Rich Man, Poor Man: The Policy Implications of Canadians Living Longer by Kevin S. Milligan, Tammy Schirle :: SSRN

September 16, 2018

A longevity gap between rich and poor has persisted over the years in Canada with significant policy implications, according to a new report from the C.D. Howe Institute. In “Rich Man, Poor Man: The Policy Implications of Canadians Living Longer” – the first study of long-term changes in longevity across earnings groups in Canada – authors Kevin Milligan and Tammy Schirle provide new evidence on the incomes and life expectancy of Canadians.

via Rich Man, Poor Man: The Policy Implications of Canadians Living Longer by Kevin S. Milligan, Tammy Schirle :: SSRN


Every Crisis Has a Silver Lining? Unravelling the Pro-Cyclical Pattern of Health Inequalities by Income by Max Coveney, Pilar Garcia-Gomez, Eddy van Doorslaer, Tom Van Ourti :: SSRN

September 15, 2018

It is well known that income and health are positively associated. Much less is known about the strength of this association in times of growth and recession. We develop a novel decomposition method that focuses on isolating the roles played by government transfers versus market transfers on changes in income-related health inequality (IRHI) in Europe. Using European Union Survey of Income and Living Conditions (EU-SILC) panel data for 7 EU countries from 2004 to 2013, we decompose the changes in IRHI while focusing on possible effects of the 2008 financial crisis. We find that such inequalities rise in good economic times and fall in bad economic times. This pattern can largely be explained by the relative stickiness of old age pension benefits compared to the market incomes of younger groups. Austerity measures are associated with a weakening of the IRHI reducing effect of government transfers.

via Every Crisis Has a Silver Lining? Unravelling the Pro-Cyclical Pattern of Health Inequalities by Income by Max Coveney, Pilar Garcia-Gomez, Eddy van Doorslaer, Tom Van Ourti :: SSRN


Injury Inequality

May 14, 2018

Social and legal understandings of injury play a key role in structuring society. They shape our sense of moral obligations to each other, help us assign blameworthiness, and govern how our collective resources – economic, psychological, and political – are to be distributed. In particular, judgments about injury determine allocations of risk and responsibility in society. Accordingly, distorted assessments of the quality, nature, and significance of injury can have serious consequences. In social and legal systems characterized by “injury inequality,” injuries affecting the powerful are exaggerated, while those affecting the vulnerable are downplayed. This is a serious cause for concern for several interconnected reasons. First, overinflated claims of injury do violence to the concept of injury itself, warping society’s collective understanding of harm. Second, injury inequality preserves the lion’s share of resources for addressing the injuries of the privileged, leaving little for those already less equipped to cope with injury. While elites can expect that their injuries will be accommodated in the structure of law and society itself, the marginalized must make do with self-help.The effect is not limited to economic, legal, or physical resources, but extends to psychological resources: injury inequality discourages empathy and compassion to the harms suffered by the less powerful. This results in legal and social practices that reinforce an unjust and perverse allocation of risks, burdens, and benefits. Such practices send social messages that directly conflict with a commitment to equality across race, gender, and class. At a minimum, out-sized solicitude for elite injuries creates indifference to marginalized injury. In the worst case, such solicitude affirmatively promotes marginalized injury as a sacrifice necessary to preserve the interests of the powerful. This article focuses on three categories of legal and social norms in the United States that demonstrate the harms of injury inequality: justifiable use of deadly force, freedom of speech, and sexual assault.

via Injury Inequality by Mary Anne Franks :: SSRN


Should Government Reduce Inequality in Life Spans?

May 7, 2018

When I talk to people, I find that they generally agree with, and rarely strongly oppose, forcible government transfers of income from the rich to the poor to reduce income inequality. But when I suggest that the government transfer medical expenditures from women to men to reduce life-expectancy inequality, I get a very different reaction. Often, the listener will simply give me a strange look and quickly depart. Those who do respond verbally, however, typically say that I couldn’t possibly be serious because my idea is outrageously silly. I agree. It is silly. But I am completely serious in suggesting it.

via Dwight R. Lee, Should Government Reduce Inequality in Life Spans? | Library of Economics and Liberty


Why Markets? Welfare, Autonomy, and the Just Society

May 5, 2018

Eric Posner & Glen Weyl’s “Radical Markets: Uprooting Capitalism and Democracy for A Just Society” is an enormously ambitious new book, one that challenges conventional wisdom and advances bold reform programs. They argue that the causes of most pitfalls of existing markets and political systems are, respectively, property and the principle of one person one vote. The former is the ultimate basis of illegitimate market power; the latter distorts politics by obscuring the intensity of people’s preferences. Posner & Weyl argue that uprooting private property and reconstructing electoral systems so that they register these intensities would revitalize the vision of the Philosophical Radicals by pushing the ideal of the market to its logical institutional conclusions.

