think it is pretty easy to connect the dots between government policy to expand home ownership and this outcome. As I said at the Senate banking committee, buying a home... MORE

Don't Tell Tyler Cowen

Income Distribution
Arnold Kling
About this paper by Ilyana Kuziemko, and others. Why do low-income individuals often oppose redistribution? We hypothesize that an aversion to being in "last place" undercuts support for redistribution, with low-income individuals punishing those slightly below themselves to keep someone... MORE

The Great Factor-Price Equalization, Again

Growth: Consequences
Arnold Kling
Dani Rodrik and Timothy Taylor both have posts, including charts, comparing growth in emerging economies with growth in developed economies. Rodrik (pointer from Mark Thoma) is writing about the past twenty years. For the first time ever, developing countries as... MORE

John Goodman Hits a Home Run

Economics of Health Care
David Henderson
On his health policy blog this morning, John Goodman asks whether there's a moral case for the Affordable Care Act. The whole thing is worth reading. Some excerpts: Search the world's ethical codes and you will have a hard time... MORE

David Henderson's Persuasive Case

Growth: Causal Factors
Arnold Kling
In his book review, Henderson writes, whatever explanation Cowen comes up with for the slower growth of median family income since 1973 should be one that is consistent with the relatively healthy growth of per capita GDP since 1973. Do... MORE

Orszag on Inequality in Life Expectancy

Economics of Health Care
David Henderson
Few would deny that a few additional years of life would be more precious to most Americans than the extra money they might receive from government transfers. If inequality in things that matter is important, there is a basic inequality... MORE

Kindred Spirit

Growth: Consequences
Arnold Kling
Kindred Winecoff writes, I do not see a world economy that has stagnated overall. I don't even see a US economy (pre-2008) that has stagnated. I see a redistribution from a certain class of American workers to workers with similar... MORE

Immigration and the Welfare State

Political Economy
Bryan Caplan
I still looking for the time to respond to Tino Sanandaji.  In the meanwhile, though, here's Henry Farrell on a new APSR paper on the political economy of the welfare state:[T]hey argue that if one tries to hold racial and... MORE

Anecdotes of an Informal Economy

Income Distribution
Arnold Kling
Victor Davis Hanson writes, There is a vast and completely unreported cash economy in Central California. Tile-setters, carpenters, landscapers, tree-cutters, general handymen, cooks, housekeepers, and personal attendants are all both finding work and being paid in cash. Peddlers (no income... MORE

Interpreting Data

Economic Methods
Arnold Kling
Two interesting examples. 1. John Taylor attempts to take on Krulong. He writes, For all of 2007, spending was 19.6 percent of GDP. For all of 2021--after the impacts of the recession and the final year of the budget window--the... MORE

Random Recommendations

Income Distribution
Arnold Kling
1. Robin Hanson writes, We humans are much better at coming up with reasons for opinions than at choosing coherent sets of opinions He shows a video of students asked about a proposal to redistribute grade-point averages by forcing the... MORE

Women Won't Marry Down

Income Distribution
Arnold Kling
So Kay Hymowitz asserts. the biggest reason we probably won't see a lot more college-educated women walking down the aisle with their plumber is one we don't like to say out loud: they want to have smart kids. Educated men... MORE

The Best Charities

Income Distribution
David Henderson
I received the following from a regular reader of this blog, an economics professor who was one of my best teachers when I studied economics for a year at the University of Western Ontario: Hi David, I have enjoyed your... MORE

John Goodman on Inequality and Lotteries

Income Distribution
David Henderson
I can't think of anything in the private sector that even begins to compare to this reverse Robin Hood redistribution from the poor to the rich and the nouveau riche. And remember, in order to pull it off, government first... MORE

How to Help Poor People in Poor Countries, Part 2

Income Distribution
David Henderson
I was gratified by the response--in quantity and quality--to my post yesterday, "How to Help Poor People in Poor Countries, Part 2." I promised to say what my colleagues wrote in response to my question. Before doing so, I'll point... MORE

How to Help Poor People in Poor Countries, Part 1

Income Distribution
David Henderson
About 40 to 60 percent of the economists around my campus--the Naval Postgraduate School--get together for a brown-bag lunch around a table once a month and just talk about whatever is on our minds. We're an eclectic bunch. There are... MORE

In a comment on my post, Minimum Wage: The Missing Explanation, Tom West writes: I'm not certain it's necessarily a net loss for the USA to have actually had labor laws and unionization that led to a middle class large... MORE

James Heckman on the Great Stagnation

Income Distribution
Arnold Kling
He writes, Currently, over 40% of all American children are born out of wedlock and more than 12% of all children live in families where the mother has never married. Such families provide fewer financial and parenting resources for child... MORE

New from the NBER

Behavioral Economics and Rationality
Arnold Kling
1. (no ungated version found) Kevin S. Milligan and David A. Wise on factors affecting labor force participation of the elderly, an important issue relative to Social Security. 2. Justine Hastings and Olivia S. Mitchell on how savings behavior and... MORE

Falkenstein vs. Sumner

Finance: stocks, options, etc.
Arnold Kling
Scott Sumner writes, I define "finance" as the business of allocating capital, which is a bit different from how it shows up in the national accounts. For instance, I believe the CEOs of major non-financial companies are being paid (in... MORE

Economic Slack

Income Distribution
Arnold Kling
Shalah M. Mostashari writes, As more firms take advantage of the cost savings of an increasingly international division of labor, continued growth in the variety of imports coming from developing nations can be expected. Pointer from Mark Thoma. Let me... MORE

Cost-of-Living Arbitrage

Income Distribution
Arnold Kling
Ed Glaeser writes, If economic productivity - created by low regulations or anything else - was causing the growth of Texas, Arizona and Georgia, then these places should have high per capita productivity and wages. Yet per capita state product... MORE

Two Views of Class Struggle

Political Economy
Arnold Kling
Jeff Sachs writes, Since Ronald Reagan became President in 1981, America's budget system has been geared to supporting the accumulation of vast wealth at the top of the income distribution. Amazingly, the richest 1% of American households now has a... MORE

Goodman on Wealth

Income Distribution
David Henderson
I think I can safely say that I have never met a person in an ordinary walk of life who complained about society's distribution of income. I've never heard a normal person say the world would be better off per... MORE

Self-Recommending

Income Distribution
Arnold Kling
1. Deirdre McCloskey interviewed about her latest book. (Elsewhere, David Brooks channels her, but without any citation. This shabby treatment contrasts with his generous treatment of Nick and me a year ago.) 2. Tyler Cowen, ostensibly on inequality. But it... MORE

The Morning Newspaper

Books: Reviews and Suggested Readings
Arnold Kling
1. Tyler Cowen writes in the New York Times, Wealthy people will always be able to buy most of what they want. But for everyone else, if we stay on the current course, the lines are likely to get longer... MORE

Work Choices, Money, and Status

Income Distribution
Arnold Kling
If Greg Mankiw did not know that his latest column on the incentive effects (on Greg) of higher marginal tax rats would be ill-received, then he is somewhere along the autism spectrum. Tyler Cowen tries to return the discussion to... MORE

