Inequality: Causes and Consequences

In good times and recessions alike, economic inequality in the United States has increased over the last three decades. The social and political significance of this widening gap between those at the top of the income gradient and the majority at lower income levels is still unclear.

The public uncertainty over the importance of economic inequality in the contemporary United States is matched by wide divisions of opinion in the academic and policy communities. Eric Wanner, President of the Russell Sage Foundation, which is supporting a major series of studies of inequality, succinctly captures questions of cause and consequence that remain unanswered:

Beginning late in the 1970s, the United States experienced a series of economic shocks and demographic changes that caused economic inequality to rise sharply. . . .Although [the] facts are well known, we still understand very little of their larger social significance. Is the recent burst of economic inequality nothing but a temporary consequence of the transition to a new and more productive economy? Can Americans respond to the increasing economic importance of education by going to college in greater numbers and insulating themselves from computerization and global competition? Or will inequality, once under way, prove difficult to reverse? This might happen if the families who have fallen behind economically also fall behind in other ways that will make it more difficult for them, and for their children, to compete with the more advantaged. --From the Foreword to Social Inequality, ed. Kathryn M. Neckerman (New York: Russell Sage Foundation, 2004).

Because poverty and inequality are so intimately linked, IRP research has maintained a consistent focus on inequality issues. During this academic year, the Institute is presenting a series of seminars on the causes and consequences of inequality, by nationally distinguished scholars.

In April 2005, IRP will also hold a national conference, "Making the Politics of Poverty and Inequality: How Public Policies Are Reshaping American Democracy."

Versions of the seminar and conference presentations will appear in issues of the IRP newsletter, Focus.

A Seminar Series on the Causes and Consequences of Inequality

October 14, 2004: What Does Increased Economic Inequality Imply about the Future Level and Dispersion of Human Capital?
Barbara Wolfe, Professor of Economics, Population Health Sciences, and Public Affairs, and IRP Affiliate, University of Wisconsin-Madison

November 5, 2004: Inequality in America: What Role for Human Capital Policies?
James Heckman, Department of Economics, University of Chicago

November 11, 2004: Distribution of Ability and of Earnings in a Hierarchical Job Assignment Model
Glenn C. Loury, Department of Economics and Institute on Race and Social Division, Boston University

November 18, 2004: The Risk Factor: The Growing Economic Insecurity of American Families
Jacob Hacker, Department of Political Science, Yale University

March 10, 2005: Race, Ethnicity, and Discrimination in Employment: Evidence from Census 2000
William Darity, Jr., Department of Economics and Institute of African American Research, University of North Carolina at Chapel Hill

April 14, 2005: Social Inequality
Kathryn Neckerman, Associate Director, Institute for Social and Economic Research and Policy, Columbia University

An IRP Conference

Making the Politics of Poverty and Inequality: How Public Policies Are Reshaping American Democracy

This invitation-only conference will be held in Madison, Wisconsin, April 21-22, 2005.

Over the past few decades, federal and state policy initiatives have reshaped the political landscape in ways that have profound implications both for American democracy and for the economic welfare of Americans. The goal of this conference is to explore not only how political forces shape public policies, but more centrally how public policies function as political forces in their own right. Leading scholars from political science, sociology, economics, and social work will examine how public policies set new political dynamics in motion, affect the course of political agendas, and promote or hinder efforts to address poverty and inequality. The conference participants will offer insights into how current policy choices might shape what is possible and likely in the coming decades of poverty and inequality politics.

This IRP conference will be organized by Joe Soss, Jacob Hacker, and Suzanne Mettler; it will be cosponsored by the Russell Sage Foundation.

Conference panels: A preliminary list

Panel I. The Landscape of Contemporary Politics and Policy:
Panelists: Kimberly Morgan, R. Shep Melnick, Lawrence Jacobs; discussant, Christopher Jencks

Panel II. Public Policy and Identity
Panelists: Jennifer Hochschild, Deborah Stone; discussant: TBA

Panel III. Public Policy, Popular Participation, and Democracy
Andrea Campbell, Frances Fox Piven, Theda Skocpol; discussant: TBA

Panel IV. Making Politics in the States
Richard Freeman and Joel Rogers, Bruce Western and Josh Guetzkow; discussant: Sanford Schram

These panels will be followed by a public session in which discussants will present key conference themes and lessons for policymakers, administrators, analysts, and other invited guests.

IRP articles on inequality: Some background reading

"Inequality and poverty in the United States: The twentieth-century record," by Robert D. Plotnick, Eugene Smolensky, Eirik Evenhouse, and Siobhan Reilly, Focus Vol. 19, no. 3 (1998) (for the full analysis, see DP1166-98)

"Cross-national income inequality: How great is it and what can we learn from it?" by Timothy M. Smeeding and Peter Gottschalk, Focus Vol. 19, no. 3 (1998).

"Family income mobility: How much is there and has it changed?" by Peter Gottschalk and Sheldon Danziger, Focus Vol. 19, no. 3 (1998).

"Incarceration, unemployment, and inequality," by Bruce Western. Focus Vol. 21, no. 3 (2001)

"Health inequality between black and white women," by Yu-Whuei Hu and Barbara Wolfe. (DP 1251-02)

See, for example, this selection of headlines from major newspapers over the last two years:

"U.S. income gap widening, study says." New York Times, Sep 25, 2003 • "Income gap up over two decades, data show." Chicago Tribune, Aug 7, 2004 • "As income gap widens, uncertainty spreads." Washington Post, Sep 20, 2004 • "Blacks still suffer financial inequality." Palm Beach Post, Aug 24, 2003 • "Blacks' income gap among lowest in U.S." Washington Times, Nov 25, 2003 •"Latinos see incomes rise among middle class." Detroit News, Oct 21, 2002 •"Salaries of rich have no bearing on poverty." Philadelphia Inquirer, June 19, 2003 • "American equality? That's rich." New York Daily News, May 16, 2004• "Income inequality is raging, but the poor aren't." San Diego Union Tribune, Dec 1 2002•