New life in the debates over poverty measurement
In recent weeks, a familiar debate over how we understand the global poverty rate across time reappeared in mainstream op-ed pages. Sparked initially by Bill Gates tweeting out an infographic produced by Our World in Data—which visualizes massive decreases (94% to 10% of people) in global poverty over the past two-hundred years—the notable discussants have been LSE anthropologist JASON HICKEL and Our World in Data researchers JOE HASELL and MAX ROSER.
Hickel published a polemical Guardian op-ed criticizing the publication of this chart, which, he argued, misrepresents the history it claims to communicate and relies on contestable and imprecise data sources to bolster its universal progress narrative, taking "the violence of colonisation and repackaging it as a happy story of progress." The responses were numerous.
Among them, a post by Hasell and Roser provided detailed descriptions of the methods and data behind their work to answer the following: "How do we do know that the vast majority of the world population lived in extreme poverty just two centuries ago as this chart indicates? And how do we know that this account of falling global extreme poverty is in fact true?"
In addition to methodological arguments regarding data sources and the poverty line, Hickel's argument emphasizes the gap between poverty and the capacity to eliminate it:
"What matters, rather, is the extent of global poverty vis-à-vis our capacity to end it. As I have pointed out before, our capacity to end poverty (e.g., the cost of ending poverty as a proportion of the income of the non-poor) has increased many times faster than the proportional poverty rate has decreased. By this metric we are doing worse than ever before. Indeed, our civilization is regressing. On our existing trajectory, according to research published in the World Economic Review, it will take more than 100 years to end poverty at $1.90/day, and over 200 years to end it at $7.4/day. Let that sink in. And to get there with the existing system—in other words, without a fairer distribution of income—we will have to grow the global economy to 175 times its present size. Even if such an outlandish feat were possible, it would drive climate change and ecological breakdown to the point of undermining any gains against poverty.
It doesn’t have to be this way, of course."
- For a measured account, see this excellent post from Branko Milanovic. On Twitter, he summarizes Hickel: "1. Maddison's 19th century GDPs do not include the value of non-cash goods and services that was relatively high then [basically true]; 2. Bourguignon-Morrisson 19th century distributions are guesses [true]; 3. Poverty Line of $1.90 is unrealistically low (disputed); 4. How to account for the extreme costs of industrialization (coercion and the dead) [often ignored although life expectancy changes are used to adjust for it]." Link.
- At Vox, Dylan Matthews provides a comprehensive summary of the recent debate's various back-and-forths, glossing the major disputes over the poverty line, historical data accuracy, and narrative. Link.
- A 2018 paper by eminent poverty scholar Martin Ravallion takes stock of poverty debates with a focus on income inequality: "Given the scope for sensible people to disagree on the desirable properties of an inequality measure—and there is no scientific justification for the near monopoly of relative measures in applied work by economists—more productive debates on globalization and development might be possible if both sides better understood what concepts of inequality they are using. To talk about 'inequality' without making explicit whether one means absolute or relative inequality is especially problematic." Link.
- These discussions over the nature of development, economic growth, and measures of economic progress derive from much earlier debates in international relations and development studies. In his canonical 1966 article, Andre Gunder Frank distinguishes between "undevelopment" and "underdevelopment," arguing that "underdevelopment is not due to the survival of archaic institutions and the existence of capital shortage in regions that have remained isolated from the stream of world history. On the contrary, underdevelopment was and still is generated by the very same historical process which also generated economic development." Link to the original text.
New Researchers: NO SUBSTITUTE
A paper finds no labor market losses resulting from minimum wage increases
In CARL NADLER'S job market paper—co-authored with SYLVIA ALLEGRETTO, ANNA GODOEY, and MICHAEL REICH—the authors build on literature that finds no job market losses resulting from minimum wage increases. The paper tests for labor-labor substitutions, a widely proposed hypothesis which suggests that employers' preferences shift in favor of skilled workers as the price of labor increases, thereby masking underlying job losses for low wage workers. It takes a concentrated look at the earnings and employment effects of increased minimum wage policies in Chicago, Washington DC, Oakland, San Francisco, San Jose, and Seattle. It also tests for labor-labor substitutions in California’s food industry.
