economic inequality: the life course perspective over economic shocks
TRANSCRIPT
Economic Inequality: The life course perspective over economic shocks
Esa Karonen & Mikko Niemelä
Tackling Inequalitiesin Time of Austerity
Aims of the PhD study
Research topic Data 1
Income inequality between generations Income distribution statistics 1987-2014Income and expenditure surveys 1966-1985
2 Wealth inequality between generations Households’ Wealth 1988-2013
3 Consumption inequality between generations Income and expenditure surveys 1966-2012
4
Benefit reforms and their effects on the income inequality between generations
SISU-microsimulation data
Life course perspective offers a great platform for researching intergenerational changes (Karl Ulrich Mayer)
Birth-cohorts as research units and objects of research
The effects of economic shocks as comparison point
Offers the periodic perspective and the association between incomes and birth-cohorts
Literature review
Adequate range of data (mainly income)
Adequate range of statistical years in data (short time series)
Age-period-cohorts –design
A prior research lacks
Research questions How birth-cohort’s income trajectories differ from
each other? What are the effects of economic shocks over
different birth-cohorts?
Economic shocks 1940 2nd World War 1973 oil crisis 1993 ”the great depression” 2007/8 financial crisis
Research questions
Two cross-sectional datasets Income Distribution Statistics, 1987-2014 Income and expenditure survey, Consumption,
1966-1985
Data
Dependent variables: Disposable household income (equivalent & inflation adjusted)
Independent variables: GDP, employment level, education, SES
Cohort design: Birth-cohorts with 5 year intervals ”Crisis cohorts” – two different generations
25-30 year olds at the time of economic shock 40-45 year olds at the time of economic shock
Used statistical models: APC-model, D-variant (age-period-cohort “detrend” -variant) Foster-Greer-Thorbecke poverty indexes
Variables & models
APC –model in a nutshell
Some technical Greek moonrunes
Results19
66
1971
1976
1981
1985
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
FGT a=0, headcount index
1966
1971
1976
1981
1985
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
0
0.02
0.04
0.06
0.08
0.1
0.12
FGT a=1, normalized poverty index19
66
1971
1976
1981
1985
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
00.005
0.010.015
0.020.025
0.030.035
0.040.045
0.05
FGT a=2, squared poverty index
WW2 - 25-30yrs - 1915-1920Oil crisis - 25-30yrs - 1948-195390´s depression - 25-30yrs - 1965-1970Financial crisis - 25-30yrs - 1985-1990Oil crisis - 40-45yrs - 1933-193790's depression - 40-45yrs - 1950-1955Financial crisis - 40-45yrs - 1967-1972
Dependent variable: centered (period level) logarithmic disposable income Control variables: Education, SES, size of household, unenployment Used weight: (weight*n members in household)
Results19
10
1915
1920
1925
1930
1935
1940
1945
1950
1955
1960
1965
1970
1975
1980
1985
-0.2
-0.15
-0.1
-0.05
0
0.05
0.1
0.15
APC-D Cohort estimates, linear regression (hysteresis adjusted)
International comparing points Scale is same as
in Norway In the cases of
Norway and France the APC-D estimates have similar shape as Finland
Results
1910
1915
1920
1925
1930
1935
1940
1945
1950
1955
1960
1965
1970
1975
1980
1985
1990
-0.6
-0.5
-0.4
-0.3
-0.2
-0.1
0
0.1
0.2
0.3
0.4
0.5
0.6
APC-D Cohort estimates, logistic model (hysteresis adjusted)
Dependent variable: middle income ”membership” Disposable income in quitiles (1-2 = 0; 3-5 = 1) No control variables included (saved processing time)
Results
Again, international comparing points Scale is more
aggressive than in Norway
Reason: upper-middle class
Norway has the same trajectory, although, younger cohorts have recovered
Results
Youngest cohort at the risk of income stagnation…or not?
Income developement peak at the cohorts born in 1930-40 and the middle income attainment at 1945-1950?
Financial crisis affects risk of poverty more heavily for those who are entering to the job market than older cohorts in more stable life cycle
Conclusion
THANK YOU!
Consortium partners of TITA project