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Is income inequality truly the defining challenge of our time? Should it be the central issue for American liberalism? Lane Kenworthy, a professor of sociology and political science at the University of Arizona, has been thinking about this more deeply than most. Earlier this year, he published “Social Democratic America,” in which he outlined how a strengthened welfare state could deliver broadly shared prosperity. This year, he is writing another — tentatively entitled “Should We Worry About Inequality?” — in which he assesses the damage inflicted by America’s widening income gap.

My Economic Scene column this week discusses what we know about inequality’s consequences. Following is a transcript of an email interview with Mr. Kenworthy last week, lightly edited for length and clarity.

Q.

You are working on a book titled “Should We Worry About Inequality?” Should we?

A.

Yes, I think we should, though not for the reasons that have dominated recent debate.

Q.

Many thinkers seem convinced that income inequality is producing all sorts of social dysfunction. How bad, in your view, is the damage?

A.

I’ve looked at the experiences of the world’s rich countries since the late 1970s to see what they tell us about income inequality’s effects on an array of economic, social, and political outcomes. I conclude that inequality’s harm has been less pervasive and devastating than some claim, but that it has done significant harm.

The evidence supports a number of the most prominent hypotheses only weakly or not at all. As best I can tell from the available data, income inequality hasn’t reduced economic growth. It hasn’t hindered employment. It may or may not have played a role in fostering economic crises, including the Great Recession. It hasn’t reduced income growth for poor households. It may or may not have contributed to the weakening of household balance sheets by encouraging too much borrowing. It may or may not have reduced equality of opportunity. It hasn’t slowed the growth of college completion. It either hasn’t reduced the increase in life expectancy or the decrease in infant mortality or, if it has, the impact has been small. It looks unlikely to have contributed to the rise in obesity. It hasn’t slowed the fall in teen births or homicides since the early 1990s. It may or may not have weakened trust. It doesn’t appear to have affected average happiness. In the United States it has had little or no impact on trust in political institutions, on voter turnout, or on party polarization. And while it may have boosted inequality of political influence, we lack solid evidence that it’s done so.

On the other hand, income inequality has reduced middle-class household income growth. It very likely has increased disparities in education, health, and happiness in the United States. And it has reduced residential mixing in the U.S.

Q.

Free-market economics is based on the premise that inequality is indispensable for growth: in an utterly equal world nobody would have an incentive to excel, launch the successful new business or invent the awesome new technology. More recent research suggests, however, that more unequal economies may actually grow more slowly. What gives?

A.

In developing nations, the evidence does suggest that income inequality tends to be bad for economic growth. This is partly because inequality hampers educational attainment, as parents force their children to work instead of going to school, and partly because it fosters political instability. But in affluent democratic countries like the United States, few families keep their children out of K-12 schooling due to financial need and governments aren’t threatened or toppled by groups demanding less inequality.

In rich nations, income inequality is thought to reduce economic growth mainly because the rich spend a smaller portion of their income than the middle class and the poor, so higher inequality may mean less consumer demand.

What does the evidence tell us? When I compare across the rich countries, I don’t find compelling evidence that income inequality has been bad for economic growth. Other recent studies have reached a similar conclusion.

Income inequality might harm the economy in another way: by causing financial crises. Households with stagnant incomes could increase borrowing in order to sustain consumption growth, and their debt levels could eventually become unsustainable. As the rich got a larger and larger portion of the income, they could end up with excess savings, which fuels speculative investment and financial bubbles. Third, the rich could use their money and political influence to press policy makers to loosen regulations on finance.

Studies that have examined financial crises across countries and over time don’t, however, find a systematic link with high or rising income inequality.

Q.

What about the 2008 crisis in particular?

A.

It probably will be a while yet before the causes are fully sorted out, but there are grounds for skepticism about income inequality’s contribution. Growing demand for loans by middle- and low-income households may have been driven more by the rising cost of homes and college, along with relaxed lending standards and the availability of home equity loans, than by slow household income growth. Risky lending may have been spurred by the creation of new financial instruments that appeared to spread risk and by rising pressure for profits in publicly-owned investment firms. Finally, the Federal Reserve could have quashed the housing bubble, the proximate precipitant of the crisis, had it wanted to. That it chose not to do so arguably owed more to Fed Chair Alan Greenspan’s ideological predilections than to the political influence of America’s rich.

There surely is some point at which the top 1 percent’s income share would be high enough to impede economic growth. But the experience of the world’s rich countries suggests that that point probably hasn’t yet been reached.

Q.

A powerful critique of inequality is that it is incompatible with democracy – slicing society into powerless have-nots and plutocrats who can shape society to fit their interests. What do you make of this argument?

A.

Money clearly matters in American politics. With the richest getting a larger share of the country’s income, it’s sensible to hypothesize that they would have growing success in swaying policy makers. Still, the influence of money in American politics occurs mainly via lobbying rather than campaign contributions. While the amount of money spent on lobbying has increased exponentially in the past several decades, much of that increase might well have occurred even if income inequality hadn’t increased. After all, lobbying is funded primarily by companies and other organizations, not individuals. Moreover, the impact of money is likely to be smaller when there is already a lot being spent. American politics has been flush with private cash for a generation, so additional spending might no longer buy much additional influence.

