Recent Poverty, Race, and Inequality Research

Economic Opportunity and Growth

Agricultural Microfinance in Mali

Agriculture is important for the world’s poor: Nearly three-quarters of those living on a dollar a day live in rural areas. At the same time, microfinance loans, which might increase agricultural productivity, tend to go to small business enterprises rather than agricultural ones. With researchers Dean Karlan and Christopher Udry of Yale University and Bram Thuysbaert of Ghent University in Belgium, IPR economist Lori Beaman is investigating the impact of agricultural loans on farmers in Mali. The researchers partnered with a microfinance institution that offered loans in randomly selected villages. In these villages, agricultural profits increased, and persisted into the next agricultural season. In villages that were not offered loans, agricultural profits did not increase. Beaman and her colleagues find that agricultural loans create a screening process, targeting farmers who will generate a larger harvest for a given amount of loan they receive. The results of the study demonstrate that microfinance loans can also benefit those working in agriculture.

Economic Opportunities for Women

More than 75 percent of the world’s poor do not have a formal bank account, constraining their ability to save, borrow, and otherwise engage in financial operations that could improve their lives. Organizations are creating savings groups in developing nations as a way to meet such untapped needs.  Women in the groups contribute to a group fund every week, then collectively decide if they should loan money from the fund to other group members, to be repaid with interest at a later date. Beaman was part of a group of cross-disciplinary researchers who conducted a large-scale randomized control experiment of a community savings program in rural Mali, West Africa. Freedom from Hunger and Oxfam’s Saving for Change (SfC) program integrates villager-managed saving and lending groups with local training and education. The program was offered to a random sample of 250 villages in Mali’s Ségou region. In an IPR working paper, Beaman and her colleagues show that women offered SfC in their village took out twice as many loans from their SfC program, saved about 30 percent more, and had less precarious food situations than those in non-SfC villages. They were also slightly less likely to seek loans from family and friends, a culturally shameful act.

Impact of Microcredit Lending

In work with MIT’s Abhijit Banerjee, Esther Duflo, and Rachel Glennerster, IPR economist Cynthia Kinnan reports on the first randomized evaluation of introducing a standard microcredit lending program in a new market. These lenders, referred to as microfinance institutions (MFIs), supply loans to poor households, targeting mostly women. In 2005, half of 104 areas in Hyderabad, India, were randomly selected to open a branch of Spandana, an MFI. Around 18 months after the introduction of the MFI, 6,850 households were surveyed. Results show that while households in treatment areas were no more likely to start a new business, those who already had a business invested more in them. Three to four years after MFI introduction, when households in treatment areas had been borrowing more for longer periods, the average business was no more profitable, though the largest businesses did benefit. Treatment-area households reduced spending on “temptation goods,” such as alcohol, gambling, and snacks. No improvements, however, were found for health, education, and women’s empowerment, and other outcomes that microfi nance is often believed to affect. The study suggests that while microcredit lending is a valuable part of poor households’ portfolios, it does not seem to lead to the miraculous social transformation that some have claimed.

Public Health Insurance for the Poor?

In 2008, India implemented a public health insurance scheme, Rashtriya Swasthya Bima Yojana (RSBY), which covers hospital expenses for families below the poverty line. Now, the Indian government is thinking of expanding the program to cover certain groups above the poverty line, and perhaps even the entire population of the country. Kinnan and her colleagues are conducting a field experiment to assess the impact of expanding RSBY eligibility. They have enrolled roughly 60,000 people in a randomized experiment, assigning them to one of four outcomes: either free RSBY insurance coverage, an unconditional cash transfer equal to the insurance premium for RSBY, the opportunity to buy RSBY coverage, or no intervention. After two years, they will survey each person about these outcomes. The study aims to quantify how much inpatient insurance improves health and reduces poverty by measuring RSBY’s effects on study participants’ health and finances. It will also examine how insurance subsidies affect the ways people choose to participate in and use insurance programs. The results of this study will inform the Indian government on how to best price health insurance, freeing extra government funds for other investments.

Poverty and Income Inequality

American Beliefs and Income Inequality

Many tend to take for granted the notion that Americans believe (perhaps naively) in the role of hard work for getting ahead in life, whereas Europeans put more stock in the role of good fortune. IPR sociologist Leslie McCall is investigating this notion, drawing on underutilized questions in the International Social Survey Program to better outline American and European opinions on the issue. She finds that when luck-related means of getting ahead (e.g., “knowing the right people”) are clearly spelled out in survey questions, Americans are actually as likely, or more likely, to recognize the importance of good fortune as are individuals in other advanced industrial countries. She suggests that Americans are simply unfamiliar with “luck” in the sense that scholars and European citizens use the term.  These results play into a greater pattern McCall is examining in her comparative work: That perceptions of economic fairness and equal opportunity are more similar across nations than previously implied by theories of American exceptionalism.

