nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2005‒06‒05
eleven papers chosen by
Maximo Rossi
Universidad de la República

  1. Trust and Fiscal Performance: A Panel Analysis with Swiss Data By Benno Torgler; Christoph A. Schaltegger
  2. Network Capital and Social Trust: Pre-Conditions for ‘Good’ Diversity? By Sandra Wallman
  3. On the Determinants of Social Capital in Greece Compared to Countries of the European Union By Asimina Christoforou
  4. Varieties of Trust By Eric M. Uslaner
  5. Making Capitalism Work: Social Capital and Economic Growth in Italy, 1970-1995 By Thomas P. Lyon
  6. Optimal unemployment insurance design: time limits, monitoring, or workfare? By Fredriksson, Peter; Holmlund, Bertil
  7. Your Money or Your Life: Changing Job Quality in OECD Countries By Andrew E. Clark
  8. How Does Marriage Affect Physical and Psychological Health? A Survey of the Longitudinal Evidence By Chris M. Wilson; Andrew J. Oswald
  9. Religious Market Structure, Religious Participation, and Outcomes: Is Religion Good for You? By Jonathan Gruber
  10. An Investigation of the Effects of Alcohol Consumption and Alcohol Policies on Youth Risky Sexual Behaviors By Sara Markowitz; Robert Kaestner; Michael Grossman
  11. Evaluating the Role of Brown vs. Board of Education in School Equalization, Desegregation, and the Income of African Americans By Orley Ashenfelter; William J. Collins; Albert Yoon

  1. By: Benno Torgler (Yale Center for International and Area Studies); Christoph A. Schaltegger (Swiss Federal Tax Administration University of St. Gallen and CREMA, Center for Research in Economics, Management and the Arts)
    Abstract: Citizens are willing to abandon their short-term financial interest in free-riding considerably, if governments act in their interest, if procedures of the public decisions-making process are felt to be fair and if other fellow-citizens have to contribute also an adequate share to the community. In such a situation trustworthiness of a government and trust in a government is high. This paper provides empirical evidence that trust is crucial for fiscal performance using data for the full sample of Swiss cantons over the 1981-2001 period. In cantons with high levels of trust, the level of indebtedness is significantly lower. Trust supports fiscal discipline. In order to get a useful approximation for mutual trust among citizens and between citizens and their representatives, we use information from direct voter participation on political issues (initiatives and public referenda) held in Swiss state (cantonal) governments. Electoral support of government proposals reveals an important aspect of trust in a real world setting. Hence, our trust variable measures the behavior at the ballots thereby reducing possible subjective biases derived from surveys and questionnaires.
    Keywords: Trust, Social capital, Fiscal performance, Indebtedness
    JEL: Z13 H11 O17 D72 E62
    Date: 2005–05
    URL: http://d.repec.org/n?u=RePEc:fem:femwpa:2005.61&r=ltv
  2. By: Sandra Wallman (University College London)
    Abstract: This paper unpicks the assumption that because social networks underpin social capital, they directly create it – more of one inevitably making more of the other. If it were that simple, the sheer quantity of networks criss-crossing a defined urban space would be a proxy measure for the local stock of social capital. Of course the interrelationships are more complex. Two kinds of complication stand out. The first is specific: networks have both quantitative and qualitative dimensions, but the two elements have no necessary bearing on each other. The shape and extent of a network says nothing about the content of the links between its nodes. Certainly the line we draw between any two of them indicates contact and potential connection, but what kind of contact, how often, how trusting, in what circumstances, to what end…? Reliable answers to these questions need more than surface maps or bird’s eye accounts of who goes where, who speaks to whom. The second complication is a general, not to say universal, difficulty. We are stuck with the fact that sociological concepts - networks, social capital and trust included - are ‘only’ abstractions. They are ways of thinking about the apparent chaos of people behaving all over the place – here, to make it worse, in multi-cultural urban environments - but none of them is visible to be measured, weighed or quantified. This does not make the concepts ‘untrue’, and it should not stop them being useful. My hope is that we can find a nuanced perspective which will at least make the complications intelligible. At best, a multi-layered model will account for diversity in the nature of trust; and for variations in the way social capital is hoarded or distributed within and across ethnic boundaries. It would be contribution enough if we were able to specify the conditions which cause social capital, as Puttnam formulates it, to be exclusionary or inclusionary in its effect.