This Book Review celebrates many of Posner and Weyl’s innovative ideas. It also concurs with their insistence that our challenging moment requires rethinking and may justify radical reconstruction of both the market’s rules of the game and its jurisdiction based on the market’s ultimate normative foundation. Posner and Weyl, however, also subscribe to a welfarist foundation and investigate some implications of taking it seriously: the creation of a radical labor market, which eliminates people’s authority to withhold their services, and a fully monetized electoral system. This Review criticizes both these implications and the welfarist foundation that motivates them. Taken to its logical extension, I argue, welfarist foundationalism threatens our endowments, citizenship, and, ultimately, our agency. I do not deny that devising measures that would further extend the ways markets facilitate people’s preference satisfaction and their welfare is a worthy endeavor. But because people’s autonomy — and not the satisfaction of their preferences or their welfare — is the ultimate value of all the major institutions of a well-ordered society, these measures cannot be acceptable if they subvert people’s self-determination.

Moreover, getting to the root of the matter, as Posner and Weyl invite us to do, requires us to appreciate the ways in which markets are conducive to people’s autonomy and redesign them accordingly. Radicalizing markets along these lines indeed implies, as Posner and Weyl claim, creating true competitive, open, and free markets. But unlike the ideal markets advocated in “Radical Markets”, the configuration of these markets starts with freedom (as autonomy) and thus inclusion, rather than with competitiveness. A proper view of the market, therefore, needs to be both careful not to facilitate autonomy-reducing transactions and mindful of the necessary role of nonmarket mechanisms in securing the minimal social and economic conditions required for the market to properly comply with its autonomy-enhancing telos.

via Why Markets? Welfare, Autonomy, and the Just Society by Hanoch Dagan :: SSRN


The Transmission of Mental Health within Households: Does One Partner’s Mental Health Influence the Other Partner’s Life Satisfaction?

May 5, 2018

This paper investigates the relationship between partner’s mental health and individual life satisfaction, using a sample of married and cohabitating couples from the Household, Income and Labour Dynamics of Australia Survey (HILDA). We use panel data models with fixed effects to estimate the life satisfaction impact of several different measures of partner’s mental health and to calculate the Compensating Income Variation (CIV) of them. To the best of our knowledge, this is the first paper to study the effect of partner’s mental health on individual’s wellbeing and to measure the impact of reduced life satisfaction in monetary terms.We also provide some new insights into adaptation and coping mechanisms. Accounting for measurement error and endogeneity of income, partners’ mental health has a significant and sizeable association with individual well-being. The additional income needed to compensate someone living with a partner with a long term mental condition is substantial (over USD 60,000). Further, individuals do not show significant adaptation to partners’ poor mental health conditions, and coping mechanisms show little influence on life satisfaction. The results have implications for policy-makers wishing to value the wider effects of policies that aim to impact on mental health and overall levels of well-being.

via The Transmission of Mental Health within Households: Does One Partner’s Mental Health Influence the Other Partner’s Life Satisfaction? by Silvia Mendolia, Paul McNamee, Oleg Yerokhin :: SSRN


Do 5 Million Americans Really Live in Third World Poverty?

March 30, 2018

Our analysis of the CEX shows that the number of Americans living on less than $4 per day is effectively zero. Since 1980, the CEX has reported on the annual consumption expenditures of 222,170 households. Of these 222,170 cases, 175 reported spending less than $4 per person per day. That’s one household in 1,270.

Deaton’s claims of Third World poverty in the U.S. can also be rebutted by examining the actual living conditions of families with ostensible incomes below the deep-poverty level.

Rather than 1.7 percent of the population living in deep poverty, expenditure surveys show the figure is only 0.08 percent.

via USA Third-World Poverty: Largely Mythical | National Review