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Working Papers

Original working papers and reports published by the III.

Exporting the winner-take-all economy: Micro-level evidence on the Impact of US Investors on Executive Pay in the United Kingdom
Lukas Linsi, Jonathan Hopkin and Pascal Jaupart

Existing studies of the political determinants of top incomes and inequality tend to focus on developments within individual countries, neglecting the role of potential interdependencies that transcend national borders. This article argues that the sharp rises in top incomes around the world in recent years are in part a product of specific features of the US political economy, which were subsequently exported to other economies through the global expansion of US-based financial investors. To test the argument, we collect fine-grained micro-level data on executive pay and firm ownership structures for a comprehensive sample of publicly listed firms in the United Kingdom (UK). Our analyses uncover robust evidence that the Americanization of UK firm ownership leads to sizable pay increases for high-level managers at those firms. Scrutinizing the causal mechanisms underlying this effect, we find them to be more consistent with changes in executive bargaining power than market-related factors such as skills premia or better corporate performance. The findings have important implications for the literature on the international political economy of inequality.

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Social polarisation at the local level: a four-town comparative study
Insa Koch, Mark Fransham, Sarah Cant, Jill Ebrey, Luna Glucksberg and Mike Savage

The concept of polarisation, where the extremes of a distribution are growing and where there is a missing or shrinking ‘middle’, has attracted recent interest driven by concerns about the consequences of inequality in British society. This paper brings together evidence of economic, spatial and relational polarisation across four contrasting towns in the United Kingdom: Oldham, Margate, Oxford and Tunbridge Wells. Deploying a comparative community analysis, buttressed by quantitative framing, we demonstrate the need to recognise how local social processes vary amongst places that on the face of it display similar trends. We show how local polarisation plays out differently depending on whether it is driven ‘from above’ or ‘from below’. Across all four towns, we draw out how a ‘missing middle’ of intermediaries who might be able to play roles in cementing local relations poses a major challenge for political mobilisation in times of inequality.

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Subjective Poverty as perceived lasting social insecurity: Lessons from a French survey on poverty, inequality and the welfare state (2015-2018)
Nicolas Duvoux and Adrien Papuchon 

Literature has long been attentive to the study of subjective happiness or well-being. Key questions developed in the late 1970’s have recently been framed as indicators of subjective economic stress or used to build “consensual poverty lines”. Yet, these notions differ from an authentic – i.e. direct – measure of subjective poverty. We use 2015-2018 French data to determine the share of the population who considers itself as poor and study its social composition. Our results demonstrate that class, family composition and income instability matter as determinants of subjective poverty. The key feature of the group of those who consider themselves as poor is a degraded attitude towards their own future. Finally, we propose a sociological understanding of our subjective poverty indicator.

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Ethnic minorities’ reactions to newcomers in East London: symbolic boundaries and convivial labour
Susanne Wessendorf

In much public discourse on immigrants in Western Europe, perceptions towards newcomers are discussed in relation to what white national majorities think. However, today, new migrants often move into places which are already settled by previous migrants. Surprisingly little is known about the local experiences, perceptions and attitudes towards newcomers among long-established ethnic minorities in areas which they have made their home, and where they predominate not just in numbers but also by way of shops, religious sites, school population, etc. Based on ongoing ethnographic fieldwork in East London (UK), this paper looks at long-established ethnic minority residents’ attitudes towards newcomers from Eastern Europe, and how these are shaped by their own histories of exclusion. By bringing together theories on symbolic boundary making with the concept of ‘convivial labour’ (Nobel 2009; Wise 2016), it shows how experiences of stigmatization impact on perceptions of white newcomers, and how these perceptions are characterized by a combination of empathy and resentment.

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The construction of the DALY: Implications and anomalies
Sudhir Anand and Sanjay G. Reddy

The disability-adjusted life year (DALY) is a measure of aggregate ill-health whose construction depends on a counterfactual – the number of life-years a person could have expected to live had she or he not died. There are two ways of specifying the DALY counterfactual to estimate years of life lost (YLL) – by employing an ‘exogenous’ or an ‘endogenous’ life table. An exogenous life table is independent of the mortality risks experienced by the population whose health (longevity) is being assessed, whereas an endogenous life table is composed of precisely these risks.

