Economics & Inequality
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Time for citizens to show more interest in how the world works
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Child Poverty and Inequality: New Perspectives

Child Poverty and Inequality: New Perspectives | Economics & Inequality | Scoop.it

The 21st century starts with vast inequalities for children in terms of income, access to food, water, health, education, housing, or employment for their families.

 

This volume presents some of the critical acknowledged voices to move a necessary agenda forward. It explains multidimensional poverty measurements, describes current trends and presents policies to reduce poverty and inequality. Contributors include Armando Barrientos, Sarah Cook, Andrea Cornia, Sir Richard Jolly, Jomo K.S., Naila Kabeer, Nora Lustig, among many others.

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How to: Measure urban poverty

How to: Measure urban poverty | Economics & Inequality | Scoop.it
In a world where more than half of the population lives in cities, poverty is increasingly an urban phenomenon. As researchers and aid agencies struggle to distinguish between chronic poverty and acute vulnerability, IRIN reviewed efforts to measure city dwellers’ poverty and vulnerability in life-threatening scenarios.

More than two-thirds of the world’s urban population lives in low- and middle-income countries where nearly one billion are living in slums, mostly in sub-Saharan Africa and South Asia, according to the World Bank.

As more people pour into cities often ill-equipped to handle the influx, experts are trying to find ways of defining and measuring urban poverty. Their findings influence humanitarian policy and programmes as well as basic services, including health, water and sanitation and education.

“Conceptualization and definition could be very much context-specific,” said Geetha Mayadunne, a senior researcher at the Centre for Poverty Analysis (CEPA) in Colombo, Sri Lanka.

The UN International Poverty Centre, based in Brazil, defines poverty as “a complex set of deprivations in many dimensions that cannot be determined on a basis of low level of income”.

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A liberal view: 6 Myths About Income Inequality in America

A liberal view: 6 Myths About Income Inequality in America | Economics & Inequality | Scoop.it
Income inequality is a term that depicts the frustration between unequal distributions of income. I explain how these claims of income inequality are myths.
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The basic unit is risk not wealth

The basic unit is risk not wealth | Economics & Inequality | Scoop.it
Today I’m going to gush over two excellent blog posts I read recently written over at Interfluidity. But first I’m going to state a pet theory of mine about what units we talk in. In a ...
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Is labour productivity up or down? Who is using the correct data?

Is labour productivity up or down? Who is using the correct data? | Economics & Inequality | Scoop.it
Is labour productivity up or down? Who is using the correct data?

 

A debate is raging over SA’s labour productivity. Firstly, Loane Sharp of Adcorp claimed that the latest SA Reserve Bank figures showed that labour productivity was the lowest in 40 years. Economist Dick Forslund took issue, saying that the latest Quarterly Bulletin actually showed that average labour productivity was up 1.1% year-on-year in June. Sharp defended his original assertion and implied that Forslund’s methodology was clouded by discredited ideology. Forlund’s latest response today repeats his claim that Sharp and other 'conservative debaters' such as Ann Berstein’s Centre for Development and Enterprise (CDE) have been basing their arguments on out-of-date statistics that have three large breaks in the data series and are no longer used by the Reserve Bank.

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Adcorp explains its employment estimates

Adcorp explains its employment estimates | Economics & Inequality | Scoop.it

In a recent research note ("How reliable is the Adcorp Employment Index?", 1 March 2012), two University of Cape Town academics, Prof Martin Wittenberg and Dr Andrew Kerr, criticize Adcorp's method of estimating informal employment in South Africa (see here). They suggest that the method lacks a scientific foundation.

By way of background, Adcorp has been involved in a long-running debate with Statistics SA (Stats SA). Stats SA, using questionnaires completed by around 30,000 people every three months, estimates that there are 2.1 million people employed in the informal sector in South Africa.

Adcorp, using discrepancies between cash in circulation (as a measure of transactions occurring in the cash economy) and official tallies of economic activity, suggests that official records do not present the whole picture, with informal sector employment estimated at 6.2 million people. The upshot of the dispute is that Stats SA estimates South Africa's unemployment rate to be around 25%, whereas Adcorp estimates it to be 9%.

Before proceeding with our response to these criticisms, it is worth noting that Adcorp and Stats SA agree about almost everything. The only disagreement concerns informal sector employment. The correlation between Adcorp's and Stats SA's estimates of formal employment is 83%, not only across time, but also across sectors and occupations.

Adcorp, as South Africa's largest employment services company, is probably the most extensive user of Stats SA's employment data aside from the government and possibly universities. Stats SA's data on wages, benefits, sectoral employment trends, retrenchments and other variables are absolutely vital to Adcorp's research and analysis of the South African labour market.

