Edward Conard

Top Ten New York Times Bestselling Author

  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Monday, December 30, 2013

AI Summary. Median real income growth over roughly three decades measures 3.2% using tax units but 36.7% after switching to households and adding government transfers, tax cuts, household-size adjustment, and employer-provided health insurance. The authors argue widely cited tax-unit data understate middle-class income growth by omitting these elements.

Greg Mankiw Greg Mankiw's Blog
Date Posted:
Is Database:
Database

Greg Mankiw’s Blog @GregMankiw: From 1979 to 2007, median real income for tax units increased by only 3.2%, but 36.7% when adjusting for household size & employer-provided health insurance.

Does the income measure chosen change middle-class income growth estimates?

Core argument: Median real income from 1979 to 2007 rose 3.2% measured across tax units but 12.5% measured across households, showing that the choice of income unit alters conclusions about middle-class stagnation.

From 1979 to 2007, median real income for tax units increased by only 3.2%, suggesting stagnation. However, when considering households instead of tax units, the increase is 12.5%. Including government transfers raises this to 15.2%, and factoring in tax cuts further elevates it to 20.2%. Adjusting for household size, the growth reaches 29.3%, and incorporating employer-provided health insurance boosts it to 36.7%. These adjustments highlight the importance of selecting appropriate income measures, as they significantly alter perceptions of middle-class income growth. The Burkhauser paper critiques the Piketty-Saez data for focusing on tax units, excluding transfers, and not accounting for household size or non-taxable compensation, underscoring the need for comprehensive data analysis in economic discussions.

Takeaways by Macro Roundup® AI

  1. Median real income from 1979 to 2007 rose 3.2% measured across tax units but 12.5% measured across households, showing that the choice of income unit alters conclusions about middle-class stagnation.
  2. Successively adding government transfers (15.2%), tax cuts (20.2%), adjustment for household size (29.3%), and employer-provided health insurance (36.7%) raises measured median real income growth from 1979 to 2007 above the 3.2% tax-unit figure.
  3. The Burkhauser paper critiques the Piketty-Saez data for focusing on tax units, excluding transfers, and omitting household size and non-taxable compensation.

http://economics.cornell.edu/uploads/Burkhauser%20paper.pdfhttp://gregmankiw.blogspot.com/2013/12/on-measuring-changes-in-income.htmlOn Measuring Changes in Income

Take this as a cautionary tale. When people talk about changes in income over time, make sure you know what measure of income they are citing.

So, during this period, has the middle class experienced stagnant real income (a mere 3.2 percent increase) or significant gains (a 36.7 percent increase)? It depends on which measure of income you look at. It seems clear to me that the latter measure is more relevant, but the former measure of income often gets more attention than it deserves.

6. There is still one thing left: employer-provided health insurance, an important fringe benefit that has grown in importance. Adding an estimate of that into income raises the 29.3 percent figure to 36.7 percent.

5. But not all households are the same size, and the size of households has fallen over time. Adjusting for household size increases that 20.2 percent to 29.3 percent.

4. What about taxes? The middle class received some tax cuts during that period. Factoring taxes in, the 15.2 percent figure rises to 20.2 percent.

3. Now consider government transfer payments. If we add those in, that 12.5 percent number becomes an even better 15.2 percent.

2. Households are more important than tax units. Two married people are one tax unit, whereas a couple shacked up are two tax units. We would not want to treat the movement from marriage to shacking up as a drop in income. If we look at households rather than tax units, that meager 3.2 percent rises to a bit more respectable 12.5 percent.

1. From 1979 to 2007, median real income as measured by pre-tax, pre-transfer cash income of tax units rose by only 3.2 percent. That is a paltry amount for such a long period. You might conclude that middle class incomes have been stagnant. But wait.

Does this matter? Yes! Here are some numbers from the Burkhauser paper:

This national conversation has generated renewed attention to the highly influential Piketty-Saez data. It is worth pointing out, therefore, some limitations of these data, which have been stressed by Cornell economistRichard Burkhauser: The data are on tax units rather than households, they do not include many government transfer payments, they are pre-tax rather than post-tax, they do not adjust for changes in household size, and they do not include nontaxable compensation such as employer-provided health insurance.

To divert attention from the disastrous rollout of his health reform, President Obama has decided to change the national conversation to discuss increasing inequality. This phenomenon is not new--the trend started about four decades ago--but it is real and important. In case you are a new reader of this blog, you can find my personal views on the matterin this paper.

Friday, January 10, 2014

AI Summary. Census Bureau data show the U.S. foreign-born population approaching 37m, or 12% of the total population. An additional 33m people, 11% of the population, are U.S.-born with at least one foreign-born parent.

U.S. Census Bureau U.S. Census Bureau
Date Posted:
Is Database:
Database

The foreign-born population in the U.S. is approaching 37m, representing 12% of the total population, according to recent @USCensusBureau data. This demographic shift highlights the role of immigration in shaping the nation’s economic landscape.

How large are the foreign-born population and their U.S.-born children?

Core argument: The U.S. foreign-born population is approaching 37m, or 12% of the total population, according to Census Bureau data.

The foreign-born population in the U.S. is approaching 37m, representing 12% of the total population, according to recent Census Bureau data. This demographic shift highlights the significant role of immigration in shaping the nation's economic landscape. Additionally, 33m individuals, or 11% of the population, are U.S.-born with at least one foreign-born parent, underscoring the growing influence of immigrant families. These figures suggest a substantial impact on labor markets, consumer demand, and cultural dynamics, as foreign-born individuals and their descendants contribute to workforce diversity and economic growth. The data excludes institutionalized populations, providing a focused view on the civilian demographic trends. As policymakers and economists analyze these trends, understanding the implications for labor force participation, social services, and economic integration becomes crucial for informed decision-making.

Takeaways by Macro Roundup® AI

  1. The U.S. foreign-born population is approaching 37m, or 12% of the total population, according to Census Bureau data.
  2. An additional 33m people, 11% of the U.S. population, are U.S.-born with at least one foreign-born parent, according to Census Bureau data.
  3. The Census Bureau figures exclude institutionalized populations, covering only the civilian demographic.

More than one in five persons in the United States are either first or second generation Americans. According to the Census Bureau’s “Foreign-Born Population of the United States: 2009” 36.7 million people, or 12 percent of the nation’s population are first generation immigrants and another 33 million people, 11 percent of the population were born in the U.S. with at least one foreign-born parent. The data excludes the institutionalized population.U.S. Census Bureau, “Nation’s Foreign-Born Population Nears 37 Million,” 19 October, 2010. Available at: http://www.census.gov/newsroom/releases/archives/foreignborn_population/cb10-159.html#immigration #importinglabor #demographics