Archives for income



Does Democracy Make Us Richer and Better Educated? Or Is It the Other Way Around?

It’s one of the ultimate chicken or egg questions: Does democracy lead to increases in education and income, or do education and higher income lead to democracy? It’s a tricky one, considering that over the last 200 years, they’ve essentially moved in tandem across much of the developed world.

So which is affecting which? A new working paper (full version here) by Fabrice Murtin and Romain Wacziarg attempts to untangle the two to understand whether democracy grows from education and higher income, or vice versa. Read More »



What’s the Median Income for a Fashion Model in the U.S.?

Take a wild guess: How much do you think fashion models make? It’s one of those professions that unless you know someone, or work in the biz, there’s not a lot of information out there to have a good view into. Judging by models’ perceived glamour and high society status, not to mention the cut-throat competition they deal with, you might think it’s a lot. I think I did. Which is why this line from a TNR review of the new book Pricing Beauty: The Making of a Fashion Model struck me as amazing:

The median income across America in 2009 for a model was $27,330—income that includes no benefits.

The book is by Ashley Mears, a former fashion model and current Boston University sociologist. Read More »



Enlisting in the Military Increases Earnings, But Only If You Stick Around

A new RAND research report prepared for the U.S. Army explores the effect of military enlistment on individual earnings and the labor market. The authors used data from applicants to “active-component enlisted service” from 1989 through 2003, and followed them for up to 18 years. From the report:

The authors find that military enlistment increases earnings in both the short and long-term: The percentage increase in earnings attributable to enlistment is about 40 percent in the first few years following application and diminishes to about 11 percent 14–18 years following application. Enlistment significantly delays college education in the short run. In the longer run, enlistment slightly increases the likelihood of attaining a two-year college degree, but it also decreases the likelihood of attaining a four-year college degree, especially among higher-aptitude youth.

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What’s the Best Way to Measure Poverty: Income or Consumption?

Yesterday we learned that 15.1% of Americans were living in poverty in 2010, the highest level since 1993, and up nearly 1 percentage point from 2009, when it was 14.3%. That data is based on an income measurement which shows that in 2010, 46.2 million Americans were living below the poverty line, defined as $22,314 a year for a family of four.

But income is just one way to measure poverty, and a particularly tricky (and narrow) way at that – so says Notre Dame economist and National Poverty Center research affiliate, James Sullivan, who believes that to measure poverty strictly by income fails to accurately reflect people’s true economic circumstances. Income alone ignores the effects of things like the Earned Income Tax Credit, Medicaid, food stamps, and housing subsidies. From a Notre Dame press release on Sullivan’s recent poverty research:

“Income received from food stamps, for example, grew by more than $14 billion in 2009. By excluding these benefits in measuring poverty, the Census figures fail to recognize that the food stamps program lifts many people out of actual poverty,” Sullivan says. “If these programs are cut back in the future, actual poverty will rise even more.”

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Nice Guys Never Win (Neither Do Mean Girls)

For years, we’ve been hearing from fictional alpha males like Ari Gold and Gordon Gekko that nice guys finish last. Now, according to a collection of studies soon to be released in the Journal of Personality and Social Psychology, there appears to be some truth to the axiom. While nice guys don’t necessarily finish last, they rarely finish first. Researchers Beth A. Livingston of Cornell, Timothy A. Judge of Notre Dame, and Charlice Hurst of the University of Western Ontario, show how “agreeableness” negatively affects monetary earnings. Moreover, their research shows that this “agreeable gap” is more pronounced in men than women, who still trail their male counterparts. Here’s a full version of the study. And here’s the abstract: Read More »



Cohabitation in the U.S. has Doubled Since the Mid-1990s

A recent study by the Pew Research Center titled “Living Together: The Economics of Cohabitation,” finds that rates of cohabitation in the U.S. have gone up significantly over the last 15 years. Authors Richard Fry and D’Very Cohn use census data from heterosexual couples who (unlike many of their homosexual counterparts) have a choice between getting married, or simply living together unmarried. Fry and Cohn write:

Cohabitation is an increasingly prevalent lifestyle in the United States. The share of 30- to 44-year-olds living as unmarried couples has more than doubled since the mid-1990s. Adults with lower levels of education—without college degrees—are twice as likely to cohabit as those with college degrees.

Perhaps you already guessed that – the pressure to get married isn’t quite the same as it was 50 years ago. What’s more interesting though is that the level of education makes a big difference as to how the median household income of cohabiters measures up against their married counterparts. Read More »



Did Women’s Lib Movement Increase Income Gap in the U.S.?

Reader Chris Fawcett writes in with an intriguing question: How did the women’s liberation movement affect the income gap in the U.S.?

Income inequality has been on the rise in the U.S. since the 1970s, roughly the same time that women began entering the workforce in large numbers. Considering the amount of attention the widening income gap gets these days as a source of our economic woes, it seemed like something worth posting.

Here’s how Chris sees the issue:

There are a number of ways I believe this has had a big impact (maybe the biggest impact of any single issue):

1. Women’s participation in the workplace has doubled in the past half century.
2. The divorce rate has increased steadily in the past half century.
3. It is more socially acceptable to not have children (through choice or abortion).
4. People are getting married later in life.

In relation to the commonly used CBO “household” income numbers, I think these issues may have had a huge effect on the perception of the widening income gap as follows:

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Income Equality in Revolutionary America

A tad late for Independence Day, but interesting nevertheless: a new paper called “American Incomes Before and After the Revolution,” by Peter H. Lindert and Jeffrey G. Williamson. Couldn’t find an ungated copy; abstract below (emphasis is mine):

Building social tables in the tradition of Gregory King, we quantify the level and inequality of American incomes before and after the Revolutionary War. Our tentative estimates suggest that between 1774 and 1800 American incomes fell in real per capita terms. The colonial South was richer, and then suffered a greater Revolutionary decline, than suggested by previous estimates. Any rapid growth after 1790 seems to have just partially offset part of a very steep wartime decline. We also find that free American colonists had much more equal incomes than did households in England and Wales. Indeed, New England and the Middle Colonies appear to have been more egalitarian than anywhere else in the measurable world. The colonists also had greater purchasing power than their English counterparts over all of the income ranks except in the top few percent.

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