nep-hap New Economics Papers
on Economics of Happiness
Issue of 2008‒03‒08
nine papers chosen by
Viviana Di Giovinazzo
University of Milano-Bicocca

  1. Job Assignments, Intrinsic Motivation and Explicit Incentives By Julia Nafziger
  2. Does Social Capital Mitigate Precariousness? By Fabio Sabatini
  3. Sen’s Capability Approach as a new social-liberal paradigm (In French) By Alexandre BERTIN
  4. Isolation and subjective welfare : evidence from South Asia By Shilpi, Forhad; Fafchamps, Marcel
  5. The Dynamics and Persistence of Poverty: Evidence from Italy By Francesco Devicienti; Valentina Gualtieri
  6. Having a child: A penalty or bonus for mother's and father's employment in Europe? By Leila Maron; Danièle Meulders
  7. Institutions, Motivations and Public Goods: Theory, Evidence and Implications for Environmental Policy By Andrew Reeson
  8. Poverty and social exclusion: two sides of the same coin or dynamically interrelated processes? By Francesco Devicienti; Ambra Poggi
  9. Working Conditions and Health of European Older Workers By Thierry Debrand; Pascale Lengagne

  1. By: Julia Nafziger
    Abstract: This paper considers the interplay of job assignments with the intrinsic and extrinsic motivation of an agent. Job assignments influence the self confidence of the agent, and thereby his intrinsic motivation. Monetary reward allow the principal to complement intrinsic motivation with extrinsic incentives. The main result is that the principal chooses an inefficient job assignment rule to enhance the agent's intrinsic motivation even though she can motivate him with monetary rewards. This shows that, in the presence of intrinsically motivated agents, it is not possible to separate job assignment decisions from incentive provision.
    Keywords: Intrinsic and Extrinsic Motivation, Job Assignments
    JEL: D82 J31 J33 M12
  2. By: Fabio Sabatini (University of Siena)
    Abstract: There is a surprising gap in the economic literature on social capital. First, we lack studies addressing the effects of social capital on those facets of development that can contribute in making growth more sustainable in the long run, like, for example, human development and social cohesion. Second, it is still unclear what type of networks may exert a positive effect on the different dimensions of development. In particular, the literature has not yet provided a rigorous assessment of the role of strong family ties, that are generally referred to as a form of bonding social capital causing backwardness. This paper carries out an empirical investigation into the relationship between the three types of social capital so far identified by the literature (i.e. bonding, bridging and linking), human development, and labour precariousness, in the belief that precariousness and uncertainty play a crucial role in determining the social cohesion and well-being that are necessary to make growth sustainable in the long run.
    Keywords: Social capital, Human development, Labour market, Precariousness, Italy
    JEL: J24 O15 Z13
    Date: 2008–01
  3. By: Alexandre BERTIN
    Abstract: The goal of this paper is to show that Amartya Sen’s idea can be rooted in the social-liberal paradigm. Combining the respect of an unconditional freedom and the research of a real equality, Sen, thanks to the Capability Approach, proposes a framework for a new theory of justice.
    Keywords: capabilities, social-liberalism, democracy, liberalism, socialism
    JEL: B10 B14 B24 I0 I30
    Date: 2008
  4. By: Shilpi, Forhad; Fafchamps, Marcel
    Abstract: Using detailed geographical and household survey data from Nepal, this article investigates the relationship between isolation and subjective welfare. This is achieved by examining how distance to markets and proximity to large urban centers are associated with responses to questions about income and consumption adequacy. Results show that isolation is associated with a significant reduction in subjective assessments of income and consumption adequacy, even after controlling for consumption expenditures and other factors. The reduction in subjective welfare associated with isolation is much larger for households that are already relatively close to markets. These findings suggest that welfare assessments based on monetary income and consumption may seriously underestimate the subjective welfare cost of isolation, and hence will tend to bias downward the assessment of benefits to isolation-reducing investments such as roads and communication infrastructure.
    Keywords: Transport Economics Policy & Planning,Economic Theory & Research,Health Monitoring & Evaluation,Consumption,Inequality
    Date: 2008–02–01
  5. By: Francesco Devicienti; Valentina Gualtieri
    Abstract: This article studies the dynamics and persistence of poverty in Italy during the nineties, using the ECHP, 1994-2001. Various definitions of poverty are analyzed in parallel, income poverty, subjective poverty and a multidimensional index of life-style deprivation. For each poverty definition, the hazard rates of leaving poverty and re-entering into it are estimated and combined to compute a measure of poverty persistence that takes account of individuals’ repeated spells in poverty. The estimates provide a picture of high poverty turnover for the majority of the Italian population, which is true for any of the alternative definitions of poverty considered. Thus movements in and out of poverty cannot be simply related to spurious transitions due to measurement errors in household income. Multivariate exit and re-entry rate regressions are then estimated jointly to allow for correlated unobserved heterogeneity. The results highlight the role of demographic characteristics, the insufficiencies of the existing social security system and, above all, the weaknesses of the Italian labor market in generating persistent poverty for certain subgroups of the population.
    Keywords: Poverty dynamics, poverty persistence, repeated spells, duration models, Italy.
    Date: 2007
