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on Economics of Happiness |
|
Issue of 2008‒05‒31
eighteen papers chosen by |
| By: | Thesia I. Garner (U.S. Bureau of Labor Statistics); Katherine S. Short (U.S. Census Bureau) |
| Abstract: | This paper presents an experimental poverty measure and compares it to the current official measure, now more than 40 years old. The experimental measure is based on an approach, drawn from work by a National Academy of Sciences (NAS) expert Panel, to consistently define basic needs and family resources. The experimental thresholds are based on out-of-pocket spending by families on basic goods and services and are based on an “outflows” concept. The resource measure is based on an “inflows” concept and reflects money coming into the household that is available to meet one’s basic needs. The U.S. Consumer Expenditure Survey serves as the basis for the experimental thresholds and the Current Population Survey Annual Social and Economic Supplement serves as the basis for the resource measure. Results for 1996 to 2005 are reported with trends examined. An important finding is that increases in expenditures for shelter and utilities, captured in the new thresholds, suggest a greater increase in the number of families not able to meet basic needs than is reflected by the official poverty statistics. |
| Keywords: | NAS, Poverty, Consumer Exenditure Survey, Current Population Survey |
| JEL: | I32 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:bls:wpaper:ec080030&r=hap |
| By: | Saint-Paul, Gilles |
| Abstract: | In order to credibly "sell" legitimate children to their spouse, women must forego more attractive mating opportunities. This paper derives the implications of this observation for the pattern of matching in marriage markets, the dynamics of human capital accumulation, and the evolution of the gene pool. A key consequence of the trade-off faced by women is that marriage markets will naturally tend to be hypergamous - that is, a marriage is more likely to be beneficial to both parties relative to remaining single, the greater the man’s human capital, and the lower the woman’s human capital. As a consequence, it is shown that the equilibrium can only be of two types. In the "Victorian" type, all agents marry somebody of the same rank in the distribution of income. In the "Sex and the City" (SATC) type, women marry men who are better ranked than themselves. There is a mass of unmarried men at the bottom of the distribution of human capital, and a mass of single women at the top of that distribution. It is shown that the economy switches from a Victorian to an SATC equilibrium as inequality goes up. The model sheds light on how marriage affects the returns to human capital for men and women. Absent marriage, these returns are larger for women than for men but the opposite may occur if marriage prevails. Finally, it is shown that the institution of marriage may or may not favour human capital accumulation depending on how genes affect one’s productivity at accumulating human capital. |
| Keywords: | human capital accumulation; hypergamy; legitimacy; Marriage markets; overlapping generations |
| JEL: | D1 D13 D3 E24 I2 J12 J13 J16 K36 O15 O43 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6828&r=hap |
| By: | Monstad, Karin; Propper, Carol; Salvanes, Kjell G |
| Abstract: | In many developed countries a decline in fertility has occurred. This development has been attributed to greater education of women. However, establishing a causal link is difficult as both fertility and education have changed secularly. The contribution of this paper is to study the connection between fertility and education over a woman’s fertile period focusing on whether the relationship is causal. We study fertility in Norway and use an educational reform as an instrument to correct for selection into education. Our results indicate that increasing education leads to postponement of first births away from teenage motherhood towards having the first birth in their twenties and, for a smaller group, up to the age of 35-40. We do not find, however, evidence that total fertility falls as a result of greater education. |
| Keywords: | causal effect; education; female fertility |
| JEL: | I20 J13 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6816&r=hap |
| By: | Markus Schaffner; Benno Torgler |
| Abstract: | It is generally understood that people care about their absolute income position, and several studies have in fact moved beyond this, showing that people also place considerable signifcance on their relative income position. However, empirical evidence about the behavioural consequences is scarce. We address this shortcoming by exploring the relative income effect in a (controlled) sporting contest environment. Specifically, we look at the pay-performance relationship by working with a large panel data set consisting of 26 NBA seasons. We explore how closeness affects positional concerns exploring in detail several potential reference groups. This allows checking of their relevance and of the scope of comparisons, a critical aspect in the literature that requires further investigation. |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:cra:wpaper:2008-13&r=hap |
| By: | Haan, Peter (DIW Berlin); Prowse, Victoria L. (University of Oxford); Uhlendorff, Arne (IZA) |
