nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2005‒07‒03
seven papers chosen by
Maximo Rossi
Universidad de la República

  1. Driving Forces Behind Informal Sanctions By Armin Falk; Ernst Fehr; Urs Fischbacher
  2. Workplace Training in Europe By Andrea Bassanini; Alison Booth; Giorgio Brunello; Maria De Paola; Edwin Leuven
  3. Distributional Effects in Household Models: Separate Spheres and Income Pooling By Martin Browning; Pierre-André Chiappori; Valérie Lechene
  4. The Value of Peripatetic Economists: A Sesqui-Difference Evaluation of Bob Gregory By Daniel S. Hamermesh
  5. Does Globalization of the Scientific/Engineering Workforce Threaten U.S. Economic Leadership? By Richard B. Freeman
  6. Empirical Applications of Multidimensional Inequality Analysis By Patricia Justino
  7. Does Watching TV Make Us Happy? By Bruno S. Frey; Christine Benesch; Alois Stutzer

  1. By: Armin Falk (IZA Bonn and University of Bonn); Ernst Fehr (University of Zurich and IZA Bonn); Urs Fischbacher (University of Zurich)
    Abstract: This paper investigates the driving forces behind informal sanctions in cooperation games and the extent to which theories of fairness and reciprocity capture these forces. We find that cooperators’ punishment is almost exclusively targeted towards the defectors but the latter also impose a considerable amount of spiteful punishment on the cooperators. However, spiteful punishment vanishes if the punishers can no longer affect the payoff differences between themselves and the punished individual, whereas the cooperators even increase the resources devoted to punishment in this case. Our data also discriminate between different fairness principles. Fairness theories that are based on the assumption that players compare their own payoff to the group’s average or the group’s total payoff cannot explain the fact that cooperators target their punishment at the defectors. Fairness theories assuming that players aim to minimize payoff inequalities cannot explain the fact that cooperators punish defectors even if payoff inequalities cannot be reduced. Therefore, retaliation, i.e., the desire to harm those who committed unfair acts, seems to be the most important motive behind fairnessdriven informal sanctions.
    Keywords: sanctioning, cooperation, social norm, reciprocity, fairness, spitefulness
    JEL: A13 D63 D23 C92 K42
    Date: 2005–06
  2. By: Andrea Bassanini (OECD and University of Evry); Alison Booth (Australian National University, University of Essex and IZA Bonn); Giorgio Brunello (University of Padova, CESifo and IZA Bonn); Maria De Paola (University of Calabria); Edwin Leuven (University of Amsterdam and CREST)
    Abstract: This paper reviews the existing evidence on workplace training in Europe in different data sources - the CVTS, OECD data and the European Community Household Panel. We outline the differences in training incidence and relate these differences to the private costs and benefits of training, and to institutional factors such as unions, employment protection and product market competition. We ask whether there is a case for under-provision of training in Europe and examine alternative policies aiming both at raising training incidence and at reducing inequalities in the provision of skills.
    Keywords: training, Europe, training policies
    JEL: J24
    Date: 2005–06
  3. By: Martin Browning; Pierre-André Chiappori (Department of Economics, University of Chicago); Valérie Lechene (University of British Columbia; Wadham College, Oxford)
    Abstract: We derive distributional effects for a non-cooperative alternative to the unitary model of household behaviour. We consider the Nash equilibria of a voluntary contributions to public goods game. Our main result is that, in general, the two partners either choose to contribute to different public goods or they contribute to at most one common good. The former case corresponds to the separate spheres case of Lundberg and Pollak (1993). The second outcome yields (local) income pooling. A household will be in different regimes depending on the distribution of income within the household. Any bargaining model with this non-cooperative case as a breakdown point will inherit the local income pooling. We conclude that targetting benefits such as child benefits to one household member may not always have an effect on outcomes.
    Keywords: Nash equilibrium; Nash bargaining; collective models; intra-household allocation; local income pooling; separate spheres
    JEL: D10 C71 C72
    Date: 2005–06
  4. By: Daniel S. Hamermesh
