Recent research in the Quarterly Journal of Economics offers previously unseen levels of detail unraveling the relationship between labor unions and income inequality in the U.S.

The study, “Unions and Inequality over the Twentieth Century: New Evidence from Survey Data,” suggests rising union membership from the 1930s to the 1960s strongly contributed to closing the income gap between the richest and poorest Americans during those decades, with particular gains for racial and ethnic minorities. The results are largely based on responses to more than 500 Gallup surveys from 1936 to 1986.

Further, a “premium” of 10% to 20% higher income for union households compared with non-union households from the 1940s through the mid-2010s remains “relatively consistent over our long sample period, despite the large swings in density and composition of union members that we document,” the authors write.

Union density generally refers to the share of workers in an industry who are in a union. The Gallup surveys did not consistently ask about health insurance coverage and paid vacation time, so the authors do not explore benefits other than higher wages that can come with union jobs.

New measures of union density

Before 1973, economists estimated union membership at the national level. For example, Rutgers University labor economist Leo Troy used union dues revenue and other data to estimate national union membership from 1897 to 1962 for a book the National Bureau of Economic Research published in 1965.

Eight years later, the U.S. Census Bureau and the Bureau of Labor Statistics began asking about union membership as part of their Current Population Survey, a monthly survey of 60,000 households. Labor economists could, for the first time, analyze individual union membership.

But by then, union density was trending downward.

The new analysis of Gallup data shows the share of U.S. households with a union member had fallen under 30% by that time, down from a high of nearly 35% in the mid-1950s.  

“Almost everything economists knew had come from this post-1970 period when unions were in decline,” says Suresh Naidu, an economics professor at Columbia University and co-author of the recent paper with Henry Farber, Daniel Herbst and Ilyana Kuziemko. “So we were like, ‘Let’s see what this looks like when you look at the period when unions were increasing.’”

The Gallup data come from a trove of surveys, available through the Roper Center for Public Opinion at Cornell University, that starting in 1937 asked respondents whether anyone in their household was a union member. The authors go back an additional year using a survey about household spending on union dues in 1936 conducted by the Bureau of Labor Statistics and the now-defunct Bureau of Home Economics.

Using those surveys and the Current Population Survey since 1973, along with other data sources, the authors find the share of union households skyrocketed from just over 10% in 1936 to roughly one-third in 1955. Union density held steady around 30% through the 1960s before dropping below 25% by 1985.

The rise of unions from 1936 to 1968 explains about 25% of the decline during that period in the Gini coefficient, a common measure of income inequality, according to the paper. The lower the Gini coefficient for a nation, the narrower the gap between its highest and lowest income earners.

After 1968, falling union membership explains roughly 10% of increasing income inequality over the next five decades, the authors find.

In 2020, about 11% of wage and salary earners were union members — 35% of them in the public sector and 6% in the private sector, according to the Current Population Survey. Union workers earned a median of $1,144 per week in 2020, compared with $958 for non-union workers. Put another way, union workers earn $1 for every 84 cents a non-union worker earns.

Although dozens of local union shops remained racially segregated in the South during the years after World War II, unions generally also “drew in disadvantaged groups such as the less educated and nonwhite households,” find Naidu and co-authors Henry Farber, Daniel Herbst and Ilyana Kuziemko.

“That suggests a reason why unions mid-century were a powerful force for equality,” Naidu says. “They brought in the people worst off in the labor market and raised their wages a lot.”

Black workers in particular continue to be represented by unions at a relatively high rate. In 2020, nearly 14% of Black workers could claim union representation, compared with 12% of white workers, 11% of Hispanic or Latino workers and 10% of Asian workers, according to the Bureau of Labor Statistics.

The rise and fall of manufacturing in the U.S.

The U.S. economy from the Great Depression through the postwar years looked very different than it does today. Before, during and after the war, unions organized some of the biggest firms engaged in domestic production for domestic buyers — think Ford, General Motors and U.S. Steel.

The 1940s specifically were “a decade of extraordinary wage compression,” as economists Claudia Goldin and Robert Margo explain in a February 1992 paper in the Quarterly Journal of Economics. The difference between the highest and lowest wage earners narrowed so significantly that Goldin and Margo dubbed those years the “Great Compression.”

As Farber, Herbst, Kuziemko and Naidu find, the Great Compression was partly spurred by unionization.

Likewise, an August 2018 paper in The Economic History Review finds that parts of the U.S. where unions grew briskly during the 1940s also show greater reductions in wage inequality than places where unions expanded less quickly.

“In 1950 we lived in an economy where Americans bought American-made goods,” explains Farber, an economics professor at Princeton University. “It’s pre-globalization. There was this overarching agreement between unions and management that management would accept the unions, unions would allow management to manage, and there would be labor peace without the opportunity to strike during a contract. Roughly speaking, it was sharing the gains that came from having a protected product market, because Americans didn’t want to buy cars made elsewhere.”

National markets are also more interconnected than they were midcentury. The U.S. is now a net importer of goods. The U.S. imported $2.3 trillion worth of goods in 2020, $911 billion more than it exported. Census data on trade balances go back to 1960, when the nation imported $15 billion worth of goods — nearly $5 billion less than it exported.

Finally, U.S. jobs are no longer dominated by manufacturing. In 1950, manufacturing firms produced $225 billion worth of goods, roughly 40% of the nation’s entire industrial output, according to the Bureau of Economic Analysis. By late 2019, before COVID-19, manufacturing represented 16% of the nation’s industrial output.

Today, the biggest firms in the U.S. — Apple, Microsoft, Amazon, Alphabet and Facebook — are data companies. If they do build physical products, like cell phones, that largely happens overseas. Income inequality has grown, with the highest income earners in the U.S. having gradually taken home a larger share of the national income from 1980 onward.

Here’s how the manufacturing decline has played out in the labor market: Nearly 30% of full- and part-time U.S. workers were employed in manufacturing in 1950. By 2019, 8% worked in manufacturing while 18% worked in retail, hospitality or food services.

Citing federal labor statistics, Vanderbilt University sociologist Daniel Cornfield writes in a 1986 paper in the American Journal of Sociology that in “manufacturing — the traditional source of union membership — the percentage of unionized workers declined from 51.3% to 39.9% between 1956 and 1978.”

The decline in manufacturing as a share of unionized workers has continued over the last 20 years. In 2000, 15% of union jobs were in manufacturing. By 2020, that figure had dipped to 8.5%, according to the Bureau of Labor Statistics.

Unionization rates for government jobs have held relatively steady over the last two decades, with about 37% of the public sector unionized today. Private sector unionization has fallen from 2000 to 2020, from 9% to 6%. The educational services sector is a notable exception, growing from 12% unionization in 2000 to 14% in 2020.

Utilities, transportation, warehousing and telecommunications remain the most unionized industries, though union density in each has declined by over 5% since 2000 — and by almost 10% in telecommunications alone.

How unions grew

The “Unions and Inequality” authors identify two primary ways unions expanded before and during World War II and the Great Compression.

The first was the Wagner Act, which President Franklin Roosevelt signed in 1935 and which the Supreme Court upheld in 1937. The act, sponsored by New York Sen. Robert Wagner, established the National Labor Relations Board. It brought legal protection to private sector unionization and collective bargaining activities, with some unions turning their focus toward organizing unskilled workers after it became law.

Before the Wagner Act, most workers involved in industrial manufacturing were not in unions. Large companies sometimes used physical violence to break organizing campaigns. “Henry Ford, whose brutal private army was well known by his workers, set the tone for how to crush unions,” recounts University of Rhode Island labor historian Erik Loomis in his 2018 book, “A History of America in Ten Strikes.”

Governments at all levels also had historically sided with employers, “with military deployments and judicial repression commonplace,” the authors of the recent paper write in the appendix.

The second event that led to union expansion was Roosevelt establishing the National War Labor Board in January 1942, weeks after the U.S. entered World War II. The board seated 12 representatives drawn from private firms, unions and the public sector. It was tasked with settling labor disputes before they affected wartime production.

“The government was letting very large defense contracts for armaments and so on and requiring, as a condition of the contract, by executive order, that companies be open to unionization,” Farber says. “In places that had a lot of government contracts, there was a growth in unionization and inequality in those places at those times declined.”

The Wagner Act also protected recognition strikes, says Naidu. Over the five years after the act passed, strikes were successful in gaining union recognition 40% of the time, compared with about 20% during the seven years before the act, the authors find.

The Korean War provides an important check on their findings. A smaller conflict than World War II, the Korean War from 1950 to 1953 still required massive production of tanks, planes, ammunition and guns.

Difference was, firms that got government contracts during the Korean War didn’t have to allow unionization efforts. The authors find “no correlation between Korean War Defense spending and changes in state union density or inequality measures.”

The post Research sheds light on how labor unions reduced income inequality from WWII through the 1970s appeared first on The Journalist's Resource.

Whether Americans support lockdown measures meant to control the spread of the new coronavirus has to do with their personal political beliefs and trust in media, according to new survey results from economists at The University of Chicago Booth School of Business.

The team of economists — Marianne Bertrand, Guglielmo Briscese, Maddalena Grignani and Salma Nassar — has released selected results from the first and second surveys of a panel of 1,400 Americans representative of the U.S. population. The first survey was conducted April 6 to 11. The second survey was conducted April 13 to 18. The team plans to conduct more surveys with the same panel before the November elections.

Three-quarters of Democrats surveyed support keeping the lockdown in place for as long as needed, compared with 45% of Republicans. The 41% of people surveyed who lost income because of the pandemic were not more likely to support a quick reopening of the American economy.

“In other words, politics more than economics is dividing Americans when it comes to what is the right trade-off our government should make between saving lives and hurting the economy,” the authors write.

The team also found links between media trust and support for lockdown measures. More than one-third of Republicans think the media is exaggerating the threat of the new coronavirus, compared with 9% of Democrats. Among Republicans who don’t think the media is overplaying the coronavirus threat, less than 20% favor a quick reopening. But among Republicans who think the media is exaggerating, more than 40% support a quick reopening.

“Besides trust in the media, trust in the U.S. president is another important correlate of preferences for an earlier reopening of the economy,” the authors write. “Individuals who have low confidence in the president are much more likely to favor a longer lockdown.”

In coming weeks, the researchers will ask that same panel how the coronavirus is affecting their economic and mental well-being. From the start, the pandemic has taken an emotional toll on many Americans, “with low-income households being the most concerned about their job, income stability, and health-care coverage,” the authors write.

The percentage of American workers who lost income due to the pandemic was twice as high for households earning less than $30,000 per year compared with households earning more than $75,000 per year, according to the first survey. The researchers will release results from the third and fourth round of surveys later this month, and results from the fifth and sixth surveys in June.

I reached out to one of the researchers, Briscese, to talk about these findings and future directions for the team’s work. I spoke with him a few weeks ago about a working paper he wrote with another group of researchers showing how people’s expectations of lockdown timeframes in Italy affect their compliance with social distancing measures there.

Media coverage has broadly focused on the health crisis first and foremost, closely followed by the economic consequences of the pandemic — jobs lost, and when and how state economies should reopen. But the new survey results suggest many Americans see the pandemic not through the lens of health and economics, but through their political beliefs and opinion of the proper role of government.

“That is one thing I would hope journalists would pick up more on,” Briscese says. “We are debating a lot about health versus the economy, and what are the right solutions. [The general public] are not seeing it that way.”

The conversation that follows has been lightly edited for clarity.

—

Clark Merrefield: This is a panel survey. Can you explain what that means and the advantages of this type of survey?

Guglielmo Briscese: This is a longitudinal wave panel. We follow the same people over time. In multiple ways, this is different from cross-sectional surveys where you do it repeatedly and with the same frequency, but you have different people. The advantage of following the same people is it allows you to see if any change in any of the perceptions or preferences is caused by any specific factor. We have done four waves that were implemented on a weekly basis, so the first four weeks of April. And we will have one wave in May and one in June and then, ideally, one closer to the [presidential] election.

The big research question is whether this unprecedented global pandemic — this once-in-a-generation type of event — changes Americans or not. There are a lot of studies on what Americans think is the right thing to do. Some early articles, some opinion columns, started at the beginning talking about the pandemic as a global equalizer to change people’s views on certain issues, like universal health care or job stability or the importance of having a more globalized, connected world. The question is, is the pandemic going to be an equalizer or will it exacerbate preexisting differences and frictions — or is it going to be the same? There is the scenario where no matter what huge event occurs, things just don’t change.

We are hoping to answer this question at the end of this big project. We’re curious which of these three scenarios America is going to face. If we do see any change, we are hoping to unpack the mechanisms that led to those changes. Is it because someone close to you got infected or died from the virus? Is anyone close to you an essential worker? Have you suffered an income loss? In what ways is this pandemic impacting your own life — and whether that changes your views.

