|
on Labor Markets - Supply, Demand, and Wages |
| By: | Lee E. Ohanian; Musa Orak; Shihan Shen |
| Abstract: | This paper revisits capital-skill complementarity and inequality, as in Krusell, Ohanian, Rios-Rull and Violante (KORV, 2000). Using their methodology, we study how well the KORV model accounts for more recent data, including the large changes in the labor's share of income that were not present in KORV. We study both labor share of gross income (as in KORV), and income net of depreciation. We also use nonfarm business sector output as an alternative measure of production to real GDP. We find strong evidence for continued capital-skill complementarity in the most recent data, and we also find that the model continues to closely account for the skill premium. The model captures the average level of labor share, though it overpredicts its level by 2-4 percentage points at the end of the period. |
| Keywords: | Capital-skill complementarity; Elasticity of substitution; Inequality; Labor share; Skill premium; Technological change |
| JEL: | E13 E25 J23 J30 J68 |
| Date: | 2021–05–19 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgif:1319&r= |
| By: | Sarah Flèche (Centre d'Economie de la Sorbonne, CEP - London School of Economics); Anthony Lepinteur (University of Luxembourg - Department of Behavioural and Cognitive Sciences); Nattavudh Powdthavee (Warwick Business School and IZA) |
| Abstract: | Would improving women's access to capital reduce the gender entrepreneurial gap? We study this issue by exploiting longitudinal data on lottery winners. Comparing between large to small winners, we find that an increase in lottery win in period t-1 significantly increases the likelihood of becoming self-employed in period t. This windfall effect is statistically the same in magnitude for men and women; the top 25% winners (an average win = £831.16) in year t-1 report a significant increase in the probability of self-employment in year t by approximately 2 percentage points, which is approximately 20-30% of the gender entrepreneurial gap. These results suggest that we can causally reduce the gender entrepreneurial gap by improving women's access to capital that might not be as readily available to the aspiring female entrepreneurs as it is to male entrepreneurs |
| Keywords: | Gender inequality, self-employment; lottery wins; BHPS |
| JEL: | J16 J21 J24 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:21015&r= |
| By: | Merfeld, Joshua D. (KDI School of Public Policy and Management) |
| Abstract: | Using detailed monthly panel data from rural India, this paper analyzes sectoral wage gaps for men and women. I document three important findings. First, there is clear evidence of sorting into sectors, with very large differences in worker human capital across the farm and non-farm sectors and much higher wages in the latter. Second, while these wage gaps are substantial in the cross-section, the wage gap within individuals is decidedly smaller, consistent with worker sorting. Third, the wage gap for women is much larger than it is for men, with the latter exhibiting almost no within-individual gap in wages across sectors. Women work fewer hours and are less likely to work outside of their own village in the non-farm sector, yet the wage gap is driven by higher-caste and married women. I find no evidence of non-pecuniary benefits of agricultural employment relative to non-farm employment being responsible for this gap. These results are consistent with a lack of local non-farm employment opportunities interacting with barriers to labor mobility for women but not men. |
| Keywords: | agriculture, gender, labor, non-farm, wages |
| JEL: | J31 J43 Q12 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14391&r= |
| By: | Colin Gray; Adam Leive; Elena Prager; Kelsey B. Pukelis; Mary Zaki |
| Abstract: | Work requirements are common in U.S. safety net programs. Evidence remains limited, however, on the extent to which work requirements increase economic self-sufficiency or screen out vulnerable individuals. Using linked administrative data on food stamps (SNAP) and earnings with a regression discontinuity design, we find robust evidence that work requirements increase program exits by 23 percentage points (64 percent) among incumbent participants after 18 months. There is a 53 percent overall reduction in program participation among adults who are subject to work requirements. Homeless adults are disproportionately screened out. We find no effects on employment, and suggestive evidence of increased earnings in some specifications. Our findings indicate that, per dollar of public expenditure, eliminating work requirements would likely transfer more resources to low-income adults than other programs targeting the same population. |
| JEL: | H53 I30 I38 J22 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28877&r= |
| By: | Ana Sofia Pessoa |
