"They find mostly no effect and a few *determinantal* effects on mental health and stress."
"The causal effect of wealth on mortality is zero. That means that if you took someone from the poorer cohort, who is 2% more likely to die than someone with $140k in extra cash and you gave them $140,000, they would still be 2% more likely *** than the people who started with that money." ***missing "to die" here?
Tabarrok’s look at the limits of pure cash transfers hits the core issue: treating symptoms with standard redistribution levers leaves the underlying machinery untouched. If raw liquidity injections have zero causal effect on systemic outcomes, it means we have an architectural problem, not a funding problem.
To withstand the K-shaped pressures of an AI-driven economy, we have to move past standard "tax-and-spend" or unconditional transfers. True structural reform requires a native equity layer—specifically an asset-backed model anchored by a Sovereign Investment Fund and a Universal Revenue Tax. This shifts the citizens' role from passive welfare recipients to active equity stakeholders in national growth.
Version 1.9 of the National Growth Compact builds out the exact mathematics for this institutional transition. It’s live and entirely open-source for a rigorous economic audit. You can find it here on Substack.
I think lottery winners are just not a good proxy for exogenous climb up the economic ladder because they're one-time wealth transfer, not income transfer, and people do not adjust their behaviour as much when they don't expect their long-term income change, and lottery winnings do run out eventually.
Another great paper looks at elite Chinese families who were thrown into poverty during Mao's revolution.
All of their land and jobs and money were taken. But within 3 generations these families were back on top of the income scale.
A negative income shock was temporary.
Yes I agree, that's an incredible paper.
Persistence Despite Revolutions
https://www.nber.org/papers/w27053
Would I be shot at dawn for wondering if SES and IQ might not be related?
Kids need two parents more than money
Thanks for the great post!
Noticed a few typos:
"They find mostly no effect and a few *determinantal* effects on mental health and stress."
"The causal effect of wealth on mortality is zero. That means that if you took someone from the poorer cohort, who is 2% more likely to die than someone with $140k in extra cash and you gave them $140,000, they would still be 2% more likely *** than the people who started with that money." ***missing "to die" here?
I don't know how I lived without Granmarly
Brill post. A much better version of something I wrote 10 years ago https://www.adamsmith.org/blog/tax-spending/why-does-the-son-rise
Thank you Ben!
Tabarrok’s look at the limits of pure cash transfers hits the core issue: treating symptoms with standard redistribution levers leaves the underlying machinery untouched. If raw liquidity injections have zero causal effect on systemic outcomes, it means we have an architectural problem, not a funding problem.
To withstand the K-shaped pressures of an AI-driven economy, we have to move past standard "tax-and-spend" or unconditional transfers. True structural reform requires a native equity layer—specifically an asset-backed model anchored by a Sovereign Investment Fund and a Universal Revenue Tax. This shifts the citizens' role from passive welfare recipients to active equity stakeholders in national growth.
Version 1.9 of the National Growth Compact builds out the exact mathematics for this institutional transition. It’s live and entirely open-source for a rigorous economic audit. You can find it here on Substack.
I thought that you were an economist, and you confuse wealth with income.
I think lottery winners are just not a good proxy for exogenous climb up the economic ladder because they're one-time wealth transfer, not income transfer, and people do not adjust their behaviour as much when they don't expect their long-term income change, and lottery winnings do run out eventually.