Diversity impedes redistribution

(Flickr photo by Maistora)

It has long been noted that in more diverse countries, it is harder to sustain wealth redistributive efforts, and public support for such programs wanes.  It has always been hard to disentangle culture from national wealth and diversity in understanding what causes this. 

A recent paper by HKS colleagues Erzo Luttmer and Monica Singhal (using European Social Survey data) gains traction on this issue by looking at immigrants to developed countries and finds that immigrants bring with them their attitudes about redistribution.  So immigrants, controlling for their wealth, education, etc., and their receiving country’s attitudes towards redistribution are more likely to support redistribution if they country that they come from supports redistribution. 

As the Economist summarized this:

Even after controlling for income, education and other relevant economic and social factors such as work history and age, views about redistribution in an immigrant’s home country are a strong predictor of his own opinions. Indeed, this measure of “cultural background” explains as much as income levels, and three-fifths as much as income and education combined. These results hold even for immigrants who moved 20 years before they were surveyed; they cannot be attributed to people not having had time to adjust their views.

 

And the results can not be explained by self-selection — which immigrants choose to migrate as these impacts would favor immigrants moving to countries that are more similar to the immigrants’ own views about redistribution.

Luttmer and Singhal found that these differences fade over time: the culture of immigrants has only about 2/3 of the effect on second generation immigrants as foreign-born immigrants.

The findings are consistent with some research done by John Helliwell about immigrants and their levels of social capital (social and civic engagement).
Helliwell describes the fact that trust levels are lower among Canadian immigrants than non-immigrants and that these differences persist even controlling for factors like education, income, time in community, etc. Tom Rice and Jan Feldman have noted the importance of immigrants’ home country trust in setting their trust levels when they emigrate. ["Civic Culture and Democracy From Europe to America" (1997).] Using this framework, Helliwell finds that these trust differentials disappear in Canada when one controls for average trust levels in the home country of the immigrants. Helliwell also asserts that contrary to the “footprint of imported trust” which lasts for many generations in the U.S., there is starting to be evidence in Canada that this it may disappear within one generation. Helliwell thus asks whether there are generalizable lessons about the win-win benefits to integrative governmental attitudes toward immigration in promoting better inter-racial attitudes and higher trust.

These findings are also broadly consistent with work done by Daniel Elazar on political culture in American states (in American Federalism: A View From the States), where he found, remarkably, that differences in “moral political culture”, especially in the upper midwest, were explained by broad migratory patterns of immigrants decades earlier from highly civic and trusting Scandinavian countries.

See “In the Blood: Attitudes towards redistribution have a strong cultural component” (Economist, June 4, 2009)

And Culture, Context, and the Taste for Redistribution by Erzo Luttmer and Monica Singhal, May 2009

Our growing divisiveness

Roger Cohen, NYT columnist (“In The Seventh Year“, 9/1/08) describes how, far from 9-11 bringing the country closer together, it has sundered America in two: with some fighting for our country while others backdated options, packaged toxic mortgage-backed securities, and got themselves wealthy in the process.  America, far from other countries has become noticeably more uneven in wealth over the past few years.  [You can see how this growth in inequality is greater than than in the UK, Canada, France or Japan.]

In an interesting companion piece, Scott Leigh notes wistfully how the promised civility of the 2008 campaign has given way to rancorous squabbling (“Civility is Casualty as Campaigns Spar“, Boston Globe, 9/1/08).  While largely initiated by the McCain/Palin team, especially in her nasty (but humorously and folksily delivered) speech at the nomination; Obama has now countered calling McCain/Palin, laughingly commenting: ““You can put lipstick on a pig; it’s still a pig. You can wrap an old fish in a piece of paper called change; it’s still going to stink after eight years.” McCain has lambasted the use of the “lipstick on a pig” image, a phrase McCain claims is a dig on Palin, even though McCain used this phrase himself earlier in the campaign.  Woe to the higher plane on which these candidates said they would play: appearing at joint meetings to discuss their policies.  And McCain’s tactics make a mockery of his claim that he will usher in a new era in bipartisan politics in Washington — live by the sword, die by it.

I myself think that President Bush squandered a remarkable opportunity after 9-11.  We had the world’s admiration and sympathies after 9-11 and now we have their enmity for our cowboy foreign policy.  We had amazing class solidarity, with financiers helping waiters out of the Twin Towers and vice versa, and now we are back to every class looking out for itself.  We had a remarkable opportunity to give Americans a chance to sacrifice for the good of our country: e.g., conserving fuel use to make us less dependent on the Arab undemocratic states, but instead we were encouraged to shop by Bush and initially the Administration’s policies drive down gas prices and made us use all the more fuel.    And we had an opportunity to use our powerful assets to reshape the world for good:  to teach Muslim youth so they saw that there was opportunity to learn beyond going to radical madrassah schools, to invest mightily in our own educational system so we could ensure that our citizens prospered in the years ahead amidst a much more globally competitive world, and to usher in the next wave of green technologies so we were exporting these technologies to the world with lots of jobs, rather than the reverse.  But all this has been squandered along with trillions of dollars on the Iraq War, which has radicalized Arab youth rather than made the world safer.  Let’s hope that we can do a far better job in the next 8 years.

