A babble-inspired, SSHRC-funded research project on inequality and social mobility

23 posts / 0 new

Thu, 2009-04-02 20:54

Stephen Gordon

Last fall, I submitted a research proposal to the Social Sciences and Humanities Research Council. It's title was - and still is, I guess - "Inequality, social mobility and growth". Here is the non-technical part that SSHRC makes public:

In most analytical frameworks of the macroeconomy, the welfare effects of economic growth are unambiguously positive: increased output is associated with higher incomes and standards of living. But there has been much recent evidence that suggests that although real average incomes have increased substantially over the past few decades, real median incomes have not grown as quickly, and there are extended periods of time where median incomes have declined.

This divergence between the evolution of average and median incomes is generally ascribed to increasing dispersion in incomes across households, and there is in fact an extensive empirical literature that documents the rise in inequality over the past couple of generations.

The aim of this project is to explore the issues of inequality and social mobility in the context of a dynamic general equilibrium model. In addition, it will try to develop insight for the implications of these issues for such questions as economic growth and optimal tax and redistribution policies.

One of the central themes of the project will involve education. One of the more persistent features of the data is that income inequality is related to differences in levels of education, and that individuals’ education levels are highly correlated with those of their parents.

This isn't the first time I've received SSHRC funding. In point of fact, this is the fourth time in a row that I've been successful; I really am pretty good at my day job. But it is the first time I've written a proposal that wasn't based on technical points upon which I'd already spent a certain amount of time and where my expertise was well-established.

The reason why I wrote the proposal is that after more than five years on babble, these issues have pushed themselves to the forefront of my research agenda, and I've decided to go with it.

So I'd like to thank babble for forcing me to organise my thoughts and to redirect my energies on the sorts of issues that made me want to be an economist in the first place.

Thu, 2009-04-02 20:58

Michelle

Congratulations, Stephen! I'm very happy for you, and thrilled to see you here, of course. :)

Thu, 2009-04-02 20:59

Cueball

Talking about putting the cart before the horse, or what!

Good to see you Stephen. Been wondering where you have been. How is the "risiduals" market these days?

Thu, 2009-04-02 21:10

Stephen Gordon

Cueball wrote:

Talking about putting the cart before the horse, or what!

Yeah, no kidding. But "publish or perish" is not a joke; those technical papers got me tenure and made me a full professor.

But now I can do what I want. And this is what I want to do.

Thu, 2009-04-02 21:13

Doug

At least wait until he's finished and published before you pooh-pooh it.

It'll be interesting to see when it's done!

Thu, 2009-04-02 21:14

Coyote

Congrats, Stephen!

Thu, 2009-04-02 21:26

Cueball

Doug wrote:

At least wait until he's finished and published before you pooh-pooh it.

It'll be interesting to see when it's done!

Well, Stephen has observed that the rich are getting richer and the poor are getting poorer. He has noticed a correlation between the level of education and the level income. He seems to be postulating that investment in education will increase the level of income, or so it seems to me. I think this ignores the systemic tendency for wealth to accumulate in the hands of the wealthy.

Essentially, though I am fully supportive for increased investment in education, I do not believe that education itself will overcome the systemic tendency for wealth to accumalte upwards, and the result will be better educated people without money.

Thu, 2009-04-02 21:37

fogbrella

hi stephen congrats on your accomplishment...you do realize what you're up against, though... no? Huffington Post Daily Kos

Thu, 2009-04-02 22:02

Stephen Gordon

Cueball wrote:

Essentially, though I am fully supportive for increased investment in education, I do not believe that education itself will overcome the systemic tendency for wealth to accumalte upwards, and the result will be better educated people without money.

I'm not expecting education to be a magic bullet, either. That's why I'll be looking closely at tax and transfer issues as well.

Thu, 2009-04-02 22:08

#10

Cueball

What we really need here is models that show how industries in key sectors can be nationalized, or partially nationalized, or co-operatively worker controlled and integrated into the market economy.

Thu, 2009-04-02 22:15

#11

Stephen Gordon

Actually, that's putting the cart before the horse. If those are solutions to a problem, fine. But I don't see the point of spending time on formulating questions for a set of pre-determined answers.

Thu, 2009-04-02 22:33

#12

Cueball

You made no bones about " a proposal that wasn't based on technical points upon which I'd already spent a certain amount of time and where my expertise was well-established," yet you have already established that enhanced educational investment, and a restructuring of the tax system would be efficacious.

Thu, 2009-04-02 22:53

#13

Stephen Gordon

You're asking me to provide a question for which you have already have a solution. But I'm not yet sure just exactly how to formulate a precise question, let alone predict the answer. I haven't worked in this area before.