| Abstract: | In this paper we develop a dynamic structural life-cycle model of labor supply behavior which fully accounts for the effect of income tax and transfers on labor supply incentives. Additionally, the model recognizes the demand side driven rationing risk that might prevent individuals from realizing their optimal labor supply state, resulting in involuntary unemployment. We use this framework to study the employment effects of transforming a traditional welfare state, as is currently in place in Germany, towards a more Anglo-American system in which a large proportion of transfers are paid to the working poor. |
| Keywords: | life-cycle labor supply, involuntary unemployment, in-work credits |
| JEL: | J22 J64 C35 C61 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3480&r=hap |
| By: | Krueger, Alan B. (Princeton University); Mueller, Andreas (IIES, Stockholm University) |
| Abstract: | This paper provides new evidence on time use and subjective well-being of employed and unemployed individuals in 14 countries. We devote particular attention to characterizing and modeling job search intensity, measured by the amount of time devoted to searching for a new job. Job search intensity varies considerably across countries, and is higher in countries that have higher wage dispersion. We also examine the relationship between unemployment benefits and job search. |
| Keywords: | unemployment, job search, time use, unemployment benefits, inequality |
| JEL: | J64 J65 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3490&r=hap |
| By: | Fräßdorf, Anna (University of Bamberg); Grabka, Markus M. (DIW Berlin); Schwarze, Johannes (University of Bamberg) |
| Abstract: | This paper analyses the contribution of capital income to income inequality in a cross-national comparison. Using micro-data from the Cross-National Equivalent File (CNEF) for three prominent panel studies, namely the BHPS for Great Britain, the SOEP for West Germany, and the PSID for the USA, a factor decomposition method described by Shorrocks (1982) is applied. The factor decomposition of disposable income into single income components shows that capital income is exceedingly volatile and its share in disposable income has risen in recent years. Moreover, capital income makes a disproportionately high contribution to overall inequality in relation to its share in disposable income. This applies to Germany and the USA in particular. Thus capital income accounts for a large part of disparity in all three countries. |
| Keywords: | inequality, capital income, factor decomposition, CNEF |
| JEL: | D33 I31 F00 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3492&r=hap |
| By: | Halfdanarson, Benedikt (Statistics Iceland); Heuermann, Daniel F. (University of Trier); Suedekum, Jens (University of Duisburg-Essen) |
| Abstract: | In this paper we survey the recent developments in two empirical literatures at the crossroads of labor and urban economics: Studies about localized human capital externalities (HCE) and about the urban wage premium (UWP). After surveying the methods and main results of each of these two literatures separately, we highlight several interrelations between them. In particular we ask if HCE can be interpreted as one fundamental cause of the UWP, and we discuss if one literature can conceptually learn from the methods that are used by the other one. |
| Keywords: | local labor markets, agglomeration, human capital externalities, urban wage premium |
| JEL: | J31 J61 R23 R12 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3493&r=hap |
| By: | Barrett, Alan (ESRI, Dublin); McCarthy, Yvonne (ESRI, Dublin) |
| Abstract: | The primary purpose of this paper is to provide a review of the papers within the economics literature that have examined the questions of immigrant welfare use and the responsiveness of immigrants to the incentives created by welfare systems. While our focus is largely on papers looking at the European case, we also draw on studies from the United States, in particular on issues where the European literature is thin. One set of papers asks whether immigrants who are more likely to use welfare are attracted to more generous welfare states. The results from these papers are not clear-cut. Another set of papers asks if immigrants use welfare more intensively than natives and if they assimilate out of or into welfare participation. In most cases, the unadjusted data shows higher use of welfare by immigrants although for some countries, for example Germany, this difference can be explained by differences in characteristics. Yet another set of papers finds that the rate of welfare use by existing migrants can influence the welfare use of newly arrived co-nationals. We illustrate some of these issues by looking at immigrant welfare use in Ireland and the UK. Immigrants in the UK appear to use welfare more intensively than natives but the opposite appears to be the case in Ireland. |
| Keywords: | immigrants, welfare participation, Ireland, U.K. |
| JEL: | I38 J61 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3494&r=hap |
| By: | John Cawley; C. Katharina Spiess |
