ECON 361 - Income Distributions and Problems in Inequality

Queen's University, Department of Economics

Instructor: Maggie Jones
Email: jonesm [at]
Location: Dunning Hall, Room 27
Times: Wednesday @ 10-11:20am and Friday at 8:30-10am
Office Hours: Fridays from 10:00-11:30am in Dunning Hall 345
TA: Jenny Watt
Email: j.watt [at]
TA Office Hours: Tuesdays from 2:30-3:30pm in Mackintosh-Corry Hall, Rm A422
Course Description:
This course will provide an introduction to the measurement and analysis of poverty and inequality, with a particular focus on inequality and the distribution of earnings in Canada. We will look at trends in inequality, theories of the principal determinants of the distribution of income, and we will also review some recent empirical findings in the related literature. Students should be comfortable with the principles of microeconomic theory, and we will also be using concepts from elementary statistics, so prior knowledge of statistics is strongly recommended. 
1.  Reminder to bring a calculator for the final exam.
2.  This week (December 8th-12th), I will have office hours on Wednesday, December 10th from 10am-12pm.  I will not hold office hours on Friday, December 12th.
3.  Late policy for the term paper will be a deduction of 10% per day, up to a maximum of 3 days, i.e., if you hand the term paper in on Dec. 2nd, the highest grade you will be able to receive is 90%, on Dec. 3rd, the highest grade you will be able to receive is 80%, and on Dec. 4th, the highest grade you will be able to receive is 70%.  After December 4th, no more late term papers will be accepted. 
4. Critical response papers can be picked up from the distribution center.  
5. Anyone who hasn't handed in a critical response has one last chance to hand it in on Friday, November 28th and the paper will be:
Chetty, Raj, Hendren, Nathaniel, Kline, Patrick and Emmanuel Saez.  Where is the land of opportunity?  The geography of intergenerational mobility in the United States.  Forthcoming, Quarterly Journal of Economics.
6.  Midterms available at the distribution centre.  Step 1: pick up midterm, step 2: read the midterm solutions, step 3: if you still have questions about grading visit Jenny's office hours, step 4: if you are still not satisfied with the grading, visit my office hours.
7.  Midterm solutions can be downloaded HERE.
8.  Assignment 1 can now be picked up at the distribution center.
9.  Explanation of the critical response paper and the term paper can be found HERE.  The critical response papers are due in class on the day we discuss the paper and the term paper is due on December 1st, by 4pm in my office (or any date before this time).
10.  Updated reading list for the last half of the course is found HERE.  
11.  Assignment 1 Solutions (POSTED HERE).  Please let me know if you have questions about any of the solutions.  
12.  Assignment 1 (POSTED HERE) was due on Tuesday, October 14th.
Recall that if you are downloading journal articles off-campus you must connect from off-campus:
1. Introduction to the course (September 10th, 2014)
2. Poverty measurement (September 12th, 2014)
Sen, Amartya (1995). Equality of What? In Inequality Reexamined (pp. 12-30). Cambridge, Massachussets: Harvard University Press. (in Stauffer Library)
Low Income Lines, 2011-2012, Statistics Canada Income Research Paper Series
Low Income in Canada a Multi-line and Multi-index PerspectiveStatistics Canada Income Research Paper Series
3. Basic statistics and econometrics review (September 17th, 2014)
4. Papers in poverty measurement (September 19th, 2014)
Osberg, Lars and Kuan Xu (1999). Poverty Intensity: How Well Do Canadian Provinces Compare? Canadian Public Policy, 25(2), 179-195.
Osberg, Lars (2000). Poverty in Canada and the United States: Measurement, Trends, and Implications. The Canadian Journal of Economics, 33(4), 847-877. 
Chen, Shaohua and Martin Ravallion (2010). The Developing World is Poorer Than We Thought, but No Less Successful in the Fight Against Poverty. The Quarterly Journal of Economics, 124(4), 1577-1625.
5. Measuring Inequality (September 24th, 2014)
6. Taxes and Transfers (September 26th, 2014)
Frenette, Mark, Green, David A. and Kevin Milligan (2007). The Tale of the Tails: Canadian Income Inequality in the 1980s and 1990s. The Canadian Journal of Economics, 40(3), 734-764.
Fortin, Nicole, Green, David A., Lemieux, Thomas, Milligan, Kevin and W. Craig Riddell (2012).  Canadian Inequality: Recent Developments and Policy Options.  Canadian Public Policy, 38(2), 121-145.
Chawla, Raj K. (2004). Wealth Inequality by Province.  Statistics Canada Perspectives, 13-19.
Ravallion, Martin (2014).  Income Inequality in the Developing World.  Science, 344(6186), 851-855.
Other paper(s) TBA by Wednesday (Oct 1st)
9.  Top Income Shares in Canada (October 8th, 2014)
Veall, Michael R. (2012).  Top Income Shares in Canada; Recent Trends and Policy Implications.  Canadian Journal of Economics, 45(4), pp. 1247-1272.
Murphy, Brian, Roberts, Paul, and Michael Wolfson (2007).  High Income Canadians.  Statistics Canada Perspectives, pp. 5-27.
