nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2005‒10‒29
five papers chosen by
Maximo Rossi
Universidad de la República

  1. Job Insecurity and Youth Emancipation: A Theoretical Approach By Sascha O. Becker; Samuel Bentolila; Ana Fernandes; Andrea Ichino
  2. Estimating a Life Cycle Model with Unemployment and Human Capital Depreciation By Andreas Pollak
  3. The Labour Market Effects of Alma Mater: Evidence from Italy By Giorgio Brunello; Lorenzo Cappellari
  4. Household Time Allocation and Modes of Behavior: A Theory of Sorts By Daniela Del Boca; Christopher J. Flinn
  5. The Role of Equality and Efficiency in Social Preferences By Ernst Fehr; Michael Naef; Klaus M. Schmidt

  1. By: Sascha O. Becker; Samuel Bentolila; Ana Fernandes; Andrea Ichino
    Abstract: In this paper, we propose a theoretical model to study the effect of income insecurity of parents and offspring on the child's residential choice. Parents are partially altruistic toward their children and will provide financial help to an independent child when her income is low relative to the parents'. We show that first-order stochastic dominance (FOSD) shifts in the distribution of the child's future income (or her parents') will have ambiguous effects on the child's residential choice. The analysis identifies altruism as the source of ambiguity in the results. If parents are selfish or the joint income distribution of parents and child places no mass on the region where transfers are provided, a FOSD shift in the distribution of the child's (parents') future income will reduce (raise) the child's current income threshold for independence
    Keywords: Altruism; Emancipation; Job security; Option value
    JEL: D1 J1 J2
    Date: 2005–10
    URL: http://d.repec.org/n?u=RePEc:ube:dpvwib:dp0514&r=ltv
  2. By: Andreas Pollak (University of Freiburg)
    Abstract: I estimate a life cycle model of consumption choice with unemployment risk. Employed individuals face the risk of losing their job. Unemployed agents receive job random offers of different quality, which they can accept or reject. Following the loss of a job and during unemployment, an agent’s productivity declines. Using micro data, I estimate the structural model for Germany, the UK, and the US following the method of simulated moments approach of Duffie and Singleton. The estimated model is used to perform policy simulations that highlight the relationship between the unemployment insurance scheme and the unemployment rates of different age groups.
    Keywords: Method of Simulated Moments, Unemployment Insurance, Life- Cycle Models, Human Capital
    JEL: C51 D1 E2 J24 J31 J38 J64
    Date: 2005–10–23
    URL: http://d.repec.org/n?u=RePEc:wpa:wuwpem:0510004&r=ltv
  3. By: Giorgio Brunello; Lorenzo Cappellari
    Abstract: We use data from a nationally representative survey of Italian graduates to study whether Alma Mater matters for employment and earnings three years after graduation. We find that the attended college does matter, and that college related differences are substantial both among and within regions of the country. However, these differences are not large enough to trigger substantial mobility flows from poorly performing to better performing institutions. There is also evidence that going to a private university pays off at least in the early part of a career: the employment weighted college wage gains from going to a private college are close to 18 percent. Only part of this gain can be explained by the fact that private universities have lower pupil - teacher ratios than public institutions. household behavior.
    Keywords: college education, Italy
    JEL: J24 J1
    Date: 2005–04
    URL: http://d.repec.org/n?u=RePEc:wpc:wplist:wp05_05&r=ltv
  4. By: Daniela Del Boca; Christopher J. Flinn
    Abstract: We develop a simple model of household time allocation decisions under strong functional form assumptions regarding preferences and household production technology. We argue that the specification is general when allowing for unrestrictive forms of population heterogeneity in the parameters characterizing these functions. Moreover, we argue that the model is not capable of distinguishing among elements of a class of behavioral rules, including Nash bargaining and Nash equilibrium, without restricting population heterogeneity in arbitrary ways. However, preferences over mates for any given set of male and female characteristics will be a function of the behavioral rules used in married households. Using data from the PSID on market hours and time spent in household production, we estimate the marginal distribution of male and female characteristics and our two alternative behavioral assumptions, and perform some formal and informal comparisons of the Nash bargaining and Nash equilibrium rules’ ability to predict the marital sorts observed in the data. Given the simplicity of the model of household behavior and marriage market equilibrium, it is perhaps not surprising that neither model provides good predictions. Overall, the evidence is slightly more supportive of the hypothesis that households behave noncooperatively.
    Keywords: Bilateral Matching, Household Time Allocation, Nash Bargaining
    JEL: D13 J12 J22
    Date: 2005–10
    URL: http://d.repec.org/n?u=RePEc:wpc:wplist:wp15_05&r=ltv
  5. By: Ernst Fehr (Institute for Empirical Research in Economics, University of Zurich, Bluemlisalpstrasse 10, CH-8006 Zurich, Switzerland); Michael Naef (Institute for Empirical Research in Economics, University of Zurich, Bluemlisalpstrasse 10, CH-8006 Zurich, Switzerland); Klaus M. Schmidt (Department of Economics, University of Munich, Ludwigstr. 28, D-80539 Muenchen, Germany)
    Abstract: Engelmann and Strobel (AER 2004) claim that a combination of efficiency seeking and minmax preferences dominates inequity aversion in simple dictator games. This result relies on a strong subject pool effect. The participants of their experiments were undergraduate students of economics and business administration who self-selected into their field of study and learned early on that efficiency is desirable. We show that for non-economists the preference for efficiency is much less pronounced. We also find a gender effect indicating that women are more egalitarian than men. However, perhaps surprisingly, the dominance of equality over efficiency is unrelated to political attitudes.
    Keywords: Social Preferences, Inequity Aversion, Efficiency Preferences
    JEL: C7 C91 C92 D63 D64
    Date: 2004–10
    URL: http://d.repec.org/n?u=RePEc:trf:wpaper:30&r=ltv

This nep-ltv issue is ©2005 by Maximo Rossi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at http://nep.repec.org. For comments please write to the director of NEP, Marco Novarese at <director@nep.repec.org>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.