nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2006‒08‒12
four papers chosen by
Maximo Rossi
Universidad de la Republica

  1. Money and Mental Wellbeing: A Longitudinal Study of Medium-Sized Lottery Wins By Jonathan Gardner; Andrew J. Oswald
  2. Earnings Inequality and Market Work in Husband-Wife Families By John Pencavel
  3. Welfare Work Requirements with Paternalistic Government Preferences By Robert Moffitt
  4. Handedness and Earnings By Christopher S. Ruebeck; Joseph E. Harrington, Jr.; Robert Moffitt

  1. By: Jonathan Gardner (Watson Wyatt Worldwide); Andrew J. Oswald (University of Warwick and IZA Bonn)
    Abstract: One of the famous questions in social science is whether money makes people happy. We offer new evidence by using longitudinal data on a random sample of Britons who receive medium-sized lottery wins of between £1000 and £120,000 (that is, up to approximately U.S. $200,000). When compared to two control groups - one with no wins and the other with small wins - these individuals go on eventually to exhibit significantly better psychological health. Two years after a lottery win, the average measured improvement in mental wellbeing is 1.4 GHQ points.
    Keywords: psychological health, happiness, GHQ, income
    JEL: D1 I3
    Date: 2006–07
  2. By: John Pencavel (Stanford University and IZA Bonn)
    Abstract: Constructing pseudo-panel data from successive Current Population Surveys, this paper analyzes earnings inequality in husband and wife families over the life cycle and over time. Particular attention is devoted to the role of labor supply in influencing measures of earnings inequality. Compact and accurate descriptions of earnings inequality are derived that facilitate the analysis of the effect of the changing market employment of wives on earnings inequality. The growing propensity of married women to work for pay has mitigated the increase in family earnings inequality. Alternative measures of earnings inequality covering people with different degrees of attachment to the labor market are constructed. Inferences about the extent and changes in earnings inequality are sensitive to alternative labor supply definitions especially in the case of wives.
    Keywords: earnings inequality, married women's employment-population ratios, hours of work
    JEL: J31 J22 D63
    Date: 2006–07
  3. By: Robert Moffitt
    Abstract: Work requirements in means-tested transfer programs have grown in importance in the U.S. and in some other countries. The theoretical literature which considers their possible optimality generally operates within a traditional welfarist framework where some function of the utility of the poor is maximized. Here we consider a case where society is paternalistic and instead has preferences over the actual work allocations of welfare recipients. With this social welfare function, optimality of work requirements is possible but depends on the accuracy of the screening mechanism which assigns work requirements to some benefit recipients and not others. Numerical simulations show that the accuracy must be high for such optimality to occur. The simulations also show that earnings subsidies can be justified with the type of social welfare function used here.
    Date: 2005–06
  4. By: Christopher S. Ruebeck; Joseph E. Harrington, Jr.; Robert Moffitt
    Abstract: We examine whether handedness is related to performance in the labor market and, in particular, earnings. We find a significant wage effect for left-handed men with high levels of education. This positive wage effect is strongest among those who have lower than average earnings relative to those of similar high education. This effect is not found among women.
    JEL: J2
    Date: 2006–07

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