William J. Wilson (1978, 1985, 1986) has hypothesized that the combination of increased spatial concentration and increased inequality of income among blacks has caused adverse behavioral consequences for poor blacks and contributed to the development of an underclass. Lessening segregation and the general rise in black economic well-being in the postwar period enabled middle-income blacks to move out of segregated inner-city neighborhoods. As a result, low-income blacks in these areas now rarely come in contact with middle-class blacks, who had previously influenced social organizations and community institutions, and provided role models of economic and social success. Wilson hypothesizes that poor blacks have changed their labor force and family behaviors because of the social and economic consequences of this selective outmigration. Wilson's hypothesis has both an empirical and a causal component. In this paper we focus primarily on the former. In the first two sections, we review changes in the level and distribution of male earnings, and in the spatial concentration of poverty. The trends for blacks are compared to those for whites. The third section discusses the links between the empirical evidence and the causal component-did these changes lead to behavioral responses that contributed to the development of an underclass?

In the September 1975 issue of this Review, Morton Paglin posits a new summary statistic, the Paglin-Gini, which he uses to measure and analyze the level and trend of income inequality in the United States. This measure intends to recognize only income differences among families unrelated to the observed age-income profile as contributing to meaningful income inequality. This is to be contrasted with the standard Lorenz-Gini, in which all differences in income among living units contribute to inequality. Paglin's measure indicates substantially less inequality in the United States than is indicated by the Lorenz-Gini. Moreover, Paglin-inequality falls considerably in the post-World War II period while other measures indicate very little change in inequality over this period. Paglin is addressing an important problem. For the postwar period when the age distribution, the length of time spent in school, and the propensity of the young and the old to form their own households have all changed rapidly, the trend in the conventional Gini coefficient has no obvious normative interpretation. However, it is often given one. Unfortunately, Paglin's proposed index of inequality does not meet its objective and, even if it did, its normative content would be no clearer than that of the standard measure. Indeed, no single indicator is sufficient to capture trends in normatively relevant inequality without further analysis. Like any other time-series, a time-series of inequality must be approached with a well-specified, multivariate model. After describing Paglin's procedure in the next section, we challenge his measure in Section II. In Section III, Paglin's interpretation of policy-relevant inequality is questioned, and in Section IV the implications of the Paglin-Gini for the equity of the transfer system are analyzed. Section V is a summary of our critique.