nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2007‒04‒14
seven papers chosen by
Maximo Rossi
University of the Republic

  1. Wage share variations in France and Germany since 1970: what does really matter? By Nicolas Canry; Arnaud Lechevalier
  2. On the Measurement of Polarisation: A Questionnaire Study By Yoram Amiel; Frank Cowell; Xavier Ramos
  3. Wage dispersion between and within plants: Sweden 1985-2000 By Oskar Nordström Skans; Per-Anders Edin; Bertil Holmlund
  4. The Reliability of Subjective Well-Being Measures By Alan B. Krueger; David A. Schkade
  5. Moving Down? Women's Part-time Work and Occupational Change in Britain 1991-2001 By Sara Connolly; Mary Gregory
  6. Modelling Vulnerability in the UK By Sanghamitra Bandyopadhyay; Frank Cowell
  7. Works councils and the anatomy of wages By Addison, John T.; Teixeira, Paulino; Zwick, Thomas

  1. By: Nicolas Canry (CES - Centre d'économie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I]); Arnaud Lechevalier (CES - Centre d'économie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I])
    Abstract: This paper refers to a few recent studies, which have focused on methodological issues related to the estimation of the wage share variations, to compare the evolutions in France and former West Germany since 1970. It is shown that the usual method overestimates the long run drop of wage share in both countries but that the magnitude and thus the contribution of different biases are quite different in France and Germany. However no bias can explain the sharp drop of wage share in Germany since 2001, which has to be analysed within the framework of the euro area.
    Keywords: Income distribution, Wage share, International comparison
    Date: 2007–04–06
  2. By: Yoram Amiel (Ruppin Academic Center); Frank Cowell (London School of Economics); Xavier Ramos (Universitat Autònoma de Barcelona and IZA)
    Abstract: Starting from the axiomatisation of polarisation contained in Esteban and Ray (1994) and Chakravarty and Majumdar (2001) we investigate wheather paople's perceptions of income polarisation is consistent with the key axioms. This is carried out using a questionnaire-experimental approach that combines both paper questionnaires and on-line interactive techniques. The responses suggest that important axioms which serve to differentiate polarisation from inquality - e.g. increased bipolarization - as well as other distinctive features of polarisation, i.e. the non-monotonous behaviour attributed to polarisation, are not widly accepted.
    Keywords: polarisation, income distribution, inequality
    JEL: D63
    Date: 2007–03
  3. By: Oskar Nordström Skans; Per-Anders Edin; Bertil Holmlund
    Abstract: The paper describes the Swedish wage distribution and how it correlates with worker mobility and plant-specific factors. It is well known that wage inequality has increased in Sweden since the mid-1980s. However, little evidence has so far been available as to whether this development reflects increased dispersion between plants, between individuals in the same plant, or both. We use a new linked employer-employee data set and discover that a trend rise in between-plant wage inequality account for the entire increase in wage dispersion. This pattern, which remains when we control for observable individual human capital characteristics, may reflect increased sorting of workers by skill levels and/or increased scope for rent sharing in local wage negotiations. Our discussion suggests that both factors may have become more important.
    JEL: J31 J63
    Date: 2007–04
  4. By: Alan B. Krueger; David A. Schkade
    Abstract: This paper studies the test-retest reliability of a standard self-reported life satisfaction measure and of affect measures collected from a diary method. The sample consists of 229 women who were interviewed on Thursdays, two weeks apart, in Spring 2005. The correlation of net affect (i.e., duration-weighted positive feelings less negative feelings) measured two weeks apart is 0.64, which is slightly higher than the correlation of life satisfaction (r=0.59). Correlations between income, net affect and life satisfaction are presented, and adjusted for attenuation bias due to measurement error. Life satisfaction is found to correlate much more strongly with income than does net affect. Components of affect that are more person-specific are found to have a higher test-retest reliability than components of affect that are more specific to the particular situation. While reliability figures for subjective well-being measures are lower than those typically found for education, income and many other microeconomic variables, they are probably sufficiently high to support much of the research that is currently being undertaken on subjective well-being, particularly in studies where group means are compared (e.g., across activities or demographic groups).
    JEL: C0 I20 J24 J28
    Date: 2007–04
  5. By: Sara Connolly; Mary Gregory
    Abstract: The UK`s Equal Opportunities Commission has recently drawn attention to the `hidden brain drain` when women working part-time are employed in jobs below their level of educational attainment and/or previous experience. These inferences were based on self-reporting. We give an objective and quantitative analysis of the nature of occupational change as women make the transition between full-time and part-time work. In order to analyse down-grading we construct an occupational classification which supports a ranking of occupations by the average level of qualification of those employed there on a full-time basis. We note that the incidence (and by implication the availability) of part-time work differs across occupations, and that occupational concentration is more acute for part-time work. Using a large sample of panel observations over the period 1991-2001 we show that women moving from full- to part-time work are approximately twice as likely to move down as up the occupational ladder, while those moving from part-time back to full-time work are twice as likely to be moving up than down the ranking. These effects are particularly marked when a change of employer is involved. Not all women are equally at risk of downgrading. It is particularly likely among women in management positions; over one-third of women in managerial or high-skilled clerical/administrative jobs downgrade when they move into part-time employment. But women in some occupations with higher specific skill requirements and where employees may have a stronger sense of vocation, notably teaching and nursing, are much less likely to experience downgrading. Nonetheless, 20% of teachers and nurses who change employer and switch into part-time work move downwards. These findings indicate a loss of economic efficiency through the underutilisation of the skills of many of the women who work part-time.
    Keywords: Female Employment, Part-time Work, Occupation, Life-cycle, Downgrade
    JEL: C23 C25 C33 C35 J16 J22 J62
    Date: 2007
  6. By: Sanghamitra Bandyopadhyay; Frank Cowell
    Abstract: In this paper we examine the concept of "vulnerability" (Townsend 1994) within the context of income mobility of the poor. We test for the dynamics of vulnerable households in the UK using Waves 1 - 12 of the British Household Panel Survey and find that, of three different types of risks that we test for, household-specific shocks and economy-wide aggregate shocks have the greatest impact on consumption, in comparison to shocks to the income stream. Quantile-specific estimates reveal specific quantiles, particularly those around the poverty line which are most susceptible to be vulnerable to shocks to the income stream. The estimates are found to be robust to household composition and year-specific shocks.
    Keywords: Income Variability, Vulnerability, Income Dynamics, BHPS
    JEL: D1 D31 I32
    Date: 2007
  7. By: Addison, John T.; Teixeira, Paulino; Zwick, Thomas
    Abstract: This paper provides the first full examination of the effect of German works councils on wages using matched employer-employee data (specifically, the LIAB for 2001). We find that works councils are associated with higher earnings. The wage premium is around 11 percent (and is higher under collective bargaining). This result persists after taking account of worker and establishment heterogeneity and the endogeneity of works council presence. Next, using quantile regressions, we find that the works council premium is decreasing with the position of the worker in the wage distribution. And it is also higher for women than for men. Finally, the works council wage premium is associated with longer job tenure. This suggests that some of the premium is a noncompetitive rent, even if works council voice may dominate its distributive effects insofar as tenure is concerned.
    Keywords: matched employer-employee data, rent seeking, tenure, wages, wage distribution, works councils
    JEL: J31 J50
    Date: 2006

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