Kyle Fitzgibbons

Up to a point, spreading the wealth around carries no growth penalty: growth in income per person is not meaningfully lower in countries with more redistribution. But economies that redistribute a lot may enjoy shorter growth spells, the authors reckon. When the gap between the market and net Ginis is 13 points or more (as in much of western Europe) further redistribution shrinks the typical expansion. The authors caution against drawing hasty conclusions. Details surely matter; nationalising firms and doling out profits would presumably be worse for growth than taxing property to fund education.

​Inequality is more closely correlated with low growth. A high Gini for net income, after redistribution, corresponds to slower growth in income per person. A rise of 5 Gini points (moving from the level in America to that in Gabon, for instance) knocks half a percentage point off average annual growth. And holding redistribution constant, a one-point rise in the Gini raises the risk an expansion ends in a given year by six percentage points. Redistribution that reduces inequality might therefore boost growth.

Deconcentrating capital ownership can be done in at least three ways:

• By giving tax preferences to small investors so that they become more likely to own shares. One could envisage a government-funded insurance whereby shares up to a certain amount would have a guaranteed, very modest, real return (say, 1% per year) even in a case of a stock market decline.


• Workers should be encouraged through the existing mechanisms, like employee stock ownership plans, to become the owners of the companies in which they work. Obviously, when they leave they could choose to sell their shares, but the experience of having had some equity (acquired perhaps at preferential rates) may make them more willing to continue investing. In other words, the working class and small investors should enjoy the same tax and other advantages that today are granted only to the rich.


• Using capital grants funded out of inheritance taxes, as suggested by Atkinson (2015), would also broaden the ownership base.

​As you can see the employment ratio was about the same in 2007 as in 1990, and hence the aggregate data shows no evidence that either trade or automation reduced employment during the period studied by Autor, Card and Hanson, as well as Acemoglu and Restrepo.

Of course that doesn't mean these factors have not had a negative effect on overall employment, just that doing so would require a very sophisticated study. Unfortunately, the science of economics has not yet advanced to the point where that sort of study is feasible. And thus we are forced to admit that we simply don't know if there is any effect on overall employment.

​But I do think that we know that trade and automation raise real GDP.

An increase in average income per capita does not necessarily guarantee that the broad population is better off. If all the income gains were captured by companies’ top executives and shareholders, the broad population might not benefit and could actually be worse off. Our analysis finds, however, that the gains from immigration are broadly shared across the population. Migration increases the average income per capita of both the bottom 90% and the top 10% of earners, even though high-skilled migration benefits more top earners — possibly because of a stronger synergy between migrants and natives with high skills. Moreover, the Gini coefficient — a broad measure of income inequality within the bottom 90% of earners — is not affected by the migrant share.

How much of a role did trade play in the long-term decline in the manufacturing share of total employment, which fell from around a quarter of the work force in 1970 to 9 percent in 2015? The answer is, something, but not much.

Or to put it another way, absent the trade deficit manufacturing would be maybe a fifth bigger than it is – which is actually what EPI estimates too (Exhibit D in the linked paper). That wouldn’t make much difference to the long-run downward trend, but looms larger relative to the absolute decline since 2000.

Autor et al only estimate the effects of the China shock, which they suggest led to the loss of 985,000 manufacturing jobs between 1999 and 2011. That’s less than a fifth of the absolute loss of manufacturing jobs over that period, and a quite small share of the long-term manufacturing decline.

​I’m not saying that the effects were trivial: Autor and co-Autors show that the adverse effects on regional economies were large and long-lasting. But there’s no contradiction between that result and the general assertion that America’s shift away from manufacturing doesn’t have much to do with trade, and even less to do with trade policy.

Job destruction caused by technology is not a futuristic concern.  It is something we have been living with for two generations. 

First everything we hear and see regarding technology suggests the rate of job destruction will pick up.  Think of the elimination of drivers, and of those who work behind cash registers.  Second, the gains in average education and health of the workforce over the last 50 years are unlikely to be repeated.  Third, to the extent that non-work is contagious, it is likely to grow exponentially rather than at a linear rate.  Fourth, declining marriage ratesare likely to raise rates of labor force withdrawal given that non-work is much more common for unmarried than married men.

Will we be able to support these people and a growing retired share of the population?  What will this mean for the American family?  For prevailing ethics of self-reliance?  For alienation and support for toxic populism? These are vital questions.  Even more vital is the question of what is to be done. These questions should preoccupy social science researchers.  They are vital to our future.​

For many pro-life politicians, the answer to high abortion rates is to make abortion illegal or harder to get. Donald Trump, a recent convert to the pro-life cause, has vowed to appoint a conservative to America’s Supreme Court. Many religious leaders fulminate against abortion, although Pope Francis softened the Catholic church’s line slightly on November 20th. Abortion remains a grave sin, but penitent women can now be forgiven by parish priests and do not have to go to a bishop.

International comparisons show that bans and restrictions do little to cut the number of abortions. Most women will do what it takes to end an unwanted pregnancy, even to the point of risking their lives. According to the Lancet study, abortion is as common in countries where it is illegal or allowed only to save a woman’s life as it is in those where it is provided on demand.