  6. By: Leila Maron (DULBEA, Université libre de Bruxelles, Brussels); Danièle Meulders (DULBEA, Université libre de Bruxelles, Brussels)
    Abstract: In this paper, we aim to study the impact of the presence of young children in the home on mother's and father's employment patterns. The results show that motherhood has an important and negative impact on labour market participation both in terms of part-time and inactivity and the child effect decreases with the age of the youngest child. As far as men are concerned, regression results show that the link between fatherhood and men's hours worked tends to be reversed in comparison with women (fathers work more hours than their childless counterparts) and suggest that men assume their good-provider role.
    Keywords: parenthood, female participation, labour market conditionsdual-earner couples, work effort
    JEL: J13 J21 J22
    Date: 2008–03
  7. By: Andrew Reeson (CSIRO Sustainable Ecosystems, Australia)
    Abstract: In economic terms, the environment is largely a public good. Contributing to a public good is costly to an individual, while the benefits are enjoyed by all. Despite this, many people voluntarily contribute to public goods, both in laboratory economic experiments and through day-to-day environmental decisions. These voluntary contributions are largely motivated intrinsically, that is satisfaction comes from the act itself rather than external rewards. Policy interventions are often required to increase the provision of public goods to the socially optimal level, which usually take the form of extrinsic incentives such as payments or regulations. Theoretical and empirical evidence from psychology and economics suggests that such extrinsic incentives can crowd out the intrinsic motivations which underlie voluntary contributions. As a result, a policy may have less than the anticipated impact. It is even possible for a costly policy intervention to lead to a decrease in overall public good provision, as individuals cease to contribute voluntarily. This paper argues that environmental policy design should proceed with caution in the presence of intrinsic motivations. Weak regulations and small, competitive financial incentives have the greatest potential for negative effects. Recognising and supporting existing efforts can crowd in, rather than crowd out, voluntary contributions. With careful design and implementation, there is the potential to maintain and support intrinsic motivations while also providing robust extrinsic incentives.
    Keywords: public goods; environmental policy; intrinsic motivation; crowding out
    JEL: H4 Q0
    Date: 2008–01
  8. By: Francesco Devicienti; Ambra Poggi
    Abstract: There is growing interest in the analysis and measurement of social exclusion, to complement the static and dynamic literature on income poverty. On theoretical grounds, social exclusion and income poverty are seen as different processes, but with closely interrelated dynamics. However, our empirical understanding of the way these two processes dynamically interact at the individual level is still very limited. To shed some light on the issue, we use a dynamic bivariate probit model, controlling for unobserved heterogeneity and Wooldridge (2005)-type initial conditions. Both first and second order Markov dynamics are examined. We estimate the model using the Italian sample of the ECHP, waves 1-8, and find a sizable extent of state dependence in both poverty and social exclusion. Moreover, there are dynamic cross-effects, implying that poverty and social exclusion are mutually reinforcing. Social policies aimed at eradicating poverty and avoiding individuals’ social and economic marginalization should take these interaction effects explicitly into account.
    Keywords: poverty dynamics, social exclusion, state dependence, dynamic bivariate probit model with random effects.
    JEL: I32 C33 C35 C61
    Date: 2007
  9. By: Thierry Debrand (IRDES institut for research and information in health economics); Pascale Lengagne (IRDES institut for research and information in health economics)
    Abstract: Working conditions have greatly evolved in recent decades in developed countries. This evolution has been accompanied with the appearance of new forms of work organisation that may be sources of stress and health risk for older workers. As populations are ageing, these issues are particularly worrying in terms of the health, labour force participation and Social Security expenditure. This paper focuses on the links between quality of employment and the health of older workers, using the Share 2004 survey. Our research is based on two classical models: the Demand-Control model of Karasek and Theorell (1991) and the Effort-Reward Imbalance model of Siegrist (1996), which highlight three main dimensions: Demand that reflects perceived physical pressure and stress due to a heavy work load; Control that refers to decision latitude at work and the possibilities to develop new skills; and Reward that corresponds to the feeling of receiving a correct salary relatively to efforts made, of having prospects for personal progress and receiving deserved recognition. These models also take into account the notion of support in difficult situations at work and the feeling of job security. Our estimations show that the health status of older workers is related to these factors. Fairly low demand levels and a good level of reward are associated with a good health status, for both men and women. Control only influences the health status of women. Lastly, the results reveal the importance on health of a lack of support at work and the feeling of job insecurity; regardless of gender; these two factors are particularly related to the risk of depression. Thus health status and working conditions are important determinants of the labour force participation of older workers.
    Keywords: Working conditions, Health, Older Workers
    JEL: I10 J28
    Date: 2008–02

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