Poverty and income inequality

Lubos Pastor, Pietro Veronesi, 12 December 2019

Economic anxiety and insecurity are often cited as drivers of populism, so why has populism emerged over the past few years in rich countries and in good times? This column, part of the Vox debate on the topic, argues that income inequality plays a role. When the economy is strong, everyone fares well but the rich fare especially well, fuelling inequality and resentment. Populism in the form of anti-globalisation may reduce everyone’s consumption, but it affects the rich disproportionately and thus appeals to many voters in richer countries. In poorer countries, however, voters are less willing to give up consumption for equality.

Neil Cummins, 08 December 2019

Sharp declines in the concentration of declared wealth occurred across Europe and the US during the 20th century. But the rich may have been hiding much of their wealth. This column introduces a new method to measure this hidden wealth, in any form. It finds that between 1920 and 1992, English elites concealed 20-32% of their wealth. Accounting for hidden wealth eliminates one-third of the observed decline of top 10% wealth share over the past century.

Tilman Brück, José Cuesta, Ugo Gentilini, Jacobus de Hoop, Angie Lee, Amber Peterman, 07 December 2019

Rigorous research in humanitarian emergencies is not only feasible but also necessary to determine what constitutes effective assistance in these settings. This column introduces a Special Issue of the Journal of Development Studies which demonstrates that research establishing causal effects is vital for the design of efficient and effective social protection in settings of fragility and displacement. 

Sebastian Edwards, 30 November 2019

In a few decades, Chile experienced dramatic economic growth and the fastest reduction of inequality in the region. Yet, many Chilean citizens feel that inequality has greatly increased. Such feelings of 'malestar' triggered the violent social unrest of October 2019. This paper explains this seeming paradox by differentiating ‘vertical’ (income) inequality from ‘horizontal’ (social) inequality. It argues that the neoliberalism that created Chile’s economic growth is no longer effective and that Chile may be headed towards adopting a welfare state model.

Sergey Alexeev, 09 November 2019

Despite the extensive literature on intergenerational mobility, few studies have investigated the effects of non-monetary income from housing, or ‘imputed rent’, on intergenerational income mobility. This column demonstrates the significance of such an omission. Using national panel data sets for Australia, the US, and Germany, it finds that only Australia sees a noticeable reduction in mobility when imputed rent is accounted for in the measure of income. The findings challenge Australia’s basic claim of providing equality of opportunity. 

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