Some Trends of Interest

Labor Market
Arnold Kling
1. Menzie Chinn offers charts that demonstrate that unemployment is highest in 2010 among those who had the lowest income in 2008. Does that mean that they have the stickiest wages? Just kidding. I think the one thing we could... MORE

The view that the U.S. government actually increases income inequality used to be limited to (some) libertarians and socialists.  After the bailouts of 2008 and beyond, though, even moderates might start to wonder.  Where does the truth lie?  Please show... MORE

Tax Rates, 1990 to Now

Taxation
David Henderson
In a comment on my post, "From the Vault: My Review of Krugman," commenter David C writes: I'd like to point out that on taxes at least, Krugman's position hasn't changed from 1990. He still thinks the tax rates we... MORE

From the Vault: My Review of Krugman

Books: Reviews and Suggested Readings
David Henderson
I was web searching this morning in the Fortune archives--I wrote a lot of articles and books reviews for Fortune between 1983 and the late 1990s--and I came across my December 31, 1990 review of Paul Krugman's 1990 book, The... MORE

Twenty-Somethings

Income Distribution
Arnold Kling
From a long piece in the New York Times Magazine: How about expanding programs like City Year, in which 17- to 24-year-olds from diverse backgrounds spend a year mentoring inner-city children in exchange for a stipend, health insurance, child care,... MORE

Hayek on Social Justice

Central Planning vs. Local Knowledge
David Henderson
Yesterday I was reading excerpts from Hayek's Law, Legislation, and Liberty to prepare for a conference this coming weekend in Seattle. Here are some choice excerpts from Hayek's discussion of "social justice." For the same reason that the prices which... MORE

David Friedman on Robert Frank

Income Distribution
David Henderson
I posted a few days ago on the debate between David Friedman and Robert Frank about income distribution. Since then, Robert Frank has replied to David Friedman and David Friedman then replied to Frank. Well worth reading for two reasons.... MORE

Marriage and Inequality

Income Distribution
Arnold Kling
Richard Fry and D'Vera Cohn write, In 2007, median household incomes of three groups -- married men, married women and unmarried women -- were about 60% higher than those of their counterparts in 1970. But for a fourth group, unmarried... MORE

The U.S. Welfare State

Income Distribution
Arnold Kling
I was invited to contribute to a British booklet called Small State, Big Society. Feeling contrarian, I refused to describe the U.S. as a small state. Instead, I wrote, The United States has a surprisingly large welfare state. The American... MORE

The Case Against Inequality

Income Distribution
Arnold Kling
In an interview, Richard Wilkinson says I think people are extremely sensitive to status differentiation and to being looked down on, or disrespected, and those often seem to be the triggers to violence. We quote an American prison psychiatrist who... MORE

What About the Bloggers?

Economic Philosophy
Bryan Caplan
One objection to my meritocratic view of the market (work backwards from here) that I haven't heard: "What about the bloggers?"  Some bloggers are great, some aren't, yet almost all of them earn the same wage - zero.  You could... MORE

How to Give to Haiti?

Income Distribution
David Henderson
I'm convinced that I want to give money to help people in Haiti. I haven't done so yet because I haven't found the right charity. Tyler Cowen has suggested two but I was underwhelmed by his suggestions. Some have said... MORE

Soft Rule-Utilitarianism

Institutional Economics
Arnold Kling
In my follow-up to James Manzi's manifesto, I brought up a notion that I call soft rule-utilitarianism. In the comments, Manzi interpreted this as being close to what I would call hard rule-utilitarianism.... MORE

Hansonian Foreign Aid

Behavioral Economics and Rationality
Arnold Kling
Bill Easterly and Laura Freschi point to a study showing that foreign aid increases happiness--for the donor countries. For the recipients, not so much. I have not read the study, but I doubt that I would find the research methods... MORE

Are American Doctors Overpaid?

Economics of Health Care
Arnold Kling
Sherry Glied, Ashwin Prabhu, and Norman Edelman do not think so. The value of physicians' underlying human capital is estimated by forecasting an age-earnings profile for doctors based on the characteristics in youth of NLSY cohort participants who subsequently became... MORE

Marginal Tax Rates, Again

Fiscal Policy
Arnold Kling
A reader recommends a paper by Laurence J. Kotlikoff and David Rapson. The reader views this paper as contradicting the article I linked to earlier. Kotlikoff and Rapson report marginal tax rates of closer to 40 percent than 100 percent... MORE

Marginal Tax Rates

Income Distribution
Arnold Kling
Clifford F. Thies writes, When you take into account the loss of means-tested benefits (e.g., cash assistance, food stamps, housing subsidies, and health insurance), and the taxes that people pay on earned income, the return to working is essentially zero... MORE

Ross Douthat's Strange Supply Curve

Income Distribution
David Henderson
In his New York Times column this morning, Ross Douthat considers various ways of reducing income inequality. While not endorsing higher taxes on high-income people, Douthat's takes it as given that such taxes would reduce inequality. Ignore the fact that... MORE

John Goodman on the Lottery

Income Distribution
David Henderson
I was waiting for others to take up John Goodman's June 12 challenge, but I think I've waited long enough. Goodman mentioned Neil Wanless, who won a $200+-million jackpot in a lottery. Statists, both economists and non-economists, often argue against... MORE

Will Wilkinson on Inequality

Income Distribution
Arnold Kling
As part of a long, interesting essay, He writes, You can see leveling in quality across the price scale in almost every kind of consumer good.19 At the turn of the 20th century, only the mega-rich had refrigerators or cars.... MORE

Krugman Killer Quote

Income Distribution
David Henderson
Last week, I highlighted parts of my favorite Paul Krugman book, Pop Internationalism. Here's another of my favorite quotes from Krugman. I used it in a sidebar for the Frank Levy article, "Distribution of Income," in the first edition of... MORE

Meritocracy Without Borders

Income Distribution
Bryan Caplan
Once you're familiar with the literature on the intergenerational income correlation, it's easy to be complacent.  But isn't there any unfairness left to get upset about?  Absolutely.  The catch: Government, not "capitalism," is clearly to blame.Yes, income difference inside Western... MORE

It's Not Who You Know, It's Who You Are

Income Distribution
Bryan Caplan
Children resemble their parents.  When the resemblance is physical, we usually think it's funny or cute.  But when the resemblance is financial, it's an Issue.  Non-economists debate the merits of the cynic's maxim that, "It's not what you know, it's... MORE

Inequality and Segregation

Income Distribution
Arnold Kling
Tara Watson has a paper that sounds interesting, based on the abstract. American metropolitan areas have experienced rising residential segregation by income since 1970. One potential explanation for this change is growing income inequality. However, measures of residential sorting are... MORE

Luck, Wealth, and Immigration

Cross-country Comparisons
David Henderson
In his column in yesterday's New York Times, Cornell University economist Robert Frank writes: Another important message of recent research is that a person's salary depends far more on where she is born than on her talent and effort. For... MORE

Emmanuel Saez's Medal

Income Distribution
David Henderson
Berkeley economist Emmanual Saez has won the 2009 John Bates Clark Medal, awarded bi-annually by the American Economic Association since 1947 to "that American economist under the age of forty who is judged to have made the most significant contribution... MORE

Richard Epstein on Happiness, I

Behavioral Economics and Rationality
David Henderson
"I'll be miserable for five years as long as you make me wealthy." I've always been a fan of Richard Epstein's thinking. I hadn't known, however, that he had thoughts on the "happiness" literature. I learned a lot about much... MORE

The Top One Percent

Income Distribution
David Henderson
I think the average quality of letters to the Wall Street Journal is medium to low, but today's lead letter is quite good. The author writes to elaborate on a point made by Daniel Henninger in a column that I... MORE

Is Greed in the Genes?