Barack, RFK and MLK

Robert F. Kennedy’s powerful speech about Martin Luther King’s assassination four decades ago makes a potent bookend to Barack Obama’s recent speech on race in America.  Reading RFK’s speech in light of Barack Obama’s campaign makes one sees both how much and how little progress has been made on issues of race in America; it would have been unheard of that a black candidate for president would be the top democratic vote getter among white men in some of the whitest states in the union; yet economic and social gaps between whites and blacks (despite the rice of many blacks into the middle and upper classes) remain appallingly wide

Both Obama and Bobby Kennedy called for us to transcend the natural polarizing forces of race in America,wrestling with America’s racial demons and evident imperfections in our efforts to build the unified vision that MLK preached:  “I have a dream that one day in the state of Georgia the sons of former slaves and the sons of former slaveoweners will be able to sit together at the table of brotherhood…”

David Brooks writes today that Barack Obama exemplifies MLK, Jr.’s strategy of finding a way to work through the organizational and institutional structure towards a more perfect union.  Read David Brooks remarks here “The View from Room 306” (in the Lorraine Motel outside of which MLK was shot on the balcony).

MLK, Jr. may your soul continue to guide us in our efforts towards economic and racial justice.

Youth voice in ‘08 largely limited to the well-educated

CIRCLE (at University of Maryland) has a recent study showing that although youth participation is up in the 2008 primaries (which we’ve blogged about before) it is not coming from all swathes of the socioeconomic spectrum.

For example, CIRCLE found that in Super Tuesday, 1 in 4 college-educated voters under age 30 were participating versus 1 in 14 for youth that only had a high school degree or less.

CIRCLE chalks this up to several factors: 1) non-college youth are less likely to be involved in groups and associations and therefore less easily reached by candidates; 2) the quality of civics education that non-college youth have been exposed to is far less than the college youth (affecting both their civic skills and disposition to get involved socially); 3) non-college youth have lower political efficacy (a sense that their vote matters and they can achieve change); and 4) that youth disproportionately hear about candidates and get motivated to get involved politically through their friends and thus there is a compounding of this problem either as non-college youth are more socially isolated and if connected to other friends, unlikely to be connected to others that are encouraging them to vote.Distressingly, this is parallel to some evidence that then-Harvard-undergraduate Rebekah Crooks explored several years ago in her thesis that showed that while volunteering rates had risen among youth since the early 1990s, this was largely coming from the ranks of the “haves”, not the lower-middle class “have nots.” While the CIRCLE study is not a longitudinal study and hence does not address whether this rich-poor civic divide is growing, the gaps are alarmingly large nonetheless.

For more information, see: CIRCLE fact sheet or study; or NPR story (Audie Cornish, “Non-College Kids Outsiders to Rising ‘Youth Vote’ “.

Paul Krugman on fall and rise of inequality

Paul Krugman has an interesting blog introduction charting the *fall and rise* (intentional inversion of the traditional phrase) of inequality over the last 100 years in America.

 Krugman concludes that the great recent run-up of inequality is as much political as some inevitable consequence of technology and globalization and he hopes the precursor of a poliitcal backlash that pushes for greater inequality. 

He also has a nice graphic charting the ratio of share of wealth of the top 10% of Americans to the bottom 90% over time.  The chart shows the Great Compression of inequality under FDR, the long period of Middle Class America from 1940 through the early 1980s and then the dramatic run-up in inequality (*The Great Divergence*) since then.

There has not been strong evidence that inter-generational mobility has dramatically declined over the past generation while income inequality soared, but we are exploring early evidence that today’s lower-class youth may face dramatically lower equality of opportunity than in the past.

Krugman’s blog post can be found here.

Achievement Trap: the fate of high-achieving students from poor backgrounds

The Achievement Trap report (of the Jack Kent Cooke Foundation) “chronicles the experiences of high achieving lower-income students during elementary school, high school, college, and graduate school.”

They note: “In some respects, our findings are quite hopeful. There are [3.4 million]… high-achieving lower-income students in urban, suburban, and rural communities all across America; they reflect the racial, ethnic, and gender composition of our nation’s schools; they drop out of high school at remarkably low rates; and more than 90 percent of them enter college.

 

“But there is also cause for alarm. There are far fewer lower-income students achieving at the highest levels than there should be, they disproportionately fall out of the high-achieving group during elementary and high school, they rarely rise into the ranks of high achievers during those periods, and, perhaps most disturbingly, far too few ever graduate from college or go on to graduate school.

