nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2007‒09‒02
five papers chosen by
Maximo Rossi
University of the Republic

  1. Inequality and the GB2 Income Distribution By Stephen P. Jenkins
  2. Using the P90/P10 Index to Measure US Inequality Trends with Current Population Survey Data: A View from Inside the Census Bureau Vaults By Richard V. Burkhauser; Shuaizhang Feng; Stephen P. Jenkins
  3. Long term effects of public policy for displaced workers in Sweden – shipyard workers in the West and miners in the North By Ohlsson, Henry; Storrie, Donald
  4. Optimal Taxation and Monopsonistic Labor Market: Does Monopsony Justify the Minimum Wage? By Pierre Cahuc; Guy Laroque
  5. Occupational Choice of High Skilled Immigrants in the United States By Barry R. Chiswick; Sarinda Taengnoi

  1. By: Stephen P. Jenkins (Institute for Social and Economic Research)
    Abstract: The generalized entropy class of inequality indices is derived for Generalized Beta of the Second Kind (GB2) income distributions, thereby providing a full range of top-sensitive and bottom-sensitive measures. An examination of British income inequality in 1994/95 and 2004/05 illustrates the analysis.
    Keywords: Dagum distribution, Singh-Maddala distribution, generalized Beta of the second kind distribution, generalized entropy indices, inequality
    Date: 2007–05
  2. By: Richard V. Burkhauser (Cornell University); Shuaizhang Feng (Shanghai University of Finance and Economics); Stephen P. Jenkins (Institute for Social and Economic Research)
    Abstract: The March Current Population Survey (CPS) is the primary data source for estimation of levels and trends in labor earnings and income inequality in the USA. Time-inconsistency problems related to top coding in theses data have led many researchers to use the ratio of the 90th and 10th percentiles of these distributions (P90/P10) rather than a more traditional summary measure of inequality. With access to public use and restricted-access internal CPS data, and bounding methods, we show that using P90/P10 does not completely obviate time-inconsistency problems, especially for household income inequality trends. Using internal data, we create consistent cell mean values for all top-coded public use values that, when used with public use data, closely track inequality trends in labor earnings and household income using internal data. But estimates of longer-term inequality trends with these corrected data based on P90/P10 differ from those based on the Gini coefficient. The choice of inequality measure matters.
    Keywords: earnings inequality, income inequality, inequality, top coding
    Date: 2007–06
  3. By: Ohlsson, Henry (Department of Economics); Storrie, Donald (European Foundation)
    Abstract: The objective of this paper is to study the long term effects of public policy measures for displaced workers. Our focus is on the individuals affected by the cutbacks at the LKAB iron ore mines in northern Sweden in 1983 and the closure of the Uddevalla Shipyard in western Sweden in 1985. These workers not only experienced job loss, but were also the target group for extraordinary labour market policies. Using register data from Statistics Sweden (labour market status, earnings, education etc.), we follow those affected until 1999. We compare this with the corresponding development of a large sample other workers who lost their jobs because of plant closures in 1987–88 but who did not receive extraordinary measures. Estimations of the net effect of the extraordinary measures find that they did have positive long-term effects for the displaced shipyard workers and miners. They have higher employment, not higher unemployment, and higher earnings than the comparison group.
    Keywords: involuntary job loss; displacement; plant closures; cutbacks; labour market policy; employment; unemployment; earnings
    JEL: J65 J68 L62 L72
    Date: 2007–08–28
  4. By: Pierre Cahuc (University of Paris 1, CREST-INSEE, CEPR and IZA); Guy Laroque (CREST-INSEE and IZA)
    Abstract: We analyze optimal taxation in an economy with monopsonistic labor markets. The individuals, whose only decisions are whether to work, or not, have heterogeneous productivities and opportunity costs of work. Given its preferences for redistribution, the government, which does not observe the opportunity costs of work, chooses a tax scheme implementing the second best allocation. We compare the optima in the competitive and monopsonistic environments. We find that the government can always implement the second best allocation of the competitive economy in the monopsonistic environment. The optimal tax schedule comprises employment subsidies financed by taxes on profits. In this setup, there is no room for a minimum wage.
    Keywords: minimum wage, optimal taxation, monopsony
    JEL: H31 J30 J42
    Date: 2007–07
  5. By: Barry R. Chiswick (University of Illinois at Chicago and IZA); Sarinda Taengnoi (Western New England College)
    Abstract: This paper explores the impact of English language proficiency and country of origin on the occupational choice of high-skilled immigrants in the U.S. using the 2000 Census. The findings reveal that high-skilled immigrants with limited proficiency in English, or whose mother tongue is linguistically distant from English, are more likely to be in occupations in which English communication skills are not very important, such as computer and engineering occupations. Moreover, the degree of exposure to English prior to immigration is found to have little influence on selecting occupations in the U.S. The paper also shows that immigrants from some origins with little exposure to English and whose native language is far from English tend to be in some "speaking-intensive" occupations, in particular social services occupations. These occupations may not require workers to be fluent in English if they mostly provide services to immigrants from their same linguistic background.
    Keywords: immigrants, English proficiency, occupation, high-skilled workers
    JEL: J15 J24 J61
    Date: 2007–08

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