Income Distribution
Bryan Caplan
Behavioral geneticists will tell you that intelligence and personality are highly heritable.  But at least for economists, intelligence and personality are mainly interesting insofar as they predict that variable that "really" counts - income.  How heritable is that?Quite.  This 2002... MORE

College and Inequality

Economics of Education
Arnold Kling
Theda Skocpol and Suzanne Mettler write (free but awkward registration required), in 1970, 6.2 percent of the U.S. population in the bottom income quartile had completed a baccalaureate degree by age 24-and that percentage actually declined slightly, to 6 percent,... MORE

Brink Lindsey Baits Paul Krugman

Income Distribution
Arnold Kling
Brink Lindsey has written a paper criticizing Paul Krugman's view that the period from 1950-1970 was a sort of golden era for economic policy, because it involved high economic growth with relatively little inequality. Lindsey instead sees the immediate postwar... MORE

Consumers or Businesses?

Fiscal Policy
Arnold Kling
Hall and Woodward write, One problem with the employment stimulus is that the funds go in the first instance to the owners of businesses and not to consumers generally. This criticism applies to my preferred stimulus, which is to take... MORE

Inequality in Life Spans

Economics of Health Care
David Henderson
Do you think the government should forcibly reduce income inequality using taxes and subsidies? If so, wouldn't it follow that the government should forcibly reduce inequality in life spans? No? Then, if you answered Yes to the first question, you... MORE

Explaining Inequality

Income Distribution
Arnold Kling
Nick Schulz and I write, It might seem natural to pin the blame for the disappointing rate of high school graduation and college training on America's education system. However, Heckman and others find little evidence that education can reduce differences... MORE

The Pity Fund

Income Distribution
Arnold Kling
Maybe some distressed borrowers should have known better, and maybe some were innocent victims. I think it's impossible to generalize. I think that whether an individual home owner or home borrower was a victim is something that ought to be... MORE

Three Quick Takes

Income Distribution
Arnold Kling
I beg to differ with PGL, Martin Feldstein, and Steve Pearlstein. First, PGL: Gee – the [Social Security] Trust Fund will have $5 trillion in bonds earning interest. What that means is that over the past decades, Social Security has,... MORE

Important Economic Drivers of the Past Thirty Years

Income Distribution
Arnold Kling
In a previous post, I questioned the narrative that says that you can describe the past three decades of economic change as resulting from a wave of deregulation. Instead, here are a list of drivers that I think played a... MORE

The Income Heritability Puzzle

Income Distribution
Arnold Kling
At GNXP, Herrick writes let's just go all the way to perfect heritability of IQ and perfect assortive mating on IQ. In other words, let's see if "IQ clones" will be have enough similarity in wages to match the 0.4... MORE

Jagdish Bhagwati on Creative Capitalism

Income Distribution
Arnold Kling
The professor who taught my international trade course back in graduate school writes, what CSR (corporate social responsibility) does is to extend the traditional practice of the Burghers-Jains-Calvinists -- where families that made the moneys spent them directly on social... MORE

The Goldin-Katz Swindle

Economics of Education
Arnold Kling
On p. 96 of their new book, Claudia Goldin and Lawrence F. Katz provide a table on the composition of the U.S. labor force in terms of educational background, based on historical census data. The percentage of high school graduates... MORE

Goldin and Katz

Human Capital: Returns to entrepreneurs, skills, etc.
Arnold Kling
I have ordered their new book, after seeing it mentioned in David Leonhardt's column in the New York Times. An excerpt from the book is here. For cohorts born from the 1870s to about 1950, every decade was accompanied by... MORE

The Last Quarter Century

Income Distribution
Arnold Kling
Brad DeLong writes, The true history of the U.S. since 1980, IMHO at least, is not Sean Wilentz's "Age of Reagan" but is instead composed of a half dozen or so deeper and broader tides, like: 1. The end of... MORE

Trends in Relative Earnings

Income Distribution
Arnold Kling
Ian Dew-Becker and Robert J. Gordon write, Only the top 10% of US earners have seen their incomes grow faster than productivity since 1966. Part of the top-earner income growth is driven by market forces (superstar economics); the only feasible... MORE

Heckman on Inequality

Income Distribution
Arnold Kling
James Heckman writes, Family environments of young children are major predictors of cognitive and socioemotional abilities, as well as a variety of outcomes such as crime and health. ...Family environments in the U.S. and many other countries around the world... MORE

Domestic Issues

Income Distribution
Arnold Kling
Income distribution, education, health care, and oil prices. David Henderson rushes in where few right-of-center economists dare to tread. He talks about the income distribution. The average number of earners per family for the top quintile is 2.16, almost three... MORE

Billers, Players, and Income Inequality

Business Economics
Arnold Kling
Another Nassim Nicholas Taleb quote: A scalable profession is good only if you are successful; they are more competitive, produce monstrous inequalities, and are far more random, with huge disparities between efforts and rewards--a few can take a large share... MORE

Discrimination or Ability?

Income Distribution
Arnold Kling
Anne Case, Christina Paxson, and Mahnaz Islam say that the wage premium reflects cognitive ability. [____] is significantly associated with greater educational attainment, and selection into higher skill occupations – both of which confer higher earnings capacity. They argue that... MORE

Richard Florida on Location in Silicon Valley

Income Distribution
Arnold Kling
He speaks on this video. He is a very powerful speaker. One theme of the talk is the importance of really creative people to the economy. This may be a valid form of elitism, although I'd like to leaven his... MORE

Income Distribution Reality

Income Distribution
Arnold Kling
In his new book Unequal Democracy, Larry Bartels writes (p.7), families at the 20th percentile experienced declining real incomes in 20 of the 58 years...by comparison, families at the 95th percentile have experienced only one decline of 3% or more... MORE

A Basic Economic Lesson

Income Distribution
Arnold Kling
In the latest econtalk, Russ Roberts just speaks himself. The result may be my favorite of all of his podcasts. If you had just one hour to learn essential, basic economics, listening to this talk would be the way to... MORE

American Excess

Income Distribution
Arnold Kling
From a longer essay on Inequality and Excess: I feel awkward and defensive when the subject of economic inequality comes up. The fact is that I cannot say that I feel comfortable with the levels of inequality and excess that... MORE

Education, Assortative Mating, and Inequality

Economics of Education
Arnold Kling
I am going to combine comments on two papers cited by Tyler Cowen. First, he cites a paper on inequality and mobility. It argues that skill differentials are widening, and that parental education seems to be increasingly important. (Note that... MORE

The Left is Always Right

Income Distribution
Arnold Kling
Lane Kenworthy writes, The most striking of the report’s findings is how little of the federal government’s mobility expenditure goes to those with low incomes. This chart shows the estimated amounts that go to lower-income households (bottom two quintiles of... MORE

