Tuesday, April 6, 2010
Poverty and vulnerability to risk
Very interesting EconTalk podcast with a sociologist named Katherine Newman. The interview is about her book called Chutes and Ladders: Navigating the Low-Wage Job Market. The book is in essence a set of case studies that follow a group of working poor in the US over a relatively long period of time to look at how they fare and why. An interesting issue that she highlighted in the interview was the capacity to use social capital to mitigate risks. The example she used was having someone to call if your kid gets sick when you have to go to work, vs. having to take off work to take care of the kid. The people with someone to call tend to do a lot better in the long run than the people who don't. This issue comes up a lot in development economics (the great Portfolios of the Poor talks about it quite a bit), I wouldn't have thought it would be so important in the US.