nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2005‒01‒16
nine papers chosen by
Maximo Rossi
Universidad de la República

  1. The private and fiscal returns to schooling and the effect of public policies on private incentives to invest in education: a general framework and some results for the EU By Angel de la Fuente; Juan Francisco Jimeno
  2. Parametric and semiparametric estimation of sample selection models: an empirical application to the female labour force in Portugal By Danilo Coelho; Helena Veiga; Róbert Veszteg
  3. Demographics and the Political Sustainability of Pay-as-you-go Social Security By Theodore C. Bergstrom; John L. Hartman
  4. Biased Technological Shocks, Wage Rigidities and Low-Skilled Unemployment By Olivier Pierrard; Henri Sneessens
  5. Does job loss shorten life? By Eliason, Marcus; Storrie, Donald
  6. An Economic Perspective on Religious Education: Complements and Substitutes in a Human Capital Portfolio By Chiswick, Carmel U.
  7. The Economics of Assisted Reproduction By Kossoudji, Sherrie A.
  8. An Index of Labour Market Well-being for OECD Countries By Lars Osberg; Andrew Sharpe
  9. Female Labor Supply: Theory and Estimation -- Introduction By James P. Smith

  1. By: Angel de la Fuente; Juan Francisco Jimeno
    Abstract: This paper develops a comprehensive framework for the quantitative analysis of the private and fiscal returns to schooling and of the effect of public policies on private incentives to invest in education. This framework is applied to 14 member states of the European Union. For each of these countries, we construct estimates of the private return to an additional year of schooling for an individual of average attainment, taking into account the effects of education on wages and employment probabilities after allowing for academic failure rates, the direct and opportunity costs of schooling, and the impact of personal taxes, social security contributions and unemployment and pension benefits on net incomes. We also construct a set of effective tax and subsidy rates that measure the effects of different public policies on the private returns to education, and measures of the fiscal returns to schooling that capture the long-term effects of a marginal increase in attainment on public finances under c
    Keywords: returns to schooling
    Date: 2004–12–22
  2. By: Danilo Coelho; Helena Veiga; Róbert Veszteg
    Abstract: This comment corrects the errors in the estimation process that appear in Martins (2001). The first error is in the parametric probit estimation, as the previously presented results do not maximize the log-likelihood function. In the global maximum more variables become significant. As for the semiparametric estimation method, the kernel function used in Martins (2001) can take on both positive and negative values, which implies that the participation probability estimates may be outside the interval [0,1]. We have solved the problem by applying local smoothing in the kernel estimation, as suggested by Klein and Spady (1993).
    Keywords: parametric estimation, semiparametric estimation, sample selection model
  3. By: Theodore C. Bergstrom; John L. Hartman
    Abstract: The net present value of costs and benefits from a pay-as-you-go social security system are negative for young people and positive for the elderly. If people all vote their financial self-interest, there will be a pivotal age such that those who are younger favor smaller social security benefits and those who are older will favor larger benefits. For persons of each age and sex, we estimate the expected present value gained or lost from a small permanent increase in the amount of benefits, where the cost of these benefits is divided equally among the population of working age. Assuming that everyone votes his or her long run financial self-interest, and calculating the number of voters in the population of each age and sex, we can determine whether there is majority support for an increase or a decrease in social security benefits. We use statistics on the age distribution and mortality rates for the United States to explore the sensitivity of political support for social security to alternative assumptions about the discount rate, excess burden in taxation, voter participation rates, and birth, death, and migration rates. We find that a once-and-for-all decrease in benefits would be defeated by a majority of selfish voters under a wide range of parameters. We also study the predicted majority outcomes of votes on changing the retirement age.
    JEL: H53
    Date: 2005
  4. By: Olivier Pierrard; Henri Sneessens
    Abstract: The contrast between the evolution over the last decades of the EU and the US unemployment rates, especially for the low-skilled, is well known. A consensus view is that these different outcomes can be explained by the interactions between common shocks and specific institutional setups. In this paper, we emphasise the interactions between technological changes and wages ridigities. We construct a fully calibrated general equilibrium model with two types of jobs and two types of workers, and with search unemployment. Our simulations show that with wages rigidities, technological changes suffice to generate a continuous rise in the low-skilled unemployment rate and an almost unchanged high-skilled unemployment rate. Without wage rigidities, the unemployment rates remain unchanged but the wage dispersion widens.
    Date: 2004–12
  5. By: Eliason, Marcus (Department of Economics, School of Economics and Commercial Law, Göteborg University); Storrie, Donald (Department of Economics, School of Economics and Commercial Law, Göteborg University)
