Family as a Source of Inequality--Drifters vs. Planners

Isabel Sawhill, a highly regarded and widely published economist at The Brookings Institution, has just published a new book on the economics of the family that has been getting a lot of well-deserved publicity. Generation Unbound: Drifting into Sex and Parenthood without Marriage looks at what is happening in the U.S., diagnoses the problem, and offers a solution. The problem is that a large fraction of children in the U.S. are growing up in poverty in a household that does not include their father. These kids are at a huge disadvantage relative to other children, and this helps to drive at least some the growing income inequality that we observe in this country. Before you say, wait a minute, it is income inequality that creates this problem in the first place, listen to what Sawhill argues, here summarized by The Economist:

At the top of the social scale, a more egalitarian version of traditional marriage is still going strong. Nearly 90% of university-educated mothers get married before having their first child—typically to an equally brainy, high-earning man. Such unions are durable and provide an excellent launchpad for children, who are showered with love and stimulation and grow up to do well in school and the workplace. These are the "planners."

Among non-graduate mothers, however, 58% of first births are out of wedlock. And although half of unmarried mothers are still living with the father when the baby is born (and another third are romantically involved with him but living apart), only a third of these couples are still intact by the time the child turns five. By contrast, four-fifths of married couples are still together at this point.

Scholars on the left tend to blame poverty for family breakdown. Ms Sawhill finds this too glib. Families were much poorer in the 1950s, but they stuck together. Unskilled men’s wages have fallen in recent decades, but not by much. This “cannot explain more than a small fraction” of the change at the bottom. On the contrary, the nuclear family is an effective way out of poverty. A child born in the bottom fifth has an 83% chance of escaping it if his parents remain married, compared with 50% if they were never wed.

Much of the problem is cultural, argues Ms Sawhill. The “feminist revolution seems to have bypassed low-income men.” Male university graduates largely treat their wives as equals; less educated men often don’t. They cannot accept not being master of the household, even if they earn less than their female partner. Increasingly, they opt out of parental responsibilities almost entirely. These are the "drifters."

And the solution? Truly effective birth control--especially the IUD (very popular in China, but not so much in the US) or implants--to reduce unintended pregnancies and allow men and women to plan their lives, rather than drifting into miserable adulthood and dragging the children along with them.

Can We Have Both Domestic and Global Income Equality?

This week the Organization for Economic Cooperation and Development (OECD), a think-tank in Paris, came out with a report titled How Was Life? Global Well-Being Since 1820. The past two centuries capture the major parts of the demographic transition and the economic transformation of the world and the OECD study attempts to track the income inequality within nations during that time, and also the income inequality between nations. The story has some twists and turns, but as the Economist notes, there is a disturbing lesson in here when it comes to inequality. First, though, the good news:

For the most part, the findings confirm what is suspected, if not known in such detail. The number of years in education has increased everywhere. Average heights have risen almost everywhere (by 1.1cm more in America in 1820-1990 than in China). The purchasing power of construction workers’ wages has grown everywhere, though in Britain the rise was tenfold in 1820-2000; in Indonesia it was only twice.

Now, the less good news:

The study uses the Gini coefficient, a measure of income inequality in which zero represents perfect equality—everyone has the same income—and 100 perfect inequality—one person has everything. The global Gini rose from 49 in 1820 to 66 in 2000. But this was not caused by widening disparities between rich and poor within countries (inequality in its usual sense). Inequality of that sort fluctuated for 130 years to 1950, before falling sharply in 1950-1980, in what the report calls an egalitarian revolution. Since 1980 it has risen again (as Thomas Piketty, a French economist, has shown), back to the level of 1820.

As globalization increased throughout the 19th century, income inequality within nations tended to increase. But, the report argues that globalization ebbed between 1914 and 1970 and during that period of time:

...rich countries had more freedom to steer domestic policies and used it to narrow differences between rich and poor. As globalisation spread again after 1980, the opposite happened: “globalisation contributed to higher income inequality within countries,” the report concludes, “while at the same time leading to a decline of income inequality between countries.”

Thus history suggests that trends in global and domestic income inequality move in opposite directions. As we globalize, domestic income inequality increases and vice-versa. From this follows the conclusion (speculative, to be sure) that when globalization slows down, we can get back to the business of creating less unequal income distributions within nations. If you have read my book, you know my view that globalization in the modern era is associated especially with population growth in developing nations, so when that stops, the world may get back to the business of improving well-being for everyone, not just an elite few.