10.  Top Income Shares Around the World (October 10th, 2014) - Assignment 1 due at the beginning of class at 8:30am.
Alvaredo, Facundo, Atkinson, Anthony B., Piketty, Thomas, and Emmanuel Saez (2013).  The Top 1 Percent in International and Historical Perspective.  Journal of Economic Perspectives, 27(3), pp. 3-20.
Piketty, Thomas and Nancy Qian (2009).  Income Inequality and Progressive Income Taxation in China and India, 1986-2015. American Economic Journal: Applied Economics, 1(2), pp. 53-63.
Piketty, Thomas and Emmanuel Saez (2003). Income Inequality in the United States.  The Quarterly Journal of Economics, 118(1), pp. 1-39.
11.  Assignment Solutions and Midterm Review (October 15th, 2014)
12.  Midterm (October 17th, 2014)
Piketty, Thomas and Nancy Qian (2009).  Income Inequality and Progressive Income Taxation in China and India, 1986-2015. American Economic Journal: Applied Economics, 1(2), pp. 53-63.
Piketty, Thomas and Emmanuel Saez (2003). Income Inequality in the United States.  The Quarterly Journal of Economics, 118(1), pp. 1-39.
Piketty, Thomas and Gabriel Zucman (2014).  Capital is Back: Wealth-Income Ratios in Rich Countries 1700-2010.  The Quarterly Journal of Economics, 129(3), pp. 1255-1310.
14.  Criticisms of "Capital is Back" and "Capital in the 21st Century" (October 24th, 2014) - slides continuing from the 22nd and notes on board
*Krusell, Per and Tony Smith (2014).  Is Piketty's "Second Law of Capitalism" Fundamental? 2014 Working Paper.
Vox overview of the above paper by Krusell and Smith.
Commentary by Brad Delong (criticism of Krusell and Smith argument).
Return commentary by Krusell and Smith.
Response by Brad Delong.
15.  Introduction to Labour Supply, Labour Demand, and Equilibrium in the Labour Market (October 29th, 2014) - notes on the board.
Borjas, George.  Labor Economics. New York, 2005.  Print. Chapters 2-5.
16.  Compensating Wage Differential & Life Cycle Model & Human Capital Model (time permitting) (October 31st, 2014) - notes on the board.
Borjas, George.  Labor Economics. New York, 2005.  Print. Chapters 6 & 7.
17.  Education (November 5th, 2014)
*Card, David and Alan Krueger (1992).  Does School Quality Matter?  Returns to Education and the Characteristics of Public Schools in the United States.  Journal of Political Economy, 100, pp. 1-40.
-Note: we won't have enough time to cover other readings listed on syllabus for this day.
*Corak, Miles (2013).  Income Inequality, Equality of Opportunity, and Intergenerational Mobility.  Journal of Economic Perspectives, 27(3), pp. 79-102.
*Aydemir, Abdurrahman, Chen, Wen-Hao, and Miles Corak (2014).  Intergenerational Education Mobility Among the Children of Canadian Immigrants.  Canadian Public Policy, 39(S1), pp. 107-122.
-Note: I may touch on the Chetty et al. paper listed in the updated reading list, however this will not be a required reading.
19.  Racial Discrimination (November 12th, 2014) - plus notes on the board
Borjas, George.  Labor Economics. New York, 2005.  Print. Chapter 10. (for discrimination theory)
*Bertrand, Marianne and Sendhil Mullainathan (2008).  Are Emily and Greg More Employable than Lakisha and Jamal? A Field Experiment on Labor Market Discrimination.  The American Economic Review,  94(4), pp. 991-1013.  
20.  Gender Discrimination (November 14th, 2014)
*Duraisamy, Malathy and P. Duraisamy (1996). Sex Discrimination in Indian Labor Markets.  Feminist Economics, 2(2), pp. 41-61.
Altonji, Joseph and Rebecca Blank (1999).  Race and Gender in the Labor Market.  Handbook of Labor Economics, 4B, pp. 1545-1592. (Note: not a required reading, although I will draw some notes from here.)
*Mankiw, Gregory N. (2013).  Defending the One Percent.  Journal of Economic Perspectives, 27(3), pp. 21-34.
*Krueger, Alan B. (2002).  Inequality, Too Much of a Good Thing.  CEPS Working Paper No. 87.
2014.  Correspondence: The One Percent: Robert Solow, N. Gregory Mankiw, Richard V. Burkhauser, and Jeff Larrimore. Journal of Economic Perspectives, 28(1), pp. 243-248.
22.  Inequality Between Countries (November 21st, 2014) 
*Engerman, Stanley L., and Kenneth L. Sokoloff. (2005). Colonialism, Inequality, and Long-Run Paths of Development. NBER Working Paper No. 11057. 
*Acemoglu, Daron, Johnson, Simon, and James Robinson. (2001).  The Colonial Origins of Comparative Development.  The American Economic Review, 91(5), pp. 1369-1401.
*Easterly, William, and Ross Levine. (2003).  Tropics, Germs and Crops: How Endowments Influence Economic Development.  Journal of Monetary Economics, 50(1), pp. 3-39.
*Engerman, Stanley L., and Kenneth L. Sokoloff. (2005)Colonialism, Inequality, and Long-Run Paths of Development. NBER Working Paper No. 11057.
Solt, Frederick. (2008).  Economic Inequality and Democratic Political Engagement.  American Journal of Political Science, 52(1), pp. 48-60. 
24.  Final Exam Review (November 28th, 2014)
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