Thomas Sowell Podcast

Income Distribution
Arnold Kling
This week's econtalk conversation, between Russ Roberts and Thomas Sowell, is not to be missed. My favorite nugget is when Sowell describes the professional progress women made early in the 20th century, because the age of marriage and childbearing was... MORE

Consumption vs. Income

Income Distribution
Arnold Kling
Bruce D. Meyer and James X. Sullivan write, The bottom deciles of consumption exceed those for income, suggesting under-reporting of income. There is a high and rising under-reporting rate for government transfers, a source of income that is particularly important... MORE

Low Income, High Marginal Tax Rate

Income Distribution
Arnold Kling
Jeff Frankel quotes Jeff Liebman: "There are some excellent papers that carefully model how the cumulative effects of the welfare system create a poverty trap. But I don’t think either of these papers includes all of the factors facing the... MORE

Interesting Tidbits

Economic Education
Arnold Kling
Professor Donald Lacombe of Ohio University is offering a course in Econoblogging! Will this test Tyler's assertion that the best way to learn economics nowadays is through blogs? In addition to blogs, a venerable source of economic wisdom is the... MORE

Gintis vs. Redistribution

Income Distribution
Arnold Kling
Herb Gintis writes, if the wealth were redistributed to the middle class, the US investment rate would fall, since the rich save their money and it is translated into investment, whereas the middle classes would spend their gains on consumption,... MORE

Ongoing Escalation of Income

Income Distribution
Arnold Kling
A Wall Street Journal editorial reports, The Treasury study examined a huge sample of 96,700 income tax returns from 1996 and 2005 for Americans over the age of 25. The study tracks what happened to these tax filers over this... MORE

Wages and Education

Income Distribution
Arnold Kling
Claudia Goldin and Lawrence Katz write, Relative demand shifts favoring more-educated workers have not been particularly rapid since 1980. Instead, the growth of the supply of skills slowed considerably after 1980 and the wage structure, in consequence, widened. The deceleration... MORE

Mankiw Scores One

Economics of Health Care
Arnold Kling
Greg Mankiw writes, Almost all sweeping health reform proposals involve higher taxes on the rich to provide benefits for those farther down the economic ladder. The redistribution, rather than health reform, is sometimes the main objective. To judge whether my... MORE

Race, Marriage, and Poverty

Income Distribution
Arnold Kling
Walter Williams writes, There's one segment of the black population that suffers only a 9.9 percent poverty rate, and only 13.7 percent of their under-5-year-olds are poor. There's another segment of the black population that suffers a 39.5 percent poverty... MORE

Good News, Bad News

Income Distribution
Arnold Kling
Ricardo Hausmann sees the silver lining. According to the latest gender related statistics published in the 2007 World Development Indicators (WDI) by the World Bank, the gaps between the sexes are going through a major shift worldwide. In 2006, literacy... MORE

Random Things to Read

Income Distribution
Arnold Kling
Terry J. Fitzgerald in the Minneapolis Fed Review: Fringe benefits have become an increasingly important part of employee compensation over the past 30 years. The BLS estimates that benefits currently account for about 30 percent of employer costs for employee... MORE

The Inequality Fuss

Income Distribution
Arnold Kling
Some recent posts on the inequality fuss: 1. Greg Mankiw writes If I were a redistributionist, here is what I might propose: A large fixed payment to every citizen, paid at the beginning of every month, financed by a proportional... MORE

What American Poverty Debates Look Like to Haitians

Income Distribution
Bryan Caplan
This story from The Onion gets funnier once you realize that - by world standards - the "American poor" are rich. P.S. Here's more economic insight from America's finest news source. HT: Mankiw.... MORE

Taxes and the Two-Income Trap

Income Distribution
Arnold Kling
Todd Zywicki writes, In turns out that for the 1970s family, paying 24% of its income in taxes works out to be $9,288. And for the 2000s family, paying 33% of its income (a higher rate presumably because of progressivity... MORE

Who Are the High Earners?

Income Distribution
Arnold Kling
Steve Kaplan and Joshua Rauh write, Overall, we estimate that the groups we study represent 15% to 26.5% of the individuals who comprise the AGI categories at and above the top 0.1%. Among the groups we study, non-financial public company... MORE

The Inequality Issue

Income Distribution
Arnold Kling
From my latest essay: The distribution of rewards in America today is still relatively merit-based. However, the extent of economic and social mobility is difficult to assess. One optimistic indicator of mobility is that wealth differences across siblings remain fairly... MORE

Demographics and Income Distribution

Income Distribution
Arnold Kling
Stephen Rose writes, Demographic changes are the most important factors in explaining where productivity growth went. In essence, the United States used some of its growth dividend in the form of more people living alone. Read the whole paper. The... MORE

Summers to the Dark Side?

Income Distribution
Arnold Kling
David Leonhardt's story on Larry Summers makes it sound like Larry has moved to the dark side. Summers says. “And I think now the challenge is, again, to protect a basic market system based on open trade and globalization, to... MORE

From a paper in the American Economic Review May 2007, by Anne Carroll, Hope Corman, Kelly Noonan, and Nancy E. Reichman. A maternal physical health condition that predated pregnancy reduces the likelihood that the child loses insurance by 6 percentage... MORE

Marriage and Caste

Income Distribution
Arnold Kling
Shelley Lundberg and Robert A. Pollak write, The marriage-rate trajectories of the more- and less-educated began to diverge in the mid-1980s. Although college-educated men and women marry later than those with less education, they are now substantially more likely to... MORE

Income Mobility

Income Distribution
Arnold Kling
Brink Lindsey writes, OK, so how do experts measure intergenerational income mobility anyway? Using survey data that tracks the income of the same individuals and families over time, researchers compare the income of parents at some specific age or age... MORE

Marriage and Poverty

Income Distribution
Arnold Kling
From The Economist, Avner Ahituv of the University of Haifa and Robert Lerman of the Urban Institute found that “entering marriage raises hours worked quickly and substantially.” Married men drink less, take fewer drugs and work harder, earning between 10%... MORE

The CBO on income dynamics

Income Distribution
Arnold Kling
The Wall Street Journal refers to a Congressional Budget Office report which says, Average income for the bottom 20 percent of all households with children was 35 percent higher in 2005 than it had been in 1991. I am a... MORE

Wealth and Self-Control

Income Distribution
Arnold Kling
Greg Mankiw writes, The neoclassical theory of distribution teaches us that a person's earnings depend on his or her productivity. But earnings are not the same as wealth. The accumulation of wealth is mostly about the ability to exert self-control.... MORE

Tyler Cowen on Income Inequality

Income Distribution
Arnold Kling
(I swear I posted on this first thing this morning, and now it's gone. It was a good post, too. I'm attempting to remember it here.) Tyler Cowen writes, For the economy as a whole, labor’s share of national income... MORE

Robert H. Frank writes, But the biggest winners of all have been top earners in the financial services industry. Thus, according to Institutional Investor’s Alpha magazine, James Simons, a hedge fund manager, earned $1.7 billion last year, and two other... MORE

