IPR - Institute for Policy Research - Northwestern University

Poverty, Race, and Inequality
reveals it was also the dawn of the era of privatization,
often described as neoliberalism. The research follows
the Southerners’ discovery of allies in the nascent
national conservative movement, their alliance building
with proponents of libertarian economics (above all,
the founders of public-choice economics), and their
contributions to the “original intent” constitutionalism
that later flowed into the Federalist Society and related
efforts. The book will also chart their involvement with
new institutional partners, such as conservative think
tanks and the Republican Party, and examine their
efforts to cultivate ties between evangelical Protestants
and Catholics for voucher advocacy. The core issues
involve how privatization is chipping away at social
citizenship—and ultimately, democratic governance.
< Linking Financial Intermediation and Policies
Sergio Urzúa and Robert Townsend of the
Massachusetts Institute of Technology are analyzing
the impact of financial intermediation on occupational
choices and income. The two economists are studying
a variety of structural-choice models to see if financial
intermediation
has an impact
on productivity
by easing credit
constraints in
occupational
choice and/or
an improved
allocation of
risk. They then
interweave the
Sergio Urzúa discusses how
family background and individual
abilities could help explain income
inequality.
analysis of these
models with
econometric
information
from natural
experiments to assess how varying policies and financial
institutions affect incomes, occupations, risk sharing,
and other variables. In bringing these two strands
together, the researchers show how individuals respond
to different financial arrangements, providing a natural
framework for the analysis and design of different
public policies.
< Nature and Nurture in Explaining Inequality
Urzúa and Julio Guzman of the University of Chicago
are developing a structural model of income inequality
that considers how parents’ human capital and an individual’s
abilities directly and indirectly affect schooling
decisions and labor-market outcomes. Using data
from Chile, they analyze how an individual’s inherited
characteristics (circumstances) and endogenous decisions
(opportunities) might explain income inequality.
Preliminary results indicate that both family background
and individual abilities play an important role
in explaining income inequality. Additionally, inadequate
levels of education appear as an important force
in explaining the country’s high levels of inequality.
< Impact of Early Life on Later Life Outcomes
To trace the effects of early life circumstances on later
life outcomes in the United States, Joseph Ferrie, an
economist, and his colleagues have assembled a remarkable
data set linking information from several separate
sources for 2.5 million Americans from birth to death
(starting in 1895 through November 2008). The combined
records include detailed household and neighborhood
information often missing from large longitudinal,
epidemiological data sets, including information
on economic privation, social isolation, birth order,
parental income and socioeconomic status, and proximity
to environmental hazards. The researchers hope
to provide more accurate projections of the longevity
and late-life health of older Americans and better costbenefit
calculations for public health initiatives.
< Biases in Risk Perception
With Devah Pager of Princeton University, Quillian
continues to study social factors that influence people’s
perceptions about their chances of experiencing a
hazardous event. Their most recent work focuses on race
and biases in perceptions of the risk of criminal victimization.
Quillian and Pager examine how perceptions of
the risk of becoming a victim of a burglary or robbery
compare with actual victimization rates. By layering
data from the Survey of Economic Expectations and
census zip code information from 1994 to 2000, they
find more people believe they will become crime victims
than is borne by victimization rates. Their results also
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