... EDWARD WOLFF is a senior scholar at the Levy Economics Institute of Bard College and profes-s... more ... EDWARD WOLFF is a senior scholar at the Levy Economics Institute of Bard College and profes-sor at New York University. AJIT ZACHARIAS is a senior scholar at the Levy Economics Institute of Bard College. ... Economic Well-Being Edward Wolff and Ajit Zacharias ...
Using two rounds of nationally representative surveys on household wealth conducted in India duri... more Using two rounds of nationally representative surveys on household wealth conducted in India during 1991India during -1992India during and 2002India during -2003 we analyze the relationship between overall wealth inequality and caste divisions in India. The average minority (SC or ST) person in India had a substantial disadvantage in wealth relative to the average non-minority person. In the non-minority group, the forward caste Hindus was the clear leaders in both the rural and the urban areas. The Other Backward Classes (OBC) and
We analyze the level and distribution of economic well-being in the United States during the 1980... more We analyze the level and distribution of economic well-being in the United States during the 1980s and 1990s based on the standard measure of money income and a measure in which income from wealth is calculated as the sum of lifetime annuity from nonhome wealth and imputed rental-equivalent for owner-occupied homes. Over the 1982-2000 period, median well-being increases faster when these adjustments are made than when standard money income is used. This adjustment also widens the income gap between African-Americans and whites but increases the relative well-being of the elderly. Adding imputed rent and annuities from household wealth to household income considerably increases measured inequality and the share of income from wealth in inequality. However, both measures show about the same rise in inequality over the period. We also find an increasing share of wage and salary income in our expanded definition of income among the richest one percent over the period but do not find tha...
We examine the economic well-being of the elderly, using the Levy Institute Measure of Economic W... more We examine the economic well-being of the elderly, using the Levy Institute Measure of Economic Well-Being (LIMEW). LIMEW is a comprehensive measure that incorporates broader definitions of income from wealth, government expenditures, and taxes than standard income, and also includes the value of household production. We find that the elderly are much better off relative to the nonelderly according to LIMEW than according to money income or the Census Bureau’s “extended income” (EI) concept. The main reason is the much higher income from wealth and net government expenditures for the elderly than the nonelderly. Both mean and median LIMEW also grew much faster for the elderly than the non-elderly over the 1989-2001 period. In contrast, growth rates of money income were actually greater for the non-elderly than the elderly over this period. We also find that the degree of inequality in the LIMEW is substantially higher among the elderly than among the nonelderly. In contrast, inequal...
Over the last three decades the extent to which governments have built and maintained an institut... more Over the last three decades the extent to which governments have built and maintained an institutional stru c t u re and spent on the social safety net— together generally re f e rred to as the welfare state—has become one of the most contentious areas of public policy debate. Members of the Organization of Economic Cooperation and Development—countries with institutional stru c t u res as diverse as those of the United States and Sweden—have rolled back the w e l f a re state, basing their actions in part on a rationale off e red by mainstream economists: because the welfare state produces a drag on economic activity and reduces economic perf o rmance, cutbacks are necessary in order to raise economic growth and lower unemployment or, in the case of the United States, to maintain high future
We compare economic well-being in Canada, France, Great Britain, and the U.S. in the 1990s and 20... more We compare economic well-being in Canada, France, Great Britain, and the U.S. in the 1990s and 2000s using an expanded measure of economic well-being called the Levy Institute Measure of Economic Well-Being (LIMEW). LIMEW is different in scope from the official U.S.
Levy Institute scholars and conference participants. The purpose of the series is to disseminate ... more Levy Institute scholars and conference participants. The purpose of the series is to disseminate ideas to and elicit comments from academics and professionals. The Levy Economics Institute of Bard College, founded in 1986, is a nonprofit, nonpartisan, independently funded research organization devoted to public service. Through scholarship and economic research it generates viable, effective public policy responses to important economic problems that profoundly affect the quality of life in the United States and abroad.
Acknowledgments: Our primary debt is to Hyunsub Kum who implemented the statistical matching algo... more Acknowledgments: Our primary debt is to Hyunsub Kum who implemented the statistical matching algorithms used in creating the synthetic dataset used in this study. We are grateful for comments from Stephan Klasen and Michael Zweig. We have also benefited from discussions about our paper with participants in the conferences of the Working Class Studies Association, Eastern Economic Association, Allied Social Science Association and International Association for Research on Income and Wealth. We alone are responsible for any errors and omissions. The Levy Economics Institute Working Paper Collection presents research in progress by Levy Institute scholars and conference participants. The purpose of the series is to disseminate ideas to and elicit comments from academics and professionals. The Levy Economics Institute of Bard College, founded in 1986, is a nonprofit, nonpartisan, independently funded research organization devoted to public service. Through scholarship and economic resea...
