Robert Manduca
@robertmanduca.bsky.social
Assistant Professor of Sociology, University of Michigan. Studying cities and inequality
If we look just at the proposed *cuts* to Medicaid and SNAP, it's the economic equivalent of Maine losing its entire forestry and paper manufacturing industries, all at once--or Alaska losing 60% of its oil and gas industry.
June 25, 2025 at 6:07 PM
If we look just at the proposed *cuts* to Medicaid and SNAP, it's the economic equivalent of Maine losing its entire forestry and paper manufacturing industries, all at once--or Alaska losing 60% of its oil and gas industry.
Put another way, Medicaid contributes roughly as much to Detroit's economy than car manufacturing, more to Houston than the chemical industry, almost twice as much to Los Angeles as motion picture production--these are big numbers!
June 25, 2025 at 6:04 PM
Put another way, Medicaid contributes roughly as much to Detroit's economy than car manufacturing, more to Houston than the chemical industry, almost twice as much to Los Angeles as motion picture production--these are big numbers!
In some parts of Florida--looking at you, Cape Coral--traditional traded industries make up just *5 percent* of the economic base. The rest of the economy is based on retirement savings, pensions, Social Security, Medicare, etc.
June 25, 2025 at 5:50 PM
In some parts of Florida--looking at you, Cape Coral--traditional traded industries make up just *5 percent* of the economic base. The rest of the economy is based on retirement savings, pensions, Social Security, Medicare, etc.
I compute the share of *all* economic base income that comes from transfers, financial income, and earnings in traded industries (the standard definition). The results are pretty striking: in 2022, transfer payments accounted for *40 percent* of the economic base across US regions
June 25, 2025 at 5:42 PM
I compute the share of *all* economic base income that comes from transfers, financial income, and earnings in traded industries (the standard definition). The results are pretty striking: in 2022, transfer payments accounted for *40 percent* of the economic base across US regions
Usually, researchers define the economic base = traded industries only. But selling products to other cities or countries isn't the only way money can enter a local economy. I explore two other sources: financial income and government transfers. Like exports, these payments sustain the local sector
June 25, 2025 at 5:40 PM
Usually, researchers define the economic base = traded industries only. But selling products to other cities or countries isn't the only way money can enter a local economy. I explore two other sources: financial income and government transfers. Like exports, these payments sustain the local sector
Other industries--some examples are restaurants, grocery stores, home construction, mechanics--serve local, not national/global demand. These are the "town fillers," now usually called the "local" or "non-basic" sector
June 25, 2025 at 5:29 PM
Other industries--some examples are restaurants, grocery stores, home construction, mechanics--serve local, not national/global demand. These are the "town fillers," now usually called the "local" or "non-basic" sector
Basically, some industries--think manufacturing, farming, etc., but also film production or high finance--sell their products on national or global markets, bringing money into their local economies. They're the "town builders", which modern scholars call "traded industries" or the "basic sector"
June 25, 2025 at 5:24 PM
Basically, some industries--think manufacturing, farming, etc., but also film production or high finance--sell their products on national or global markets, bringing money into their local economies. They're the "town builders", which modern scholars call "traded industries" or the "basic sector"
The starting point is Economic Base Theory--a classic concept in economics and geography going back at least to Werner Sombart's 1916 classic "Der moderne Kapitalismus", which made the distinction between "town builders" and "town fillers"
June 25, 2025 at 5:14 PM
The starting point is Economic Base Theory--a classic concept in economics and geography going back at least to Werner Sombart's 1916 classic "Der moderne Kapitalismus", which made the distinction between "town builders" and "town fillers"
Moreover, if you control for wealth-to-income in a regression, then you see a strong, *positive* relationship between wealth and income inequality. This suggests that maybe Norway and Denmark really are more equal than the US, they just manifest it in different ways
April 24, 2025 at 6:47 PM
Moreover, if you control for wealth-to-income in a regression, then you see a strong, *positive* relationship between wealth and income inequality. This suggests that maybe Norway and Denmark really are more equal than the US, they just manifest it in different ways
But there's a strong *negative* relationship between wealth inequality and wealth-to-income: countries with greater inequality also have less total wealth, relative to the size of their economies. And it's a lot less: (low inequality) Italy has 3x as much wealth per dollar of income as Sweden does
April 24, 2025 at 6:44 PM
But there's a strong *negative* relationship between wealth inequality and wealth-to-income: countries with greater inequality also have less total wealth, relative to the size of their economies. And it's a lot less: (low inequality) Italy has 3x as much wealth per dollar of income as Sweden does
Using @lisdata.bsky.social data, I plot wealth inequality against income inequality and the wealth-to-income ratio: how much wealth a country has, relative to the size of its economy. As expected, there's minimal relationship between the Gini index for marketable wealth and that for income
April 24, 2025 at 6:41 PM
Using @lisdata.bsky.social data, I plot wealth inequality against income inequality and the wealth-to-income ratio: how much wealth a country has, relative to the size of its economy. As expected, there's minimal relationship between the Gini index for marketable wealth and that for income
But if wealth and social insurance programs can be (partial) substitutes, it starts to make sense. Fessler and @martinviktor.bsky.social show in countries with larger welfare states, people accumulate less private savings--especially poorer residents www.tandfonline.com/doi/full/10....