CM: The research team you’re on recently posted selected results from the first two waves. What were you exploring in the first wave, and was there anything that surprised you?

GB: The purpose of the first wave was to collect baseline data. We wanted to have a snapshot of these 1,000-plus people we are going to become best friends with over the next few months. We wanted to know who are they, what do they think, what challenges they’re facing now. So the purpose of the first wave was this snapshot of this representative sample of Americans at this specific point in time, which is the beginning of the pandemic.

We saw at that early stage that it had already hit Americans disproportionately. A lot of scholars and economists have talked about this, how inequality in the U.S. is an issue from a factual point of view and also from a perceived inequality point of view. In this survey, we see quite clearly if you are low-income in the first week of the pandemic, you were much more likely to be economically impacted by the pandemic. People earning under $15,000 per year were twice as likely to incur financial losses from the pandemic. That shift is already telling the story that the pandemic is exacerbating preexisting inequalities. So, if you don’t have savings for rainy days, this pandemic was already hitting you pretty hard.

The other interesting thing is that this is not just about inequality of the economic impact, but also emotional well-being. Lower-income Americans are more worried about losing their jobs, and affording a mortgage, and more worried about not being able to afford health care. That is probably quite unique to the American context. We saw lots of newspaper articles and blog posts about how [the pandemic] was going to have disproportionate impact on poorer Americans. So, the first wave of the longitudinal survey allowed us to see that and quantify that.

CM: One thing I thought was interesting from the first survey wave was that even among the 20% or so of participants who disapproved of a national coordinated response to the pandemic, there was a clear partisan divide about why they disapproved. New York Gov. Andrew Cuomo in April suggested other states send ventilators to his state, and he would reciprocate as the virus spread west — essentially advocating for a “centralized resource allocation model,” as you and your co-authors put it. Your team found that Democrats were more likely to disapprove of such a model because they don’t trust the federal government. Republicans were more likely to disapprove because they don’t trust other state governments.  

GB: This is something we wanted to look at for the first wave — again, is America becoming more connected, more centralized, or not? Is it better to have a centralized approach to the pandemic or not? And what does it mean to have a centralized system? France has the most centralized system. They have hospitals almost entirely governed by their federal government. In the U.S., by contrast, you have states and even cities that manage that.

And Cuomo said, “We don’t have enough ventilators and staff. There are a bunch of states out there in the U.S. not being affected. Send us your ventilators. Let us save lives. And once we sort it out, we’ll send them back to you.” We thought that was interesting because this is very different from the health care system in the U.S. So we asked Americans if they would support something like that. Would you be in favor of your state lending ventilators to a state in need? Then, would you be willing to take on patients from other states? We found a large amount of Americans would be in support of that.

We wanted to see what is driving these 18% to 20% of people who are quite against such a policy. What we found was that institutional trust plays a large role. The Democrats don’t trust that a centralized system will work because they don’t trust the federal government. And Republicans don’t trust other state governments. This is an interesting case where trust in institutions and politics can change. We are starting to unpack where there is a mismatch between your own political views and your governor’s policy. The thing to keep in mind is most Americans were in favor of these policies, which are more similar to a European system.

CM: What did you find in the second wave?

GB: The thing that led us to the second wave was the political divide. There is quite broad support for these lockdown measures. We are going to look back in a few years at these times as [being] crazy. We put democracy on pause and standby. We allowed a lot of our individual freedoms to be ceased. We decided to give up a little of our individual freedom for the greater good. This is what economists would call a “public good experiment.” We all sacrifice a little bit so we are all better off.

So what we see is that Americans are willing to accept these individual sacrifices. But we do see even though there is broad support, there is a political divide. Democrats are significantly more likely to support these policies compared with Republicans. Why is that? Is it because your political affiliation leads you to support a certain policy or another? But we found a good portion of the difference is driven by support of the president or support in [news] media. If you trust the media and you are a Republican, you are slightly more likely to support the lockdown. If you are Republican and trust the president, you are more likely to be against the lockdown. Trust in media is quite crucial.

CM: Infectious disease experts say contact tracing will be critical to returning to some sense of normalcy, in particular digital contact tracing like through a smartphone app. You controlled for age, income, political preference, education and trust in media and other institutions, and you still found differences by gender and race in support for such an app where people might have to share personal health information.

GB: These results came out of somewhat successful tracing efforts like in South Korea and Singapore, which have very different cultures and governments and sense of civic duty from the U.S. Countries like Australia have experimented with these applications, where they have a much higher trust in government. But in Italy, it’s been less successful. The reactions from the general public and press are less supportive. So in the U.S., the question is, how willing are you to reopen the economy as soon as possible? And based on that, how much of your individual freedom are you willing to give up to go back to your normal life?’

We see a clear political divide when it comes to Americans on whether the economy should open as soon as possible, or have these measures in place as long as needed. We thought that if you are in favor of opening the economy as soon as possible — even if you don’t believe the coronavirus is a hoax — you may be willing to trade going back to normalcy for an app. And we see that’s not the case. If you think the economy should reopen as soon as possible, you don’t want to compromise the way in which the government should reopen the economy. The political divide and trust in media play the most significant role, and that is after controlling for variables.

I wouldn’t read too much into the breakdown by gender and race differences, since we are dealing with a small sample. But the politics and trust in media are consistently the most significant variables.

CM: What questions or angles do you want journalists to take away from the research findings so far?

GB: One thing I’ve been thinking about is that I would think conversations should be about the economy and health. First of all, we should address the health emergency. And then, after that, let’s debate about the economy. What’s the recovery plan? What’s the right level of unemployment benefits?  All these are questions economists can talk about and disagree [on]. And the way we tackle the health emergency management is something that health economists and virologists and epidemiologists can argue about. That’s what we read in the news. These experts say one thing and other experts say another thing.

But it seems most people don’t see the pandemic through those lenses. It’s really about who do you vote for and what media do you consume and do you trust the media? Almost everyone will know a person who has been impacted somehow by the crisis. You know someone who died or recovered. The more people are infected, the closer the pandemic gets, and yet people don’t change their views.

We are seeing even though Italians, just like Americans, are quite compliant with these measures, the level of compliance is dependent on communications. Whether the government communicates [stay-at-home] end dates in an effective way — if I set a clear deadline and you expect them to be lifted and then I take you by surprise [and extend the deadline], people drop their willingness to comply. If you think something is wrong just because of politics, it doesn’t matter whether people are dying — you are going to stick to what you believe and ignore all other evidence. That is one thing I would hope journalists would pick up more on. We are debating a lot about health versus the economy, and what are the right solutions. [The general public] are not seeing it that way. It really seems politics and [personal views on] the role of government are crucial.

Another question that will be interesting to unpack is, where do beliefs come from? Do I follow [television host Sean] Hannity on Fox News because he is confirming my existing beliefs, or is he shifting my views on the world? What’s the cause and effect there? Am I going to believe what the president says no matter what because I think he’s right? Or, if [Donald] Trump changed his communication strategy and took a completely different approach, would he be betrayed by his hardcore supporters? Would he have the power to change their minds and views? Ultimately, that’s democracy. If you think people have strong beliefs that can’t be changed, there will always be an incentive for a politician to exploit those views and become the spokesperson and representative for those views. But if these views can be changed, then the media plays a much bigger role.

A [working paper] by [University of Chicago economics professor Leonardo Bursztyn] looks at people who watch Hannity and those who watch [television host] Tucker Carlson on Fox News. I wasn’t involved in that research. But, basically, he is saying that Tucker Carlson from the beginning warned Americans that the virus was real and they had to be careful. Whereas Hannity said at the beginning that it was a hoax and fake news and Americans should go about their lives as usual. Then he changed over time. What these researchers show is those who watch Hannity more than Carlson died at a higher rate.

CM: How many more survey waves will there be and when are they coming out?

GB: We have now completed four waves. We will release some results from waves three and four later in May. Most likely, our next blog post will focus on gender. One thing we started to see is that gender is also a great source of division on how the pandemic is affecting people, and child care responsibilities are playing a big role. Women who have child care responsibilities are struggling more now. And we are seeing, potentially, if there is a non-coordinated reopening of the economy — like in Italy, where the economy opened but schools didn’t — that could have a disproportionate impact on employment status of women. Chances are, women are going to have to either change jobs or reduce their working hours and reduce salaries and find other solutions. That is quite interesting because, again, the way in which countries choose to reopen their economies will have consequences for years to come. Once you have addressed the health emergency, the way in which you reopen the economy is going to have consequences that last for a long time.

Wave four is going to be about whether anything changed in Americans’ views of the country over the first month of the pandemic. This will be the first stress test of our hypothesis research question. If things have changed, was one month all it took? If not, why have things not changed? Is the pandemic just reinforcing prior beliefs, or is it changing Americans? Are they more likely to support universal basic income, or universal health care and converge on trust in the government?

And then wave five will be in May and wave six will be in June. Sometime toward the end of the summer, we are hoping to unpack more. If things have changed, why have they changed? Was it because the pandemic touched you closely somehow? Or, again, it could be that nothing changed at all.

Check out our coronavirus-related resources, including tips on covering biomedical research preprints and why journalists shouldn’t use the term “patient zero” in their coverage.

We’ve also pulled together research on topics such as consumer spending in the wake of the pandemic and how public health messaging might explain why the coronavirus appears to have a disparate impact on racial and ethnic minorities.

The post Americans view the coronavirus pandemic through a lens of media trust and politics appeared first on The Journalist's Resource.

The gap between economic theory and practice is sometimes cavernous. According to one theory, developed financial markets and access to lenders should make it easier for people to borrow money, become entrepreneurs and move to higher income brackets. But new research in the Journal of Policy Modeling finds that, in practice in the U.S., income inequality increases as financial markets develop.

“We find that financial development positively affects income inequality,” the authors write. “A linear relationship exists in 50 U.S. states between financial development and income inequality.”

Many studies that look at the consequences of financial development compare data across countries. But cultural and political differences that are difficult to measure can sometimes skew results. By looking across states within the U.S., those differences may be minimized, explains Stephen Miller, director of the Center for Business and Economic Research at the University of Nevada, Las Vegas and one of the paper’s authors.

As a proxy for financial development, the authors use a ratio of per-capita stock market wealth to per-capita personal income, neither adjusted for inflation. Stock market wealth refers to household financial wealth measured through assets like corporate stocks, pension fund reserves and mutual funds. The ratio is “a proxy trying to capture” some measure of access to capital, Miller says.

To measure income inequality, they look at three measures — the Gini coefficient, a widely used measure of household inequality, and the share of the population in the top 10% and top 1% of income. The data cross five decades, from 1976 to 2011.

Inverting Kuznets

Again, the relationship between financial development and income inequality that the authors find is linear. Visually, the relationship resembles a line. Plotting the data for all 50 states would produce a graph that looks something like this:

It’s important to note that the authors of this paper are looking at decades-long trends within a specific time frame in an advanced economy. The linear relationship they find runs counter to the Kuznets curve, which is based on a longstanding hypothesis that economist Simon Kuznets developed more than half a century ago.

The Kuznets curve is an inverted U-shape that demonstrates Kuznets’ hypothesis on the relationship between economic growth and income inequality. It shows how income inequality changes as economies move from agrarian, to industrial, to post-industrial. It looks something like this:

Kuznets speculated that as economic markets develop, inequality rises but later falls. That’s because in less-developed economies, fewer people have initial access to capital. Most people might be farmers, for example, and not live near cities where finance is developing. But as an economy industrializes, more people gain access to capital to start businesses. Wages rise and inequality decreases.

“The early stages of development and growth lead to inequality but the economy, when it continues to grow, eventually drives down inequality,” Miller says, explaining the Kuznets curve. “So the idea is: don’t be concerned with inequality, it’s necessary to start the growth process. But, eventually, it will turn around and have some correction.”

A different relationship between financial development and inequality emerged when the authors drilled down and split the country into states with above-average income inequality and those with below-average inequality. The Kuznets curve showed up for states with below-average inequality. But states with above-average inequality had a U-shaped curve. Income inequality decreased as financial markets developed, then increased as those markets matured. For above-average states, the curve looks something like this:

It matters where states start from

These different relationships might have to do with extensive and intensive margins, according to the authors. Extensive margins relate to whether poor people have access to or use financial markets. They describe the extent to which people have access to capital — a measure of quantity. Intensive margins focus on the behavior of wealthy people who already use financial products. They describe the intensity with which people use financial markets — a measure of degree. The authors explain that, “the benefits of improving the quality of the financial system may disproportionately benefit the wealthy, which tends to increase income inequality.”

