Edward Conard

Top Ten New York Times Bestselling Author

  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…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
  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
  • “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
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
Upside of Inequality Oxford Unintended Consequences

AI Summary. The authors estimate substantially higher intergenerational persistence using expected lifetime resource measures than using traditional income measures. They estimate that, measured at ages 30–35, almost 80% of male children have higher disposable income than their fathers did, about 70% have higher consumption, and around 60% have greater expected lifetime resources.

Sadegh Eshaghnia, James Heckman, Rasmus Landersø, and Rafeh Qureshi National Bureau of Economic Research
Date Posted:

Estimating evolving expectations of lifetime resources over 40 years of Danish data, @r_landersoe finds that although 80% of male children have higher disposable income at ages 30-35 than their fathers, only 60% have higher lifetime income.

Do lifetime resource measures show stronger family influence than income measures?

Core argument: Nearly 80% of male children in the 1981–1982 birth cohort had higher disposable income at ages 30–35 than their fathers did at a similar age, versus about 70% for consumption and roughly 60% for expected lifetime resources.

Our expected lifetime measures quantify long-term family influence on children. We estimate significantly higher intergenerational persistence in expected lifetime measures compared to what is found using traditional measures of income and compared to realized lifetime measures. One measure of absolute mobility is the percentage of children who have better outcomes than their parents. For each measure of resources, we estimate the percentage of children (of the 1981—1982 birth cohort) whose resources are greater than those of their parents where we measure resources over ages 30–35. [In figure 9], the steep gradients for wage income, gross income excluding transfers, and gross income including transfers suggest substantial mean reversion across generations. However, once redistribution via taxes is factored in as done for disposable income and consumption, the gradient is much smaller. For disposable income, almost 80% of male children have higher income than their fathers had at a similar age. For consumption, this fraction is around 70%, while for expected PDV around 60% have higher expected lifetime resources than their father.

Takeaways by Macro Roundup® AI

  1. Nearly 80% of male children in the 1981–1982 birth cohort had higher disposable income at ages 30–35 than their fathers did at a similar age, versus about 70% for consumption and roughly 60% for expected lifetime resources.
  2. Expected lifetime measures of resources show significantly higher estimated intergenerational persistence than traditional income measures or realized lifetime measures.
  3. Steep intergenerational gradients for wage income and gross income with and without transfers suggest substantial mean reversion across generations, while the gradient is much smaller for disposable income and consumption, which factor in redistribution via taxes.

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  • The Life-Cycle Dynamics of Wealth Mobility — The authors identify four wealth trajectory groups within a birth cohort: 21% who start and remain near the top, 42% who start and remain near the bottom, and 21% and 15% who stay in the middle while rising or falling in rank. They conclude that wealth mobility is concentrated in these middle groups rather than shared across the population.
  • Intergenerational Mobility in American History: Accounting for Race and Measurement Error — Accounting for Black families, who historical studies routinely drop, and for measurement error in fathers' economic status can double estimates of intergenerational persistence in linked United States census data from 1850 to 1940. The author argues historical mobility was lower than previously estimated, implying greater equality of opportunity today than in the past.
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