Exogenous life tables have been used to construct the DALY in the Global Burden of Disease (GBD) studies – with different exogenous life tables used in the GBD 1990 and GBD 2010 (and later) exercises. However, an endogenous life table is more appropriate for predicting life-years lost from premature mortality in any given country, and allocating resources through health interventions there on the basis of DALYs averted.

Whether an exogenous or an endogenous life table is used, anomalies can arise. Furthermore, the approach adopted in GBD 2010 onwards adds special difficulties of its own. GBD 2010 and later GBDs use an exogenous reference life table which is the same for men and women. This leads to an underestimation of the disease burden of women relative to that of men.

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Group rights and gender justice: exploring tensions within an indigenous community in India
Naila Kabeer, Nivedita Narain, Varnica Arora and Vinitika Lal

This paper seeks to address some of the tensions identified in the political literature between group rights, which allows historically marginalized communities some measure of self-governance in determining its own rules and norms, and the rights of marginalized sub-groups, such as women, within these communities.  As the literature notes, community norms frequently uphold patriarchal structures which define women as inferior to men, assign them a subordinate status within the community and cut them off from the individual rights enjoyed by women in other sections of society. 

There is a tendency within this literature to assume that if women within these communities fail to exercise ‘voice’ by protesting gender injustice within their community or choose ‘exit’ by giving up their membership of the community, they can be deemed to have consented to their subordinate status within the community. Yet, as feminists have pointed out, the capacity for neither voice nor exit can be taken for granted. Indeed, community norms may be organized in ways that explicitly deny women any voice in its decision-making forums as well as the resources they would need to survive outside the community.

This paper draws on quantitative and qualitative research among the Gond, an Adivasi or indigenous community in the Chattisgarh state in India to explore this debate in greater detail. The Gond community, like other Adivasi groups in India, have long been among the poorest and most socially marginalized sections of the Indian population. In recognition of their historical disadvantage, the Indian constitution allows these communities a degree of self-governance within the territories in which they are concentrated. As our research shows, this has allowed these communities to uphold norms that systematically discriminate against women, exercising greater controls over their marital, sexual and reproductive behaviour than men, denying them equal access to community resources and excluding them from community decision making forums.

Given the strength of the forces within the community militating against their capacity for either voice or exit, the question motivating the research was whether external organizations could make a difference to one or other or both.  Our research set out to answer this question by exploring the impacts of two external development organizations, BIHAN and PRADAN, that sought to work with women within these communities, organizing them into self-help groups in order to promote access to new financial resources and livelihood skills as well as their political capabilities within the community and government decision-making domains. We ask whether these organizations were effective in their objectives, whether they had any impact on women’s voice and exit options and whether the kind of organization they were made a difference to the impacts that we found.

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American Exceptionalism in Inequality and Poverty: a (tentative) historical explanation
Nicola Lacey and David Soskice

The United States is a fascinating case study in the complex links between crime, punishment and inequality, standing out as it does in terms of inequality as measured by a number of economic standards; levels of serious violent crime; and rates of imprisonment, penal surveillance and post-conviction disqualifications. In this chapter, we build on previous work arguing that the exceptional rise in violent crime and punishment in the US from the mid 1970s to the early 1990s could be explained by the interaction of four political and economic variables: ‘technological regime change’; ‘varieties of capitalism’ and ‘varieties of welfare state’; types of ‘political system’; and – critically and specifically – the US as a radical outlier in the degree of local democracy.  Here we ask three further questions implied by our previous work.  First, why did such distinctive patterns of local democracy arise in America? And to what extent is this political structure tied up with the history and politics of race? Second, what did the distinctive historical development of the US political economy in the 19th century imply for the structure of its criminal justice institutions? And third, why did the burden of crime and punishment come to fall so disproportionately on African Americans? 

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Do Firms Manage Pay Inequality?
Paul Willman and  Alexander Pepper

We examine the role of the modern firm in generating income inequality. Specifically, we consider the growth in the use of asset-based rewards for senior executives, combined with continued use of salaries and wages for other employees, and the impact this has on measures of inequality within firms.  Our paper presents data on intra firm inequality from the UK FTSE 100 for the period 2000-2015. It looks at ratios of CEO to average earnings and attempts to explain both the growth in inequality on this measure and the extent of variance between firms. It distinguishes between a period of “administered inequality” up to the early 1980’s when intra-firm processes defined differential pay and a subsequent one of “outsourced inequality” when capital market measures dominate executive pay. In the latter period, intra firm inequality measures are defined by upward movements in capital market measures and the extent of outsourcing of low paid work.