| Abstract: | This paper documents earnings dynamics over the life-cycle and income level using a large administrative database from German tax records. I find that labor earnings display important deviations from the typical assumptions of linearity and normality. For the bottom earners, large income changes are driven equally by hours and wages which is consistent with transitions between labor status or jobs, whereas for those at the top, earnings changes are mainly induced by wage rate growth. There are also asymmetries in mean reversion of earnings growth mainly driven by the asymmetric hours dynamics. Finally, there is no evidence of an added-worker effect but government insurance and income pooling can mitigate the pass-through of individual earnings changes to the household level and attenuate the deviations from normality of the male earnings growth distribution. |
| Keywords: | earnings dynamics, earnings risk, insurance, wages, hours, higher-order earnings risk, skewness, kurtosis |
| JEL: | E24 H24 J31 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9117&r= |
| By: | Paula A. Calvo; Ilse Lindenlaub; Ana Reynoso |
| Abstract: | We build a novel equilibrium model in which households' labor supply choices form the link between sorting on the marriage market and sorting on the labor market. We first show that in theory, the nature of home production – whether partners' hours are complements or substitutes – shapes marriage market sorting, labor market sorting and labor supply choices in equilibrium. We then estimate our model on German data to assess the nature of home production in the data, and find that spouses' home hours are complements. We investigate to what extent complementarity in home hours drives sorting and inequality. We find that the home production complementarity – by strengthening positive marriage sorting and reducing the gender gap in hours and labor sorting – puts significant downward pressure on the gender wage gap and within-household income inequality, but it fuels between-household inequality. Our estimated model sheds new light on the sources of inequality in today's Germany and – by identifying important shifts in home production technology towards more complementarity – on the evolution of inequality over time. |
| JEL: | D1 J01 J12 J16 J24 J31 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28883&r= |
| By: | Marczak, Emily; Yawson, Robert |
| Abstract: | This article reviews theories of motivation in the workplace, what these theories look like in the modern workplace, and interventions designed to increase individual and system-wide organizational motivation. We explored a wide range of theories, including the expectancy theory, Maslow’s hierarchy, the motivation-hygiene theory, the equity theory, reward structures, cognitive evaluation theory, and feedback, to formulate conclusions about common organization development (OD) interventions that are meant to address the theories. Reviewed interventions include; organization structure design, achievement orientation, goal setting, job design, quality feedback, and empowerment programs. We followed a multidisciplinary integrated literature review approach to move beyond merely summarizing the literature but substantially contributing new and valuable knowledge to the fields of leadership and organization development. The research cements the need for understanding individuals’ needs and goals, the value of quality feedback, rewarding positive behavior, leading with fairness, and allowing space for autonomy. |
| Keywords: | motivation in the workplace, employee engagement, reward, needs hierarchy |
| JEL: | L2 M0 M1 M12 M52 |
| Date: | 2021–05–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:108001&r= |
| By: | Klump, Rainer; Jurkat, Anne; Schneider, Florian |
| Abstract: | Robots are continuously transforming industrial production worldwide and thereby also inducing changes in a variety of production-related economic and social relations. While some observers call this transformation an unprecedented "revolution", others regard it as a common pattern of capitalist development. This paper contributes to the literature on the effects of the rise of industrial robots in three ways. Firstly, we describe the historic evolution and organizational structure of the International Federation of Robotics (IFR), which collects data on the international distribution of industrial robots by country, industry, and application from industrial robot suppliers worldwide since 1993. Secondly, we extensively analyze this IFR dataset on industrial robots and point out its specificities and limitations. We develop a correspondence table between IFR industry classification and the International Standard Industrial Classification (ISIC) Revision 4 and shed some light on the price development of industrial robots by compiling data on robot price indices. We further compute implicit depreciation rates inherent to the operational stocks of robots in the IFR dataset and find an average depreciation rate of aggregate robot stocks between 4% and 7% per year between 1993 and 2019. Moreover, tracking