Barone on the Kling Scenario

Labor Mobility, Immigration, Outsourcing
Arnold Kling
Michael Barone writes, Start with the Coastal Megalopolises: New York, Los Angeles, San Francisco, San Diego, Chicago (on the coast of Lake Michigan), Miami, Washington and Boston. Here is a pattern you don't find in other big cities: Americans moving... MORE

Kling vs. Lang

Income Distribution
Arnold Kling
My latest essay concerns poverty. the results of centrally-planned anti-poverty efforts are small, and perhaps negative (certainly very negative in the case of Communism). Decentralized capitalism, in which no one sets out to broadly reduce poverty, is the best anti-poverty... MORE

I Heart Kevin Lang

Income Distribution
Arnold Kling
With his new book, Poverty and Discrimination, Kevin Lang becomes my go-to guy on poverty. I disagree with him on some important and emotional points, and I'll have more to say about that at a later date. But I want... MORE

I was born into a family of tax consumers. My father was an engineer for a defense contractor during the last decades of the Cold War. My mom was a substitute teacher for the public schools, though she did spend... MORE

Write Your Calhounian Class Autobiography

Income Distribution
Bryan Caplan
Last year, I convinced quite a few econo-bloggers to post their "class autobiographies." (Here was mine). One thoughtful reader suggested that it would have been more fruitful to build on John Calhoun's theory of class. For Calhoun, the relevant classes... MORE

Paul Graham on the Distribution of Income

Income Distribution
Arnold Kling
From Mind the Gap. Like chess or painting or writing novels, making money is a very specialized skill. But for some reason we treat this skill differently. No one complains when a few people surpass all the rest at playing... MORE

Tax-eaters

Income Distribution
Arnold Kling
Robert E. Rector, Christine Kim and Shanea Watkins write Overall, households headed by persons without a high school diploma (or low-skill households) received an average of $32,138 per household in direct benefits, means-tested benefits, education, and population-based ser­vices in FY... MORE

Lawrence Katz on Inequality

Income Distribution
Arnold Kling
Katz provides Greg Mankiw with some context for remarks quoted in a Wall Street Journal article. I substantially agreed with Eddie Lazear's view that a major part of the growth of U.S. earnings inequality is driven by rising returns to... MORE

Atlas Left a Big Tip

Income Distribution
Arnold Kling
The IRS reports, For tax year 2004...Taxpayers with an AGI of at least $328,049, the top 1 percent of taxpayers, accounted for 19 percent of total AGI, representing an increase in income share of 2.2 percentage points from the previous... MORE

The Distribution of Tax Burdens

Income Distribution
Arnold Kling
How progressive is the current U.S. tax system? Not very, if you read the new paper in the Journal of Economic Perspectives by Thomas Piketty and Emmanuel Saez. As Mark Thoma reported, they say that The progressivity of the U.S.... MORE

Marriage, Income, Cause, and Effect

Income Distribution
Arnold Kling
The Washington Post reports, As marriage with children becomes an exception rather than the norm, social scientists say it is also becoming the self-selected province of the college-educated and the affluent. The working class and the poor, meanwhile, increasingly steer... MORE

Mental Health

Income Distribution
Arnold Kling
From an editorial in the Seattle Times: Montana, for example, faces predictions of rapidly rising prison populations; Gov. Brian Schweitzer notes that 93 percent of the state's prisoners are incarcerated in part because of alcohol and drug addiction and 50... MORE

The Median Household

Income Distribution
Arnold Kling
Anne Kim, Adam Solomon, Bernard L. Schwartz, Jim Kessler, and Stephen Rose write, the “real” middle class is made up of households in their prime working years, ages 25-59, 75 percent of whom are couples and 56 percent of whom... MORE

Marriage and Inequality

Income Distribution
Arnold Kling
Stephanie Coontz writes, In 2001, University of Texas psychologist David M. Buss and colleagues compared mate preferences based on national surveys taken for several decades beginning in 1939. Their research, published in the Journal of Marriage and Family, found that... MORE

How Redistribution Really Works

Income Distribution
Bryan Caplan
From Olaf Gersemann's Cowboy Capitalism: In the United States 41.4 percent of the cash transfers go to the poorest 30 percent of the population.Typical American indifference to the fate of the poor, right? Well, if that's American indifference, then what's... MORE

Inequality

Income Distribution
Arnold Kling
At Cato Unbound, Alan Reynolds and his critics debate inequality statistics. So far, Reynolds and Gary Burtless have weighed in. For those interested in the topic, Brad DeLong has a reading list. I have an uneasy feeling that the people... MORE

Speaking of Rising Inequality

Income Distribution
Arnold Kling
Tyler Cowen's NYT column today is a must read. In general, there is more income inequality among older populations than among younger populations, if only because older people have had more time to experience rising or falling fortunes. Furthermore, more-educated... MORE

CEO Pay and Market Signals

Income Distribution
Arnold Kling
Bruce Bartlett writes (from behind the NYTimeSelect firewall, unfortunately), [Alan] Reynolds has been criticized for making too much of inherent limitations in the data that have been known for many years and for ignoring evidence that conflicts with his thesis.... MORE

Universal Savings Accounts

Income Distribution
Arnold Kling
Tyler Cowen endorses the idea, with a twist. Just as the earned-income tax credit pays poor people to work, the universal 401(k) would pay poor people to save... There is an obvious way to pay for a universal 401(k) plan.... MORE

Baker vs. Reynolds

Income Distribution
Arnold Kling
In a comment on my earlier post, Dean Baker chided me for using anecdotes rather than data to make my claim that economic suffering is overstated in the media. Apparently, if I wanted to make my claim using data, I... MORE

Why aren't there more investment bankers?

Income Distribution
Arnold Kling
David Leonhardt writes, From World War II through the 1970s, while most Americans were getting solid raises every year, the incomes of the richest 1 percent were doing only a little better than inflation. Since the 1980s, the two groups... MORE

Baker vs. Summers

Income Distribution
Arnold Kling
Dean Baker writes, Larry Summers got fired from his last job as president of Harvard. He doesn't seem to be doing much better at his current job, working as a columnist at the Financial Times. Today's column rightly notes the... MORE

Disrupted Families

Income Distribution
Arnold Kling
I am reading Kay Hymowitz's book, Marriage and Caste in America. She was cited in the Wall Street Journal. Americans born into poverty have a long history of moving themselves, or their children, out of it. But the cycle of... MORE

Shifty Statistics

Income Distribution
Arnold Kling
Peter Orszag writes, According to Yale's Jacob Hacker, the average family had a 7 percent chance in the early 1970s of seeing its income drop by half or more. By 2002, that probability rose to nearly 17 percent. This statistic... MORE

A Middle-Class World

Books: Reviews and Suggested Readings
Arnold Kling
The above graph is lifted from a forthcoming book by Surjit S. Bhalla, called Second Among Equals: The Middle Class Kingdoms of India and China. It shows the share of the middle class in world population rising from 2... MORE

The Distribution of Consumer Spending

Income Distribution
Arnold Kling
Diana Furchtgott-Roth writes, Last year Americans in the lowest income quintile spent an average of $11,247 per person, according to the Bureau of Labor Statistics, compared with $15,843 for middle income quintiles, and $28,272 for the top quintile. The top... MORE

