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21. Achieving Inclusive and Innovative Growth with Competition Policies

Author:
Minsoo Han and Subin Kim
Publication Date:
01-2022
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
In recent years, inequality has grown worse worldwide. Recent studies have pointed out weakening market competition and deepening industrial concentration as one of factors for this phenomenon. Therefore, the role of competition policies in promoting market competition should also be considered as a countermeasure against deepening inequality beyond the traditional view about competition policies. Against this backdrop, we empirically analyze cases of the US, the EU and Korea, and then propose a competition policy direction to achieve inclusive and innovative growth pursued by the Korean government.
Topic:
Inequality, Economic Growth, Innovation, Inclusion, and Economic Competition
Political Geography:
South Korea, United States of America, and European Union

22. Young, Gifted, and Black: Inequitable Outcomes of Gifted and Talented Programs

Author:
Krystal Cohen
Publication Date:
05-2022
Content Type:
Journal Article
Journal:
Journal of Public and International Affairs (JPIA)
Institution:
School of Public and International Affairs (SPIA), Princeton University
Abstract:
Gifted and talented programs in the United States have been an object of controversy for decades, with many arguing that gifted education widens the gap between high achieving students and their peers, typically along racial lines. There is currently a large body of literature on underrepresentation in gifted programs for Black and Latinx students, as well as low-income students, however academic research on the impact of such programs, especially for disadvantaged populations, is a far less developed research space. Drawing on data from the National Longitudinal Survey of Youth of 1979, this study utilizes propensity matching and OLS regression to examine racial and socioeconomic disparities in the long-term outcomes of participation in gifted programs. I find that: race and maternal education are significant predictors for gifted program participation, and gifted education is positively associated with achievement test scores, academic attitudes, and self-perception, with greater academic differences for non-Black/Hispanic students and students of higher socioeconomic status, and greater social-emotional differences for Black/Hispanic students and students of lower socioeconomic status.
Topic:
Education, Race, Inequality, and Domestic Policy
Political Geography:
North America and United States of America

23. Chicago's Racial Wealth Gap: Legacies of the Past, Challenges in the Present, Uncertain Futures

Author:
Fructoso M. Basaldua Jr., Maximilian Cuddy, Amanda E. Lewis, and Ivan Arenas
Publication Date:
02-2022
Content Type:
Special Report
Institution:
Institute for Research on Race and Public Policy (IRRPP), University of Illinois at Chicago
Abstract:
By the time they reach adulthood, Black and Latinx children born to middle income families in Chicago are far less likely than White children from families with the same income to remain in the middle class or to attain a college degree. These patterns in downward mobility among middle class Black and Latinx Chicagoans are much worse than national averages, raising important questions about the future of Black and Latinx communities in Chicago. In this report, we argue that we need an in-depth understanding of wealth inequality to comprehend why middle class families in Chicago seem to be on such different trajectories. The report centers the life experiences of middle class Black, Latinx, and White families to demonstrate that there is much work to be done to support our middle class families, many of whom are contending today not just with the legacies of past inequities, but also with the ongoing failures of public policy to address basic needs.
Topic:
Education, Children, Inequality, Class, Economic Inequality, and Middle Class
Political Geography:
North America and United States of America

24. Monetary Policy and Racial Inequality

Author:
Alina Bartscher, Moritz Kuhn, Moritz Schularick, and Paul Wachtel
Publication Date:
01-2022
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
The racial tensions that spread across the United States in 2020 have caught the attention of monetary policymakers and focused concern on the size and persistence of the gap between both the income and wealth of black and white households. There is widespread recognition that despite some decline in overt labor market discrimination, gains in educational opportunities, and income growth of black households since the onset of the civil rights movement, the gaps persist and have even grown larger by some measures. According to the 2019 Survey of Consumer Finances (SCF), the median wealth of a white household was $184,390, compared with only $20,730 for the median black household. The typical black household owns only about 11 percent of the wealth of the typical white household. The income gap is smaller but still large; the median income of black households ($38,688) is 58 percent of the median income of white households ($67,196).
Topic:
Race, Monetary Policy, Inequality, and Economic Policy
Political Geography:
North America and United States of America

