nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2004‒12‒12
fourteen papers chosen by
Maximo Rossi
Universidad de la República

  1. INEQUALITY AND CRIMINALITY REVISITED: FURTHER EVIDENCE FROM BRAZIL By Maria Bernadete Sarmiento Gutierrez; Mario Jorge Cardoso de Mendonça; Adolfo Sachsida; Paulo Roberto Amorim Loureiro
  4. Decomposing Granger Causality over the Spectrum By Lemmens, A.; Croux, C.; Dekimpe, M.G.
  5. Higher Education Levels, Firms' Outside Options and the Wage Structure By Rosén, Åsa; Wasmer, Etienne
  6. Partner Choice and Women's Paid Work in Sweden - The Role of Earnings By Henz, Ursula; Sundström, Marianne
  7. Language Skills and Immigrant Adjustment: What Immigration Policy Can Do! By Chiswick, Barry R.; Miller, Paul W.
  8. The Effect of Firm-Level Contracts on the Structure of Wages: Evidence from Matched Employer-Employee Data By Card, David; de la Rica, Sara
  9. Minimum Wage Effects in the Longer Run By Neumark, David; Nizalova, Olena
  10. Charitable Giving by Married Couples: Who Decides and Why Does it Matter? By James Andreoni; Eleanor Brown; Isaac C. Rischall
  11. The Gini Coefficient Reveals More By Peter J. Lambert; Andre Decoster
  12. School-to-Career and Post-Secondary Education: Evidence from Philadelphia Educational Longitudinal Study By Frank Furstenberg; David Neumark
  13. Emulation, Inequality, and Work Hours: Was Thorsten Veblen Right? By Samuel Bowles; Yongjin Park
  14. Experiments on Intertemporal Consumption with Habit Formation and Social Learning By Colin F. Camerer; Zhikang Chua

  1. By: Maria Bernadete Sarmiento Gutierrez; Mario Jorge Cardoso de Mendonça; Adolfo Sachsida; Paulo Roberto Amorim Loureiro
    Abstract: The objective of this study is to shed light on the determinants of criminality in Brazil. In order to undertake it we performed an econometric model based in panel data analysis for Brazilian states: Among the major conclusions we have an important result that income inequality plays an important role in criminality. Results also showed that unemployment and urbanization are positively related to crime factors. Based in panel data GMM methodology we found the existence of "inertial effect" on criminality. Panel data GMM estimator was also used to control the existence of endogeneity related to the variable public security. In this case, the results showed that public security spending is effective to diminishes criminality. Contrary to the common wisdom, we cannot found evidence that poverty increases violent crime. Finally considering the results from the Granger causality tests, it was possible to show that inequality causes crime in fact and not the contrary, what supports that the income inequality in an inequivocous determinant of criminality.
    JEL: K42 Z13 C23
    Date: 2004
  2. By: Raquel Carrasco; Juan F. Jimeno; Ana Carolina Ortega
    Abstract: Spain is one of the European countries where immigration flows during the last decade have increased noticeably. The Spanish labor market institutions and the Spanish immigration policy exhibit some peculiarities which may be relevant when analyzing the impact of immigration. This paper provides a first approximation to the labor market effects of immigrants in Spain during the second half of the 1990s, the period in which immigration flows to Spain have accelerated. By using alternative datasets, we estimate both the impact of legal and total immigration flows on the employment rates of native workers, accounting for the possible occupationa l and geographical mobility of immigrants and native-born workers. Using different samples and estimation procedures, we have not found a significant negative effect of immigration on the employment rates of native workers. The corresponding estimated elasticity is low, around -0.1, when considering only legal immigrants, and is not significant when considering both legal and illegal immigrants.
    Date: 2004–10
  3. By: Sara Lemos
    Abstract: There is very limited evidence on the e.ects of the minimum wage in developing countries, and none whatsoever on the e.ects of the minimum wage on the public sector. Most of the evidence available uses (US) private sector data. However, evidence regarding the private sector need not carry over to the public sector. This paper estimates minimum wage e.ects across sectors using an under-explored monthly Brazilian household survey from 1982 to 2000. The minimum wage was found to compress the wage distribution of both sectors. However, consistent with a stronger compression e.ect, more adverse long run employment e.ects are observed in the private sector.