    Abstract: I ask generally whether a country can benefit from the temporary importation of human capital, and specifically whether a program that attracts large groups of academic visitors to a distant country benefits it by generating additional scholarly research on local issues. Using the list of visitors to the ANU Research School's Economics Program, I estimate this impact from responses to a survey in which visitors described their research before and after their visit and designated as a"control person" another economist who had a similar career but had not visited. The matching of the control may be viewed as being along both observable and (to the researcher) unobservable characteristics of the "treated" and control individuals. The results show a highly significant ceteris paribus impact of such visits on the visitor's subsequent research. Valuing this extra research based on the scholarly citations it received and the effects of citations on salaries shows a substantial monetary impact of visiting economists. Less tangible additional impacts in terms of research style also clearly result.
    JEL: J24 H43
    Date: 2005–07
  5. By: Richard B. Freeman
    Abstract: This paper develops four propositions that show that changes in the global job market for science and engineering (S&E) workers are eroding US dominance in S&E, which diminishes comparative advantage in high tech production and creates problems for American industry and workers: (1) The U.S. share of the world's science and engineering graduates is declining rapidly as European and Asian universities, particularly from China, have increased S&E degrees while US degree production has stagnated. 2) The job market has worsened for young workers in S&E fields relative to many other high-level occupations, which discourages US students from going on in S&E, but which still has sufficient rewards to attract large immigrant flows, particularly from developing countries. 3) Populous low income countries such as China and India can compete with the US in high tech by having many S&E specialists although those workers are a small proportion of their work forces. This threatens to undo the "North-South" pattern of trade in which advanced countries dominate high tech while developing countries specialize in less skilled manufacturing. 4) Diminished comparative advantage in high-tech will create a long period of adjustment for US workers, of which the off-shoring of IT jobs to India, growth of high-tech production in China, and multinational R&D facilities in developing countries, are harbingers. To ease the adjustment to a less dominant position in science and engineering, the US will have to develop new labor market and R&D policies that build on existing strengths and develop new ways of benefitting from scientific and technological advances in other countries.
    JEL: G0 I2 F0 J0
    Date: 2005–07
  6. By: Patricia Justino (Poverty Research Unit at Sussex, Department of Economics, University of Sussex)
    Abstract: This paper explores the empirical application of theoretical multidimensional inequality analysis using real household welfare distributions. The paper operationalises recent conceptual developments in multidimensional inequality theory and assesses their usefulness for measurement and policy analysis. Despite the existence of a thriving theoretical literature on multidimensional inequality, empirical applications, particularly at the individual and household levels, are few and far between. This paper compares and contrasts different methodologies for the analysis of multidimensional welfare, including multidimensional inequality indices and stochastic dominance techniques. The results strongly highlight the importance of bringing non-monetary aspects of household welfare into the forefront of inequality analysis since measurements based solely on the distribution of income variables may misrepresent the degree of overall inequality in society. Agreement over the various approaches to the measurement of multidimensional inequality entails, however, non-trivial decisions that may limit the practical usefulness of these measures. We suggest that the use of multidimensional inequality ranges and restrictive dominance criteria may open significant scope for further developments in the empirical analysis of multidimensional inequality.
    Keywords: Multidimensional inequality; inequality indices; income inequality; education inequality; health inequality; stochastic dominance
    JEL: D31 D63 I19 I29
    Date: 2005–06
  7. By: Bruno S. Frey; Christine Benesch; Alois Stutzer
    Abstract: The paper studies a major human activity – that of watching TV - where many individuals have incomplete control over, and foresight into, their own behavior. As a consequence, they watch more TV than they consider optimal for themselves and their well-being is lower than what could be achieved. Mainly people with significant opportunity costs of time regret the amount of time spent watching TV. They report lower subjective well-being when watching TV for many hours. For others, there is no negative effect on life satisfaction from watching TV. Long hours spent in front of a TV are linked to higher material aspirations and anxiety and therewith lower life satisfaction.
    Keywords: Life satisfaction; mispredicting utility; revealed behavior; self-control problem; TV consumption
    JEL: D12 I31
    Date: 2005–05

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