Wealth Gap Research Articles

Quantifying Specific and Systemic Factors in the Black-White Wealth Gap in the United States

Quantifying Specific and Systemic Factors in the Black-White Wealth Gap in the United States

Does employee ownership promote workers’ wealth accumulation? the case of stock options

ABSTRACT This study examines the consequences of employee ownership for workers’ economic outcomes, with a focus on wealth accumulation. Using large-scale, nationally representative data from the US Survey of Consumer Finances, this study focuses on stock options as a pathway into employee ownership and examines the association between stock options and wealth. A difference-in-differences analysis shows that employees with stock options accumulate greater wealth than employees who do not receive stock options, and the differences are larger at longer tenure. The differences remain statistically significant after accounting for a wide range of job characteristics and sociodemographic attributes. Furthermore, the wealth gap between employees with and without stock compensation widened over time. Finally, results show that stock options are more prevalent among already more socioeconomically advantaged employees. Together, these findings suggest that broadening employee ownership – through stock options or similar avenues – might help in addressing increasing wealth inequality in the United States by giving workers, especially middle- and lower-income workers, a stake in US economic growth.

Wealth creators or inheritors? Unpacking the gender wealth gap from bottom to top and young to old

There is growing interest in understanding how gender influences the accumulation of wealth. While prior studies focused on labor-related determinants, our research focuses on inheritances and gifts. Using unique survey data that oversamples the top 1% of wealth holders in Germany, we show that the gender wealth gap is small for individuals up to age 40, then widens, and declines for those past retirement age. Transfer amounts and their timing are important drivers of these differences: men tend to inherit larger sums than women during their working life. Women often outlive their male partners, thus receiving larger inheritances at older ages.

The analysis of good and bad effects of business people’s money-making and money-spending activities

There is no doubt that the money-making and money-spending activities of successful business people have a positive impact on society. Firstly, the rich alleviate the wealth gap and promote income equity through wealth distribution mechanisms such as taxation and charitable donations. Secondly, the rich promote economic development by accelerating money circulation and boosting employment through investment and consumption. Besides, business operations and charitable consumption by the rich can increase the supply of public goods and improve social welfare. However, there are also some adverse effects, such as the Matthew effect widening the gap between rich and poor, the exploitation and oppression of workers by capitalists, and the negative externalities of business people’s economic activities. This paper proposes some policy recommendations to address these challenges.

The price of inequality: How state tax policies widen the wealth gap

State taxation has become particularly regressive in recent decades. Across the country, states have increasingly begun to rely on sales and consumption taxes to fund significant portions of their expenditures. Given that these taxes disproportionately hurt lower classes that spend a larger portion of their income on consumable goods and services, these trends widen wealth gaps. By replacing and reducing progressive income taxes with these regressive forms of taxation, levels of inequality have risen. This paper examines the impact of such state and local taxes on the levels of income inequality within each state. Through empirical analysis, it identifies a substantial and positive correlation between the regressivity of state tax codes, as measured by the relative tax burdens on different income brackets, and the levels of inequality, as quantified by the income share of the top 1%. In this study, I examine the relationship between state tax policies and income inequality in the United States. By analyzing the tax structures of different states, I identify a significant correlation between regressive taxes, that disproportionately burden the less wealthy, and increased income inequality. Using quantitative data from 2013 to 2019, I show that states that rely more on taxes that burden working class families, like sales and excise taxes, witness larger portions of wealth concentration within the top 1%. These findings suggest that tax policy at the state level significantly shapes wealth distribution and highlight the need for reforms to reduce inequality at the state level.

Who Benefits from Mass Incarceration? A Stratification Economics Approach to the “Collateral Consequences” of Punishment

A rich empirical literature documents the consequences of mass incarceration for the wealth, health, and safety of Black Americans. Yet it often frames such consequences as a regrettable artifact of racially disproportionate criminal legal system contact, rather than situating the impetus and functioning of the criminal legal system in the wider context of White political and economic domination. Revisiting a quarter century of mass incarceration research through a stratification economics lens, we highlight how mass incarceration shapes Black–White competition for education, employment, and financial resources and contributes to Black–White disparities in well-being. Highlighting persistent research gaps, we propose a research agenda to better understand how mass incarceration contributes to systematic White advantage. To address mass incarceration's consequences and transform the conditions of White political and economic domination under which it arose, we call for legislative and judicial intervention to remedy White hyper-enfranchisement and reparations to eliminate the Black–White wealth gap.

