productivity, inequality and mobility, andrew leigh

Download Productivity, Inequality and Mobility, Andrew Leigh

Post on 29-May-2015

904 views

Category:

Economy & Finance

1 download

Embed Size (px)

DESCRIPTION

Presentation by Andrew Leigh, "Productivity, Inequality and Mobility, Andrew Leigh"

TRANSCRIPT

  • 1. Andrew LeighPRODUCTIVITY, INEQUALITY & MOBILITY OECD, Paris

2. How Immobility Hurts ProductivityMisallocation of human capital investmentChoosing the wrong parents is the biggest market failure of all (Heckman)Misallocation of financial capitalThin capital markets hurt entrepreneurs with poor parents.Mismatch in the labour marketToo much emphasis on family means bad hiring decisions.Andrew Leigh: Productivity, Inequality & Mobility 3. How Much Mobility Exists?Andrew Leigh: Productivity, Inequality & Mobility 4. How Much Mobility Exists?In no other country on earth is my story even possibleIt is harder today for a child born here in America to improve her station in life than it is for children in most of our wealthy alliesBarack Obama, 2004Barack Obama, 2013Andrew Leigh: Productivity, Inequality & Mobility 5. What Drives Mobility?1.Inequality2.Families3.Schooling4.TargetingSeveral excellent review papers:e.g. DAddio (2008), Causa & Johansson (2009), Corak (2013)Andrew Leigh: Productivity, Inequality & Mobility 6. Mobility & InequalityAndrew Leigh: Productivity, Inequality & Mobility 7. Andrew Leigh: Productivity, Inequality & Mobility 8. Andrew Leigh: Productivity, Inequality & MobilityLess mobility 9. Andrew Leigh: Productivity, Inequality & Mobility Less mobility 10. Mobility & FamiliesBy the age of three, children of professional parents have heard 30 million more words from their parents than those whose parents were long-term welfare recipients (Hart & Risley 1995).An affluent five-year-old has about the same vocabulary as an adult living in poverty. (Hank Bounds, Mississippi commissioner of higher education)Andrew Leigh: Productivity, Inequality & Mobility 11. Mobility & FamiliesAffluent families spend more on educational enrichmentRise in single parent families larger among low-educated parents.Concerted cultivation vs natural growth parentingAndrew Leigh: Productivity, Inequality & Mobility 12. Mobility & SchoolingSome evidence that higher returns to education means lower mobility (Solon 2004, Corak 2013)Test score dispersion is associated with more inequality (and therefore less mobility?)Andrew Leigh: Productivity, Inequality & Mobility 13. Andrew Leigh: Productivity, Inequality & MobilitySource: Corak (2013) Source: Leigh (2013) 14. Mobility & TargetingTargeting could cover:Progressivity of education spending (tricky to measure)Progressivity of tax systemProgressivity of welfare systemAndrew Leigh: Productivity, Inequality & Mobility 15. Andrew Leigh: Productivity, Inequality & MobilitySource: Whiteford (2014) 16. Empirical ChallengesIdeally, we want to look at changes on changesBut changes in survey-based estimates are rarely statistically significant.Policy experiments are rareException: Pekkarinen et al. (2006)Andrew Leigh: Productivity, Inequality & Mobility 17. Empirical ChallengesProxies for mobility are imperfectMobility estimates using parent/child education or occupation are sensitive to the number of categories (and degree of dispersion across them)Surname estimates may be capturing a parameter (like race) that is different to mobility.Andrew Leigh: Productivity, Inequality & Mobility 18. Five Possible Projects1.Estimate small-area mobility in countries for which good administrative data exists, then use to test relationships with inequality and productivity.2.Look at changes in extremely static systems (eg. European feudalism, traditional Indian caste system). How much of the productivity benefits of the Industrial Revolution are mobility-related?Andrew Leigh: Productivity, Inequality & Mobility 19. Five Possible Projects3.Explore educational channel what are the features of school systems in mobile societies?4.Explore family channel what role does family structure, parental time play in mobility?5.Explore innovation channel where does parental wealth affect entrepreneurial success least? Are there lessons from the banking system there?Andrew Leigh: Productivity, Inequality & Mobility 20. Supplementary MaterialAndrew Leigh: Productivity, Inequality & Mobility 21. Empirical ChallengesThe very top is differentIGEs approach 0.9 at the top of the Swedish & Canadian distributions.Surname approach of Clark finds IGEs of 0.7-0.9Chetty et al. (2014) find no relationship between top 1% share & mobility.Andrew Leigh: Productivity, Inequality & Mobility 22. Simple correlations can mislead The case of inequality & infant mortalityAndrew Leigh: Productivity, Inequality & MobilityAUSAUT BELCANCZEDNKFINDFERUAGRCHUNIRLITANLDNORSVKESPSWECHEGBRUSA4 6 810.2 .25 .3 .35 .4Gini CoefficientAUSBELCANFRADEUITANLDNORESPSWECHEGBRUSA-4-3.5-3-2.5-2-1.5Change in infant mortality-.02 0 .02 .04Change in Gini 23. Some disagreement on trends in US mobilityAaronson & Mazumder 2008Chetty et al. 2014Andrew Leigh: Productivity, Inequality & Mobility 24. Andrew Leigh: Productivity, Inequality & Mobility

Recommended

View more >