nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2007‒01‒23
five papers chosen by
Maximo Rossi
Universidad de la Republica

  1. Some New Evidence on Overtime Use, Total Job Compensation, and Wage Rates By Barkume, Anthony J.
  2. The Effect of Growth and Inequality in Incomes on Health Inequality: Theory and Empirical Evidence from the European Panel By Tom Van Ourti; Eddy Van Doorslaer; Xander Koolman
  3. Ethnic Persistence, Assimilation and Risk Proclivity By Holger Bonin; Amelie Constant; Konstantinos Tatsiramos; Klaus F. Zimmermann
  4. Education and Happiness: a Further Explanation to theEasterlin Paradox? By CASTRIOTA STEFANO
  5. Life Satisfaction and Economic Outcomes in Germany Pre- and Post-Unification By Richard A. Easterlin; Anke Zimmermann

  1. By: Barkume, Anthony J. (U.S. Bureau of Labor Statistics)
    Abstract: This paper is a replication of research reported by Steven Trejo in the 1991 American Economic Review. Trejo used labor force data from the seventies to assess the relevance of two contrasting views of the impact of overtime pay regulation. This paper reports research using a recent representative sample of U.S. private industry jobs that includes employer-reported measures of usual annual hours of overtime work and comprehensive measures of employer costs for job compensation. Comparisons are made between a set of jobs likely to be subject to U.S. overtime pay regulation—jobs paid hourly on 40 hour a week schedules—with another set of jobs that can offer overtime but are not likely to be subject to Federal overtime requirements—jobs on reduced hour schedules. The main findings of the research are: (1) higher wage rates are associated with a lower incidence of overtime work among the set of jobs with 40 hour work schedules, but not among the set of jobs with reduced hour schedules (2) in jobs using overtime work, more usual overtime work is associated with lower wage rates among the jobs with 40 hour work schedules, but not among the jobs on reduced hour schedules (3) higher “quasi-fixed” job compensation, such as employer health insurance costs, is associated with a higher incidence of overtime use. The paper also discusses some of the difficulties of interpreting these statistical results in the context of the labor market models considered by Trejo.
    Keywords: overtime work hours; hedonic wage curve
    JEL: J31 J33
  2. By: Tom Van Ourti (Erasmus Universiteit Rotterdam); Eddy Van Doorslaer (Erasmus Universiteit Rotterdam); Xander Koolman (Erasmus Universiteit Rotterdam)
    Date: 2006–12–12
  3. By: Holger Bonin; Amelie Constant; Konstantinos Tatsiramos; Klaus F. Zimmermann
    Abstract: The paper investigates the role of social norms as a determinant of individual attitudes by analyzing risk proclivity reported by immigrants and natives in a unique representative German survey. We employ factor analysis to construct measures of immigrants' ethnic persistence and assimilation. The estimated effect of these measures on risk proclivity suggests that adaptation to the attitudes of the majority population closes the immigrant-native gap in risk proclivity, while stronger commitment to the home country preserves it. As risk attitudes are behaviourally relevant, and vary by ethnic origin, our results could also help explain differences in economic assimilation of immigrants.
    Keywords: Risk attitudes, ethnic persistence, assimilation, second generation effects, gender
    JEL: D1 D81 F22 J15 J16 J31 J62 J82
    Date: 2006
    Abstract: Previous empirical research has found a positive impact of education on happiness on regional and worldwide scale. In this paper I analyze the effect of absolute income on human happiness by education level. Using data from the World Bank’s World Value Survey on more than 118,000 individuals I find that the higher the education level is, the less relevant the absolute income level (GDP per capita measured in PPP constant 2000 international USD) for self-declared life-satisfaction. Higher income makes everybody happier but, everything else being equal, the marginal utility of additional income is higher for less educated people. This might partly explain the Easterlin paradox. Although the GDP level has been constantly rising from the end of World War II onwards, the average life-satisfaction in Western Europe and the United States has remained almost constant. Furthermore, average happiness levels in rich and poor countries are very similar. Since the average education level has risen a lot over time and is much higher in advanced countries, this might contribute to explain why higher absolute income level has not implied higher life-satisfaction across countries and over time.
    Date: 2006–12
  5. By: Richard A. Easterlin (Department of Economics, University of Southern California); Anke Zimmermann (Department of Economics, University of Southern California)
    Abstract: Throughout Germany real income has trended upward since 1991, but life satisfaction has risen in the East, fallen in the West, and been fairly stable for Germany as a whole. By 1997 the initial excess of West over East Germany was cut by over one-half; since then, the differential has changed very little, and even edged slightly upward. The post-unification decline in West Germany appears to be a break with the pattern in the seven years prior to unification and occurs among Germans, European foreigners, and Turkish foreigners. After 1997, Turkish foreigners, unlike the others, continue to decline in life satisfaction, and by 2004, their initial excess over East Germans largely disappears. The life satisfaction of post-unification migrants from East Germany to the West is somewhat less than that of Germans and European foreigners in the West, but higher than that of Turkish foreigners and of Germans in East Germany. Migrants from the West to East Germany have life satisfaction about equal to that of Germans in that region. Trends and differences in overall life satisfaction are most systematically related to reports on satisfaction with income, next to the unemployment rate, and least of all, to absolute real income.
    Keywords: Subjective well-being, Domain satisfaction, German unification
    JEL: D60 I31 D1 O52
    Date: 2006–12

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