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Tyler was kind enough (or provocative enough!) to request a response to the latest Hamilton Project study showing that improving living standards are primarily about increases in hours worked.  Sadly, I haven't had much time to blog lately, and I can't say much this time either.  But this is a good opportunity for me to explain: I'm in a new position as a Fellow at the Brookings Institution, in the Center on Children and Families.  In the medium-term, I'll actually be able to do more blogging than I have in the past (where blogging coexisted uneasily with my day job).  But in the short-term, I have a big research project to manage that is going to keep me from blog debates.  All I can say is thank you to everyone who has read and/or supported the blog.  I couldn't have gotten my new gig without it, and I look forward to being able to re-engage in various economic debates soon.

OK, my short response to the living standards question is that everything hinges on three questions, none of which are as obviously answered as you think:
1. To what extent have the ever-growing cost of health insurance benefits eaten into wages, and have the increasing costs provided the utility to workers that they would have received if they'd just gotten extra pay?
2. How much do conventional ways of adjusting for cost of living overstate inflation, thereby understating the improvement in living standards?
3. To what extent have husbands voluntarily chosen to reduce the number of hours they work (or to work in less-highly-paid positions) as a reaction to not having to be the sole breadwinner (thanks to the revolution in women's labor force participation).

There's not really any debate about how downscale folks have fared the past few decades.  The debate is about the median--typical--family.  I'll dive back in this fall.


07/08/2012 7:16am

In the Survey of Consumer Finances the real gains in median income from 1989 to 2007 were similar for the top 10% and bottom 40%, but much slower in the middle. The notion that "median" means "typical" is not true if 60 percent or more have gains that exceed those at the median. Please contact me when you dig into this -- I have other sources, data and ideas.


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