Joe Pinsker: Can you walk through one of the strategies that you describe in the paper?
Guillermina Jasso: Let’s talk about the principle of transfers. In a nutshell, this says, if a transfer occurs from one individual to a relatively poorer individual, inequality declines. This is well known, and there are lots of mathematical equations that show it.
Suppose that the richest person in a given distribution transfers a certain amount that will preserve their ranking [as richest], but that will make the poorest person or persons better off—inequality decreases.
Pinsker: To make this a little more concrete, is the recommendation here to donate to charity?
Jasso: That is a very good question. One of the things I go into in the paper is that sometimes there are long chains of transfers, and it can be very difficult to see who is becoming better off and who is becoming worse off as a result of certain spending. What is the final effect of all of these long chains of transfers? What is the final effect on inequality?
So for example, if I buy a best-selling book by a best-selling author, what is the final net effect on inequality? I do not know. There are so many, many little links in this chain. The people who make the paper, who make the ink, who make the binding, the booksellers, et cetera.
Pinsker: What’s another approach you bring up in the paper?
Jasso: Another is assortative mating—this, to my knowledge, was first described by Plato. If rich marry rich and poor marry poor, inequality will either stay the same or increase. But if rich marry poor, inequality will decrease. So, he says, this is what people ought to do.
Now, this mechanism of inequality is well known among scholars, and it can be expressed mathematically. But there’s a really serious side effect: The economic disparity between the two spouses increases.
Pinsker: The concern being, if two spouses come from really different economic backgrounds, their marriage might be less harmonious?
Jasso: We need much, much further research. Maybe one way that this can work is if the rich marrying poor are not really from the extremes—say, if someone from the 60th percentile of wealth marries someone from the 40th percentile. Then the side effect is less extreme than if it’s someone from the 99th percentile marrying someone from the first percentile.
Pinsker: I’m trying to think about what could be done with this knowledge. It would be bizarre to command people to seek out partners who have less money than them. Is the idea instead for people to consider the pools of potential spouses that they surround themselves with, and try to put themselves into situations where there’s more economic diversity?
Jasso: Yes, that’s a wonderful strategy. Now, we already have lots of opportunities for that. Many people play sports, for example. People go to church, they sing in the choir. Obviously, the more opportunities, the better.