nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2008‒02‒02
eleven papers chosen by
Maximo Rossi
University of the Republic

  1. Distributional Orderings: An Approach with Seven Flavours By Yoram Amiel; Frank A Cowell; Wulf Gaertner
  2. Income Distribution and Inequality By Frank A Cowell
  3. Redistributive Taxation and PublicExpenditures By Sanghamitra Bandyopadhyay; Joan Esteban;
  4. Human Capital Depreciation during Family-related Career Interruptions in Male and Female Occupations By Görlich Dennis; Grip Andries de
  5. Lags and Leads in Life Satisfaction : A Test of the Baseline Hypothesis By Andrew E. Clark; Ed Diener; Yannis Georgellis; Richard E. Lucas
  6. Do Reservation Wages Really Decline? : Some International Evidence on the Determinants of Reservation Wages By John T. Addison; Mário Centeno; Pedro Portugal
  7. Happiness and time allocation By Baucells, Manel; Sarin, Rakesh K.
  8. Unions, Training, and Firm Performance By Addison, John T.; Belfield, Clive R.
  9. Realizing the gains from trade : export crops, marketing costs, and poverty By Porto, Guido; Brambilla, Irene; Balat, Jorge
  10. Agro-manufactured export prices, wages and unemployment By Porto, Guido
  11. More Income Equality or Not? An Empirical Analysis of Individuals’ Preferences for Redistribution By María A. García-Valiñas; Roberto Fernández Llera; Benno Torgler

