James Heckman, 20 March 2011

Disparities between Blacks and Whites are a persistent feature of American society. This column shows that problems facing African Americans are shared by many other groups and stem from shortfalls in skills. It argues that the most helpful and cost-effective policy to enhance the skills of disadvantaged children is support for parenting. The early years of a child’s life lay the foundation for all that follows.

Romain Rancière, Michael Kumhof, 04 February 2011

Of the many origins of the global crisis, one that has received comparatively little attention is income inequality. This column provides a theoretical framework for understanding the connection between inequality, leverage and financial crises. It shows how rising inequality in a climate of rising consumption can lead poorer households to increase their leverage, thereby making a crisis more likely.

Ejaz Ghani, 28 October 2010

South Asia’s economy is one of the fastest growing in the world, yet it is also home to the largest concentration of people living in debilitating poverty. How do the two co-exist? This column says that South Asia’s division into leading and lagging regions means that stupendous growth hides deep pockets of poverty.

Giuseppe Bertola, 04 October 2010

How does accumulation of public debt affect the menu of labor market policies available to policymakers? Discussion Paper 8037 finds a strong association between debt stock and debt service indicators and employment and unemployment rates between 1980 and 2000. The author suggests that debt service obligations will have important implications for future labour market interventions.

Ryan Edwards, 10 July 2010

In the least 30 years, the difference in life expectancy at birth across the globe has fallen dramatically. This column presents new data on life expectancy within and between countries for the period 1970 to 2000. Controlling for infant mortality, it finds that while within-country inequality in life expectancy fell, between-country inequality rose, leaving total inequality unchanged.

Brian Bell, John Van Reenen, 03 May 2010

The global crisis has sharpened the media spotlight and political debate on bankers’ bonuses. Focusing on evidence from the UK, this column argues that to avoid excessive risk-taking in the financial sector and exploitation of moral hazard, bankers’ bonuses should be based on risk-adjusted long-run performance or be subject to “clawback” if future performance declines.

Jonathan Heathcote, Gianluca Violante, Fabrizio Perri, 02 February 2010

The unemployment rate has dominated economic headlines, but recessions raise numerous problems. This column warns that recessions raise earnings inequality and income inequality, absent mitigating government programmes. The current recession has indeed raised such inequality, but consumption inequality has surprisingly declined.

Axel Leijonhufvud, 13 January 2009

Following the analysis of the crisis’s causes in the yesterday’s column, this column suggests that the new financial regulatory system should impose effective reserve requirements on deposit-taking banks, and impose capital requirements for virtually all financial institutions with these requirements being counter-cyclical to dampen the boom-bust cycle.

Paolo Epifani, Gino Gancia, 07 October 2008

Wage inequality between skilled and unskilled workers has increased in recent years, particularly in countries that opened their markets to international trade. This column explains how trade may push up the demand for skilled workers worldwide by creating larger international markets for differentiated goods.

Edward Leamer, 26 September 2008

At the Global Economic Symposium in Schleswig-Holstein in September 2008, Edward Leamer of the University of California, Los Angeles spoke at a session on inequality and globalisation. Afterwards, he talked to Romesh Vaitilingam about his concept of ‘neurofacturing’ (creating value through knowledge work rather than physical labour), its rising significance in the world of the personal computer and the internet, the impact on inequality and the implications for our education systems.

Betsey Stevenson, Justin Wolfers, 04 August 2008

Surveys that have attempted to measure the level of happiness in US citizens by means of a subjective response have unveiled decreases in happiness inequality. The authors of CEPR DP6929 have used these responses to analyse the level and dispersion of happiness within and between demographic groups over the period of 1972-2006.

Joseph Altonji, Prashant Bharadwaj, Fabian Lange, 06 May 2008

The earnings premium for skilled labour has increased dramatically in recent decades. Yet, as this column shows, Americans are not acquiring significantly greater skills in response to this change. The resulting gap will increase US income inequality in the coming decades.

Andreas Georgiadis, Alan Manning, 05 January 2008

The standard framework for thinking about inequality and redistribution – the median voter approach – predicts that rising inequality should produce more redistribution. The facts reject this prediction for the UK and suggest that beliefs may be an important missing factor.

Janet Currie, Firouz Gahvari, 17 December 2007

Many countries provide large in-kind transfers although standard economic theory says cash transfers would be more efficient. Here is some new evidence evaluating the many justifications for in-kind transfers; it seems paternalism is the most likely explanation.

Branko Milanovic, Peter Lindert, Jeffrey Williamson, 05 December 2007

Is inequality largely the result of the Industrial Revolution? Or were ancient incomes as unequal as they are today in poor pre-industrial societies? Looking at pre-industrial inequality from the Roman Empire in 14 AD to British India in 1947 generates new insights into the inequality and economic development connection over the very long run.

Pedro Carneiro, Costas Meghir, Matthias Parey, 22 November 2007

New research shows that raising the level of mothers’ education pays large intergenerational returns with kids benefiting, for example, from extra parental investment in their education. Policies that promote women’s education should take account of this in their design and evaluation.

Alberto Alesina, Francesco Giavazzi, 05 October 2007

Anti-reformists in Europe claim to be protecting Europe’s weak and poor. Nothing could be further from the truth. Labour-market flexibility, deregulation of the service industry, pension reforms and greater competition in university funding might harm the interest of well-connected, privileged citizens but it would open up opportunities for Europe’s youth and disadvantaged groups. A real left-wing agenda would embrace reform.

Indraneel Dasgupta, Ravi Kanbur, 02 July 2007

Rich individuals are encouraged to make large contributions to the provision of public goods in return for tax exemptions, a policy that appears to endorse the claim that philanthropy can be considered a substitute for the direct income redistribution brought about through taxation. The authors of CEPR DP6362 address the question of how voluntary provision affects welfare inequality and find that (1) philanthropy can in fact increase inequality among the non-rich, but (2) income redistribution can be more effective in reducing inequality when accompanied by philanthropy. Automatic exemption from expropriation for rich philanthropists is therefore not the right policy.

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