James M. and Cathleen D. Stone Centre for the Study of Wealth Inequality

Stijn van Nieuwerburgh
Professor of Finance, Earle W. Kazis and Benjamin Schore Professor of Real Estate

June 2021

Abstract: Financial wealth inequality and long-term real interest rates track each other closely over the post-war period. Faced with unanticipated lower real rates, households which rely more on financial wealth must see large capital gains to afford the consumption that they planned before the decline in rates. Lower rates beget higher financial wealth inequality. Inequality in total wealth, the sum of financial and human wealth and the relevant concept for household welfare, rises much less than financial wealth inequality and even declines at the top of the wealth distribution. A standard incomplete markets model reproduces the observed increase in financial wealth inequality in response to a decline in real interest rates because high financial-wealth households have a financial portfolio with high duration.

Bertrand Badre
Inspector of Finances, HEC, Sciences Po 

January 2021

Rafael Lalive
Professor, Faculty of Business and Economics, University of Lausanne

December 2020

Abstract: In June 2004 the Austrian Equal Treatment Act banned the use of gender preferences in vacancy and recruiting notices. At the time over 40% of posted vacancies in the nation’s largest job board included explicit preferences for either male or female applicants. We use data on posted vacancies, merged to administrative records on employer workforces and on the gender of workers hired to fill vacancies, to study how the legal prohibition of gender preferences affected hiring rates of women and men and the degree of gender segregation across firms. Consistent with recent evidence from China (Kuhn et al., 2018) we show that in the pre-2004 period employers with a stated preference were very likely (>90%) to hire a worker of that gender. We also show that most firms advertising for men had a high fraction of male employees and were seeking to fill a job in a highly-male occupation, with the opposite pattern for those advertising for women. Nevertheless, a small minority of employers appear to have been using gender preferences to recruit against stereotypes. Within two years of the new law, stated gender preferences in Austrian job ads largely disappeared, and employers were posting vacancies using both female and male versions of the occupation title. Classifying firms based on their share of female employees and their industry sector, we show that the elimination of gender preferences led to a 2.0-2.5 percentage point rise in the fraction of females hired by firms that were most likely to advertise for male workers in the per-2004 period, and a 1.0-1.5 percentage point rise in the fraction of males hired by firms that were most likely to advertise for females. We conclude that the law had a systematic but modest effect on reducing gender segregation across firms.

Ignacio Flores
Postdoctoral Research Fellow, INSEAD Stone Centre for the Study of Wealth Inequality
October 15, 2020

PhD Seminar

Abstract: The goal of this seminar is to introduce students to methodological issues in the study of income and wealth inequality. I will first present a short story of the evolution of distributional issues in economics. I will then describe some of the fundamental concepts that are used in the literature, to then cover main empirical findings on the evolution of global inequality in the last century. A particular focus will be given to the data availability and the present challenges related to the variety of imperfect sources that are used to construct estimates.

Ignacio Flores
Postdoctoral Research Fellow, INSEAD Stone Centre for the Study of Wealth Inequality
October 8, 2020

INSEAD Stone Centre Seminar

Abstract: This paper measures the relative underestimation of factor income (i.e., capital and labor) in distributive data, with respect to national accounts’ figures. I study a group of countries with harmonized surveys in the Luxembourg Income Studies database, but also tax and Distributional National Accounts (DINA) estimates, from the World Inequality Database, for the US. I find that households receive around only half of national gross capital income, as opposed to private and public corporations, and the trend decreases in most countries over 1995-2015 (panel, 19 countries). Due to heterogeneous non-response and misreporting, household-surveys only capture around 20% of this aggregate, versus 70% of labor income (sub-panel, 13 countries). This structure understates inequality estimates, which become insensitive to changes in the capital share (gross and net estimates) and its distribution. These distortions are weaker in tax data but still present, while DINA estimates are not subject to them by construction. I formalize this system in a novel theoretical framework based on accounting identities. I then use it to compute marginal effects and contributions to changes in fractile shares.

Maripier Isabelle
Postdoctoral Researcher, INSEAD Stone Centre for the Study of Wealth Inequality
April 2019

INSEAD Stone Centre Seminar

Eliana La Ferrara
Fondazione Romeo ed Enrica Invernizzi Chair in Development Economics, Bocconi University

April 3, 2019

Abstract: We test the effectiveness of an entertainment education TV series, MTV Shuga, aimed at providing information and changing attitudes and behaviors related to HIV/AIDS. Using a simple model we show that “edutainment” can work through an ‘individual’ or a ‘social’ channel. We conducted a randomized controlled trial in urban Nigeria where young viewers were exposed to MTV Shuga or to a placebo TV series. Among those exposed to MTV Shuga, we created additional variation in the ‘social messages’ they received and in the people with whom they watched the show. We find significant improvements in knowledge and attitudes towards HIV and risky sexual behavior. Treated subjects are twice as likely to get tested for HIV eight months after the intervention. We also find reductions in STDs among women. These effects are stronger for viewers who report being more involved in the narrative, consistent with the psychological underpinnings of “edutainment”. Our experimental manipulations of the social norm component did not produce significantly different results from the main treatment. The ‘individual’ effect of “edutainment” thus seems to have prevailed in the context of our study.

Brendan M. Price
Assistant Professor of Economics, University of California, Davis

March 20, 2019

Abstract: Economic activity is highly seasonal. We show how seasonal fluctuations in aggregate employment induce earnings volatility for individual workers and households. To do so, we introduce a novel measure of seasonal work interruptions premised on the idea that seasonal workers are likely to exit from employment at the same time each year. We show, in two panel datasets on US households spanning 1984-2013, that a disproportionate number of prime-age workers experience recurrent job separations spaced exactly 12 months apart. Annually recurrent separations are most common in months when aggregate employment is declining; are concentrated in industries subject to seasonal shifts in labor demand; and exhibit a negative skill gradient, especially among men. Using machine-learning tools to identify the subset of job separators most likely to experience a repeat separation 12 months later, we track the evolution of personal earnings and household income before and after probable seasonal work interruptions. Seasonal workers incur large earnings losses during the off-season. These earnings losses are (i) driven primarily by recurrent separations from the same employer; (ii) not recouped in other firms or industries; (iii) partially offset by the receipt of unemployment insurance; and (iv) exacerbated by concurrent reductions in spousal employment and earnings. On net, there is little if any offsetting of seasonal earnings losses among modern US households.