The effect on inequality of changing one or two incomes

We examine the effect on inequality of increasing one income, and show that for two wide classes of indices a benchmark income level or position exists, dividing upper from lower incomes, such that if a lower income is raised, inequality falls, and if an upper income is raised, inequality rises. We provide a condition on the inequality orderings implicit in two inequality indices under which the one has a lower benchmark than the other for all unequal income distributions. We go on to examine the effect on the same indices of simultaneously increasing one income and decreasing another higher up the distribution, deriving results which quantify the extent of the ‘bucket leak’ which can be tolerated without negating the beneficial inequality effect of the transfer. Our results have implications for the inequality and poverty impacts of different income growth patterns, and of redistributive programmes, leaky or not, which are briefly discussed.     

Distributive effects of benefits and taxes

In light of the growing federal deficit, pressure is mounting to cut federal spending. If the budget for social security programs is cut, who will suffer? This article presents the results of a study that investigated the degree to which taxes and public income transfers change the level of income, the degree of inequality in income distribution, and the poverty rates of various demographic groups. Major findings are that public income transfers are more powerful than taxes in equalizing the income distribution and that poverty reduction through non-means-tested transfer programs is more effective among elderly people, white people, and people in married-couple families, whereas poverty reduction through means-tested transfer programs is more effective among nonelderly people, black people, and people in female-headed families. Implications for social work practice are discussed.     

Social Heterogeneity and Volunteering in U.S. Cities

In this research we explore the relationship between social heterogeneity and volunteering across U.S. metropolitan areas testing a theory that race heterogeneity, racial segregation, and income inequality are negatively associated with the rate of volunteering. Theorizing that social heterogeneity will have different effects for religious and secular volunteering rates, we analyze them separately. We use nonlinear multilevel models to analyze nearly 200,000 individuals across 248 cities, controlling for nonprofits per capita, religious congregations per capita, proportion of the population with college degrees, and the family poverty rate. While much of the intercity variation in volunteering is due to the composition of the population living in each city, we find general support for the predicted negative effect of social heterogeneity on volunteering. However, the effects vary by volunteering type. Race heterogeneity is negatively related only to secular volunteering, racial segregation is negatively related to both general volunteering and secular volunteering, and income inequality is negatively related to all types of volunteering.     

Marriage Promotion Policy and Family Inequality

In 1996, Congress overhauled welfare policy to promote marriage and work as ways to lift American families out of poverty. Almost all of the funding for governmental marriage promotion has been devoted to relationship skills programs intended to help couples strengthen their relationships, encourage them to marry, and thereby prevent poverty. Marriage promotion policy has sparked intense debate, especially over the connection between marriage and family inequality. While advocates of the policy argue the government should promote marriage because it fosters social and economic well‐being, critics challenge the assumption that marriage itself causes these benefits or will help lift poor families out of poverty. Recent sociological research on why poor and low‐income couples marry less finds that they tend not to marry if they cannot meet a specific economic threshold. This suggests that rather than promoting the view that relationship skills en route to marriage can help prevent poverty, marriage promotion policy could likely better serve disadvantaged families by acknowledging and addressing the socioeconomic roots of family inequality.     

“Beating the Odds” Versus “Changing the Odds”: Poverty,Resilience, and Family Policy

Mixed in with national data on declining poverty rates are other signs that poverty, economic hardship, and inequality continue unabated. This essay examines: (a) the scope of poverty and the growing disparity in income and wealth; (b) the consequences of poverty of adults and children; and (c) strategies for improving their resilience. It is suggested that resiliency will be enhanced more by keen attention to national economic policies than by focusing upon individual personality characteristics, family attributes, or even unique community features. Drawing on a public health analogy, a focus on prevention (through sound economic redistribution policies) could significantly strengthen families and improve their well‐being.     