For states starting with below-average inequality — states with a relatively small gap between the highest and lowest earners — the wealthy tend to initially benefit from a growing and improved financial market. The poor see benefits later. That’s the Kuznets curve.

But the poor generally seem to benefit from financial development right off the bat in states with above-average inequality, this new research finds. In the long run, however, the wealthy benefit more from ongoing improvements to the financial system. Though the authors don’t analyze outliers, a small number of anomalies among above-average states — for example, a handful that have especially wide income inequality gaps — might explain why this group flips the Kuznets curve, Miller says.

“That’s pure speculation on my part,” he adds.

States may aim to reduce income inequality by helping the poor gain access to financial markets. Whether a state starts out more or less equal could make a difference as to whether that access helps close income inequality gaps.

“Whether such policies actually reduce or increase inequality depends on the individual characteristics that determine whether a state experiences above or below average inequality in the first place,” the authors write. “Our results suggest that such policies more likely achieve the expected outcomes in below-average inequality states.

The post Want to reduce income inequality through access to startup capital? Results may vary appeared first on The Journalist's Resource.

To paraphrase toothpaste advertising, it might be said that 9 out of 10 economists agree: putting a price on carbon dioxide emissions can help bring those emissions down. Using economics to curb climate change is an idea that’s been kicking around for a while.

“The central question for economists, climatologists and other scientists remains: How costly are the projected changes in — or uncertainties about — the climate likely to be, and, therefore, to what level of control should we aspire?” Yale University economist and 2018 Nobel laureate William Nordhaus wrote in 1976.

Forty-some-odd years later, government and academic analyses have provided a solid sense of the costs of climate change. But how the price of carbon is set, and who sets it, are hardly settled.

How carbon taxes and cap-and-trade work

Carbon taxes and cap-and-trade are the two big ideas U.S. economists have come up with to address climate change. Carbon taxes put an initial financial burden on entities that pollute. Governments set the price of pollution while markets determine the amount of pollution — companies can pollute and pay the tax or reduce emissions to avoid the tax. There are carbon taxes in other countries but not in the U.S. In practice, the tax burden might be passed along to consumers. If a refinery that produces heating oil pays a tax for emitting carbon, customers might end up paying higher home heating oil prices. To some economists, this is not a bug but a feature: higher prices would lower demand for carbon-intensive fuels.

Cap-and-trade policy puts a cap on overall amounts of pollution. Governments set the amount of allowable pollution, markets set the price. The idea is the emissions cap is divided into credits and those credits are distributed across companies that pollute. Companies that pollute under the cap can sell credits to entities that pollute more. Part of the appeal is that as the cap lowers over time, so does the number of credits, incentivizing companies to pollute less.

So far, the U.S. has gone with cap-and-trade strategies over carbon taxes. The strategies go by different names, but in practice they may not be that dissimilar — the devil, as always, is in the details.

“Although there is a lot of discussion about carbon taxes versus cap-and-trade, depending on how a carbon tax is designed, it can become very close to cap-and-trade,” says Harvard University economist Robert Stavins. “It’s really a continuous spectrum of carbon pricing — from one extreme of a pure carbon tax to a pure cap-and-trade system with all these hybrid approaches in the middle. That’s why I think it’s the design of the system that is most important.”

Welcome to Econ 101

Stavins assesses the state of the practice in a recent National Bureau of Economic Research working paper. He writes that economists have reached consensus that pricing systems such as carbon taxes and cap-and-trade will be key to reducing carbon dioxide emissions: “There is widespread agreement among economists — and a diverse set of other policy analysts — that at least in the long run, an economywide carbon pricing system will be an essential element of any national policy that can achieve meaningful reductions of [carbon dioxide] emissions cost-effectively in the United States.”

There are other economic levers that can be pushed or pulled — subsidies for clean fuel and energy-efficient cars, for example, or technology standards on machines that burn fossil fuels. But economists generally agree that carbon taxes and cap-and-trade offer the best bang for the buck.

“We know that if you raise the prices of something, people consume less of it,” says Tufts University economist Gilbert Metcalf. “It’s an Economics 101 principle that the demand curve slopes down. Raise the price of gasoline, people buy less of it. Raise it enough and they stop buying Hummers and start buying Priuses. So the economics is pretty clear, either cap-and-trade or a carbon tax can really blunt emissions.”

From national to regional cap-and-trade

The U.S. Environmental Protection Agency’s Acid Rain Program in 1995 became the first national cap-and-trade effort. It seeks to reduce airborne sulfur dioxide and nitrogen oxides coming from power plants. Acid rain happens when those pollutants get into the atmosphere, then fall to the ground via moisture like rain or snow, contaminating waterways and crops. Acid deposits have decreased 30% across the Midwest and Northeast and the program saves 20,000 to 50,000 lives each year, according to the EPA.

Another national cap-and-trade program was the NOx Budget Trading Program, which operated during the 2000s and sought to reduce nitrogen oxides from power plants during the summer. The program prevented nearly 2,000 summertime deaths each year in participating states, most of them along the east coast, according to a 2017 analysis in the American Economic Review. But an economywide cap-and-trade program bought the farm in 2010, in part because opponents rebranded it “cap-and-tax,” making the idea politically unpalatable. No national cap-and-trade program has come close to passing Congress in the decade since.

“In Washington circles, a lot of people think carbon taxes are going to be much more politically feasible,” Stavins says. “We have a number of carbon tax proposals, some within the Congress and some from outside the government, and a lot of people think those will be more successful than cap-and-trade. My view is, if it was possible to demonize cap-and-trade as a tax, it is highly likely that it will be possible to demonize a carbon tax as a tax.”

States have since taken up the cap-and-trade baton. The Regional Greenhouse Gas Initiative covers nine New England and Mid-Atlantic states and set its first carbon cap for the power sector in 2009. Greenhouse gases have fallen 40% in those states, and they’re aiming for another 30% reduction by 2030. The initiative has raised $2.7 billion, which has gone back into renewable energy and to help low-income people pay their energy bills.

Power plants in participating states generate about 112,000 megawatts less each month than states that don’t participate, and they emit 286 fewer tons of sulfur dioxide and 131 fewer tons of nitrogen oxides per month, according to a recent paper in Energy Economics. However, that analysis finds the initiative had a causal effect only on reductions of sulfur dioxide emissions, not nitrogen oxides. This could be because power plants emit much more sulfur dioxide than nitrogen oxides — more data makes it easier to pinpoint causation, explains one of the authors, University of Massachusetts Amherst economist Nathan Chan.

The authors looked at daily data on megawatts produced from power plants in the continental U.S. — 300,000 observations in total — from 2002 to 2016. The initiative has so far achieved its main goal of reducing power plant emissions in participating states, according to the paper. Facilities in participating states saw 20% greater carbon reductions, on average, than facilities in states that don’t participate.

Participating states also reduced overall electricity generation, in particular from coal plants. Some environmental benefits were offset by increased natural gas energy production in neighboring states, like Pennsylvania and Ohio. This concept is called leakage, and it works like this: the cost of carbon credits can lead an energy producer in a cap-and-trade state to raise prices. A competitor just over the state border might sell energy for cheaper, or an energy producer might move out of a cap-and-trade state. Because air pollution doesn’t respect state boundaries, environmental benefits can take a hit if customers buy carbon-intensive energy from plants that don’t have to abide by emissions caps. As far as the Regional Greenhouse Gas Initiative is concerned, that offset appears to be less severe than previously estimated.

“Leakage effects aren’t as pronounced as people might have thought,” Chan says. “There were simulations before that suggested leakage might be as much as 100% so every reduction in carbon in the region would be completely offset. We’re showing that’s not as much of an issue.”

East coast climate change strides aside, it’s the west coast, where the world’s fifth largest economy hugs the Pacific Ocean, that can claim the longest running statewide cap-and-trade program in the U.S.

California, here we come

California’s cap-and-trade program began in 2006 and the legislature extended it in 2017. It has an emissions cap affecting 80% of greenhouse gases coming from about 450 of the state’s biggest polluters. The way the program works is a little inside baseball, but a big part of it is that companies buy something called allowances at state auction. Allowances let companies emit pollutants, and companies can also buy pollution credits from entities that reduce greenhouse gases or store carbon. California takes revenue from those auctions and reinvests the money into climate-friendly programs.

The program “has demonstrated the feasibility and effectiveness of an economy-wide approach, compared with sectoral systems,” write economists Richard Schmalensee of the Massachusetts Institute of Technology and Stavins of Harvard in the Oxford Review of Economic Policy. California reports it is on track to beat its initial target of reducing greenhouse gas emissions to 1990 levels by 2020, and is now aiming for emissions levels 40% under 1990 levels by 2030. Schmalensee and Stavins note in their paper that cap-and-trade alone is not enough to address climate change:

“While there has been a significant amount of experience over the past 30 years with the use of cap-and-trade instruments for environmental protection in the United States and Europe, market-based instruments have not replaced nor come close to replacing conventional approaches,” like governments setting uniform, economywide emissions limits.

Some experts also caution that the People’s Republic of California, as the state is sometimes jokingly called, is markedly dissimilar from most states. California has a strong, mostly popular, single-party majority in its legislature, so it’s an easier political lift to experiment with market-based emissions reduction programs. Its utilities are largely on board with addressing climate change, even through regulation. So the state doesn’t rely much on coal to produce energy, while many other states do.

“Because California is a unique case in several respects, it is unlikely that other states in the U.S. will be able to adopt similar systems,” Guri Bang, research director at the Center for International Climate Research in Oslo, and her co-authors write in a 2017 article in Global Environmental Politics.

Then there is the free-rider problem, which extends well beyond California. There is, right now, no prospect of an enforceable, international cap-and-trade system that could put a meaningful dent in global carbon emissions. There are too many hurdles to mention, but one of them is that countries would probably want higher emissions caps for themselves, but lower emissions caps for the rest of the world, as the late Harvard economist Martin Weitzman explained in a June 2019 article in Environmental and Resource Economics. In other words, countries want to reap the benefits of carbon reduction without paying the price.

“Overcoming the free-rider problem in carbon emissions is central to a successful comprehensive international climate-change agreement,” Weitzman writes.

Carbon taxes: who pays more?

In the U.S. there is no federal, or state-level — or any-level — carbon tax. Still, a national carbon tax is popular among some economists. About 3,500 economists from across the political spectrum, including 27 Nobel laureates, are in favor of a carbon tax plan that would give dividends directly to Americans.

A carbon tax dividend is what some economists might call a second-best design, according to Stavins. But sometimes the policy that’s second-best to economists is first-best to lawmakers.

“The first-best design of a carbon tax from an economic perspective is revenue neutral, that takes that revenue to cut distortionary taxes on labor and investment,” Stavins says. “But there’s very little interest in doing that despite the fact that academic economists love the idea. Policy proposals now are to send checks to each and every family in the country. That’s actually going to be a more costly policy, but it’s probably vastly more politically feasible.”

Discussions about political feasibility also sometimes center on whether a national carbon tax would be regressive or progressive. A regressive tax puts a higher financial burden on lower-income households while a progressive tax puts more burden on higher-income households. From a purely dollars-and-cents perspective, a carbon tax would be regressive. For example, lower-income households spend relatively more of their income on vehicle fuel. If gasoline refineries have to pay a carbon tax, the price of fuel may go up. That price hike hits lower-income households harder.

Here’s how Robert Bryce, senior fellow at the Manhattan Institute think tank, which advocates for free-market policies, laid out the regressivity argument earlier this year in the National Review:

The regressive effects are well known. Even if, as many proponents suggest, the proceeds of the tax were paid out to consumers on a quarterly basis rather than being used to fund the government, having to wait months to recover the extra money they’ve spent could cause financial stress for poor and working-class families.

A 2012 study by scholars from the Brookings Institution and American Enterprise Institute found that the carbon-tax burden “would comprise 3.5 percent of the income of the poorest decile of households and only 0.6 percent of the income of the highest decile.”

The authors of that Brookings paper continue: “Results suggest that if policymakers direct about 11 percent of the tax revenue towards the poorest two deciles, for example through greater spending on social safety net programs than would otherwise occur, then on average those households would be no worse off after the carbon tax than they were before.”

Metcalf, the Tufts economist, makes a few other arguments in favor of carbon taxes being progressive in a June 2019 paper in Energy Policy. One point he makes is that a carbon tax on energy producers, like natural gas power plants, is going to lead to either lower profits for companies or lower wages for workers. Data suggest the financial burden would fall on companies, not workers, because of simple labor economics: “If you cut wages too much, you won’t get the workers you need,” he says.

