Postdoc vacancy: An introduction into the Employment, Equity, and Growth ... standards, which he publishes on his web pu
Postdoc vacancy: An introduction into the Employment, Equity, and Growth team We are looking for a new postdoctoral research fellow for our Employment, Equity, and Growth (EEG) research group at the Institute for New Economic Thinking (INET) at the University of Oxford. To provide some background information, in this blog post we give general information about the focus of the EEG research project and tell something about INET and Oxford as a place to work. Then, Stefan Thewissen, a postdoctoral researcher in the team, will give an example of the research he conducted within the EEG project together with fellow members Brian Nolan and Max Roser.
General information about the EEG team, INET, and Oxford The main objective of our Employment, Equity, and Growth (EEG) research team is to examine how prosperity and improved living standards can be achieved for middle and below income households. We take a rather broad approach to the notion of prosperity and living standards, focusing on incomes but also going beyond income and looking into various aspects of quality of life. Our central research themes cover topics including intergenerational social mobility, labour market polarisation, technological change, top incomes, debt, and the housing market. The research we do is empirical, interdisciplinary, and policy relevant. We work in collaboration with the Resolution Foundation, an independent research and policy organisation based in London. The members of the EEG team work on different sub-projects. Marii Paskov, a postdoc with a background in sociology, looks at living standards in terms of economic burdens, indebtedness, wellbeing, and intergenerational social mobility. Postdoc and economist Max Roser studies long-term trends in living standards, which he publishes on his web publication called Our World in Data. Postdoc and political economist Stefan Thewissen conducts research on labour market risks such as international trade and technological change, and income shocks, wage inequality, and redistribution preferences. We have two DPhil students; Chloé Touzet is a political scientist examining tax expenditures from a comparative political economy perspective, and Tahnee Ooms is an economist studying the national accounts to examine what share of economic growth reaches the household
sector. Alice Lazzati is working as the EEG research assistant; she is contributing to our work on various projects. A number of other scholars are associated with our team, including Tony Atkinson, Facundo Alvaredo, Erzsébet Bukodi, Carl Frey, Craig Holmes, and John Muellbauer. Brian Nolan coordinates this diverse range of topics as the director of the team. Our EEG team is part of the Institute for New Economic Thinking (INET) of the Oxford Martin School. INET is a vibrant institute, where scholars from a wide range of backgrounds come together to analyse issues such as inequality, climate change, technological change and innovation, and financial contagion. We are also affiliated with the Department of Social Policy and Intervention with a strong research focus on welfare states, poverty, education, and intergenerational social mobility. We have our offices in the new INET building located in Jericho, a beautiful area in Oxford ten minutes walk away from the city centre. The University of Oxford has great opportunities for researchers with countless seminars and lectures by leading researchers and policy-makers from around the world. The university also offers many social activities at the different colleges. Anyone who would like to contribute to our empirical and interdisciplinary research related to any of the topics mentioned above is more than welcome to apply. You can always contact Marii Paskov (
[email protected]), Brian Nolan (
[email protected]), or Stefan Thewissen (
[email protected]) if you have any additional questions.
Living standards, inequality, and growth: an example of EEG research So what kind of research is being conducted at EEG? I am Stefan Thewissen and I am a postdoc at EEG. Here I briefly discuss a project I have been involved in for the last year with my two colleagues Brian Nolan and Max Roser. It is an example of the broad questions we look at in our Employment, Equity and Growth (EEG) team, in this case related to living standards, inequality, and economic growth. For many years inequality in income and wealth received little attention in public debate and was only a minority interest in the economics profession. GDP per capita was widely considered to be a satisfactory indicator of economic prosperity. Yet, inequality has now become the focus of remarkably wide-ranging attention, from Davos and the State of the Union address to academic journals across a variety of disciplines. Thought-provoking research by Tony Atkinson and Thomas Piketty on an increased concentration at the very top of the income and wealth distribution over the last century has played a major role in moving inequality towards the centre of political and academic debate. As the chart below shows from about 1980s onwards top income inequality (measured as the share of total income going to the top 1%) has been increasing – particularly rapidly in the English speaking countries and more modestly in Europe and Japan. This is in sharp contrast to the decline in inequality seen over the pervious 40 years.
Measures like top income shares and summary measures of inequality (such as the widely used Gini coefficient) help us to track inequality as a central indicator of national economic progress. Nevertheless, these measures do not tell us about living standards, which we define here as real income levels of households at different parts of income distribution. Both the top shares and the Gini coefficient only measure the distribution since they are expressed in relative terms. Moreover, for the top income shares only pre-tax incomes are available, therefore they do not reflect actual consumption possibilities. In order to gain insight into income levels as well as its distribution we should look at the evolution of living standards at different points of the distribution. With Brian and Max we have used micro data from LIS and OECD to calculate the level of disposable household incomes at different deciles of the income distribution. We have expressed this in real terms (taking changes in price levels into account to reflect purchasing power) while also making adjustments for household size and composition to take into account that the standard of living attainable with a given level of household income depend on the number of persons in the household. Our data reveal large differences across countries in the extent to which living standards improved for ordinary households, as shown in the charts below. If we look at a set of countries for which we have data from around 1980 onwards, we can see that the average annual rise in median incomes ranges from 0.3% (the United States) to 3.2% (Norway). As a result of its spectacular growth, Norway now is the country with the highest level of median income in our sample. If we compare the median income growth rates to economic growth measured as real gross national income (GNI) per capita, we see that there is more variation across countries in median incomes whilst economic growth rates seem to be more alike. In terms of GNI per capita the US still is the richest country.
Real household incomes
Real GNI per capita
Particularly interesting is the comparison between the UK and the US. These countries share many characteristics: both are liberal in their welfare state policies, their growth in GNI per capita was quite comparable (1.7% in the US and 2.0% in the UK per year), both saw a substantial rise in their level of inequality as measured by the Gini (0.21 Gini points in the US and 0.24 in the UK per year) and top income shares (0.28 percentage points in the US and 0.21 in the UK per year). Yet, the evolution in real living standards from 1974-2010 differs drastically – median incomes almost doubled in the UK, whereas they were almost stagnant in the US.
Together with Lane Kenworthy and Tim Smeeding we further look into the relations between inequality, growth, and living standards. In a nutshell, we find that median incomes are positively associated with economic growth and negatively with Gini coefficients and top income shares, but that still a significant proportion of variation in median incomes is left unexplained. In follow-up papers we aim to look closer into factors that might explain the gap between median household incomes and economic growth. The discrepancy might be due to inequality, which affects the median but not average economic growth. Economic growth is calculated per capita, whereas median incomes are equivalised (summed at the household level and divided by the square root of the household size, as we assume there are economies of scale within a household). Because of that, changes in household composition affect the median but not per capita growth. Other differences are that certain income components, such as in-kind benefits including health and education, are not taken into account in median incomes but are part of per capita growth, and that we use different price corrections for the two concepts (the consumer price index versus a GDP deflator). In another paper we try to assess under what circumstances incomes increase for ordinary households. Using our dataset and figures we gathered on income sources across the distribution (labour income from the household head or the spouse, capital income, taxes and transfers) we try to shed light on these issues.