Inequality,Health Infrastructure,and Spatial Context: Understanding Pathways to Variations in the Causal Determinants of Race-Specific Mortality Rates

Previous research examines the ecological relationship between income inequality and mortality, and results are inconclusive. This analysis builds upon these findings by implementing a spatially weighted path analysis to better understand the mediating relationships of economic and social inequality, health infrastructure, and mortality. In the analysis, overall and race-specific mortality rates are combined with local health infrastructure data, income inequality and racial segregation data, and a series of ecological controls to undertake this examination. Ultimately, findings show that income inequality is a stronger determinant of mortality than is segregation, for whites and blacks, regardless of the existing health infrastructure. We also find racial disparities in the direct effect of local health infrastructure on mortality. In contrast to previous literature suggesting no association between income inequality and mortality after accounting for race and model sophistication, we argue that the significance of the relationship persists using race-specific, spatially weighted path models.     

Uneven Development and Local Inequality in the U.S. South: The Role of Outside Investment,Landed Elites,and Racial Dynamics

This paper develops a historically contingent understanding of patterns of uneven economic development in the U.S. South. We conceptualize spatial variation in economic development and its consequences for inequality to be embedded in both local and international dynamics. The character of local economic development, it is argued, reflects the organizational base and heterogeneity of local elites, the divisions and relative power of nonelites, and the embeddedness of the local political economy in national and world systems of politics and production. These ideas are developed and made historically and spatially specific through an analysis of uneven development in one Southern state, North Carolina. Our findings suggest that contemporary patterns of uneven development and the resulting income deprivations and inequality reflect conditional interactions between elite economic projects and racial divisions within the working class. We find that outside investment seems to reproduce rather than disrupt local patterns of inequality and poverty.     

Charitable conservatism, poverty radicalism and inequality aversion

In his Presidential Address to the European Economic Association, Tony Atkinson introduced the idea of a “charitable conservatism” position in public policy, which “exhibits a degree of concern for the poor, but this is the limit of the redistributional concern and there is indifference with respect to transfers above the poverty line.” This contrasts with the perspective of poverty indices, which give zero weight to those above the poverty line, which we call “poverty radicalism,” and with standard “inequality aversion” where the weights decline smoothly as we move up the income scale. The object of this paper is, first, to clarify the interrelationships between charitable conservatism, poverty radicalism and inequality aversion. We do this by showing how the patterns of welfare weights to which each of these gives rise are related to each other. Secondly, we are concerned to demonstrate the implications of these different views for optimal income taxation. In terms of levels and patterns of marginal tax rates, we show that charitable conservatism and poverty radicalism are on a continuum, and by choice of low or high inequality aversion one can approximate either outcome fairly well.     

Changing Economic Opportunities,Family Structure,and Poverty in Rural Areas1

Abstract Instrustrial restructuring in the 1980s ushered in a new pattern of growing economic diversity over geographic space. The objective of this study is to examine the extent and etiology of changing spatial inequality between and within metropolitan (metro) and nonmetropolitan (nonmetro) areas, as measured by increasing or decreasing county poverty rates. Results based on data from the 1980 and 1990 census summary tape files suggest several conclusions. First, poverty rates increased more rapidly in nonmetro than metro counties during the 1980s; historical patterns of metro-nonmetro economic convergence slowed over the past decade. Second, poverty rates tended to decline in nonmetro counties with traditionally high rates of poverty, thus providing counter-evidence to arguments suggesting that the gap between traditionally poor and nonpoor nonmetro counties has widened. Third, spatial differences in poverty rates and relative increases in county poverty rates over the 1980s were most strongly associated with women's employment and headship status. The results raise questions about the extent to which traditional rural economic development strategies address the potentially deleterious economic effects of rising percentages of poor female-headed families.     

Judgment of distributional inequality in networks

Why is income inequality perceived and judged differently across a society? Following the social comparison theory, one reasonable explanation suggests that individuals are exposed to different local reference groups in social networks. We design a vignette experiment to study how income distributions are judged by individuals structured in networks. The experiment shows that perceptions of distributional inequality are high when network ties are unequally distributed across individuals, suggesting that network inequality contributes to distributional inequality. Beyond the network effect, inequality judgment is found to be driven by a mix of self-interest and other-regarding preference: people are in favor of group-beneficial income distributions wherein they rank high, but not extremely high, in the group. It shows that people care about not only their relative affluence, but also where others stand in the distribution.     