Hispanic Unwed Mothers

Income Distribution
Arnold Kling
Heather MacDonald writes Every 1,000 unmarried Hispanic women bore 92 children in 2003 (the latest year for which data exist), compared with 28 children for every 1,000 unmarried white women, 22 for every 1,000 unmarried Asian women, and 66 for... MORE

Families and Inequality

Income Distribution
Arnold Kling
My latest essay collects a lot of my thoughts on inequality. Since World War II, our economy has evolved in ways that reinforce the financial differences between strong families and weak families. As the earnings of women have risen, "assortive... MORE

Taxes vs. Philanthropy

Income Distribution
Arnold Kling
The New York Times' Louis Uchitelle writes, When it comes to wealth, one in every 325 households had a net worth of $10 million or more in 2004, the latest year for which data is available, more than four times... MORE

James Webb's Macaca

Income Distribution
Arnold Kling
Senator-elect Webb writes, The most important--and unfortunately the least debated--issue in politics today is our society's steady drift toward a class-based system...America's top tier has grown infinitely richer and more removed over the past 25 years. It is not unfair... MORE

Middle-Class Squeeze

Income Distribution
Arnold Kling
Larry Summers writes, As the great corporate engines of efficiency succeed by using cutting-edge technology with low-cost labour, ordinary, middle-class workers and their employers – whether they live in the American midwest, the Ruhr valley, Latin America or eastern Europe... MORE

Envy and Resentment

Income Distribution
Arnold Kling
Fortune's Matt Miller writes, Here's my outlandish theory: that economic resentment at the bottom of the top 1 percent of America's income distribution is the new wild card in public life. Ordinary workers won't rise up against ultras because they... MORE

The Internet Boom, Location, and Income Distribution

Income Distribution
Arnold Kling
Hal Varian reports on research by Jamie Galbraith and Travis Hale. According to Mr. Galbraith and Mr. Hale, much of the increase in income inequality in the late 1990’s resulted from large income changes in just a handful of locations... MORE

Consumption Mobility and Inequality

Income Distribution
Arnold Kling
Jonathan D. Fisher and David S. Johnson write, we show that there has been a large increase in income inequality but no concurrent increase in consumption inequality in the 1990s. Conversely, income mobility and consumption mobility are similar during this... MORE

Envy and Status

Income Distribution
Arnold Kling
'Jane Galt' writes, when it comes to hyper-obsession with invisibly fine status distinctions, no banker could hold a candle to the average academic Read the whole thing, and also re-read Economic Man vs. Status Man. Incidentally, in Learning Economics, I... MORE

The Escalation of Well-Being

Income Distribution
Arnold Kling
Don Boudreaux pulls some facts out of a Bureau of Labor Statistics report. It's surprising (and important to note) that in 1901 only 19 percent of U.S. families owned a home; by 1972-1973, this figure had risen to 58.8; indeed,... MORE

Tax Reform

Tax Reform
Arnold Kling
Sebastian Mallaby writes, The same argument holds for tax incentives to buy health insurance. Just over a quarter of this subsidy is swallowed by households in the $100,000-plus bracket; far from promoting the wider dissemination of health insurance, it may... MORE

Envy, Happiness, and Social Policy

Behavioral Economics and Rationality
Arnold Kling
Brad DeLong serves, I'm enough of a touchy-feey sociology-lover to believe that a good chunk of the utility the rich derive from their conspicuous consumption is transferred to them from the poor: the happiness America's working poor and middle class... MORE

Adjusting Income for Age

Income Distribution
Arnold Kling
Anne Kim, Adam Solomon, and Jim Kessler write, Progressive economists typically peg median household income at about $45,000. But that includes households headed by 22-year olds (who are on their way up) and 76-year olds (who live on fixed incomes... MORE

Homage to Catalonia, II

Income Distribution
Bryan Caplan
I've long been suspicious of international comparisons that weight all nations equally. When someone says "Former British colonies do better than former French colonies," my reaction is "Yes, but India did badly for decades, and it's probably got more people... MORE

My Student Gets a Letter in the Washington Post

Income Distribution
Bryan Caplan
My former student Daniel Lurker (and the youngest graduate in the history of GMU!) got his letter published in the Washington Post. You may even detect trace elements of my lectures: To read Brigid Schulte's recent "Class Questions" article about... MORE

Improvements for the Poor

Income Distribution
Arnold Kling
Nicholas Eberstadt writes Perhaps not surprisingly, adults without a high school diploma had significantly higher age-standardized death rates than the general population: In 2002, the differential was over 50 percent among both men and women. Despite the relative magnitude of... MORE

The homeless are different from you and me, and it's not because they have less money. It's because they are extraordinarily low in what personality psychologists call conscientiousness. That's my theory, anyway. A quite watchable documentary on Showtime (and that's... MORE

Thoughts on the Super-Rich

Income Distribution
Arnold Kling
Brad DeLong writes If it is luck or talent, the 60% of me that is a social democrat thinks that this is grossly unfair, and that we should think very seriously about powerful public policies that will level the distribution... MORE

I am not an IQ-ist

Income Distribution
Arnold Kling
I think of Bryan as an IQ-ist. To me, IQ-ism is the doctrine that IQ determines many things in life, including income and health. I take the view that cultural and emotional factors matter. On cultural matters, see Judith Harris'... MORE

Mankiw's Got Class

Income Distribution
Bryan Caplan
Greg Mankiw's posted a short class autobio. Highlight: My parents made what must have been a significant financial sacrifice for them to send me to a good private school, where most of the other kids were from families higher up... MORE

Boudreaux Class Autobio

Income Distribution
Bryan Caplan
My boss, Don Boudreaux, has posted his class autobio. As you would expect, the man who rules me and my fellow professors with an iron hand grew up with a silver spoon in his mouth: I’m the only of my... MORE

Class and Poverty

Income Distribution
Arnold Kling
I put my views in an essay. When people care about their own children, there is bound to be some inequality. A friend of ours has worked in his parents' store since his early teens, and he probably has averaged... MORE

My Future Calhounian Class Autobio

Income Distribution
Bryan Caplan
The most interesting comment I've gotten about class autobiography comes from James at Degrees of Freedom: I'm not a big fan of this theory of class, largely because it doesn't do what class theories are supposed to do according to... MORE

Bloggers' Class Autobios

Income Distribution
Bryan Caplan
Quite a few bloggers took the bait and wrote their class autobiographies. Here are all the ones I'm aware of: Me Arnold Mark Thoma Alcibiades Chris Dillow Steve Miller Dennis Mangan James Don Boudreaux All of which confirms the conclusion... MORE

Class Once More

Income Distribution
Arnold Kling
My class autobiography got people riled up. More commenters were riled up at Economist's View than here, by the way. There are some things that I wrote that I don't wish to stand by and defend, after thinking about it... MORE

My Class Autobiography

Income Distribution
Arnold Kling
Bryan is encouraging these things. On both sides of my family, my grandparents were immigrant Jews who tried to make a living as merchants. My mother's family settled in Bradford, Pennsylvania, a declining steel town. My father's family settled in... MORE

One-Sentence Class Autobio of Tyler Cowen

Income Distribution
Bryan Caplan
It's easy to miss: Mine would involve lots of sports, a mother who brought me to chess tournaments, a father who didn't believe in college, and a grandmother who loved Victor Hugo and Shakespeare.... MORE