 

“Unless something is done, many more of America’s brightest lower-income students will meet this same educational fate, robbing them of opportunity and our nation of a valuable resource.”

 

The findings come from three federal databases that have tracked students in elementary and high school, college, and graduate school over the past 20 years. And this population of 3.4 million children that are the top quartile academically on standardized tests, but come from households with incomes below the national median exceed the populations of 21 states. (Over one million of these children Kqualify for free or reduced-price lunch.)

Selected other findings:

• They exhibit an Unequal Start: “Among first-grade students performing in the top academic quartile, only 28 percent are from lower-income families, while 72 percent are from higher-income families.”
• In elementary and high school, these low-income, high-achieving students lose ground during K-12, becoming ever less frequent as the years progress. For example, “only 56 percent of lower-income students maintain their status as high achievers in reading by fifth grade, versus 69 percent of higher-income students….[And] [w]hile 25 percent of high-achieving lower-income students fall out of the top academic quartile in math in high school, only 16 percent of high-achieving upper-income students do so….Among those not in the top academic quartile in first grade, children from families in the upper income half are more than twice as likely as those from lower-income families to rise into the top academic quartile by fifth grade.”   So the ranks of low-income high-achievers start proportionately smaller, they have a harder time holding ground and low-income students are much less likely to break into this high-achieving group if they don’t start there.
• High-achieving lower-income students drop out of high school or do not graduate on time twice as often “as their higher-income peers (8 percent vs. 4 percent) but still far below the national average (30 percent).”
• “Unfulfilled Potential in College & Graduate School: Losses of high-achieving lower-income students and the disparities between them and their higher-income academic peers persist through the college years. While more than nine out of ten high-achieving high school students in both income halves attend college (98 percent of those in the top half and 93 percent of those in the bottom half), high-achieving lower-income students are:
  • Less likely to graduate from college than their higher-income peers (59 percent versus 77 percent);
  • Less likely to attend the most selective colleges (19 percent versus 29 percent);
  • More likely to attend the least selective colleges (21 percent versus 14 percent); and
  • Less likely to graduate when they attend the least selective colleges (56 percent versus 83 percent).”
• “High-achieving lower-income students are much less likely to receive a graduate degree than high-achieving students from the top income half. Specifically, among college graduates, 29 percent of high achievers from lower-income families receive graduate degrees as compared to 47 percent of high achievers from higher-income families. This pattern of declining educational attainment mirrors the experiences of underachieving students from lower-income families — they start grade school behind their peers, fall back during high school, and complete college and graduate school at lower rates than those from higher-income families.”

“Our nation has understandably focused education policy on low-performing students from lower-income backgrounds. The laudable goals of improving basic skills and ensuring minimal proficiency in reading and math remain urgent, unmet, and deserving of unremitting focus. Indeed, our nation will not maintain its promise of equal opportunity at home or its economic position internationally unless we do a better job of educating students who currently fail to attain basic skills. But this highly visible national struggle to reverse poor achievement among low-income students must be accompanied by a concerted effort to promote high achievement within the same population. The conclusion to be drawn from our research findings is not that high-achieving students from lower-income backgrounds are suffering more than other lower-income students, but that their talents are similarly under-nurtured. Even though lower-income students succeed at one grade level, we cannot assume that they are subsequently exempt from the struggles facing other lower-income students or that we do not need to pay attention to their continued educational success. Holding on to those faulty assumptions will prevent us from reversing the trend made plain by our findings: we are failing these high-achieving students throughout the educational process.”

[above adapted from their Executive Summary.] 

The report is silent on what the mechanisms are that account for the unequal start of these groups in school and why the low-income, high-achieving groups lose ground over time in schools. It could be parental support, it could be school attention on this group, it could be peer groups, or other causes, but they indicate that this issue of mechanisms is definitely worthy of greater attention and study.

Full “Achievement Trap” report here.

Powerful photo of inequality: let them eat ‘bolo’

Not that inequality is limited to the developing world… (The U.S. is experiencing record high levels of inequality, whose results are described here and here.)

But Revista (the Rockefeller Center for Latin American Studies at Harvard’s  Latin American Review) has a powerful image on their Spring 2007 cover which can be seen here.  (It is a photo taken by Tuca Vieira of luxury buildings and tennis courts in Sao Paulo’s affluent Morumbi neighborhood, check to jowl with the misnamed Paraisopolis (“Paradise City”), one of the city’s favelas.)