Measuring poverty and inequality in northern Canada

We provide the first direct comparisons of poverty and inequality in the North (i.e. Yukon, Northwest Territories, Nunavut) with elsewhere in Canada. We do so by first constructing a northern equivalence scale. Based on an Engel methodology, we estimate the extra income needed by families in the North to devote the same share to necessities as those in southern Canada. Using econometric techniques and public use microdata from the Survey of Household Spending, we find that cost of living is 1.46 times higher in the North. We use this scale to adjust the incomes of northern residents so that purchasing power is, for the purposes of our model, equal to that in the South. We subsequently measure poverty and inequality in northern versus southern Canada over the period 1997–2009. Our findings indicate that incidence of poverty is much higher in the North. For example, 31.1% of northern families with children are poor, compared with 9.9% in the South. Moreover, while approximately 10% of the southern population is represented in each income decile, 31.1% of northern families with children are in the bottom 10%. Only 3% have incomes that would place them among the richest 10% of Canadians.     

Income Inequality and Chronic Health Conditions: A Multilevel Analysis of the U.S. States

Recently, scholarly work has examined the effect of rising income inequality on health outcomes. However, this work is somewhat inconclusive. The mechanisms that could produce such an association are still being sorted out. Much of this work focuses on mortality outcomes with little attention to how this process operates for actual health conditions, including chronic health problems—arguably the main public health concerns of the developed world. In a series of multilevel binary logistic regression models using data from the 2005 and 2007 Behavioral Risk Factor Surveillance System, we examine the association between state-level income inequality, poverty, and social welfare measures on spending and policy to examine the association between these factors for three chronic health outcomes: diabetes, hypertension, and coronary heart disease. We find that income inequality is conditionally positively related only to the diagnosis of diabetes and hypertension, and only in 2007. However, absolute poverty is related to the outcome across all three dependent variables. Certain social welfare measures attenuate the effects of both income inequality and absolute poverty, suggesting that some policies reduce this association.     

Do Minimum Wages Fight Poverty?

We present evidence on the effects of minimum wages on family incomes. The results indicate that minimum wages increase both the probability that poor families escape poverty and the probability that previously nonpoor families fall into poverty. The estimated increase in the flow into poverty is larger, although this difference is not statistically significant. We also find that minimum wages tend to boost the incomes of poor families that remain below the poverty line. On net, the various trade-offs created by minimum wage increases more closely resemble income redistribution among low-income families than income redistribution from high- to low-income families.     

The Unintended Significance of Race: Environmental Racial Inequality in Detroit

This article addresses shortcomings in the literature on environmental inequality by (a) setting forth and testing four models of environmental inequality and (b) explicitly linking environmental inequality research to spatial mismatch theory and to the debate on the declining significance of race. The explanatory models ask whether the distribution of blacks and whites around environmental hazards is the result of black/white income inequality, racist siting practices, or residential segregation. The models are tested using manufacturing facility and census data from the Detroit metropolitan area. It turns out that the distribution of blacks and whites around this region's polluting manufacturing facilities is largely the product of residential segregation which, paradoxically, has reduced black proximity to manufacturing facility pollution.     

Working Poverty across the Metro‐Nonmetro Divide: A Quarter Century in Perspective, 1979–2003

Researchers are increasingly recognizing space as a key axis of inequality. Scholars concerned with spatial inequality have called for special attention to issues of comparative advantage and disadvantage across space as well as the consideration of the subnational scale. This study draws on these ideas by examining the relationship between work and poverty in the United States with an explicit comparative focus on metropolitan (metro) and nonmetropolitan (nonmetro) areas. Moreover, this study joins space with its counterpart time by exploring how this relationship has changed over the last quarter century. Using data from the March Current Population Survey, the results show that working poverty persistently had a disproportionate impact on nonmetro families between 1979 and 2003. However, the results also show a trend of residential convergence, as working poverty in metro areas has climbed toward the levels experienced in nonmetro areas. Logistic‐regression models exploring the effects of residence, family labor supply, and period confirm that labor supply has consistently provided nonmetro families with less protection from poverty than their metro counterparts, but also show that this disadvantage has waned in recent years. The findings underscore the need for policies that support those working on the economic margins and recognize the variable opportunity costs of employment across the rural‐urban continuum.     