Public Preferences for Redistribution

According to the General Social Survey (GSS), confidence in banks and financial institutions sank from more than 30 percent in the mid-2000s to 8 percent in 2010. Despite the rise of public discontent with the private sector, little is known about how the public views corporations’ responsibilities and performance in addressing economic and social problems. In a project receiving support from the Russell Sage Foundation, McCall and her colleagues Jonas Edlund and Arvid Backstrom of Sweden’s Umea University and Christian Larsen of Aalborg University in Denmark are examining what citizens see as the proper mix and balance of state and market policies. The researchers are exploring this issue after having added new questions to existing nationally representative surveys in 2014—the GSS in the United States and the International Social Survey Program in Sweden and Denmark. Given the distinctive roles that market institutions play in different societies, the researchers will compare results from these three countries to assess if and how views vary between them. They will also pursue collaborations with other European countries, as well as in other regions of the world where inequality is a major issue, such as Latin America.

Public Views About Inequality

Most people assume that Americans care more about equality of opportunity than equality of outcomes. McCall and IPR social psychologist Jennifer Richeson are testing this proposition, postulating that, in contrast to the traditional view, Americans might now consider rising inequality itself as a threat to the “American Dream” of open and expanding opportunities. The study, supported by the Russell Sage Foundation, has two main components: A media analysis of how American inequality has been discussed over the past 30 years, followed by a series of social psychological experiments designed to probe the conditions that provoke heightened concerns about inequality and support for policies designed to reduce it. Preliminary results indicate that rising inequality indeed triggers Americans to believe that their opportunities are fewer, and also that people (Republicans and Independents, in particular) support measures compelling employers to reduce pay disparities more than they support measures compelling the government to reduce income disparities. These results are contrary to claims that Americans oppose interventions in the market. In combining a media study with psychological experiments, McCall and Richeson aim to learn more about how conceptions of inequality, opportunity, and redistribution intertwine in American culture.

Class Dynamics and Social Mobility

The Rise of Women in Sociology

In the social sciences, researchers’ “scholastic worth” is often associated with how much research they have published, the proportion of their publications that are in leading journals of their discipline, and the number of citations referencing their work. But surprisingly little is known about the mechanisms that enable scholars to publish (or prevent them from publishing) in the first place. IPR social demographer Quincy Thomas Stewart, with Northwestern doctoral student Saheli Nath and Indiana University’s Fabio Rojas, is exploring how network ties among authors and reviewers influence the patterns of publication in leading sociology journals from 1980–2012. Using data from 62,424 pairs of scholars spanning the five leading journals in sociology—American Sociological Review, American Journal of Sociology, Demography, Social Forces, and Social Problems—the work explores how actors in the network ascertain the mechanisms of how an “elite” group of people act as gatekeepers, or “publication police,” for the rest of the scholars in the discipline. In addition to network structure, the researchers also investigate the role that gender plays in the network. The results show that women have been playing an increasingly important role over time.

Gender Inequality and Family Income

McCall is collaborating with Northwestern doctoral student Derek Burk, a former IPR graduate research assistant, and Deirdre Bloome of the University of Michigan to update her demographic analyses of trends in men and women’s family formation patterns. These include marriage and assortative mating—when individuals who are similar mate more frequently than would be expected if mating occurred randomly; in humans, for instance, people with similar levels of education or similar levels of wealth might be more likely to pair up. McCall will sort these data, which so far span 1970–2010, according to individuals’ earnings groups (top 10 percent, middle 10 percent, and bottom 10 percent). She will also embark on a more extensive analysis of changes in couples’ earnings distributions, wherein women depend less on men’s earnings, but men do not depend more on women’s earnings. A forthcoming article on this research discusses questions of family relationships and inequality and also highlights some of the key trends that result in growing class inequality and declining gender inequality in family income.

