That was dissappointing

Prof. Kenworthy responds to Wilkinson’s essay on inequality and mostly punts. He goes after the idea that consumption inequality should matter and not income inequality. His argument basically boils down to the idea that he doesn’t think we measure consumption well. He’s right about consumption surveys missing outliers like the very very rich because they […]

No sane human being has ever given his assent

As dictator of the universe, I would force everyone to read the second part of Will Wilkinson’s essay; the part on why mechanisms generating income inequality, not inequality itself, are what matter. This is mostly because I’m writing a paper on one such mechanism and, hey, publicity!, but also everyone should read it because, well, […]

Have poorer States faired worse in the recession?

That’s not the question Will Wilkinson asked, but until more disaggregate data becomes available we won’t know the impact of the recession on inequality. What’s more, we only have data at the State level through 2008 so we don’t even see the brunt of the badness. Here’s State income levels in 2007 plotted against income […]

For Mike

Mike asks for median wage-age profiles. I don’t know how to do quantile regressions for panel data, but I have a second best for him. Here’s wage-age profiles with the top 90th percentile wage earners removed: And here’s the wage-age profile with both the bottom 10th percentile and the top 90th percentile removed:

Optimal policy

Is this the best way to determine optimal policy?: But the current magnitude of inequality in America strikes me as unfair. Prof. Kenworthy goes on to say: What’s the proper amount of income inequality? I don’t have a precise answer, but that doesn’t mean it’s wrong to feel that our current level is excessive. With […]

Wage-age profiles now and then

The red line is the wage-age profile from 1990 to 2005 and the blue line is the wage-age profile from 1968 to 1980. I just picked those years randomly. These profiles were calculated in such a way that what you’re seeing is average “within person” wage profiles over their lives ((I estimated this equation with […]

A story that never gets old

Commenter slocum at CT: The reason tax rates aren’t higher and bankers are getting bailed out on hugely generous terms isn’t because Rawlsians have outvoted Cohenites behind the veil of ignorance, or even because lots of economists believe the Laffer hypothesis. It’s because the rich and powerful are, well, rich and powerful. No. Tax rates […]

Height and income

Some folks at Princeton have found, using panel data from England, that each additional inch in height is associated with 1.5-1.8% more wage income. Their suggested mechanism is having wealthy parents that feed their kids right and make sure they get more and better education leads to taller and better paid kids. Its strange to […]

Of mice and maximin

Gabriel summarizes the debate on fiscal stimulus and comes down on John Taylor‘s side (good choice). Those checks we got in the mail from the Feds didn’t increase aggregate demand; while take home pay went up, consumption didn’t. People, on average, put that money in savings (e.g. paid down their credit card debt). This conforms […]

Inequality and immigration

Prof. Peri spoke at GMU today about immigration. There’s an economic argument against immigration that says because most immigrants are unskilled, they reduce the wages of native unskilled workers. These are the most economically vulnerable members of society, so we should care about the effect immigration has on these folks. Well, one solution would be […]