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Where is the Middle Class? Inequality,Gender and the Shape of the UpperTail from 60 million English Death and Probate Records, 1892-2016
Neil Cummins

This paper analyses a newly constructed individual level dataset of every English death andprobate from 1892-2016. The estimated top wealth shares match closely existing estimates.However, this analysis clearly shows that the 20th century's `Great Equalization' of wealthstalled in mid-century. The probate rate, which captures the proportion of English with anysignificant wealth at death rose from 10% in the 1890s to 40% by 1950 and has stagnated to2016. Despite the large declines in the wealth share of the top 1%, from 73% to 20%, themedian English person died with almost nothing throughout. All changes in inequality after1950 involve a reshuffling of wealth within the top 30%. Further, I find that a log-lineardistribution fits the empirical data better than a Pareto power law. Finally, I show that the topwealth shares are increasingly and systematically male as one ascends in wealth, 1892-1992, but this has equalized over the 20th century.

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Switching Focus: whose responsibility to improve disabled people's employment and pay?
Liz Sayce

This report sets an agenda to scale up inclusive employment practice through policies that focus on the demand side: incentivising and supporting employers. Decades of focus on the supply side – requiring or supporting disabled individuals to move towards work – have left the UK with stubborn disability employment and pay gaps. A different approach is needed.

Links to report: 

Full PDF report, see here
Full Word report, see here
Easyread version, see here
Executive Summary, see here

Links to video and audio: 

Audio, see here                                                                                   

Video, see here

Rent Sharing and Inclusive Growth 
Brian Bell, Paweł Bukowski and Stephen Machin

The long-run evolution of rent sharing is empirically studied. Based upon a comprehensive and harmonized panel of the top 300 publicly quoted British companies over thirty five years, the paper reports evidence of a significant fall over time in the extent to which firms share rents with workers. It confirms that companies do share their profits with employees, but at much smaller scale today than they did during the 1980s and 1990s. This is a robust finding, corroborated with industry-level analysis for the US and EU. The decline in rent sharing is coincident with the rise of product market power that has occurred as worker bargaining power has dropped. Although firms with more market power previously shared more of their profits, they experienced a stronger fall in rent sharing after 2000.

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Populism and the Rule of Law
Nicola Lacey

The resurgence of populism in Europe and North America is widely thought to have placed the rule of law under pressure. But how many of the relevant developments are indeed associated with populism? And is any such association a contingent or analytic matter: does populism inevitably threaten the rule of law, or do other conditions intervene to shape its impact? After setting out how I will understand the rule of law and populism, I examine the ways in which contemporary populist discourse has challenged the rule of law through a variety of mechanisms - notably agenda-setting, policy impact, influencing discretionary decisions and convention-trashing - considering the institutional and social conditions which conduce to strengthen or weaken these mechanisms in particular contexts. Finally, I consider the implications of the analysis for contemporary criminalisation, assessing how many of the factors producing ‘penal populism’ or ‘overcriminalization’ are truly a product of populism.

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Inequality Interactions  
Paul Segal with Mike Savage

This paper elaborates a framework for understanding inequalities that is multi-dimensional, inter-disciplinary, and dynamic. We first clarify the conceptual relationship between individual and categorical inequalities as studied by economists, sociologists, and other social scientists. We then present a set of new concepts. Inequality diversion is defined as a reduction in one form of inequality that is dependent on sustaining, or worsening, another form of inequality. We show how it arises out of cases in the literature on intersectionality, and that it also characterizes the transition to increasing meritocracy, and the relationship between increasing professional female labour market participation and domestic service. Inequality re-ordering is defined as a change in categorical or group inequalities that leaves individual inequality unchanged, such as when elites become more categorically diverse without reducing their economic or social distance from non-elites. We use these concepts to interrogate the potential of levelling up and progressive redistribution for inequality reduction. Exploring these relationships helps us understand trade-offs and complementarities in tackling inequalities.

