There are gaps in data on income inequality in poor countries. The newly appointed Noranda Chair Professor of Economics Fatih Guvenen intends to address those gaps.
“Gaps exist for good reasons,” Professor Guvenen explained. “They exist because addressing those gaps is complicated, filling them would take a lot of work for which there are inadequate resources, and there is often a disconnect between what scholars want to achieve, or think they want to achieve, and how research benefits or does not benefit communities.
The challenges described were part of the motivation behind Guvenen’s decision to join the Department of Economics at the University of Toronto from the University of Minnesota.
“There are many institutions who have resources to invest in research,” he said. “The University of Toronto had not only resources, but vision.”
That vision created a place for the senior scholar of international income inequality here in Toronto. While here, Guvenen plans to create an institute for the study of income inequality and income dynamics that is built on an evidence-based foundation and is fully inclusive of those countries where there is an information gap. It is a goal he has already started to work toward. Guvenen is the founder of the Minnesota Economics Big Data Institute (MEBDI), and of one of the co-founders of the GRID project, the Global Repository of Income Dynamics. The 120 economists working on GRID have created a database of micro statistics on income inequality and income dynamics from, mostly, the world’s wealthier countries. The statistics are compiled using administrative data on historical earnings from organizations like Statistics Canada. Expansion of the dataset is a key part of Guvenen’s plans. He also hopes to work with First Nations communities to understand their income dynamics and economic systems.
“The challenge of understanding income dynamics in poorer communities — the reasons why they are not included in existing data — is not because we don’t want to include them,” Guvenen said. “It’s because there is a disconnect between the research communities and the statistical agencies of these countries and the global research community. Here, we have the opportunity to do the work and create a rich picture of what is really happening across the globe.”
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