| Abstract: | In developed countries, obesity tends to be associated with worse labor market outcomes. One possible reason is that obesity leads to less human capital formation early in life. This paper investigates the association between obesity and the developmental functioning of children at younger ages (2-4 years) than ever previously examined. Data from the German Socio-Economic Panel Study are used to estimate models of developmental functioning in four critical areas (verbal skills, activities of daily living, motor skills, and social skills) as a function of various measures of weight (including BMI and obesity status) controlling for various child and family characteristics. The findings indicate that, among boys, obesity is a significant risk factor for lagged development in verbal skills, social skills, and activities of daily living. Among girls, weight generally does not have a statistically significant association with these developmental outcomes. Further investigations show that the correlations exist even for those preschool children who spend no time in day care, which implies that the correlation between obesity and developmental functioning cannot be due solely to discrimination by teachers, classmates, or day care providers. |
| JEL: | I1 I2 J13 J24 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13997&r=hap |
| By: | Tomas Philipson; Richard Posner |
| Abstract: | The world-wide and ongoing rise in obesity has generated enormous popular interest and policy concern in developing countries, where it is rapidly becoming the major public health problem facing such nations. As a consequence, there has been a rapidly growing field of economic analysis of the causes and consequences of this phenomenon. This paper discusses some of the central themes of this decade long research program, aiming at synthesizing the different strands of the literature, and to point to future research that seems particularly productive. |
| JEL: | I18 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14010&r=hap |
| By: | Seema Jayachandran |
| Abstract: | Smoke from massive wildfires blanketed Indonesia in late 1997. This paper examines the impact this air pollution (particulate matter) had on fetal, infant, and child mortality. Exploiting the sharp timing and spatial patterns of the pollution and inferring deaths from "missing children" in the 2000 Indonesian Census, I find that the pollution led to 15,600 missing children in Indonesia (1.2% of the affected birth cohorts). Prenatal exposure to pollution largely drives the result. The effect size is much larger in poorer areas, suggesting that differential effects of pollution contribute to the socioeconomic gradient in health. |
| JEL: | I12 O1 Q52 Q53 Q56 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14011&r=hap |
| By: | Kathy Fogel; Randall Morck; Bernard Yeung |
| Abstract: | Many countries appear to have excessively stable big business sectors, in that higher rates of big business turnover have been correlated with faster economy growth. Public policies that stabilize big business sectors are sometimes justified as supportive of social objectives. We find no consistent link between big business stability and public goods provision, egalitarianism, or labor empowerment. While absence of evidence is not evidence of absence, these findings suggest that other explanations, such as special interest politics or behavioral biases favoring the status quo also be considered. |
| JEL: | D3 G3 I0 J0 O4 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14027&r=hap |
| By: | Bernhard, Sarah (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Gartner, Hermann (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Stephan, Gesine (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "In Germany, since 2005 needy job-seekers without access to earnings-related and insurance-paid 'unemployment benefit I' are entitled to means-tested and tax-funded 'unemployment benefit II'. Several active labour market programmes support the integration of these needy job-seekers into the labour market. Our paper estimates the average effect of targeted wage subsidies - paid to employers for a limited period of time - on the subsequent labour market prospects of participating needy job-seekers. We apply propensity score matching to compare participants with a group of similar non-participants. The results show that wage subsidies had in fact large and significant favourable effects: 20 months after taking up a subsidised job, the share of persons in regular employment is nearly 40 percentage points higher across participants. Estimated effects on the shares not unemployed and the share no longer receiving 'unemployment benefit II' are slightly smaller." (author's abstract, IAB-Doku) ((en)) |
| Keywords: | Arbeitslosengeld II-Empfänger, Eingliederungszuschuss, Wirkungsforschung, Arbeitsmarktchancen |
| JEL: | J68 J64 J65 |
| Date: | 2008–05–21 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:200821&r=hap |
| By: | Antonio Rodríguez (Departamento de Análisis Económico y Finanzas, Universidad de Castilla La Mancha, Albacete, España); Sunny Collings (Social Psychiatry & Population Mental Health Research Unit, Department of Public Health, University of Otago Wellington, New Zealand); Ping Qin (National Centre for Register-based Research, University of Aarhus, Denmark) |