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The Great British Sorting Machine: Adolescents’ future in the balance of family, school and the neighborhood 
Jonathan J.B. Mijs and Jaap Nieuwenhuis

Research calls attention to the divergent school and labor market trajectories of Europe’s youth while, across the Atlantic, researchers describe the long-lasting consequences of poverty on adolescent development. In this paper we incorporate both processes to shed a new light on a classic concern in the sociology of stratification: how are adolescents’ aspirations, expectations, and school performance shaped by the combined socioeconomic contexts of family, school and neighborhood life? Theoretically, social contexts provide children with cultural resources that may foster their ambitions and bolster their academic performance. Reference group theory instead highlights how seemingly positive settings can depress educational performance as well as aspirations and expectations. We empirically test these competing claims, drawing on the Avon Longitudinal Study of Parents and Children (ALSPAC) which describes the school and neighborhood trajectories of 7,934 British children followed from birth to adolescence. We find that, generally, childhood school and neighborhood deprivation is negatively associated with adolescents’ school performance, aspirations and expectations for their future, in line with the cultural resource perspective. However, there are important exceptions to this pattern which point to reference group processes for (1) children of highly-educated parents, whose academic performance especially suffers from growing up in a poor neighborhood, and (2) for children from low-educated parents, whose academic aspirations and expectations are unexpectedly high when they either went to an affluent school or lived in an affluent neighborhood—but not both. We conclude by discussing implications for theory, policy and future research. 

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Inclusive Growth in Cities: a sympathetic critique
Neil Lee

The concept of “Inclusive Growth” – a concern with the pace and pattern of growth – has become a new mantra in local economic development. Despite enthusiasm from some policymakers, others argue it is a buzzword which is changing little. This paper summarises and critiques this agenda. There are important unresolved issues with the concept of Inclusive Growth, which is conceptually fuzzy and operationally problematic, has only a limited evidence base, and reflects an overconfidence in local government’s ability to create or shape growth. Yet, while imperfect, an Inclusive Growth model is better than one which simply ignores distributional concerns. 

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Mapping recent inequality trends in developing countries
Rebecca Simson

Over the course of the middle half of the 20th century, countries around the world underwent dramatic social transformations as incomes grew, inequality declined and living standards improved. Since roughly 1980, however, this downward trend in income inequality has reversed or stagnated in many regions. Leading researchers have warned that we are entering a new era of high and persistent inequality coupled with low economic growth (Piketty 2014; Scheidel 2017). Yet other research suggests that this inequality escalation is not a universal phenomenon. As many scholars of global inequality have noted, Latin America saw a sizable decline in the gini index in the 2000s. The available evidence also suggests that many countries in Africa and the Middle East experienced an inequality drop in the 1990s-2000s. Even in Asia, where aggregate inequality has been on the rise, there are nonetheless a few countries where inequality is defying the regional trend. What does the available evidence tell us about inequality trends in these less studied regions of the world? What may explain these different trajectories across regions or countries? This paper provides a review of the state of knowledge about inequality dynamics in developing regions, with a focus on countries where the level of income inequality has fallen in recent decades. It is written to inform future research at LSE’s International Inequalities Institute about the political drivers of redistribution.

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Recasting Human Development Measures
Sudhir Anand

The UNDP introduced three new human development measures in its 2010 HumanDevelopmentReport, which it has since continued to estimate and report on annually.  These measures are the geometrically-averaged Human Development Index (HDI), the Inequality-adjusted Human Development Index (IHDI), and the Gender Inequality Index (GII).  This paper critically reviews these measures in terms of their purpose, concept, construction, properties, and data requirements.  It shows that all three measures suffer from serious defects, and concludes that two of them are not fit for purpose.  The paper suggests how HDI and GII might be recast to overcome the problems identified and better reflect the purposes for which they were devised. 

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The Stakes of Trade Policy: domestic and global inequalities
Sarah Goff

Economic nationalism is on the rise, while decision-making is floundering within multilateral and regional trade institutions. As stakes ‘take back control’ over their trade policies, what does this imply for domestic and global inequalities? The paper will clarify how a state’s trade policy can affect what matters about domestic inequalities, global procedural fairness, and global distributional inequality. A state should aim to: i) pursue gains in national income, without making excessive contributions of its ‘policy space’ on issues that matter for disadvantaged groups; ii) refrain from abusing its unilateral decision-making power over its trading partners; and iii) prioritize trade liberalization with poor countries that have the competencies to take advantage of economic opportunities and that are likely to share the benefits of prosperity with disadvantaged citizens. There is room for a state’s trade policy to represent improvements over existing multilateral and regional institutions with respect to these aims, although improvements are by no means guaranteed.