    Keywords: Network capital, Social trust, ‘Good’ diversity
    Date: 2005–05
    URL: http://d.repec.org/n?u=RePEc:fem:femwpa:2005.67&r=ltv
  3. By: Asimina Christoforou (Athens University of Economics and Business)
    Abstract: Social capital refers to the stock of social relations, based on norms and networks of cooperation and trust that spill over to the market and state to enhance collective action between actors and achieve improved social efficiency and economic growth. The aim of the present paper is to discuss the implications of contemporary literature and empirical findings on social capital for the growth prospects of Greece, compared to the member-states of the European Union. In order to examine the potential of social capital to enhance growth, we must look into the factors that determine the nature and context of trust, norms and networks that have emerged in our multinational, multiethnic and multicultural Europe.The contribution of this paper is to offer insight on the determinants of social capital in Greece, compared to the European Union (EU - former 15 member-states). For this purpose, we regress an index of individual group membership, derived from the European Community Household Panel (ECHP), on a set of individual as well as aggregate factors of social capital. Regression results provide evidence of the impact of both individual and institutional characteristics on group membership. Differences on the extent of group membership between countries might be indicative of the historical and cultural differences that have affected the evolution of social capital across Europe. Particularly in Greece, the relatively low level of group membership compared to the other EU countries might provide further evidence of its low levels of civicness. Historically, its weak civil society has been a result of a prior civic tradition of clientelism under arbitrary rule, the interference of special-interest groups and the lack of credibility and impartiality from the part of the state. And these factors might be responsible for the slow pace in reform and growth observed compared to the rest of the EU. Nevertheless, the findings on the determinants of social capital may direct us to possible means of rebuilding patterns of participatory and cooperative behavior, especially in countries with low levels of trust and civicness, such as Greece.
    Keywords: Determinants, Social capital in Greece, European union, Diversity
    Date: 2005–05
    URL: http://d.repec.org/n?u=RePEc:fem:femwpa:2005.68&r=ltv
  4. By: Eric M. Uslaner (University of Maryland)
    Abstract: There are multiple dimensions of trust. The standard meaning I call "strategic trust." But more important is "moralistic trust," which does not stem from experience, but rather is learned early in life and is largely stable over time. Moralistic trust leads people to do good works such as contributing to charity and volunteering time and to be more tolerant toward minorities. Countries with high levels of trust have better functioning governments and redistribute resources from the rich to the poor. Moralistic trust rests upon a foundation of economic equality: The most equal countries have the highest levels of trust.
    Keywords: Trust, Social capital, Tolerance, Civic engagement
    Date: 2005–05
    URL: http://d.repec.org/n?u=RePEc:fem:femwpa:2005.69&r=ltv
  5. By: Thomas P. Lyon (Indiana University)
    Abstract: Using data on the 20 Italian regions for the period 1970-1995, I examine whether the presence of social capital, as reflected in a number of different measures collected by Putnam (1993), affects economic productivity. I find three types of effects. First, social capital, when treated as an input to regional production, has a positive and significant effect in the South, but a much weaker effect in the North. Second, some forms of social capital can significantly increase regions’ propensities to make physical capital investments; however, dense networks of association reduce capital investment in both the North and South. Instrumental variables estimates show that social capital affects growth both directly and through affecting investment in physical capital. Third, social capital contributes positively to the rate of total factor productivity growth in the Italian regions.
    Keywords: Social capital, Growth, Investment, Italy
    JEL: O17 O47 O52
    Date: 2005–05
    URL: http://d.repec.org/n?u=RePEc:fem:femwpa:2005.70&r=ltv
  6. By: Fredriksson, Peter (IFAU - Institute for Labour Market Policy Evaluation); Holmlund, Bertil (Uppsala University)
    Abstract: This paper analyses crucial design features of unemployment insurance (UI) policies. We examine three different means of improving the efficiency of UI: the duration of benefit payments, monitoring in conjunction with sanctions, and workfare. To that end we develop a quantitative model of equilibrium unemployment. The model features worker heterogeneity in preferences for leisure. The numerical analysis suggests that a system with monitoring and sanctions restores search incentives most effectively, since it brings additional incentives to search actively so as to avoid the sanction. Therefore, the UI provider can offer a more generous UI replacement rate in a system with monitoring and sanctions than in the other two systems. Workfare appears to be inferior to the other two systems.