    Abstract: We examine whether there is a causal relationship from job displacement to mortality. The study is based on employees who lost their job from all establishment closures in 1987 and 1988 in Sweden and, as a control group, a large random sample of employees not experiencing displacement at that time. The registers follow all these individuals, between 1983 and 2000 with minimal attrition. They also provide much relevant information on individual, family and establishment characteristics, and predisplacement health and labor market history. Using propensity score matching, we find higher mortality among the displaced up to the eighth follow-up year, mainly due to suicide and heart diseases. Estimates of all-cause mortality risk show significant effects for displaced men, but not for women, up to nine years after displacement. An important methodological conclusion is that research that focuses only on those who leave late in the closure process may over-state the impact of displacement on mortality. <p>
    Keywords: Plant closure; displaced workers; mortality; propensity score matching
    JEL: I12 J63 J65
    Date: 2004–12–01
  6. By: Chiswick, Carmel U. (University of Illinois at Chicago and IZA Bonn)
    Abstract: This paper models the tradeoffs between education in secular subjects, formal and informal, and the formation of religion-specific human capital. It explores some implications of negative externalities between religious and secular education. Applications include the tension between science and religion during the European Enlightenment and the development of religious education by American Jewry in the 20th century United States. The paper also discusses some implications for the vitality and intergenerational robustness of religious communities.
    Keywords: religion, ethnic groups, education, minorities
    JEL: Z12 J20 J15
    Date: 2005–01
  7. By: Kossoudji, Sherrie A. (University of Michigan and IZA Bonn)
    Abstract: Typically, when two people decide to become parents, they procreate by copulation and produce a child. What do people do if, for some reason, they can’t produce their own children but want to be parents? Today, a prospective parent can go to the web, drop a vial of sperm from a donor with specific selected characteristics into a “shopping cart” and have that sperm delivered in twenty-four hours. Similarly, one can sift through the profiles and pictures of women who are egg donors and select eggs from women with desired characteristics and arrange an egg delivery. These markets are two segments that loosely fall under the rubric of Assisted Reproduction Technologies (ART), which is a shorthand term for the numerous procedures aided by technology used to produce a baby. This primer in the economics of assisted reproduction introduces some of the economic dilemmas brought about by new reproductive technologies. Now the cost of producing children can radically differ among people of similar incomes and values because a prospective parent may have to pay to gain rights to the genetic components that build the child.
    Keywords: fertility, women's labor, gender
    JEL: J13 J16
    Date: 2005–01
  8. By: Lars Osberg; Andrew Sharpe
    Abstract: This report’s objective is the construction of an index of labour market well-being that is capable of measuring the well-being that individuals in a given society at a given point in time can obtain through the labour market. Besides considering simply the average return from working, workers are also typically concerned with inequality in the distribution of earnings, as well as skills acquisition that affects future returns from working and the uncertainty surrounding these future returns due to, for example, the possibilities of job loss, injury and insufficient income in retirement. The index proposed and constructed here hence attempts to incorporate each of these aspects of labour market well-being. The Centre for the Study of Living Standards has developed an Index of Economic Well-being based on trends in consumption flows, stocks of wealth, inequality, and economic security. This framework is applied here, but the focus is on the well-being of individuals as workers. The proposed Index of Labour Market Well-being (ILMW) therefore covers all persons of working age, both employed and unemployed, and includes 1) the average current return from work; 2) the aggregate accumulation of human capital, which enables future returns from work; 3) inequality in current returns from work; and 4) insecurity in the anticipation of future returns from work. Estimates of the proposed Index are developed for 16 OECD countries for the 1980-2001 period.
    Keywords: Well-being, Wellbeing, Well Being, Unemployment, Labour Market Outcomes, Labour Market, Labor Market, Wages, Earnings, Labour Compensation, Labor Compensation, Compensation, Human Capital, Long-term Unemployment, Long Term Unemployment, Earnings Inequality, Low Wage Earners, Living Wage, Retirement, Pensions, Defined Benefit, Defined Contribution, Unemployment Insurance, Workplace Injuries, Workplace Fatalities, Injuries, Fatalities, Workplace Safety, Index of Economic Well-being, IEWB, ILMW
    JEL: O57 I31 E25 J30 J60 J81 J24 J26 J28 H55
    Date: 2003–09
  9. By: James P. Smith (The Rand Corporation)
    Abstract: This Introduction has a threefold purpose: (1)to relate the volume to the existing literature so that the reader is better able to appreciate the motivation for the essays, the problems they are attempting to resolve, and their departure from conventional methods of analysis; (2)to highlight the main theoretical and econometric innovations of the individual essays; and (3)to attempt to synthesize the principal empirical findings with an eye toward identifying the major similarities and differences emerging from the separate papers.
    JEL: J
    Date: 2005–01–10

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