Research Findings

How does income inequality affect the relation between economic growth and CO2 emissions?


September 19, 2018

Since 2014, global energy related carbon dioxide emissions have stagnated while the global economy has grown, ushering in the era of “decoupling.” The International Energy Agency (IEA) attributes this phenomenon to increases in renewable energy consumption, shifts from coal to natural gas, enhancements in energy efficiency, as well as structural changes in the global economy.

The first three of these factors have a clear association to decoupling. For instance, one may expect decoupling of economic growth and emissions, if the share of energy consumption from renewables increases. Similarly, enhancements in energy efficiency should reduce emissions, assuming there is no corresponding increase in energy consumption, which is referred to as the rebound effect (However, colleagues and I have critiqued these assertions; see links above.)

Structural changes in the global economy, also cited by the IEA, are more complex than these other factors contributing to decoupling. What are “structural changes in the global economy”? Have there been changes in how wealth is accumulated? If so, are these changes deliberate? Is growth in the global economy shifting to different nation-states? If so, which ones?

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Research Findings

The criminal justice system as an engine for downward socioeconomic mobility

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September 17, 2018

Over the past forty years, the growth of the criminal justice system in the United States has had many damaging consequences for individuals, ranging from economic hardship to health and family problems. Nobody doubts that getting involved in the criminal justice system affects one’s future life chances, especially because prospective employers (and even institutions of higher education) are increasingly requiring applicants to disclose any criminal past.

But isn’t this really just a problem for serious criminals serving time in prison or for poor people, who lack the financial resources to buy their way out of any problems with superior legal representation and who are more likely to be involved in the criminal justice system in the first place?

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Research Findings

Elite men and inequality in the hedge fund industry


September 15, 2018

“I’m sorry, but so and so’s brother needed to get hired. Shit happens,” Karen recounted, with resignation, a time her boss denied her a promotion.

Karen is a white woman who works at a hedge fund, a private financial firm. She continued, “When there’s big money, greed, power, people protect their own. And sometimes it’s the guy in the parish, the guy in the corner [office], the guy in the whatever.”

Karen’s account provides insight into why firms run by white men manage 97 percent of hedge fund assets­—a $3.55 trillion industry. Moreover, she sheds light on why these elite men have amassed riches.

Indeed, I find that gender and racial inequality provide a key to explaining why hedge funds drive the divide between the rich and the rest. Since 1980, U.S. income inequality has skyrocketed, in part due to mushrooming pay in financial services. Hedge fund managers are well represented among the “1 percent” with average pay of $2.4 million. Even entry-level positions earn on average $372,000. ($390,000 is the threshold for the top 1 percent of families.)

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Research Findings

Respectful leadership may help employees overcome the “think manager, think male” effect

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September 12, 2018

Female leadership is a crucial agenda item for major corporations. Over the past years, the perception of female leaders has improved, along with the increased participation of women in the workforce. However, for many people, the mental model for leader still fits the phrase “think manager—think male”. Likewise, a large-scale survey of the German socio-economic panel shows that women are still falling behind when it comes to high-level promotions.

The negative attitude towards female leadership not only affects how women are perceived in their leadership role, but also negatively influences the performance of their subordinates. In our research, we set out to understand the processes that keep this negative image in place, and investigated whether a respectful leadership strategy could counter the effects.

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Research Findings

How can we improve low- and moderate-income families’ social mobility?

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September 5, 2018

A core belief of many Americans is that society should provide equal opportunity to its members. Embedded in this belief is the idea that hard work is rewarded and that everyone has a chance of success regardless of the circumstances of their birth; many people refer to this as the American Dream. Unfortunately,

In the U.S., 42 percent of adult men whose parents were in the bottom income quintile when they were born remain in the bottom quintile as adults. 62 percent of U.S. men and women born into the top quintile remain in the top two-fifths as adults. Economist Richard Burkhauser and his colleagues describe this phenomenon as “stickiness at the ends.” Our study provides insight into processes that help maintain stickiness and foster social mobility at the bottom.

Low- and moderate-income families face constraints that limit their choices. For example, exploitative subprime mortgages and the Great Recession resulted in Black and Latino families losing more than 50 percent of their wealth between 2005 and 2009, compared to 16 percent for White families. Based on current trends, scholars calculate that it will take 228 years to close the wealth gap between Black and White families and 84 years to close the gap between White and Latino families.

These issues frame our research and allow us to focus on how low- and middle-income families take advantage of social mobility pathways generally reserved for the middle class. Sociologist Glen Elder describes agency as the “choices and actions [individuals] take within the opportunities and constraints of history and social circumstances.” This study examines how some low- and moderate-income families are able to build assets and move to reasonably-priced rental housing in safe neighborhoods with good schools and other amenities, while others are stuck in place.

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Research Findings

Are there birth order differences in college major, and does that matter?


August 29, 2018

Many people have an opinion about the importance of birth order. They might recall that while their parents gave them a curfew, that didn’t apply to their younger brother. Or that their parents idolized the oldest child. The interesting thing is, research suggests that birth order actually does influence the long-term paths that people follow in life.

Previous research has shown that, compared to first-borns, later-born siblings in the same family tend to have lower grades in high school, are less likely to go to university, achieve a lower overall level of education, have less prestigious occupations in adulthood, and also make less money.

Furthermore, it is not just a difference between first-borns and all later-born siblings; the second-born typically does worse than the first-born, the third-born does worse than the second-born, and so on. These patterns are observed amongst children who grew up in the same family, and can be seen across families of all sizes.

In our study we wanted to extend this research to see whether there are birth order differences in what siblings choose to study if they go to university. College major can matter a lot for long-term outcomes.