The idea that saving is the force driving private investment and economic growth has become ever ... more The idea that saving is the force driving private investment and economic growth has become ever more entrenched in mainstream economic thought as well as in the minds of policymakers and the general public. Even though the empirical evidence that increased household saving will directly stimulate private investment and economic growth is scant, the idea remains prominent and underlies policy debates on topics ranging from Social Security to a balanced federal budget to reducing the national debt. The popular theory underlying these cuts is countered with evidence that private sector investment is financed primarily out of business retained earnings, not household saving, which explains why current policies aimed at raising household saving via cuts to social spending programs have been unsuccessful at raising saving rates. Moreover, government spending on social programs does not necessarily reduce economic growth. Higher government spending could be supported, and a greater degree...
We explore the relationships between aggregate profitability and women's growing share of market ... more We explore the relationships between aggregate profitability and women's growing share of market work in the United States during the 1980s and 1990s. Using decomposition analysis and counterfactuals, we investigate whether the contribution of the declining wage share to the upswing in profitability was aided by the growing incorporation of women into the workforce. Results show that women helped to moderate the decline in the aggregate wage share. The counterfactuals suggest that the reduction in gender pay disparity overwhelmed the negative effect of women's growing share of market work on the wage share. The decline in the wage share was driven primarily by distributional changes within the sectors rather than by changes in the composition of value added. In sectors where wage shares fell, however, women did not restrain the fall, indicating that the aggregate outcome was the net result of distinct sectoral trends in women's employment.
We use here a new measure of household economic well-being called LIMEW. LIMEW is different in sc... more We use here a new measure of household economic well-being called LIMEW. LIMEW is different in scope from the official U.S. Census Bureau measure of gross money income (MI) in that it includes taxes, noncash transfers, public consumption, income from wealth, and household production. We analyze trends in LIMEW from 1959 to 2004, and find that median LIMEW grew by 0.7 percent per year while median MI increased by 0.6 percent per year. LIMEW grew much slower than MI from 1959 to 1982, and much faster than MI from 1982 to 2004. In 2004, measured inequality was lower in LIMEW than MI (a difference of 5.5 Gini points); similarly, the increase in inequality between 1959 and 2004 was higher in MI than LIMEW (6.2 versus 5.1 Gini points). Much of the difference in these measures can be traced to the role of net government expenditures. According to both measures, the racial gap narrowed from 1959 to 1989; it then widened somewhat from 1989 to 2004 according to LIMEW but continued to narrow according to MI. The difference in time trends can be traced mainly to the rising income from wealth of white households relative to nonwhite households. The gap in well-being between single females and married couples widened from 1959 to 1989 and then narrowed slightly between 1989 and 2004 according to LIMEW but increased rather steadily from 1959 to 2004 according to MI. The fortunes of the elderly relative to the nonelderly showed considerable improvement from 1959 to 2004 according to LIMEW, almost reaching parity in 2004. In contrast, according to MI, the relative position of the elderly was about the same in 2004 as in 1959. In this instance, the difference in time trends can be traced mainly to rising income from wealth and government transfers accruing to the elderly relative to the nonelderly. JEL Classifications: D31, D63, P17
In this paper, we conduct the novel exercise of analyzing the relationship between overall wealth... more In this paper, we conduct the novel exercise of analyzing the relationship between overall wealth inequality and caste divisions in India using nationally representative surveys on household wealth conducted during 1991-92 and 2002-03. According to our findings, the groups in India that are generally considered disadvantaged (known as Scheduled Castes or Scheduled Tribes) have, as one would expect, substantially lower wealth than the "forward" caste groups, while the Other Backward Classes and non-Hindus occupy positions in the middle. Using the ANOGI decomposition technique, we estimate that between-caste inequality accounted for about 13 percent of overall wealth inequality in 2002-03, in part due to the considerable heterogeneity within the broadly defined caste groups. The stratification parameters indicate that the forward caste Hindus overlap little with the other caste groups, while the latter have significantly higher degrees of overlap with one another and with the overall population. Using this method, we are also able to comment on the emergence and strengthening of a "creamy layer," or relatively well-off group, among the disadvantaged castes, especially the Scheduled Tribes.
In this Special Report, Levy scholars Ajit Zacharias, Thomas Masterson, and Kijong Kim provide a ... more In this Special Report, Levy scholars Ajit Zacharias, Thomas Masterson, and Kijong Kim provide a preliminary assessment of the 2009 American Recovery and Reinvestment Act (ARRA), a package of transfers and tax cuts that is expected to provide relief to low-income and vulnerable households especially hurt by the economic crisis, while at the same time supporting aggregate demand. By the
... EDWARD WOLFF is a senior scholar at the Levy Economics Institute of Bard College and profes-s... more ... EDWARD WOLFF is a senior scholar at the Levy Economics Institute of Bard College and profes-sor at New York University. AJIT ZACHARIAS is a senior scholar at the Levy Economics Institute of Bard College. ... Economic Well-Being Edward Wolff and Ajit Zacharias ...