How Insured Are Workers Against Unemployment? Unemployment Insurance and the Distribution of Liquid Wealth

In this Economic Commentary, we analyze the relationship between unemployment insurance (UI) recipiency and insurance by examining the wealth distribution of workers who have been through an unemployment spell. We focus on the net liquid wealth gap between recipients and nonrecipients of UI along the income distribution of the unemployed. Using recent data from the Survey of Income and Program Participation at the individual level, we estimate that UI recipients at the bottom half of the income distribution tend to have higher median net liquid wealth than nonrecipients, putting nonrecipients in a potentially vulnerable economic position during periods of unemployment. Replication codes for this paper are available at https://github.com/avdluduvice/LuduviceTruss-Williams_UI.

Race, inclusion, and equity: do ESOP jobs deliver for Black workers?

ABSTRACT This paper investigates whether ESOPs closed the wage gap and provided better benefits for millennial workers during the COVID-19 pandemic. The four factors that will be the focus are wages, non-wage benefits, COVID-19 outcomes, and risk of catching COVID-19. The sample size of this study is 4,417, and logit regressions were used to analyse data from Round 20 of the National Longitudinal Study of Youth, collected in 2021. The study found that ESOP jobs provide higher wages and more non-wage benefits than non-ESOP jobs. ESOP workers were less likely to experience a work stoppage during the COVID-19 pandemic. There were no significant differences in the risk of catching COVID-19. Scholarship focuses on ESOPs’ ability to close the wealth gap between Black and White workers. While ESOPs do provide better wages than non- ESOP jobs, there is a large disparity between the wages of Black and White ESOP workers.

Unraveling the global economic and mortality effects of rising urban heat island intensity

The increasing severity of urban heat island (UHI) effects poses a significant concern in cities, where to over half of the world's population lives. We examine the pattern of surface UHI intensity (SUHII) and its effect on urban economic productivity and mortality across 171 countries from 2003 to 2018. Countries with heavy industrial/manufacturing bases and higher income levels face more significant economic repercussions from SUHII. Males experience higher mortality rates under comparable SUHII conditions. A unit increase in GNI correlates to a 23.2 % rise in SUHII's effect on GDP and a 5.5 % increase in its effect on mortality rate. A higher Socio-Demographic Index mitigates SUHII's impact on urban GDP. Moreover, the Gini index directly impacts SUHII more than it affects SUHII-related mortality through inequality. Reducing income inequality by one unit will increase the enhancing effect of SUHII on the mortality rate by 11.8 %. Our findings reveal a significant link between wealth disparity and amplified health risks associated with SUHII, potentially leading to new forms of urban inequality. The study highlights the importance of development status and economic composition in facing UHI-related challenges and recommends equitable strategies for policymakers and urban planners to mitigate UHI effects in diverse developmental contexts.

Does increasing robot density exacerbate wealth inequality?

This article expands the economic consequences of applying automation technology beyond the labor market to encompass wealth distribution. It empirically investigates the effects of changes in robot density on household wealth inequality and potential mechanisms. By using three-digit industry codes provided by the China Census 1 % sampling data in 2015, this paper achieves a more accurate matching of industrial robot data with individual data and employs instrumental variables to alleviate potential endogeneity bias. This paper finds that increasing robot density exacerbates the inequality of family wealth, and this effect has a particularly significant impact on young labor force and workers with low education. Its impact mechanism may come from the inequality of employment difficulty and the increase of the non-transferability of human capital. This study is of great importance to deeper understand the economic consequences of the accelerated use of automation technology and accurately formulate public policies to narrow the wealth gap.