The Gilded Age (II): No Tooth for a Tooth

Bob Herbert, who so often and importantly chronicles the divides in today’s society has a column (“The Divide In Caring For Our Kids“, 6/12/07, NYT) contrasting the experience of Desperate Housewives’ Teri Hatcher who used her contacts to arrange emergency tooth abscess treatment for her daughter on a Saturday.  [Hatcher humorously told the story of having to serve as a dental assistant, despite her squeamishness about dentists, and seeing if she could bring a tank of Novocaine home to calm her own nerves.]  Herbert contrasts this with a 12-year old homeless boy in Prince George’s County, MD who died from a tooth abscess that when untreated (because of lack of medical coverage) the bacteria spread and infected his brain.

Gates exhorts Harvard graduates to tackle global inequities

Bill Gates in his Harvard commencement address (2007) said “Be activists. Take on big inequities…You have an awareness of global inequity, which we did not have. And with that awareness you likely have an informed conscience that will torment you if you abandon these people whose lives you could change with very little effort.”

He confessed his ignorance of this topic when he was a Harvard undergraduate.  Gates is the wealthiest Harvard dropout in history — he dropped out in 1975 after two years at Harvard – who has given away billions of dollars of his fortune to the Gates Foundation to tackle global diseases and other topics.  [Gates joked about his dropping out;  saying "I’ve been waiting more than 30 years to say this. Dad, I always told you I’d come back and get my degree."]

“We can make market forces work better for the poor if we can develop a more creative capitalism, if we can stretch the reach of market forces so that more people can make a profit, or make a living, serving people who are suffering, ” Gates commented.

Gates reportedly got his inspiration for the commencement talk (according to today’s WSJ) while waiting to see Condoleeza Rice at the State Department, in December, when he happened to read a framed copy of the Marsall Plan for Europe, given by George Marshall at a post-WWII Harvard commencement address.  Gates saw parallels between his social vision for the world and Marshall’s social and economic vision for Europe post-WWII.

We hope that his example (and Warren Buffet’s) of philanthropy and dedication to easing global inequity inspires countless other wealthy capitalists to make similar commitments.

The Gilded Age redux

In American Cities and the Great Divide (NYT, 5/22/07, Bob Herbert) describes how we’ve returned to a Gilded Age and cites an illustration where a high school student couldn’t imagine a dinner for 4 in NYC costing $500. The student asked incredulously, ‘How Much Can You Eat?’

Herbert points out that we’ve returned to a Gilded Age where for some the city is “paved for gold” and for others it is paved in “ash.”  Herbert observes that “One of the city’s five counties, the Bronx, is the poorest urban county in the nation. The number of families in the city’s homeless shelters is the highest it has been in a quarter of a century. Twenty-five percent of all families with children in New York City — that’s 1.5 million New Yorkers — are trying to make it on incomes that are below the poverty threshold established by the federal government.”   This in contrast to the NYC wealthy where: “…8 million residents of New York City, and roughly 700,000 are worth a million dollars or more. The average price of a Manhattan apartment is $1.3 million.” and ”The annual earnings of the average hedge fund manager is $363 million.”

In The widening gap between rich and poor: Which might have something to do with the rising rate of incivility in 2007 America” (Pittsburgh Post-Gazette, 5/23/07, Dan Simpson), Simpson tried to understand why their is complacency about these gaps.  Simpson describes the economic machines that are voraciously driven to get the poor having more credit cards and more shaky mortgages, but in many cases are insulated from the results when they turn financially sour — for example, the mortgage company has repackaged the mortgage and sold it off to another entity that has been compensated for the risk of non-repayment. Simpson laments that no one in the mortgage or real estate business really focuses on our common goal of home ownership, and regardless of defaults, they have made out well on the building, selling, and financing of millions of homes.

For sure some of our decline in caring about the other is wrapped up hand in hand with our declines in social capital.  And the link between levels of social capital and  equality is well established.  [This is true across countries, across U.S. States and across periods of time, as chronicled in Bowling Alone.]  This is because our level of trust in others (a close correlate of social capital) and our level of bridging social ties with others of different economic means determines whether we see the poor’s economic problems as OUR problem or THEIRS.

Simpson observed that “[t]here are still enough remnants remaining of the so-called Protestant ethic at the core of American society for some to say that if people are in trouble, it is because they deserve to be in trouble. The absolutely feckless way that some people — even employed people — get themselves mired in debt beyond their ability ever to dig themselves out serves as illustration.”

Simpson thinks that the ‘cheery’ financial news is a chimera:  the unemployment rate ignores those that have long given up on finding work, the stock market is buoyed by market traders seeking short-term gains, the inflation rate under-measures actual increases in goods.

He concludes that there may be a relation between the yawning gap between rich and poor and the increasingly incivility, such as “methamphetamine and other drug abuse, identity theft, home ‘invasions,’ the burning of churches, petty and grand thievery, extreme religiosity, gambling and child and elderly abuse that defies belief. Some of it looks like urban Victorian England. But so do our rich resemble the lords of those days in their economic distance from the poor.”  And Simpson quotes Officer Krupke (West Side Story) who observed ‘they are depraved because they are deprived.’