Another point has to do with safety net transfer programs, like housing assistance or food stamps. The amount of money people get from such programs is tied to inflation. As the overall price of goods goes up, so do government payments. If a carbon tax were to raise the price of vehicle fuel across the country, those transfer programs targeted to help lower-income Americans would pay out more.

There’s also that question of what policymakers in the U.S. would do with carbon tax revenues.

“When people say, ‘Oh, a carbon tax is expensive because it’s going to raise the price of gasoline or electricity,’ I think what often gets ignored is that — wait a minute — that revenue is going to come back to people in one way or another,” Metcalf says. “And you really need to look at the balance. You can’t look at one side of the ledger without looking at the other side.”

A 2016 paper in Energy Policy analyzed real-world carbon tax and cap-and-trade programs and found that policymakers earmark 70% of revenues from cap-and-trade to climate-friendly efforts, while 72% of revenues from carbon tax systems — there are several in European and other countries — are refunded to people or put into government general funds.

“One thing we’ve been very focused on as a discipline is efficiency — can we reduce pollution at the lowest cost possible to society?” says Chan, the UMass Amherst economist. “That’s a noble goal, but one thing economists are starting to think more about is political economy. Citizens have been very worried about distributional, regressive concerns. The more journalists can do to help us communicate to the public, the better off we’ll be.”

Economic fallout from climate change will settle on the poor

Regardless of the economic levers that do or don’t get pulled, climate change right now is providing ample fuel to power economic inequality.

“Available evidence indicates that this relationship is characterized by a vicious cycle, whereby initial inequality causes the disadvantaged groups to suffer disproportionately from the adverse effects of climate change, resulting in greater subsequent inequality,” write economic affairs officers S. Nazrul Islam and John Winkel in a 2017 United Nations working paper.

The congressionally mandated Fourth National Climate Assessment from the U.S. Global Change Research Program doesn’t assign likelihoods to its scenarios projecting rates of global warming. Yet even under the most generous scenario, where the amount of atmospheric carbon remains relatively low by 2100, the average global temperature could increase as much as — but will likely stay below — 3.6 degrees Fahrenheit. Under the worst-case scenario, where fossil fuel emissions continue to increase, the global temperature could be nearly 10 degrees Fahrenheit higher, on average, in 2100 than the 1986-to-2005 average. Hot spots around the globe have already breached the best-case temperature increase, a recent Washington Post investigation finds.

Climate change could cost the U.S. economy many billions of dollars. Some academics have argued that there is already a kind of carbon tax — in the sense that some parts of the U.S. are experiencing substantial economic losses from climate change, like from more severe storms that lead to billions of dollars in property damage. One landmark 2017 paper in Science projects that for every 1.8 degree Fahrenheit average temperature increase in the U.S., gross domestic product will fall by 1.2% — an amount equal to about $233 billion at today’s GDP of $19.4 trillion. Poorer Americans would be disproportionately impacted. By the end of this century, the poorest third of counties in the U.S. are likely to see between 2% and 20% less income “under business-as-usual emissions,” according to the paper.

The California cap-and-trade program may also be distributing benefits unequally. Companies that emit greenhouse gases there tend to be located in areas where more people live in poverty, but the program hasn’t led to environmental benefits in those neighborhoods, according to a recent analysis in PLOS Medicine. Greenhouse gas emissions in neighborhoods near polluters actually increased from 2013 to 2015, compared with 2011 to 2012, the authors find. They peg overall greenhouse gas reductions to the state importing less electricity from coal-fired plants. Emissions reductions also vary widely by industry, the authors find. Seventy percent of certain power plants reduced emissions over the period studied, while 75% of cement plants increased emissions. A glut of allowances on the market may keep local, lower-income California communities from enjoying the environmental benefits of cap-and-trade.

“There was a larger aggregate decrease in local [greenhouse gas] emissions in 2015 compared to prior years, suggesting that greater reductions may be achieved going forward as the cap is lowered further,” write San Francisco State University assistant professor Lara Cushing and her co-authors. “However, banking of excess allowances from early years of the program and the substantial use of offset credits suggest that there may continue to be little reduction in in-state emissions.”

Environmental lawyer Alice Kaswan at the University of San Francisco School of Law similarly concludes that California’s cap-and-trade program has provided minimal benefits to lower-income communities near power plants, in a recent article in Natural Resources & Environment:

The data suggest that, although the state has reduced [greenhouse gas] emissions overall, there have been fewer reductions in the industrial sector and, consequently, fewer reductions (and co-pollutant reductions) in communities near industrial sources.

The result is not surprising. Because numerous state programs are designed to drive down emissions in the transportation and electricity sectors, those sectors are unlikely to have strong demand for emissions allowances or offsets. That means that ample, and inexpensive, allowances are available for industry, potentially leading industry to purchase allowances to maintain or, to the extent consistent with existing permits, increase emissions.

By the dawn of the next century, the things the U.S. produces might look much different from the things the nation produces today. Unexpected industries might dominate the economic mix. The future, in short, can be difficult to predict. But there’s one element of the research that appears almost certain to come to pass: the economic consequences of climate change will be felt unequally.

“It is unlikely that future research will overturn the fundamental finding that it is the poor who will suffer most from climate change and reducing poverty should be a key priority for policies aimed at alleviating the impact of climate change,” writes University of Sussex economics professor Richard Tol in a 2018 article in the Review of Environmental Economics and Policy.

The post Carbon taxes + cap and trade = Tackling climate change like an economist appeared first on The Journalist's Resource.

Individual perception — for example, how people feel they are doing financially compared with others — often doesn’t jibe with reality.

Economic mobility is one area where beliefs solidify absent information. Research shows that Americans are chronically under-informed about the size of the economic inequality gap in the U.S. That leads people to think they are more economically mobile than they really might be. And misperception can impact policy.

“If we believe there is less inequality than there is, then how we allocate resources is determined by that,” says Shai Davidai, an assistant professor at Columbia Business School and a psychologist who studies economic inequality. “We say, ‘Why should we put a lot of money into promoting underprivileged groups?’”

Research on perceptions of economic mobility show a clear narrative: we still believe that through hard work we can improve our economic station, but we have a hard time understanding that the massive economic gap between the wealthiest and the poorest makes that American Dream truly just a dream for many.

Here are five recent studies that explore what we think when we think about economic mobility:

Intergenerational Mobility and Preferences for Redistribution
Alesina, Alberto; Stantcheva, Stefanie; Teso, Edoardo. American Economic Review, February 2018.

When it comes to moving up the economic ladder, American optimism runs high in the face of reality.

“We show that, paradoxically, optimism is particularly high in U.S. states where actual mobility is particularly low,” Alesina, Stantcheva and Teso write.

The authors describe economic status in quintiles — as they put it, imagine 500 families divided into fifths. There’s the richest 100 families, the second-richest 100, the middle 100, the second-poorest 100 and the poorest 100 families.

They analyze survey data for France, Italy, Sweden, the United Kingdom and the U.S. to examine perceptions of mobility compared to actual intergenerational mobility — whether children move to a higher quintile than their parents. They also look at the link between perceived mobility and policies aimed at redistributing wealth. Here are the survey sample sizes for each geographic region:

• United States: 4,705 adult participants
• United Kingdom and France, each: 2,148
• Italy: 2,143
• Sweden: 1,494

The surveys included roughly equal numbers of women and men across age and income groups. The authors asked about participants’ socioeconomic backgrounds and how they have moved along the economic ladder compared with their parents. They also asked whether participants think their country’s economic system is fair or unfair, and if they think people in the bottom wealth quintiles are likely to move up. Finally, they asked how involved the government should be in redistributing wealth.

Participants on the political left were more pessimistic than those on the right about economic mobility, while women, parents, lower-income respondents, and those without a college education were more likely to be optimistic. African Americans were also were more likely to be optimistic.

The authors explain the optimism expressed by African Americans, who comprise a “small share” of the total sample, may be due to something called system justification, “an idea supported by a large body of evidence from the social psychology literature.” The system justification explanation goes like this: “particularly bad social and economic situations tend to be self-justified by respondents to avoid cognitive dissonance and to lend some legitimacy to the suffering caused,” the authors write.

People tend to take too much credit for their own success and blame failure on outside forces, according to psychology literature the authors cite. Along those lines, the authors find that college-educated people tend to “believe more in the role of effort for improving the chances of moving out of the bottom quintile.”

U.S. respondents favor less government intervention to spread the wealth than do Europeans in the study. About 32% of respondents from the U.S. think it’s better to lower taxes on wealthy people and corporations to spur economic growth than to raise taxes on the wealthy to expand anti-poverty programs. The percentage was higher in France and Italy, the authors report. They suggest this finding may be because the U.S. already has low tax rates for corporations and high-wealth people, lower than France and Italy.

Overall, Europeans take a dimmer view of their economic prospects than Americans.

“Europeans are not only more pessimistic than Americans, but they are also too pessimistic relative to the true degree of mobility and have particularly gloomy views about the probability of a child born poor remaining stuck in the bottom quintile,” the authors write.

Why Do Americans Believe in Economic Mobility? Economic Inequality, External Attributions of Wealth and Poverty, and the Belief in Economic Mobility
Davidai, Shai. Journal of Experimental Social Psychology, November 2018.

Across five studies with more than 3,000 participants, Davidai explores why Americans believe that through hard work and determination they can move up the economic ladder even though, as he writes, “economic inequality in the United States has been consistently rising” since the 1970s.

“Americans, I argue, believe in economic mobility because they underestimate inequality but, at the same time, believe that inequality and mobility are negatively linked,” Davidai writes.

To test that hypothesis, Davidai recruited U.S. adults with a range of incomes from Amazon’s Mechanical Turk. Survey-takers believed that as economic inequality in the U.S. rises, economic mobility gets tougher. The catch is that respondents often didn’t know how big the inequality gap really is. When inequality is high, people blame things outside of their control, like random luck and politics, Davidai found. When inequality is lower, people tend to take credit for their success.

While participants were generally aware of inequality, this research finds they overestimate opportunities for economic mobility because they underestimate the true extent of economic inequality. Education about inequality can help realign expectations with reality, Davidai suggests. But knowledge — people understanding the true size of the  inequality gap — could also have consequences.

“There is another important question: is it bad that people have misperceptions?” Davidai says. “There is something about misperceiving economic mobility that may benefit people. There is some research suggesting if you believe in mobility and work harder in school you can achieve better outcomes. On the one hand, that’s the benefit. But the drawback would be if you believe in mobility and work hard and don’t succeed, what would be the repercussions? It’s a double-edged sword.”

(Mis)perceptions of Inequality
Hauser, Oliver; Norton, Michael. Current Opinion in Psychology, December 2017.

In this literature review, the authors lay out the current academic understanding of how people perceive economic inequality. Bottom line: people have a hard time estimating inequality gaps, and that’s not only true of Americans.

“The misperception of how wealth in the United States is distributed is not only prevalent among adults, but it is even more pronounced among adolescents,” Hauser and Norton write. “Likewise, despite the fact that Australia has a more equal distribution of wealth than the United States, respondents in Australia also underestimate current levels of wealth inequality in their country, suggesting that misperceptions of wealth inequality also exist outside the United States.”

When Americans learn the true extent of inequality in the U.S. they don’t much change their views on policies that would redistribute income from the rich to the poor, except when it comes to the estate tax, according to the authors, citing a 2015 study in the American Economic Review. When respondents learned how few people pay the estate tax, support for it doubled.

Inequality that is visceral and in your face — think of a town with a rich neighborhood close to a poor neighborhood, or walking through first class on your way to coach — can shape people’s overall perceptions of equality, the authors explain. The next paper deals with this exact phenomenon.

Who Sees an Hourglass? Assessing Citizens’ Perception of Local Economic Inequality
Newman, Benjamin; Shah, Sono; Lauterbach, Erinn. Research & Politics, August 2018.

Economists in the early 1980s theorized that as inequality in the U.S. increased, people from the lower and middle economic classes would demand policies to redistribute wealth. But that theory made an assumption that hasn’t borne out: that people would have accurate perceptions of national economic inequality.

What has happened, in fact, is that “Americans largely offer inaccurate estimates of macroeconomic statistics such as inflation, unemployment, and the median income,” Newman, Shah and Lauterbach write.

To explore perceptions of economic mobility at the local level — given yet more research showing citizens are not good at estimating economic inequality in their country — the authors analyzed 1,000 responses from the 2016 Cooperative Congressional Election Study, a national survey that a team of researchers from Harvard University, Tufts University and the market research company YouGov conduct during federal election years.

The 2016 survey included this salient question:

“To the best of your knowledge, how much economic inequality (that is, the size of the gap between the rich and the poor) would you say there is in your local area?”

As actual inequality within counties went up, so too did the probability that people would recognize their localities as having higher levels of inequality, the authors find.

