7 ms·

our findings suggest that in affluent countries with extensive social safety nets, causal effects of wealth are not a major source of the wealth-mortality gradi

by blfr 10y ago

our findings suggest that in affluent countries with extensive social safety nets, causal effects of wealth are not a major source of the wealth-mortality gradients, nor of the observed relationships between child developmental outcomes and household income Pretty much the same as in the 19th century US: Sons of winners have no better adult outcomes (wealth, income, literacy) than the sons of non-winners, and winners' grandchildren do not have higher literacy or school attendance than non-winners' grandchildren. This suggests only a limited role for family financial resources in the transmission of human capital across generations and a potentially more important role for other factors that persist through family lines. https://www.nber.org/papers/w19348 https://www.nber.org/papers/w19348

mc32 10y ago
You know, since lotteries are run by states, could they not somehow require as a stipulation of taking the prize winners must also simultaneously and compulsorily have to take financial planning education courses at an additional 25% penalty for not attending, for winnings over double median household income? Including lessons on rebuffing close and distant relatives.
- korethr 10y ago
  They could. I doubt it would have much effect. It is very hard to get someone to learn something that they aren't interested in, don't care about, or don't agree with. What would most likely happen is people would take the penalty, or memorize the data in the class long enough to pass the test, then forget it all then and spend it how they were going to anyway.
  - JustSomeNobody 10y ago
    A concern I have with basic income. People will treat it as a lottery.
    - copperx 10y ago
      Basic income shouldn't leave you with much, if any, discretionary income. I don't see the relation.
    - dredmorbius 10y ago
      BI is almost exactly the opposite of a lottery. It isn't a sudden mass windfall, but instead, a steady trickle which, if spent appropriately, enables a secure existance. There's the question of whether or not it will be spent appropriately, which raises the prospect of whether or not there are a class of people whose economic decisions ought be made for them. Or rather, what additional classes of people exist meeting that criterion, as we already hold that children, the senile, and various handicapped individuals cannot see after their own affairs.
      - epicureanideal 10y ago
        I think you're on to something here, maybe accidentally in your comment. A "steady trickle" is a great idea. Rather than giving people say, $1500 on the 1st of the month, if it could be spread out to $30 per day after some initial lump sum, then it would require saving in order to buy anything significant. Someone inclined to blow all $1500 on the first day just couldn't. I guess another solution would be to earmark some amount of the funds for rent or provide vouchers for housing or other services.
        dredmorbius 10y ago
        Not accidental ;-) There's also the matter of windfall wealth to corporations or countries. Dutch diseaase, resource curse, etc.
        aab0 10y ago
        Payday loan-style businesses would let people monetize their BI. And that wouldn't work well with rent, which is usually paid in lump sums.
      - JustSomeNobody 10y ago
        My brother would work a job for two weeks, get a check, then quit. He'd spend the money on stupid, useless stuff. Then, he'd sleep on someone's couch until they had enough of him eating their food and kick him out. He'd "bum" 2 dollars for a gallon of gas to get to the next couch. I'm not making this up. This was his existence for most of his life. He would see his weekly/monthly/whatever BI check as a lottery. There are many people like him. They would not, in any way, spend the money appropriately. I firmly believe that anyone pushing for BI has never met anyone like my brother.
- nostrebored 10y ago
  This really assumes that financial planning is the issue. It's a symptom of the problem. The winners of the lottery are ill equipped to pass on the life skills for success, because generally they don't have them. While tons of people gripe about the accumulated wealth of the upper class, there is some socialization in upper class families that sets the children up to succeed -- it's not just an increased access to connections. I say this as someone who lived in a four person family that lived on a single welfare check for years. There is a huge cultural difference between those who are systemically poor, situationally poor, and the upper class. Learning upper class behaviors -- and unlearning my 'poor person' behaviors -- has had an immensely positive effect on my life and the way that I handle situations.
  - grandalf 10y ago
    > There is a huge cultural difference between those who are systemically poor, situationally poor, and the upper class. I'd be interested to read more of your thoughts on this based on your observations.
    - nostrebored 10y ago
