Deaths of Despair

A short note on intergenerational inequality and poverty transmission

1/ I spent this week reviewing my finances, filing my FY2019-20 tax return, and assessing my PhD and research program expenses. Since 2007, I’ve been a self-funded researcher (also working as a university research administrator) so keeping track of research expenses and understanding them are crucial. I completed my political science PhD in April. This past year I also built up a working knowledge of recent developments in evolutionary psychiatry, life history analysis, and contemporary international security. Part of this is a search for an underlying meta-theory of strategic culture.

2/ But my biggest focus this year apart from completing my PhD was a far more personal one: to understand the economic and the sociological literature on economic stratification and intergenerational inequality. As I previously related in a post about my Bachelor of Arts studies, I came from a lower middle class family and I attempted to use education for social mobility. A recent Brookings Institution report has highlighted the importance for students from low socio-economic backgrounds to access financial aid, scholarship and support services - I had a patchy record at this as an ‘at risk’ and homeless student. My freelance publishing career at the time resulted in cover-stories and insightful interviews - but not financial security.

3/ The Brookings Institution report led me to reflect on an important aspect of social mobility: its transmission mechanisms. One of the most intriguing aspects of the Brookings Institution report was the longitudinal pathway of students who started in a low socio-economic background and yet who ended up securely in the middle class. This has likewise been my pathway over a 20 year period: from homeless to MSc, MA and PhD studies, and current employment in research administration at the University of Melbourne’s Melbourne Graduate School of Education. But I still feel the odd one out. I didn’t come from a secure middle class experience, and the on-going restructures of Australian universities makes my class niche less secure, despite my credentials.

4/ A few months ago I became aware of Nobel Prize winner Angus Deaton’s significant research on health, mortality, human capital, and inequality. Deaton has recently authored a book with Anne Case on the “deaths of despair” phenomenon of severe health problems and working class deaths. When I read of Deaton and Case’s research I had an epiphany about my own troubled family history. My mother died in 1978 of a car accident (triggered by a custody dispute) that was in economic terms an “income shock” to me (despite her estate providing the means for private school education that in itself resulted in social mobility). My father died in 2017 during an operation for a medical condition that he had left untreated for three years. Deaton and Case’s framework and research gave me the tools to understand my father’s downward spiral - from a failed entrepreneurial venture to losing his house due to the adverse selection of a home equity line of credit. My father basically gave up, rather than look after his health.

5/ These issues are captured in an economic paper by Shankha Chakraborty and Mausumi Das on mortality, human capital, and persistent inequality. Education provides the environment and the support structures for human capital accumulation - a fact noted in the Brookings Institution report above. Chakraborty and Das however find that people from low socio-economic backgrounds often remain in intergenerational poverty traps because their parents do not have or prioritise good health and, consequently, fail to leave their children with assets from a bequest or an estate. In contrast, people with richer parents grow up in better familial and material conditions, and often have more preferential access to health services. This stratification creates a Matthew Effect where more success goes to the already successful. Both of my parents faced significant mortality risks.

6/ Chakraborty and Das find that intergenerational poverty is transmitted through low private health investment and “endogenous mortality risks.” This is very sobering to read. The COVID-19 pandemic likewise creates a psychological climate of fear and uncertainty where health issues and mortality risks become more visible. This awareness gives my research program a new dimension: it is an unfolding process of human capital accumulation with the aim of ensuring greater economic and social mobility out of earlier life poverty traps and a ‘deaths of despair’ family background. The key from the Brookings Institution report above is to understand the transmission mechanisms of upward mobility. I thought about this more after filing my annual tax return, and have greater clarity on what I will focus on in 2020-21.