25. Inequality and the Decline of Small Business

Author:
Sebastian Doerr, Thomas Drechsel, and Donggyu Lee
Publication Date:
09-2022
Content Type:
Policy Brief
Institution:
Economics for Inclusive Prosperity (EfIP)
Abstract:
The share of income that goes to top earners has reached levels not seen in over half a century, and addressing inequality has become a central issue for policymakers. Designing policies to alleviate income disparities requires a thorough understanding of how inequality affects the economy. Somewhat surprisingly, while several studies investigate the consequences of rising income inequality for households (Auclert and Rognlie 2017, 2020; Mian et al. 2020), much less is known about how inequality affects firms. In a recent study (Doerr et al. 2022), we examine the important link between income inequality and firms’ job creation. Our analysis of US data reveals that a larger top income share hurts small firms, while benefiting larger firms. The reason is that households’ savings portfolios change with their income level. Higher income inequality leads to more household savings flowing into stocks and bonds – which are mostly used for financing by larger firms – rather than into bank deposits. In turn, as small businesses depend on banks for financing, their funding becomes more costly and they create fewer jobs. Complementing our analysis with a theoretical model, we show that by altering the allocation of household savings, rising income inequality not only hurts small firms, but suppresses overall employment. Income inequality has thereby contributed to two important macroeconomic trends: the decline in small business and the fall in the labor share, i.e., the share of total income that accrues to workers (Decker et al. 2016; Autor et al. 2020).
Topic:
Economics, Inequality, Business, and Business Management
Political Geography:
North America and United States of America

26. Savings Glut, Secular Stagnation, Demographic Reversal, and Inequality: Beyond Conventional Explanations of Lower Interest Rates

Author:
Matias Vernengo
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
Interest rates have declined over the last 40 years, a period of increasing inequality. The steady decline in interest rates has been interpreted by and large as resulting from a decline of the natural rate of interest. This paper surveys the main explanations associated with the notion of a decline in the natural rate of interest, including the savings glut and the secular stagnation hypothesis. It analyzes the views according to which demographic forces were behind the decline, and might perhaps be associated to a future rise of the same natural rate. It also discusses the view according to which the role of inequality has been also to affect the natural rate of interest. Finally, views that discuss the role of monetary and financial factors, including the so-called global financial cycle literature, are discussed. It is argued that the conventional view suffers from logical and empirical problems that are ultimately insurmountable. A brief critique of the notion of a natural rate of interest, and alternative monetary theory of the decline of interest rates, as determined exogenously by the monetary authority of the hegemonic country, the United States, is proposed.
Topic:
Demographics, Inequality, Finance, and Interest Rates
Political Geography:
North America and United States of America

27. Regional Deprivation and Populism - Evidence from Germany and the U.S.

Author:
Michael Bayerlein
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
A widely held view is that increasing globalisation and inequality are fostering support for populist actors. Surprisingly, when focusing on Germany and the U.S., populist voting is highest in less globalised regions with rather equal income distributions. Addressing this puzzle, I ask how the regional variance in populist voting can be explained. In my answer, I introduce the concept of spatial inequality, which describes the regional inequality within countries, and construct a measure of public goods scarcity. I argue that the spatial inequality induced feeling of being left behind is positively correlated with populist voting and that this effect is mitigated by public goods provision. Using county level data to develop spatial inequality and public good scarcity indices, I can provide empirical support for these arguments. The findings have important implications for understanding the sub-national variance in populist voting and the role of relative economic deprivation as well as public goods provision.
Topic:
Globalization, Inequality, Populism, Voting, Regional Economy, and Public Goods
Political Geography:
Europe, Germany, North America, and United States of America

28. Employment Mobility and the Belated Emergence of the Black Middle Class

Author:
Joshua Weitz, William Lazonick, and Philip Moss
Publication Date:
01-2021
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
As the Covid-19 pandemic takes its disproportionate toll on African Americans, the historical perspective in this working paper provides insight into the socioeconomic conditions under which President-elect Joe Biden’s campaign promise to “build back better” might actually begin to deliver the equal employment opportunity that was promised by Title VII of the Civil Rights Act of 1964. Far from becoming the Great Society that President Lyndon Johnson promised, the United States has devolved into a greedy society in which economic inequality has run rampant, leaving most African Americans behind. In this installment of our “Fifty Years After” project, we sketch a long-term historical perspective on the Black employment experience from the last decades of the nineteenth century into the 1970s. We follow the transition from the cotton economy of the post-slavery South to the migration that accelerated during World War I as large numbers of Blacks sought employment in mass-production industries in Northern cities such as Detroit, Pittsburgh, and Chicago. For the interwar decades, we focus in particular on the Black employment experience in the Detroit automobile industry. During World War II, especially under pressure from President Roosevelt’s Fair Employment Practices Committee, Blacks experienced tangible upward employment mobility, only to see much of it disappear with demobilization. In the 1960s and into the 1970s, however, supported by the Civil Rights Act and the Equal Employment Opportunity Commission, Blacks made significant advances in employment opportunity, especially by moving up the blue-collar occupational hierarchy into semiskilled and skilled unionized jobs. These employment gains for Blacks occurred within a specific historical context that included a) strong demand for blue-collar and clerical labor in the U.S. mass-production industries, which still dominated in global competition; b) the unquestioned employment norm within major U.S. business corporations of a career with one company, supported at the blue-collar level by massproduction unions that had become accepted institutions in the U.S. business system; c) the upward intergenerational mobility of white households from blue-collar employment requiring no more than a high-school education to white-collar employment requiring a higher education, creating space for Blacks to fill the blue-collar void; and d) a relative absence of an influx of immigrants as labor-market competition to Black employment. As we will document in the remaining papers in this series, from the 1980s these conditions changed dramatically, resulting in erosion of the blue-collar gains that Blacks had achieved in the 1960s and 1970s as the Great Society promise of equal employment opportunity for all Americans disappeared.
Topic:
Government, History, Employment, Inequality, Mobility, Unions, Middle Class, New Deal, African Americans, and Great Migration
Political Geography:
North America and United States of America