April 24, 2025 at 6:38 PM
But if wealth and social insurance programs can be (partial) substitutes, it starts to make sense. Fessler and @martinviktor.bsky.social show in countries with larger welfare states, people accumulate less private savings--especially poorer residents www.tandfonline.com/doi/full/10....
The US has high inequality in both, but places like Norway, Sweden, and Denmark have high (marketable) wealth inequality despite very low income inequality
April 24, 2025 at 6:30 PM
The US has high inequality in both, but places like Norway, Sweden, and Denmark have high (marketable) wealth inequality despite very low income inequality
Thinking hard about augmented wealth also illuminates a major puzzle in wealth inequality research. As @mjantti.bsky.social @esiermin.bsky.social @fabianpfeffer.bsky.social @norawaitkus.bsky.social (+ more) have shown, there's minimal correlation across countries between wealth and income inequality
April 24, 2025 at 6:29 PM
Thinking hard about augmented wealth also illuminates a major puzzle in wealth inequality research. As @mjantti.bsky.social @esiermin.bsky.social @fabianpfeffer.bsky.social @norawaitkus.bsky.social (+ more) have shown, there's minimal correlation across countries between wealth and income inequality
Programs to support new parents are also important: paid parental leave + child allowances have a discounted value of about $70k per child in Norway, and $40k in the US. The raw numbers are smaller than pensions, but as a fraction of a 30-year-old's savings, they're comparable
April 24, 2025 at 6:20 PM
Programs to support new parents are also important: paid parental leave + child allowances have a discounted value of about $70k per child in Norway, and $40k in the US. The raw numbers are smaller than pensions, but as a fraction of a 30-year-old's savings, they're comparable
But other types of social insurance are also massive, especially in Norway. For the median worker, unemployment insurance + paid sick leave are worth almost $60,000 in Norway--but just $1200 in the US
April 24, 2025 at 6:17 PM
But other types of social insurance are also massive, especially in Norway. For the median worker, unemployment insurance + paid sick leave are worth almost $60,000 in Norway--but just $1200 in the US
In both countries, public retirement assets are enormous: worth $100,000s per person, comparable to the marketable net worth of the median retiree
April 24, 2025 at 6:13 PM
In both countries, public retirement assets are enormous: worth $100,000s per person, comparable to the marketable net worth of the median retiree
So far, most augmented wealth research has focused on pensions. But if we dig deeper, we see that other types of social insurance are also major sources of wealth for many people. I explore this in Norway and the USA
April 24, 2025 at 6:10 PM
So far, most augmented wealth research has focused on pensions. But if we dig deeper, we see that other types of social insurance are also major sources of wealth for many people. I explore this in Norway and the USA
By matching wealth definitions to specific uses, researchers can avoid talking past each other and make progress towards building shared understanding. I give some recommendations
April 24, 2025 at 6:04 PM
By matching wealth definitions to specific uses, researchers can avoid talking past each other and make progress towards building shared understanding. I give some recommendations
If you're studying readiness for retirement, then not including Social Security as a form of wealth is fundamentally misleading. But if you're studying the ability to meet an unexpected financial shock—or the way wealth influences politics—then you probably shouldn't include it
April 24, 2025 at 6:02 PM
If you're studying readiness for retirement, then not including Social Security as a form of wealth is fundamentally misleading. But if you're studying the ability to meet an unexpected financial shock—or the way wealth influences politics—then you probably shouldn't include it
Which definition you use matters: as @mwronski.bsky.social and others have shown, in many countries, pensions are worth more than all *marketable wealth combined*. And inequality in augmented wealth is much lower than in marketable wealth doi.org/10.1016/j.je...
April 24, 2025 at 5:56 PM
Which definition you use matters: as @mwronski.bsky.social and others have shown, in many countries, pensions are worth more than all *marketable wealth combined*. And inequality in augmented wealth is much lower than in marketable wealth doi.org/10.1016/j.je...
Most research defines “marketable wealth” as easily tradeable assets—like cash, stocks, and real estate. But some—going all the way back to Milton Friedman—argue we should include pensions and social benefits too. This is called "augmented wealth."
April 24, 2025 at 5:53 PM
Most research defines “marketable wealth” as easily tradeable assets—like cash, stocks, and real estate. But some—going all the way back to Milton Friedman—argue we should include pensions and social benefits too. This is called "augmented wealth."
I have a new paper out! "Should Social Insurance Programs Count as Wealth? Augmented Wealth in Research and Policy." Published yesterday in Socio-Economic Review @sasemeeting.bsky.social doi.org/10.1093/ser/...
April 24, 2025 at 5:44 PM
I have a new paper out! "Should Social Insurance Programs Count as Wealth? Augmented Wealth in Research and Policy." Published yesterday in Socio-Economic Review @sasemeeting.bsky.social doi.org/10.1093/ser/...
To dig deeper into regional industries, you can download our full categorization of NAICS 6-digit industries from my website robertmanduca.com/publications/
December 9, 2024 at 7:01 PM
To dig deeper into regional industries, you can download our full categorization of NAICS 6-digit industries from my website robertmanduca.com/publications/
They're also important spaces for entrepreneurship: there are 3x as many privately held companies in regional industries as in traded ones, and average sales are 2x local industries
December 9, 2024 at 6:52 PM
They're also important spaces for entrepreneurship: there are 3x as many privately held companies in regional industries as in traded ones, and average sales are 2x local industries