“Importantly, while citizens evince awareness of local inequality, our findings — as well as those reported by [researchers] Minkoff and Lyons and Solt et al. — indicate that they do not translate local conditions into perceptions of economic conditions in the nation as a whole,” the authors write.

Trust in Government and the American Public’s Responsiveness to Rising Inequality
Macdonald, David. Political Research Quarterly, July 2019.

Inequality is rising but there is scant support for new policies to redistribute wealth, even among lower-income Americans, Macdonald writes. The reason for these two seemingly at-odds facts, he argues, has to do with trust.

Trust is about perception. And there is a perception, according to Macdonald, that the government can’t be trusted: “people have low trust in the actor most responsible for enacting redistributive policies — the federal government.”

To explore the relationship between public trust and wealth redistribution, Macdonald analyzed information on state-level income inequality from the IRS and from American National Election Studies survey data collected from 1984 to 2016. ANES conducts national surveys every presidential election year to capture public sentiment on a range of issues, including trust in government. When the public trusts the federal government more, they tend to favor redistributive policies as inequality rises, Macdonald finds.

“If trust returned near its mean level in 1964 (pre-Vietnam and pre-Watergate), the public would respond to higher inequality by demanding more redistribution, pressuring government to alleviate economic inequities,” he writes. “The low levels of trust observed today, however, suggest that the mass public is unlikely to respond to higher inequality, via increased support for economic redistribution.”

“Perceptions of Reality”

Americans also have skewed perceptions of U.S.-China trade relations. Most economists agree that U.S.-China trade is a net good because both countries win, says Davidai. But, he says, people on both the political right and left tend to think of U.S.-China trade as a zero sum game — when one country wins, the other loses.

That, in turn, could lead Americans to vote for politicians who promise to pursue tough-on-China policies that cause both countries to lose out on trade benefits, Davidai says.

“What moves people is not reality but perceptions of reality,” he says. “Especially nowadays we see politics strafed with a lot of misperception. It’s not just the general public misperceiving reality, it’s policymakers too. I would want to see more work just polling people. What do you think happens in that meeting point between perception and reality? Journalism is a great place for that to happen. Journalists who have the facts are in a position to see what the layperson from the street believes.”

For more on the reality of the trade war, check out our roundup, “How consumers are footing the bill for the U.S.-China trade war.”

The post Perception versus reality: What Americans think about economic mobility appeared first on The Journalist's Resource.

Growing up in a country with wide income inequality is associated with being bullied during early adolescence, according to a new paper in JAMA Pediatrics from nine researchers representing universities around the world.

The authors analyzed survey responses from 874,203 kids aged 11 to 15 across 40 countries, mostly in Europe and North America. They found the strongest association between these experiences:

• Living from birth to 4 in areas with high income inequality.
• Being bullied at school.

Put another way, there is a link between early life inequality and being bullied at school later in life.

“Being a developmental psychologist, I’m interested in the early life effects — when does this [association] get under the skin?” says lead author Frank Elgar, a researcher at McGill University in Montreal. “Here, the most consequential exposure is infancy.”

What’s happening is unclear, but it’s happening before kids start going to school

The team from universities in Canada, Israel, the Netherlands, Poland and Ireland pooled data from 1994 to 2014 from the World Health Organization’s Health Behavior in School-Aged Children, a cross-national survey conducted every four years.

The data span time and geography, but the survey doesn’t intentionally re-survey the same children across years. It provides a snapshot every four years of key health indicators among children aged 11 to 15.

Some countries did not participate in every survey. The U.S. did not participate in 1994 and 2014.

“There were interruptions, [countries] dropped out due to financial reasons,” Elgar says.

Given the sheer number of survey participants, Elgar is confident in the association between early exposure to income inequality and being bullied later in life. But the strength of the association is unclear.

“The associations we found are consistent and reinforce the literature showing that income inequality is related to interpersonal violence and various measures of decreased social capital,” Elgar says.

Anti-bullying efforts at schools are important for reducing bullying, according to the authors, but these results indicate that schools can’t do everything. What’s happening at home also matters.

“That the effect is there before they reach school age suggests it’s not an outcome, not a product of school resources or programming,” Elgar says.

Walk, don’t run with these results

The number of survey participants is massive and the authors control for several variables — changes in inequality from birth to when bullying was captured, national per capita income, family socioeconomic position, and birth year — but they couldn’t control for everything.

“Kids in more unequal settings probably had a range of other factors that we can’t control for,” Elgar says.

The WHO data define bullying in broad strokes, with questions adapted from the 40-question Olweus Bully-Victim Questionnaire. Questions included:

• How often have you been bullied at school during the past couple of months?
• How often have you taken part in bullying other students during the past couple of months?

The authors did not associate early-life inequality and being a bully, a result they call “unexpected.” The reason may have to do with self-reporting. The questionnaire is better at capturing results about being bullied than bullying, according to the authors.

In other words, kids seem to be more forthcoming when they’re being bullied than when they’re doing the bullying. This work appears to be a jumping off point for further study — not a final word.

“Although the study found that income inequality is associated with later violence, more robust surveillance efforts and further research are needed to understand the psychosocial and physiological mechanisms that explain why children that grow up in more economically unequal settings are at greater risk,” the authors conclude.

Something for the journalists in the audience

The association is not between poverty and bullying, it’s between inequality and bullying. Elgar offers this for journalists to keep in mind:

“Usually when we think of poverty and inequality, we think about growing up poor. This is the effect of growing up in an unequal setting and it’s interesting to think it might change the course of a kid’s development.”

Check out some of our related coverage, including research comparing fear of bullying between college students of color and white students, and this research roundup on bullying and teen suicide.

The post Income inequality and bullying linked in new study appeared first on The Journalist's Resource.

Banks consider lots of factors when determining if a mortgage applicant is a good credit risk. Race can’t be one of them — but that wasn’t true before the Fair Housing Act became law in 1968.

Redlining as an official government practice began with a now-defunct government-sponsored agency that created residential security maps in the 1930s. The agency filled in red the neighborhoods it determined to be the most risky for home loan prospects. These were usually black neighborhoods. Or, white neighborhoods near black neighborhoods.

New insight from a National Bureau of Economic Research working paper suggests that even without federally sanctioned redlining, areas of major U.S. cities that shifted from white to black during the 1930s would have suffered economically. Many black families faced a double whammy of soaring rental prices and plunging home values as they moved from the American South to cities in the North and Midwest.

From 1930 to 1940, rental prices increased 40% in areas that went from white to majority black, relative to areas that stayed white, according to the paper. The authors surmise from historical accounts that white investors purchased rental properties in black neighborhoods and that some white homeowners moved but continued to rent their homes.

“Both considerations underscore the fact that in our setting the owners of rental properties were most likely white,” the authors write.

At the same time, home values fell by more than half in areas that went from white to majority black in cities that were major landing spots for black families during the prewar years, including Chicago, Philadelphia and Detroit — relative to areas that stayed white.

“In the Depression everyone’s home lost value, but our point is homes in neighborhoods that underwent racial transition lost way more,” says Allison Shertzer, associate professor of economics at the University of Pittsburgh, who co-authored the paper with Prottoy A. Akbar, Sijie Li and Randall P. Walsh.

Intergenerational impacts on wealth growth

Wealth equals assets minus liabilities. As a simple example, a family that owns a $100,000 home and has $10,000 in credit card debt has wealth totaling $90,000.

Median wealth for white families was $171,000 in 2016, the most recent year available from the Federal Reserve, compared with $17,600 for black families. The difference is $153,400.

In Boston, the median net worth for black families is $8 according to a 2015 study from the Federal Reserve Bank of Boston, Duke University and the New School — that’s not a typo.

Owning a home is a key way that Americans build wealth, including for low- and moderate-income households, and a generation of prewar black families saw their home values decline in major U.S cities.

“Housing is the most important asset for the vast majority of American households and a key driver of racial disparities in wealth,” the authors write. “These findings suggest that, because of the segregated housing market, black families faced dual barriers to wealth accumulation: they paid more in rent for similar housing while the homes they were able to purchase rapidly declined in value.”

A brief history of racist lending practices

After the turn of the 20^th century, millions of black families in the U.S. started moving from the South to cities in the North. The first Great Migration happened from 1910 to 1940. One motivator was the glut of decent-paying jobs to build new mass-produced things, like cars.

The federal government officially began sanctioning racist home lending practices in the late 1930s. By 1936 the Home Owners Loan Corporation had drawn up its residential security maps, which outlined neighborhoods the agency determined had risky home loan prospects.

Without access to credit, many black neighborhoods deteriorated.

“If I try to move to opportunity, in our context from working in sharecropping in Jim Crow south, I move to Chicago and I’m earning more money and I have a less terrible job but then I see these dynamics in the housing market,” Shertzer explains. “So if I try to improve my circumstances by moving to a better neighborhood I see this play out over and over again. Essentially if you’re black in early-to-mid-century U.S. you can’t move to opportunity without paying out increased wages in the housing market.”

Racial segregation was not a side effect but a feature of federal housing policy around this time. From the 1938 Federal Housing Administration Underwriting Manual:

“Areas surrounding a location are investigated to determine whether incompatible racial and social groups are present, for the purpose of making a prediction regarding the probability of the location being invaded by such groups.”

It would be another three decades before the U.S. outlawed redlining. Many redlined communities still struggle today.

Research methods

The authors used Census tabulations from 1930 and 1940 covering nine major cities and two boroughs in New York City: Baltimore, Boston, Brooklyn and Manhattan, Chicago, Cincinnati, Cleveland, Detroit, Philadelphia, Pittsburgh and St. Louis.

They call Baltimore, Cincinnati and St. Louis “border cities.” These cities are closer to the south and had large black populations by 1930. Boston, Brooklyn and Pittsburgh had fewer migrants during the first Great Migration, so they’re called “low-migration” cities. Chicago, Cleveland, Detroit, Manhattan and Philadelphia are called “high-migration” cities.

“You can do a real apples-to-apples comparison,” Shertzer says. “You can go look at the same house and it has white occupants [in 1930] and now [in 1940] it has black occupants.”

The authors built a dataset of 591,780 unique home addresses across 100,000 city blocks with an average of 10 to 15 addresses per block. They focused on blocks that changed from 95% white in 1930 to majority black by 1940.

“We are looking at city blocks, one section of one road located in a very specific geographic area,” Shertzer says. “Our control group is a block in that same neighborhood that does not undergo racial transition.”

By 1940, home values in transitioning blocks in high-migration cities were 54% lower than home values on blocks that remained white. Home values increased slightly on transitioning blocks in border cities, but rents on those blocks increased 86% relative to blocks that stayed white, driving the overall rental premium across the cities.

Though redline maps emerged in the late-1930s, Shertzer doubts they had much effect on the results.

“The number of HOLC loans was so small in our sample, it’s less than 1%, and even by the most generous estimation it’s stupendously unlikely the HOLC lending activity could be driving any of our results,” she says.

Topline findings

Here’s what the researchers determined by matching housing data from 1930 and 1940:

• In neighborhoods that shifted from white to majority black, rental prices increased 40%.
• Across cities, home values in blocks that transitioned to majority black fell on average by 10% compared to blocks that stayed all white.
• In high-migration cities — Chicago, Cleveland, Detroit, Manhattan and Philadelphia — home values on transitioning blocks were 54% lower than on blocks that stayed white.
• Home prices fell most on blocks that were more than 50% black by 1940.
• In border cities — Baltimore, Cincinnati and St. Louis — rents on transitioning blocks increased 86% compared to blocks that stayed white.
• Across cities, the capitalization rate — the income a property brings in compared to the property’s market value — was 17% on blocks that turned majority black compared to 11% on white blocks, meaning higher rents in black neighborhoods led to more relative profit for landlords.

Again, housing practices that spurred racial segregation began before redlining

Here’s one big takeaway for journalists: Prewar housing inequality is a complicated story and there were market forces at play before the federal government signed on to redlining.

“It’s not all about redlining,” Shertzer says. “Every interaction I’ve had with journalists the last 2 years has been like, ‘This is the legacy of redlining.’ And I try to explain what’s happening in the housing market. I think the most important thing for journalists is not to neglect the housing market dynamics and not default to, ‘It’s redlining,’ or, ‘It was the government.’”

She adds: “I know I’m swimming upstream on this but it’s something that’s really poorly understood. I’m not saying redlining doesn’t matter but the way that people understand it is not exactly right.”

Want more JR coverage on inequality? Check out how global warming has worsened economic inequality and made some rich countries richer and how high housing costs are associated with increased food insecurity, child poverty and a greater proportion of people in fair or poor health.

The post Soaring rents and plunging home values: How 1930s housing practices eroded black wealth appeared first on The Journalist's Resource.

