nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2008‒07‒30
nine papers chosen by
Maximo Rossi
University of the Republic

  1. The Geography of Economics and Happiness By Luca Stanca
  2. Flexicurity and Workers Well-Being in Europe: Is Temporary Employment Always Bad? By Federica Origo; Laura Pagani
  3. Happiness Dynamics with Quarterly Life Event Data By Frijters, Paul; Johnston, David W.; Shields, Michael A.
  4. Scale, Diversity, and Determinants of Labour Migration in Europe By Zaiceva, Anzelika; Zimmermann, Klaus F.
  5. New Estimates of the Effects of Minimum Wages in the U.S. Retail Trade Sector By Addison, John T.; Blackburn, McKinley L.; Cotti, Chad D.
  6. How does the marriage market clear? An empirical framework By Aloysius Siow
  7. Qual Linha de Pobreza? Uma Resposta a Reddy By Martin Ravallion
  8. Top Incomes in Norway By Rolf Aaberge and Anthony B. Atkinson
  9. German Works Councils and the Anatomy of Wages By John T. Addison; Paulino Teixeira; Thomas Zwick

  1. By: Luca Stanca
    Abstract: This paper investigates the spatial pattern of the e®ects of eco- nomic conditions on subjective well-being, using a large sample of in- dividuals from 81 countries throughout the world. We ¯nd evidence of substantial spatial heterogeneity and spatial dependence in the cross- country distribution of the e®ects of income and unemployment on happiness. We examine the impact of macroeconomic conditions on country-level sensitivities of subjective well-being to microeconomic conditions. The e®ect of income on well-being is found to be signif- icantly stronger in countries with lower GDP per capita and higher unemployment rate. The e®ect of unemployment on well-being is in- stead signi¯cantly stronger in countries with higher GDP per capita and higher unemployment rate.
    Keywords: subjective well-being, economic geography, spatial econometrics
    JEL: A12 D12 I31
    Date: 2008–06
  2. By: Federica Origo; Laura Pagani
    Abstract: In this paper we study the effect of a micro-level measure of flexicurity on workers job satisfaction. To this aim, using micro data from the Eurobarometer survey, we split workers in different groups according not only to their employment contract (i.e. permanent or temporary), but also to their perceived job security, and we evaluate differences in job satisfaction between these groups. After controlling for the potential endogeneity of job type, results show that what matters for job satisfaction is not just the type of contract, but mainly the perceived job security, which may be independent of the type of contract. The combination “temporary but secure job” seems preferable with respect to the combination “permanent but insecure job”, pointing out that the length of the contract may be less relevant if the worker perceives that he/she is not at risk of becoming unemployed. Our main conclusions are robust to the use of alternative definitions of workers’ types and they generally hold within different welfare regimes and also for different aspects of job satisfaction, mainly for those more related to job security.
    Keywords: Flexicurity, Job Satisfaction, POLS
    JEL: J28 J81
    Date: 2008–06
  3. By: Frijters, Paul (Queensland University of Technology); Johnston, David W. (University of Melbourne); Shields, Michael A. (University of Melbourne)
    Abstract: This paper addresses the question of when and to what extent individuals are affected by major positive and negative life events, including changes in financial situation, marital status, death of child or spouse and being a victim of crime. The key advantage of our data is that we are able to identify these events on a quarterly basis rather than on the yearly basis used by previous studies. We find evidence that life events are not randomly distributed, that individuals to a large extent anticipate major events and that they quickly adapt. These effects have important implications for the calculation of monetary values needed to compensate individuals for life events such as crime or death of spouse. We find that our new valuation methodology that incorporates these dynamic factors produces considerably smaller compensation valuations than those calculated using the standard approach.
    Keywords: life satisfaction, life events, adaptation, compensation
    JEL: I0
    Date: 2008–07
  4. By: Zaiceva, Anzelika (IZA); Zimmermann, Klaus F. (IZA, DIW Berlin and Bonn University)
    Abstract: While global migration is increasing, internal EU migration flows have remained low. This paper contributes to a better understanding of the determinants and scale of European migration. It surveys previous historical experiences and empirical findings including the recent Eastern enlargements. The determinants of migration before and after the 2004 enlargement and in the EU15 and EU10 countries are analysed using individual data on migration intentions. In addition, perceptions about the size of migration after the enlargement are studied. The potential emigrant from both old and new EU member states tends to be young, better educated and to live in larger cities. People from the EU10 with children are less likely to move after enlargement in comparison to those without family. There exists a correlation between individual perceptions about the scale of migration and actual flows. Better educated and left-oriented individuals in the EU15 are less likely to perceive these flows as important.
