Betsey Stevenson, Associate Professor of Public Policy, Universitiy of Michigan.
Diminishing marginal well-being from income suggests that redistributing income from the rich to the poor will raise average levels of well-being within a society. This utilitarian logic suggests that—conditional on average income—countries with greater income inequality will experience lower levels of average well-being.
Yet existing research has failed to find clear evidence that inequality undermines average levels of subjective well-being, and many have concluded that therefore no such relationship exists.
We develop a model that quantifies the utilitarian hypothesis quite precisely and find that existing data cannot reject the utilitarian intuition that economic inequality undermines average levels of well-being. However, equally, we are unable to reject the hypothesis that the inequality does not impact well-being.
In short, we show that there is so little variation in economic inequality around the world that existing results reflect imprecise estimates, rather than important insight into the link between inequality and well-being.
About the speaker
Betsey Stevenson is an associate professor of public policy at the Ford School, with a courtesy appointment in the Department of Economics. She is also a research associate with the National Bureau of Economic Research, a fellow of the Ifo Institute for Economic Research in Munich, and serves on the board of directors of the American Law and Economics Association.
Stevenson served a two-year term as an appointed member of the White House Council of Economic Advisers from 2013 to 2015. Previously she served as the chief economist of the U.S. Department of Labor from 2010 to 2011.
Stevenson is a labor economist whose research focuses on the impact of public policies on the labor market. Her research explores women's labor market experiences, the economic forces shaping the modern family, and the potential value of subjective well-being data for public policy.
Stevenson received the 2010 John T. Dunlop Scholar Award for the best young labor economist. She is a graduate of Wellesley College, and earned her PhD in Economics from Harvard University.
Learn more about Betsey Stevenson's work