      Sure thing! I won't go too in depth, but I was just talking about this with my wife a few days ago. My dad came from a family of systemic poverty. Money was something to be spent. Ironically, he was in charge of saving money for our family, which understandably went poorly. He tanked nearly all of our money in the dot com boom. One of the biggest things that stands out to me in retrospect was how little respect he had for his body, especially as a manual laborer. Rather than trying to preserve the resource that he used to make money, he broke his back (doing absolutely dumb things) twice. At this point he was functionally unable to work, and became a stay at home parent because it was the only option left to him. There was no backup plan. He'd dropped out of high school to go to Vietnam, and hadn't saved money in a safe way in case of a catastrophe -- even after one had already struck. Rather than a safe, well diversified plan, all of our money that was not immediately spent was put into tech stocks. And then the dot com bubble hit. People who are systemically poor are more likely to be content with a good gig, even if it is not sustainable. They are less likely to hedge against risk in this situation as well. This showed in other areas as well. For example, he'd lost all of his teeth by 40. My mother on the other hand was situationally poor -- her father's family had a good bit of money, but he passed away very young leaving her and her two siblings with a single mother, who worked in public schools. My mom pursued a degree in journalism, while her brother went into tech. While in school, she dropped out to become an administrative assistant for a large uranium company that was paying more than she was looking at as a journalism grad. People who are situationally poor are willing to take low risk opportunities with a good reward (take a job that pays more, leave school -- if it works then that's great, if not then you head back to school with more money as a buffer). They are less likely to make a career out of things that use your body as a resource, as such careers are usually unsustainable. Upper class people I've met are far more likely to take high risk opportunities, even without a buffer. A decision my wife and I made that I think is a more 'upper class' decision was moving to Seattle without much of a financial buffer and no jobs, because we thought it had a very good chance of being the best payoff for our degrees. It's a decision that has accelerated both of our careers and earnings immensely. Upper class people network. A lot. While they are born into connections, I'm shocked at how few people (myself included) have not picked up the networking skill. Upper class people are also more likely to understand that their brain/body is a resource that needs to be taken care of to have personal and economic success. For instance, attitudes towards consumption of media, food, and learning materials is something that is shockingly different. There's a reason why when you read about the success that upper class people have had, there's usually very little mention of television, and an extreme amount of "i used to read a lot." I considered myself to be someone who read a lot, and compared to my peers I did, but when I'm hanging out with people who grew up in this culture, I'm simply unable to keep up with the amount of references that they make. There's more, but this has gone on for longer than I was expecting it to, and of course it's all just my opinions and observations.
- Trundle 10y ago
  They could but why would they? Governments aren't opposed to people spending irresponsibly.
- WalterBright 10y ago
  > compulsorily Force people into a classroom, and they will learn nothing. I see similar things all the time, like various schemes to force parents to go to PTA meetings, laws to force people to vote, etc. Utopia cannot be created this way.
ThomPete 10y ago
It is however a strawman since no one is claiming that the money in themselves are the issue. It's not the actual wealth that matters but how long the family have had it. When you raise children you build their character and their ability to deal with a bunch of different complex choices in life. You can't really be using lottery winners to say anything that what happens to lottery winners.
- aab0 10y ago
  > It is however a strawman since no one is claiming that the money in themselves are the issue. I am, uh, pretty sure that people do claim all the time that money is a pretty big issue and this is why we need more income equality and welfare and jobs.
  - deleted 10y ago
    [deleted]
  - ThomPete 10y ago
    Yes but as a fundamental thing NOT as a sudden strike of luck.
- gscott 10y ago
  Right away it said it was testing "wealth shocks" going from something to everything in a day. Take a person who has a habit of gambling (the lottery) and they win millions, could be great or a disaster. Someone who has had money from birth, say Donald Trump, gets all sorts of perks like the best schools and a dad that gets him influence and early good deals.
  - ThomPete 10y ago
    Yes but why is it testing that? Who is claiming this is important?