the share of industrial robots that are not classified to any industry or application we find that their share in total robot stocks has sharply declined after 2005. The average value of 45% of unspecified industrial robots at country level is therefore likely to shrink in the future. We also compare IFR data with other data sources such as UN Comtrade data on net imports and unit prices of industrial robots or data on robot adoption from firm-level surveys in selected countries. Thirdly, we provide a comprehensive overview of the empirical research on industrial robots that is based on the IFR dataset. We identify four important strands of research on the rise of robots: (i) patterns of robot adoption and industrial organization, (ii) productivity and growth effect of robot adoption, (iii) its impact on employment and wages, and (iv) its influence on demographics, health, and politics. |
| Keywords: | Robots, productivity, growth, employment, industry classification, depreciation rates, IFR |
| JEL: | C23 E1 J2 J24 O3 O33 O4 O47 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107909&r= |
| By: | Gałecka-Burdziak, Ewa; Góra, Marek; Jessen, Jonas; Jessen, Robin; Kluve, Jochen |
| Abstract: | We quantify labour market effects of changes in the potential benefit duration (PBD) in Poland. Individual workers' PBD depends on the county unemployment rate relative to the national average - 12 months of PBD above a cut-off of 125 per cent and 6 months below. This cut-off shifted from 125 to 150 per cent in a 2009 reform. We utilize i) the natural experiment of the reform and ii) the sharp discontinuity generated by the cut-offs to estimate effects of shortening the PBD. Our administrative data cover unemployment spells for prime age workers during the years 2006-2018. A one-month shorter PBD decreases average benefit duration by 0.5 months and average unemployment duration by 0.4 months. The PBD reduction by six months increased the job finding rate within the first 9 months by 6 percentage points. Using the stock of unemployed per county, we find evidence for positive aggregate employment effects. |
| Keywords: | Unemployment benefits,extended benefits,spell duration |
| JEL: | H55 J20 J65 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:911&r= |
| By: | Ali Moghaddasi Kelishomi (School of Business and Economics, Loughborough University); Roberto Nisticò (Università di Napoli Federico II, CSEF and IZA) |
| Abstract: | This paper investigates the effect of economic sanctions on employment. We exploit the imposition of a series of unexpected and unprecedented international economic sanctions on Iran in 2012 and estimate the short-run effects of the change in import exposure on manufacturing employment at the industry level. Our estimates indicate that the sanctions led to an overall decline in manufacturing employment growth rate by 16.4 percentage points. Yet, we uncover significant asymmetric effects across industries with different ex-ante import shares. Interestingly, the effects are mostly driven by labor-intensive industries and industries that heavily depend on imported inputs. This suggests that the overall negative impact of the sanctions on employment might have been largely due to the decline in productivity experienced by industries with a high propensity to import inputs from abroad. |
| Keywords: | Trade Shock, Economic Sanctions, Employment. |
| JEL: | F16 F51 J21 |
| Date: | 2021–06–08 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:615&r= |
| By: | Camila Cisneros-Acevedo |
| Abstract: | This paper studies the effect of an increase in import competition on informality along two margins. I consider the extensive margin, where workers are hired by unregistered employers and the intensive margin, where even though jobs are carried out in registered firms, employees are off the books. Peru's relentless informal employment and its unprecedented trade-driven growth provides an ideal case study. Using a rich household survey, I find that exposure to trade impacts on informality through two competing and contrasting mechanisms. On the one hand, extensive-informal employment declines as unregistered employers shrink or exit due to their low productivity. On the other hand, intensive-informal employment rises as registered employers reduce costs by hiring informal workers. Furthermore, results suggest that the intensive margin drives the overall effect. Hence, I find that trade liberalisation increases informality. |
| Keywords: | trade liberalization, labour informality, Peru |
| JEL: | F16 F14 J46 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9114&r= |
| By: | Luciana Méndez Errico (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Ivone Perazzo (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Guillermo Sánchez-Laguardia (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía) |
