nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2007‒11‒10
three papers chosen by
Maximo Rossi
University of the Republic

  1. The Dynamics of Growth, Poverty, and Inequality: A Panel Analysis of Regional Data from the Philippines and Thailand By Kyosuke Kurita; Takashi Kurosaki
  2. Labor Adjustment Costs in a Panel of Establishments: A Structural Approach By João Miguel Ejarque; Pedro Portugal
  3. "For One More Year with You": Changes in Compulsory Schooling, Education and the Distribution of Wages in Europe By Giorgio Brunello; Margherita Fort; Guglielmo Weber

  1. By: Kyosuke Kurita; Takashi Kurosaki
    Abstract: We propose a new methodological framework to empirically analyze the dynamics of growth, poverty, and inequalitythat incorporates the fact that the entire distribution of a welfare indicator, say, real percapita consumption, changes over time, and that empirical variables for growth, poverty, and inequality are often compiled from the distribution of the welfare indicator. Empirical models derived from this framework are applied to a unique panel dataset of provinces in the Philippines (1985-2003) and Thailand (1988-2004), compiled from microdata on household expenditures. The system GMM estimation results suggest that inequality reduced the subsequent growth rate of percapita consumption in both countries and differences in inequality explain a substantial portion of the Philippine-Thai difference in growth and poverty reduction during the late 1980s and the 1990s.
    Keywords: poverty, inequality, pro-poor growth, convergence, Thailand, the Philippines
    JEL: I32 O15
    Date: 2007–10
  2. By: João Miguel Ejarque (University of Essex); Pedro Portugal (Bank of Portugal, Universidade Nova de Lisboa and IZA)
    Abstract: This paper estimates a structural model of the employment decision of the firm. Our establishment level data displays an extreme degree of rigidity in that employment levels are largely constant throughout our sample. This can be due to the fact that establishments face large shocks but also large adjustment costs, or alternatively that they incur no adjustment costs but that shocks are negligible. Given our identifying assumptions, we find that rigidity is due to adjustment costs and not to the shock process. We further find that these costs reduce the value of the firm as much as 5%. Finally, small fixed costs of adjustment have a large impact on entry and exit job flows.
    Keywords: adjustment costs, employment, rigidity
    JEL: C33 C41 E24 J23
    Date: 2007–10
  3. By: Giorgio Brunello (University of Padova, CESifo and IZA); Margherita Fort (European University Institute and University of Padova); Guglielmo Weber (University of Padova, CEPR and IFS)
    Abstract: Using data from 12 European countries and the variation across countries and over time in the changes of minimum school leaving age, we study the effects of the quantity of education on the distribution of earnings. We find that compulsory school reforms significantly affect educational attainment, especially among individuals belonging to the lowest quantile of the distribution of ability. Contrary to previous findings in the relevant literature, we find that additional education reduces wage inequality below median income and increases it above median income. There is also evidence in our data that education and ability are complements in the production of human capital and earnings. While these results support an elitist education policy - more education to the brightest, they also suggest that investing in the less fortunate but bright could payoff both on efficiency and on equity grounds.
    Keywords: education reforms, distribution of earnings, Europe
    JEL: J24
    Date: 2007–10

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