nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2007‒11‒17
seven papers chosen by
Maximo Rossi
University of the Republic

  1. Labour market programmes and labour market outcomes: a study of the Swedish active labour market interventions By Adda, Jérôme; Costa Dias, Mònica; Meghir, Costas; Sianesi, Barbara
  2. Inequality, Democracy, Institutional Quality, and Fiscal Redistribution By Alberto Chong; Mark Gradstein
  3. Traditional Excluding Forces: A Review of the Quantitative Literature on the Economic Situation of Indigenous Peoples, Afro-Descendants, and People Living with Disability By Hugo Ñopo; Laura Ripani; Nestor Gandelman
  4. Occupational Training to Reduce Gender Segregation: The Impacts of ProJoven By Hugo Ñopo; Jaime Saavedra-Chanduvi; Miguel Robles
  5. Discrimination in Latin America: An Elephant in the Room? By Alberto Chong; Hugo Ñopo
  6. An Extension of the Blinder-Oaxaca Decomposition to a Continuum of Comparison Groups By Hugo Ñopo
  7. Poverty reduction: the paradox of the endogenous poverty line By De MESNARD, Louis

  1. By: Adda, Jérôme (Institute for Fiscal Studies); Costa Dias, Mònica (Institute for Fiscal Studies); Meghir, Costas (Institute for Fiscal Studies); Sianesi, Barbara (Institute for Fiscal Studies)
    Abstract: This paper assesses the impact of Swedish welfare-to-work programmes on labour market performance including wages, labour market status, unemployment duration and future welfare-to-work participation. We develop a structural dynamic model of labour supply which incorporates detailed institutional features of these policies and allows for selection on observables and unobservables. We estimate the model from a rich administrative panel data set and show that training programmes - which account for a large proportion of programmes - have a little effect on future outcomes, whereas job experience programmes have a beneficial effect.
    Keywords: Labour market programmes; labour market outcomes
    JEL: J65
    Date: 2007–10–25
  2. By: Alberto Chong (Inter-American Development Bank); Mark Gradstein (Ben Gurion University)
    Abstract: This paper studies the joint effect of economic and political inequalities on redistributive taxation and institutional quality. The theoretical model suggests that income inequality, coupled with political bias in favor of the rich, decreases redistribution and lowers institutional quality. The effect of the former is to increase productive investment, and the effect of the latter is to decrease it—with resulting ambiguous implications for economic growth. Testing these predictions empirically in a panel of countries, the paper finds that inequality has a negative effect on both institutional quality and redistribution, especially in non-democratic countries.
    Keywords: Inequality, institutions, redistribution
    JEL: D31 D90 E62 H11 O11
    Date: 2007–10
  3. By: Hugo Ñopo (Inter-American Development Bank); Laura Ripani (Inter-American Development Bank); Nestor Gandelman (Universidad ORT Uruguay)
    Abstract: Unequal income distribution in Latin America and the Caribbean is linked to unequal distributions of (human and physical) assets and differential access to markets and services. These circumstances, and the accompanying social tensions, need to be understood in terms of traditional fragmenting forces; the sectors of the population who experience unfavorable outcomes are also recognized by characteristics such as ethnicity, race, gender and physical disability. In addition to reviewing the general literature on social exclusion, this paper surveys several more specific topics: i) relative deprivation (in land and housing, physical infrastructure, health and income); ii) labor market issues, including access to labor markets in general, as well as informality, segregation and discrimination; iii) the transaction points of political representation, social protection and violence; and iv) areas where analysis remains weak and avenues for further research in the region.
    Keywords: Discrimination, Social exclusion, Latin America and the Caribbean
    Date: 2007–10
  4. By: Hugo Ñopo (Inter-American Development Bank); Jaime Saavedra-Chanduvi (World Bank); Miguel Robles (University of California)
    Abstract: This paper discusses program evaluation for ProJoven, the Peruvian youth labor training program. Complementing detailed fieldwork, the econometric work implements a two-stage matching procedure on propensity scores, gender and labor income. This allows identification of differentiated program impacts on males and females and attacks the problem of Ashenfelter’s Dips. The evaluation shows substantial differences in ProJoven’s impact for males and females. Eighteen months after participation in the program, employment rates for females improve by about 15 percent (while employment for males reduces by 11 percent), gender occupational segregation reduces by 30 percent, and females’ labor income improves by 93 percent (while males’ earnings increase by 11 percent). Nonetheless, gender equality promotion represents only 1.5 percent of ProJoven’s budget. These results suggest that labor-training programs that promote equal gender participation have disproportionately positive effects on outcomes for women trainees in a labor market with substantial gender differences.
    Date: 2007–10
  5. By: Alberto Chong (Inter-American Development Bank); Hugo Ñopo (Inter-American Development Bank)
    Abstract: This paper surveys evidence on discrimination in Latin America and shows that there is a widespread perception of discrimination, especially against the poor, the uneducated and those who lack connections. The channels through which discrimination occurs may be built on the basis of economic factors. However, while perception surveys may be informative, they are less than ideal at helping pinpoint the extent and mechanisms related. Recent experimental evidence suggests little room for discriminatory practices in the region. This puzzle, where individuals perceive discrimination is in the air, but few act discriminatorily, is consistent with an explanation about stereotyping that vanishes when information flows operate well.
    Keywords: Economic Experiments, Discrimination, Latin America
    JEL: J15 J16 J71 C93 O54
    Date: 2007–10
  6. By: Hugo Ñopo (Inter-American Development Bank)
    Abstract: This paper proposes an extension of the Blinder-Oaxaca decomposition from two to a continuum of comparison groups. The proposed decomposition is then estimated for the case of racial wage differences in urban Peru, exploiting a novel data set that allows the capturing of mestizaje (racial mixtures).
    Keywords: Blinder-Oaxaca decomposition, Race, Gender, Informality
    JEL: J1 J7 O17
    Date: 2007–10
  7. By: De MESNARD, Louis (LEG - CNRS UMR 5118 - Université de Bourgogne)
    Abstract: When evaluating poverty, the relative poverty line may be considered as a percentage of the median income or it may be a percentage of the average income. It is proved that, with a poverty line relative to the median income, reducing poverty may become less costly in proportion to the total income as poverty increases (measured by the Sen, the Sen-Shorrocks- Thon or the Foster-Greer-Thorbecke poverty indexes) by passing from a Lorenz concentration curve to another curve associated with more poverty. This is obviously a paradox, although a largely overlooked one. However, it is shown that the paradox vanishes if the poverty line is relative to the average income. The demonstration is both experimental (algebraic or numeric where necessary) based on families of non-intersecting concentration curves produced by various algebraic functions (power function, exponential function or elliptic function but also produced by the Pareto distribution) and it is analytic. One concludes that the poverty line should be relative to the average income rather than to the median income.
    Keywords: Poverty, poverty line, poverty indexes, median
    JEL: D31 D63 I32
    Date: 2007–11

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