Black Americans’ Landholdings and Economic Mobility after Emancipation: Evidence from the Census of Agriculture and Linked Records

Large and persistent racial disparities in land-based wealth were an important legacy of the Reconstruction era. To assess how these disparities were transmitted intergenerationally, we build a dataset to observe Black households’ landholdings in 1880 alongside a sample of White households. We then link sons from all households to the 1900 census records to observe their economic and human capital outcomes. We show that Black landowners, relative to laborers, transmitted substantial intergenerational advantages to their sons, particularly in literacy and homeownership. However, such advantages were small relative to the racial gaps in measures of economic status.

The erosion of democracy in an age of wealth inequality: Unravelling the impact of subjective socioeconomic stratification

Since the 1980s, the growing wealth disparity in advanced capitalist societies has drawn attention from political economy scholars due to its profound effects on political systems. This research explores the relationship between wealth inequality and the stability of democratic institutions, focusing on how subjective class perceptions shape support for democratic governance. The findings indicate that as wealth inequality intensifies, it significantly reshapes class identities, influencing attitudes towards democracy. Both the subjective lower and upper classes exhibit diminished support for democratic systems, albeit for different reasons, which may pose risks to democratic stability. In contrast, the subjective middle class, a stronghold of democratic values, is shrinking in both proportion and influence as wealth inequality widens, potentially weakening democratic institutions further. This study underscores the connection between increasing wealth inequality and challenges to democratic values, highlighting the importance of policy measures to protect democratic integrity in the face of rising economic disparities.

Gender Gap in Spousal Education and Wealth After Marriage in India

This study examines gender-based disparities in spouse selection among parents in India. Our focus on studying this gender gap in low- and middle-income countries is important as arranged marriages are prevalent in many such societies, and the education and wealth of a groom can significantly impact his spouse and future generations’ long-term economic well-being. Our findings reveal that parents frequently arrange marriages for their daughters with more educated and wealthier grooms, while sons are often matched with brides of lower education. Notably, a novel finding of our study is that daughters, despite generally lower education levels, achieve higher combined educational attainment with their husbands than sons with their wives, especially in areas with lower literacy, income, and employment rates. Overall, our analysis brings to light an important facet of discriminatory societal norms that place a higher value on men’s financial success and women’s social status.

High-Deductible Health Insurance May Exacerbate Racial And Ethnic Wealth Disparities.

This study examined the equity implications of high-deductible health plans within the context of racial and ethnic wealth disparities. Using restricted data from the Medical Expenditure Panel Survey, we evaluated the net worth (in 2011-18) and financial assets (in 2011-16) of families with private insurance and those in high-deductible health plans with and without an associated health savings account. Our results represent, to our knowledge, the first estimates of racial and ethnic wealth disparities within these populations. Results show that White households consistently held significantly more wealth than did Black and Hispanic households across income levels. In the lowest income quartile, White privately insured families had more than 350percent more in financial assets than their Black counterparts. Low-income Black and Hispanic families with high-deductible health plans but no savings accounts had median financial assets ($2,200 and $2,000, respectively) that were well below the average family coverage deductible. Study findings highlight the role of systemic racial wealth disparities, beyond that of income, to establish a unique pathway whereby high deductibles can exacerbate health care inequities.

Effects of the Local Environment and Nutritional Status on the Incidence of Acute Respiratory Infections Among Children Under 5 Years Old in Indonesia.

