nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2008‒08‒06
eight papers chosen by
Maximo Rossi
University of the Republic

  1. Happiness Inequality in the United States By Stevenson, Betsey; Wolfers, Justin
  2. Measuring well-being across Europe: Description of the ESS Well-being Module and preliminary findings By Felicia A. Huppert; Nic Marks; Andrew E. Clark; Johannes Siegrist; Alois Stutzer; Joar Vittersø; Morten Wahrendorf
  3. The Socio-Economic Gap in University Drop Out By N Powdthavee; A Vignoles
  4. What Happens to People After Moderate and Serious Disability? A Longitudianal Study of Satisfaction with Different Areas of Life By N Powdthavee;
  5. Mental Health of Parents and Life Satisfaction of Children: A Within-Family Analysis of Intergenerational Transmission of Well-Being By N Powdthavee; A Vignoles
  6. Do Women Pay More for Credit? Evidence from Italy By Alberto F. Alesina; Francesca Lotti; Paolo Emilio Mistrulli
  7. Labor Supply: Are the Income and Substitution Effects Both Large or Both Small? By Miles S. Kimball; Matthew D. Shapiro
  8. The Wage Gap between Francophones and Anglophones: A Canadian Perspective, 1970 to 2000 By David Albouy

  1. By: Stevenson, Betsey (Wharton School, University of Pennsylvania); Wolfers, Justin (Wharton School, University of Pennsylvania)
    Abstract: This paper examines how the level and dispersion of self-reported happiness has evolved over the period 1972-2006. While there has been no increase in aggregate happiness, inequality in happiness has fallen substantially since the 1970s. There have been large changes in the level of happiness across groups: Two-thirds of the black-white happiness gap has been eroded, and the gender happiness gap has disappeared entirely. Paralleling changes in the income distribution, differences in happiness by education have widened substantially. We develop an integrated approach to measuring inequality and decomposing changes in the distribution of happiness, finding a pervasive decline in within-group inequality during the 1970s and 1980s that was experienced by even narrowly-defined demographic groups. Around one-third of this decline has subsequently been unwound. Juxtaposing these changes with large rises in income inequality suggests an important role for non-pecuniary factors in shaping the well-being distribution.
    Keywords: happiness, subjective well-being, inequality
    JEL: D3 D63 I3 J1 Y1
    Date: 2008–07
  2. By: Felicia A. Huppert; Nic Marks; Andrew E. Clark; Johannes Siegrist; Alois Stutzer; Joar Vittersø; Morten Wahrendorf
    Abstract: It has become customary to judge the success of a society through the use of objective indicators, predominantly economic and social ones. Yet in most developed nations, increases in income, education and health have arguably not produced comparable increases in happiness or life satisfaction. While much has been learned from the introduction of subjective measures of global happiness or life satisfaction into surveys, significant recent progress in the development of high-quality subjective measures of personal and social well-being has not been fully exploited. This paper describes the development of a set of well-being indicators which were included in Round 3 of the European Social Survey. This well-being Module seeks to evaluate the success of European countries in promoting the personal and social well-being of their citizens. In addition to providing a better understanding of domain-specific measures, such as those relating to family, work and income, the design of the Well-being Module recognises that advancement in the field requires us to look beyond measures which focus on how people feel (happiness, pleasure, satisfaction) to measures which are more concerned with how well they function. This also shifts the emphasis from relatively transient states of well-being to measures of more sustainable well-being. The ESS Well-being Module represents one of the first systematic attempts to create a set of policy-relevant national well-being accounts.
    Date: 2008
  3. By: N Powdthavee; A Vignoles
    Abstract: It has been shown in the recent literature on widening participation that in England a disadvantaged pupil has as much a chance of attending a university as a more advantaged student, provided that s/he manages to reach a sufficient level of achievement at the secondary school level. This finding leads to an important conclusion of no genuine socio-economic gap in university participation once prior attainments have been taken into account. The current article investigates whether the same conclusion can be reached with respect to university drop-out. Using a combination of school and higher education administrative data sets, we are able to show that there is indeed a sizeable and statistically significant gap in the rate of withdrawal after the first year of university between the most advantaged and disadvantaged English students. This socio-economic gap in university drop-out remains even after allowing for their personal characteristics, prior achievement and institution choice. Our results thus suggest that the use of raw drop out rates in the English university 'league table' as one of the main indicators of university efficiency can be quite misleading given that the ranking of universities by drop out rate would change markedly if the prior attainment of students were taken fully into account.
