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September 28, 2007

Interesting Paper on how we view inequality

Matthew D. Adler has posted an interesting paper to SSRN that explores whether we should think of poverty through snapshots (single time examinations) or through a lifetime perspective.  Well-Being, Inequality and Time: The Time Slice Problem and its Policy Implications is available through SSRN, here, and bepress, here.  Below is the abstract:

Should equality be viewed from a lifetime or "sublifetime" perspective? In measuring the inequality of income, for example, should we measure the inequality of lifetime income or of annual income? In characterizing a tax as "progressive" or "regressive," should we look to whether the annual tax burden increases with annual income, or instead to whether the lifetime tax burden increases with lifetime income? Should the overriding aim of anti-poverty programs be to reduce chronic poverty: being badly off for many years, because of low human capital or other long-run factors? Or is the moral claim of the impoverished person a function of her current state - meaning that someone who is badly nourished, badly housed, or in pain at present has a strong claim on our aid regardless of whether this is a chronic or transient state? Should we think of the aged as a "suspect class," a low-well-being group? From the sublifetime perspective, the aged are indeed a kind of "suspect class," because they tend to have low current incomes and health and to be socially isolated. But the aged have lived for many years and are therefore, as a matter of lifetime well-being, relatively "rich" compared to the rest of the population.

This Article addresses the time-slice question. I use the framework of welfarism and the formal apparatus of "social welfare functions" to sharpen analysis. The first half of the Article argues for the lifetime perspective. The second half surveys the implications of that perspective for a host of legal and policy issues: the measurement of equality; the measurement of poverty; the design of redistributive taxes; the question whether non-tax instruments, such as environmental regulations or tort law, should also be used for redistribution; and how the "suspect class" framework and other distributively sensitive policy tools should be structured. Above all, the Article aims to raise the profile of a foundational question which has been insufficiently discussed - a question that anyone who cares about equality should grapple with.

-E.R. erosser@wcl.american.edu

September 28, 2007 | Permalink

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