This study aimed to map the incidence of acute respiratory infections (ARIs) among under-5 children in Indonesia, address the triple burden of malnutrition, and analyze the impact of malnutrition on ARIs, taking into account the environmental and wealth disparities in Indonesia. This study utilized an ecological design, analyzing aggregate data from the Indonesia Nutrition Survey, 2022. It encompassed 33 provinces and 486 districts/cities, involving a total of 334 878 children under 5 years of age. Partial least squares structural equation modeling was employed to investigate the relationships among wealth, environment, malnutrition (stunting, wasting, and underweight), and ARIs. The proportion of ARI cases in Indonesia was generally concentrated in central Sumatra, the western and eastern parts of Java, and eastern Papua. In contrast, the northern part of Sumatra, central Kalimantan, central Sulawesi, and central Papua had a higher proportion of malnutrition cases compared to other regions. Negative associations were found between malnutrition and ARIs (path coefficient =-0.072; p<0.01) and between wealth and environment (path coefficient =-0.633; p<0.001), malnutrition (path coefficient=-0.399; p<0.001), and ARIs (path coefficient=-0.918; p<0.001). An increasing wealth index is expected to contribute to reducing ARIs, malnutrition and environmental burdens in the future. This study emphasizes the necessity for focused strategies that address both immediate health challenges and the underlying socioeconomic determinants to improve child health outcomes in the Indonesian context.

‘The assisting hand’ or ‘the grabbing hand’: experimental evidence from PPP investments in the implementation of official rotation systems

In the context of uneven and insufficient social development, examining the relationship between the official rotation system and the quality of government services offers an effective guide to addressing government misconduct and reducing wealth disparities. This study employs a public goods game experiment to simulate the investment scenario of Public-Private Partnership (PPP) projects, focusing on three pivotal questions: Firstly, do the ‘assisting hand’ and the ‘grabbing hand’ of officials differ between developed and underdeveloped regions? Secondly, can the interregional rotation system enhance the ‘assisting hand’ and weaken the ‘grabbing hand’ in both areas? Lastly, can political tournaments more effectively alleviate the issue of ‘government misconduct’? The experimental results reveal: Firstly, low economic growth potential limits the ‘assisting hand’ of officials while fostering the ‘grabbing hand’; secondly, the interregional rotation system strengthens the ‘assisting hand’ in underdeveloped areas but weakens it in developed regions; finally, compared to the interregional rotation system, the tournament system reinforces the ‘assisting hand’ in developed regions. These findings provide micro-level insights into the relationship between official behavior and regional characteristics, and offer significant implications for the reform of governance policies.

Social Transition and Modernization of Eurasian Countries

Abstract Unlike political and economic transitions, the social transition of Eurasian countries exhibits a certain degree of passivity. Eurasian countries prioritize solving political and economic issues, with strict control over social aspects leading to a relatively delayed modernization of the social sector. The market-oriented economic transitions have resulted in a disparity in wealth among the populace, and political transformation has generated various conflicts and social divisions, which pose significant challenges to the simultaneously initiated social transformation. Currently, some Eurasian countries are still undergoing systemic reforms aimed at modernization, implemented as a long-term national strategy. The progress and prospects of these reforms depend on the interplay of multiple factors, and their future trajectory warrants continuous attention. The modernization of Eurasian countries is destined to follow a development path different from that of other countries, determined by their unique cultural traditions, social structures, and specific national conditions. Meanwhile, the social changes over more than 30 years of independence have profoundly altered the cultural and social characteristics of Eurasian countries. While preserving traditions, they need to incorporate valuable experiences from the modernization of other countries and seek development paths best suited to their own contexts.

Challenges Afflicting Indian Courts

The Indian legal system faces numerous challenges that impact nearly every court across the nation. Key issues include a heavy caseload coupled with inadequate court facilities, personnel, and equipment. The wealth disparity exacerbates inequalities, placing the poor in a position where they struggle more intensely to access justice. Additionally, slow judicial proceedings, a shortage of judges, and a failure to adopt technology are contributing factors to ongoing delays. Allegations of corruption within the judiciary, lawyers' strikes, a lack of specialist expertise among judges, ineffective legal aid systems, linguistic barriers among individuals, irregularities in case listings, opaque processes for the appointment and transfer of judges, and the executive's tendency to disregard the Supreme Court collegium's recommendations for judiciary appointments and promotions based on selective intelligence reports are significant challenges. Furthermore, some judges exhibit political biases that may seek future favors, and the temporary nature of public prosecutor positions alongside biased selection processes complicates matters. Addressing these issues requires comprehensive reforms, increased funding for the sector, and a firm commitment to proper legal practices.