    JEL: J38
    Date: 2004
  4. By: Lemmens, A.; Croux, C.; Dekimpe, M.G. (Erasmus Research Institute of Management (ERIM), Erasmus University Rotterdam)
    Abstract: We develop a bivariate spectral Granger-causality test that can be applied at each individual frequency of the spectrum. The spectral approach to Granger causality has the distinct advantage that it allows to disentangle (potentially) di?erent Granger- causality relationships over di?erent time horizons. We illustrate the usefulness of the proposed approach in the context of the predictive value of European production expectation surveys.
    Keywords: Business Surveys;Granger Causality;Production Expectations;Spectral Analysis;
    Date: 2004–12–01
  5. By: Rosén, Åsa (Swedish Institute for Social Research, Stockholm University); Wasmer, Etienne (ECARES)
    Abstract: We analyze the consequences of an increase in the supply of highly educated workers on relative and real wages in a search model where wages are set by Nash-bargaining. The key insight is that an increase in the supply of highly educated workers improves the firms' outside option. As a consequence, the real wage of all workers decreases in the short-run. Since this decline is more pronounced for less educated workers, wage inequality increases. In the long-run a better educated work force induces firms to invest more in physical capital. Wage inequality and real wages of highly educated workers increase while real wages of less educated workers may decrease. These results are consistent with the U.S. experience in the 70s and 80s. Based upon differences in legal employment protection we also provide an explanation for the diverging evolution of real and relative wages in Continental Europe.
    Keywords: Wage Inequality; Matching; Creation Costs; Firing Costs.
    JEL: J31
    Date: 2001–12–01
  6. By: Henz, Ursula (Institute for Gerontology, King’s College London); Sundström, Marianne (Swedish Institute for Social Research, Stockholm University)
    Abstract: Recent observations of higher labour -market activity among women with a high-earning spouse and widened household inequality have spurred research interest in earnings homogamy and in effects of own and spouse’s earnings on female labour supply. This article studies trends in earnings homogamy among married and cohabiting parents and in effects of own and spouse’s earnings on mothers’ time in employment and non-employment in Sweden. We analyse, first, correlations between spouses’ earnings and, second, effects of time -varying own and spouse’s earnings on mothers’ transitions between part-time and full-time work, on their exits from and re-entries into employment and on their exits from parental leave over the years 1968-92. We use individual life histories from the 1992 Swedish Family Survey combined with longitudinal information on earnings from the national taxation register. A unique aspect of this data set is that it has very accurate longitudinal earnings information for both married and cohabiting spouses, including former spouses. We find that mothers’ own earnings have a larger and more significant impact on their labour -market transitions than spouse’s earnings and that the impact of the latter has even declined over time.
    Keywords: -
    Date: 2001–09–01
  7. By: Chiswick, Barry R. (University of Illinois at Chicago and IZA Bonn); Miller, Paul W. (University of Western Australia)
    Abstract: This study provides an account of the dynamics of the dominant language adjustment process among immigrants in Australia using the Longitudinal Survey of Immigrants to Australia, which comprises two cohorts of immigrants that arrived in Australia around five years apart. There are two special features of these data that provide the framework for analysis. First, the visa class under which the immigrants entered Australia is known from administrative records. Second, between the two surveys, some visa classes, but not others, were affected by changes in government policy relating to the role of English language skills in immigrant selection. A difference between differences approach is used to isolate the impacts of these policy changes, and thus enable an assessment of what immigrant selection policy can do in this area. It is found that visa category, educational attainment and age at migration impact on immigrant’s language skills. The increased English Proficiency requirement for the Independent and Skilled-Australian Sponsored categories appears to have been successful in raising the English language proficiency of these immigrants.
    Keywords: immigrants, immigration policy, language, visa category
    JEL: F22 J61 J15 J24
    Date: 2004–11
  8. By: Card, David (University of California, Berkeley and IZA Bonn); de la Rica, Sara (DFAEII, Universidad del País Vasco)
    Abstract: In Spain, as in several other European countries, sectoral bargaining agreements are automatically extended to cover all firms in an industry. Employers and employees can also negotiate firm-specific contracts. We use a large matched employer-employee data set to study the effects of firm-level contracting on the structure of wages. Employees covered by firm-specific contracts earn about 10 percent more than those covered by sectoral contracts. The estimated premium is about the same for men in different skill groups, but higher for more highly skilled women, suggesting that firm-level contracts raise wage inequality for women. At the establishment level, we compare average wages under firm-level and sectoral bargaining, controlling for the propensity to negotiate a firm-specific contract. Consistent with the worker-level models, we find that firm-specific contracting raises average wages, with a pattern of effects that tends to increase inequality relative to sectoral bargaining for women. Although we cannot decisively test between alternative explanations for the firm-level contracting premium, workers with firm-specific contracts have significantly longer job tenure, suggesting that the premium is at least partially a non-competitive phenomenon.
