Rich partners, poor parents and Trump-loving neighbours

So we’re going from opening up to closing back down again. Local lockdowns, rules of six and (apparently) circuit breaks. All I’m saying is that the last remaining V-shapers out there must be smoking something very strong indeed. In fact, if rising cases and rising unemployment have one silver lining it’s to end the V-shaped nonsense – which has distracted policymakers from their overriding twin tasks this Autumn: keeping both down.

Now obviously every week we have a top chart for you (otherwise the trade descriptions people would be all over us), but this week it’s particularly good – giving us a new angle on a hot topic. Which gives me a good excuse to say thank you to the chart-tastic Resolution team – and to Cara Pacitti, Charlie McCurdy, Rob Holdsworth and Becki Hawkes in particular who are the TOTCs elves that make sure this email actually emerges into inboxes each week.

Thanks to them, and thanks to you for reading. Have a great weekend.

Torsten

Mating assertively assortively. Despite the cancellation of Love Island 2020 (possibly the only coronavirus upside) – ‘coupling up’ still has real economic consequences. A recent US paper looks at the phenomenon of ‘assortative mating’. It’s an appropriately unromantic term for the idea that we increasingly partner up with someone from a similar income bracket. The idea isn’t new but the paper has some stark findings on the scale of change since the 1970s: the proportion of the top tenth of male earners marrying someone in the top tenth of female earners doubled from 11 to 23 per cent by 2018. Unlike some previous studies though, the authors don’t think this reduction in within-couple diversity is the biggest driver of increasing income inequalities between couples as a whole. They argue that growing gaps in female earnings and shifts in the division of work within couples matter more.

Golfing with Trump. I feel bad rewarding the authors of this paper for its attention-grabbing title… but it’s a goodie so here we go. You’ll remember Robert Putnam and his bowling alone argument (basically, the combination of rising inequality and falling civic engagement was the root of American’s problems). Many have taken those twin trends as part of the explanation for the rise of Trump. But this new paper says… not so much, showing that the areas with the highest interpersonal inequality (booming cities) or weakest social capital (the poorest places) didn’t vote Trump. Instead it was socially cohesive small cities and rural areas in the Rustbelt/Great Plains (ie the losers from geographical economic inequality) whose clubs votes swung for Trump. Indeed, in some ways the economic and demographic decline of these places may be particularly keenly felt because they were strongly cohesive. As the authors say “the rise in populist vote represents a reaction of strong communities in which individual losses are strongly identified with collective losses.”

The rule of five. I’m not saying another lockdown is coming, but getting a stash of reading set aside seems like a bright idea, just in case… Luckily polymath Brad DeLong (who you should be following on twitter) is here to help with this whistle-stop tour of some of the biggest names in classical economics, and five of the best books to read on them (long-form TOTC if you will). There’s loads of interest in there, even if you don’t get round to reading the books.

Defending statistics If you’re strapped for time this weekend, then listen to this 10-minute podcast from Tim Harford, economist and author of just released ‘How to Make the World Add Up’. In the mini-podcast, he leads with a ‘cautionary tale’ for statistic-cynics on the undermining of the first evidence linking smoking and cancer by tobacco companies – a particularly relevant reminder of how necessary statistics are in a world where R-numbers and daily infection statistics have never been so important. If you enjoy the podcast, join us for an event with Tim on 28^th September – full details coming your way on Monday.

Chart of the Week

The Government’s long-term political priority is to ‘level up’ the country, and hold on to its new ‘Blue Wall’ seats. The Government’s more immediate priority is to get the economy up and running again. The sweet spot is obviously combining the two. How have they done on that front? Not great, says Chart of the Week. Examining the Chancellor’s flagship ‘Eat Out to Help Out’ scheme, it asks who got what place wise from the hundreds of millions of taxpayers’ pounds spent on all of your discounted scoffing. It turns out that the scheme has not led to partisan porking out. Blue Wall constituencies saw 40 per cent less cash from the scheme than average, and overall Labour areas (many city centres) got marginally more benefit than Tory seats. But if new Tory areas missed out, an old Tory one at least got the single biggest benefit. Westminster and the City somehow hoovered up £6.1m of discounts – 16 times the Blue Wall average. The people of Luton North did the least helping eating out with just £25,000 of discounts – but that’s because they only had their local lockdown lifted the day before the discounts kicked in. And before you ask, no (unlike some others) our work (tweeted here) shows no relationship between how much discounted grub areas munched, and their recent increases in cases