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Private Renting: can social landlords help?
Anne Power, Alice Belotti, Laura Lane, Bert Provan 

Private renting is a massively expanding sector, and has now overtaken social housing to become the second largest housing tenure in Britain after owner-occupation. Private renting plays a crucial role in housing many groups who can neither afford to buy, and are unable to access social housing. Vulnerable and homeless people are more and more housed in privately rented accommodation. However, the private rented sector is weakly regulated and offers little security to tenants.

This report explores how social landlords are increasingly contributing to the growth of private renting in a variety of different ways. Social landlords have experience in managing rented housing and a strong track record in providing long-term, secure, decent homes. They have an ethical purpose and a core mission to house people. Their involvement in the private rented sector provides an opportunity to make the PRS more stable, secure, and affordable. As well-established landlords and housing managers, social landlords can provide decent quality and secure homes to the people who need them within the private sector. As institutional investors, private renting at sub-market or intermediate rent becomes possible and social landlords should not seek to maximise profits as their main purpose. We also look at how local authorities can improve the private rented sector, looking at case studies of Newham, Liverpool, and other areas that have established local housing companies, have increased their regulatory role with licensing schemes and enforcement powers, as well as how the private rented sector differs in the devolved nations.

The overall conclusion of our report is that private renting by social landlords can deliver good housing for households in need of a home. This activity provides decent private rental homes; and surpluses to cross-subsidise social housing. We believe that through the development of private rented accommodation and the regulation and licensing of the private rented sector, social landlords and local authorities are able to provide a more social model of private renting. 

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Can cultural consumption increase future earnings? Exploring the economic returns to cultural capital
Aaron Reeves and Robert de Vries

Cultural consumption is often viewed as a form of embodied cultural capital which can be converted into economic rewards because such practices increase the likelihood of moving into privileged social positions. However, quantitative evidence supporting this proposition remains uncertain because it is often unable to rule out alternative explanations. Cultural consumption appears to influence hiring decisions in some elite firms, in both the U.S. and the U.K., but it is unclear whether these processes are generaliseable to other professional occupations and other labour market processes such as promotions. We examine these processes using data from Understanding Society, an individual-level panel survey conducted in the UK, allowing us to explore whether cultural consumption predicts future earnings, upward social mobility, and promotions. People who consume a larger number of cultural activities are more likely to earn higher wages in the future, to be upwardly socially mobile, and to be promoted. Cultural consumption, then, can function as cultural capital in some labour market settings, potentially contributing to the reproduction of income inequality between generations.

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Immobility and the Brexit vote
Neil Lee, Katy Morris and Tom Kemeny

Popular explanations of the Brexit vote have centred on the division between cosmopolitan internationalists who voted Remain, and geographically rooted individuals who voted Leave. This paper conducts the first empirical test of whether residential immobility - the concept underpinning this distinction - was an important variable in the Brexit vote. It finds that locally rooted individuals - defined as those living in their country of birth - were 7 percent more likely to support Leave. However, the impact of immobility was filtered by local circumstances: immobility only mattered for respondents in areas experiencing relative economic decline or increases in migrant populations. 

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The transition to the knowledge economy, labour market institutions, and income inequality in advanced democracies
David Hope and Angelo Martelli

The transition from Fordism to the knowledge economy in the advanced democracies was underpinned by the ICT revolution. The introduction and rapid diffusion of ICT pushed up wages for college-educated workers with complementary skills and allowed top managers and CEOs to reap greater rewards for their talents. Despite these common pressures, income inequality did not rise to the same extent everywhere; the Anglo-Saxon countries stand out as being particularly unequal. To shed new light on this puzzle, we carry out a panel data analysis of 18 OECD countries between 1970 and 2007. The analysis stands apart from the existing empirical literature by taking a comparative perspective. We look at the extent to which the relationship between the knowledge economy and income inequality is influenced by national labour market institutions. We find that the expansion of knowledge employment is positively associated with both the 90–10 wage ratio and the income share of the top 1%, but that these effects are mitigated by the presence of strong labour market institutions, such as coordinated wage bargaining, strict employment protection legislation and high bargaining coverage. The study provides robust evidence against the argument that industrial relations systems are no longer important safeguards of wage solidarity in the knowledge economy.

