New publication: Unequal unions? A comparative decomposition of income inequality in the European Union and United States Abstract: 

With Stefano Filauro, I take a look at how income inequality in the 50 United States compares to that of the combined EU-28. Take a look at our new publication in the Journal of European Social Policy:

Unequal unions? A comparative decomposition of income inequality in the European Union and United States

Abstract: This study applies improved household income data to measure and decompose trends in pan-European income inequality from 2006 to 2014. To contrast the relative significance of economic homogeneity versus the efficacy of welfare state and labour market institutions in shaping income distributions, we compare the structure of inequality in the 28 Member States of the European Union (EU-28) to that of the 50 United States. This comparison stands in contrast to the standard practice of evaluating the United States against individual EU Member States. Despite the greater relative heterogeneity of the EU-28 and our corrections for the underreporting of household income in the United States, post-fisc income inequality in the EU-28 remains lower than that of the United States from 2006 onward. Moreover, inequality appears to be rising in the United States, while it has remained stagnant since 2008 in the EU-28. In both unions, and particularly the United States, within-state income differences contribute more to union-wide inequality than between-state differences. In a counterfactual analysis, we find that if the EU-28 matched the between-state homogeneity of the United States, but maintained its relative within-country inequalities, pan-European inequality would fall by only 20 percent. Conversely, inequality in the United States would fall by 34 percent if it matched the within-country inequality of the EU-28. Our findings suggest that the strengthening of egalitarian institutions within the 28 Member States is more consequential than economic convergence in reducing pan-European income inequality. We highlight institutional challenges towards achieving a ‘more equal’ Europe and discuss implications for future EU policymaking.

Link: https://journals.sagepub.com/doi/abs/10.1177/0958928718807332

New publication: Poor State, Rich State: Understanding the Variability of Poverty Rates across U.S. States

What explains variation in poverty rates across the 50 United States? We take a look in our new publication at Sociological Science.

Poor State, Rich State: Understanding the Variability of Poverty Rates across U.S. States

Authors: Jennifer Laird, Zachary Parolin, Jane Waldfogel, Christopher Wimer

Abstract: According to the Supplemental Poverty Measure, state-level poverty rates range from a low of less than 10 percent in Iowa to a high of more than 20 percent in California. We seek to account for these differences using a theoretical framework proposed by Brady, Finnigan, and Hübgen (2017), which emphasizes the prevalence of poverty risk factors as well as poverty penalties associated with each risk factor. We estimate state-specific penalties and prevalences associated with single motherhood, low education, young households, and joblessness. We also consider state variation in the poverty risks associated with living in a black household and a Hispanic immigrant household. Brady et al. (2017) find that country-level differences in poverty rates are more closely tied to penalties than prevalences. Using data from the Current Population Survey, we find that the opposite is true for state-level differences in poverty rates. Although we find that state poverty differences are closely tied to the prevalence of high-risk populations, our results do not suggest that state-level antipoverty policy should be solely focused on changing “risky” behavior. Based on our findings, we conclude that state policies should take into account cost-of-living penalties as well as the state-specific relationship between poverty, prevalences, and penalties.

Link: https://www.sociologicalscience.com/articles-v5-26-628/