    Keywords: Unemployment insurance; search equilibrium; time limits; monitoring and sanctions; workfare
    JEL: J64 J68
    Date: 2005–05–12
    URL: http://d.repec.org/n?u=RePEc:hhs:ifauwp:2005_013&r=ltv
  7. By: Andrew E. Clark (CNRS, PSE and IZA Bonn)
    Abstract: Job quality may usefully be thought of as depending on both job values (how much workers care about different job outcomes) and the job outcomes themselves. Here both crosssection and panel data are used to examine changes in job quality in OECD countries over the 1990s. Despite rising wages and falling hours, overall job satisfaction is either stable or declining. These movements are not due to changes in the type of workers, nor to changes in their job values. A number of pieces of evidence point to stress and hard work as being strong candidates for what has gone wrong with employees’ jobs. We find evidence of increasing inequality in a number of job outcomes. Some groups of workers have done better than others: the young and the higher-educated have been insulated against downward movements in job quality, and there is tentative evidence that trade unions may have protected their members against adverse job outcomes.
    Keywords: job values, job outcomes, job satisfaction, effort
    JEL: J28 J3 J81
    Date: 2005–05
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp1610&r=ltv
  8. By: Chris M. Wilson (University of East Anglia); Andrew J. Oswald (University of Warwick, Harvard University and IZA Bonn)
    Abstract: This paper examines an accumulating modern literature on the health benefits of relationships like marriage. Although much remains to be understood about the physiological channels, we draw the judgment, after looking across many journals and disciplines, that there is persuasive longitudinal evidence for such effects. The size of the health gain from marriage is remarkable. It may be as large as the benefit from giving up smoking.
    Keywords: mortality, health, marriage, happiness, longitudinal
    JEL: I0 I12
    Date: 2005–05
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp1619&r=ltv
  9. By: Jonathan Gruber
    Abstract: Religion plays an important role in the lives of many Americans, but there is relatively little study by economists of the implications of religiosity for economic outcomes. This likely reflects the enormous difficulty inherent in separating the causal effects of religiosity from other factors that are correlated with outcomes. In this paper, I propose a potential solution to this long standing problem, by noting that a major determinant of religious participation is religious market density, or the share of the population in an area which is of an individual's religion. I make use of the fact that exogenous predictions of market density can be formed based on area ancestral mix. That is, I relate religious participation and economic outcomes to the correlation of the religious preference of one's own heritage with the religious preference of other heritages that share one's area. I use the General Social Survey (GSS) to model the impact of market density on church attendance, and micro-data from the 1990 Census to model the impact on economic outcomes. I find that a higher market density leads to a significantly increased level of religious participation, and as well to better outcomes according to several key economic indicators: higher levels of education and income, lower levels of welfare receipt and disability, higher levels of marriage, and lower levels of divorce.
    JEL: H3 N4
    Date: 2005–05
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:11377&r=ltv
  10. By: Sara Markowitz; Robert Kaestner; Michael Grossman
    Abstract: The problems of teen pregnancy, HIV/AIDS and the high rates of other sexually transmitted diseases among youth have lead to widespread concern with the sexual behaviors of teenagers. Alcohol use is one of the most commonly cited correlates of risky sexual behavior. The purpose of this research is to investigate the causal role of alcohol in determining sexual activity and risky sexual behavior among teenagers and young adults. This research also addresses the question of whether there are public policies that can reduce the risky sexual behavior that results in harmful consequences. Individual and aggregate level data are used to investigate these questions. Results show that alcohol use appears to have no causal influence in determining whether or not a teenage has sex. However, alcohol use may lower contraception use among sexually active teens.
    JEL: I0
    Date: 2005–05
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:11378&r=ltv
  11. By: Orley Ashenfelter; William J. Collins; Albert Yoon
    Abstract: In this paper we study the long-term labor market implications of school resource equalization before Brown and school desegregation after Brown. For cohorts born in the South in the 1920s and 1930s, we find that racial disparities in measurable school characteristics had a substantial influence on black males' earnings and educational attainment measured in 1970, albeit one that was smaller in the later cohorts. When we examine the income of male workers in 1990, we find that southern-born blacks who finished their schooling just before effective desegregation occurred in the South fared poorly compared to southern-born blacks who followed behind them in school by just a few years.
    JEL: J7 I28 N32
    Date: 2005–06
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:11394&r=ltv

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