The most relevant evidence comes from studies by political scientists Larry Bartels and Martin Gilens. They examined the relationship between votes in Congress on proposed policy changes and the opinions of Americans with different incomes. They found that voting correlated much more closely with the views of the rich.

We need to know whether this pattern of unequal influence increased as income inequality rose. According to Gilens, the correlation between income and influence on policy was weak during the Johnson presidency, strong during the presidencies of Reagan and Clinton, and relatively weak during the presidency of George W. Bush. This isn’t what the inequality hypothesis predicts.

Now, this is by no means a full and complete test of the inequality hypothesis. The well-to-do may exert their influence mainly by keeping proposed reforms from ever coming to a vote and via behind-the-scenes shaping of legislation, and their ability to use these kinds of levers might have increased as their share of income grew. But here too we lack supportive evidence.

Q.

Another common argument is that widening income inequality is hindering social mobility – making it more difficult for children born at the bottom of the income pile to rise through the ranks. Recent research has cast some doubt on this proposition, however. What do you find?

A.

Children who grow up in households with lower incomes are less likely to have good health care, low stress, learning-centered preschools, good elementary and secondary schools, extracurricular activities that promote cognitive and non-cognitive skills, and access to a strong university. We would thus expect a widening of the gap in parents’ income to reduce the likelihood that children from low-income families will succeed in moving up.

Yet parents’ income isn’t the only determinant of a person’s abilities and motivations when she reaches adulthood. Non-monetary influences such as genetics, in-utero developments, parents’ habits and behaviors, peers, and schooling matter too. In addition, there surely are diminishing returns to money; beyond a certain point, more parental income probably helps only a little, if at all.

Among the rich nations for which we have data, those with greater income inequality tend to have less mobility across generations, just as the inequality hypothesis predicts. The problem is that there are other factors that could explain this. The four Nordic nations — Denmark, Finland, Norway, and Sweden — have low inequality and high mobility. Maybe their low inequality causes their high mobility. But they’ve been providing affordable high-quality early education to a substantial portion of children age 1 to 5 for roughly a generation, and they also feature late tracking in K-12 schools and heavy subsidies to ensure that college is affordable for all. These public services, rather than low income inequality, could be the key to why the Nordic countries have such high intergenerational mobility. If we leave out the Nordic nations, the cross-country association between income inequality and mobility remains, but it is quite weak.

Patterns in local communities in the United States suggest little if any correlation between income inequality and relative intergenerational mobility. Deirdre Bloome, a Ph.D. student at Harvard, also finds that states in which income inequality has increased the most haven’t been more likely to suffer a decline in intergenerational income mobility.

If income inequality impedes intergenerational mobility, we should observe a decline in mobility during the period of rising income inequality. But it’s too early to reach a definitive conclusion about this. We need to know whether mobility declined for Americans born after 1979, and they haven’t yet reached their peak earning years. Findings so far are mixed. Some recent studies find no indication of declining mobility, while others conclude that it probably has declined.

So the available evidence offers hints of support for the hypothesis that income inequality reduces intergenerational mobility, but only hints.

Q.

Given the weak evidence that inequality is leading to bad social outcomes, on what grounds should we oppose it? What is the case for policies to stop the widening of income inequality?

A.

I think there are three. First, the evidence suggests that income inequality does have some harmful effects. It reduces income growth for middle-class households. This is a big problem; slow income growth for ordinary Americans is in my view one of our country’s chief failures over the past generation. Income inequality probably also increases inequalities in health, education, and happiness, and it leads to greater residential segregation.

Second, although we don’t yet have conclusive evidence, there is a strong possibility that income inequality has enhanced the political influence of the rich. Not only is this problematic for democracy; it also could have bad spillover effects on other things we care about, from education to economic growth to climate change and beyond.

Third, the fairness objection to high income inequality remains, I believe, as compelling as ever. Much of what determines a person’s earnings and income — intelligence, creativity, physical and social skills, motivation, persistence, confidence, connections, inherited wealth, discrimination — is a product of genetics, parents’ assets and traits, and the quality of one’s childhood neighborhood and schools. These things aren’t chosen; they are a matter of luck. A nontrivial portion of income inequality is therefore, arguably, undeserved.

Q.

So what are the appropriate policies to address these shortcomings? Do we need to reduce income inequality?

A.

I think the smartest approach for most problems is to tackle them directly, rather than pursue an indirect route via lower income inequality. For instance, if we want to improve intergenerational mobility, our best bet might be universal early education rather than a reduction in the top 1 percent’s income share. If we want to boost college graduation, we could increase financial aid to students from low-income families. If we want to reduce inequality of political influence, we could expand public funding of election campaigns and enhance transparency rules for lobbying and private contributions.

On the other hand, addressing the problem of slow income growth for middle-class households probably does require reduced income inequality. Ideally, we could figure out a way to get both the employment rate and wages rising again, but an array of economic pressures — intense competition, shareholder demands for constant profit growth, computers and robots, the attraction of outsourcing and offshoring, and more — make this a very difficult task. We may need to turn to a public insurance mechanism. One possibility would be to expand the earned-income tax credit well into the middle class and index it to G.D.P. per capita. This could be funded by higher tax rates on those at the top of the income ladder.