nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2005‒03‒06
five papers chosen by
Maximo Rossi
Universidad de la República

  1. Estimation of inequality indices from survey data, allowing for design effects By Stephen Jenkins
  2. Measuring lifetime redistribution in Dutch collective arrangements By Harry ter Rele
  3. The Measurement of Income Distribution Dynamics when Demographics are correlated with Income By Michael Grimm; Denis Cogneau
  4. Does Wage Rank Affect Employees’ Wellbeing? By Brown, Gordon D. A.; Gardner, Jonathan; Oswald, Andrew; Qian, Jing
  5. How Robust Are the Linkages Between Religiosity and Economic Growth By Chih Ming Tan; Steven N. Durlauf; Andros Kourtellos

  1. By: Stephen Jenkins (University of Essex)
    Abstract: Martin Biewen and I have derived the sampling variances of Generalized Entropy and Atkinson indices for the case they are estimated from survey data with a complex design. This talk illustrates how the indices may calculated in Stata, using our commands -svyatk- and -svygei-. The empirical illustrations compare income inequality in Britain and Germany.
    Date: 2005–03–03
  2. By: Harry ter Rele
    Abstract: This paper assesses how the system of Dutch collective arrangements redistributes between the rich and the poor. Its approach deviates from the way these issues are commonly dealt with by incorporating the full life cycle in the measurements rather than only the annual effects, and by including a larger part of the arrangements than is usually the case. <P> The measurements on redistribution are carried out using the level of educational attainment to classify the population. For an average, representative person of each level of education we measure, in terms of present values, the average net benefit from government. <P> The results show that the net benefits are positive for the lower levels of education and negative for the higher levels. The figures indicate a sizable redistribution from the rich to the poor and a significant reduction of welfare inequality. The net effect on income inequality is, however, substantially smaller than when it is measured on an annual basis.
    Keywords: redistribution; lifetime redistribution; comprehensive measurement; government; tax; taxes; social security; health insurance; pension; pensions; disability; unemployment; education
    JEL: D31 H24 H52 H53
    Date: 2005–02
  3. By: Michael Grimm (University of Goettingen); Denis Cogneau (DIAL-IRD, Paris)
    Abstract: The purpose of our paper is to derive instructive analytics on how to account for differentials in demographic variables, in particular mortality, when performing welfare comparisons over time. The idea is to apply various ways of ‘correcting’ estimated income distribution measures for ‘sample selection’ due to differential mortality. We implement our approach empirically using three waves of the Indonesian Family Life Surveys (IFLS). We distinguish the direct effect of mortality, i.e. individuals who die leave the population and no longer contribute to monetary welfare, from the indirect effect, i.e. the impact on survivors in the deceased’s household who may experience a decrease or increase in monetary welfare. In the case of Indonesia, we show that the direct and indirect effects of mortality on income distribution have opposite signs, but are roughly the same in magnitude. We also show that the effects of other demographic changes—such as changes in the structure of fertility, migration and educational attainment—dominate the effects of mortality, whether direct or indirect. However, we find that none of these demographic developments is substantial enough to explain a significant part of the change in income distribution, regardless of whether the pre-crisis period (1993-1997) or the post-crisis period (1997-2000) is considered.
    Keywords: Differential Mortality, Income Distribution Dynamics, Welfare Comparisons, Decomposition
    JEL: D10 D63 J17
    Date: 2005–01–25
  4. By: Brown, Gordon D. A. (University of Warwick); Gardner, Jonathan (Watson Wyatt LLP); Oswald, Andrew (University of Warwick and IZA Bonn); Qian, Jing (University of Warwick)
    Abstract: What makes workers happy? Here we argue that pure ‘rank’ matters. It is currently believed that wellbeing is determined partly by an individual’s absolute wage (say, 30,000 dollars a year) and partly by the individual’s relative wage (say, 30,000 dollars compared to an average in the company or neighborhood of 25,000 dollars). Our evidence shows that this is inadequate. The paper demonstrates that range-frequency theory – a model developed independently within psychology and unknown to most economists – predicts that wellbeing is gained partly from the individual’s ranked position of a wage within a comparison set (say, whether the individual is number 4 or 14 in the wage hierarchy of the company). We report an experimental study and an analysis of a survey of 16,000 employees’ wage satisfaction ratings. We find evidence of rank-dependence in workers’ pay satisfaction.
    Keywords: job satisfaction, wages, rank, wellbeing
    JEL: J28 J30
    Date: 2005–03
  5. By: Chih Ming Tan; Steven N. Durlauf; Andros Kourtellos
    Abstract: Do variations in the degree of religiosity across countries translate into predictable differences in cross-country growth experiences? We apply a model averaging procedure to investigate the empirical robustness of linkages between religiosity and growth when other fundamental growth determinants, such as institutions, fractionalization, and geography, are simultaneously considered. Our results suggest that while religiosity variables such as belief in hell, belief in heaven, and monthly church attendance are potentially relevant to growth there is no evidence to suggest that they are either quantitatively significant or important.
    Keywords: Economic growth, Religion, Model Uncertainty
    JEL: O40 Z12 C59

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