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Top Incomes during Wars, Communism and Capitalism: Poland 1892-2015
Pawel Bukowski and Filip Novokmet

This study presents the history of top incomes in Poland. We document a U-shaped evo-lution of top income shares from the end of the 19th century until today. The initial high level, during the period of Partitions, was due to the strong concentration of capital income at the top of the distribution. The long-run downward trend in top incomes was primarily induced by shocks to capital income, from destructions of world wars to changed political and ideological environment. The Great Depression, however, led to a rise in top shares as the richest were less adversely affected than the majority of population consisting of smallholding farmers. The introduction of communism abruptly reduced inequalities by eliminating private capital income and compressing earnings. Top incomes stagnated at low levels during the whole communist period. Yet, after the fall of communism, the Polish top incomes experienced a substantial and steady rise and today are at the level of more unequal European countries. While the initial upward adjustment during the transition in the 1990s was induced both by the rise of top labour and capital incomes, the strong rise of top income shares in 2000s was driven solely by the increase in top capital incomes, which make the dominant income source at the top. We relate these developments to processes associated with the new phase in globalisation. 

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The Wider Impacts of High-Technology Employment: Evidence from U.S. Cities
Tom Kemeny and Taner Osman

Innovative, high-technology industries are commonly described as drivers of regional development. ‘Tech’ workers earn high wages, but they allegedly generate knock-on effects throughout the local economies that host them, producing new jobs and raising wages in nontradable activities. At the same time, in iconic high-tech agglomerations like the San Francisco Bay Area, the home of Silicon Valley, the success of the tech industry creates tensions, in part as living costs rise beyond the reach of many non-tech workers. Across a large sample of US cities, this paper explores these issues systematically. Combining annual data on wages, employment and prices from the Quarterly Census of Employment and Wages, the Department of Housing and Urban Development and the Consumer Price Index, it estimates how growth in tradable tech employment affects the real, living-cost deflated wages of local workers in nontradable sectors. Results indicate that high-technology employment has significant, positive, but substantively modest effects on the real wages of workers in nontradable sectors. However, in cities with highly price-inelastic housing markets, the relationship is inverted, with tech generating negative externalities for nontradable workers. 

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Inequalities in the application of welfare sanctions in Britain
Robert de Vries, Aaron Reeves and Ben Geiger

Unemployed people in Britain who are in receipt of government welfare benefits can have these benefits stopped if they fail to comply with certain conditions. Such a stoppage is known as a 'benefit sanction'. This working paper has two aims: 1) to provide an introduction to the British system of sanctions, specifically as it applies to unemployed people who are not disabled, and ii) to identify demographic inequalities in the application of sanctions. Using data published by the UK Department of Work and Pensions, we find that some groups of unemployed claimants (younger people, men, and ethnic minorities) are at substantially higher risk of experiencing a sanction. This paper will be updated at a later date with analyses investigating the drivers of this inequality.

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Intersecting Inequalities and the Sustainable Development Goals: insights from Brazil
Naila Kabeer and Ricardo Santos

The international development community has long been pre-occupied with the reduction of absolute income poverty, relegating concerns with inequality to the margins of its policy agenda. The Millennium Development Goals, for instance, which were adopted by 189 world leaders at the 2000 Millennium Summit, defined the reduction of absolute poverty by 2015 as its overarching goal. However, concerns about the dramatic rise in income inequality across the world have been growing over the last few decades and came to the forefront of public consciousness in the wake of the global financial crisis of 2008. At the same time, assessments of national progress on the Millennium Development Goals made it clear that income inequality alone did not explain the distribution of gains and losses across countries. Rather it was the intersection of income inequality, marginalized social identities and, very often, locational disadvantage which led to the systematic exclusion of certain groups. In recognition of this, the Sustainable Development Goals which became the basis of the new post-2015 international development agenda now includes a commitment to the reduction of income and other inequalities, summarized as the principle of ‘leave no one behind’. Our paper uses national data from Brazil between 2002 and 2013 to examine retrospectively how it has performed on some of the indicators relating to the inclusive principles articulated by the SDGs. We have selected this period in Brazil because at a time when income inequalities were rising in most countries of the world, they were declining in Brazil. Our paper examines the extent to which this decline in income inequality was accompanied by a decline in intersecting inequalities and explores some of the economic, political and social explanations given for the country’s performance. 