Getting Real About Ebola

My two favorite TV programs are the Daily Show with Jon Stewart and the Colbert Report (for which Jon Stewart serves as Executive Producer). The genre is sometimes called "fake news" and they are on the Comedy Channel, after all. But both programs regularly hit the news on the head like no one else. Last night's Daily Show did this with Ebola--putting it into perspective in a way that is both thought-provoking and mind-blowing. You have to watch it for yourself.

Global Housing Gap--Another Sign of Inequality

Housing the world's growing population is not easy. Keeping track of this is the job of UNHabitat:

Rapid urbanization places remarkable strain on housing and serviced land. By 2030, about 3 billion people, or about 40 per cent of the world’s population, will need proper housing and access to basic infrastructure and services such as water and sanitation systems. This translates into the need to complete 96,150 housing units per day with serviced and documented land from now till 2030.

In some cities, up to 80 per cent of the population lives in slums. Fifty-five million new slum dwellers have been added to the global population since 2000. Sub-Saharan Africa has a slum population of 199.5 million, South Asia 190.7 million, East Asia 189.6 million, Latin America and the Caribbean 110.7 million, Southeast Asia 88.9 million, West Asia 35 million and North Africa 11.8 million.

 But, what to do? That's a tougher issue, and Bloomberg News reports that the global consulting firm of McKinsey & Co is actually thinking about this.

Replacing the world’s substandard housing and building affordable alternatives to meet future global demand would cost as much as $11 trillion, according to initial findings in a McKinsey & Co. report.

About 330 million households -- about 1.2 billion people -- now struggle with substandard housing, a number that may increase to 440 million in 11 years, McKinsey forecasts. Acceptable housing is within an hour’s commute of work and has basic services including flush toilets and running water, the report says.

In Lagos and Bombay, two of the world’s fastest-growing cities, the issue of inadequate housing is particularly grim as both emerging metropolises are poverty-ridden. There, the affordable-housing gap amounts to more than 10 percent of each city’s economic output.

The deficit presents an opportunity for construction companies -- with some of largest markets in emerging economies such as China, India, Brazil and Russia. Mortgage lenders also stand to benefit; by 2025, the market for affordable-home loans could be worth as much as $400 billion a year, the report said.

The point is important. If governments cannot afford to house their populations--or prefer instead to send a rocket to Mars--maybe the private sector can step in. The missing ingredient in this formula, however, is how these people who cannot currently afford a decent place to live will in the future be able to do that. That problem of income inequality keeps coming back to bite us.

Biodemography--Learning About Ourselves By Studying Other Animals

The National Research Council just published a volume on "Sociality, Hierarchy, Health: Comparative Biodemography: Papers from a Workshop." Now, I admit that this is unlikely to lead to a hit series on HBO, but it really is fascinating. The major takeaway is that humans are not the only species in which we find a social gradient in health. Higher status animals routinely have better health and typically live longer than those at the bottom of the hierarchy. And, yes, most animal species have these social gradients--this is not something unique to humans. The first chapter in the volume is by Maxine Weinstein, Hillard Kaplan, and Meredith A. Lane, who nicely summarize the volume, but I especially like some of the comments in the final chapter by Michael G. Marmot and Robert Sapolsky. For example, one might well speculate that low social rank is caused by poor health, rather than things being the other way around. However, longitudinal studies of baboons suggests that...

While poor health can certainly lead to low social rank, the longitudinal data in these studies demonstrate that the pathophysiological correlates of subordination follow, rather than precede, the establishment of a rank. We argue that, as with the human health gradient, this rank/health link is mostly psychosocial in nature.

This is partly because the social gradient in health exists in high and low mortality societies, suggesting that it has little to do with the amount of food, for example, or the gene pool of the species. Studying non-humans helps us to understand humans.

One clear advantage of studying nonhuman primates is their very nonhumanness. Many of the candidates put forward to explain health inequalities in humans simply are not seen in other species. Baboons don’t smoke, eat fast foods, or have differential access to health care depending on ability to pay. A stressed primate, however, will have similar physiological responses to those of a stressed human. There is insight to be gained not only in understanding the biological pathways by which social position affects health, but also in understanding the circumstances under which these
physiological responses are evoked. They lend credence to our claim that psychosocial factors play a major role in generating the social gradient in health.

The bottom line for humans and non-humans is that context matters. You cannot understand health just by studying individuals. You have to put them into context. Indeed, an important part of that context is inequality. Greater inequality may be bad for your health, not just your pocketbook--unless of course you are in the top 1 percent.