Some are great again
“Our Country Needs a Strong Leader Right Now”: Economic Inequality Enhances the Wish for a Strong Leader
Stefanie Sprong et al.
Psychological Science, forthcoming
Abstract:
Societal inequality has been found to harm the mental and physical health of its members and undermine overall social cohesion. Here, we tested the hypothesis that economic inequality is associated with a wish for a strong leader in a study involving 28 countries from five continents (Study 1, N = 6,112), a study involving an Australian community sample (Study 2, N = 515), and two experiments (Study 3a, N = 96; Study 3b, N = 296). We found correlational (Studies 1 and 2) and experimental (Studies 3a and 3b) evidence for our prediction that higher inequality enhances the wish for a strong leader. We also found that this relationship is mediated by perceptions of anomie, except in the case of objective inequality in Study 1. This suggests that societal inequality enhances the perception that society is breaking down (anomie) and that a strong leader is needed to restore order (even when that leader is willing to challenge democratic values).
Buying Happiness in an Unequal World: Rank of Income More Strongly Predicts Well-Being in More Unequal Countries
Lucía Macchia, Anke Plagnol & Nattavudh Powdthavee
Personality and Social Psychology Bulletin, forthcoming
Abstract:
Does income rank matter more for well-being in more unequal countries? Using more than 160,000 observations from 24 countries worldwide, we replicate previous studies and show that the ranked position of an individual’s income strongly predicts life evaluation and positive daily emotional experiences, whereas absolute and reference income generally have weak or no effects. Furthermore, we find the association between income rank and an individual’s well-being to be significantly larger in countries where income inequality, represented by the share of taxable income held by the top 1% of income earners, is high. These results are robust to using an alternative measure of income inequality and different reference group specifications. Our findings suggest that people in more unequal societies place greater weight on the pursuit of higher income ranks, which may contribute to enduring income inequality in places where greater well-being can be bought from moving up the income ladder.
Inequality Growth and Economic Policy Liberalism: An Updated Test of a Classic Theory
Benjamin Newman
Journal of Politics, forthcoming
Abstract:
Longstanding political economy theory argues that increases in economic inequality will increase public demand for liberal economic policy. Empirical support for this proposition is relatively inconsistent though, with the result being uncertainty about the validity of the theory. Since the inception of such theory, however, scholarship has rendered new insights about how to conceptualize the most theoretically plausible measure of exposure to inequality. In contrast to prior work, which largely focuses on citizens’ responses to what may now be viewed as an implausible measure, national-level inequality, this article focuses on what this literature suggests to be a more plausible measure: inequality growth in citizens’ local context. Utilizing national panel data, this article offers a theoretically updated and more rigorous test of the redistributive democracy hypothesis. The results demonstrate that drastic increases in local income inequality are associated with increasing support for liberal economic policy.
Do Inheritance Customs Affect Political and Social Inequality?
Anselm Hager & Hanno Hilbig
American Journal of Political Science, forthcoming
Abstract:
Why are some societies more unequal than others? The French revolutionaries believed unequal inheritances among siblings to be responsible for the strict hierarchies of the ancien régime. To achieve equality, the revolutionaries therefore enforced equal inheritance rights. Their goal was to empower women and to disenfranchise the noble class. But do equal inheritances succeed in leveling the societal playing field? We study Germany — a country with pronounced local‐level variation in inheritance customs — and find that municipalities that historically equally apportioned wealth, to this day, elect more women into political councils and have fewer aristocrats in the social elite. Using historic data, we point to two mechanisms: wealth equality and pro‐egalitarian preferences. In a final step, we also show that, counterintuitively, equitable inheritance customs positively predict income inequality. We interpret this finding to mean that equitable inheritances level the playing field by rewarding talent, not status.
Re-estimating the relationship between inequality and growth
Nathalie Scholl & Stephan Klasen
Oxford Economic Papers, October 2019, Pages 824–847
Abstract:
In this paper, we revisit the inequality–growth relationship using an enhanced panel data set with improved inequality data. We explicitly take into account the special role of transition (post-Soviet) countries and add an instrumental variable (IV) estimation to add a causal interpretation to our findings. Our analysis is based on the specification used by Forbes in her 2000 paper, but we also address functional form concerns raised by Banerjee and Duflo three years later. We arrive at three main findings: First, the significant positive association between inequality and economic growth in the full sample is entirely driven by transition countries. Second, this relationship in transition countries is not robust to the inclusion of separate time effects. Lastly, it appears that this association is not causal but rather driven by the particular timing of the transition. Results from IV estimation confirm our interpretation of the observed positive relationship in the overall sample as non-causal.
Viewing equality as a loss: How highlighting policy costs and benefits influences attitudes
Thomas Hayes & Christopher Guay
Social Science Journal, forthcoming
Abstract:
As economic and political inequality has increased in recent decades, scholars and policymakers have turned their attention to the American public’s reaction and response to this phenomenon. While most opinion polls demonstrate Americans general dislike of both economic and political inequality, there have been few implementations of policy that would reverse the trend of rising economic inequality or the outsized role that the wealthy have over policy. Moreover, redistributive tax policies put to direct vote at the state level have generally not fared well. Under what conditions might Americans be more likely to support policy that increases political equality by reducing unequal influence? Why might Americans vote against or oppose redistributive tax policies even though they object to rising economic inequality? We conduct two survey experiments highlighting costs and benefits of inequality reducing policies. Using data from the CCES and Amazon Mechanical Turk, we find that respondents can shift their support for inequality reducing policy in response to costs yet rarely change opinions when exposed to potential benefits. Our findings suggest individuals can be swayed more by messages highlighting the costliness of redistributive tax policy rather than the potential benefits, suggesting loss aversion may be one explanation for why specific redistributive tax policies can be rejected.