| Abstract: | This article provides new evidence for a developing country regarding early maternal employment and child development by exploring alternative household care arrangements that could compensate for a loss in maternal care time. First we analyze whether the condition of maternal employment, its intensity —part-time or full-time jobs— and the timing of a mother's entrance into the labor market affects her child's development; we focus on the effects of intrahousehold distribution regarding childcare and household tasks on the decision of maternal employment and child development. We address the causality of early maternal labor and its conditions on a child's probability of being considered at risk in several development dimensions by estimating seemingly unrelated equations with instrumental variables; therefore we account for simultaneity in decisions regarding maternal employment and formal childcare. Results indicate that neither maternal employment, nor the job's intensity influences a child's development. However, fathers' involvement in childrearing and more equitable distribution of intrahousehold tasks can foster child development as much as maternal labor supply. |
| Keywords: | Child development, Parenting behavior, Maternal work conditions |
| JEL: | J13 J22 J81 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:ulr:wpaper:dt-05-21&r= |
| By: | Anna Adamecz-Völgyi (Institute of Economics, Centre for Economic and Regional Studies (KRTK KRTI), Toth Kalman u. 4, 1097 Budapest andUCL Social Research Institute, University College London, 27 Woburn Square, London WC1H 0AA); Morag Henderson (UCL Social Research Institute, University College London, 27 Woburn Square, London WC1H 0AA); Nikki Shure (UCL Social Research Institute, University College London, 27 Woburn Square, London WC1H 0AA and Institute of Labor Economics (IZA), Schaumburg-Lippe-Str. 5-9, D-53113 Bonn.) |
| Abstract: | We examine how first in family (FiF) graduates (those whose parents do not have university degrees) fare on the labor market in England. We find that among women, FiF graduates earn 7.4% less on average than graduate women whose parents have a university degree. For men, we do not find a FiF wage penalty. A decomposition of the wage difference between FiF and non-FiF graduates reveals that FiF men earn higher returns on their endowments than non-FiF men and thus compensate for their relative social disadvantage, while FiF women do not. We also show that a substantial share of the graduate gender wage gap is due to, on the one hand, women being more likely to be FiF than men and, on the other hand, that the FiF wage gap is gendered. We provide some context, offer explanations, and suggest implications of these findings. |
| Keywords: | socioeconomic gaps, intergenerational educational mobility, higher education, labor market returns, gender economics |
| JEL: | I24 I26 J24 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:2127&r= |
| By: | Albert Jan Hummel |
| Abstract: | This paper studies the implications of monopsony power for optimal income taxation and welfare. Firms observe workers’ abilities while the government does not and monopsony power determines what share of the labor market surplus is translated into profits. Monopsony power increases the tax incidence that falls on firms. This makes labor income taxes less (more) effective in redistributing labor income (profits). The optimal tax schedule is less progressive. Monopsony power alleviates the equity-efficiency trade-off that occurs because the government does not observe ability, but at the expense of exacerbating capital income inequality. I illustrate these findings for the US economy. |
| Keywords: | monopsony, optimal taxation, tax incidence |
| JEL: | H21 H22 J42 J48 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9128&r= |
| By: | Dennis C. Hutschenreiter; Tommaso Santini; Eugenia Vella |
| Abstract: | Empirical evidence in Dauth et al. (2021) suggests that industrial robot adoption in Germany has led to a sectoral reallocation of employment from manufacturing to services, leaving total employment unaffected. We rationalize this evidence through the lens of a general equilibrium model with two sectors, matching frictions, and endogenous participation. Automation induces firms to create fewer vacancies and job seekers to search less in the automatable sector (manufacturing). The service sector expands due to the sectoral complementarity in the production of the final good and a positive wealth effect for the household. Analysis across steady states shows that the reduction in manufacturing employment can be offset by the increase in service employment. The model can also replicate the magnitude of the decline in the ratio of manufacturing employment to service employment in Germany between 1994 and 2014. |
| Keywords: | automation, manufacturing, services, sectoral reallocation, participation, matching frictions, vacancy creation, productivity |
| JEL: | E24 O14 O33 J22 |
| Date: | 2021–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:aue:wpaper:2106&r= |
| By: | Barton Hamilton; Andrés Hincapié; Emma C. Kalish; Nicholas W. Papageorge |
