PERI
Overlooked but Not Forgotten: Social Security Lifts Millions More Children Out of Poverty

Social Security is one of the federal government’s largest antipoverty programs for children. A new study written by PERI's Peter Arno and Jeannette Wicks-Lim and published by the Center for Global Policy Solutions examines Social Security's effect on children living in extended households that receive benefits, with results stratified by race and ethnicity.  The study demonstrates that, as of 2014, approximately 6.4 million children benefited from Social Security directly or indirectly.   This amounts to fully 9 percent of all U.S. children under the age of 18 and 11 percent of all Social Security beneficiaries.

>> "Read Overlooked But Not Forgotten: Social Security Lifts Millions More Children Out of Poverty"

What Has Our Flawed Financial System Cost the U.S. Economy?

Big Finance’s destructive practices and the overcharging of customers will have cost the U.S. economy between $12.9 and $22.7 trillion by 2023. A new report by the Roosevelt Institute co-authored by PERI’s Gerald Epstein and Juan Antonio Montecino estimates these costs by analyzing three components: 1) rents, or excess profits; 2) mis-allocation costs and 3) the costs of the 2008 financial crisis. The authors describe mechanisms finance uses to pocket these rents and suggest policies to reduce these high costs and to reform the financial sector to play a more productive role in society.

>> Read "Overcharged: The High Cost of High Finance"

A Just Transition for U.S. Fossil Fuel Industry Workers

The world must dramatically cut its dependence on fossil fuels over the next 20 years to stabilize the global climate. Clean energy investments will expand overall job opportunities. Yet workers and communities whose livelihoods depend on the fossil fuel industry will unavoidably lose out in the clean energy transition. In this The American Prospect article, Robert Pollin and Brian Callaci develop a Just Transition framework for workers and communities now dependent on the fossil fuel industry. Their proposal focuses on income and pension-fund support for workers as well as transition assistance for what are now fossil-fuel dependent communities. They estimate the overall cost of the program at a relatively modest $600 million per year.

>>Read "A Just Transition for U.S. Fossil Fuel Industry Workers"

Adjusting China’s Carbon Trading to Ensure Maximum Environmental Benefits

Dramatically reducing consumption of oil, coal, and natural gas as energy sources is necessary for climate stabilization. Reducing fossil-fuel consumption will also be a major factor in protecting the present generation from the health effects of dirty air. PERI's James K. Boyce joins Chinese researchers in the latest issue of Global Environmental Change to analyze how air quality co-benefits could be incorporated into the design of the cap-and-trade system being introduced in Beijing and nearby regions.

>> Read "Gearing carbon trading towards environmental co-benefits in China"

Capital Flight and Foreign Direct Investment in Africa

Leonce Ndikumana and Mare Sarr explore the puzzling simultaneous rise in foreign direct investment (FDI) inflows and capital flight in Africa over recent decades. They examine two questions: Is FDI a potential driver of capital flight? And, is natural resource endowment a possible channel for the capital flight-FDI link? Three important findings emerge. First, while there is no robust evidence that capital flight is fueled by annual FDI inflows, there is a positive relationship between the stock of FDI and capital flight. Second, natural resource endowment is directly related positively to capital flight, especially in the case of oil. Third, high-quality institutions significantly weaken the link between FDI and capital flight.

>> Read “Capital Flight and Foreign Direct Investment in Africa”

Capital Controls in a Time of Crisis

Prior to the financial crisis of 2008, capital controls – measures taken to limit the flow of foreign capital in and out of a domestic economy – were largely discredited by neoclassical economists as wrong-headed economic meddling. But Ilene Grabel writes that the crisis brought about a “rebranding” of capital controls, which are now seen as legitimate and necessary by a broader set of economists. The paper highlights factors contributing to the evolving perception of capital controls among academics and policymakers, and the tensions around this rebranding.

>> Read “Capital Controls in a Time of Crisis”

What is the Relationship Between Income Inequality and Growth?

Income inequality has increased dramatically since the late 1970s. As a result, economists have sought to explain the cause of this increase, and its impact on growth. In a recent PERI Working Paper, Thomas Palley explores the ways that functional and personal income distribution impact growth. By using neo-Kaleckian and Cambridge growth models, he finds that contrary to widespread claims, inequality per se does not impact growth. Instead, Palley writes, both growth and inequality are impacted by changes in the underlying form and pattern of income payments. 

>> Read "Inequality and Growth in Neo-Kaleckian and Cambridge Growth Theory"

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