Those of you who read Sound Economics last year might remember that in the spring we had a special column dubbed “Thesis Corner”. This semester we are bringing it back and this time we are featuring theses written by the class of 2015. If there are any seniors that you would like to see on the Thesis Corner, or if you are an Economics senior that would like to be, get in touch with me at firstname.lastname@example.org.
Our first thesis on the column is by Taylor Smith, who also happens to be the ASAPS Director of Business Services. You can come see him present his thesis, along with all the other senior theses at the Economics Department Senior Thesis Poster Session, this Thursday from 5pm to 6:30pm in the Rotunda. There will be food, research in abundance, and good times. This is designed to be a fun and entertaining event, friends and family are welcome! Topics range from football, sustainability, the water shortage and food deserts in California, and the music industry, so it’s guaranteed to be a great place for people planning on writing a thesis in the future to get ideas. Come support the latest round of thesis writers and see all the research that is happening on campus! And without further delay, here is the first installation of this year’s Thesis Corner, “Where has the American Dream Gone? A look into the Income Inequality Cycle in the United States.”
How would you describe your thesis in a brief sentence?
It’s a meta analysis of inequality in America examining the inequality cycle and examining “Is the American dream still a thing?”
And what inspired your interest for this topic?
I wasn’t always very interested in inequality. It’s a very interesting topic, it’s always covered in the news and all that kind of stuff but I’ve always been very frustrated by the lack of action around it. Everyone’s aware of it, everyone talks about it. No one actually wants to do anything about it so I think that’s why I choose to do this topic and there was so much information on it, which was a blessing and a curse.
What kind of qualifiers did you find made a source helpful to you in your research?
For my topic, it was very interesting because there are really only a few central sources that I needed. There are few people that have done the regressions with all the tax data over the years, which is helpful that there are only a few because it’s really hard to mess it up. It’s one set of data, everyone knows it, it’s reliable, and so it was easy to look at those core sources and off of those everyone had written about that so I was able to draw not only from those central sources, but the secondary sources after that. Really my job was made very easy. I knew I wasn’t going to do a data analysis because I don’t have the time to do regressions on tax data going back to the beginning of the 1900’s. So that was my criteria for a source was, usually having something to do with those central data sets.
In terms of the importance of your findings, what would you say to someone whom didn’t necessarily have an understanding of economics?
That’s a good question. I found three causes of income inequality. There are an infinite causes of income inequality and down on the micro-level each individuals has a unique reason why everyones’ incomes are the way they are, but on the macro-level I found three. There’s financialization, which is the move from long term gains to short term gains, so all they care about now is quarter to quarter, and I think that’s an easy concept to understand. Shareholders want quarter to quarter gains and don’t really care about how a company does in the long run, though they should care about a company does in the long run, but that’s just the way the financial sector shifted. Then there’s taxes. Everyone understands taxes, everyone has to pay taxes, and looking at how taxes have dropped since the 1970’s, that’s really when the income inequality cycle bottomed out and then has come back up in the 70’s when the tax cuts began and you see income inequality start to rise again. And finally social change and with that specifically is the access to education. One of the biggest reasons income inequality was able to to slope off was WWII and the GI bill. People had access to higher education and now higher education is so out of reach, as we all know. So I think those three concepts that I found, while they are rooted in economics, everyone understands those and I think that made my thesis very accessible.
What kind of advice do you have for junior Economics majors going into their theses in the fall?
You have to start thinking about it early. I had two ideas in my head at the spring semester last year. I either wanted to do income inequality, which I ended up doing, or I was going to look at the economy of the Democratic Republic of the Congo, but in doing some initial research over the summer I couldn’t really find anything on the economy of the DRC and so it was really more about the access to the data and sources. So have an idea, do a little bit of research, and don’t stress yourself out. The thesis advisor is there to help guide you through the way. When you show up on day one you don’t have to have your thesis already done, you just need to have a little nugget and keep an open mind because if you already do all the research and have your topic set in stone, then it’s not really going to be a journey. It’ll just be you regurgitating all the things you learned, where as when I started I didn’t really have an opinion on income inequality so I was able to let the sources take me on a journey, which was cool.
Thanks for reading, and don’t forget to come to the Department Poster Session on Thursday!