nep-hap New Economics Papers
on Economics of Happiness
Issue of 2008‒01‒26
six papers chosen by
Viviana Di Giovinazzo
University of Milano-Bicocca

  1. Clash of Career and Family: Fertility Decisions after Job Displacement By Emilia Del Bono; Andrea Weber; Rudolf Winter-Ebmer
  2. The Effect of Hours of Work on Social Interaction By Henry Saffer; Karine Lamiraud
  3. Research to Develop a Community Needs Index By HUD - PD&R
  4. ¿Pueden Todas las Transferencias Monetarias Reducir Desigualdades? By Sergei Suarez Dillon Soares; Eduardo Zepeda
  5. Don’t aim too high: the potential costs of high aspirations By Astrid Matthey; Nadja Dwenger
  6. Social Network Capital, Economic Mobility and Poverty Traps By Chantarat, Sommarat; Barrett , Christopher

  1. By: Emilia Del Bono (ESRC Research Centre on Micro-Social Change, Institute for Social and Economic Research (ISER), University of Essex); Andrea Weber (Department of Economics & Finance Institut für Höhere Studien (IHS) (Institute for Advanced Studies)); Rudolf Winter-Ebmer (Department of Economics, Johannes Kepler University Linz, Austria)
    Abstract: In this paper we investigate how fertility decisions respond to unex- pected career interruptions which occur as a consequence of job displace- ment. Using an event study approach we compare the birth rates of dis- placed women with those of women una®ected by job loss after establish- ing the pre-displacement comparability of these groups. Our results reveal that job displacement reduces average fertility by 5 to 10% in both the short and medium term (3 and 6 years) and that these e®ects are largely explained by the response of white collar women. Using an instrumen- tal variable approach we provide evidence that the reduction in fertility is not due to the income loss generated by unemployment but arises be- cause displaced workers undergo a career interruption. These results are interpreted in the light of a model in which the rate of human capital accumulation slows down after the birth of a child and all specific human capital is destroyed upon job loss.
    Keywords: fertility, unemployment, plant closings, human capital
    JEL: J13 J64 J65 J24
    Date: 2008–01
  2. By: Henry Saffer; Karine Lamiraud
    Abstract: Over time, increases in hours of work per capita have created the intuitively plausible notion that there is less time available to pursue social interactions. The specific question addressed in this paper is the effect of hours of work on social interaction. This is a difficult empirical question since omitted factors could increase both hours of work and social interaction. The approach taken in this paper utilizes an exogenous decline in hours of work in France due to a new employment law. The results clearly show that the employment law reduced hours of work but there is no evidence that the extra hours went to increased social interactions. Although hours of work are not an important determinant of social interaction, human capital is found to be important. The effect of human capital, as measured by education and age, is positive for membership groups but negative for visiting relatives and friends. Also, contrary to expectations, there are no important differences in the determinants of social interaction by gender, marital status or parent status. Finally, a comparison between France and the US show that the response to human capital and other variables are much the same in both nations.
    JEL: Z1
    Date: 2008–01
  3. By: HUD - PD&R
    Abstract: The U.S. Department of Housing and Urban Development (HUD) funded this research for the purpose of developing an index of community needs. Such an index would take information from various public databases on different types of community problems and produce an overall assessment of a community’s needs. As far back as 1976, HUD devoted its own staff resources to studying community needs and devising ways to synthesize various types of needs into an overall index of needs. HUD’s efforts have been sporadic because the primary source of data on community needs has been the decennial censuses, and thus new information on needs has been available only at 10-year intervals. Now, the American Community Survey (ACS) will provide every year the information that previously was available only from the decennial censuses. The annual availability of information through the ACS makes a community needs index much more valuable for HUD.
    JEL: D83
    Date: 2007–06
  4. By: Sergei Suarez Dillon Soares (Institute of Applied Economic Research (IPEA)); Eduardo Zepeda (International Poverty Centre)
    Date: 2008–01
  5. By: Astrid Matthey; Nadja Dwenger
    Abstract: The higher our aspirations, the higher the probability that we have to adjust them downwards when forming more realistic expectations later on. This paper shows that the costs induced by high aspirations are not trivial. We first develop a theoretical framework to identify the factors that determine the effect of aspirations on expected utility. Then we present evidence from a lab experiment on the factor found to be crucial: the adjustment of reference states to changes in expectations. The results suggest that the costs of high aspirations can be significant, since reference states do not adjust quickly. We use a novel, indirect approach that allows us to infer the determinants of the reference state from observed behavior, rather than to rely on cheap talk.
    Keywords: aspirations, reference state, expectations, individual utility, experiments
    JEL: D11 D84 C91
    Date: 2008–01
  6. By: Chantarat, Sommarat; Barrett , Christopher
    Abstract: The paper explores the role social network capital might play in facilitating poor agents’ escape from poverty traps. We model and simulate endogenous network formation among households heterogeneously endowed with both traditional and social network capital who make investment and technology choices over time in the absence of financial markets and faced with multiple production technologies featuring different fixed costs and returns. We show that social network capital can serve as either a complement to or a substitute for productive assets in facilitating some poor households’ escape from poverty. However, the voluntary nature of costly social network formation also creates both involuntary and voluntary exclusionary mechanisms that impede some poor households’ exit from poverty. Through numerical simulation, we show that the ameliorative potential of social networks therefore depends fundamentally on broader socioeconomic conditions, including the underlying wealth distribution in the economy, that determine the feasibility of social interactions and the net intertemporal benefits of social network formation. In some settings, targeted public transfers to the poor can crowd-in private resources by inducing new social links that the poor can exploit to escape from poverty.
    JEL: O1 Z1 I3
    Date: 2008–01

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