New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2005‒05‒29
six papers chosen by

  1. Colonization, Institutions, and Inequality: A Note on Some Suggestive Evidence By Denis Cogneau; Charlotte Guénard
  2. Social experiments and intrumental variables with duration outcomes By Abbring, Jaap H; van den Berg, Gerard J
  3. Marriage, Wealth, and Unemployment Duration: A Gender Asymmetry Puzzle By Rasmus Lentz; Torben Tranæs
  4. Trust: A Concept Too Many By Timothy W. Guinnane
  5. Labor Surplus Economies By Gustav Ranis
  6. Productive Benefits of Health: Evidence from Low-Income Countries By T. Paul Schultz

  1. By: Denis Cogneau (DIAL, Paris); Charlotte Guénard (DIAL, Paris)
    Abstract: What is the kind of institutions that affect economic inequalities? Using a database on national income inequality for 73 non-European countries, we show that \'good governance\' not only contributes to the level of income but also to a more equal distribution by increasing the income share of the middle class. Beside this effect of the quality of capitalist institutions, we also find an inverted U relationship between inequalities and the extent of European settlement. We finally find a large and robust correlation between the pre-colonial population density and the present equality of income distribution. We argue that this latter correlation may have to do with institutional dimensions that are not captured by usual measures of institutional quality in available databases. Countries which were more densely populated in 1500 have indeed worse \'governance\' but give larger income shares to the poor. They had more structured pre-colonial States, more often resisted to colonisation, and more often adopted a mixed economic system. Many of them in fact ended with a more equal land distribution. The equality in the distribution of landholdings does appear as an important determinant of the overall equality of income and of poverty which is independent from \'usual\' governance issues.
    Keywords: Colonization, Inequalities, Institutions, Development
    JEL: N37 O40 P51
  2. By: Abbring, Jaap H (Free University Amsterdam); van den Berg, Gerard J (Free University Amsterdam)
    Abstract: This paper examines the empirical analysis of treatment effects on duration outcomes from data that contain instrumental variation. We focus on social experiments in which an intention to treat is randomized and compliance may be imperfect. We distinguish between cases where the treatment starts at the moment of randomization and cases where it starts at a later point in time. We derive exclusion restrictions under various informational and behavioral assumptions and we analyze identifiability under these restrictions. It turns out that randomization (and by implication, instrumental variation) by itself is often insufficient for inference on interesting effects, and needs to be augmented by a semi-parametric structure. We develop corresponding non- and semi-parametric tests and estimation methods.
    Keywords: Event-history analysis; intention to treat; non-compliance; policy evaluation; selection
    JEL: C14 C31 C41
    Date: 2005–05–03
  3. By: Rasmus Lentz (Boston University); Torben Tranæs (Rockwool Foundation Research Unit, CESifo and IZA Bonn)
    Abstract: This note presents evidence of the following gender asymmetry: the job-finding effort of married men and women is affected by the income of their spouses in opposite directions. For women, spouse income influences job finding negatively, just as own wealth does: the more the man earns and the wealthier the woman is, the longer it takes for her to find a job. The contrary is the case for men, where spouse income affects job finding positively: the more the wife earns, the faster the husband finds a job. This is so despite the fact that greater own wealth also prolongs unemployment spells for men. These findings are hard to reconcile with the traditional economic model of the family.
    Keywords: gender asymmetries, wealth effects on job finding, unemployment duration
    JEL: D1 J4 J6
    Date: 2005–05
  4. By: Timothy W. Guinnane (Economic Growth Center, Yale University)
    Abstract: Research on "trust" now forms a prominent part of the research agenda in history and the social sciences. Although this research has generated useful insights, the idea of trust has been used so widely and loosely that it risks creating more confusion than clarity. This essay argues that to the extent that scholars have a clear idea of what trust actually means, the concept is, at least for economic questions, superfluous: the useful parts of the idea of trust are implicit in older notions of information and the ability to impose sanctions. I trust you in a transaction because of what I know about you, and because of what I can have done to you should you cheat me. This observation does not obviate what many scholars intend, which is to embed economic action within a framework that recognizes informal institutions and social ties. I illustrate the argument using three examples drawn from an area where trust has been seen as critical: credit for poor people.
    Keywords: Trust, Social Capital, Credit Cooperatives, Uniform Laws
    JEL: G2 N2
    Date: 2005–02
  5. By: Gustav Ranis (Economic Growth Center, Yale University)
    Abstract: The labor surplus economy model has as its basic premise the inability of unskilled agricultural labor markets to clear in countries with high man/land ratios. In such situations, the marginal product of labor is likely to fall below a bargaining wage, related to the average rather than the marginal product. The reallocation of such disguisedly unemployed workers by means of "balanced" intersectoral growth ultimately permits the entire economy to operate on neo-classical principles. Finally, the paper introduces open economy dimensions, indicates the existence of other labor surplus sub-sectors and briefly responds to neo-classical critiques on both theoretical and empirical grounds.
    Keywords: Development Theory, Labor Markets
    JEL: O10 O12 O17
    Date: 2004–12
  6. By: T. Paul Schultz (Economic Growth Center, Yale University)
    Abstract: Various household survey indicators of adult nutrition and health status are analyzed as determinants of individual wages. However, survey indicators of health status may be heterogeneous, or a combination of health human capital formed by investment behavior and variation due to genotype, random shocks, and measurement error, which are uncontrolled by behavior. Although there are no definitive methods for distinguishing between human capital and genetic variation in health outcomes, alternative mappings of health status, such as height, on community health services, parent socioeconomic characteristics, and ethnic categories may be suggestive. Instrumental variable estimates of health human capital and residual sources of variation in measured health status are included in wage functions to assess empirically whether the productivity of both components of health are equal. Evidence from Ghana, Cote d'Ivoire and Brazil suggests that the health human capital effect on wages is substantially larger than that associated with residual health variation.
    Keywords: Health Human Capital, Wage Productivity, Brazil, Ghana, Cote D'Ivoire
    JEL: I12 J24 O12
    Date: 2005–01

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