Class Autobio of Mark Thoma

Income Distribution
Bryan Caplan
Economist Mark Thoma has posted his class autobiography. My favorite parts: So, growing up I had a chip on my shoulder, probably still do. I was lucky though for two reasons. First, no matter what I did or how much... MORE

My Short Class Autobiography

Income Distribution
Bryan Caplan
I grew up in an upper-middle class family in a suburb of Los Angeles. My father earned his Ph.D. in electrical engineering from UCLA when I was five; my mom went to college part-time at CSUN, and finished her bachelor's... MORE

My Future Class History

Income Distribution
Bryan Caplan
Class Action challenges visitors to write a Class Autobiography: "Write your 'Class Autobiography.' A powerful way to reflect on class is to take an hour and write the story of your upbringing in relation to money and class." I had... MORE

Move Over, Milgram

Income Distribution
Bryan Caplan
In Stanley Milgram's famous Obedience to Authority Study, subjects were led to believe that they were giving another human being electric shocks. Many administered what they believed was a lethal dose, just because a man in a white coat told... MORE

Wealthy Ugandan Expats

Income Distribution
Arnold Kling
Val MacQueen writes Those expelled from East Africa were third generation immigrants to Africa, and had created assets and wealth. Which is why Idi Amin was so interested in them. Now, those families are again third generation immigrants, this time... MORE

Charles Murray writes, Instead of sending taxes to Washington, straining them through bureaucracies and converting what remains into a muddle of services, subsidies, in-kind support and cash hedged with restrictions and exceptions, just collect the taxes, divide them up, and... MORE

Inequality

Income Distribution
Arnold Kling
Inequality is the topic of both the latest Cato Unbound and the latest WSJ Celebrity Death Match. In the Cato piece, David Schmidtz writes, Here is a truism about the wealth of nations: Zero-sum games do not increase it. Historically,... MORE

Skewness in Earnings

Income Distribution
Arnold Kling
Brad DeLong asks, What skills and assets do the top 1% of America's pretax income distribution have today that lead the market to grant them 14% of total income, when their counterparts back in 1980 were granted only 8% of... MORE

Inequality and Innovation

Income Distribution
Arnold Kling
David Wessel writes, the best minds in labor economics differ on whether the 1990s and early 2000s are best seen as a continuation of the 1980s inequality trend (Harvard's Mr. Katz) or an end to it (Berkeley's David Card.) The... MORE

Targeting Aid to the Poor

Income Distribution
Arnold Kling
James Heckman writes, Although much public policy discussion focuses on the failings of schools, a major finding from the research literature is that schools and school quality contribute little to the emergence of test-score gaps among children. By the second... MORE

Buying Habits, Race, and Income

Income Distribution
Arnold Kling
Alex Tabarrok writes, Expenditures on footwear by whites and other races: $274 Expenditures on footwear by blacks: $440. Chalk one up for the good Dr. Cosby. Alex is defending Bill Cosby against an attack by a Washington Post financial columnist.... MORE

The Plight of the Poor

Income Distribution
Arnold Kling
William Easterly writes (also can be found here) , The poor have neither the income nor political power to hold anyone accountable for meeting their needs--they are political and economic orphans. The rich-country public knows little about what is happening... MORE

Greed and Price-Gouging

Economics of Education
Arnold Kling
Robert M. Dunn complains, The disparities in college endowments are enormous. As of mid 2004, Harvard, Yale, and Princeton had average endowments of $14.9 billion, while three private institutions of similar size, George Washington University, Georgetown, and American University, averaged... MORE

Poverty vs. the Moon Mission

Income Distribution
Arnold Kling
A classic rhetorical question is "If we can put a man on the moon, why can't we end poverty?" Russ Roberts attempts to answer. Putting a man on the moon is an engineering problem. It yields to a sufficient application... MORE

Education and Income

Economic Education
Arnold Kling
Michael Mandel writes, Four years of falling earnings for the college-educated. That hasn't happened since the 1970s... The only people doing well have advanced degrees. The world has changed. Just college is no longer enough. I'm basically an optimist, but... MORE

An Envy Tax?

Income Distribution
Arnold Kling
Catching up on a week's worth of blog reading, the best thing I missed appears to be this post by Will Wilkinson. Richard Layard points out that one's perceived position in the income distribution is a better predictor of self-reported... MORE

Middle Class Squeeze

Income Distribution
Arnold Kling
Robert J. Samuelson writes, Since 1970 the size of the average home has increased 55 percent (to 2,330 square feet), while the size of the average family has decreased 13 percent... the new American home is a residential SUV. It's... MORE

fighting African poverty

Income Distribution
Arnold Kling
In this essay, I offer some advice for people who care about African poverty. 1. The world is a complex place. The farther you are removed from a situation, the less likely that your intervention there will do good and... MORE

Income Distribution Facts

Income Distribution
Arnold Kling
While the consistently pessimistic and erroneous Louis Uchitelle is reassuring elitists that America's middle class is insecure and in need of help, economist Steve Rose is crunching some numbers. The approach used here tracks family incomes over 15 years for... MORE

Immigrant Progress

Income Distribution
Arnold Kling
The latest Milken Institute Review has a number of interesting articles. For example, a report on the income status of second-generation immigrants. According to a new Census survey, the 30 million second-generation Americans seem well on their way to achieving... MORE

When people argue about whether immigrants are pulling down our standard of living, they rarely notice a simple but deep arithmetical fact: Everyone in a country can get richer as per-capita income falls. Proof by example: Suppose the residents of... MORE

Income Volatility, Saving, and Risk Pooling

Income Distribution
Arnold Kling
On my earlier post on income volatility, D-aquared asked why smaller risk pools would be efficient? His point is that if the problem is volatility, risk can be diversified away. If 10 families pool their savings, volatility will be lower... MORE

Income Volatility

Income Distribution
Arnold Kling
The Los Angeles Times reports In the early 1970s, the inflation-adjusted incomes of most families in the middle of the economic spectrum bobbed up and down no more than about $6,500 a year, according to statistics generated by the Los... MORE

Redistribution vs. Paternalism

Income Distribution
Arnold Kling
Tim Worstall argues that big government is not compatible with only taxing the rich. For the fact is that the rich don't have enough money to pay for all of the things that are being demanded from the State. We... MORE

Income Distribution and the Left

Income Distribution
Arnold Kling
Chris Dillow thinks that the Left has lost its moorings on the issue of income distribution. That is, Dillow supports income redistribution, but he thinks that neither the Left nor the Right is with him. Hayekian arguments can be applied... MORE

Working Poor

Income Distribution
Arnold Kling
The plight of low-skilled has received notice in several recent books. See Jane Galt's post, for example. Now, Russ Roberts weighs in. Waiters and waitresses, a janitor to push the improved vacuum cleaner or power waxer, the cleaning service that... MORE

Poverty and Social Pressure

Income Distribution
Arnold Kling
Jane Galt writes, Most of us reading this blog, after all, went to college and/or got nice steady jobs because we had enormous social and familial pressure on us to do so. How many of us were strong enough to... MORE

Entrepreneurs and "giving back"

