American income inequality, Poverty, Social welfare programs, Socio-economic inequality, Social policy, Luxembourg Income Study
Public Policy | Social Welfare
Increasingly the rich nations of the world face a common set of social and economic issues: the cost of population aging, a growing number of single parent families, the growing majority of two-earner families, increasing numbers of immigrants from poorer nations, and in particular, rising economic inequality generated by skill-based technological change, international trade and other factors. All of these nations have also designed systems of social protection to shield their citizen against the risk of a fall in economic status due to unemployment, divorce, disability, retirement, and death of a spouse. The interaction of these economic and demographic forces and social programs generates the distribution of disposable income in each of these nations. The experiences of nations in dealing with issues of economic and social inequality is the subject of this paper. Thanks to the emergence and availability of cross-nationally comparable databases, we are in a position to directly compare the experiences of rich nations in coping with the growth of market income inequality. Comparisons of these experiences may help us to understand how the United States is similar to and different from other nations. It may also help us trace these differences to their economic, demographic, and policy-related sources. The institutions put in place in other nations to help mitigate the forces of market-driven economic inequality are also of interest. Cross-national research has taught us that every nation must design its own set of social policies tempered by its institutions, values, culture, and politics. But it has also shown that we can learn important features of policy design by looking to other nations who seem to do a better job combating social injustice and the poor outcomes of market-based economic inequality than does the United States. It will be seen that policies designed to generate economic equality need not result in lower rates of economic growth or increased economic inefficiency. In fact, a set of policies to help combat growing economic inequality are available to our nation. What is needed is the leadership to make these opportunities a reality.
Smeeding, Timothy M., "American Income Inequality in a Cross-National Perspective: Why Are We So Different?" (1997). Center for Policy Research. Paper 153.