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Punishing slackers and do-gooders | Discover Magazine

Punishing slackers and do-gooders | Discover Magazine | Economics & Inequality | Scoop.it

Psychological experiments suggest that punishment is part of the glue that binds a cooperating society together. In general, we as a species value fair play and we loathe freeloaders, to the extent that we are all too willing to sacrifice our own gains in order to punish cheats.
But punishment is a two-way street and not all freeloaders take castigation lightly. They can easily get their own back on altruists out of revenge or a simple desire to take down some do-gooders. This ‘antisocial punishment’ is often ignored by social science research but a new study shows that it has the ability to derail the high levels of cooperation that other more fairer forms of punishment can help to entrench.

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The economics of happiness: Can't buy it?

The economics of happiness: Can't buy it? | Economics & Inequality | Scoop.it
Lord Layard's thinking goes, by spending 90 hours a week in the office, you may be improving your own income, but you are also causing other people to feel less satisfied with theirs. They may be encouraged to work longer themselves just to keep up, taking from the time that gets devoted to family and community.
It is, the author argues, something similar to environmental pollution, where one person's action (or a company's) makes others worse off. Fortunately, he notes, economists have already figured out how to deal with such externalities: tax them so that the polluter internalises the cost of his actions. And so, near the top of Lord Layard's list for improving human happiness, comes the following recommendation: much higher rates of income tax to tame the rat race.
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The World's Next Top (Economic) Model

The World's Next Top (Economic) Model | Economics & Inequality | Scoop.it
Economist and WEF founder Klaus Schwab is leading the charge, and is not mincing words about the failure of the status quo -- talking about 'outdated and crumbling models' and the need for new ways of thinking, going so far as to say that capitalism in its current form is not working.

Those are welcome words to labor leaders as we prepare to put our case for reform at Davos this week.

It's never been clearer that unrestrained market forces do not produce the kind of societies we aspire to -- economically stable and socially inclusive, where citizens have access to secure jobs with the dignity of a fair wage and a welfare safety net.

Just ask an unemployed parent in Greece, a pensioner in Britain, a subsistence farmer in Africa or an evicted homeowner in the US whether system is working for them.
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Global Risks 2012 - Seventh Edition

Global Risks 2012 - Seventh Edition | Economics & Inequality | Scoop.it
Economic imbalances and social inequality risk reversing the gains of globalization, warns the World Economic Forum in its report Global Risks 2012. These are the findings of a survey of 469 experts and industry leaders, indicating a shift of concern from environmental risks to socioeconomic risks compared to a year ago.
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Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty. By Abhijit Banerjee and Esther Duflo

Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty. By Abhijit Banerjee and Esther Duflo | Economics & Inequality | Scoop.it
“Poor Economics” should appease some of their critics. It draws on a variety of evidence, not limiting itself to the results of randomised trials, as if they are the only route to truth. And the authors’ interest is not confined to “what works”, but also to how and why it works. Indeed, Ms Duflo and Mr Banerjee, perhaps more than some of their disciples, are able theorists as well as thoroughgoing empiricists.
They are fascinated by the way the poor think and make decisions. Poor people are not stupid, but they can be misinformed or overwhelmed by circumstance, struggling to do what even they recognise is in their best interests. The authors recount (with grudging admiration) how nurses in rural Rajasthan outwitted the two professors’ efforts to stop them skiving off work. They also describe how borrowers in south India exploited a contractual loophole to avoid taking out health insurance, which their microlender insisted they buy for their own good.
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Homepage | Poor Economics

Homepage | Poor Economics | Economics & Inequality | Scoop.it

Radically rethinking the way we fight poverty.
Why would a man in Morocco who doesn’t have enough to eat buy a television? Why is it so hard for children in poor areas to learn, even when they attend school? Does having lots of children actually make you poorer? Answering questions like these is critical if we want to have a chance to really make a dent against global poverty.

Based on our work and that of many others, we try to do that in our book. This website provides supporting material: informative slideshows, material for teaching the book, supporting data, and links to researcher and organization websites. Feel free to delve in and learn more.