    Keywords: migration, EU Eastern enlargement, migration intentions, determinants of labour migration
    JEL: F22 J15 J61
    Date: 2008–07
  5. By: Addison, John T. (University of South Carolina); Blackburn, McKinley L. (University of South Carolina); Cotti, Chad D. (University of Wisconsin, Oshkosh)
    Abstract: This paper examines the impact of minimum wages on earnings and employment in selected branches of the retail-trade sector, 1990-2005, using county-level data on employment and a panel regression framework that allows for county-specific trends in sectoral outcomes. We focus on particular subsectors within retail trade that are identified as particularly low-wage. We find little evidence of disemployment effects once we allow for geographic-specific trends. Rather, in many sectors the evidence suggests modest (but robust) positive employment effects. One explanation we consider for these ‘perverse’ effects is that minimum wages may have significant influences on product demand shifts.
    Keywords: minimum wages, wages and employment, county-level data, spatial trends, border county analysis, unions, right-to-work states
    JEL: J23 J38
    Date: 2008–07
  6. By: Aloysius Siow
    Abstract: The paper surveys the Choo Siow (CS) marriage matching model and its extensions. CS derives a behavioral marriage matching function. The collective model of intra-household allocations can be integrated into this framework. Spousal labor supplies respond to changing marriage market conditions. Marriage market tightness, the ratio of unmarried type i men to unmarried type j women is a sufficient statistic for marriage market conditions for those types of individuals. The hypothesis that spousal labor supplies vary to equilibrate the marriage market has overidentifying restrictions. The framework extends to a dynamic marriage matching environment. Empirically, this paper shows how the famine caused by the great leap forward in Sichuan affected the marital behavior of famine born cohorts. Marriage market tightness is shown to be a useful statistic for summarizing marriage market conditions in the United States. Marriage market conditions in the contemporary United States primarily affect spousal labor force participation rather than hours of work.
    Keywords: marriage, matching, collective model
    JEL: J
    Date: 2008–07–12
  7. By: Martin Ravallion (World Bank)
    Abstract: Há alguns anos um consenso surgiu na comunidade em desenvolvimento acerca da idéia de uma linha da pobreza internacional por volta de 1 dólar diário com base na paridade do poder de compra. Este se tornou o foco do primeiro Objetivo de Desenvolvimento para o Milênio (ODM), que estabele a redução pela metade da incidência da pobreza de 1990 até 2015, considerando a linha de pobreza de 1 dólar diário. (...)
    Keywords: Qual Linha de Pobreza? Uma Resposta a Reddy
    Date: 2008–07
  8. By: Rolf Aaberge and Anthony B. Atkinson (Statistics Norway)
    Date: 2008–07
  9. By: John T. Addison (QueenÕs University and The Rimini The Rimini Center for Economic Analysis, Italy); Paulino Teixeira (Universidade de Coimbra, Portugal); Thomas Zwick (Centre for European Economic Research (ZEW), Germany)
    Abstract: This paper provides a comprehensive examination of the effect of German works councils on wages, using matched employer-employee data from the German LIAB for 2001. In general, we find that works councils are associated with higher earnings, even after accounting for worker and establishment heterogeneity. At this level, the works council premium exceeds the collective bargaining mark-up, and is modestly higher in the presence of collective bargaining once we account for worker selection into the two institutions. More specifically, works councils do seem to benefit women relatively and to build on collective bargaining in this regard. They also seem to favor foreign, east-German, and service-sector workers although the effects of collective bargaining are not always reinforcing. The evidence from quantile regressions suggests that only in conjunction with collective bargaining is the narrowing influence of works councils really clear-cut. The above findings pertain to workers in all plants. Once we consider smaller establishments with 21-100 employees, however, each of these results is further qualified, beginning with the effect on wage levels where premia are now only observed in conjunction with collective bargaining.
    Keywords: works councils, collective bargaining coverage, matched employer-employee data, wages, wage distribution.
    JEL: J31 J50
    Date: 2008–01

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