Growth: Causal Factors
Arnold Kling
Tim Worstall comments on a paper by William Nordhaus on the private vs. social returns of innovation. As a factor of production, the entrepreneur class (and yes, we have been considered for decades to be a factor of production to... MORE

Escalation of Income

Income Distribution
Arnold Kling
In this essay, I suggest using an escalator rather than a pie as a metaphor for differences in income. Overall, over 60 percent of families surveyed in 1975 made it to the top 40 percent in 1991. If the "distribution... MORE

Squeezed Up

Income Distribution
Arnold Kling
The Washington Post (possibly more reliable link here) does not use phony documents, but the thrust of the story, including the headline "More U.S. families struggle to stay on track" is at variance with the facts that they present. The... MORE

Nobel Laureates speak

Cross-country Comparisons
Arnold Kling
The Wall Street Journal asks a series of questions to a number of Nobel Laureates in economics. On one question, whether the global income distribution will be more equal 50 years from now, several of them say "yes," because they... MORE

Productivity vs. Distribution

Income Distribution
Arnold Kling
Jeff Madrick is not impressed with Wal-Mart. Critics are compiling evidence that Wal-Mart's success, while entrenched in the brilliant management of new technologies, is dependent on low labor costs... A new study by Arindrajit Dube and Ken Jacobs of the... MORE

Middle Class Squeezed Up

Income Distribution
Arnold Kling
Bruce Bartlett explains what is happening to the shrinking middle class. In fact, the ranks of the poor have fallen along with those of the middle class. Using the Times' characterization of any household with an income below $25,000 in... MORE

Overspending and Obesity

Income Distribution
Arnold Kling
My post-vacation essay is somewhat wide ranging. by far the biggest indicator that middle-class squeeze is not quite what is portrayed in the media was the volume of construction and the prices of homes. Since our first vacation there almost... MORE

Barbell Labor Market?

Labor Market
Arnold Kling
Frank Levy and Richard J. Murnane predict that computer automation is leading to a split in the labor market. Good jobs will increasingly require expert thinking and complex communication. Jobs that do not require these tasks will not pay a... MORE

Tax Cuts for the Rich

Income Distribution
Arnold Kling
Philosopher Keith Burgess-Jackson dissects the phrase. Nobody, to the liberal, has a valid claim on anything, even his or her talents. Those who produce or acquire wealth do so not because of effort, initiative, creativity, or sacrifice. They're just lucky.... MORE

Who is Rich?

Income Distribution
Arnold Kling
David R. Henderson and Charley Hooper argue that most of us are rich. Except for the few hundred thousand who are homeless, the Americans whom the U.S. government defines as poor live exceptionally rich lives. In most ways, their lives... MORE

Athletes and Entertainers

Income Distribution
Arnold Kling
Allen R. Sanderson writes, no one complains when Ray Romano ("Raymond") gets $50 million a year—$1.8 million per episode—which takes about the same time to film as a baseball game...But let Alex Rodriguez sign for $25 million a year or... MORE

Gender Differences

Income Distribution
Arnold Kling
Alex Tabarrok points to a paper by Uri Gneezy, Muriel Niederle, and Aldo Rustichini showing that although women solve a particular class of problems about as well as men on average, men improve their scores more than women when there... MORE

What Explains Inequality?

Income Distribution
Arnold Kling
Two new books give provocative answers. According to Houses Divided, reviewed here, Thomas M. Shapiro argues in this sober and authoritative book that we should look to disparities of wealth for the answer...Whites start out ahead because they inherit more... MORE

Income Redistribution Proposals

Income Distribution
Arnold Kling
The Chronicle of Higher Education discusses a number of income redistribution proposals. For example, Edmund Phelps has suggested a government wage subsidy for low-wage workers. Mr. Phelps argues that his plan -- which, in his view, should entirely replace the... MORE

Poverty and Income Distribution

Income Distribution
Arnold Kling
Robert E. Rector and Kirk A. Johnson offers some interesting facts concerning poverty in the United States, including Forty-six percent of all poor households actually own their own homes...The average poor American has more living space than the average individual... MORE

Income Mobility

Income Distribution
Arnold Kling
Is the United States becoming a more rigid class society? Paul Krugman sounded such an alarm, but Tyler Cowen issues a rebuttal. Yes, there is some correlation in wealth across the generations. But most of that correlation (almost seventy percent)... MORE

Libertarian Redistribution

Income Distribution
Arnold Kling
In an essay called Bleeding-Heart Libertarianism, I sketch a system for using a consumption tax with a negative-income-tax feature to replace government-provided health care, education, and income security. Does the bleeding-heart libertarian approach seem harsh? Actually, the Welfare State is... MORE

Minimum Wage and CEO Pay

Income Distribution
Arnold Kling
Marc Brazeau asks (see Steve Antler's site), Two common arguments against raising the minimum wage are possible inflationary effects and job loss. Why aren't these issues raised in relation to executive compensation? I think that the conventional wisdom is that... MORE

Imputed Income

Income Distribution
Arnold Kling
Jeff Madrick discusses the work of Elizabeth Warren and Amelia Warren Tyagi on the plight of middle-class two-income families with children. what families spend a lot more on, the authors calculate, is a house in a safe neighborhood with a... MORE

Information Goods and Income Distribution

Information Goods, Intellectual Property
Arnold Kling
James Miller has an interesting thesis concerning information goods. Since most of the cost is up-front research and development, he argues that these goods will be priced attractively for mass consumption. As easily copied informational goods become more important to... MORE

High income and Wealth

Income Distribution
Arnold Kling
Some recent articles on income and wealth. Thomas Sowell writes, high tax rates hit people who are currently earning high incomes -- usually late in life, after having worked their way up in their professions over a period of decades.... MORE

Income Distribution Stories

Income Distribution
Arnold Kling
This week, the topic of income distribution made news. Several news outlets highlighted a report from the IRS on the 400 highest-income taxpayers. annual samples of individual income tax returns for Tax Years 1992 through 2000 were sorted by AGI,... MORE

Comment of the Week, 2003-06-04

Income Distribution
Arnold Kling
This week, there were a number of interesting comments on the topic of measuring income inequality and income mobility. In response to a question I raised about whether a measure of wealth should include expected future earnings, D-squared wrote, Absolutely... MORE

The Poor Get Richer

Income Distribution
Arnold Kling
Daniel Drezner assembles several items that refute the conventional wisdom that in the United States the poor get poorer as the rich get richer. If you care only about income, the poorest percentage of the population made great strides during... MORE

China, India and Deflation

International Macroeconomics: Exchange Rates, International Debt, etc.
Arnold Kling
Prashant Kothari forwarded an email from one of his readers that said, I think global deflation is [in] the cards as long as we have free trade in goods and services. China is rapidly becoming a sophisticated manufacturer and there... MORE

Measuring Tax Progressivity

Income Distribution
Arnold Kling
The May issue of The Atlantic Monthly pointed to this study of tax progressivity at the state level. The authors write, Our primary finding is that most state and local tax systems take a much greater share of income from... MORE

Migratory Lucky Duckies

Income Distribution
Arnold Kling
One of the weaknesses of using income variation in a single year as a measure of the distribution of income is that people change income brackets over time. In general, the trend for any given household is upward, as households... MORE

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