RSF Grantee Daniel Schneider Awarded Tobin Project Research Prize
RSF grantee Daniel Schneider (University of California, Berkeley) and Orestes Hastings (Colorado State University) have been awarded the 2018 Prize for Exemplary Work on Inequality and Decision Making from the Tobin Project for their study, “Income Inequality and Class Divides in Parental Investments,” which was supported by the Russell Sage Foundation.
In their study, Schneider and Hastings merged thirty years of microdata from the Consumer Expenditure Survey and American Heritage Time Use Survey on parental expenditures—schooling, childcare, and lessons—with state-level measures of income inequality from the IRS and Census to study the effects rising income inequality on these expenditures. They show that between 1980 and 2014, as inequality increased, so did gaps in parents’ investments in children by household income. “In high inequality contexts,” Schneider writes, “families in the top 10 percent spend 3.5 times as much as those in the bottom 75 percent.” As he further notes, this appears not to be a result of lower income families spending less, but rather, of affluent families spending much more.
Schneider and Hastings note that the increase in rich parents’ expenditures is partially the result of income concentrating at the top of the distribution—that is, rich parents spend more on their children simply because they have more to spend. But they also show that the rich spend a larger proportion of their income on financial investments in children, particularly when income inequality is higher. “In summary,” the authors write, “we provide new evidence that rising income inequality is reshaping parenting practices in the United States along class lines.”
Schneider and Hastings’ paper was selected for the research prize by a committee comprised of leading scholars of inequality, as part of the Tobin Project’s initiative on Inequality and Decision Making. “With this prize, we recognize work that we expect will provide a model for subsequent research and spur further innovation in this critical field of study,” the Tobin Project said in a statement.