Unequal incomes, unequal outcomes? Economic inequality and measures of well-being, closing discussion: social policy implications, general commentary

This paper was presented at the conference "Unequal incomes, unequal outcomes? Economic inequality and measures of well-being" as part of the closing discussion, "Social policy implications." The conference was held at the Federal Reserve Bank of New York on May 7, 1999. The author advocates the need to examine further the effectiveness of policy responses to inequality. He identifies three broad categories of policy responses worthy of study: policies aimed at investing in public goods to enhance human capital, policies that reward socially acceptable actions and provide economic mobility by increasing incomes (such as earned income tax credits), and policies that assist those individuals with the most serious physical and mental disabilities.Income distribution ; Public policy

Social Security Reform: Improving Benefit Adequacy and Economic Security for Women

This policy brief is designed to raise awareness of the current and future economic circumstances of older women, and the ways in which Social Security reform can help alleviate their unmet needs. It considers the gaps in benefit adequacy and economic security that are not addressed by current Social Security reform proposals and then suggests a series of modest, low-cost reforms to help close these gaps. If our proposals are adopted, Social Security reform will not only close the long-run financial deficit, but it will also greatly reduce the future poverty status of older women, particularly those who live alone. This is an opportunity for progressive reform as well as for budgetary balance. The Social Security program was designed over 60 years ago for a world in which mothers worked at home, raised children, and were widowed young, but not divorced; where fathers worked in industrial settings; and where both men and women had much shorter life expectancies at older ages than those of succeeding generations. Back in 1935 the founders of Social Security did not anticipate that women would become the major beneficiaries of the program. Increasingly, women rely on Social Security as the major source of their economic security at older ages, much more so than do men. Therefore, women are the group with the most to gain or lose from reform of the Social Security system and modification of its benefit formulae. Future women beneficiaries will be different. Women's lives are changing rapidly in many ways. More women work outside the home today, and about half of all marriages end in divorce.

Recent Trends in the Distribution of Income: Labor, Wealth and More Complete Measures of Well Being

>The impact of the great recession on inequality is unclear. Because the crises in the housing and stock markets and mass job loss affect incomes from across the entire distribution, the overall impact on inequality is difficult to determine. Early speculation using a variety of narrow measures of earnings, income and consumption yield contradictory results. In this paper, we develop new estimates of income inequality based on ‘more complete income’ (MCI), which augments standard income measures with those that are accrued from the ownership of wealth. We use the 1989-2007 Surveys of Consumer Finances, and also construct MCI measures for 2009 based on projections of assets, income, and earnings. We investigate the level and trend in MCI inequality and compare it to other estimates of overall and ‘high incomes’ in the literature. Compared to standard measures of income, MCI suggests higher levels of inequality and slightly larger increases in inequality over time. Several MCI-based inequality measures peaked in 2007 at their highest levels in twenty years. The combined impact of the “great recession” on the housing, stock, and labor markets after 2007 has reduced some measures of income inequality at the top of the MCI distribution. Despite declining from the 2007 peak, however, inequality remains as high as levels experienced earlier in the decade, and much higher than most points over the last twenty years. In the middle of the income distribution, the declines in income from wealth after 2007 were the result of diminished value of residential real estate; at the top of the distribution declines in the value of business assets had the greatest impact. We also assess the level and trend in the functional distribution of income between capital and labor, and find a rising share of income accruing to real capital or wealth from 1989 to 2007. The recent economic crisis has diminished the capital share back to levels from 2004. Contrary to the findings of other researchers, we find that the labor share of income among high-income groups declined between 1992 and 2007.

The EITC and USA\u27s/IDA\u27s: Maybe a Marriage Made in Heaven

The EITC and USA\u27s/IDA\u27s: Maybe a Marriage Made in Heave

Social Security Reform: Improving Benefit Adequacy and Economic Security for Women

This policy brief is designed to raise awareness of the current and future economic circumstances of older women, and the ways in which Social Security reform can help alleviate their unmet needs. It considers the gaps in benefit adequacy and economic security that are not addressed by current Social Security reform proposals and then suggests a series of modest, low-cost reforms to help close these gaps. If our proposals are adopted, Social Security reform will not only close the long-run financial deficit, but it will also greatly reduce the future poverty status of older women, particularly those who live alone. This is an opportunity for progressive reform as well as for budgetary balance. The Social Security program was designed over 60 years ago for a world in which mothers worked at home, raised children, and were widowed young, but not divorced; where fathers worked in industrial settings; and where both men and women had much shorter life expectancies at older ages than those of succeeding generations. Back in 1935 the founders of Social Security did not anticipate that women would become the major beneficiaries of the program. Increasingly, women rely on Social Security as the major source of their economic security at older ages, much more so than do men. Therefore, women are the group with the most to gain or lose from reform of the Social Security system and modification of its benefit formulae. Future women beneficiaries will be different. Women\u27s lives are changing rapidly in many ways. More women work outside the home today, and about half of all marriages end in divorce

Social Security Reform: A Budget Neutral Approach to Reducing Older Women's Disproportional Risk of Poverty

Perhaps the single greatest achievement of social policy in the United States over the last three decades has been reducing poverty in old age. The transition from work to retirement is no longer economically perilous for the vast majority of older American workers. For most married couples, the risk of falling into poverty even several years after retirement is small. But when one partner of the marriage dies, the survivor faces another much more risky economic transition. The single greatest risk of falling into poverty in old age now comes after the death of a spouse, as the survivor faces life after marriage. And this risk disproportionately affects older women, who are nearly three times as likely as older men to be widowed (49 percent to 14 percent) and can expect to remain widowed an average of 17 years. Here we document the disproportionate risk of poverty faced by such survivors and show that the Social Security system in the United States has been much less successful in protecting single older people from poverty, especially single older women, than government-administered social security systems in other post-industrialized countries. We argue that this lack of success stems in part from the failure of the Social Security program to transform the basis for its payout rules from a "traditional" one-earner family model to a model more consistent with today's families in which both the husband and wife work. We then offer a budget neutral plan to redistribute some of the benefits a married couple receive over their lifetime from the years they are both alive to the years following the death of a spouse, which we argue would substantially reduce the risk of poverty faced by older women.

Regional Poverty and Income Inequality in Central and Eastern Europe: Evidence from the Luxembourg Income Study

poverty, income inequality, regions, Central and Eastern Europe