nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2006‒06‒10
seven papers chosen by
Maximo Rossi
Universidad de la Republica

  1. Employment subsidies and substitutable skills : An equilibrium matching approach By Gabriele, CARDULLO; Bruno, VANDERLINDEN
  2. Does the Liberalization of Trade Advance Gender Equality in Schooling and Health? By T. Paul Schultz
  3. The Effects of Labor Market Policies in an Economy with an Informal Sector By James Albrecht; Lucas Navarro; Susan Vroman
  4. Gender Differences in Job Separation Rates and Employment Stability: New Evidence from Employer-Employee Data By Anders Frederiksen
  5. DAD: a Software for Poverty and Distributive Analysis By Abdelkrim Araar; Jean-Yves Duclos
  6. Happiness and the Human Development Index : The Paradox of Australia By Blanchflower, David G; Oswald, Andrew J
  7. How Does Marriage Affect Physical and Psychological Health? A Survey of the Longitudinal Evidence By Wilson, Chris M; Oswald, Andrew J

    Abstract: This search-matching model is well suited for an equilibrium evaluation of labor market policies. When those policies are targeted on some groups, the usual juxtaposition of labor markets is however a shortcoming. There is a need for a setting where workers’ productivity depends on employment levels in all markets. This paper provides such a theoretical setting. We first develop a streamlined model and then show that it can be extended to deal with interactions among various labor market and fiscal policies. Simulation results focus on the effects of employment subsidies and in-work benefits and on their interactions with the profile of unemployment benefits and with active labor market programs.
    Keywords: Unemployment; search-matching equilibrium; wage bargaining; reductions of social security contributions; unemployment insurance; labor market programs
    JEL: E24 J3 J41 J64 J65 J68
    Date: 2006–03–28
  2. By: T. Paul Schultz (Yale University and IZA Bonn)
    Abstract: This paper assesses the empirical relationship between the liberalization of international trade and the economic status of women. Although historically globalization is not generally linked to the advancement of women, several recent country studies find export led growth in middle and low income countries is associated with improvements in women’s employment opportunities. Does intercountry empirical evidence confirm this association across a wider range of countries, and suggest the mechanisms by which it operates? Measures of wages for men and women are an unreliable basis for study of gender inequality in many low income countries, and thus schooling and health are analyzed here as indicators of productivity and welfare and gender gaps. For a sample of 70 countries observed at five year intervals from 1965 to 1980, tariff, quota, and foreign exchange restrictions are found to be inversely associated with trade, and with the levels of education and health, especially for women. Natural resource exports, although providing foreign exchange for imports, appear to reduce investments in schooling and health, and delay the equalization of these human capital investments between men and women. Liberalization of trade policy is consequently linked in the cross section to increased trade, to greater accumulation of human capital, and to increased gender equality.
    Keywords: trade liberalization, schooling, health, gender equality
    JEL: I12 J16 I21
    Date: 2006–05
  3. By: James Albrecht (Georgetown University and IZA Bonn); Lucas Navarro (Queen Mary, University of London); Susan Vroman (Georgetown University and IZA Bonn)
    Abstract: In many economies, there is substantial economic activity in the informal sector, beyond the reach of government policy. Labor market policies, which by definition apply only to the formal sector, can have important spillover effects on the informal sector. The relative sizes of the informal and formal sectors adjust, the skill composition of the workforce in the two sectors changes, etc. In this paper, we build an equilibrium search and matching model to analyze the effects of labor market policies in an economy with an informal sector. Our model extends Mortensen and Pissarides (1994) by allowing for ex ante worker heterogeneity with respect to formal-sector productivity. We analyze the effects of labor market policy on informal- and formal-sector output, on the division of the workforce into unemployment, informal-sector employment and formal-sector employment, and on wages. Finally, our model allows us to examine the distributional implications of labor market policy; specifically, we analyze how labor market policy affects the distributions of wages and productivities across formal-sector matches.
    Keywords: search, matching, informal sector
    JEL: E26 J64 J65 O17
    Date: 2006–05
  4. By: Anders Frederiksen (Hoover Institution, Stanford University, Aarhus School of Business and IZA Bonn)
    Abstract: I analyze the job separation process to learn about gender differences in job separation rates and employment stability. An essential finding is that employer-employee data are required to identify gender differences in job separation probabilities because of labor market segregation. Failure to recognize this may potentially lead to statistical discrimination. Three important empirical results are obtained from the analysis. First, women have higher unconditional job separation probabilities. Second, there are no gender differences in job separation probabilities for employees working in similar workplaces. Finally, women’s employment stability is relatively low because they are more likely to move from a job and into unemployment or out of the labor force, and less likely to make job-to-job transitions.
    Keywords: job separations, employment stability, labor reallocation, employer-employee data
    JEL: C23 E24 J63
    Date: 2006–05
  5. By: Abdelkrim Araar; Jean-Yves Duclos
    Abstract: DAD is designed to facilitate the analysis and the comparisons of social welfare, inequality, poverty and equity across distributions of living standards and using disaggregated data. It is freely distributed. DAD's features include the estimation of a large number of indices and curves that are useful for distributive comparisons as well as the provision of various statistical tools to enable statistical inference. Many of the features are useful for estimating the impact of programs (and reforms to these programs) on poverty and equity.
    Keywords: Poverty, equity, inequality, statistical inference, software
    JEL: L86 I30 I32 D63 C12
    Date: 2006
  6. By: Blanchflower, David G (Dartmouth College); Oswald, Andrew J (Warwick University and Harvard University)
    Abstract: According to the well-being measure known as the U.N. Human Development Index, Australia now ranks 3rd in the world and higher than all other English-speaking nations. This paper questions that assessment. It reviews work on the economics of happiness, considers implications for policymakers, and explores where Australia lies in international subjective well-being rankings. Using new data on approximately 50,000 randomly sampled individuals from 35 nations, the paper shows that Australians have some of the lowest levels of job satisfaction in the world. Moreover, among the sub-sample of English-speaking nations, where a common language should help subjective measures to be reliable, Australia performs poorly on a range of happiness indicators. The paper discusses this paradox. Our purpose is not to reject HDI methods, but rather to argue that much remains to be understood in this area.
    Keywords: Well-being ; happiness ; HDI ; macroeconomics
    JEL: E6
    Date: 2005
  7. By: Wilson, Chris M (University of East Anglia); Oswald, Andrew J (University of Warwick and Harvard University)
    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
    Date: 2005

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