Does Money Matter for Intergenerational Income Transmission?
Michelle Miller & Frank McIntyre
Southern Economic Journal, forthcoming
Abstract:
The intergenerational income elasticity (IIE) is a crucial measure of income mobility. In this article, we develop a structural model to examine the channels through which this elasticity operates. Using data from the Panel Study of Income Dynamics, we separately identify the human capital and the financial components. The human capital component examines the transmission of human capital, independent of financial investments, whereas the financial component examines the impact of income that is uncorrelated with human capital, that is, exogenous income. Using a two‐stage framework, we show that the IIE operates through both channels. Moreover, our estimates show that the financial component may have a larger effect than previously estimated, plausibly attributing to 36% of intergenerational income transmission. Indeed, this result holds even when the financial component is defined in an incredibly narrow manner. This suggests that cash payments could promote intergenerational mobility.
Trends in Public Support for Welfare Spending: How the Economy Matters
Christopher Wlezien & Stuart Soroka
British Journal of Political Science, forthcoming
Abstract:
As spending on welfare in the United States has increased over time, preferences for more spending have remained fairly stationary. Given that previous research shows that the public adjusts its welfare spending preference thermostatically in response to welfare spending, the over-time pattern of preferences implies that something must be producing an increase in public support, but what? We address this question, focusing on individuals' demographics and a set of aggregate economic variables, both macroeconomic and distributional. Results reveal that individual-level factors matter little to the temporal variation and aggregate economics matter a lot: there are pro-cyclical and counter-cyclical elements in spending preferences and a dampening effect of income inequality over time. The combination of these variables accounts for the underlying trend in welfare spending preferences in the US, and the method used to reveal these dynamics can be used to analyze preference evolution in other spending domains and countries.
The Effects of Differential Income Replacement and Mortality on U.S. Social Security Redistribution
Li Tan & Cory Koedel
Southern Economic Journal, October 2019, Pages 613-637
Abstract:
We study redistribution via the U.S. Social Security retirement system for cohorts of men born during the second half of the 20th century. Our focus is on redistribution across race and education groups. The cohorts we study are younger than cohorts studied in previous, similar research and thus more exposed to recent increases in earnings inequality. All else equal, this should increase the degree of progressivity of Social Security redistribution due to the structure of the benefit formula. However, we find that redistribution is only modestly progressive for individuals born as late as 1980. Differential mortality rates across race and education groups are the primary explanation. While Black–White mortality gaps have narrowed some in recent years, they remain large and dull progressivity. Mortality gaps by education level are also large and unlike the gaps by race, they are widening, which puts additional regressive pressure on Social Security redistribution.
Marching across Generations? Education Benefits and Intrahousehold Decision-Making
Benjamin Castleman, Francis Murphy & William Skimmyhorn
Journal of Human Capital, Fall 2019, Pages 410-433
Abstract:
We investigate how families resolve an important intrafamily household allocation problem — investing in their children’s postsecondary education — in the context of the Post-9/11 GI Bill. This legislation allowed service members to transfer education benefits to a family member in exchange for additional military service. Descriptive analysis reveals clear socioeconomic differences in patterns of transfer: utilization rates are highest among senior service members, who are better educated and earn higher wages, and are lowest among less educated, lower-wage junior soldiers. This pattern of use suggests that the transfer provision may have limited impact on intergenerational mobility for service members of low socioeconomic status.
Beyond the “Usual Suspects”? Reimagining Democracy With Participatory Budgeting in Chicago
Madeleine Pape & Chaeyoon Lim
Sociological Forum, forthcoming
Abstract:
This article examines whether democratic innovations in the United States attract citizens who are typically underrepresented within existing political institutions. We focus on participatory budgeting, an intervention where residents decide how to allocate a particular pot of public money. Taking “PB Chicago” as our case study, we use survey and interview data to examine whether organizers realized their stated goal of involving residents other than the “usual suspects.” We find that residents who voted in PB Chicago were more often white, college educated, and from higher‐income households relative to both the local population and politically active residents in Chicago. While these residents were not necessarily the most active across other stages of the PB Chicago process, we find little evidence that lower socioeconomic status and minority residents were accessing the civic learning and empowerment gains associated with participatory forms of democracy. Outreach made the process more inclusive but was insufficient to overcome several important structural constraints. Of particular note, the needs and interests of less privileged residents were not met by the narrow capital works focus of PB Chicago. We suggest that when implemented under such conditions, participatory budgeting risks deepening existing political and social inequalities.
Roman Wealth and Wealth Inequality in Comparative Perspective
Walter Scheidel
Stanford Working Paper, September 2019
Abstract:
Reflecting current concerns about economic inequality, scholars who study the pre-modern past are increasingly addressing this issue. The obstacles to measuring the distribution of income or wealth in the ancient Roman world are formidable. Only a few highly localized datasets are available. Any appraisal of conditions in the Roman empire as a whole therefore requires parametric modeling. Building on earlier work by Scheidel and Friesen (2009), this paper explores new ways of establishing plausible parameters for a probabilistic reconstruction of the total size of Roman wealth and the share held by the top tier of society.