"In the six cities, we find positive earnings responses in the food services industry that are remarkably close to those estimated in recent studies of state and federal minimum wage increases. … Like these studies, we also do not detect any employment losses. … Our analysis of California food services finds no evidence of either labor-labor substitution or hours effects. As a result, the most likely explanation for our findings is that total labor demand elasticity for employment and hours combined is inelastic, and the policies have raised the earnings of low-wage workers in the six cities. ."
Each week we highlight great work from a graduate student, postdoc, or early-career professor. Have you read any excellent research recently that you'd like to see shared here? Send it our way: email@example.com.
- The University of Anterwerp's Herman Deleck Center for Social Policy published a working paper exploring how institutional and cultural factors influence support for a UBI. They find that "countries with the greatest demand for a universal basic income are the countries with the least institutional capacity to implement a generous, unconditional, and universal cash assistance program." Link.
- Caroline Lester reports on the largest ever study of moral preferences for autonomous vehicles in The New Yorker: "Most players sacrificed individuals to save larger groups. Most players spared women over men. Dog-lovers will be happy to learn that dogs were more likely to be spared than cats. Human-lovers will be disturbed to learn that dogs were more likely to be spared than criminals." Link.
- From the Undark Magazine podcast, an interview with researchers who use audio data to “monitor rapidly-melting polar ice caps.” Link.
- On the cartography of meta-data: at Failed Architecture, Matthew Stewart reveals how real estate developers use algorithmic representations of urban neighborhoods to plan future investments. "We could place these developments firmly within a momentum that persists between urbanization and financialization; one mitigated by real estate markets and effectively unaltered post-2008 and the subprime mortgage crisis." Link.
- Preliminary results from Finland’s UBI experiment. Link. ht Lauren
- "It’s the poorest part of California...There’s almost no middle class." Michael Greenberg recounts the extreme conditions experienced by farm laborers in the San Joaqium Valley. Link.
- German Gutierrez argues that the shift towards monopolization in US industries and the growth of the real estate sector are responsible for labor's declining profit share in the United States: "...a detailed analysis of US industry-level trends suggests that rising mark-ups and increasing concentration are critical to jointly explaining declining (gross and net) labor shares and rising profit shares." Link to the full paper.
- Governor Gavin Newsome has proposed a "digital dividend" for Californians, drawn from the profits "created from their data." Link. Any details are yet to come, but the idea of a digital dividend has appeared in our newsletter before, in a paper co-authored by Glen Weyl last year. Link to that paper.
- An insight into Brazil's Belo Horizante: a city which began providing access to food as a right of citizenship in 1993. Link.
- "When the early proponents of the scale-free paradigm started seeing power laws in real-world networks in the late 1990s, they viewed them as evidence of a universal organizing principle underlying the formation of these diverse networks… Now, the new paper reports that few real-world networks show convincing evidence of scale-freeness." From last year, an article in Quanta covers ongoing debates in social network analysis research. Link. ht Steven Nuñez
- "The Great Dying of the Indigenous Peoples of the Americas resulted in a human-driven global impact on the Earth System in the two centuries prior to the Industrial Revolution." A new paper by Alexander Kocha, Chris Brierley, Mark Maslina, and Simon Lewis tests the pre-industrial revolution Anthropocene thesis. Link.
- "Shoplifting occurred nationwide, but it was disproportionately a problem in the capital. A study of a sample of the many thousand prosecutions at the Old Bailey reveals that linen drapers, shoemakers, hosiers and haberdashers were the retailers most at risk. Over 70% of goods stolen, particularly by women, were fabrics, clothing and trimmings." From a study of petty theft in 18th century England, highlighted at the always-excellent EHS Long Run Blog. Link.