As the Federal Reserve bumped interest rates more than 4 percentage points in the lead-up to the Great Recession, investors steered toward increasingly risky bets on the U.S. housing market, according to a recent working paper from the National Bureau of Economic Research.

The Federal Reserve, or the Fed, is the central bank of the United States. The story goes like this: the Fed raised interest rates from 2003 to 2006. Banks in turn lowered their own interest rates on deposits. Some customers withdrew their deposits. Banks use deposits to back up and fund mortgage loans, so some mortgage lending decreased.

Higher interest rates meant fewer mortgages, exactly what rate increases had done in the past.

But from 2003 to 2006, financial institutions made up some unrealized loan profits through something called private-label securitization. The rise of the private-label securities market — which, in a nutshell, is made up of investors buying, slicing up and reselling bundles of mortgages — began in the early 2000s and followed the rise in interest rates.

When the private-label securitization market began to crumble, the Great Recession wasn’t far behind. The recession lasted from December 2007 to June 2009 and was the longest postwar recession in the U.S. (so far).

You may feel a small pinch while we get a little technical

When the Fed raises interest rates, the cost of borrowing money goes up for all sorts of things — home mortgages, cars, growing a business — anything a person or an entity could buy with a loan. In economic parlance this is called tightening. Interest rates go up, the cost of borrowing money goes up and the flow of loans usually slows down, like squeezing a garden hose.

“Which is not to say that the Fed shouldn’t have tightened,” says Itamar Drechsler, an associate professor of finance at the Wharton School at the University of Pennsylvania and one of the authors of the paper. “We’re not making that statement. It’s just that tightening wasn’t effective in doing what it normally did.”

When Fed rates increase, banks often keep rates low on deposit accounts, according to the authors. Rates for run-of-the-mill checking and savings accounts are usually pretty low, but there are other kinds of deposit accounts that pay higher rates. What banks do is widen the difference between the interest they pay on deposits and the interest they bring in from loans, since they’re now making fewer loans. This difference is called the net interest spread, and it is the fundamental way banks make money.

Some customers respond to flatter returns by pulling their deposits. Banks need deposits. They are “by far the largest source of bank funding,” the authors write. The federal government guarantees some loans, like Federal Housing Administration loans, while banks also make long-term loans that are not backed by the government but are backed by and drawn from stable sources — like customer deposits.

During the run-up to the Great Recession, the loan-to-deposit ratio at large banks was 95 percent, meaning banks were lending nearly a dollar for every dollar they had in deposits. Though there were fewer mortgages being made, and some mortgages were being bundled and sold to investors, traditional banks also had increasingly less cash to cover defaults.

The ensuing economic crisis is history (though still being felt).

Something else was happening too: financial institutions that didn’t take deposits and weren’t federally insured were buying bundles of mortgages. This was the growing private-label securities market.

So, from 2003 to 2006 the Fed raised interest rates about 4.25 percentage points from just under 1% in late 2003 to 5.25% in late 2006. Banks bumped up their spreads, their stock of deposits dropped by 12.4% and they reduced their portfolio mortgage lending by more than a quarter, according to the new research.

A portfolio mortgage is a mortgage that a bank will keep on its books and won’t resell as a private-label security. Portfolio mortgage applicants often have to meet more stringent requirements than traditional loan applicants. The takeaway is that as the Fed raised rates, banks took on fewer loans they’d be on the hook for — and the market boomed for private-label securities.

“We basically are finding that as the Fed tightened, the mortgage market shifted from a much more stable source of funding through bank balance sheets — you need a stable source of funding where it is not going to dry up in times of stress — it shifted from that conventional market to where you are going to capital markets and you are exposing the housing market,” says Alexi Savov, an associate professor of finance at New York University’s Stern School of Business and another author of the paper. “This funding could dry up. It’s a much more runnable market compared to bank deposits, which are more structured.”

Here comes the risk

Lenders that aren’t traditional banks are often called shadow banks. Shadow banks, also called nonbanks, are financial institutions that are not subject to the same government regulation as commercial banks. The Financial Crisis Inquiry Commission spent a year figuring out what went wrong during the financial crisis, and its Great Recession postmortem goes into detail on how and why the shadow banking system evolved.

(Hint: there was money to be made.)

Heading into the 2000s, nonbanks helped push mortgage securitization and mortgage lending itself into increasingly unregulated, shadowy waters.

“Why did the market become amenable to nonbank providers of credit? That’s an open question,” Drechsler says.

Loans not backed by the federal government — and not subject to federal loan risk standards — were bundled and sold as smart risks to nonbanks like Merrill Lynch, Bear Stearns and others. Again, this was the burgeoning private-label securities market. Loan officers who sold these private-label securities didn’t much care if a particular mortgage bundle was financially sound.

“You had no incentive whatsoever to be concerned about the quality of the loan, whether it was suitable for the borrower or whether the loan performed,” one loan officer trainer recounted in the FCIC report, released in 2011. “In fact, you were in a way encouraged not to worry about those macro issues.”

Credit rating agencies blessed many of these securities with their highest ratings. Nonbanks sliced up the loan bundles and sold the pieces, including riskier pieces, to other investors. Government-sponsored entities like Fannie Mae and Freddie Mac bought them too, and were bailed out. Some investors bought credit default swaps, which were insurance in case borrowers defaulted on their mortgages. And they did default, because more mortgages were going to riskier applicants.

In short, things got complex. Hundreds of investors might have owned financial products spun off from a single loan. “Like trying to untangle a vat of cooked spaghetti,” is how former New York Fed president Gerald Corrigan described these mortgage products to former Treasury Secretary Tim Geithner.

The authors estimate that because of Fed tightening, private-label securities made up 10.2 percentage points more of all non-government backed mortgage lending from 2003 to 2006. This accounts for most of the 11.4 percentage point increase in the share of private-label securities, according to the authors.

“Our estimates suggest if the Fed hadn’t tightened, the shift to private-label securities would have been smaller,” Savov says.

Whether the Fed could or should have done anything differently remains unsettled. On one side, Stanford economist John Taylor has argued the Fed should have increased rates sooner to cool the housing market.

On the other, former Fed chair Ben Bernanke blames lax lending standards, not Fed monetary policy.

“Imagine you’re the Fed and it’s 2003,” Savov says. “They’re seeing the housing sector booming and are worried there is some overheating. You have data on how things used to work and you know from past cycles if you raise interest rates, mortgage lending would come down and that would slow down the boom. What’s happening is you are in a different environment. As you tighten, you have the same impact on banks as you always had, but now there is all this other type of mortgage lending that wasn’t there before.”

Americans may feel the fallout for decades, but unequally

Mortgage securities based on risky mortgages were a major reason the Great Recession was so bad for so many people. While the housing crisis hit family wealth across the board, subprime loans were more likely than prime loans to go under. Black applicants who were approved for loans were 2.6 times more likely to be offered a subprime loan compared with white applicants, according to a 2012 study examining more than 3.8 million loan applications.

The fallout from the crisis will probably cross decades. White wealth could be 31% lower by 2031 due to the Great Recession, while black wealth could decrease nearly 40%, according to a 2015 independent report commissioned by the American Civil Liberties Union, an advocacy organization.

Mortgage securitization is making a modest comeback

As in all horror stories, the monster is back — a little. Though the Fed seems poised to hold steady on rate increases for now (unless the president gets his way), recent rate increases have been concurrent with a small uptick in private-label securities, the authors find.

Time will tell if the story ends the same way as it did in the late-2000s. The Dodd-Frank Act included some requirements that are supposed to keep asset-backed securities from imploding again. Attempts to roll back core Dodd-Frank requirements have likely been overstated, according to Aaron Klein at Brookings.

“There is a ‘skin-in-the-game’ requirement where originators are required to hold part of the security,” Drechsler says. “My guess is the experience after the crisis was educational and probably scared away a lot of players in that game that are not going to come back fast. That may have made a bigger difference than anything else in limiting people’s enthusiasm, but there have been additional constraints.”

Research methods and conclusions

The authors used home purchase loan data from 2002 to 2006 provided through the Home Mortgage Disclosure Act. They drew their conclusions on bank deposit quantities from Federal Deposit Insurance Corporation data covering 58,604 bank branches around the country from June 2003 to June 2007.

Other data sources included SIFMA (a security industry trade association), U.S. Call Reports, Ratewatch and the U.S. Census. The authors’ findings include the following:

• From 2003 to 2006, the private-label securities market rose along with interest rates.
• Banks responded to rising rates by increasing deposit spreads, leading to a 12.4% drop in deposits.
• Banks also reduced their portfolio mortgage lending by 25.9%. But with more mortgages going to the securities market, total lending contracted only 4.4%.
• Private-label securities as a share of all mortgages not backed by the federal government grew 10.2 percentage points, accounting for nearly all of the total 11.4 percentage point increase in the share of private-label securities.
• The private-label securities market is again expanding, albeit slowly, concurrent with rising Fed rates.

By using bank deposits, the authors analyze how the Fed hiking interest rates before the Great Recession affected activity at individual banks across the nation.

“A feature of the deposit channel is we can look at different parts of the country,” Savov says. “That allows us to control for the aggregate business cycle, and that’s why the [Taylor-Bernanke] debate has been so hard to resolve. People have looked at the aggregate data. But I think on the deposit channel, you can shed more light.”

Angles for journalists

• Keep an eye on the private-label securitization market. SIFMA offers data to track and explore.

“I don’t see much coverage of that, and it is not as high as it was, but that seems like something worth paying attention to,” Savov says. “It coincides with this time when the Fed is raising rates. And you see bank deposit growth going down. It’s something to keep an eye on.”

• The Fed doesn’t make monetary policy by blueprint. There are numerous macroeconomic theories that compete with one other and may or may not influence Fed rate changes.

“There are [economic] theories but it’s not obvious that affects what policymakers do,” Drechsler says. “In some sense, it’s a journalistic argument. If the average person knew how much of an open question that is I think they would be quite surprised.”

Want to more insights on the U.S. economy? Check out our recent coverage on earnings inequality, reverberations from tariffs, and what happens to personal health when the economy suffers.

The post How Fed rates helped fuel the investment bust that sparked the Great Recession appeared first on The Journalist's Resource.

Child and adolescent deaths have decreased 51.7% worldwide from 1990 to 2017. But inequality between poor and rich countries has increased, with wealthier nations accounting for an increasingly smaller proportion of deaths overall, according to new research in JAMA Pediatrics.

“Childhood and adolescence are vulnerable periods and a crucial window for adult health determination,” the authors write. “While improvements in the mortality rate of children younger than 5 years (the population often called under-5) have been undeniably dramatic and positive, the full story of child and adolescent health is more nuanced and heterogeneous, with a notably broader range of characteristics than can be told with a single summary statistic.”

To home in on more detailed information about child and adolescent health, this study looks at data collected between 1990 and 2017 on those under the age of 20 living in 195 countries and territories. The researchers compiled data from thousands of sources, which they have made accessible to the public through the Global Health Data Exchange.

The authors note the limitation that data availability poses on their analysis. Estimates might be out-of-date due to time lags in reporting data; estimates might not be accurate for countries in conflict, like Syria, Iraq and South Sudan, which might suffer “data deficiencies.”

The researchers were interested in changes in mortality rates over time, as well as trends in nonfatal illness and disability. They analyzed at 359 diseases and injuries as causes of death and disability.

Here’s what they found:

• In 1990, there were 13.77 million child and adolescent deaths. In 2017 there were 6.64 million.
• Over half of all child and adolescent deaths — 60.1% — occurred in babies less than one year old. Nearly half of these infants — 46.6% — were less than one week old.
• During the period studied, deaths decreased most rapidly for children between the ages of 1 and 4. This age group had a 61% reduction in premature mortality.
• In less-developed regions, decreases in deaths were attributed mostly to reductions in mortality due to infectious diseases, neonatal disorders and unintentional injuries. The authors write that these decreases are linked to gains in development and “improvements in vaccination, early childhood nutrition, sanitation, clean water, and targeted interventions for HIV/AIDS and malaria.”
• In more-developed regions, mortality decreased primarily because of reductions in mortality due to non-communicable diseases, such as birth defects and blood disorders.
• While the largest absolute declines in mortality occurred in African, low- and low-middle income countries still had relatively higher percentages of the global share of premature mortality — 82.2% of deaths in 2017, an increase from 70.9% in 1990.
• Overall, the countries that had the greatest improvements in child and adolescent mortality also had the greatest improvements in maternal mortality, too.
• However, eight countries had divergent trends between maternal mortality and child and adolescent health. American Samoa, Canada, Greece, Jamaica, St. Vincent and the Grenadines, the United States and Zimbabwe had increases in maternal mortality and decreases in child and adolescent mortality and disability rates.
• Total disability-adjusted life years (DALYs), which are the sum of years lived with a disability and years of life lost due to premature mortality, decreased by 46% from 1.31 billion in 1990 to 709 million in 2017.
• Globally, the top ten contributors to premature death and disability were anemia, neonatal disorders, lower respiratory infection, diarrhea, congenital birth defects, malaria, meningitis, road injuries, malnutrition and HIV/AIDS.
• In total, disability rates increased 4.7% from 1990 to 2017. The authors explain that the decline in premature mortality, coupled with the increase in years lived with a disability show that global health trends are shifting towards nonfatal health issues.