| Abstract: | The objective of this paper was to investigate variations in the risk of suicide by socioeconomic status/position (SES) for men and women. Data on 15,648 suicide deaths between 18-65 year old men and women over the period 1981-1997 were linked to data on SES indicators, using a nested case control design. Cox’s proportional hazard regression models were fitted separately for men and women. The results showed that suicide, in both men and women aged 18 to 65 years, is strongly associated with a range of commonly measured indicators of SES, and that the association does vary by sex even after adjusting for these SES measures simultaneousely and controlling for the effect of health status. Low economic status, measured as low income, unskilled blue-collar work, unspecific wage work and unemployment, tends to increase suicide risk more prominently in men than in women; marital status seems to have a comparable influence on suicide risk in the both sexes and the risk is significantly higher among the singlers; parenthood is protective against suicide and the protective effect is statistically stronger for women; living in a big city tends to raise suicide risk for women but reduce the risk for men; Foreign citizens living in Denmark have a lower risk for suicide compared with Danish dwellers but the reduced risk is mainly confined to male immigrants. Our findings reflect the reality of the SES distribution of suicide risk, and underscore the importance and necessity of taking sex, various SES proxies and health factors into consideration mutually and simultaneously for a better understanding of this association. |
| Keywords: | Suicide risk; Socioeconomic status; Sex differences; Population study. |
| JEL: | I00 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:adv:wpaper:200805&r=hap |
| By: | Alan Barrett (Economic and Social Research Institute (ESRI)); Yvonne McCarthy (The Central Bank & Financial Services Authority of Ireland) |
| Abstract: | The primary purpose of this paper is to provide a review of the papers within the economics literature that have examined the questions of immigrant welfare use and the responsiveness of immigrants to the incentives created by welfare systems. While our focus is largely on papers looking at the European case, we also draw on studies from the United States, in particular on issues where the European literature is thin. One set of papers asks whether immigrants who are more likely to use welfare are attracted to more generous welfare states. The results from these papers are not clear-cut. Another set of papers asks if immigrants use welfare more intensively than natives and if they assimilate out of or into welfare participation. In most cases, the unadjusted data shows higher use of welfare by immigrants although for some countries, for example Germany, this difference can be explained by differences in characteristics. Yet another set of papers finds that the rate of welfare use by existing migrants can influence the welfare use of newly arrived co-nationals. We illustrate some of these issues by looking at immigrant welfare use in Ireland and the UK. Immigrants in the UK appear to use welfare more intensively than natives but the opposite appears to be the case in Ireland. |
| Keywords: | Immigrants; welfare participation; Ireland; U.K. |
| JEL: | I38 J61 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp238&r=hap |
| By: | Bruce D. Meyer; James X. Sullivan |
| Abstract: | In the U.S., analyses of poverty rates and the effects of anti-poverty programs rely almost exclusively on income data. In earlier work (Meyer and Sullivan, 2003) we emphasized that conceptual arguments generally favor using consumption data to measure the wellbeing of the poor, and, on balance, data quality issues favor consumption in the case of single mothers. Our earlier work did not show that income and consumption differ in practice. Here we further examine data quality issues and show that important conclusions about recent trends depend on whether one uses consumption or income. Changes in the distribution of resources for single mothers differ sharply in recent years depending on whether measured by income or consumption. Measures of overall and sub-group poverty also sharply differ. In addition to examining broader populations and a longer time period, we also consider new dimensions of data quality such as survey and item nonresponse, imputation, and precision. Finally, we demonstrate the flaws in recent research that concludes that consumption and income trends are similar for disadvantaged households, and that consumption data at the bottom are of lower quality than income data. |
| Keywords: | poverty, measurement, income, consumption |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:har:wpaper:0719&r=hap |
| By: | Bruce D. Meyer; James X. Sullivan |
| Abstract: | This paper examines income and consumption based measures of poverty for those 65 and over between 1972 and 2004. This study contributes to the existing literature on poverty in several ways. First, we construct consumption based measures of poverty that improve upon measures used in previous studies. In particular, we develop better measures of consumption of durables including vehicles and housing and we incorporate the value of health insurance into our measure of consumption. Second, we provide estimates of consumption based poverty for those 65 and over using the most recent data through 2004. Third, we examine the effect on poverty trends of alternative price indices, equivalence scales, and resource sharing units (the family or household). Fourth, in addition to poverty rates, which focus on the cumulative distribution function at a single point, we also study extreme poverty, near poverty and poverty gaps in order to examine more fully the trends in well-being of older individuals. |
| Keywords: | poverty, measurement, income, consumption, 65 and older |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:har:wpaper:0721&r=hap |