Essays on inequality: Causes and consequences of income differences in the American political economy

Of the advanced capitalist democracies, the United States is exceptional for its high level of income inequality. This volume explores the relationship between American income differences and three other distinct features of American society: great inequality in measured cognitive skills, low levels of voter turnout, and public support for limited-government public policy reforms.; In the first chapter, Richard Freeman and I explore the extent to which greater earnings inequality in the United States compared to Europe reflects greater inequality of cognitive skills. Using the International Adult Literacy Survey, we do a simple decomposition analysis and find that skill inequality explains very little of the cross-country difference in wage inequality. Most strikingly, the dispersion of earnings in the US is larger in narrowly defined skill groups than is the dispersion of earnings for European workers overall. We conclude that the bulk of cross-country differences in wage inequality occur within skill groups, not between them.; In the second chapter, I study differences in voter turnout by income level. Using data from the National Election Studies 1948–98, I show that in states where registration levels are low, there is a greater gap between the rich and the poor in voter turnout rates. Recent evidence from the Current Population Survey provides some confirmation of these findings. The evidence suggests, however, that while registration laws may help to increase registration among the poor, these laws do not in themselves significantly reduce the income bias in voter turnout.; In the final chapter, I conduct a new survey on attitudes on a current policy issue: the proposal to privatize Social Security. I focus on why the poor are less likely than others to support the privatization of Social Security. I find that the poor tend to believe that the government will manage Social Security responsibly; expect that they will rely on Social Security as a primary source of income; and would prefer to keep their money in the current system, rather than save or invest it. Together, these expectations and beliefs explain much of the income gap in support for privatization.