    Keywords: bargaining, wage inequality, labor contracts
    JEL: J31 J51
    Date: 2004–12
  9. By: Neumark, David (Public Policy Institute of California, NBER, University of California, Berkeley and IZA Bonn); Nizalova, Olena (Michigan State University)
    Abstract: Exposure to minimum wages at young ages may lead to longer-run effects. Among the possible adverse longer-run effects are decreased labor market experience and accumulation of tenure, lower current labor supply because of lower wages, and diminished training and skill acquisition. Beneficial longer-run effects could arise if minimum wages increase skill acquisition, or if short-term wage increases are long-lasting. We estimate the longer-run effects of minimum wages by using information on the minimum wage history that workers have faced since potentially entering the labor market. The evidence indicates that even as individuals reach their late 20’s, they earn less and perhaps work less the longer they were exposed to a higher minimum wage, especially as a teenager. The adverse longerrun effects of facing high minimum wages as a teenager are stronger for blacks. From a policy perspective, these longer-run effects of minimum wages are likely more significant than the contemporaneous effects of minimum wages on youths that are the focus of most research and policy debate.
    Keywords: minimum wage, employment, hours, earnings
    JEL: J22 J23 J38
    Date: 2004–12
  10. By: James Andreoni; Eleanor Brown; Isaac C. Rischall
    Abstract: We examine how charitable giving is influenced by who in the household is primarily responsible for giving decisions. Looking first at single-person households, we find men and women to have significantly different tastes for giving, setting up a potential conflict for married couples. We find that, with respect to total giving, married households tend to resolve these conflicts largely in favor of the husband’s preferences. However, when the woman is the decision maker, she will still make a significantly different allocation of those charity dollars, preferring to give to more charities but to give less to each. We find our results give new insights into both issues of charitable giving and household decision making.
    Date: 1999–07
  11. By: Peter J. Lambert (University of Oregon Economics Department); Andre Decoster (University of Leuven)
    Abstract: We revisit the well-known decomposition of the Gini coefficient into between-groups, within-groups and overlap terms in the context of two groups in which the incomes in one group may be scaled and that group’s population weight modified. In this more general setting than usual, we focus on the properties of the overlap term, proving inter alia that overlap unambiguously reduces as a result of a within-group progressive transfer, and is increased by scaling up the incomes in the group with the lower mean, reaching a maximum when the two means become the same. In the case of a socially heterogeneous population and equivalized incomes, the effect on the Gini overlap of changing the income unit is determined, along with that of adjusting the equivalence scale deflator in case the income unit is the equivalent adult (such adjustment simultaneously changing the weighting of income units). Relationships of the findings to existing literature are thoroughly explored.
    Keywords: Gini decomposition, inequality decomposition, Gini residual
    JEL: D63
  12. By: Frank Furstenberg; David Neumark
    Abstract: School-to-career (STC) programs provide high school students with career information and education to increase their educational attainment and enhance their long-term labor market success. These programs often target sub-groups that are less likely to attend four-year post-secondary institutions. We study a set of programs in Philadelphia that focus on boosting post-secondary enrollment and are less career-oriented than traditional STC programs. We find a strong association between participation in these programs and a wide array of academic outcomes. The findings are generally quite robust and are only slightly attenuated by the introduction of factors that might be indicative of selection. Finally, there is some evidence that the effects of these programs were greater for at-risk students, especially those whose mothers have at most a high school education.
    Date: 2004–11
  13. By: Samuel Bowles (University of Massachusetts Amherst); Yongjin Park (Connecticut College)
    Abstract: We investigate Veblen effects on work hours, namely the way that a desire to emulate the consumption standards of the rich induces longer work hours among the rest. Consistent with our model of these asymmetric social comparisons, greater inequality predicts longer work hours in ten OECD countries over the period 1963-1998. The country fixed effects estimates of the impact of inequality on hours are large, robust, and cannot be explained by conventional incentive effects. In the presence of Veblen effects, a social welfare optimum cannot be implemented by a flat tax on consumption but may be accomplished by progressive consumption taxes.
    Keywords: Interdependent utility, relative income, social comparisons, inequality, emulation, Veblen effects, work hours
    JEL: H23 D31 D62 J22
    Date: 2004–11
  14. By: Colin F. Camerer; Zhikang Chua
    Date: 2004–12–02

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