nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2005‒03‒20
nine papers chosen by
Maximo Rossi
Universidad de la República

  1. Contracts, Fairness and Incentives By Ernst Fehr; Alexander Klein; Klaus M Schmidt
  2. Non-Catastrophic Endogenous Growth and the Environmental Kuznets Curve By J. Aznar-Márquez; J. R. Ruiz-Tamarit
  3. Demographic change, immigration, and the labour market: A European perspective By Juan F. Jimeno
  4. The measurement of gender wage discrimination: the distributional approach revisited By Coral del Río Otero; Carlos Gradín Lago; Olga Cantó Sánchez
  5. Tax avoidance and intra-family transfers By Nordblom, Katarina; Ohlsson, Henry
  6. Are Vietnamese Farmers Concerned with their Relative Position in Society? By Carlsson, Fredrik; Nam, Pham Khanh; Linde-Rahr, Martin; Martinsson, Peter
  7. Interfirm Mobility, Wages, and the Returns to Seniority and Experience in the U.S. By Buchinsky, Moshe; Fougère, Denis; Kramarz, Francis; Tchernis, Rusty
  8. A Portrait of Child Poverty in Germany By Corak, Miles; Fertig, Michael; Tamm, Marcus
  9. Regional Mismatch and Unemployment: Theory and Evidence from Italy, 1977-1998 By Marco Manacorda,Barbara Petrongolo