Survey nonresponse and the distribution of income

The paper examines the distributional implications of selective compliance in sample surveys, whereby households with different incomes are not equally likely to participate. Poverty and inequality measurement implications are discussed for monotonically decreasing and inverted-U compliance-income relationships. We demonstrate that the latent income effect on the probability of compliance can be estimated from information on response rates across geographic areas. On implementing the method on the Current Population Survey for the U.S. we find that the compliance probability falls monotonically as income rises. Correcting for nonresponse appreciably increases mean income and inequality, but has only a small impact on poverty incidence up to poverty lines common in the U.S. Martin Ravallion: Corresponding author.     

Blind Faith in the Free Market: Urban Poverty, Residential Segregation, and Federal Housing Retrenchment, 1970–1995

In recent years, research on poverty and segregation has been organized within a dominant discourse that centers on the relative salience of racial discrimination or macroeconomic change as a determinant of concentrated minority poverty. In contrast, little sociological research has focused on federal housing policies and programs as important factors shaping racial patterns of poverty and residential segregation in U.S. metropolitan areas. Drawing upon census data, public documents, housing reports, and interviews with local residents, I examine how federal and local housing initiatives in the 1980s and 1990s have interacted with the shift to a service-oriented economy to reinforce racial residential segregation and exacerbate urban poverty in Kansas City. I find that persistent racial residential segregation, including minority poverty concentration and the spatial isolation of inner-city neighborhoods, is due to post-1970 changes in the operation of the metropolitan housing market and retrenchment in federal and local housing policy. Rather than viewing racial discrimination and macroeconomic change as disconnected and separate "variables," I focus on the interconnectedness and mutually reinforcing character of both factors. Such an emphasis moves beyond separate-variables approaches and analyses to identify how concentrated minority poverty is sustained not only by racial discrimination and large-scale macroeconomic and demographic changes, but also by the market-centered orientation of federal housing programs and policies.     

Income inequality,poverty and crime across nations

We examine the relationship between income inequality, poverty, and different types of crime. Our results are consistent with recent research in showing that inequality is unrelated to homicide rates when poverty is controlled. In our multi‐level analyses of the International Crime Victimization Survey we find that inequality is unrelated to assault, robbery, burglary, and theft when poverty is controlled. We argue that there are also theoretical reasons to doubt that the level of income inequality of a country affects the likelihood of criminal behaviour.     

Life Satisfaction Among Children in Different Family Structures: A Comparative Study of 36 Western Societies

This paper examines differences in life satisfaction among children in different family structures in 36 western, industrialised countries (n = 184 496). Children living with both biological parents reported higher levels of life satisfaction than children living with a single parent or parent–step‐parent. Children in joint physical custody reported significantly higher levels of life satisfaction than their counterparts in other types of non‐intact families. Controlling perceived family affluence, the difference between joint physical custody families and single mother or mother–stepfather families became non‐significant. Difficulties in communicating with parents were strongly associated with less life satisfaction but did not mediate the relation between family structure and life satisfaction. Children in the Nordic countries characterised by strong welfare systems reported significantly higher levels of life satisfaction in all living arrangements except in single father households. Differences in economic inequality between countries moderated the association between certain family structures, perceived family affluence and life satisfaction.     

On intertemporal poverty measures: the role of affluence and want

This paper proposes classes of intertemporal poverty measures which take into account both the debilitating impact of prolonged spells in poverty and the mitigating effect of periods of affluence on subsequent poverty. The weight assigned to the level of poverty in each time period depends on the length of the preceding spell of poverty or of non-poverty. The proposed classes of intertemporal poverty measures are quite general and allow for a range of possible judgements as to the overall impact on a poor period of preceding spells of poverty or affluence. We discuss the properties of the proposed classes of measures and axiomatically characterize these measures.