Studies of Western countries suggest that few women who have had an abortion regret their choice. Although women with pre-existing mental-health problems can see them worsen following an abortion, such problems also tend to worsen if they carry an unwanted baby to term. But in poor countries, where sterile rooms and well-trained doctors are in short supply, even legal surgical abortions can be risky. In the West less than 1% of abortions carried out by manual vacuum aspiration are followed by complications. In Bangladesh the share is 12%.

Contraception also offers an excellent return on public investment. An abortion costs the NHS 13 times the amount it spends on the average contraceptive user per year. The Copenhagen Consensus, a think-tank, estimates that making contraception and sexual-health advice universally available would bring returns worth $120 for every $1 spent, mostly by reducing deaths in pregnancy and childbirth in poor countries.

​Even in England, with its well-run sexual-health clinics and policy of providing contraceptives free, about a fifth of pregnancies end in abortion. And a third of women who have abortions have had at least one before. It cannot be abolished, no matter how enlightened a government’s policy. But the English have more-or-less the right attitude. A high abortion rate is best viewed as a public-health problem that can be cheaply addressed—not through pointless bans or restrictions, but by providing the means to avoid unwanted pregnancies in the first place.

Refugees might be the face of migration in the media, but 90 percent of the world’s 247 million migrants have moved across borders voluntarily, usually for economic reasons. Voluntary migration flows are typically gradual, placing less stress on logistics and on the social fabric of destination countries than refugee flows. Most voluntary migrants are working-age adults, a characteristic that helps raise the share of the population that is economically active in destination countries.

Moving more labor to higher-productivity settings boosts global GDP. Migrants of all skill levels contribute to this effect, whether through innovation and entrepreneurship or through freeing up natives for higher-value work. In fact, migrants make up just 3.4 percent of the world’s population, but MGI’s research finds that they contribute nearly 10 percent of global GDP. They contributed roughly $6.7 trillion to global GDP in 2015—some $3 trillion more than they would have produced in their origin countries. Developed nations realize more than 90 percent of this effect.

Realizing the benefits of immigration hinges on how well new arrivals are integrated into their destination country’s labor market and into society. Today immigrants tend to earn 20 to 30 percent less than native-born workers. But if countries narrow that wage gap to just 5 to 10 percent by integrating immigrants more effectively across various aspects of education, housing, health, and community engagement, they could generate an additional boost of $800 billion to $1 trillion to worldwide economic output annually. This is a relatively conservative goal, but it can nevertheless produce broader positive effects, including lower poverty rates and higher overall productivity in destination economies.

Air quality has improved dramatically in rich countries over the past century. Around 1880, when the air was worst in London, it is estimated that 9,000 people died each year from air pollution,1 about one of every seven deaths.2 Today, London air is cleaner than since medieval times.

Yet, air pollution is still a huge problem, especially in the developing world. It kills 7 million people each year, or one of every eight deaths globally. This is not, however, the air pollution that most think about. The most deadly air pollution comes from inside people’s houses, because 2.8 billion people still use firewood, dung and coal for cooking and keeping warm, breathing polluted air inside their homes every day.

To people, who don’t live under these conditions, it is hard to imagine how dirty the indoor air is. The World Health Organization points out that the outdoor air in, for instance, Beijing, Delhi and Karachi is several times more polluted that the outdoor air in Berlin, London and Paris.3 But the typical indoor air in a developing country dwelling with an open fire is many times more polluted than Beijing, Delhi or Karachi. That is why indoor air pollution kills 4.3 million people each year, making it one of the world’s leading causes of death. (Kindle Locations 641-653)

The connection between housing and health is coldly logical. The sick and vulnerable become homeless, and the homeless become sicker and more vulnerable.
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Although the tipping point is often the loss of a job, sickness or injury often precede it. Sickness and injuries make holding a job difficult, which leads to income declining and homelessness for those without a safety net. Due to the mostly employer-based health insurance coverage system in the U.S., no job means no health insurance. The combination of unemployment and poor health can then lead to financial ruin. Nerdwallet estimated that 57.1 percent of U.S. personal bankruptcies are due to medical bills, making it the leading cause of the financial calamity that often precedes homelessness.

The specific therapy for homelessness and its associated health issues is housing.

​The approach known as “Housing First” is very simple: Provide housing, give support, and people’s health will improve. Skeptics may argue that this approach is naïve and refer to the welfare reform debates from years ago which advocated for the boot-straps approach and questioned whether a person “deserves” housing or is “ready” to make full use of it. Lastly, people may argue that we could never afford it.

Fortunately, Housing First has already proved successful. The first pilot was started in 1988 by PATH Beyond Shelter, a homeless program in Los Angeles. This model focused on getting people into permanent supportive housing rather than the usual patchwork of services at homeless shelters. Beyond housing, Housing First programs provide individuals and families with case management services to connect people with health care and social services.

Homeless programs across the U.S. have since adopted it. In 2009, the Journal of the American Medical Association reported that a program in Seattle that provided housing to merely 95 severe alcoholics saved the city $4 million by decreasing health care costs and jail-related expenses. The program cost less than $14,000 per person per year. Cities such as San Francisco, Denver, and Minneapolis also demonstrated success, but most notable is what Salt Lake City and the entire state of Utah have accomplished. Salt Lake City virtually ended chronic homelessness among veterans. The entire state has decreased chronic homelessness by 91 percent according to state officials.​