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Understanding the Determinants of Penal Policy: crime, culture and comparative political economy
Nicola Lacey, David Soskice and David Hope

This review sets out four main explanatory paradigms of penal policy—focusing on, in turn, crime, cultural dynamics, economic structures and interests, and institutional differences in the organisation of different political economies as the key determinants of penal policy.  We argue that these paradigms are best seen as complementary rather than competitive, and present a case for integrating them analytically in a comparative political economy framework situated within the longue durée of technology regime change.  To illustrate this, we present case studies of one exceptional case—the United States—and of one substantive variable—race. Race has been thought to be of importance in most of these paradigms and provides a pertinent example of how the different dynamics intersect in practice. We conclude by summarising the explanatory challenges and research questions that we regard as most urgent for the further development of the field, and point to the approaches that will be needed if scholars are to meet them.

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De-Democratisation and Rising Inequality: The Underlying Cause of a Worrying Trend
Dena Freeman

This paper is concerned with the question of why economic inequality has increased so dramatically in recent decades, and in particular, with the seemingly paradoxical situation that this upswing in inequality has taken place at the same time as a major spread of democracy worldwide. This paper argues that democracy itself has changed in this period and that globalization has led to a process of economic de-democratisation – by (1) the direct removal of certain economics matters from political control, (2) by increasing restrictions on the policy options available to policy-makers, and (3) by transformations in the structure of the policy-making process itself. In each of these shifts the representation of capital has been significantly increased, while that of labour has been correspondingly decreased. This analysis has major implications for how we should go about tackling the contemporary rise in inequality and suggests that it is imperative to democratise economic policy making at both the national and the global level.  If we are serious about tackling inequality then we must be serious about democracy.

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A Relational Analysis of Top Incomes and Wealth: Economic Evaluation, Relative (Dis)advantage and the Service to Capital
Katharina Hecht

While an impressive body of economic literature documents increases in top incomes and wealth in liberal market economies, few studies focus on the social and cultural processes constitutive of this inequality. Drawing on a mixed-methods study in the UK, this article elaborates how top incomes and wealth are made sense of and produced by economic ‘elites’ through the cultural process of economic evaluation. Economic evaluative practices are based on the idea that ‘the market’ is a neutral and fair instrument for the distribution of resources. Due to economic evaluation and inequality at the top, top income earners experience relative (dis)advantage; while recognizing their advantage compared to the general population they experience disadvantage when ‘looking up’. Top incomes are produced via economic evaluative practices which conceptualize the value of labour based on increases in the value of capital. Hence the legitimating purpose of top incomes and wealth is service to capital. 

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The rise and fall of Africa's bureaucratic bourgeoisie: public employment and the income elites of postcolonial Kenya and Tanzania
Rebecca Simson

In 1961 Frantz Fanon scathingly characterised the emerging African elite as a bourgeoisie of the civil service. Many others have since described Africa’s public sector employees as a privileged rentier class that grew disproportionately large in relation to the continent’s under-developed private sector. Is this characterisation accurate? Using household budget survey and administrative data from Kenya and Tanzania, this paper aims to situate public sector employees in two African countries within their respective national income distributions and establish the share of high-income households that were headed by public servants. It finds that while public sector employees formed a considerable share of the top 1% - 0.1% at independence, their share of the broader middle class was never that large and fell substantially over the postcolonial era.

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Wealth, Top Incomes and Inequality
Frank Cowell, Brian Nolan, Javier Olivera and Philippe Van Kerm

Although it is heartening to see wealth inequality being taken seriously, key concepts are often muddled, including the distinction between income and wealth, what is included in "wealth", and facts about wealth distributions. This paper highlights issues that arise in making ideas and facts about wealth inequality precise, and employs newly-available data to take a fresh look at wealth and wealth inequality in a comparative perspective. The composition of wealth is similar across countries, with housing wealth being the key asset.  Wealth is considerably more unequally distributed than income, and it is distinctively so in the United States. Extending definitions to include pension wealth however reduces inequality substantially. Analysis also sheds light on life-cycle patterns and the role of inheritance. Discussion of the joint distributions of income and wealth suggests that interactions between increasing top income shares and the concentration of wealth and income from wealth towards the top is critical.

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The impact of benefit sanctioning on food insecurity: a dynamic cross-area study of food bank usage in the UK
Rachel Loopstra, Jasmine Fledderjohann, Aaron Reeves and David Stuckler

Household food security, which may be compromised by short-term income shocks, is a key determinant of health. Since 2012, the UK witnessed marked increases in the rate of ‘sanctions’ applied to unemployment insurance claimants, which stop payments to claimants for a minimum of four weeks. In 2013, over 1 million sanctions were applied, potentially leaving people facing economic hardship and driving them to use food banks. The paper tests this hypothesis by linking data from the Trussell Trust Foodbank Network with records on sanctioning rates across 259 local authorities in the UK. 

