Category Archives: Poverty

Forever Unequal, Immobile, and Politically Divided? Facing Brutal 500 Year Trends

Much of modern philanthropy focuses on reducing inequality, increasing economic mobility, and increasing the efficacy of government.

Three recent books, each in their own way, make the case that philanthropy will likely fail.

Forever Unequal: Inequality Persists Save for Massive Wars, Plagues, State Collapse 

In The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-First Century, Walter Scheidel argues that inequality generally increases over time unless something very awful happens: massively mobilized warfare, societal upending revolutions, plagues, or state collapses.

In short: since the advent of farming, rising inequality has been the default state of humanity across almost all cultures and economic systems.

See below for a history of European inequality. Inequality has always risen save for the Fall of the Roman Empire, the plague, the Black Death, and WWI/WWII.


Scheidel marshalls data sets that support this argument in societies across the world.

His final take: while it’s possible that we can inequality through policy and social programs, it’s unlikely.

Yes, individual countries can tweak inequality at the margins, but since the invention of farming, policy has never been able trump long-term immutable trends of increased inequality.

Forever Immobile: The Persistence of Family Status 

In The Son Also Rises, Gregory Clarke utilizes a novel technique – tracking the status of last names over time – to solve many previous problems of economic mobility research, which usually only tracked economic shift of 1-2 generations.

Clarke’s method allows him to avoid the noise of only looking at short time horizons.

If a rich person’s son becomes a poet, it might appear that the family was downwardly mobile. However, if the poet’s daughter then becomes a CEO, the downwardly mobile trend is erased – and so on.

Clarke’s main argument is that, over multiple generations, there’s much less mobility than we thought.

Clarke’s results are stunning: the previous literature estimated intergenerational earnings elasticity to be around ~.3; Clarke’s data raises this estimate to ~.8.


Under Clarke’s estimate, family advantages don’t disappear over two or three generations, but ten to fifteen generations.

Forever Divided: The Long Hold of Original Immigration Patterns

In Albion’s Seed: Four British Folkways in America, David Fischer argues that you can trace many of our country’s current conditions to long-ago immigration patterns from Europe (note: I have not read the book yet, and am largely relying on Scott Alexander’s review). 

Fischer tracks the migrations of the Puritans, Cavaliers, Quakers, and Scotch-Irish – and shows how current inequities and culture can in many ways be tied to these 400-500 year old immigrations patterns.

In summarizing the book, Scott Alexander makes a few observations:

If this is true, I think it paints a very pessimistic world-view. The “iceberg model” of culture argues that apart from the surface cultural features we all recognize like language, clothing, and food, there are deeper levels of culture that determine the features and institutions of a people: whether they are progressive or traditional, peaceful or warlike, mercantile or self-contained.


If America is best explained as a Puritan-Quaker culture locked in a death-match with a Cavalier-Borderer culture, with all of the appeals to freedom and equality and order and justice being just so many epiphenomena – well, I’m not sure what to do with that information. Push it under the rug? Say “Well, my culture is better, so I intend to do as good a job dominating yours as possible?” Agree that We Are Very Different Yet In The End All The Same And So Must Seek Common Ground? Start researching genetic engineering? Maybe secede? I’m not a Trump fan much more than I’m an Osama bin Laden fan; if somehow Osama ended up being elected President, should I start thinking “Maybe that time we made a country that was 49% people like me and 51% members of the Taliban – maybe that was a bad idea“.

Many have argued that the post-colonial country formation process led to unworkable patchworks of different cultures be thrown into single countries.

Perhaps this is true of the United States as well.

Will This Time Be Different? 

On one hand, all of the above makes me incredibly gloomy about our prospects of evolving our society into a more equal, mobile, and better governed nation.

On the other hand, the sample size is small: humans have only had post hunter and gather economies for relatively small time frame, and our current institutions and technologies are very different than those of a few hundred years ago.

Moreover, there’s one place we have improved things: we’re incredibly more productive and wealth than we used to be.

So perhaps what we need is the equivalent of the industrial revolution but for inequality, mobility, and political culture.

But, at the very least,  baseline predictions should keep us sober: it will take a radical departure from historical trends to change the trajectory of our nation.

These major cities could afford a $10K per family basic income w/o raising taxes

There’s been a lot of talk recently about the pros and cons of a universal basic income.

There’s also been a lot of talk about how expensive this would be.

But, from my quick analysis, I actually think quite a few major cities could institute a child based basic income utilizing only existing tax revenues.

