John Gibson, Chao Li, 27 November 2013

Many studies find evidence of a growing income inequality in China. However, the majority of these studies may be constructing biased measures of inequality. This column presents evidence from a new study on how inequality in China is overstated if one ignores the spatial differences in the cost of living. With a booming urban housing market that displays a high degree of heterogeneity, accounting for spatial price differences is essential.

David Dollar, Tatjana Kleineberg, Aart Kraay, 19 November 2013

A key Millennium Development Goal was to halve the number of people living on less than $1.25 a day. This was met five years ahead of schedule, and the World Bank is promoting a new goal of ‘shared prosperity’ defined in terms of the growth rate of incomes in the bottom 40% of households. This column discusses research showing that there is a strong one-for-one relationship between overall growth and average income growth in the poorest quintiles. Overall growth is thus still important.

Michael Keen, 16 October 2013

Fiscal consolidation, and public concern that its pain be fairly spread, is putting tax systems under considerable pressure. This column takes stock of how they have been faring, and how they could do better.

Thomas Piketty, Gabriel Zucman, 26 September 2013

According to many measures, inequality has been increasing in the developed world and is now approaching prewar levels. Income inequality does not tell the whole story. This column documents the increase in the ratio of private wealth to national income. This macroeconomic change, precipitated by slowing GDP growth, exacerbates the problem of wealth inequality and makes the economy more susceptible to bubbles.

Sambit Bhattacharyya, Jeffrey Williamson, 10 August 2013

What distributional effect do natural-resource booms have on wealth, income and economic power? Using Australia as a case study, this column argues that resource booms tend to exacerbate inequality. The distributional impact of commodity-price shocks in Australia yield important lessons for primary producers from the developmental south, and it’s important for resource-rich developing countries to design appropriate policies to tackle this inequality.

Jayant Menon, 02 June 2013

How will the new members of ASEAN catch up? This column argues that the gap in income is closing between the two groups within ASEAN: the newly industrialising economies and the older members. However, a marked cost of this convergence has been increasing income inequality within individual countries. To remedy this, and to increase overall convergence, a number of conditions must be simultaneously met: investment in social infrastructure, especially education and health; improving the investment climate; and land reform that directly redresses asset inequality.

Maria Kuecken, Marie-Anne Valfort, 09 March 2013

Are African education policies reaching the marginalised? This column reports results from a cross-country analysis, finding that the sharing of textbooks has a positive effect only for the most privileged students. For the average student, textbook access has no impact on academic outcomes. Indeed, less privileged students perform poorly due to a combination of low parent and teacher expectation, poor health, and routine classroom disruptions. It is these factors that reduce the effectiveness of policies like the improvement of access to textbooks. For education to be truly for all, educational reforms must target the least privileged students.

Alberto Alesina, Stelios Michalopoulos, Elias Papaioannou, 18 November 2012

This paper explores the consequences and origins of contemporary differences in well-being across ethnic groups within countries. The authors show that ethnic inequality is strongly inversely related to per capita income, and that differences in geographic endowments across ethnic homelands explain a sizable portion of contemporary ethnic inequality. This deeply rooted inequality in geographic attributes across ethnic regions is also negatively related to comparative development.

Stelios Michalopoulos, Alireza Naghavi, Giovanni Prarolo, 08 December 2012

Islam spread remarkably quickly before the era of European colonialism. This column argues that an important economic factor in determining the geographic range was spatial inequality that necessitated a politically unifying force like Islam. Regions that harboured such economic inequality were especially ripe for a system like Islam that offered progressive redistributive tenets with centralised authority to enforce them.

John Van Reenen, 03 November 2012

Income inequality has been rising in the US for almost four decades. President Obama plans to increase taxes on those with high incomes while Governor Romney is against such “class warfare”. This column argues a better focus would be on restoring America’s place as a world leader in public education and thereby tackling the human capital deficit that is at the heart of the inequality challenge.

John Gibson, Chao Li, 09 August 2012

Many an economist will tell you they base their decisions on evidence. But what if the evidence is based on incorrect or irrelevant data? This column asks what this might mean for our view on regional inequality in China.

Oleg Itskhoki, Marc Muendler, Stephen Redding, Elhanan Helpman, 20 May 2012

What is the effect of trade on inequality? This column presents a unique study examining wage inequality in Brazil after liberalisation. Starting from a closed economy, the column finds that wage inequality will initially rise as only some firms take advantage of the new opportunities. But as trade costs continue to fall and more firms start to trade, wage inequality peaks and begins to fall back.

Michael Bordo, Christopher Meissner, 24 March 2012

Did inequality in the US lead to the global financial crisis? This column presents evidence from 14 countries between 1920 and 2008 and argues that while inequality can be blamed for many things, the global crisis is not one of them.

Ronald Mendoza, 11 March 2012

Inequality in the world’s poorest countries is considered one of the main barriers to development. But this column points out that the inequality is about much more than the über-rich and the destitute – it is about access to political power. This column looks at political dynasties, where leadership is passed down through family ties, to see if these are a cause of the persistent social and economic divides.

Robert Frank, 23 December 2011

Robert Frank of Cornell University talks to Romesh Vaitilingam about his book, ‘The Darwin Economy: Liberty, Competition and the Common Good’. He argues that Charles Darwin's understanding of competition – in which individual and group interests often diverge sharply – describes economic reality far more accurately than Adam Smith's. They discuss the implications of this view for current debates about inequality, taxation, and policies to get out of economic stagnation. The interview was recorded in London in November 2011. [Transcript available]

Vassilis Tselios, Andrés Rodríguez-Pose, Andy Pike, John Tomaney, Gianpiero Torrisi, 15 October 2011

Devolution can have incongruous effects on equality. Decentralisation of powers and resources to lower tiers of government can either increase or reduce interpersonal inequalities, depending on characteristics of the devolved region. This column uses data from regions of Western Europe to show that greater fiscal decentralisation is associated with lower income inequality.

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.

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