Affirmative Action Laws and Their Effects

Origins of Affirmative Action

As the nation’s population grows more diverse, many institutions of higher learning will continue to remain interested in diversifying their student body by considering race in the admissions process. Despite the intensity of the debates surrounding affirmative action programs, surprisingly little is known about how such policies came to be. IPR sociologist Anthony Chen and his collaborators have been exploring a wide range of archival manuscripts to understand why American colleges and universities adopted affirmative action in the first place. Their evidence challenges the still-popular idea that the initial advent of affirmative action was primarily a response to campus unrest or urban riots during the late 1960s. They find that affirmative action actually originated in the early 1960s, as key numbers of college and university leaders drew inspiration from the civil rights movement and began seek out new ways of making racial integration a reality at the Northern, Midwestern, and Western schools over which they presided. An article by Chen and Lisa Stulberg of New York University was published in Sociology of Education, and they are also working on a related book.

Race, Interracial Relations, and Prejudice

Maintaining Racial Inequality with a Few Racists?

Stewart is writing a book that scrutinizes the history of racial inequality since the era of Jim Crow laws, roughly 1865 to 1965, and the social organizations involved in maintaining black-white inequities. Tentatively titled “ How Many Racists? How Everyday People Contribute to a System of Social Inequality,” it sheds new light on historical evidence, which has indicated that a large number of racists is needed to maintain institutional inequalities.  By putting recent research into context, Stewart points to a significant decline in the number of people who hold racist beliefs, yet parallel declines in racial inequality have not been registered—statistics that seem to refute the idea that the number of racists is what counts. Using an agent-based model of a Nash Bargaining game, which is a simple two-person bargaining model, Stewart’s investigation demonstrates that a system inspired by biased social institutions, even though they are administered or used by nonbiased (nonracist) individuals, can maintain racial inequality with a few, or even no, racists.  The book will focus on the social dynamics that lead to the emergence of racial inequality in an artificial society, the actors and factors that sustain it once it is established, and the policies that can be used to undermine racial inequality.

Signaling Racial Identity

While the magnitude of current racial disparities in educational achievement is clear and widely accepted, the source is not. One theory suggests that many minority students are socially marginalized and face a unique signaling quandary. This means that African American students must act in ways that “signal” to their black peers that they are “black enough,” while signaling to the larger society that they are “white enough” to be American. In a project with Rachelle Winkle-Wagner of the University of Wisconsin–Madison, Stewart examines this using an agent-based model and qualitative data from a larger study of the college experiences of African American undergraduate women. The model analyzes the social psychological mechanisms embedded in the signaling quandary, while the qualitative study assesses how, and to what extent, black college women experience the quandary. Their results suggest that the black women’s experiences are unique. Those in the qualitative study felt the need to simultaneously signal their racial identity to white and black peers using several widely recognized behaviors that often conflicted with one another. The researchers did not find, though, that the signaling quandary was related to an anti-intellectual culture in the black community or to low achievement among black college women.

Racial Disparities in Causes of Mortality

Racial disparities in mortality, which are highest in infancy and middle age and converge at the oldest ages, are the focus of countless studies that aim to reveal the factors responsible for them, as well as related policy means to alleviate them. One aspect of mortality disparities that has received considerable attention is their underlying causes—the most immediate mechanisms contributing to disparities, and those that offer insight into what diseases and social maladies are responsible for them (namely, heart disease, homicide, HIV/AIDS, and cancer). But little research addresses how racial disparities in mortality have varied in response to substantial changes in these underlying causes. Stewart examines the history of racial disparities in mortality since Jim Crow, investigating whether changes in the distribution of underlying causes have reduced racial mortality disparities for certain age groups, or if the relative privilege of whites has allowed socioeconomic status (SES)-related health disparities to persist over time. Thus, the driving question of this work is, “Has the age-pattern and magnitude of racial mortality disparities shifted as a result of changes in the distribution of underlying causes in both the black and white populations?” Stewart’s results indicate that the age pattern of mortality disparities does not change over time, and that changes in underlying causes are only modestly related to mortality disparities over this 60-year period, highlighting the persistence of inequities in racial health.

A Majority-Minority America

The racial and ethnic diversity of the United States is rapidly increasing, such that racial and ethnic minorities are expected to comprise more than 50 percent of the U.S. population by 2042, effectively creating a so-called “majority-minority” nation.  With Northwestern doctoral student Maureen Craig, also a dissertation fellow at the American Bar Foundation, Richeson examines how white Americans react to information about the impending population changes.  In a series of experiments, she and Craig present consistent evidence that exposure to information about shifting U.S. racial demographics evokes the expression of more implicit and explicit racial bias and a greater tendency to endorse political conservatism. These are brought about by a perception that increases in racial minorities’ societal status will reduce white Americans’ influence in society. The effects suggest that rather than ushering in a more tolerant future, the increasing national diversity could actually yield more intergroup hostility and have untold influence on white Americans’ political participation both now and in the decades to come. Richeson and Craig point to the way the media and institutions frame the demographic shift, for instance by lumping all nonwhite groups together, as exacerbating the concern felt by whites. Richeson and Craig’s work on this topic was published in Psychological Science and Personality and Social Psychology Bulletin.