I. Numerous big cities spend over $20,000 per student

Getting accurate city per-pupil spending amounts can be a near impossible task, but nearly all sources I reviewed showed that Washington D.C., Newark, and New York City spend at least ~$18K a student. I think Boston spends around this as well.

And higher end estimates get closer to $25-30K per student.

For the sake of modeling out how to end child poverty, let’s assume ~$20K per student.

II. Giving $5K per student per year basic income back to families

Let’s say that starting next school year, each of these cities decided to reduce public education spending from $20K to $15K per student, and instead of giving this money back to taxpayers, provided a universal basic income of $5K per child back to families.

Assuming your average family has about two kids in the public school system, that’s $10K per family.

That won’t make any family rich, but it would probably get most families out of deep poverty.

III. A $5K per student spending reduction would likely not lead to major education losses

Dropping to $15K per student would still put these cities ahead of the national average of ~$10K per student. Even adjusting for cost of living differences, none of the cities would be that far off typical educational spending.

To get a taste for what cities are able to achieve with various students and spending, see below:


The above is by no means an accurate picture of school system effectiveness, as it’s based on absolute scores rather than growth; however, it provides decent evidence that schools systems that spend $10K-15K to student can still achieve relatively ok outcomes.

50% of the top ten adjusted scoring cities in the country are located in Texas and Florida, both of which spend very modestly.

Ultimately, the students in Washington D.C., Newark, and New York City are different than students in other cities, so we can’t make any claims with 100% confidence, but the experience of other cities suggests that spending $15K per student is enough to provide an education on par with other major cities across the country.

IV. What do you think parents would want?

Somebody should poll this question, but I expect families that have two children would rather have $10K in cash per year / $15K in education spending rather than $0K in cash / $20K in education spending.

For many of these families, $10K per year would be absolutely game changing.

It would be very interesting for an aspiring politician to run on this as a single issue platform. Or to take the issue to a popular referendum.

V. Trade off that no one explicitly made

Here’s the thing: every marginal $1K increase in education spending can be justified at the time. There’s always a compelling financial ask to be made when families in poverty are struggling to get a great education.

But, eventually, these marginal increases can lead to spending allocations that just might be out of line with what families want and what might be in the public interest.

My guess is that providing a $5K per student basic income to families – and reducing educational spending by the same amount – would increase the welfare of families in some cities.


How Hard is Life? Here’s What the Numbers Say

Scott Alexander just wrote one of the more important posts I’ve read this year (HT Tyler Cowen).

Please do read the full post.

After Scott gave qualitative information about human suffering in America, he ran some numbers to come up with what a random sample of 20 Americans might be dealing with.

Here’s what he came up with (NP = no problem in terms of the narrow ailments he ran):

Screen Shot 2015-12-28 at 5.16.50 PM

In sum, only 9 out of 20 Americans have escaped some combination of chronic pain, alcoholism, sexual abuse, domestic violence, unemployment, and depression.

Of course, this doesn’t mean that these people can’t lead happy and meaningful lives (I personnaly am very close with three alcoholics who have kicked drinking and are thriving).

But this is also a narrow list of ailments: I could think of numerous other sufferings that could make life very, very difficult.

A few takeaways, most of which are pretty obvious:

  1. Things were probably harder back in the day. This seems to definitely be true during the agriculture and early industrial ages, and was probably true in the hunter and gather age as well.
  2. The United States is amongst the richest nations in the world. It also has fairly high levels of happiness and meaning rates. So if the numbers are grim here, they are most likely worse for much of the world.
  3. So while things are indeed better, they are not amazing. Declaring that things are amazing is ignorant at best and destructive at worst, as the policy regime for “things are amazing” is likely to be different than the policy regime for “things are still pretty tough for a lot of people.”
  4. Of course, humans brains were not evolved to be happiness machines, so suffering will always be with us so long as we retain our humanness. But I hope there doesn’t need to be this much suffering.

It is interesting to think about what this might mean for education.

I’ll try to tackle that in a later post.

Poverty, the Brain, Tax Rates…. a Way to End Childhood Poverty?


A new study links poverty to brain development.

The findings:

Screen Shot 2015-04-01 at 3.26.57 PM

I’m not an expert in brain science, so I will not attempt to evaluate the science. I’ll just note that the findings are based on correlation, not causation.

This findings mirror other findings linking poverty to reduced IQ.


Let’s say that we prove that poverty negatively affects brain development.

Furthermore, let’s assume that the negative effects can be completely eradicated by increasing the wealth of those living in poverty.