Internal CSR and the decline of organised labour: a possible elective affinity?

Purpose This paper aims to explore the potential relationship between internal corporate social responsibility (CSR) and the decline of organised labour in countries of the global North. Given the opposing trends since the late 20th century and the widespread adherence of internationally recognised labour standards in CSR codes, standards, and reporting frameworks, questions arise about the disparity between CSR rhetoric and practice regarding the collective rights of in-house employees. The paper further explores the tendency in CSR scholarship to overlook violations of collective rights for in-house employees in the global North. Design/methodology/approach To examine whether there is an elective affinity between the rise of CSR and the decline of organised labour, the paper uses a discursive institutionalism approach, providing a meta-theoretical analysis of academic literature on internal CSR. A scoping review methodology was used to identify relevant literature and compile it into an empirical corpus for a metatheoretical analysis. The empirical corpus, consisting of 38 articles, was generated through a Google Scholar (GS) search guided by the following questions: (1) What are the dominant conceptual framings of internal CSR? (2) What are the dominant roles and practical aspects of internal CSR? Findings The paper identifies two key disparities in the literature: (1) between rhetoric and practice regarding the collective rights of in-house employees in the global North and (2) between the extensive CSR research on violations of collective rights of value chain workers and the limited attention to in-house employees’ collective rights. The analysis highlights two factors contributing to these disparities: the integration of internal CSR into the corporate managerial toolbox and the distinction in CSR discourse between core labour standards and workplace issues. The analysis shows that internal CSR has an elective affinity with the decline of organised labour. Research limitations/implications While scoping reviews are often standalone studies, this paper used the methodology for its stated purpose. Limitations include the broad span of internal CSR across various academic fields and reliance solely on GS. Measures taken to enhance inclusivity were unlimited review period, refined inclusion criteria and keywords during the selection process and cross-checks of cited articles. Social implications Considering the implications of the decline of organised labour on workers’ collective voice, poverty and the distribution gap in wealth and income, this paper suggests that for CSR to play a significant role in advancing sustainable social justice, scholars and practitioners should look at ways to reduce the disparity between rhetoric and practice regarding employees’ voice and collective rights. Originality/value The paper lays the foundation for a better understanding of the potential links between internal CSR and the decline of organised labour. It addresses a gap in the literature on the interrelations between CSR and organised labour in the global North and proposes root causes of this gap. This contribution enriches the scarce literature exploring the potential elective affinity between CSR and transformations in the global economy and labour markets since the late 1980s. Finally, the paper deepens the understanding of the implications of CSR for employees’ collective rights and voice as well as for organised labour.

Artificial intelligence and wealth inequality: A comprehensive empirical exploration of socioeconomic implications

This study introduces a global database on artificial intelligence (AI) capital stock and related AI indicators. Using the data constructed, we investigate the impact of AI and capital stock accumulation on wealth inequality, a dimension not extensively explored in the literature. This study contributes to the growing body of literature on the socioeconomic consequences of AI, with implications for scholars, policymakers, and corporate executives. An innovative database detailing AI capital stock is developed by incorporating data from various sources, including corporate reports, industry databases, and scholarly literature. This novel dataset, focusing on the US, the EU, and Japan from 1995 to 2020, is a critical resource for future investigations. The research methodology is centered on an extended Solow–Swan model, conceptualizing AI as a form of capital that can substitute for or complement traditional forms of labor. A panel-corrected standard errors model is used to analyze the data, accounting for potential cross-sectional dependence and heteroscedasticity. Our findings reveal a positive and statistically significant correlation between AI technology adoption, AI capital stock accumulation, and wealth disparity. The analysis further indicates a complex interaction between income and wealth disparities, suggesting a mutually reinforcing cycle. This study fills a significant gap in the existing literature by offering a novel perspective on the distributional impact of AI. Our results underscore the importance of considering the broader socioeconomic implications of AI, extending beyond considerations of immediate productivity and economic growth. This study offers valuable insights for policy formulation and business decision making, emphasizing the necessity of a comprehensive understanding of the influence of AI on wealth distribution.