by blfr 10y ago

mc32 10y ago

You know, since lotteries are run by states, could they not somehow require as a stipulation of taking the prize winners must also simultaneously and compulsorily have to take financial planning education courses at an additional 25% penalty for not attending, for winnings over double median household income? Including lessons on rebuffing close and distant relatives.

korethr 10y ago
They could. I doubt it would have much effect. It is very hard to get someone to learn something that they aren't interested in, don't care about, or don't agree with. What would most likely happen is people would take the penalty, or memorize the data in the class long enough to pass the test, then forget it all then and spend it how they were going to anyway.
- JustSomeNobody 10y ago
  A concern I have with basic income. People will treat it as a lottery.
  - copperx 10y ago
    Basic income shouldn't leave you with much, if any, discretionary income. I don't see the relation.
  - dredmorbius 10y ago
    BI is almost exactly the opposite of a lottery. It isn't a sudden mass windfall, but instead, a steady trickle which, if spent appropriately, enables a secure existance. There's the question of whether or not it will be spent appropriately, which raises the prospect of whether or not there are a class of people whose economic decisions ought be made for them. Or rather, what additional classes of people exist meeting that criterion, as we already hold that children, the senile, and various handicapped individuals cannot see after their own affairs.
    - epicureanideal 10y ago
      I think you're on to something here, maybe accidentally in your comment. A "steady trickle" is a great idea. Rather than giving people say, $1500 on the 1st of the month, if it could be spread out to $30 per day after some initial lump sum, then it would require saving in order to buy anything significant. Someone inclined to blow all $1500 on the first day just couldn't. I guess another solution would be to earmark some amount of the funds for rent or provide vouchers for housing or other services.
      - dredmorbius 10y ago
        Not accidental ;-) There's also the matter of windfall wealth to corporations or countries. Dutch diseaase, resource curse, etc.
      - aab0 10y ago
        Payday loan-style businesses would let people monetize their BI. And that wouldn't work well with rent, which is usually paid in lump sums.
    - JustSomeNobody 10y ago
      My brother would work a job for two weeks, get a check, then quit. He'd spend the money on stupid, useless stuff. Then, he'd sleep on someone's couch until they had enough of him eating their food and kick him out. He'd "bum" 2 dollars for a gallon of gas to get to the next couch. I'm not making this up. This was his existence for most of his life. He would see his weekly/monthly/whatever BI check as a lottery. There are many people like him. They would not, in any way, spend the money appropriately. I firmly believe that anyone pushing for BI has never met anyone like my brother.
nostrebored 10y ago
This really assumes that financial planning is the issue. It's a symptom of the problem. The winners of the lottery are ill equipped to pass on the life skills for success, because generally they don't have them. While tons of people gripe about the accumulated wealth of the upper class, there is some socialization in upper class families that sets the children up to succeed -- it's not just an increased access to connections. I say this as someone who lived in a four person family that lived on a single welfare check for years. There is a huge cultural difference between those who are systemically poor, situationally poor, and the upper class. Learning upper class behaviors -- and unlearning my 'poor person' behaviors -- has had an immensely positive effect on my life and the way that I handle situations.
- grandalf 10y ago
  > There is a huge cultural difference between those who are systemically poor, situationally poor, and the upper class. I'd be interested to read more of your thoughts on this based on your observations.
  - nostrebored 10y ago
    Sure thing! I won't go too in depth, but I was just talking about this with my wife a few days ago. My dad came from a family of systemic poverty. Money was something to be spent. Ironically, he was in charge of saving money for our family, which understandably went poorly. He tanked nearly all of our money in the dot com boom. One of the biggest things that stands out to me in retrospect was how little respect he had for his body, especially as a manual laborer. Rather than trying to preserve the resource that he used to make money, he broke his back (doing absolutely dumb things) twice. At this point he was functionally unable to work, and became a stay at home parent because it was the only option left to him. There was no backup plan. He'd dropped out of high school to go to Vietnam, and hadn't saved money in a safe way in case of a catastrophe -- even after one had already struck. Rather than a safe, well diversified plan, all of our money that was not immediately spent was put into tech stocks. And then the dot com bubble hit. People who are systemically poor are more likely to be content with a good gig, even if it is not sustainable. They are less likely to hedge against risk in this situation as well. This showed in other areas as well. For example, he'd lost all of his teeth by 40. My mother on the other hand was situationally poor -- her father's family had a good bit of money, but he passed away very young leaving her and her two siblings with a single mother, who worked in public schools. My mom pursued a degree in journalism, while her brother went into tech. While in school, she dropped out to become an administrative assistant for a large uranium company that was paying more than she was looking at as a journalism grad. People who are situationally poor are willing to take low risk opportunities with a good reward (take a job that pays more, leave school -- if it works then that's great, if not then you head back to school with more money as a buffer). They are less likely to make a career out of things that use your body as a resource, as such careers are usually unsustainable. Upper class people I've met are far more likely to take high risk opportunities, even without a buffer. A decision my wife and I made that I think is a more 'upper class' decision was moving to Seattle without much of a financial buffer and no jobs, because we thought it had a very good chance of being the best payoff for our degrees. It's a decision that has accelerated both of our careers and earnings immensely. Upper class people network. A lot. While they are born into connections, I'm shocked at how few people (myself included) have not picked up the networking skill. Upper class people are also more likely to understand that their brain/body is a resource that needs to be taken care of to have personal and economic success. For instance, attitudes towards consumption of media, food, and learning materials is something that is shockingly different. There's a reason why when you read about the success that upper class people have had, there's usually very little mention of television, and an extreme amount of "i used to read a lot." I considered myself to be someone who read a lot, and compared to my peers I did, but when I'm hanging out with people who grew up in this culture, I'm simply unable to keep up with the amount of references that they make. There's more, but this has gone on for longer than I was expecting it to, and of course it's all just my opinions and observations.
Trundle 10y ago
They could but why would they? Governments aren't opposed to people spending irresponsibly.
WalterBright 10y ago
> compulsorily Force people into a classroom, and they will learn nothing. I see similar things all the time, like various schemes to force parents to go to PTA meetings, laws to force people to vote, etc. Utopia cannot be created this way.

ThomPete 10y ago

It is however a strawman since no one is claiming that the money in themselves are the issue. It's not the actual wealth that matters but how long the family have had it. When you raise children you build their character and their ability to deal with a bunch of different complex choices in life. You can't really be using lottery winners to say anything that what happens to lottery winners.

aab0 10y ago
> It is however a strawman since no one is claiming that the money in themselves are the issue. I am, uh, pretty sure that people do claim all the time that money is a pretty big issue and this is why we need more income equality and welfare and jobs.
- deleted 10y ago
  [deleted]
- ThomPete 10y ago
  Yes but as a fundamental thing NOT as a sudden strike of luck.
gscott 10y ago
Right away it said it was testing "wealth shocks" going from something to everything in a day. Take a person who has a habit of gambling (the lottery) and they win millions, could be great or a disaster. Someone who has had money from birth, say Donald Trump, gets all sorts of perks like the best schools and a dad that gets him influence and early good deals.
- ThomPete 10y ago
  Yes but why is it testing that? Who is claiming this is important?