The question then becomes one of wealth transfers: what tax rates would we need to give enough wealth to those living in poverty in order to eradicate the negative brain development effects?


The Laffer Curve is a simple way to understand the trade offs between tax rates and revenue. The key insight of the curve is that there is some point at which tax rates are so high that they reduce tax revenue. For example, at a 100% tax rate, presumably no one would work, which would mean no revenues for government.

So, if you want to to raise taxes to fund wealth transfers, you want to make sure you stay on the “good” side of the curve (once you cross to the other side increased taxes do not increase revenue).

There’s not universal agreement on where the curve peaks, but estimates generally fall in the 50-70% range.


There is much debate about how to calculate the number of adults living in poverty. Similar debates are had about the number of children living in poverty. Estimates are around 16 million children. Let’s assume this is roughly right and let’s also assume an average of two children per household.

That would be 8 million households with children living in poverty.

Let’s say we wanted to transfer $20,000 worth of wealth to each of these households, which would presumably lift most of these households out of poverty. For example, someone with children earning minimum wage probably makes around $20,000 a year post tax transfers, so this proposal would double her earnings.

To annually provide $20,000 in additional funds to 8 million households, we would need to raise an additional $160,000,000,000 (160 billion) in tax revenue per year.

Currently, the federal government raises ~3.3 trillion in taxes.

Raising another 160 billion would require a ~5% increase in federal tax revenue.

This is all back of the envelop math, but I think it’s roughly right. Let me know if I’ve made any major errors.


A 5% increase in federal tax revenue will likely keep us on the “good” side of the Laffer Curve, especially if the revenue is drawn from both middle and high income taxpayers (the broader the base, the less likely any specific group is going to see their tax rates skyrocket, though the top 10% of tax payers produce the majority of income tax revenue, so the impact would likely be concentrated at the top).

And if you don’t think $20,000 is enough, make it $30,000; I think this would still keep us on the “good” side of the curve (based on eyeballing this somewhat outdated chart).

The next question would be how to transfer this wealth. Direct transfers could reduce the incentive to work, while wage subsidies would only impact those who do work. Direct transfers that are predicated on behavior (child attendance in school, etc.) could also be an option.

My preference would be to emphasize a mix of wage subsidies and conditional transfers, but I’m not an expert on the mechanics of wealth transfers, so others might come up with better ideas. There is probably some trade off between covering all households in poverty and incentivizing work. We may also want to keep the tax “reward” for having children from being too high.


Given my philosophical beliefs, I’m generally inclined to raise taxes as high as they can optimally go. No one chooses her genes; no one chooses her environment; and I’m skeptical of any strong versions of free will. To paraphrase Obama: you didn’t build you.

So I find hard to justify why some people should have way more money than others.

My philosophical beliefs aside, there may be strong scientific reasons to conduct wealth transfers.

Ensuring everyone’s brains develop to their full potential seems like a good enough reason to me.

Lastly, given my lack of expertise in taxes and transfers, all feedback especially welcome.

What is a Normal Amount of Sadness?

Carol Graham posted some interesting data over at Brookings.

Before I dig in, one caveat: all of this data is based on surveys, which I find useful but always take with a grain of salt.

In my opinion, revealed behavior is much more useful data than that which comes from surveys.

All that being said, here’s the chart:

poverty stress


1. The Physical Pain Numbers are Striking

~37% of people living in poverty report suffering from physical pain, while only ~16% of the rich report such ills.

There have been periods in my life when I’ve suffered from physical pain, and these periods were not  good. Physical pain affects everything from mood to ability to work to relationships.

I hope Obamacare and other such health interventions reduce these rates.

2. There’s Not Much Difference Between the Middle Class and the Rich

Nearly every category is within ~5% reporting rates across the middle class and the rich. Once you hit middle class levels, it appears that money can’t buy you reduced stress, anger, worry, pain, or sadness.

This might, depending on your views, lead you to believe that poverty reduction should be a greater policy focus than middle income stagnation.

3. Causation and Correlation Issues  

Particularly when it comes to something like physical pain, it could be that the source of the pain caused the poverty, and not that poverty is causing the pain.

4. What is Normal? What is Optimal?

Whenever I read data like this, I wonder: what is normal?

Over the course of humanity, what would average trend lines look like?

Humans are not designed to be happy machines.

At any point in time, some of his are going to be feeling stressed, angry, or sad.

If we optimized our environment, psychology, culture, etc. – what would optimal levels look like?