“Continued monitoring of the drivers of child and adolescent health loss is crucial to sustain the progress of the past 26 years,” the authors conclude. “Only then will we be able to accelerate progress to 2030 and beyond.”

The post Child and adolescent deaths decreased by half worldwide since 1990 appeared first on The Journalist's Resource.

Economic inequality across countries has been declining for decades. China’s economic boom has been a big reason, along with technology that has brought energy and clean water to poorer countries.

But a new paper in the Proceedings of the National Academies of Sciences finds that without global warming, the gap in gross domestic product per capita between the poorest and richest countries would have been even smaller — by 25% — from 1961 to 2010.

“It has been taken as given that countries and populations most vulnerable are not the countries and populations most responsible for emissions, and vice versa,” says Noah Diffenbaugh, one of the report authors and a senior fellow at Stanford University who studies climate systems. “Until this study, if someone was pressed to state exactly how much each country had been harmed relative to their contribution to global warming, those numbers were not available.”

In hotter countries, global warming can stunt GDP growth …

Global warming is hampering economic growth in poorer, naturally warmer countries, according to the authors. Pestilence, disease, flood and drought: just a few of the climate change consequences that disproportionately and negatively affect economies in poorer countries.

For large areas of the tropics and subtropics, the authors find a more than 99% chance of GDP declines associated with global warming over roughly the past half century.

Sudan, India, Nigeria, Indonesia and Brazil combined have more than 2 billion people — more than a quarter of the world’s population — and GDP would have been at least 25% higher in each of those countries from 1961 to 2010 if not for global warming, according to the authors. Out of those five countries, Sudan was most harmed, its GDP 36% lower with global warming.

… while colder countries can see GDP gains

Colder, often wealthier countries are more than 90% likely to experience GDP growth associated with global warming, the authors find. Norway, Canada, Sweden, Great Britain and France, with a combined population of 185 million, all have experienced GDP growth associated with global warming. Norway leads the group at 34% higher GDP and Canada is second at 32% higher GDP.

“There is some indication of a benefit of global warming in some of the wealthy countries,” Diffenbaugh says. “We have less scientific certainty in that result than the impact at the warm end of the temperature range.”

GDP growth in the world’s largest economies — the U.S., China and Japan — would have been only slightly higher from 1961 to 2010 without global warming, the authors find.

Emit less, grow less economically

This paper adds an economic angle to past research establishing that poorer countries are at the greatest risk for changes in climate. The authors find the 18 countries that emitted less than 10 tons of carbon dioxide per capita from 1961 to 2010 had a median 27% lower GDP with global warming. Of the 36 countries in the middle range for CO2 emissions — 10 to 100 tons per capita — 34 had negative economic impacts associated with global warming, with a median 24% lower GDP among those 34 countries.

Meanwhile, 14 of the 19 countries that emitted more than 300 tons of CO2 per capita benefitted from global warming, with a median 13% higher GDP from 1961 to 2010 for those 14 countries.

Research by Diffenbaugh’s co-author, Stanford professor Marshall Burke, may indicate why warmer countries have seen slower GDP growth due to global warming: Economic productivity for farming and other activities peaks at an annual average temperature of about 55 degrees Fahrenheit.

“This has implications for quantifying the costs and benefits of climate change, and implications for some of the issues that have been raised over the years in the UN [United Nations] treaty negotiations,” Diffenbaugh says. “A loss and damage mechanism has been discussed over the years, and this is relevant to how countries would quantify their losses.”

Data notes

The authors use temperature data from the Coupled Model Intercomparison Project, also called CMIP5, out of the Lawrence Livermore National Laboratory in California. CMIP5 is a widely used dataset in climate change research. It’s the same dataset researchers used for the U.S. Global Change Research Program’s Fourth National Climate Assessment, part of a series of reports USGCRP regularly provides Congress and the president on how climate change is affecting the earth.

For GDP data, the authors used two datasets: the primary dataset covers 1961 to 2010 and is the one the authors draw their conclusions from. They also looked at a second dataset from 1991 to 2010.

The primary dataset includes fewer countries but covers more years. Effects of GDP growth build up over time, so more years provides a clearer picture of economic impacts related to global warming. The second dataset has more countries but covers fewer years. The authors find similar patterns across the datasets, “but the cumulative magnitude is larger over the longer period,” they write.

The post Global warming has worsened economic inequality and made some rich countries richer appeared first on The Journalist's Resource.

Pick a huge company out of a hat and it wouldn’t be surprising to find that the pay gap between the CEO and the average worker has been widening for decades.

But it’s actually average employee earnings across firms — not within them — that accounts for most of the rise in earnings inequality in the U.S. from 1981 to 2013, according to research in The Quarterly Journal of Economics.

Workers of a feather earn together

Here’s another way to think about it: Imagine all the firms in the U.S. lined up in a row. Now arrange them in order of firms that pay the most on average to firms that pay the least — wealth management firms here, office cleaning contractors there. In the early 1980s, the distance between average pay at the highest-paying firms and average pay at the lowest-paying firms would have been relatively small.

Today, that distance is much wider.

“Firms that don’t pay lots of money still don’t, and firms that used to pay a lot now pay a lot more,” said David Price, an assistant economics professor at the University of Toronto and one of the co-authors of the paper, “Firming Up Inequality.”

Turns out high-skill employees tend to work with each other, and they’re working in firms that offer high average earnings. This can make for a self-enriching circle for highly skilled, highly paid employees in firms that offer good money — leaving lower-skill workers to firms with low average wages. And individual earnings tend to evolve in line with coworkers’ earnings, according to the authors.

“There are these high-paying firms pulling away from low-paying firms, and there are different possible stories for why that would happening,” Price said.

Exploring a “massive” worker database

This research adds to past explorations into inequality in pay and productivity across firms, and it is the first to explore a dataset that includes earnings for almost every worker in the U.S. over three decades. The researchers used a logarithmic—or log—scale in their analysis, so the overall earnings data would be less skewed by super high earners.

Data come from the Social Security Administration’s confidential Master Earnings File, which covers everyone in the U.S. with a social security number. The authors sorted individuals’ annual earnings from 1981 to 2013 by employer identification number, to segment the U.S. workforce by firm. The result is a “massive, matched employer-employee database,” the authors write.

The researchers excluded workers earning less than about $3,700 per year. Firms were limited to those with more than 20 employees, so data on earnings inequality within firms would remain meaningful. The authors also excluded workers at government agencies and in public and private education. The average dataset for each year included 72.6 million workers across 477,000 firms.

Sorting and segregation: Global phenomena

Worker sorting and segregation are propelling earnings inequality across firms, according to the authors. Sorting is the idea that more and more high-earners work at firms that, on average, offer high wages. Meanwhile, lower- and higher-paid workers are increasingly likely to work at different firms — that’s worker segregation.

Sorting and segregation account for almost the entire increase in average earnings inequality across firms over the period studied. The authors cite similar patterns in every country with available, detailed worker-firm earnings data: Brazil, Germany, Sweden, Japan and the United Kingdom.

Outsourcing tasks like cleaning, catering and human resources is one reason the authors offer for why earnings inequality within firms is not as high as earnings inequality across firms. A financial analyst and a janitor might work in the same building, but their paychecks probably come from different firms.

“For whatever reason, firms seem to be becoming more homogeneous,” Price said.

The authors consider that technological advances may affect pay averages across firms. Some industries, such as telecommunications, naturally attract workers who draw higher wages as technologies develop and firms expect new skills. Yet even within industries there were average pay disparities across firms.

Employee pay gaps are widening most at mega firms

It’s easy to find stories about soaring CEO-to-average-employee pay gaps. This research presents evidence that the pay gap between CEOs and average workers may be a lesser driver of national earnings inequality, but that pay differential can still be vast.

Within firms, two-thirds of the widening inequality came from mega firms — those with more than 10,000 employees. Over the study period, the log earnings gap between top- and median-earners widened by 155 percent at mega firms but just 11 percent at smaller firms, “a strikingly large difference,” the authors write. Median log earnings rose 31 percent at smaller firms, while they fell 7 percent at mega firms.

But from 1981 to 2013, high earners accounted for just 3 percent of the rise in log earnings inequality at mega firms. That’s because top-50 earners make up only 35,000 of the 20 million employees at mega firms. Widening the pool to include the top 10 percent of earners at mega firms accounts for nearly half — 46 percent — of the rise, according to the authors.

Death and taxes: The policy implications of low earnings

The authors offer several big-picture concerns:

• Low-wage workers seem to have lost access to good jobs at firms that offer high average wages.
• Firms provide health care and retirement savings for many Americans, “so rising worker segregation could very well spill into rising health care and retirement inequality,” they write.
• Workers gain experience faster when they have high-skill colleagues, and a lack of work experience can stunt earnings growth.
• Over the past 30 or so years, income and life expectancy have become more strongly correlated, where life expectancy tends to increase and decrease along with income.

Several other pieces of research point to policy questions related to earnings inequality. Inequality can hinder economic development, particularly in advanced economies. Research has also shown that as inequality rises, inter-generational poverty is exacerbated for those with parents who have low education levels—less than upper secondary. Other research has linked inequality to violent crime. The Organization for Economic Cooperation and Development, a global intergovernmental economic forum, has suggested that policymakers can help reduce earnings inequality through education strategies that promote equal access, and through progressive tax rates.

“We still don’t know exactly why these phenomena that we’re finding are happening,” Price said. “To me I don’t think this immediately tells you what a public policy response is. The one thing I would say is, if you think focusing on CEO pay is going to be the silver bullet that will solve inequality, I think this research says that’s wrong.”

Story ideas: Digging into evolving pay practices and workforce makeup

“I would love for journalists to talk to different firms that have been around for a while and see how their pay practices have evolved — firms that pay a lot and firms that don’t — and try to find some exemplars of firms that were high-paying in the ‘80s and that are extremely high paying now, and what they did,” Price said. “And, firms maybe that changed toward getting a more homogeneous workforce in terms of quality of the workers. I definitely think there’s a lot of room here.”

Related research

It’s Where You Work: Increases in the Dispersion of Earnings across Establishments and Individuals in the United States

Barth, Erling, et al. Journal of Labor Economics, April 2016.

The authors combine U.S. Census and other data and also find that recent increases in earnings inequality stem from differences in average earnings at firms.

Earnings Inequality and Mobility Trends in the United States: Nationally Representative Estimates from Longitudinally Linked Employer-Employee Data

Abowd, John; et al. Journal of Labor Economics, January 2018.

The authors analyze a decade of data and find that across all skill types there are benefits of working for top-paying firms. And it’s not just about higher earnings. Working for top-paying firms also improves the probability of upward economic mobility.

Capitalists in the Twenty-First Century

Smith, Matthew, et al. National Bureau of Economic Research Working Paper Series, April 2019.

The authors explore the importance of human capital for top earners. Human capital may include a person’s professional and personal network, their reputation and their ability to recruit talent. They find that top earners get most of their income because of their human capital.

Who Becomes an Inventor in America? The Importance of Exposure to Innovation

Bell, Alex; et al. The Quarterly Journal of Economics, November 2018.

Are there “lost Einsteins” out there? The authors examine a database of 1.2 million inventors and find that children from top-1-percent-earning families are 10 times as likely to become inventors compared to children from below-median income families.

The Growing Gap in Life Expectancy by Income: Implications for Federal Programs and Policy Responses

National Academies of Sciences, Engineering, and Medicine, 2015.

Comparing people born in 1930 to people born in 1960, life expectancy rises for higher earners while for lower earners life expectancy increases less — or even declines. The authors conclude that inequality in life expectancy is rising, concurrent to rising income inequality.

“Income inequality, USA, 1913-2014” from the World Inequality Database.

The post Diverging average company pay—not what the CEO makes—explains most earnings inequality appeared first on The Journalist's Resource.

Employees who work in hot conditions are not as productive and can suffer from kidney injury, dehydration and other health problems, according to a new review of 111 studies published in Lancet Planetary Health. The included studies involved 447 million workers in over 40 different occupations, including outdoor and indoor jobs.

