Working Papers

Are Populists Worried about their Children’s Futures? Intergenerational Economic Insecurity and U.S. Voting Behavior (with Lars Osberg & Stephen Law)


Abstract: Could faster inclusive growth solve the American political alienation problem? We examine the importance of relative intergenerational income mobility for political attitudes and feelings toward marginalized groups, using the US Opportunity Atlas. Findings suggest that an erosion of 'white privilege' has led to intergenerational rank mobility being highest among Asians and lowest among Whites. Further, positive rank mobility is observed by most Blacks, Latinxs, and Asians, but intergenerational rank mobility for Whites tends to be negative. When merged with the 2016 American National Election Study, results show that among US-born White males, a lack of state-level mobility is associated with more interest in authoritarian ideals, more support for Trump, and reduced feelings toward Blacks, Latinxs, Asians, Muslims, and illegal immigrants - this is particularly true for those of working age and/or a middle-class income. These results are also apparent in states where at least one visible minority group experiences a state-level increase in intergenerational rank that exceeds their national average; however, results are tempered when Whites also experience a rise that exceeds their national average. Based on political affiliation, the impact of rank immobility among US-born Whites is driven by Democrats, along with those who reside in states with above-average growth. This is also the case for those living in the so-called 'blue wall' states, and states with above-average levels of unemployment insurance generosity. Consequently, we argue that, given changes in relative income rankings will produce precisely as many losers as winners, inclusive growth worsens the political alienation problem, fostering increased interest in populist ideals.

Dreaming of a Brighter Future? The Impact of Economic Vulnerability on University Aspirations (with Nancy Kong, Shelley Phipps, & Angela Daley)


Abstract: We examine whether there is an inequality of opportunity to achieve higher education, partially explained by aspirations for youth age 12-15 in economically vulnerable households. Using a unique Canadian dataset (2002-2008), we find that poverty is associated with reduced university aspirations from the perspective of the youth and their mother. Further, poverty depth matters less than incidence. In terms of magnitude, poverty contributes to about 10-15 percent of the observed inequality of opportunity gap (mother's education being the largest factor at 30 percent). Interestingly, economic insecurity is not associated with educational aspirations, and this result persists regardless of how we measure insecurity. Controls for academic effort, including standardized test scores, daily reading, and getting good grades do not impact these findings. Results therefore suggest that alleviating child poverty and easing post-secondary financial barriers among the poor, may help offset reduced university aspirations at a critical time in a youth's life.

The impact of capitation on health insurance membership and the provision of care in Ghana (with Bintu Bayong)


Abstract: To address escalating health care costs, in 2012, the National Health Insurance Authority (NHIA) for Ghana piloted a capitation model in the Ashanti region. Employing a difference-in-differences strategy, we use district-level data from 2010-2014 to examine the impact capitation had on health insurance membership and the associated provision of care. Findings suggest that, relative to control districts, capitation reduced membership by 39 percent, putting downward pressure on total outpatient department (OPD) usage (falling 48 percent) and cost (falling 38 percent). However, in per-member terms, neither OPD usage, nor cost, changed during this period - i.e., cost savings were the result of declining renewals. When observing each year of capitation, per-member cost rebounded in 2013 after an initial 34 percent decline, however, per-member usage did not deviate from pre-capitation levels. Additionally, there appears to have been a cost-shift in that capitation produced rising inpatient department cost - an avenue not affected by capitation - at both the total (29 percent) and per-member (68 percent) level. Lastly, although premium exempt, capitation particularly reduced membership among the poor. Thus, future policies should be cognisant of declining membership, incentives for cost increases and cost-shifting, along with the potential inequitable impacts of capitation.

Give & Take? Child Benefits & Prices in Northern Canada (with Angela Daley & Nicholas Li)


Abstract: Cost of living is comparatively high in Northern Canada, which is a remote and sparsely populated region served by retail oligopolies (40 percent of communities feature a monopoly, while the rest feature a duopoly). Government transfers constitute a large share of household income in Northern communities, and child benefits are particularly important, with these programs having expanded in recent years (Universal Child Care Benefit in 2015 and Canada Child Benefit in 2016). We assess the extent to which increased child benefits are ``captured" by retailers via higher prices. Using the Longitudinal Administrative Database and community-level data on prices and food shipments from Nutrition North Canada (2012-2019), we find that expanded child benefits are associated with higher prices, with an elasticity of 0.027. And, while not statistically significant, the quantity response is comparatively large, with an increase of 22 grams per extra dollar of child benefits versus 3.6 grams per extra dollar of total income. These results suggest that expanded child benefits coincide with an increase in food demand, leading retailers to raise prices. The conjecture that Northern communities are not pure ``price-takers" is supported by our tests for heterogeneity, where the price and quantity effects are driven by monopoly communities.

Skating on thin ice? Exposure to poverty among Canadians (with Khan Islam & Murshed Chowdhury)


While poverty metrics typically capture incidence, they do not necessarily incorporate vulnerability, which we define as the conditional probability that an individual may become poor. Consequently, there is a dearth of measures that report exposure to poverty – i.e., the inclusion of both the incidence and vulnerability to poverty. To address this issue, in addition to measuring the current state of poverty, we estimate an individual's conditional expectation of income, along with their vulnerability to poverty, using the 2016 Canadian Survey of Financial Security. Results suggest that almost 13 percent of respondents were in poverty at the time of survey, and just over 2 percent were chronically poor. However, among the non-poor, almost 16 percent were highly vulnerable to poverty. Thus, existing measures of poverty mask the fact that a non-trivial number of non-poor individuals are vulnerable to poverty. When accounting for poverty incidence and vulnerability, we estimate that almost one-quarter of Canadians were highly exposed to poverty. Therefore, we argue that, in addition to targeting current levels of poverty, policy-makers should also be cognizant of the high level of vulnerability and exposure to poverty, particularly among non-poor individuals, when designing poverty reduction strategies. Further, an awareness of the correlates regarding increased poverty exposure is required, and our regression estimates suggest that a rising level of consumer debt is of particular concern.