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Progress for the Poor

Lane Kenworthy writes:

The book is full of graphs that support the above claims. One thing I like about Kenworthy’s approach is that he performs a separate analysis to examine each of his hypotheses. A lot of social scientists seem to think that the ideal analysis will conclude with a big regression where each coefficient tells a story and you can address all your hypotheses by looking at which predictors and interactions have statistically significant coefficients. Really, though, I think you need a separate analysis for each causal question (see chapters 9 and 10 of my book with Jennifer, follow this link).

Kenworthy’s overall recommendation is to increase transfer payments to low-income families and to increase overall government spending on social services, and to fund this through general tax increases.

What will it take for this to happen? After a review of the evidence from economic trends and opinion polls, Kenworthy writes, “Americans are potentially receptive to a more generous set of social programs, but their demand for it is far from overwhelming.”

P.S. See Kenworthy’s blog for related material and here for our paper on income inequality and partisan voting.

4 Comments

  1. Joseph says:

    If these points end up being the consensus of how to best reduce poverty then they completely invert the “conventional wisdom” which relies on pushing employment and tax cuts to increase economic growth. On the other hand, examples like the Nordic countries (Sweden, Denmark, etc) suggest that low levels of poverty can be combined with economic growth. We see the same issues with England and Canada.

    But I also agree with the last point. Our standard of living in Canada was not noticeably less despite have income support programs for the very poor (that could operate indefinitely, in many cases).

  2. mTa says:

    Kindle edition is $57.38… progress towards making me poor.

  3. Jeremy says:

    I’d be interesting in knowing how he defines public and private social spending. Last I looked at the OECD data, US public social spending was 16% of GDP, and Sweden, Finland, Denmark, and Germany were between 25%-29% (I’ve also noticed a discrepancy between Eurostat and OECD data on this topic). It’s hard to wrap my brain around the idea that the private sector in the US contributes upwards of 10% of GDP to “social spending”, but it could be the non-profit/charity-friendly tax code in effect.

  4. […] of big picture here. Regarding the substance of the matter, my reading of Lane Kenworthy’s recent book convinces me that, whatever the causes of the current inequality, tax increases are a key part of […]