nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2005‒01‒02
eight papers chosen by
Maximo Rossi
Universidad de la República

  1. Gender Discrimination and Growth: Theory and Evidence from India By Berta Esteve-Volart
  2. Unemployment in Britain: A European Success Story By Christopher A. Pissarides
  3. The Union Wage Premium in the US and the UK By D Blanchflower; Alex Bryson
  4. Good Jobs and Bad Jobs By Richard Layard
  5. Two Sides to Every Story: Measuring the Polarisation of Work By Paul Gregg; Jonathan Wadsworth
  6. Employment and Taxes By Stephen Nickell
  7. Can a Work Organization Have An Attitude Problem? The Impact of Workplaces on Employee Attitude and Economic Outcomes By Ann Bartel; Richard Freeman; Casey Ichniowski; Morris Kleiner
  8. Are European Labor Markets As Awful As All That? By Richard Freeman

  1. By: Berta Esteve-Volart
    Abstract: Gender inequality is an acute and persistent problem, especially in developing countries. This paper argues that gender discrimination is an inefficient practice. We model gender discrimination as the complete exclusion of females from the labor market or as the exclusion of females from managerial positions. The distortions in the allocation of talent between managerial and unskilled positions, and in human capital investment, are analyzed. It is found that both types of discrimination lower economic growth; and that the former also implies a reduction in per capita GDP, while the latter distorts the allocation of talent. Both types of discrimination imply lower female-to-male schooling ratios. We discuss the sustainability of social norms or stigma that can generate discrimination in the form described in this paper. We present evidence based on panel-data regressions across Indian states over 1961-1991 that is consistent with the model¿s predictions.
    Keywords: Growth, gender discrimination, labor market, allocation of talent, India.
    Date: 2004–01
  2. By: Christopher A. Pissarides
    Abstract: Unemployment in Britain has fallen from high European-style levels to US levels. I argue that the key reasonsare first the reform of monetary policy, in 1993 with the adoption of inflation targeting and in 1997 with theestablishment of the independent Monetary Policy Committee, and second the decline of trade union power. Iinterpret the reform of monetary policy as an institutional change that reduced inflationary expectations in theface of falling unemployment. The decline of trade union power contributed to the control of wage inflation.The major continental economies failed to match UK performance because of institutional rigidities, despite lowinflation expectations.
    Keywords: unemployment in UK, monetary policy, Beveridge curve, Phillips curve
    JEL: E5 J5 J64
    Date: 2003–12
  3. By: D Blanchflower; Alex Bryson
    Abstract: This paper presents evidence of both counter-cyclical and secular decline in the union membership wage premiu m inthe US and the UK over the last couple of decades. The premium has fallen for most groups of workers, the mainexception being public sector workers in the US. By the beginning of the 21st Century the premium remainedsubstantial in the US but there was no premium for many workers in the UK. Industry, state and occupation-levelanalyses for the US identify upward as well as downward movement in the premium characterized by regression tothe mean. Using linked employer-employee data for Britain we show estimates of the membership premium tend tobe upwardly biased where rich employer data are absent and that OLS estimates are higher than those obtained withpropensity score matching.
    Keywords: union membership wage premium.
    JEL: J51 J52
    Date: 2004–02
  4. By: Richard Layard
    Abstract: 1. Human happiness is more affected by whether or not one has a job than by what kindof job it is.2. Thus, when jobs are to hand, we should insist that unemployed people take them. Thisinvolves a much more pro-active placement service and clearer conditionality thanapplies in many countries.3. But we should also guarantee unemployed people work within a year of becomingunemployed. In this way we put a reciprocal obligation on the state (to produce work)and on the individual (to take it). Such a guarantee requires a well- judged mix ofsubsidies, supported work, and training.4. Where there is low pay, the correct response is in-work benefits, together with a longtermstrategy to reduce low skill.
    Date: 2004–04
  5. By: Paul Gregg; Jonathan Wadsworth
    Abstract: Individual and household based aggregate measures of joblessness can, and do, offer conflicting signals about labour market performance if work is unequally distributed. Thispaper introduces a simple set of indices that can be used to measure the extent of divergencebetween individual and household-based jobless measures. The indices, built around acomparison of the actual household jobless rate with that which would occur if work wererandomly distributed over the working age population, conform to basic consistency axiomsand can be decomposed to try to identify the likely source of any disparity betweennonemployment rates calculated at the 2 levels of aggregation. Applying these measures todata for Britain, we show that there has been a growing disparity ¿ polarisation - between theindividual and household based jobless measures that are largely unrelated to changes inhousehold structure or the principal characteristics associated with individual joblessness.
    Keywords: Workless households, Distribution of work, Polarisation, Joblessness
    JEL: C1 J0 J6
    Date: 2004–05
  6. By: Stephen Nickell
    Abstract: This paper considers the impact of taxation policy on market work. On the basis of theevidence, we find that a 10 percentage point rise in the tax wedge will reduce overall labourinput provided via the market by around 2 per cent of the population of working age. The taxwedge is the sum of the payroll, income and consumption tax rates.This only explains a minority of the market work differentials across count ries. Muchof the remainder is probably down to the differences in the social security systems supportingthe unemployed, the sick and disabled and the early retired.
    Keywords: Employment, Taxation, Labour Supply
    JEL: H2 J2
    Date: 2004–05
  7. By: Ann Bartel; Richard Freeman; Casey Ichniowski; Morris Kleiner
    Abstract: In this study we examine whether a workplace can induce good or bad attitudes among its employees andwhether any such ¿workplace attitudes¿ affect economic outcomes. This study analyzes responses ofthousands of employees working in nearly two hundred branches to the emp loyee opinion survey of amajor US bank in 1994 and 1996. The results document the existence and persistence of a genuineworkplace effect in how workers view their jobs and organizations. Employee attitudes differ significantlyacross branches in ways that cannot be explained by branches randomly drawing workers from adistribution of workers with different innate attitudes. Furthermore, newly hired workers adopt thefavourable or unfavourable attitudes that the branches exhibited before they arrived. These workplaceattitudes also have significant effects on economic outcomes. Branches with less favourable attitudes havehigher turnover, lower levels of sales, and lower rates of sales growth than branches where workers havemore favourable attitudes. Less favourable branch attitudes are also a significant predictor of subsequentbranch closings. The study¿s results show that there are happy and unhappy workplaces, as well as happyand unhappy workers, with very different patterns of turnover and productivity in these workplaces.
    Keywords: work motivation, workplace attitudes, organization, performance
    JEL: J0 J2
    Date: 2004–05
  8. By: Richard Freeman
    Abstract: "The standard explanation of why advanced Europe has generated less work per adult thanthe US is that something is seriously amiss with EU labor markets. The theme of this piece issimple. Compared to an ideal competitive market, EU labor markets fall seriously short, butcompared to labor markets in the US and to other markets in advanced capitalist countries,EU labor markets do not live up to their awful press. The variety of labor market institutionsamong EU countries, moreover, reveals a much richer picture of performance and diversitythan the blanket condemnation of inflexibility suggests. I make my case in four propositions,with supporting evidence. My comparisons are with the actual labor market in the US andwith other real world markets, not with the economists' dream ideal competitive markets. Ireview briefly the evidence that labor markets in the EU have performed worse on thequantity side of the market but better on the price or wage side of the market than the USlabor market, then consider the extent to which differences in outcomes are attributable todifferences in the performance of labor markets."
    Keywords: labour markets, US, EU, labour market institutions
    JEL: J0
    Date: 2004–08

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