Using two rounds of nationally representative surveys on household wealth conducted in India duri... more Using two rounds of nationally representative surveys on household wealth conducted in India during 1991India during -1992India during and 2002India during -2003 we analyze the relationship between overall wealth inequality and caste divisions in India. The average minority (SC or ST) person in India had a substantial disadvantage in wealth relative to the average non-minority person. In the non-minority group, the forward caste Hindus was the clear leaders in both the rural and the urban areas. The Other Backward Classes (OBC) and
We analyze the level and distribution of economic well-being in the United States during the 1980... more We analyze the level and distribution of economic well-being in the United States during the 1980s and 1990s based on the standard measure of money income and a measure in which income from wealth is calculated as the sum of lifetime annuity from nonhome wealth and imputed rental-equivalent for owner-occupied homes. Over the 1982-2000 period, median well-being increases faster when these adjustments are made than when standard money income is used. This adjustment also widens the income gap between African-Americans and whites but increases the relative well-being of the elderly. Adding imputed rent and annuities from household wealth to household income considerably increases measured inequality and the share of income from wealth in inequality. However, both measures show about the same rise in inequality over the period. We also find an increasing share of wage and salary income in our expanded definition of income among the richest one percent over the period but do not find tha...
We examine the economic well-being of the elderly, using the Levy Institute Measure of Economic W... more We examine the economic well-being of the elderly, using the Levy Institute Measure of Economic Well-Being (LIMEW). LIMEW is a comprehensive measure that incorporates broader definitions of income from wealth, government expenditures, and taxes than standard income, and also includes the value of household production. We find that the elderly are much better off relative to the nonelderly according to LIMEW than according to money income or the Census Bureau’s “extended income” (EI) concept. The main reason is the much higher income from wealth and net government expenditures for the elderly than the nonelderly. Both mean and median LIMEW also grew much faster for the elderly than the non-elderly over the 1989-2001 period. In contrast, growth rates of money income were actually greater for the non-elderly than the elderly over this period. We also find that the degree of inequality in the LIMEW is substantially higher among the elderly than among the nonelderly. In contrast, inequal...
Over the last three decades the extent to which governments have built and maintained an institut... more Over the last three decades the extent to which governments have built and maintained an institutional stru c t u re and spent on the social safety net— together generally re f e rred to as the welfare state—has become one of the most contentious areas of public policy debate. Members of the Organization of Economic Cooperation and Development—countries with institutional stru c t u res as diverse as those of the United States and Sweden—have rolled back the w e l f a re state, basing their actions in part on a rationale off e red by mainstream economists: because the welfare state produces a drag on economic activity and reduces economic perf o rmance, cutbacks are necessary in order to raise economic growth and lower unemployment or, in the case of the United States, to maintain high future
We compare economic well-being in Canada, France, Great Britain, and the U.S. in the 1990s and 20... more We compare economic well-being in Canada, France, Great Britain, and the U.S. in the 1990s and 2000s using an expanded measure of economic well-being called the Levy Institute Measure of Economic Well-Being (LIMEW). LIMEW is different in scope from the official U.S.
Levy Institute scholars and conference participants. The purpose of the series is to disseminate ... more Levy Institute scholars and conference participants. The purpose of the series is to disseminate ideas to and elicit comments from academics and professionals. The Levy Economics Institute of Bard College, founded in 1986, is a nonprofit, nonpartisan, independently funded research organization devoted to public service. Through scholarship and economic research it generates viable, effective public policy responses to important economic problems that profoundly affect the quality of life in the United States and abroad.
Acknowledgments: Our primary debt is to Hyunsub Kum who implemented the statistical matching algo... more Acknowledgments: Our primary debt is to Hyunsub Kum who implemented the statistical matching algorithms used in creating the synthetic dataset used in this study. We are grateful for comments from Stephan Klasen and Michael Zweig. We have also benefited from discussions about our paper with participants in the conferences of the Working Class Studies Association, Eastern Economic Association, Allied Social Science Association and International Association for Research on Income and Wealth. We alone are responsible for any errors and omissions. The Levy Economics Institute Working Paper Collection presents research in progress by Levy Institute scholars and conference participants. The purpose of the series is to disseminate ideas to and elicit comments from academics and professionals. The Levy Economics Institute of Bard College, founded in 1986, is a nonprofit, nonpartisan, independently funded research organization devoted to public service. Through scholarship and economic resea...