| Abstract: | We examine whether medical innovation can reinforce existing health disparities by disproportionately benefiting socioeconomically advantaged patients. The reason is that less advantaged patients often do not use new medications. This may be due to high costs of new drugs, but could also reflect differences in how side effects of new treatments interact with labor supply. To investigate, we develop a dynamic lifecycle model in which the effect of medical treatment on labor supply varies across sociodemographic groups. We estimate the model using rich data on treatment choices and employment decisions of men infected with HIV. In the model, treatments can improve long-run health, but can also cause immediate side effects that interact with the utility cost of work. Estimates indicate that HIV-infected men often forego medication to avoid side effects, in part to remain employed. This effect is stronger for people with fewer years of education, leading to lower use of treatment and worse health outcomes. As a result, while a breakthrough HIV treatment - known as HAART - improved lifetime utility for all patients, it disproportionately benefitted those with higher levels of completed education, thereby reinforcing existing inequality. A counterfactual subsidy that increases non-labor income reduces employment for all education groups, but only increases adoption of HAART and improves health among lower-education individuals, who face a starker health-work tradeoff. |
| JEL: | I12 I14 I20 J2 O31 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28864&r= |
| By: | Somanathan, E.; Somanathan, Rohini; Sudarshan, Anant; Tewari, Meenu |
| Abstract: | Hotter years are associated with lower economic output in developing countries. We show that the effect of temperature on labor is an important part of the explanation. Using microdata from selected firms in India, we estimate reduced worker productivity and increased absenteeism on hot days. Climate control significantly mitigates productivity losses. In a national panel of Indian factories, annual plant output falls by about 2% per degree Celsius. This response appears to be driven by a reduction in the output elasticity of labor. Our estimates are large enough to explain previously observed output losses in cross-country panels. |
| Keywords: | Temperature,warming,labor productivity,labor supply |
| JEL: | Q54 Q56 J22 J24 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:912&r= |
| By: | Jung Sakong |
| Abstract: | I test for the causal impact of Black electoral victories in local elections on White Americans’ attitude toward Black Americans. Using Race Implicit Attitude Test scores as a measure of racial prejudice and close-election regression-discontinuity design for causal inference, I find Black electoral victories cause measures of racial bias to rise, by 4% of the average Black-White difference in IAT scores. Simultaneously, they widen racial gaps in unemployment and mortgage denials. Interpreting these close electoral victories as instrumental variables, I find a large causal effect of prejudice-based racial discrimination on Black-White economic gaps. |
| Keywords: | Racial discrimination; Racial discrimination Regression discontinuity |
| JEL: | D91 G41 J15 J71 |
| Date: | 2021–05–17 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedhwp:92065&r= |
| By: | Yuanyuan Deng; Hanming Fang; Katja Hanewald; Shang Wu |
| Abstract: | We develop and calibrate a life-cycle model of labor supply and consumption to quantify the implications of alternative pension reforms on labor supply, individual welfare, and government budget for China’s basic old-age insurance program. We focus on urban males and distinguish low-skilled and high-skilled individuals, who differ in their preferences, health and labor income dynamics, and medical expense processes. We use the calibrated model to evaluate three potential pension reforms: (i) increasing the pension eligibility age from 60 to 65, but keeping the current pension benefit rule unchanged; (ii) keeping the pension eligibility age at 60, but proportionally lowering pension benefits so that the pension program’s budget is the same as under Reform (i); and (iii) increasing the pension eligibility age to 65 and simultaneously increasing the pension benefits so that individuals of both skill types attain the same individual welfare levels as in the status quo. We find that relative to the baseline, both Reforms (i) and (ii) can substantially improve the budgets of the pension system, but at the cost of substantial individual welfare loss for both skill types. In contrast, we find that Reform (iii) can modestly improve the budget of the pension system while ensuring that both skill types are as well off as in the status quo. We find that Reforms (i) and (ii) slightly increases, but Reform (iii) slightly decreases, the overall labor supply. |
| JEL: | D14 D15 H55 J22 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28897&r= |
