Negative Consequences of Income Inequality Reduce common interests of the population Increase social separation of the classes Inequality of opportunity for children Children in poverty Potential for racial and ethnic conflict Does it increase crime? Political polarization Relative deprivation

Positive Consequences of Income Inequality Some argue that it fosters innovation and risk taking among people who see the great advantages at the top. As long as opportunity is equal, outcomes should not be made equal as it takes away motivation to do better. Inconvenient fact: it does make life easier and better for those in the top of the distribution.

Inequality and Mobility Inequality=contemporary difference in wages, income and wealth at some point in time. Mobility=difference from one generation to the next in these and other standards of living. Perfect mobility=correlation between starting point and ending point is zero. Equality of opportunity.

Mobility Sticky at the top and the bottom. Lower in the U.S. than every other advanced country, with the exception of the UK. Harder for African Americans to have social mobility than for whites.

Family Changes in the US Transformation of relations between men and women in traditional families. Growth of non-traditional families Growth of non family living Working mothers and child care

Family Changes and Social Problems Moral Concerns: Decline of Marriage, Rise of Out of Wedlock Births, Premarital Sex Child Poverty Concerns: Children with one parent are poorer, get less attention. Quality of Life Concerns: Time pressures on dual earner households, especially women. The Opt Out Revolution?

Current Families in the US, % of the nation ’ s households are married couples. (In 1930 married couples were 84% of all households) 20% of households are “traditional families” married couples with kids. (Compared to 43% in 1950s) 5% of households, or 5.2 million couples are unmarried opposite sex partners.

Marriage and Education Marriage is increasingly more likely for people with higher income and higher education. Children are more likely to be born out of wedlock than ever before, the trend is growing for less educated women. This trend of women having children out of wedlock is most pronounced among African Americans but growing among whites.

Rising Womens Labor Force Participation Mothers are in labor force, creates need for child care. Women are increasingly heading households, what is the impact of the motherhood penalty?

U.S. vs. Western Europe Growth of births outside marriage is also happening in other countries. Key difference is the collapse of fertility in Europe compared to the US.

Sources: Europe: Council of Europe, Recent demographic developments in Europe, 2005; National statistical offices. Others: National statistical offices; U.S. National Center for Health Statistics. Proportion of Births Outside Marriage, Western Europe,