Horizontal inequalities

To understand to what extent South Africa’s post-Apartheid transformations have met the expectations of the early 1990s, this study looks at the evolution of overall and racial inequalities, before and after tax and transfers, from 1993 to 2019.

Despite significant progress in recent decades, the labour market gap between men and women remains substantial in almost all countries across different dimensions: employment, wages, promotions, and earnings (Olivetti and Petrongolo 2016). Recent research has shown that the differential impact of parenthood on men and women – so-called child penalties – accounts for much of the remaining gender gap (Kleven, Landais, and Søgaard 2019; Kleven et al. 2019). Prior evidence on child penalties has been limited to a small group of high-income countries. In Kleven, Landais, and Leite-Mariante (2024), we estimate child penalties for 134 countries around the world, representing more than 95% of the global population.

Brazil is one of the world's most unequal countries, yet little is known about how much of this extreme inequality persists across generations. This paper provides the first estimates of intergenerational income mobility (IGM) for a large developing country using tax data. A central challenge is that nearly a third of Brazil's economy is informal — unrecorded in administrative registries. We develop a method to measure both formal and informal income, enabling the study of mobility for a representative sample of 1.3 million children born between 1988 and 1990 and their parents.

The urban population in developing countries grew by 12.5 percent between 2015 and 2020, and it is projected to grow by 64.7 percent by 2050 (UNCTAD, 2021). Part of this growth is driven by rural-urban migration, which is expected to intensify due to climate change. Whether urban developing economies will be able to generate enough good jobs to accommodate this fast-growing workforce is a fundamental question for economic development. The consensus among economists since Harris and Todaro (1970) and Fields (1975) is that rural-urban migrants end up unemployed or informally employed. The empirical evidence that confirms this view is mostly based on short-term (year-on-year) effects of rural-urban migration. This begs the question of what happens over longer time horizons?

This paper investigates how unrepresentative product testing can systematically erode trust within excluded populations. The authors investigate this hypothesis---that who is in the data matters for diffusion---in the context of medical innovation, where Black Americans make up 13% of the population, yet are less than 5% of clinical trial participants

We survey archaeological evidence suggesting that among hunter-gatherers and farmers in Neolithic western Eurasia (11,700 to 5,300 years ago) elevated levels of wealth inequality occurred but were ephemeral and rare compared to the substantial enduring inequalities of the past five millennia. In response, we seek to understand not the de novo “creation of inequality” but instead the processes by which substantial wealth differences could persist over long periods and why this occurred only at the end of the Neolithic, at least four millennia after the agricultural revolution. Archaeological and anthropological evidence suggests that a culture of aggressive egalitarianism may have thwarted the emergence of enduring wealth inequality until the Late Neolithic when new farming technologies raised the value of material wealth relative to labor and a concentration of elite power in early proto-states (and eventually the exploitation of enslaved labor) provided the political and economic conditions for heightened wealth inequalities to endure.

This project studies the distributional effects of international trade policies and shocks via their impact on consumer prices, which may be different across consumer groups who have different consumption baskets.

I assess the efficiency of transport networks for every country in Africa. Using spatial data from various sources, I simulate trade flows over more than 70,000 links covering the entire continent. I maximise over the space of networks and find the optimal road system for every African state. My simulations predict that Africa would gain 1.3% of total welfare from reorganising its national road systems, and 0.8% from optimally expanding it by a tenth. I then construct a dataset of local network inefficiency and find that colonial infrastructure projects significantly skew trade networks towards a sub-optimal equilibrium today. I find suggestive evidence that regional favouritism played a role sustaining these imbalances.

There are two broad views as to why people stay poor. One emphasizes differences in fundamentals, such as ability, talent, or motivation. The poverty traps view emphasizes differences in opportunities that stem from access to wealth. To test these views, we exploit a large-scale, randomized asset transfer and an 11-year panel of 6,000 households who begin in extreme poverty. The setting is rural Bangladesh, and the assets are cows. The data support the poverty traps view—we identify a threshold level of initial assets above which households accumulate assets, take on better occupations (from casual labor in agriculture or domestic services to running small livestock businesses), and grow out of poverty. The reverse happens for those below the threshold. Structural estimation of an occupational choice model reveals that almost all beneficiaries are misallocated in the work they do at baseline and that the gains arising from eliminating misallocation would far exceed the program costs. Our findings imply that large transfers, which create better jobs for the poor, are an effective means of getting people out of poverty traps and reducing global poverty.

This paper examines how objective and subjective heterogeneity in life expectancy affects savings behavior of healthy and unhealthy people. Using data from the Health and Retirement Study, we first document systematic biases in survival beliefs across self‐reported health: those in poor health not only have a shorter actual lifespan but also underestimate their remaining life time. To gauge the effect on savings behavior and wealth accumulation, we use an overlapping‐generations model where survival probabilities and beliefs evolve according to a health and survival process estimated from data. We conclude that differences in life expectancy are important to understand savings behavior, and that the belief biases, especially among the unhealthy, can explain up to a fifth of the observed health‐wealth gap.

The number of international students in American universities more than doubled in the last decade. These students disproportionately attend colleges in small urban economies, where local housing markets largely depend on student demand. This study estimates the impact of international students on home prices, rents, and residential construction.

This paper introduces a novel lens through which we can view and understand the world, which is compositional inequality. Compositional inequality describes differences between rich and poor in terms of the labour share and capital share of their income.

This paper investigates how individuals weight income gaps between themselves and others in particular positions in a societal income distribution. This is crucial to understand how individuals form their fairness considerations and preferences for redistribution, as we know that people care about inequality both in absolute and in relative terms.

This paper asks what are the gaps in exposure between racial groups, and how have they evolved over time. It shows that the gap between the non-Hispanic white population and African Americans is narrowing over time, and investigates what is the specific contribution of the Clean Air Acts.‍

In the largest correspondence study conducted to date in the rental housing market, encompassing 50 major cities in the US, this paper documents patterns of discrimination across US regions, and explores relationships between discrimination, segregation, and economic opportunity.

The importance of siblings and the quality of their bond for children's development have not been sufficiently explored, even though most children have at least one sibling. Policy has instead focused on stimulating interactions between parents and the target child. Understanding the role of siblings in the human capital formation process can provide another policy tool to tackle inequality.

There is a wealth of evidence showing that young people’s attitudes change when they interact with people different from themselves, but little evidence for older, established professionals. This paper aims to understand the decisions of older, established professionals because these are often the people with the power to provide opportunities to others.

Using a database of four decades of research from 1960, this study finds that economics lags far behind the disciplines of sociology and political science in publishing research related to racial differences.

Human development has many dimensions that are important for life course outcomes, including cognitive abilities and socio-emotional skills. These different skills are correlated across generations and this plays an important (although not exclusive) role in the intergenerational transmission of inequality. The evidence on the intergenerational transmission of different types of skills is still scarce.

This research uses lab experiments to find out whether common values, including equality, enhance cohesion in a society.

When first implemented, affirmative action policies are temporary measures to help underrepresented groups close achievement gaps. Nevertheless, successive governments tend to keep them in place. This paper investigates why this tends to be the case.