The idea that saving is the force driving private investment and economic growth has become ever ... more The idea that saving is the force driving private investment and economic growth has become ever more entrenched in mainstream economic thought as well as in the minds of policymakers and the general public. Even though the empirical evidence that increased household saving will directly stimulate private investment and economic growth is scant, the idea remains prominent and underlies policy debates on topics ranging from Social Security to a balanced federal budget to reducing the national debt. The popular theory underlying these cuts is countered with evidence that private sector investment is financed primarily out of business retained earnings, not household saving, which explains why current policies aimed at raising household saving via cuts to social spending programs have been unsuccessful at raising saving rates. Moreover, government spending on social programs does not necessarily reduce economic growth. Higher government spending could be supported, and a greater degree...
We explore the relationships between aggregate profitability and women's growing share of market ... more We explore the relationships between aggregate profitability and women's growing share of market work in the United States during the 1980s and 1990s. Using decomposition analysis and counterfactuals, we investigate whether the contribution of the declining wage share to the upswing in profitability was aided by the growing incorporation of women into the workforce. Results show that women helped to moderate the decline in the aggregate wage share. The counterfactuals suggest that the reduction in gender pay disparity overwhelmed the negative effect of women's growing share of market work on the wage share. The decline in the wage share was driven primarily by distributional changes within the sectors rather than by changes in the composition of value added. In sectors where wage shares fell, however, women did not restrain the fall, indicating that the aggregate outcome was the net result of distinct sectoral trends in women's employment.
We use here a new measure of household economic well-being called LIMEW. LIMEW is different in sc... more We use here a new measure of household economic well-being called LIMEW. LIMEW is different in scope from the official U.S. Census Bureau measure of gross money income (MI) in that it includes taxes, noncash transfers, public consumption, income from wealth, and household production. We analyze trends in LIMEW from 1959 to 2004, and find that median LIMEW grew by 0.7 percent per year while median MI increased by 0.6 percent per year. LIMEW grew much slower than MI from 1959 to 1982, and much faster than MI from 1982 to 2004. In 2004, measured inequality was lower in LIMEW than MI (a difference of 5.5 Gini points); similarly, the increase in inequality between 1959 and 2004 was higher in MI than LIMEW (6.2 versus 5.1 Gini points). Much of the difference in these measures can be traced to the role of net government expenditures. According to both measures, the racial gap narrowed from 1959 to 1989; it then widened somewhat from 1989 to 2004 according to LIMEW but continued to narrow according to MI. The difference in time trends can be traced mainly to the rising income from wealth of white households relative to nonwhite households. The gap in well-being between single females and married couples widened from 1959 to 1989 and then narrowed slightly between 1989 and 2004 according to LIMEW but increased rather steadily from 1959 to 2004 according to MI. The fortunes of the elderly relative to the nonelderly showed considerable improvement from 1959 to 2004 according to LIMEW, almost reaching parity in 2004. In contrast, according to MI, the relative position of the elderly was about the same in 2004 as in 1959. In this instance, the difference in time trends can be traced mainly to rising income from wealth and government transfers accruing to the elderly relative to the nonelderly. JEL Classifications: D31, D63, P17
In this paper, we conduct the novel exercise of analyzing the relationship between overall wealth... more In this paper, we conduct the novel exercise of analyzing the relationship between overall wealth inequality and caste divisions in India using nationally representative surveys on household wealth conducted during 1991-92 and 2002-03. According to our findings, the groups in India that are generally considered disadvantaged (known as Scheduled Castes or Scheduled Tribes) have, as one would expect, substantially lower wealth than the "forward" caste groups, while the Other Backward Classes and non-Hindus occupy positions in the middle. Using the ANOGI decomposition technique, we estimate that between-caste inequality accounted for about 13 percent of overall wealth inequality in 2002-03, in part due to the considerable heterogeneity within the broadly defined caste groups. The stratification parameters indicate that the forward caste Hindus overlap little with the other caste groups, while the latter have significantly higher degrees of overlap with one another and with the overall population. Using this method, we are also able to comment on the emergence and strengthening of a "creamy layer," or relatively well-off group, among the disadvantaged castes, especially the Scheduled Tribes.
In this Special Report, Levy scholars Ajit Zacharias, Thomas Masterson, and Kijong Kim provide a ... more In this Special Report, Levy scholars Ajit Zacharias, Thomas Masterson, and Kijong Kim provide a preliminary assessment of the 2009 American Recovery and Reinvestment Act (ARRA), a package of transfers and tax cuts that is expected to provide relief to low-income and vulnerable households especially hurt by the economic crisis, while at the same time supporting aggregate demand. By the
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