  1. By: Ernst Fehr; Alexander Klein; Klaus M Schmidt
    Date: 2005–03–16
  2. By: J. Aznar-Márquez; J. R. Ruiz-Tamarit
    Abstract: The competitive equilibrium in an endogenous growth model is not Pareto-optimal nor environmentally sustainable in presence of pollution externalities, even if costly abatement activities are allowed to be endogenously decided. In this paper we introduce the possibility of an ecological catastrophe by imposing an upper-limit to the pollutants stock. We characterize the socially optimal solution and study sustainability of the long-run balanced growth path. We find that the rate of growth depends negatively on the weight of environmental cares in utility and positively on the population growth rate. The latter effect is stronger as higher is the weight of environment in the utility function. We also identify some policies the central planner could undertake looking to guarantee sustainability. An EKC is derived in the long term using the implications of the demographic transition for the rate of population growth, and the accompanying variation in the willingness to pay for environmental quality as the economy develops.
  3. By: Juan F. Jimeno
    Abstract: After a long period of high unemployment, the EU is about to face a significant change in the demographic structure of its labour force, due to a reduction in fertility rates in the past, and increasing immigration flows. There is a long standing literature of empirical studies aiming at measuring the effects of cohort sizes and of immigration flows on employment and unemployment rates and on the wage profiles of several population groups. And there are some reasons to think that these effects depend on the institutions determining the functioning of the labour market. This paper argues that population ageing may produce a reduction of employment rates in the EU15 over the next two decades, as the share of the older workers in the labour force increase. Then it discusses the reasons why, despite this direct composition effects, there may be another indirect effects of changing composition of the labour supply on population specific employment and unemployment rates. Finally, it uses cross-country data to find how the interaction between the age composition of the labour force and the share of foreign workers in the labour force, on the one hand, and labour market institutions, on the other hand, contribute to explaining international differences in age and gender- specific employment and unemployment rates.
  4. By: Coral del Río Otero; Carlos Gradín Lago; Olga Cantó Sánchez
  5. By: Nordblom, Katarina (Department of Economics, School of Economics and Commercial Law, Göteborg University); Ohlsson, Henry (Department of Economics, Uppsala University)
    Abstract: To what extent do people avoid taxes on intra-family transfers (bequests and gifts), and how would integration (unification) of the different transfers taxes affect tax avoidance? These issues are important for families and their welfare, as well as for governments and their possibilities of raising revenue from transfer taxes. In this paper we study the effects of transfer taxes on altruistic parents' transfers to their children. Using a theoretical model we find that altruistic parents do not necessarily tax minimize. However, in some cases when they do, there is an infinitely large excess burden of a transfer tax. We also find that integration of transfer taxes reduces tax avoidance. All tax avoidance is eliminated with complete integration. <p>
    Keywords: tax avoidance; bequests; inheritances; inter vivos gifts; altruism
    JEL: D10 D64 D91
    Date: 2005–03–16
  6. By: Carlsson, Fredrik (Department of Economics, School of Economics and Commercial Law, Göteborg University); Nam, Pham Khanh (Faculty of Development Economics, University of Economics); Linde-Rahr, Martin (Department of Economics, School of Economics and Commercial Law, Göteborg University); Martinsson, Peter (Department of Economics, School of Economics and Commercial Law, Göteborg University)
    Abstract: This paper examines the attitude towards relative position or status among rural households in Vietnam. On average, the respondents show weaker preferences for relative position than in comparable studies in Western countries. Possible explanations are the emphasis on the importance of equality and that villagers are very concerned with how the local community perceives their actions. We also investigate what influences the concern for relative position and find, among other things, that if anyone from the household is a member of the Peoples Committee then the respondent is more concerned with the relative position. <p>
    Keywords: Relative income; positionality; experiments; Vietnam; Asia
    JEL: C91 D63
    Date: 2005–03–16
  7. By: Buchinsky, Moshe (UCLA,CREST-INSEE and NBER); Fougère, Denis (CNRS, CREST-INSEE, CEPR and IZA Bonn); Kramarz, Francis (CREST-INSEE, CEPR and IZA Bonn); Tchernis, Rusty (Indiana University)
    Abstract: Much of the research in labor economics during the 1980s and the early 1990s was devoted to the analysis of changes in the wage structure across many of the world’s economies. Only recently, has research turned to the analysis of mobility in its various guises. From the life cycle perspective, decreased wage mobility and increased job instability, makes the phenomenon of increasing wage inequality more severe than it appears to be at first sight. In general, workers’ wages may change through two channels: (a) return to their firm-specific human capital (seniority); or (b) inter-firm wage mobility. Our theoretical model gives rise to three equations: (1) a participation equation; (2) a wage equation; and (3) an interfirm mobility equation. In this model the wage equation is estimated simultaneously with the two decision equations. We use the Panel Study of Income Dynamics (PSID) to estimate the model for three education groups. Our main finding is that returns to seniority are quite high for all education groups. On the other hand, the returns to experience appear to be similar to those previously found in the literature.
    Keywords: wage mobility, interfirm mobility, returns to seniority, panel data, Markov Chain Monte Carlo methods
    JEL: C11 C15 J31 J63
    Date: 2005–03
  8. By: Corak, Miles (UNICEF Innocenti Research Centre and IZA Bonn); Fertig, Michael (RWI Essen and IZA Bonn); Tamm, Marcus (RWI Essen and Ruhr University of Bochum)
    Abstract: This paper offers a descriptive portrait of income poverty among children in Germany between the early 1980s and 2001, with a focus on developments since unification in 1991. Data from the German Socio-Economic Panel are used to estimate poverty rates, rates of entry to and exit from poverty, and the duration of time spent in and out of poverty. The analysis focuses upon comparisons between East and West Germany, by family structure, and citizenship status. Child poverty rates have drifted upward since 1991, and have been increasing more than the rates for the overall population since the mid-1990s. In part these changes are due to increasing poverty among children from households headed by noncitizens. Children in single parent households are by all measures at considerable risk of living in poverty. There are also substantial differences in the incidence of child poverty and its dynamics between East and West Germany.
    Keywords: poverty dynamics, poverty duration, immigrant households
    JEL: I32 I38 J13
    Date: 2005–03
  9. By: Marco Manacorda,Barbara Petrongolo (Dept. of Economics Queen Mary; Dept. of Economics London School of Economics; University of London; CEP and STICERD,London School of Economics)
    Abstract: This paper describes the functioning of a two-region economy characterized by asymmetric wage-setting. Labor market tightness in one region (the leading-region) affects wages in the whole economy. IN equilibrium, net labor demand shifts towards the leading region raise unemployment in the rest of the economy and leave regional wages unchanged, causing an increase in aggregate unemployment. This model has some success in explaining the evolution of regional unemployment rates in Italy during the period 1977-1998. Based on SHIW micro data on earnings and ISTAT data on unemployment rates we find strong evidence that wages in Italy only respond to labor market tightness in the North. We estimate that around one third of the increase in aggregate unemployment in Italy can be explained by regional mismatch, mainly due to an excess labor supply growth in the South.
    Keywords: Regional imbalances, Wage curve, Unemployment.
    JEL: E24 J23 J31

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