nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2006‒06‒03
seven papers chosen by
Maximo Rossi
Universidad de la Republica

  1. Variance estimation for generalized entropy and Atkinson inequality indices: The complex survey data case By Martin Biewen
  2. The Power of Positional Concerns: A Panel Analysis By Benno Torgler; Sascha L. Schmidt; Bruno S. Frey
  3. The Fallacy of “Job Robbing”: A Meta-Analysis of Estimates of the Effect of Immigration on Employment By Simonetta Longhi; Peter Nijkamp; Jacques Poot
  4. Hedonic Capital By Graham, Liam; Oswald, Andrew J.
  5. Unemployment and Psychological Well-Being By Nick Carroll
  6. The Distribution of Top Incomes in New Zealand By A. B. Atkinson; Andrew Leigh
  7. Hours of Work and Gender Identity: Does Part-time Work Make the Family Happier? By Alison Booth; Jan van Ours

  1. By: Martin Biewen (University of Frankfurt)
    Abstract: We derive the sampling variances of generalized entropy and Atkinson indices when estimated from complex survey data, and we show how they can be calculated straightforwardly by using widely available software. We also show that, when the same approach is used to derive variance formulae for the i.i.d. case, it leads to estimators that are simpler than those proposed before. Both cases are illustrated with a comparison of income inequality in Britain and Germany.
    Date: 2006–05–24
  2. By: Benno Torgler; Sascha L. Schmidt; Bruno S. Frey
    Abstract: Many studies have established that people care a great deal about their relative economic position and not solely, as standard economic theory assumes, about their absolute economic position. However, behavioral evidence is rare. This paper provides an empirical analysis on how individuals’ relative income position affects their performance. Using a unique data set for 1040 soccer players over a period of eight seasons, our analysis suggests that the larger the income differences within a team, the worse the performance of the soccer players is. The more the players are integrated in a particular social environment (their team), the more evident this negative effect is. Moreover, we find that positional effects lowering performance are stronger among high performing teams.
    Keywords: Relative income; positional concerns; envy; performance; social integration
    JEL: D00 D60 L83
    Date: 2006–05
  3. By: Simonetta Longhi (University of Essex); Peter Nijkamp (Vrije Universiteit Amsterdam); Jacques Poot (University of Waikato)
    Abstract: Immigration is a phenomenon of growing significance in many countries. Increasing social tensions are leading to political pressure to limit a further influx of foreign-born persons on the grounds that the absorption capacity of host countries has been exceeded and social cohesion threatened. There is also in public discourse a common perception of immigration resulting in economic costs, particularly with respect to wages and employment opportunities of the native born. This warrants a scientific assessment, using comparative applied research, of the empirical validity of the perception of a negative impact of immigration on labour market outcomes. Applying meta-analytic techniques to 165 estimates from 9 recent studies for various OECD countries, we assess in this paper whether immigration leads to job displacement among native workers. The ‘consensus estimate’ of the decline in native-born employment following a 1 percent increase in the number of immigrants is a mere 0.024 percent. However, the impact is somewhat larger on female than on male employment. The negative employment effect is also greater in Europe than in the United States. Furthermore, the results are sensitive to the choice of the study design. For example, failure to control for endogeneity of immigration itself leads to an underestimate of its employment impact.
    Keywords: Immigration; Employment; Meta-Analysis
    JEL: F22 J61
    Date: 2006–05–22
  4. By: Graham, Liam (University College London); Oswald, Andrew J. (University of Warwick)
    Abstract: This paper proposes a new way to think about happiness. It distinguishes between stocks and flows. Central to the analysis is a concept we call ‘hedonic capital’. The paper sets out a model of the dynamics of wellbeing in which bad life-shocks are smoothed by the drawing down of hedonic capital. The model fits the patterns found in the empirical literature: the existence of a stable level of wellbeing and a tendency to return gradually towards that level. It offers a theory of hedonic adaptation.
    Keywords: Adaptation ; wellbeing ; evolution ; happiness ; habituation
    JEL: D1
    Date: 2006
  5. By: Nick Carroll
    Abstract: Who records the largest drops in life satisfaction when they move into unemployment? Do men experience a larger drop in life satisfaction than women? Do Australians and Americans record a larger drop than Europeans? Using an Australian panel data-set (the Household Income and Labour Dynamics Survey of Australia), this paper finds that the unemployed in Australia report lower life satisfaction than observationally equivalent employed people (holding current income constant). Being currently unemployed is estimated to be equivalent to the loss of $42,100 annual income for men and $86,300 annual income for women. Thus, the drop in life satisfaction, after controlling for unobserved time invariant characteristics, associated with unemployment is larger for women than men. The impact of unemployment on life satisfaction is large compared to the drops in life satisfaction associated with changes in income and disability status. It is found that unemployment is less painful for men in Australia than for men in Germany and the United Kingdom. The paper hypothesises that the large fall in life satisfaction may be the result of a drop in life-time earnings, as well as a ‘psychological’ effect.
    Keywords: well-being, happiness, unemployment
    JEL: I31 J64
    Date: 2005–07
  6. By: A. B. Atkinson; Andrew Leigh
    Abstract: Using taxation statistics, we estimate the income share held by top income groups in New Zealand over the period 1921-2002. We find that the income share of the richest fell during the 1930s, rose again after World War II, and steadily declined from the late-1950s until the mid-1980s. From the mid-1980s until the mid-1990s, top income shares rose rapidly. We also estimate shares-within-shares, and find that the income share of the super-rich as a share of the rich followed a similar trajectory, rising sharply over the past quarter-century. Throughout the twentieth century, top income shares in New Zealand followed a very similar pattern to top income shares in Australia. We speculate that the reduction in top marginal tax rates, the deregulation of the economy, and the internationalisation of the market for English-speaking CEOs may have contributed to the recent rise in top income shares.
    Keywords: Inequality, New Zealand
    JEL: D31 N37
    Date: 2005–11
  7. By: Alison Booth; Jan van Ours
    Abstract: Taking into account inter-dependence within the family, we investigate the relationship between part-time work and happiness. We use panel data from the new Household, Income and Labor Dynamics in Australia Survey. Our analysis indicates that part-time women are more satisfied with working hours than full-time women. Partnered women’s life satisfaction is increased if their partners work full-time. Male partners’ life satisfaction is unaffected by their partners’ market hours but is increased if they themselves are working full-time. This finding is consistent with the gender identity hypothesis of Akerlof and Kranton (2000).
    Keywords: part-time work, happiness, gender identity.
    JEL: J22 I31 J16
    Date: 2005–12

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