Effects of Redemption Narratives

Richeson, with Northwestern doctoral student Katie Rotella and Northwestern psychology professor Dan McAdams, is examining how people find meaning in past wrongdoing. Specifically, she is looking at “redemption narratives”—thinking about an event in a way that transforms it from a negative outcome to a positive one, such as being abused and then becoming an advocate for abuse survivors. In Richeson’s experiment, participants were asked to write for five minutes about the bombing of Hiroshima, Japan, in 1945. Those who were also prompted to engage in redemption narratives, by writing about how these events “transformed America” and the “lessons and insights” that might have been gained from them, expressed greater collective guilt and willingness to reconcile with bombing victims.  The researchers also looked at the impact of redemption narratives on victims. White, American undergraduate students who read about inhumane treatment of American POWs in Japanese custody during World War II, and who also read a “redemption narrative” about how the perpetrators of these injustices had learned from their mistakes, were more likely to perceive the perpetrators as having changed for the better.  They were also more willing to reconcile with—though not forgive—them. The work highlights the potential for redemption narratives to serve as an intervention for past intergroup conflict, increasing the chance for intergroup reconciliation. The study was published in Group Processes & Intergroup Relations.

Regulating Emotions and Discrimination

Contending with discrimination can yield negative emotional and cognitive outcomes. For instance, research suggests that contending with discrimination can impair individuals’ psychological well-being and performance on a variety of cognitive tasks. Research largely outside of the discrimination domain suggests, however, that reflecting on stressful events from a self-distanced perspective—i.e., as a “fly on the wall”—results in more positive emotional outcomes, compared with reflecting from a self-immersed, first-person perspective. Building on this work, Richeson explores whether contending with a racially discriminatory event from a self-distanced perspective yielded more positive cognitive outcomes, versus contending with the event from a self-immersed perspective.  Her results point to the opposite pattern: Participants who recalled a discriminatory event from a self-distanced perspective exhibited poorer cognitive outcomes and engaged in greater risk-taking than did participants who recalled a discriminatory event from a self-immersed perspective.

Racial Bias and Attitudes Toward Sexual Minorities

Previous research has shown that when a person believes his or her own racial group suffers from discrimination, he or she is more likely to express support for members of other racial minority groups. But when a white woman is a victim of sexism, she is less likely to express support for racial minority groups.  Richeson and Craig, a former IPR graduate research assistant, speculate that this is because perceiving discrimination against one’s own group enables identification with other disadvantaged groups within—but not across—dimensions of identity, for example, those of gender or race. Their current research investigates whether discrimination is so “potent” for racial minorities that it can reach across dimensions of identity—that is, if racial groups facing discrimination will express support for “sexual minorities” (e.g., gay men and lesbians). Richeson and Craig discover that when racial minorities perceive discrimination against their own group, they are less likely to express support for sexual minorities and are less likely to support policies that would benefit these individuals. This research was published in the Journal of Experimental Social Psychology.

Immigrant Sexual Citizenship

Though immigration and gay rights issues continue to make headlines in America, there has been little public attention to the ways that immigration and sexuality might relate to one another. Sociologists and IPR associates Héctor Carrillo and Steven Epstein, who is John C. Shaffer Professor in the Humanities, connect these issues in a Citizenship Studies article. The researchers interviewed 76 self-identified gay and bisexual Mexican male immigrants, aged between 20 and 57, who lived in San Diego. Almost half of the men were undocumented immigrants, a few were U.S. citizens, and the others had visas, work permits, or permanent residency. Based on the interviews, the researchers discovered the men drew on three “templates” to make sense of how sexual rights and legal citizenship intertwined in their lives. The “asylum template” centered on obtaining U.S. legal asylum due to sexual persecution in Mexico. The “rights template” described the interplay between one’s legal rights as an immigrant and one’s legal rights as a gay person living in the United States. The “local attachments template” outlined how immigrants incorporated themselves into local gay communities. Though each template offered these men a model of how they might simultaneously become members of the gay community and members of the United States, each template was also hard to follow because of tensions between the identities of “gay” and “immigrant.” Carrillo will incorporate this research into a forthcoming book on sexual migration.