Andreas Flouris, professor of exercise science at the University of Thessaly in Greece and lead author of the study, said in a phone call with Journalist’s Resource that this study is the first meta-analysis of its kind and provides quantitative proof of the health impacts of working in a hot environment.

He added that the review also found that in hot environments, “our bodies want to protect us,” so workers slow down and are less productive.

Flouris described the health and productivity effects of heat stress as another, less-explored aspect of climate change. As global average temperatures rise and heat waves become more frequent and last longer, “more and more people will have reductions in productivity,” he said, adding that this could have “immense economic effects.”

The review included studies from 30 countries, including the United States. All continents except Antarctica were represented. The nations included account for 77 percent of the world’s gross domestic product. Because the review relied on existing research, Africa is not well represented in the study – though South Africa, Angola and Egypt are included. Despite the region’s climate, Flouris explained that the studies on heat strain and workers in Africa are “very few and unfortunately outdated.”

Most of the studies, he added, were published within the past 10 years. The researchers were interested in a few different outcomes, including the prevalence of occupational heat strain, kidney disease and productivity loss.

Occupational heat strain is defined in the paper as “the physiological consequences of environmental heat stress,” which involves working in an environment with an air temperature between 91.4 and 101.6 degrees Fahrenheit. The physiological effects of heat strain include dehydration, fainting, kidney injury and hyperthermia.

Workers who met one of the following criteria counted as experiencing occupational heat strain: having a core body temperature above 100.4 degrees Fahrenheit, experiencing at least one symptom of occupational heat strain, as defined by international health and safety guidelines, or having heat-induced elevated cholesterol levels.

In this analysis, the researchers found that people who worked a single shift under heat stress were four times more likely to experience occupational heat strain than those in normal (thermoneutral) working conditions, which allow the body to maintain a normal temperature with little additional effort. Specifically, 35 percent of people who worked under heat stress experienced occupational heat strain.

Additionally, 30 percent of people working under heat stress reported productivity losses.

The effects of heat stress compound with the frequency of exposure – 15 percent of people who worked under heat stress for at least six hours a day, five days a week, for two or more months of the year experienced kidney disease or acute kidney injury.

Flouris explained that the effect of heat strain is likely to exacerbate global economic inequalities.  Hotter regions of the world tend to be poorer, and these economies will face additional challenges as global temperatures rise. Developing economies tend to rely more on manual labor, which further contributes to the risk of occupational heat strain.

In their paper, the authors make recommendations for how policy makers, employers and health care professionals can respond to these findings. “Concerted international action is needed to mitigate the effects of occupational heat strain, particularly in light of climate change and the anticipated rise in environmental heat stress,” the authors write. “The presented evidence shows the urgent need to establish a surveillance system to monitor prevalence of occupational heat strain throughout the world. At the same time, increased efforts should be made to educate workers and employers about the health and performance effects of occupational heat strain, and appropriate screening protocols should be incorporated within health and safety legislation. Importantly, physicians and other health-care providers can play a crucial part in the primary prevention and management of occupational heat strain.”

Flouris said he is collaborating on a World Health Organization task force to develop guidelines to protect both workers’ health and their employers. He added that there are some wearable technologies available for workers to alleviate heat, but they can be “impractical and quite expensive.”

Looking for more research? Check out our round-up of scholarship on how heat waves affect the elderly. We also have tips on covering extreme weather.

The post Heat makes workers less productive, impacts health appeared first on The Journalist's Resource.

An unhealthy economy might portend bad news for physical and mental health.

The issue: When the global economy slumped during the Great Recession of 2007-2009, Americans grappled with effects on their personal finances and employment status. At its peak, unemployment during the Great Recession topped out at 10 percent.

As Americans lost their jobs, some also lost insurance coverage. Research on the impacts of the Recession on health insurance coverage suggests that unemployment and health insurance coverage for men were linked, with a 1 percentage point increase in the state unemployment rate translating to a 1.67 percentage point reduction in the likelihood that men were insured.

In a new study, researchers at Hunan University and the University of Hawaii theorized that this lack of insurance, along with other factors, might have an impact on personal welfare. To test their theories, they looked at links between the health of the economy and personal health during the Great Recession.

An academic study worth reading: “Health and Health Inequality During the Great Recession: Evidence from the PSID,” published in Economics and Human Biology, 2018.

About the study: The researchers looked at data from over 7,000 respondents in a national longitudinal study that surveys individuals about their health, along with other demographic data. The scholars focused on data collected from 2003 to 2013 from working adults between the ages of 25 and 55. The specific health outcomes they looked at were drinking, mental health, self-reported health status and obesity. The researchers analyzed the relationship between employment rates and these outcomes during the Great Recession.

Key findings:

• A 1 percentage point increase in the unemployment rate was linked to an increase in reports of poor health by between 7.8 and 8.8 percent.
• Delving further into the data, the researchers found that the Recession had impacts on both self-reported health status and mental health for white, but not black, people.
• The drinking behavior of black people, however, was affected by unemployment rates. A 1 percentage point increase in unemployment was linked to a 1.1-1.7 percentage point increase in black people’s propensity for heavy drinking.
• The authors suggest that less educated people and women experienced more pronounced negative health effects during the Recession than more educated people and men.

Other resources:

• The Bureau of Labor Statistics offers current national statistics on employment. The Bureau also has statistics on inflation and other measures of the economy.
• The U.S. Centers for Disease Control and Prevention’s National Center for Health Statistics has data sets and fact sheets on a wide range of topics.

Related research:

• A 2017 study published in The Review of Economics and Statistics, “Crime Scars: Recessions and the Making of Career Criminals,” indicates that students graduating (or dropping out) during recessions are more likely to become career criminals.
• A 2017 study published in the Journal of Health Economics, “Economic Conditions, Illicit Drug Use and Substance Use Disorders in the United States,” finds increases in intensity of prescription pain reliever use and opioid use disorder alongside economic downturns.
• A 2016 working paper, “Killer Debt: The Impact of Debt on Mortality,” analyzed credit reports to find that worsening credit and increasing debt are linked to mortality risk increases.

The post When the economy suffers, so does personal health appeared first on The Journalist's Resource.

Income inequality — broadly speaking, the gap between the earnings of the rich and of the poor — has widened in America over recent decades, scholars have shown. But amid all the debate about what’s to blame for the increasingly lopsided distribution, little is known about public opinion on policy changes.

An academic study worth reading: “Exposure to Rising Inequality Shapes Americans’ Opportunity Beliefs and Policy Support,” in Proceedings of the National Academy of Sciences, August 2017.

Study summary:

Americans, when they realize the extent to which their country’s poor are getting poorer and rich are getting richer, are keen to redistribute. So theorizes a team of scholars led by Leslie McCall of City University of New York. McCall and her colleagues believe that rising concern about income inequality is masked by the fact that few Americans, compared to residents of other rich countries, support redistributive social policies.

The authors hypothesize that as income inequality rises and becomes more apparent, Americans are becoming more skeptical of the “American Dream” — the idea that anyone who works hard can get ahead.

McCall and her colleagues designed three experiments to test Americans’ beliefs about the factors that cause some to thrive and some to struggle in the modern economy. After exposing a set of respondents to a nonpartisan news report about growing income inequality and another set to a non-related news article, they ask questions targeting so-called “opportunity beliefs.” These are the factors that help Americans get ahead, such as being born wealthy (a “structural” advantage) and hard work (an “individual” pursuit). Further tests exposed survey participants to a “rags-to-riches” story exemplifying the American Dream. The largest survey group was a nationally representative sample of 1,501 Americans.

Key takeaways:  

• Exposure to information about income inequality seems to make Americans more skeptical about the American Dream.
• Participants exposed to the story about income inequality were more likely to rate structural factors (family connections) as important to getting ahead and less likely to name individual factors such as hard work.
• Participants exposed to the story about income inequality and then to a story exemplifying the American Dream still rated structural factors as more important for getting ahead than individual hard work.
• Respondents exposed to the news story of income inequality were statistically more likely to support government intervention (such as social programs for the poor) and corporate intervention (such as reducing the differences in pay between executives and low-skilled workers).
• This same group was also less likely to say that low-income individuals are responsible for their situation or that inequality “does not need to be reduced.”
• These findings suggest that “beliefs about the opportunity structure in society may play an important role in shaping Americans’ evaluations of equity-enhancing policies in the wake of rising economic inequality.”

Helpful resources:

One of the best sources of economic data is the Federal Reserve Economic Database (FRED) at the Federal Reserve Bank of St. Louis. We discussed how to visualize that and other economic data in this tip sheet.

The Pew Research Center has a number of surveys on how Americans perceive income inequality.

The New York Times published an interactive chart in August 2017, based on the work of some topic economists, that explored the changing share of income accruing to the very top earners since World War II.

Other research:

An often-cited work on economic inequality was this 2014 paper in Science by Thomas Piketty and Emmanuel Saez: “Inequality in the Long Run.”

More recently, two 2017 papers in Economic Inquiry analyze the data from different angles: “Inequality and Growth in the United States: Why Physical and Human Capital Matter,” and “Estimating the Level and Distribution of Global Wealth, 2000-2014.”

A 2017 paper in the Journal of Personality and Social Psychology found people are happier when they live in more equal countries.

Journalist’s Resource has profiled related research on labor unions, the relationship between Medicaid and Medicare and income inequality, the role of globalization, income inequality in China, and debates over how a universal basic income could be either an efficient equalizer or a waste of cash.

The post Faced with income inequality, Americans support government action appeared first on The Journalist's Resource.

An overwhelming amount of scientific evidence has shown that the earth is getting hotter. As the planet warms, humans in some of the most extreme climates are struggling to adapt.

In India, heat waves have become a public health crisis in recent years, responsible for thousands of deaths. About 25 percent of the country’s population lacks access to electricity. Many more lack air conditioning, a factor that researchers associate with death during a heat wave. In May 2016, for example, the city of Jaisalmer reached 52.4°C (126.3°F); nationwide, about 700 people died that month due to heat stress, according to the Indian Meteorological Department.

Between 1960 and 2009, average temperatures in India rose by about 0.5°C (or 0.9° on the Fahrenheit scale). Forecasters say the heat will keep rising: By the end of this century, average temperatures in India are expected to climb between 2.5°C and 5.5°C over what they were in 1960.

A new paper looks at the increasing rates of mortality. “Future climate warming could have a relatively drastic human toll in India and similarly in developing tropical and subtropical countries,” the authors write.

An academic study worth reading: “Increasing Probability of Mortality During Indian Heat Waves,” in Science Advances, 2017.

Study summary: Omid Mazdiyasni of the University of California, Irvine, and his colleagues compare temperature and heat-related mortality data in India going back to 1960. They define a heat wave as a “three or more consecutive days of temperatures above the 85th percentile” of the hottest monthly temperature in a specific location and a mass heat-related mortality as the related deaths of more than 100 people. Both have increased in frequency. Mazdiyasni and his colleagues also review literature showing how heat stress can exacerbate many life-threatening ailments, including heart disease and respiratory problems.

They acknowledge that mass heat-related deaths do not hit every region equally. Some areas are more prone to poverty, where access to air conditioning and health care is worse. These areas are likely to have higher mortality rates during a heat wave.

Key takeaways:

• By 2009, India was 146 percent more likely to experience a heat-related mass mortality event than it was in 1960.
• The probability of such an event increases 78 percent when a heat wave increases from 6 to 8 days.
• Southern and western India saw 50 percent more heat waves during the years 1985 to 2009 than they had in the previous 25 years.
• The rest of the country saw heat waves increase in frequency by about 25 percent.

Helpful resources:

• NASA explains “why a half-degree temperature rise is a big deal,” in this 2016 post.
• Data on the annual summer monsoons in South Asia are available dating back to 1871 from the Indian Institute of Tropical Meteorology.
• The India Climate Dialogue, a website sponsored by the U.S. nonprofit Internews, reports “impartial and objective news and views on all aspects of climate change, how it affects India, and what can be done about it.”
• The Council on Foreign Relations examines how India has responded to President Trump’s decision to pull the U.S. out of the Paris climate accord.

Other research:

• This 2015 paper in the Proceedings of the National Academy of Sciences charts the “substantial” increase in the number of droughts and heat waves that happen concurrently in the U.S.
• The risk of deadly heatwaves is growing in most countries, according to this 2017 review of decades of research in Nature Climate Change.
• Several other papers look at heat waves and climate change projections in India.
• We have written extensively on climate change, highlighting projections of future hurricane damage in the U.S., arctic ice melt and trade, predicting where the seas are rising fastest, environmental regulations, and the gender stereotypes about “going green.”

The post Heat waves: Increasingly common, ever more deadly appeared first on The Journalist's Resource.