nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2008‒05‒31
seven papers chosen by
Maximo Rossi
University of the Republic

  1. Creating a Consistent Poverty Measure Over Time Using NAS Procedures: 1996-2005 By Thesia I. Garner; Katherine S. Short
  2. Intergenerational Persistence in Income and Social Class: The Impact of Increased Inequality By Jo Blanden; Paul Gregg; Lindsey Macmillan
  3. Education and Fertility: Evidence from a Natural Experiment By Monstad, Karin; Propper, Carol; Salvanes, Kjell G
  4. Meet the Joneses: An Empirical Investigation of Reference Groups in Relative Income Position Comparisons By Markus Schaffner; Benno Torgler
  5. On the Link Between On-the-Job Training and Earnings Dispersion By Said Hanchane; Jacques Silber
  6. Income and Body Mass Index in Europe By Jaume Garcia; Climent Quintana
  7. The Emerging Aversion to Inequality: Evidence from Poland 1992–2005 By Grosfeld, Irena; Senik, Claudia

  1. By: Thesia I. Garner (U.S. Bureau of Labor Statistics); Katherine S. Short (U.S. Census Bureau)
    Abstract: This paper presents an experimental poverty measure and compares it to the current official measure, now more than 40 years old. The experimental measure is based on an approach, drawn from work by a National Academy of Sciences (NAS) expert Panel, to consistently define basic needs and family resources. The experimental thresholds are based on out-of-pocket spending by families on basic goods and services and are based on an “outflows” concept. The resource measure is based on an “inflows” concept and reflects money coming into the household that is available to meet one’s basic needs. The U.S. Consumer Expenditure Survey serves as the basis for the experimental thresholds and the Current Population Survey Annual Social and Economic Supplement serves as the basis for the resource measure. Results for 1996 to 2005 are reported with trends examined. An important finding is that increases in expenditures for shelter and utilities, captured in the new thresholds, suggest a greater increase in the number of families not able to meet basic needs than is reflected by the official poverty statistics.
    Keywords: NAS, Poverty, Consumer Exenditure Survey, Current Population Survey
    JEL: I32
    Date: 2008–05
  2. By: Jo Blanden; Paul Gregg; Lindsey Macmillan
    Abstract: Sociologists and economists reach quite different conclusions about how intergenerational mobility in the UK compares for those growing up in the 1970s and 1980s. Persistence in social class is found to be unchanged while family income is found to be more closely related to sons’ earnings for those born in 1970 compared to those born in the 1958. We investigate the reasons for the contrast and find that they are not due to methodological differences or data quality. Rather, they are explained by the increased importance of differences in income within social class for sons’ earnings in the second cohort. When economists measure intergenerational mobility their ideal is to see how permanent income is transmitted across generations. Our investigations show that the importance of within-social class differences in income mean that a single measure of income is a better predictor of permanent income status than fathers’ social class. We would not, therefore, expect the results for changes in intergenerational mobility based on income and social class to necessarily coincide.
    Keywords: Intergenerational mobility, Earnings, social class
    JEL: J62 I2 D31
    Date: 2008–03
  3. By: Monstad, Karin; Propper, Carol; Salvanes, Kjell G
    Abstract: In many developed countries a decline in fertility has occurred. This development has been attributed to greater education of women. However, establishing a causal link is difficult as both fertility and education have changed secularly. The contribution of this paper is to study the connection between fertility and education over a woman’s fertile period focusing on whether the relationship is causal. We study fertility in Norway and use an educational reform as an instrument to correct for selection into education. Our results indicate that increasing education leads to postponement of first births away from teenage motherhood towards having the first birth in their twenties and, for a smaller group, up to the age of 35-40. We do not find, however, evidence that total fertility falls as a result of greater education.
    Keywords: causal effect; education; female fertility
    JEL: I20 J13
    Date: 2008–05
  4. By: Markus Schaffner; Benno Torgler
    Abstract: It is generally understood that people care about their absolute income position, and several studies have in fact moved beyond this, showing that people also place considerable signifcance on their relative income position. However, empirical evidence about the behavioural consequences is scarce. We address this shortcoming by exploring the relative income effect in a (controlled) sporting contest environment. Specifically, we look at the pay-performance relationship by working with a large panel data set consisting of 26 NBA seasons. We explore how closeness affects positional concerns exploring in detail several potential reference groups. This allows checking of their relevance and of the scope of comparisons, a critical aspect in the literature that requires further investigation.
    Date: 2008–05
  5. By: Said Hanchane (Institut d’Economie Publique (IDEP), Marseille, and Laboratoire d’Economie et de Sociologie du Travail (LEST), Aix-en-Provence); Jacques Silber (Department of Economics, Bar-Ilan University, Israel, and Institut d’Economie Publique (IDEP), Marseille)
    Abstract: This paper is a first attempt to devise a methodology that allows estimating the exact impact of training on the dispersion of wages. It uses an approach originally proposed by Fields (2003) but extends it to the breakdown of inequality by population subgroups as well as to the case where the earnings function that is at the base of the analysis has to be adjusted for selectivity bias. The empirical illustration is based on a survey conducted in France at the end of the twentieth century.
    Keywords: earnings’ dispersion, France, labour market segmentation, on-the-job training, overlapping, selectivity bias, unobserved heterogeneity
    JEL: J24
    Date: 2007–09
  6. By: Jaume Garcia; Climent Quintana
    Abstract: The problem of obesity is alarming public health authorities around the world. Therefore, it is important to study its determinants. In this paper we explore the empirical relationship between household income and body mass index (BMI) in nine European Union countries. Our findings suggest that the association is negative for women, but we find no statistically significant relationship for men. However, we show that the different relationship for men and women appears to be driven by the negative relationship for women between BMI and individual income from work. We tentatively conclude that the negative relationship between household income and BMI for women may simply be capturing the wage penalty that obese women suffer in the labor market.
    Date: 2008–05
  7. By: Grosfeld, Irena (PSE); Senik, Claudia (University of Paris IV Sorbonne, PSE)
    Abstract: This paper provides an illustration of the changing tolerance for inequality in a context of radical political and economic transformation and rapid economic growth. We focus on the Polish transition experience, and explore individuals' self-reported attitudes. Using unusually long and frequent (monthly) representative surveys of the population, carried out by the Polish poll institute (CBOS) from 1992 to 2005, we identify a structural break in the relationship between income inequality and subjective well-being. The downturn in the tolerance for inequality (1997) coincides with increasing distrust of political elites.
    Keywords: inequality, subjective satisfaction, breakpoint, transition
    JEL: C25 D31 I30 P20 P26
    Date: 2008–05

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