29. Case Studies on the Role of Gender and Identity in Shaping Positive Alternatives to Extremisms

Author:
Rosalie Fransen, Melinda Holmes, Helena Gronberg, Stacey Schamber, and Shannon Foley Martinez
Publication Date:
10-2021
Content Type:
Case Study
Institution:
International Civil Society Action Network (ICAN)
Abstract:
The International Civil Society Action Network (ICAN), with the support of Global Affairs Canada, has developed a set of “Case Studies on the Role of Gender and Identity in Shaping Positive Alternatives to Extremisms,” in Cameroon, Indonesia, Jordan, Libya, Pakistan, Somalia, Sweden, and the United States. The case studies demonstrate how conducting a Gender-Based Analysis Plus (GBA+) improves understanding of the drivers, narratives and roles that engender extremisms and violent extremist activity. By profiling examples of peacebuilding, deradicalization, reintegration and counternarrative work in these contexts, the case studies emphasize how attention to gender and intersectional identities can improve the effectiveness of interventions to transform extremisms – not only by preventing or countering it, but by providing positive alternatives that enable people to realize a peaceful, pluralistic future. The case studies cover a number of themes relevant to contemporary preventing/countering violent extremism (P/CVE) and counterterrorism (CT) work, including countering white supremacist extremism, the role of masculinities in recruitment and disengagement, addressing trauma and deploying mental health and psychosocial support (MHPSS) approaches in reintegration and rehabilitation, and work with religious leaders to promote peaceful, pluralistic and gender-just interpretations of religious texts and traditions. The case studies are intended for use by practitioners and policymakers to guide them in conducting a gender analysis and in integrating responsiveness to gender and identity factors in policies and interventions.
Topic:
Education, Religion, Violent Extremism, Counter-terrorism, Women, Inequality, Trauma, Violence, Mental Health, White Supremacy, Identity, Political Participation, and Gender
Political Geography:
Pakistan, Africa, South Asia, Indonesia, Middle East, Libya, North Africa, Sweden, Jordan, Somalia, Southeast Asia, Cameroon, and United States of America

30. “Baby Won't You Please Come Home:” Studying Ethnoracial Segregation Trends in New Orleans Pre and Post Hurricane Katrina

Author:
Nathan Babb
Publication Date:
05-2021
Content Type:
Working Paper
Institution:
School of Public and International Affairs (SPIA), Princeton University
Abstract:
This paper explores the ethnoracial segregation trends of New Orleans, Louisiana between the years 2000, 2010, and 2018. It studies the effect of Hurricane Katrina—which struck in August 2005—on population figures and racial composition within two geographic units of study in Orleans parish: neighborhoods and census tract block groups. Since Hurricane Katrina, White residents have returned in larger numbers than Black residents, and particularly so in neighborhoods that were predominantly Black before the storm. In 2019, New Orleans had 100,000 fewer people than before the storm—nearly the same as the number of Black residents who have not returned. Using a Gibbs-Martin index, which measures racial diversity, the paper finds that decreases in population at the census block group level are associated with racial “diversifying.” This trend invites a conversation on the normative interpretations of racial heterogenization, its causes, and its consequences: who bears the costs of increased “diversity” and what is the historical backdrop it operates under?
Topic:
Race, Natural Disasters, Governance, Inequality, Domestic Policy, Disaster Management, and Segregation
Political Geography:
North America and United States of America