| By: | A. Ford Ramsey; Barry Goodwin; Mildred Haley |
| Abstract: | Food manufacturing and processing is an important link between agricultural producers and consumers in the agricultural supply chain. The food manufacturing sector in the United States is both increasingly mechanized and increasingly concentrated. Consequently, labor risks in food manufacturing have changed over time with changes in industry structure. Labor risks were highlighted by the COVID-19 pandemic - particularly in the animal slaughtering and processing industry - where labor-driven disruptions resulted in temporary plant closures. We use county-level data on employment in food manufacturing and dynamic panel models estimated via generalized method of moments to examine employment and wage dynamics in the food manufacturing sector and animal processing industry. We then compare forecasts from the estimated models with changes in food manufacturing and animal processing employment and wages during the onset of the COVID-19 pandemic. Our results provide insight into the role of operational and disruption risks in food manufacturing. We find significant delays in adjustment to employment and quicker adjustment in wages. Although there is an unanticipated drop in employment in food manufacturing and animal processing in April of 2020, employment returned to predicted levels within two to three months. The response of wages and employment to the COVID-19 pandemic suggest a degree of resilience in food supply chains. |
| JEL: | J2 L66 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28896&r= |
| By: | Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | This paper pursues a scenario analysis to shed light on past and potential future labour supply and labour demand dynamics of different skill groups in the six Western Balkan countries (WB6). It differentiates between four educational levels (low, medium-general, medium-VET, and high) and looks at a medium-term projection period until 2030. Starting from a baseline scenario, it examines how several different scenarios would affect the employment situation of different skill groups. These scenarios are built on the possible impact which potential labour market policies, education policies, migration flows and policies as well as GDP growth developments and structural change could have on ‘surplus’ and ‘shortage’ situations of different skill groups. Simulation results of the baseline scenario show that both labour shortage and excess labour for different skill groups would coexist alongside each other within the projection period. In all WB6 countries, the low educated (given their low activity rates) would experience labour shortages either already within or shortly after the projection period. Similarly, while Med-VETs, Med-GENs and the highly educated would also face labour shortages within or shortly after the projection period in the majority of WB6 countries, in some of these countries, there would also be evidence of growing excess labour, such as among Med-VETs in Montenegro and Kosovo, Med-GENs in Kosovo and the highly educated in Bosnia and Herzegovina and Montenegro. Additional scenarios point to important country-specific policy options that can help to mitigate these projected labour market imbalances among different skill groups and, furthermore, contribute to an improved economic development trajectory for these economies. |
| Keywords: | dynamic labour supply-labour demand model, scenario analysis, skill demand by educational groups, skill shortages and surplus, net migration flows, Western Balkan countries |
| JEL: | J11 J21 J23 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:wii:wpaper:200&r= |
| By: | Rodriguez Torres, Omar (UNU-MERIT) |
| Abstract: | This paper investigates how entrepreneurship affects the likelihood of households graduating out of poverty. It analyses the effect of entrepreneurship in the outcomes of the households enrolled in the Colombian poverty reduction programme. A contribution to the Capability Approach is proposed with the inclusion of entrepreneurship as a 'functioning' linked to overcoming poverty. Entrepreneurship presents a great potential given its multidimensional nature. In its more basic conception, it is connected to income-generation, and in its more complex conception, it is related to the concept of agency. Using the Colombian UNIDOS programme (which is a programme focused on helping poor graduating out of poverty) as a case study, we employ a Probit Regression model with sample selection to model this mechanism. The results present a positive, statistically significant impact of entrepreneurial households in their probability of graduating out of poverty. The results confirmed that entrepreneurial households show a higher likelihood of escaping from poverty. |
| Keywords: | Capability approach, poverty reduction, entrepreneurship, public policy, enterprise policy |
| JEL: | I31 I32 L26 J48 L53 |
| Date: | 2021–04–28 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2021018&r= |