It's frustrating, I agree, but that's pretty much to be expected from a research proposal at this point. All I really know is what I said in the OP.

eta: I don't *know* that education and tax-and-transfer policies are the key. But it seems a reasonable place to start, given my understanding of the raw correlations in the data. But if it turns out that I can't come up with a story that reconciles these notions with the data, then I'll try to think of something else.

Fri, 2009-04-03 00:14

#14

Cueball

I think the logical place to start with an analysis of the relationship between education and the economy is research that educators have done identifying how those two things inter-relate. I think you will see that most of this research indicates that the primary factor is not the education of the parents, but the economic status of the parents that impacts on the education of their children, not vis-versa.

Have you looked at any of this research, as part of your preperation for this project?

Poor people have less access to extra-curricular aids, such as out of school tutoring. They have less time to do their own tutoring. Their kids spend more time in daycare, and less time at home. Their children spend more time with third parties such as babysitters, and so on and so forth. All of these things act to make children less happy, less well adjusted and compound with the lack of extracurricular support to bias the process against children of people who have less money, and less time to support their kids.

I don't think you can really make a determination based on mere statistical correlations, and nor do I think their is a reason to reinvent the wheel, lest it end up on a cart drawn horse.

Fri, 2009-04-03 09:01

#15

George Victor

In fact, neuro science now points out that in groupings of children by social class ("economic status"), the five-year-old in the upper-middle strata will have heard three million more words in their short lifetime than the children at bottom, and their brains will have been "wired" in this way (one of many) for further development.

Fri, 2009-04-03 14:12

#16

Stephen Gordon

I've read similar findings. It makes it all the harder to make the distinction between 'nature' and 'nurture' if one pretty much determines the other.

Tue, 2009-04-07 23:20

#17

KenS

Stephen Gordon wrote:

I'm not expecting education to be a magic bullet, either. That's why I'll be looking closely at tax and transfer issues as well.

Congrats both on getting the grant and going after one that really motivates you.

I don't really grasp what this might look like. I'm also skeptical of anything focused on direct causality of education.

With that prejudice in mind, the tax and transfer issues look more promising to me. But I have no idea of what can be captured in that kind of data. [Basic stuff, like whether you can get reasonably accurate aggregated data for income groups that shows overall effects of taxes and transfers.]

From what you posted here- and linked to- I could tell you had an abiding interest in transfer and income distribution issues. How distant is this from the 'technical stuff' that was the bread and butter of your career?

And does the effect of price/costs of goods and services on income distribution have a place in there somewhere?

Thu, 2009-04-09 18:28

#18

Cueball

Stephen Gordon wrote:

I've read similar findings. It makes it all the harder to make the distinction between 'nature' and 'nurture' if one pretty much determines the other.

Not really, actually this evidence goes towards nurture, obviously.

This is not much of a response to my query about what research you have done reagarding what teaching professionals make of the statistics you are looking at, and the conclusions they have drawn from them. Do you actually have an interest in finding out what experts in the field think about the relationship between economy and student performance?

Thu, 2009-04-09 19:18

#19

N.Beltov

Welcome back, SG. Just don't mention "evolution by natural selection" in your documentation unless you're willing to prove it to the satisfaction of the SSHRC funding committee over the alternative view of "intelligent design". They may just cut your funding without a proper explanation ...

Thu, 2009-04-09 20:46

#20

Stephen Gordon

Heh. I tried to get the inside story on that one (I was chair of the Economics SSHRC committee in the following two years), but I never was able to. But since then, SSHRC has made it a point to make sure that rejection letters are *very* carefully worded.

Thu, 2009-04-09 21:44

#21

Stephen Gordon

Cueball wrote:

Not really, actually this evidence goes towards nurture, obviously.

i

I agree. What I meant was that it's hard to introduce much in the way of a separate role for 'nature'.

Quote:

This is not much of a response to my query about what research you have done reagarding what teaching professionals make of the statistics you are looking at, and the conclusions they have drawn from them. Do you actually have an interest in finding out what experts in the field think about the relationship between economy and student performance?

Well, yes, but I've by no means made an exhaustive survey of the literature. I'll be doing my best to fill in those gaps, but I've read enough to realise that it's not the sort of issue I can quickly gloss over.

Thu, 2009-04-09 21:48

#22

Cueball

What literature have you read from experts in the field that forms the basis of your lay-opinion? Any analysis from them you would like to offer to support your views?

Thu, 2009-04-09 21:57

#23

Stephen Gordon

Maybe it would be easier if you could point me to some references. As I think I mentioned, I've not even started working on the project. So far, all I know is enough to put together a grant proposal.