Research by Author & Topic

Publications by Melissa Favreault on Income and Wealth Distribution

Using data from the Health and Retirement Study, we consider how parental education relates to four outcomes in the children's generation: education, lifetime earnings, health, and wealth. By focusing on parents' and children's ranks, we characterize relative mobility in terms of distributions of outcomes and can see patterns that even a relatively disaggregated analysis, like a quintile-based transition matrix, can obscure. Our results show relatively high intergenerational mobility except at extremes, where very low-ranked parents are much more likely to have very low-ranked children and very high-ranked parents are much more likely to have very high-ranked children.

Despite working hard and playing by the rules over long periods, many workers end up poor in retirement. We propose an enhanced minimum benefit for Social Security that targets long-career workers with low lifetime earnings along with a modest credit that compensates workers for up to three years out of the labor market due to caregiving, unemployment, or poor health. By combining these elements, the proposal provides work incentives, yet recognizes realities facing low-wage workers, many of whom have had intermittent work careers. We show that these proposed enhancements would allow more adults to retire with a secure financial foothold.

Although many researchers have documented lower levels of upward mobility amongst black families, it is difficult to disentangle the effects of discrimination from differences in (sometimes unobservable) characteristics that also contribute to variation in employment, income, health, housing, and wealth outcomes across groups. As a consequence, findings regarding the presence or absence of discrimination tend to be controversial. This review pulls together several strands of research on the subject, including the statistical analysis of survey data, audit studies comparing market outcomes for similarly qualified individuals who differ along racial lines, and public opinion polling data on discrimination. (Review 1 of 11.)

Children's mobility outcomes are a function of not only their parents' characteristics and resources, but also of the way parents transmit those characteristics and resources across generations. This review assesses the literature on the effects of family structure, resources, and childrearing styles on children's economic outcomes. Particular attention is paid to the challenge of disentangling the impacts of these determinants, which are often highly correlated: high socio-economic status individuals are better able to address their children’s material needs, but are also more likely to form stable, two-parent families and may even tend to employ more effective parenting strategies. (Review 3 of 11.)

In this study we project the long-term effects of a proposal that carves out some Social Security contributions to pay for personal accounts. We compare the distributional outcomes to the current system and examine how different strategies for annuitizing personal account balances might change these outcomes. We find that personal accounts would reduce some of the redistribution in the current system by tying benefits more closely to work histories. However, annuitization of balances and options such as joint and survivor protection, period certain payouts, and cash refunds also would affect the distributional outcomes.

This report details the development of a third version of MINT (Modeling Income in the Near Term), a tool for simulating the retirement incomes of members of the Baby Boom and neighboring cohorts. MINT3 can produce projections of economic and demographic characteristics in the year 2020, at the time of retirement, and for other years and ages. It can be used both to construct a baseline using alternative economic and demographic assumptions and to analyze the distributional consequences of a variety of Social Security policy changes.