Linking Input Inequality and Outcome Inequality

• In Event: 2248 - Social Inequality and Stratification: Analytical Advances and Empirical Applications

Abstract

Inequality often appears in linked pairs of variables. Examples include schooling and income, income and consumption, wealth and happiness. Consider the famous words of Veblen: “wealth confers honor.” Understanding inequality requires understanding input inequality, outcome inequality, and the relation between the two. This paper contributes to the theoretical and methodological toolkit for studying inequality by developing a framework that makes explicit these two kinds of inequality and by addressing three main associated questions: (1) How do the mechanisms for generating and altering inequality differ across inputs and outcomes? (2) Which have more inequality – inputs or outcomes? (3) Under what conditions, and by what mechanisms, does input inequality affect outcome inequality? Results include: First, under certain specified conditions, distinctive mechanisms govern inequality in inputs and outcomes. Second, whether inequality is greater among inputs or outcomes depends on the configuration of inputs and outcomes; outcome inequality can be zero, providing refuge from input inequality but also hindering efforts to reduce it. Third, the link between inequality among inputs and outcomes can be nonexistent or vary in shape, thus presenting empirical challenges. More deeply, this work sheds light on the fragility of economic equality and the phenomenon of blissful obliviousness to economic inequality.

Author

• Guillermina Jasso, New York University