nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2008‒04‒04
six papers chosen by
Maximo Rossi
University of the Republic

  1. How Hurricanes Affect Employment and Wages in Local Labor Markets By Belasen, Ariel R.; Polachek, Solomon
  2. Lost in Transition: Life Satisfaction on the Road to Capitalism By Easterlin, Richard A.
  3. Does Employment Protection Help Immigrants? Evidence from European Labor Markets By Sa, Filipa
  4. Job Satisfaction and Happiness: New Evidence from Japanese Union Workers By Adrian de la Garza; Atsushi Sannabe; Katsunori Yamada
  5. How People perceive the Welfare State. A real effort experiment By Ottone, Stefania; Ponzano, Ferruccio
  6. Social exclusion and the gender gap in education By Lewis, Maureen; Lockheed, Marlaine

  1. By: Belasen, Ariel R. (Saint Louis University); Polachek, Solomon (Binghamton University, New York)
    Abstract: This paper adopts a generalized-difference-in-difference (GDD) technique outlined in Ariel R. Belasen and Solomon W. Polachek (IZA Discussion Paper #2976) to examine the impact of hurricanes on the labor market. We find that earnings of the average worker in a Florida county rises over 4% within the first quarter of being hit by a major Category 4 or 5 hurricane relative to counties not hit, and rises about 1¼% for workers in Florida counties hit by less major Category 1-3 hurricanes. Concomitantly, employment falls between 1½ and 5% depending on hurricane strength. On the other hand, the effects of hurricanes on neighboring counties have the opposite effects, moving earnings down between 3 and 4% in the quarter the hurricane struck. To better examine the specific shocks, we also observe sectoral employment shifts. Finally, we conduct a time-series analysis and find that over time, there is somewhat of a cobweb with earnings and employment rising and falling each quarter over a two-year time period.
    Keywords: exogenous shock, difference-in-difference estimation, local labor market, earnings, employment, sectoral shifts
    JEL: J23 J49 Q54 R11
    Date: 2008–03
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp3407&r=ltv
  2. By: Easterlin, Richard A. (University of Southern California)
    Abstract: In the transition from socialism to capitalism in Eastern Europe life satisfaction has followed the V-shaped pattern of GDP but failed to recover commensurately. In general, increased satisfaction with material living levels has occurred at the expense of decreased satisfaction with work, health, and family life. Disparities in life satisfaction have increased markedly with those hardest hit being the less educated and persons over age 30; women and men have suffered about equally. The asymmetric response of life satisfaction to decreases in GDP in transition countries and increases in GDP in non-transition countries is arguably due to loss aversion.
    Keywords: happiness, transition, capitalism, socialism, loss aversion
    JEL: I31 P5 P27 D60
    Date: 2008–03
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp3409&r=ltv
  3. By: Sa, Filipa (Bank of England)
    Abstract: High levels of employment protection reduce hiring and firing and have a theoretically ambiguous effect on the employment level. Immigrants, being new to the labor market, may be less aware of employment protection regulations and less likely to claim their rights, which may create a gap between the costs for employers of hiring a native relative to hiring an immigrant. This paper tests that hypothesis drawing on evidence for the EU and on two natural experiments for Spain and Italy. The results suggest that strict employment protection legislation (EPL) gives immigrants a comparative advantage relative to natives. Stricter EPL is found to reduce employment and reduce hiring and firing rates for natives. By contrast, stricter EPL has no effect on most immigrants and may even increase employment rates for those who have been in the country for a longer time.
    Keywords: employment protection, immigration
    JEL: J6
    Date: 2008–03
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp3414&r=ltv
  4. By: Adrian de la Garza (Yale University); Atsushi Sannabe (Kyoto University); Katsunori Yamada (Japan Society for the Promotion of Science and Osaka University)
    Abstract: This paper utilizes survey data of Japanese union workers to pro- vide new insights to the \happiness and economics" literature. A cru- cial item that distinguishes our empirical analyses from previous stud- ies is the use of data on workers' expectations of their peers' wages. With our data, we conrm that individuals report higher levels of subjective well-being (SWB) when they perceive that their wages are higher relative to their peers'. On the other hand, the traditional ap- proach in the literature constructs relative wages from Mincer equa- tions, thus presuming that individuals infer their peers' wages the way econometricians do. We argue that this method may be inappropriate. Moreover, we address the issue of endogeneity of our subjective refer- ence income measure employing an instrumental variables approach, and corroborate the causality from relative income to SWB. Addition- ally, we study the relationship between SWB measures and workers' individual characteristics, and compare our results with standard nd- ings in the literature for U.S. and European workers. In agreement with these studies, women and married individuals seem to be happier than their counterparts, men and single workers. However, we observe a U-shaped relationship between education and happiness, which con- trasts with ndings for U.S. and British workers. Finally, we attempt to explain these relationships in the context of the Japanese social background.
    Keywords: subjective well-being; relative utility; sub- jective reference income
    JEL: C25 D00 J28
    Date: 2008–03
    URL: http://d.repec.org/n?u=RePEc:osk:wpaper:0810&r=ltv
  5. By: Ottone, Stefania; Ponzano, Ferruccio
    Abstract: The main activity of a welfare state is to impose taxes in order to collect money to provide services. In this paper we want to test subjects’ perception of these two steps in the lab. In particular, using a real effort experiment as a tool, we aim at measuring both the labour supply and the consensus as the level of taxation and the efficiency of the welfare state vary.
    Date: 2008–03
    URL: http://d.repec.org/n?u=RePEc:uca:ucapdv:101&r=ltv
  6. By: Lewis, Maureen; Lockheed, Marlaine
    Abstract: Despite a sharp increase in the share of girls who enroll in, attend, and complete various levels of schooling, an educational gender gap remains in some countries. This paper argues that one explanation for this gender gap is the degree of social exclusion within these countries, as indicated by ethno-linguistic heterogeneity, which triggers both economic and psycho-social mechanisms to limit girls ' schooling. Ethno-linguistic heterogeneity initially was applied to explaining lagging economic growth, but has emerged in the literature more recently to explain both civil conflict and public goods. This paper is a first application of the concept to explain gender gaps in education. The paper discusses the importance of female education for economic and social development, reviews the evidence regarding gender and ethnic differences in schooling, reviews the theoretical perspectives of various social science disciplines that seek to explain such differences, and tests the relevance of ethnic and linguistic heterogeneity in explaining cross-country differences in school attainment and learning. The study indicates that within-country ethnic and linguistic heterogeneity partly explains both national female primary school completion rates and gender differences in these rates, but only explains average national learning outcomes when national income measures are excluded.
    Keywords: Primary Education,Education For All,Gender and Education,Population Policies,Disability
    Date: 2008–03–01
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:4562&r=ltv

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