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Land Politics under Kenya's New Constitution: Countries, Devolution, and the National Land Commission
Catherine Boone, Alex Dyzenhaus, Seth Ouma, James Kabugu Owino, Catherine Gateri, Archiba Gargule, Jackie Klopp, and Ambreena Manji

Kenya's new constitution, inaugurated in August 2010, altered the institutional structure of the state in complex ways. In the land domain, reform objectives were as explicit and hard-hitting as they were anywhere else. Reform of land law and land administration explicitly aimed at putting an end to the bad old days of overcentralization of power in the hands of an executive branch considered by many to be corrupt, manipulative, and self-serving. This research asks how these significant reforms are changing land control and governance in rural Kenya.

This project was partly supported by the III Research Innovation Fund.

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Who are the Global Top 1%?
Sudhir Anand and Paul Segal

This paper presents the first in-depth analysis of the changing composition of the global income rich and the rising representation of developing countries at the top of the global distribution. We construct global distributions of income between 1988 and 2012 based on both household surveys and the new top incomes data derived from tax records, which better capture the rich who are typically excluded from household surveys. We find that the representation of developing countries in the global top 1% declined until about 2002, but that since 2005 it has risen significantly. This coincides with a decline in global inequality since 2005, according to a range of measures. We compare our estimates of the country-composition and income levels of the global rich with a number of other sources – including Credit Suisse’s estimates of global wealth, the Forbes World Billionaires List, attendees of the World Economic Forum, and estimates of top executives’ salaries. To varying degrees, all show a rise in the representation of the developing world in the ranks of the global elite.

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Gendering the elites: an ethnographic approach to elite women's lives and the re-production of inequality
Luna Glucksberg

This paper argues that the process by which accumulated capital is socialized and passed down the generations of the 'super-rich' is gendered in nature, heavily reliant on women, and currently under-researched. The author addresses this gap ethnographically, focusing on the gendered labour that women perform to sustain and reproduce the dynaist projects of elite families. In light of this data, elite London emerges as a social space structured around strong hierarchies not just of class but also gender. The paper concludes that it is essential to understand more about the interplay of these two structuring principles within elite spaces, focusing on the 'invisible' labour performed by elite women.

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The measurement of health inequalities: does status matter?
Joan Costa-Font and Frank A. Cowell

This paper examines several status concepts to examine self-assessed health inequality using the sample of world countries contained in the World Health Survey.  The authors also perform correlation and regression analysis on the determinants of inequality estimates assuming an arbitrary cardinalisation.  The findings indicate major heterogeneity in health inequality estimates depending on the status approach, distributional-sensitivity parameter and measure adopted.  The authors find evidence that pure health inequalities vary with median health status alongside measures of government quality.

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Top incomes and the gender divide
Tony Atkinson, Sarah Voitchovsky and Alessandra Casarico

In the recent research on top incomes, there has been little discussion of gender.  How many of the top 1 and 10% are women?  A great deal is known about gender differentials in earnings, but how far does this carry over into the distribution of total incomes, bringing self-employment and capital income into the picture?  We investigate the gender divide at the top of the income distribution using tax record data for a sample of 8 countries with individual taxation.

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The challenge of measuring UK wealth inequality
Facundo Alvaredo, Tony Atkinson and Salvatore Morelli

The concentration of personal wealth is now receiving a great deal of attention as an important part of understanding rising income inequality. But how can we measure the wealth of the super-rich? This Working Paper looks at the challenges of understanding the assets of the top 1% and 0.1%.

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European Identity & Redistributive Preferences
Joan Costa-Font and Frank A. Cowell

Did the introduction of the Euro change public preferences for redistribution? This Working Paper examines how the emergence of a European identity impacts support for poverty reduction policies.

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Inequality: what can be done?
Tony Atkinson

Economic inequality has become centre stage in the political debate, but what the political leaders have not said is what they would do about it. In this Working Paper, Tony Atkinson seeks to show what could be done to reduce the extent of inequality if we are serious about that objective.

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An interview with Thomas Piketty
Mike Savage

III Co-Director Mike Savage's interview focuses on Thomas Piketty’s future intellectual plans after Capital in the 21st Century. Includes insights into Piketty's views of new elites, social class, Bourdieu and Marx.

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