nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2006‒06‒24
four papers chosen by
Maximo Rossi
Universidad de la Republica

  1. The income of the Swedish baby boomers By Flood, Lennart; Klevmarken, Anders; Mitrut, Andreea
  2. The Gender Wage Gap in Chile 1992-2003 from a Matching Comparisons Perspective By Hugo Nopo
  3. Fertility and its Consequence on Family Labour Supply By Jungho Kim; Arnstein Aassve
  4. Robust Multidimensional Poverty Comparisons with Discrete Indicators of Well-being By Jean-Yves Duclos; David Sahn; Stephen D. Younger

  1. By: Flood, Lennart (Department of Economics, School of Business, Economics and Law, Göteborg University); Klevmarken, Anders (Department of Economics, Uppsala University); Mitrut, Andreea (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: This paper study the income of Swedish households belonging to the baby boom generation, i.e those born in the 1940-50. An international comparison as well as an historical presentation of income patterns is given. However, the main purpose is to generate the future income of the baby boom generation as they get older. A major result is that the income standard of the young-old will become much higher than that of the very old. If our simulations bear the stamp of realism they suggest that we will see new and large poverty in Sweden among the very old in the future. The pension system contributes to this result. The "front loaded" design gives with its reduced wage indexation a higher income immediately after retirement but a much lower income at older age. From this perspective it is unfortunate that so much attention is given to the discussion of replacement rates. The replacement rate, although interesting in itself, completely miss the long run effect and just provides a comparison of incomes shortly after with incomes before retirement. If we instead focus on the relative income of older pensioners the results become quite different. Our results challenge the conception of a sustainable pension system. If the relative income of older pensioner’s drops and at the same time expenditures for health and care increase, one might wonder how the old in our society will make both ends meet. If pensions become too small to meet "minimum standards" the requirement of financial sustainability of the pension system results in an increasing financial burden on other parts of the general social protection system. <p>
    Keywords: Pensions; Replacement rates; Disposable income; Poverty rates
    JEL: H24 H31 H55
    Date: 2006–06–09
  2. By: Hugo Nopo (Inter-American Development Bank)
    Abstract: This paper analyzes the evolution of the gender wage gap in Chile during the period 1992 to 2003 using the decomposition approach developed in Ñopo (2004). This approach, which decomposes the wage gap into four additive elements, stresses the need for comparisons inside the common support for the distributions of observable characteristics of individuals. Also, it allows an analysis of the distribution of unexplained differences in wages (not only the averages). The results suggest that, besides the high educational attainment of females, there are noticeable gender wage gaps in Chile favoring males. These unexplained differences in wages, which move around 25 percent of average female wages, show no clear tendency during the period of analysis. The wage gaps are higher at the highest percentiles of the wage distribution, among those with higher educational attainment, among directors and among part-time workers. The technique also detects some evidence of a glass-ceiling effect in Chilean labor markets, such that for some occupations and particular combinations of observable characteristics, there are highly paid males but not females.
    Keywords: Matching; Non-parametric; Gender Wage Gap; Latin America
    JEL: C14 D31 J16 O54
    Date: 2006–05
  3. By: Jungho Kim (Vienna Institute of Demography and IZA Bonn); Arnstein Aassve (ISER, University of Essex)
    Abstract: While a large body of literature focuses on how fertility affects female labour market participation, there are relatively few studies that examine the effect of fertility on male labour market participation. Even if the burden of child care falls mainly on women, an exogenous increase in fertility is likely to change the optimal allocation of time, therefore, the labour supply decision of both female and male in a household. This paper analyses how an exogenous increase in fertility affects labour market participation of men and women in Indonesia - a country that has seen dramatic changes in the labour market over recent decades. The finding is that women reduce their working hours in response to the higher fecundity in both rural and urban areas in Indonesia. On the other hand, the higher fecundity leads to men’s increasing their working hours only in rural areas. The higher degree of specialization in response to fertility in rural areas is driven mainly by the differences in the cost of childcare rather than the characteristics of occupation or household bargaining power.
    Keywords: fertility, labour supply, division of labour, Indonesia
    JEL: J13 J22 J24
    Date: 2006–06
  4. By: Jean-Yves Duclos; David Sahn; Stephen D. Younger
    Abstract: This paper provides a method to make robust multidimensional poverty comparisons when one or more of the dimensions of well-being or deprivation is discrete. Sampling distributions for the statistics used in these poverty comparisons are provided. Several examples show that the methods are both practical and interesting in the sense that they can provide richer information than do univariate poverty comparisons.
    Keywords: Multidimensional Poverty, Stochastic Dominance
    JEL: D31 D63 I31 I32
    Date: 2006

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