Mo#va#on: Why study inequality? 1) Inequality is a defining feature of Chile and all of La#n America. 2) Reducing inequality is a major development goal in the region. 3) You can’t assess the likely impacts of popula#on aging without understanding inequality. Consump#on Inequality in Chile
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Mo#va#on: Why study inequality… …using NTA? 1) NTA focuses on consump#on inequality rather than on income inequality. 2) NTA provides a complete picture of the role of all economic ins#tu#ons: labor markets, financial markets, governments, and families. 3) NTA promotes dialogue between economists and demographers. 4) NTA provides a unified framework to look at both inequality and popula#on aging. Consump#on Inequality in Chile
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Methods • Divide up popula#on based on educa#on of household head and age of individual. • Why use educa#on of household head and not educa#on of individual? • We use 5 years age groups rather than single year. Consump#on Inequality in Chile
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Chilean Popula#on Donut
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Chilean Consump#on Donut
Consump#on inequality: High and persistent across age
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Labor earnings
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Life Cycle Deficit: Large varia#on across groups
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Consump#on Financed Very Differently Among SES Groups
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How is consump#on financed among elderly?
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How is consump#on financed among children?
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Why study inequality in the context of aging? Diversity within countries is as great as the diversity between countries.
Robin Hood Index.
Robin Hood Index for Groups.
The propor#on of aggregate income which The propor#on of must be transferred aggregate income which from rich to poor to must be transferred reach perfect equality. from rich groups to poor groups to reach perfect equality between groups. Consump#on Inequality in Chile
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“An ounce of preven#on is worth a pound of cure.” -‐-‐ Benjamin Franklin Robin Hood Index for Groups.
Ben Franklin Index for Groups.
The propor#on of The propor#on of aggregate income which aggregate income which must be transferred must be invested in from rich groups to lower educa#on groups poor groups to reach to reach the perfect equality educa#onal investment between groups. of the highest educa#on group. Consump#on Inequality in Chile
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6 ounces of preven#on are worth a pound of cure.
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¡Gràcies! Future Work 1. Finish the paper. 2. Think about a micro-‐level NTA which would preserve individual level data and rela#onships between individuals. 3. We need a country or countries which shows us what equality looks like. Consump#on Inequality in Chile
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