Research in the United States and Norway has shown that the difference in long-term earnings between the most lucrative and the least lucrative college major can be as large as the earnings gap between those who go to college and those who do not.

Examining whether there are birth order differences in college major would help us to further understand the effects of birth order on education. Furthermore, birth order differences in college major might explain part of the long-term birth order differences observed in occupational prestige and earnings, given the importance of college major for those outcomes.

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Research Findings

Field of work determines pay, and increasingly so


August 27, 2018

Sociologists have traditionally considered occupation—field of work—a central factor in differentiating people’s life chances. This post summarizes new research reinvigorating sociology’s preoccupation with occupation. It suggests that field of work is a critical factor determining pay, and increasingly so, and that this is the case because different occupations involve different tasks.

Occupational tasks and wages

For a number of years now, I have been studying how occupation relates to pay in the United Kingdom. In this research, I have found that occupations have become a stronger predictor of earnings since the 1970s such that occupations explain the majority of wage inequality and its growth in the United Kingdom. Moreover, this trend has shown no sign of reversal even with the wage stagnation of the last decade.

But how might we explain the connection between field of work and pay, and why the connection might be evolving? An exciting new approach examines the task content of occupations.

At the heart of this idea is that pay is attached to particular types of tasks: Different tasks command different rates of pay in the labor market. Since tasks are differentially bundled together across occupations, some occupations pay more than others.

Since the value of tasks is not constant, this approach might also explain why some occupations’ wages rise faster than others. For instance, sociologists Liu and Grusky examined the growth in wage inequality in the United States and found that occupational tasks explain most of the rise in between-occupation inequality there.

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Research Findings

The price employers pay for employees’ financial precarity


August 25, 2018

It is difficult to overlook the growing number of reports and studies documenting the downward spiral of personal financial wellness within the United States. The American Psychological Association, for example, indicates that finances have become a more frequently cited source of stress than work, family, or health concerns. The Federal Reserve Board further reports that half of the population does not have $400 in the event of an emergency, while spending equals or exceeds income for many households.

As Neal Gabler summarizes in the Atlantic, “In the 1950s and ‘60s, economic growth democratized prosperity. In the 2010s, we have democratized financial insecurity.”

Although rising debt and stagnating incomes are often ascribed as the main culprits for this turn of events, the impact of historic changes in employment relations and the organization of work on these trends tends to be understated if not go unmentioned. Research suggests that companies have increasingly relied on contingent workers, adopted variable pay and scheduling schemes, laid off employees, and increased employees’ share of the costs and risk associated with fringe benefits since the mid-1970s, which in sum has created a context for financial uncertainty and precarity to thrive among a substantial segment of the population.

Given the contribution of changing work practices to the current crisis in personal finance in the United States, an open question that has not received much attention is whether these trends carry economic implications for employers.

We set out to answer this question by collaborating with a national transportation company to collect survey data from over 1,000 short-haul truck drivers and track their accident rates for the subsequent 8 months.

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Research Findings

By giving greater relief to the highest earners, the charitable deduction disadvantages charities which protect the most vulnerable


August 22, 2018

By the end of this month, the Internal Revenue Service will have received about 140 million individual tax returns. Many of those who have filed this year will have hoped to see greater tax relief than they have years past. The tax legislation passed by Congress in December 2017 promised to lower the tax burden for a large swath of American households. One way it does this is by doubling the standard deduction—the baseline deduction in taxable income every taxpayer is eligible to take. Taxpayers are celebrating the change, but charitable organizations are decidedly less enthusiastic about it.

Charities are aggrieved because a larger standard deduction will likely reduce the number of taxpayers who itemize their deductions (rather than take the standard deduction) —and the number of taxpayers who take the tax deduction for charitable contributions (which I refer to as the charitable deduction). The charitable deduction is only available to itemizers, currently about a third of taxpayers. It works by lessening the cost of charitable gifts proportionally by one’s marginal income tax rate; i.e., the after-tax cost of charitable gifts declines as one’s income bracket increases. Now that the standard deduction has doubled in size, some taxpayers who itemized in years past will likely take the standard deduction this year and will no longer have a tax-related motivation for making donations.

This means we might see a dip in charitable giving. Charities have not hesitated to register their displeasure about this. As the tax legislation began to take form last fall, charities began to express their concerns that a diminished itemizer class would strip them of their ability to meet basic needs. In a statement to New York Times columnist Ann Carns, Feeding America executive Diana Aviv explained how a potential decline in charitable giving would “devastate [their] ability to provide food assistance;” Orvin Kimbrough of the United Way of Greater St. Louis voiced his concerns in similarly stark terms: “This is about people’s lives.”

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Research Findings

Which professional jobs are better for mothers?

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August 20, 2018

Compared to other workers, mothers face a number of disadvantages, including lower wages, bias in recruitment and promotion, and a greater risk of joblessness. These disadvantages may be more prevalent in professional jobs where ‘ideal worker’ norms are most salient. Professional employers tend to view mothers as less competent and committed than other workers—a major stigma in careers that require around-the-clock dedication.

These biases are so strong that employers often discriminate against mothers irrespective of their experience, skill or job commitment.

Our own research has shown that employers use a variety of strategies to shed, demote and otherwise marginalize professional mothers, including screening mothers out of the recruitment process or channeling them into positions with lower pay, prestige and responsibility.

But little is known about which kinds of professional jobs are better—or worse—for working mothers.

What role does job context play in shaping professional mothers’ access to highly skilled professional jobs? In a recent study we sought to answer this question. Our analysis drew on 51 in-depth interviews with employers in two professional sectors in Hungary: finance and business services. These two sectors allowed us to compare the ways job context shapes recruitment and hiring norms and practices.

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