Heikki Hiilamo: Exposing false prophets?


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Inequality and the Nordic Welfare Model –seminar
7th November 2011, Helsinki
Exposing false prophets?
Eight rounds on income inequality and welfare outcomes
Hiilamo, H & Kangas, O: Väärien profeettojen jäljillä

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Heikki Hiilamo: Exposing false prophets?

  1. 1. Exposing false prophets? Eight rounds on income inequality and welfare outcomesHiilamo, H & Kangas, O: Väärien profeettojen jäljillä (manuscript under review)
  2. 2. Starting point: The Spirit Level• A book by two British epidemiologist Richard Wilkinson and Kate Pickett in 2009 (2010 in Swedish Jämlikhetsanden, 2011 in Finnish Tasa-arvo ja hyvinvointi)• Positing a Grand Theory: everything is better in more equal societies-> lower child mortality-> higher social trust-> higher life satisfaction etc.parempi koettu hyvinvoinnin taso• More equality is not only better for the poor but to almost everyone -> social gradient
  3. 3. Divided reception• Debate in Great Britain: John Goldthorpe• Debate in Sweden: Skattebetalarnas Förening: Jämlikhetsbluffen, 2010• Debate in Finland: Heikki Taimio vs. Aki Kangasharju
  4. 4. Peter Saunders: Beware False Prophets: Equality, the Good Society and The Spirit Level, 2010.”The Spirit Level has little claim to validity. Its evidence is weak, the analysis is superficial and the theory is unsupported. The book’s growing influence threatens to contaminate an important area of political debate with wonky statistics and spurious correlations. The case for radical income redistribution is no more compelling now than it was before this book was published.”
  5. 5. Saunders’ claims- W&P’s book ”propaganda masquerading as science”In fact more equal societes suffer from: Higher rate of suicides Higher insidence of HIV/AIDS Higher divorce rates Lower fertility
  6. 6. Confronting causalityWhich mechanism – if any – ties income equality with welfare outcomes?A) Stress theoryB) Level theoryPeriod of exposition?Confounding variables?
  7. 7. Research task• Evaluate W&P’s theory on income equality and welfare outcomes• Replicate W&P’s and Saunders’ analysis with their country selection and with our country selection (127 countries)• Data from 2008/2009 UNDP database• 127 countries – Allows to separate W&P’s 23 countries and Saunders’ 44 countries – Other country groups: OECD, Africa, Muslim countries, Catholic countries, East-Euroean countries etc.• Controllig for effects of other variables• Construing a model for connections
  8. 8. Variables to be analyzedHIVLife ExpectancyInfant MortalityHomicidesSuicidesDivorceAlcohol consuptionFertility= Eight Rounds
  9. 9. Independent variableGINISaunders: GiniW&P: 20/80 ratio
  10. 10. Correlation between Gini and welfare outcome variables 2008 W&P Saunders 127 countriesHIV/AIDS .50* .64** .58**Life Expectancy -.18 -.47** -.47*Infant Mortality .48* .66** .49**Homicides .23 .56** .60**Suicides -.33 -.42** -.40**Divorce -.33 -.29 -.34**Alcohol consump -.17 -.45** -.11Fertility .11 .59** .50*** = almost statistically significant: ** = statistically significant
  11. 11. Links between GINI and welfare outcome variables, regression model, t-values HIV LifeEx Inf Mort Homis Suic Divorce Alchol FertilityGINI 7.40*** -4.15*** 5.54*** 6.71*** -5.28*** ns 2.10* nsGDP/C ns 7.22*** -15.03*** -4.59*** ns 3.67*** 5.23*** -8.44Africa 6.41*** -6.19*** 3.32*** -2.18* 2.50* ns ns 3.91***Islam ns ns ns ns -2.89** ns -4.79*** nsCatol ns ns ns ns ns -2.07* ns nsEast-E ns -3.89 2.42* ns ns ns 3.91*** -8.21Alcohol ns ns ns ns ns 3.17** - nsR² .57 .81 .88 .45 .89 .58 .52 .83N of contr 126 127 126 124 79 70 123 127
  12. 12. Results W&P SaundersHIV +LifeEx +Infant Mortal +HomicidesSuicides +Divorce +AlcholFertility
  13. 13. SAUNDERS IS RIGHT!!!• Beware of false prophets• Otherwise W&P’s case is more convincing• Income inequality is connected with negative welfare outcomes• More research is needed (Gini Project)