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The economic, and democratic, crisis in Europe raises questions.- Le Monde diplomatique - English edition

The economic, and democratic, crisis in Europe raises questions.- Le Monde diplomatique - English edition | Economics & Inequality | Scoop.it
“Consciously or not, policy makers are catering almost exclusively to the interests of rentiers – those who derive lots of income from assets, who lent large sums of money in the past, often unwisely, but are now being protected from loss at everyone else’s expense.”
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After capitalism: Watch this series of economics videos to cool you down or wake you up - via the guardian

After capitalism: Watch this series of economics videos to cool you down or wake you up - via the guardian | Economics & Inequality | Scoop.it
Economist Jayati Ghosh has seven dreams for an ideal society, which would root out inequality but preserve cultural differences.
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Reducing Income Inequality Is the Key to Economic Growth -- Time to Pass the Buffett Rule

Reducing Income Inequality Is the Key to Economic Growth -- Time to Pass the Buffett Rule | Economics & Inequality | Scoop.it
Increased per capital economic output is made possible by increases in productivity. When productivity increases, the same number of hours of work generate more goods and services.

But it should be obvious to anyone that if all of the income that results from increases in economic output flow to the top one percent of the population, then the rest of us won't have that income to buy the increasing number of products and services that result from the increased productivity.

What happens, then, is simple: economic growth stalls. Companies won't hire people to produce more products and services if no one has the money to buy them, so they lay people off. Taken as a whole, the economy then has even fewer people with the money to buy new goods and services.

Simply put, increasing economic inequality is a straight-forward formula for economic stagnation.

 

Over the last 20 years, Brazil's policy of reducing economic inequality has brought 40 million people out of poverty and into the consumer economy. The Gini coefficient of inequality fell from .63 in 1989 to .53 in 2011.

Brazil has a long way to go. But it is now the sixth largest economy in the World.

Two examples of Brazil's policies aimed at reducing economic inequality are particularly instructive.

Brazil just raised the minimum wage by 14 percent. And it indexed the minimum wage both to inflation, and to increase in Gross Domestic Product. In other words, if the GDP goes up 2.7 percent, so does the share of income going to the lowest earners in the society.

Brazil has a program of cash transfers to women in its poorest families. To receive these payments, mothers have to make sure that their children attend school and get medical care. That program alone has converted millions of formerly desperately poor families into consumers. By the way, it has also reduced levels of domestic violence. Men are apparently not so eager to abuse women who have their own sources of family income.

In other words, then, the Brazilians are committed to the economic principles that America once embraced -- principles that lead to the creation of the American middle class.

 

In the mid seventies, the corporate CEO class and the far right organized a movement to undermine the American consensus that ending income inequality was necessary for our economy. They set to work cutting taxes for millionaires, putting the brakes on spending for education and children, attacking Social Security and Medicare and -- perhaps most important -- attacking unions whose muscle defended middle class incomes, both at the bargaining table and the ballot box.

In the end, that has increased income inequality in America. That, coupled with the deregulation of the big Wall Street banks and their reckless speculation, led to the Great Recession.

Next week the Senate will vote on the "Buffett Rule" -- a bill supported by President Obama and Democrats in the Senate that is aimed at requiring that, at the very least, millionaires should not pay a lower percentage of their income in taxes than ordinary people like their secretaries.

The Buffett Rule -- named after billionaire Warren Buffett, who is its chief advocate -- would be a major first step in eliminating the spectacle of multi-millionaires like Mitt Romney paying an effective tax rate of less than 15 percent, while ordinary middle class people pay substantially more.

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Tom Norton's curator insight, March 23, 2015 8:16 AM

#igers #420 #interestingforthetopic #b4ller #blazin #plowsnbella4eva, hi guys, this could be useful for AS economics. #noragrets

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In search of the Global Middle-Class: A New Index by Uri Dadush

In search of the Global Middle-Class: A New Index by Uri Dadush | Economics & Inequality | Scoop.it
There is no widely accepted definition of what constitutes the middle class, and the commonly used income-based measures suffer from a number of deficiencies. Yet, there is an easy-to-understand and as-yet-overlooked metric available: the number of passenger cars in circulation can act as a direct measure of the middle class in developing countries.
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interfluidity » Trade-offs between inequality, productivity, and employment

There is a tradeoff between inequality and full employment that becomes exacerbated as technological productivity improves. This is driven by the fact that the marginal benefit humans gain from current consumption declines much more rapidly than the benefit we get from retaining claims against an uncertain future
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Politicsweb - How reliable is the Adcorp Employment Index?

Politicsweb - How reliable is the Adcorp Employment Index? | Economics & Inequality | Scoop.it

In November 2011 we wrote to Business Day expressing concerns about the claims made by Adcorp in the Adcorp Employment Index (AEI) and the lack of transparency of the methods used in the AEI.

Unfortunately the methods used in the AEI have still not been set out transparently on the AEI website. Instead our understanding of it comes from a series of emails sent by Loane Sharp of Adcorp to the authors setting out the methodology behind the Index. In this paper we set out several criticisms of the methodology used in the Adcorp Employment Index and respond to some of the criticisms Adcorp has made about the Statistics South Africa (Stats SA) employment estimates.