  1. By: Yoram Amiel; Frank A Cowell; Wulf Gaertner
    Abstract: We examine individuals' distributional orderings in a number of contexts. This is done by using a questionnaire-experiment that is presented to respondents in any one of seven "flavours" or interpretations of the basic distributional problem. The flavours include inequality, risk, social welfare and justice. The issue of personal involvement in the distributional comparison is explicitly addressed.
    Keywords: social welfare, inequality, justice, risk, questionnaire experiments.
    JEL: C13 D63
    Date: 2007–10
  2. By: Frank A Cowell
    Abstract: What are the principal issues on which research on income distributionand inequality focus? How might that focus shift in the immediate future?Prepared for the The Elgar Handbook of Socio-Economics.
    JEL: C13 D63
    Date: 2007–10
  3. By: Sanghamitra Bandyopadhyay; Joan Esteban;
    Abstract: We introduce a model of redistributive income taxation and publicexpenditure. Besides redistributing personal income by means of taxesand transfers, the government supplies goods and services. Thegovernment chooses the tax schedule that is found acceptable by thelargest share possible of the population. We show that there is a uniqueincome tax schedule that is universally acceptable. The progressivity ofthe income tax is shown to depend on the composition of the publicexpenditure and on the substitutability between the goods and servicessupplied by the government and the consumption goods privatelyobtained through the market. We test the empirical implications of themodel. Specifically, we use OECD data to observe the relationshipbetween marginal tax rates and the distribution over the taxpayers of thebenefits produced by the specific composition of the governmentexpenditure in the provision of goods and services. We confirm that forlower elasticities of substitution between public and private goods, thereis a negative relationship between marginal tax rates and pro-taxpayerbias,and for higher elasiticities, there is a positive relationship.
    Keywords: Government policy, Income Taxation, Public Expenditure
    Date: 2007–10
  4. By: Görlich Dennis; Grip Andries de (ROA rm)
    Abstract: Human Capital Depreciation during Family-related Career Inter¬ruptions in Male and Female Occupations This study investigates the relation between human capital depreciation during family-related career interruptions and occupational choice of women in the (West) German labour market. In contrast to other studies that do not explicitly focus on family-related career interruptions, we find that short-term human capital depreciation during these career interruptions is significantly lower in female occupations than in male occupations. This holds for both high- and low-skilled occupations. Our findings support the self-selection hypothesis with respect to occupational sex segregation, i.e. women might deliberately choose female occupations because of lower short-term wage penalties for family-related career interruptions. Moreover, we find that particularly men employed in high-skilled male occupations face large short-run as well as long run wage penalties when they have a family related career break.
    Keywords: education, training and the labour market;
    Date: 2007
  5. By: Andrew E. Clark; Ed Diener; Yannis Georgellis; Richard E. Lucas
    Abstract: We look for evidence of habituation in twenty waves of German panel data: do individuals, after life and labour market events, tend to return to some baseline level of well-being? Although the strongest life satisfaction effect is often at the time of the event, we find significant lag and lead effects. We cannot reject the hypothesis of complete adaptation to marriage, divorce, widowhood, birth of child, and layoff. However, there is little evidence of adaptation to unemployment for men. Men are somewhat more affected by labour market events (unemployment and layoffs) than are women, but in general the patterns of anticipation and adaptation are remarkably similar by sex.
    Keywords: Life satisfaction; anticipation; adaptation; baseline satisfaction; labour market and life events
    JEL: I31 J12 J13 J63 J64
    Date: 2008
  6. By: John T. Addison; Mário Centeno; Pedro Portugal
    Abstract: Using cross-country data, we investigate the determinants of reservation wages and their course over the jobless spell. Higher unemployment benefits lead to higher reservation wages. Further, again consistent with the basic search model, repeated observations on the same individual provide scant evidence of declining reservation wages.
    Keywords: Reservation wages, probability of reemployment, unemployment benefits, arrival rate of job offers
    JEL: J64 J65
    Date: 2008
  7. By: Baucells, Manel (IESE Business School); Sarin, Rakesh K. (UCLA Anderson School of Management)
    Abstract: We consider a resource allocation problem in which time is the principal resource. Utility is derived from time-consuming leisure activities, as well as from consumption. To acquire consumption, time needs to be allocated to income generating activities (i.e., work). Leisure (e.g., social relationships, family and rest) is considered a basic good, and its utility is evaluated using the Discounted Utility Model. Consumption is adaptive and its utility is evaluated using a reference-dependent model. Key empirical findings in the happiness literature can be explained by our time allocation model. Further, we examine the impact of projection bias on time allocation between work and leisure. Projection bias causes individuals to overrate the utility derived from income; consequently, individuals may allocate more than the optimal time to work. This misallocation may produce a scenario in which a higher wage rate results in a lower total utility.
    Keywords: Life satisfaction; Work; Leisure; Social comparison; Adaptation;
    Date: 2007–09–09
  8. By: Addison, John T. (University of South Carolina); Belfield, Clive R. (Queens College, CUNY)
    Abstract: The present paper uses a combination of workplace and linked employee-workplace data from the 1998 Workplace Employee Relations Survey and the 2004 Workplace Employment Relations Survey to examine the impact of unions on training incidence, training intensity/coverage, and training duration. It also examines the impact of unions and training on earnings and a measure of establishment labour productivity. In addition, the implications of training for the firm’s bottom line are evaluated. Union effects on training emerge as fairly subtle, and are more positive when using individual rather than plant-wide training data. A positive impact of training on earnings is detected in both the individual and plant-wide wage data, albeit only for the earlier survey. Consistent with other recent findings, the effects of union recognition on earnings are today rather muted, while union-training interaction effects vary greatly. Instrumenting training provides positive results for the labour productivity outcome and, in the case of the earlier survey, for the financial performance indicator as well. However, some negative effects of unions are now also detected.
    Keywords: labour productivity, union recognition, bargaining structure, employer-provided training, training Incidence, training intensity/coverage, training duration, earnings, financial performance
    JEL: J24 J33 J51
    Date: 2008–01
  9. By: Porto, Guido; Brambilla, Irene; Balat, Jorge
    Abstract: This paper explores the role of export costs in the process of poverty reduction in rural Africa. The authors claim that the marketing costs that emerge when the commercialization of export crops requires intermediaries can lead to lower participation into export cropping and, thus, to higher poverty . They test the model using data from the Uganda National Household Survey. The findings show that: i) farmers living in villages with fewer outlets for sales of agricultural exports are likely to be poorer than farmers residing in marketendowed villages; ii) market availability leads to increased household participation in export cropping (coffee, tea, cotton, fruits); and iii) households engaged in export cropping are less likely to be poor than subsistence-based households. The authors conclude that the availability of markets for agricultural export crops helps realize the gains from trade. This result uncovers the role of complementary factors that provide market access and reduce marketing costs as key building blocks in the link between the gains from export opportunities and the poor.
    Keywords: Transport Economics Policy & Planning,Markets and Market Access,Rural Poverty Reduction,Crops & Crop Management Systems
    Date: 2008–01–01
  10. By: Porto, Guido
    Abstract: This paper estimates the impacts of world agricultural trade liberalization on wages, employment and unemployment in Argentina, a country with positive net agricultural exports and high unemployment rates. In the estimation of these wage and unemployment responses, the empirical model allows for individual labor supply responses and for adjustment costs in labor demand. The findings show that a 10 percent increase in the price of agricultural exports would cause an increase in the Argentine employment probability of 1.36 percentage points, matched by a decline in the unemployment probability of 0.75 percentage points and an increase in labor market participation of 0.61 percentage points. Further, the unemployment rate would decl ine by 1.23 percentage points (by almost 10 percent). Expected wages would increase by 10.3 percent, an effect that is mostly driven by higher employment probabilities. This indicates that the bulk of the impacts of trade reforms originates in household responses in the presence of adjustment costs, and that failure to account for them may lead to significant biases in the welfare evaluation of trade policy.
    Keywords: Labor Markets,Labor Policies,Economic Theory & Research,,Markets and Market Access
    Date: 2008–01–01
  11. By: María A. García-Valiñas; Roberto Fernández Llera; Benno Torgler
    Abstract: Do people prefer a society with an extensive social welfare system with high taxes, or low taxes but lax redistributive policies? Although economists have for a long time investigated the trade-off mechanism between equity and efficiency, surprisingly little information is available about citizens’ preferences over the distribution of income in a society. The aim of this paper is reduce this shortcoming, investigating in an empirical study working with World Values Survey, what shapes individuals’ preferences for income equality in Spain. We present evidence that not only traditional economic variables are relevant to be considered, but also factors such as ideology, political interest, fairness perception about others or trust in institutions, are key determinants to understand preferences towards redistribution and equality. Furthermore, we also find that regional conditions affect the citizens’ preferences for income equality. Higher income inequality leads to stronger preferences for equality. On the other hand, there is the tendency that higher social expenditures reduce the preferences for income equality.
    Keywords: redistribution, inequality, welfare state, social capital, regional conditions
    JEL: H23 H53 I31
    Date: 2008–01–23

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