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A doctored service - Abhijit Banerjee from MIT

The healthcare systems of the US and India are different. There is, however, one trait common to the two democracies: inequality. Abhijit Banerjee writes.

 

Most Indians, including the very poor, get most of their healthcare from the private sector. In our data, only 20 per cent of all visits are to government health facilities, even for the poorest people (under Rs 200 a month per capita). Why is this the case has a lot to do with the way the public sector functions, which deserves a separate column by itself. Here I just want to point out a paradox. In India, where the market rules, and the government spends less than 20 per cent of the total amount spent on healthcare, the policy conversation is premised on the fact that the government is central to the health system. Almost no one talks about how to fix the ills of the private market for health.

 

In the US, by contrast, the market is anything but free and the government already bears 65 per cent of all healthcare costs (mostly because it pays for the elderly). Yet the right-wing opposition to government provided health insurance for the uninsured is in the name of saving the free market from encroaching socialism. What is it about healthcare that makes it so prone to nonsense?

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Freakonomics » We Hold These Truths to Be Universal

Freakonomics » We Hold These Truths to Be Universal | Economics & Inequality | Scoop.it

The green, left-hand side of the graph shows the propensity of subjects to punish players who failed to contribute to the group project.? The propensity of U.S. subjects to punish free-riders doesn’t seem weird at all.? But the U.S, Australia and the U.K. subjects were much less likely to punish players who HAD cooperated by contributing to the group project.? In other societies, “[m]any subjects?engaged in anti-social punishment; that is, they paid to reduce the earnings of “overly” cooperative individuals (those who contributed more than the punisher did).”? It might be that subjects in Oman reason: Who do you think you are, giving so much of your private money to promote a social cause?

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Globalised food system has failed the poor

Globalised food system has failed the poor | Economics & Inequality | Scoop.it
Globalisation involves winners and losers — that has been established.

But losing out, for a subsistence farmer, means sinking into dire poverty and hunger.

Is the denial of a vulnerable population’s right to food an acceptable byproduct of a trade deal? Should the goal be to multiply the interests of powerful multinationals? Are these the economic processes that we want, or need?
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George Monbiot – The Great Pay Robbery

George Monbiot – The Great Pay Robbery | Economics & Inequality | Scoop.it
The successful bank robber no longer covers his face and leaps over the counter with a sawn-off shotgun. He arrives in a chauffeur-driven car, glides into the lift then saunters into an office at the top of the building. No one stops him. No one, even when the scale of the heist is revealed, issues a warrant for his arrest. The modern robber obtains prior approval from the institution he is fleecing.
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Book Excerpt: Architects of Poverty by Moeletsi Mbeki

Book Excerpt: Architects of Poverty by Moeletsi Mbeki | Economics & Inequality | Scoop.it
The problem with Africa is that it is still locked in the mercantile stage of capitalism. The challenge facing the continent is how to modernise capitalism from mercantilism to industrialism. Two countries are an exception to this observation – South Africa and Mauritius.
Why don’t the powerful in Africa ever learn that mercantilism is a road to nowhere? Africa needs new rulers – the people themselves – who understand that the path to a prosperous future lies in hard work, creativity, knowledge and equity.
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Obstacles to social mobility weaken equal opportunities and economic growth, says OECD study

Obstacles to social mobility weaken equal opportunities and economic growth, says OECD study | Economics & Inequality | Scoop.it

It is easier to climb the social ladder and earn more than one’s parents in the Nordic countries, Australia and Canada than in France, Italy, Britain and the United States, according to a new OECD study. Intergenerational Social Mobility: a family affair? says weak social mobility can signal a lack of equal opportunities, constrain productivity and curb economic growth.

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Clara Dunphy's curator insight, June 27, 2014 11:48 AM

"weak social mobility can signal a lack of equal opportunities"

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The Book of Jobs - Re-examining the cause of the Great Depression

The Book of Jobs -  Re-examining the cause of the Great Depression | Economics & Inequality | Scoop.it
Many have argued that the Depression was caused primarily by excessive tightening of the money supply on the part of the Federal Reserve Board. Ben Bernanke, a scholar of the Depression, has stated publicly that this was the lesson he took away, and the reason he opened the monetary spigots. He opened them very wide. Beginning in 2008, the balance sheet of the Fed doubled and then rose to three times its earlier level. Today it is $2.8 trillion. While the Fed, by doing this, may have succeeded in saving the banks, it didn’t succeed in saving the economy.
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