    Keywords: Drop out rate; Higher Education; Prior achievement; Socio-economic gap.
    Date: 2008–07
  4. By: N Powdthavee;
    Abstract: The current study uses a large British panel data set to examine the impact of disability, and the speed and extent of adaptation to disability, in seven domain satisfactions. Results show that the onset of a severe disability has the most detrimental impact on health, income, and social life in that order. Adaptation in the domain satisfactions is complete for the moderately disabled. However, there is little evidence of adaptation to severe disability in any of the affected domains. Finally, this paper proposes van Praag et al's (2003) two-layer model as an alternative way to study adaptation.
    Keywords: Disability; Adaptation; Domain satisfactions; Life satisfaction; Focusing effects.
    Date: 2008–07
  5. By: N Powdthavee; A Vignoles
    Abstract: This paper addresses the extent to which there is an intergenerational transmission of mental health and subjective well-being within families. Specifically it asks whether parents' own mental distress influences their child's life satisfaction, and vice versa. Whilst the evidence on daily contagion of stress and strain between members of the same family is substantial, the evidence on the transmission between parental distress and children's well-being over a longer period of time is sparse. We tested this idea by examining the within-family transmission of mental distress from parent to child's life satisfaction, and vice versa, using rich longitudinal data on 1,175 British youths. Results show that parental distress at year t-1 is an important determinant of child's life satisfaction in the current year. This is true for boys and girls, although boys do not appear to be affected by maternal distress levels. The results also indicated that the child's own life satisfaction is related with their father's distress levels in the following year, regardless of the gender of the child. Finally, we examined whether the underlying transmission correlation is due to shared social environment, empathic reactions, or transmission via parent-child interaction.
    Keywords: Life satisfaction, mental health, intergenerational transmission, within-family, longitudinal, GHQ
    JEL: D64 I1 I31 J13
    Date: 2008–07
  6. By: Alberto F. Alesina; Francesca Lotti; Paolo Emilio Mistrulli
    Abstract: The answer is yes. By using a unique and large data set on overdraft contracts between banks and microfirms and self-employed individuals, we find robust evidence that women in Italy pay more for overdraft facilities than men. We could not find any evidence that women are riskier then men. The male/female differential remains even after controlling for a large number of characteristics of the type of business, the borrower and the market structure of the credit market. The result is not driven by women using a different type of bank than men, since the same bank charges different rates to male and female borrowers. Social capital does play a role: high levels of trust loosen credit conditions by lowering interest rates, but this benefit is not evenly distributed, as women benefit from increased social capital less than men.
    JEL: G21 J16 J71
    Date: 2008–07
  7. By: Miles S. Kimball; Matthew D. Shapiro
    Abstract: Labor supply is unresponsive to permanent changes in wage rates. Thus, income and substitution effects cancel, but are they both close to zero or both large? This paper develops a theory of labor supply where income and substitution effects cancel, taking into account optimization over time, fixed costs of going to work, and interactions of labor supply decisions within the household. The paper then applies this theory to survey evidence on the response of labor supply to a large wealth shock. The evidence implies that the constant marginal utility of wealth (Frisch) elasticity of labor supply is about one.
    JEL: C42 E24 J22
    Date: 2008–07
  8. By: David Albouy
    Abstract: The wage differential between Francophone and Anglophone men from 1970 to 2000 fell by 25 percentage points within Quebec, but only by 10 points Canada-wide, largely because the wages of Quebec Anglophones fell by 15 points relative to other Canadian Anglophones. Accordingly, the Canadian measure of the Francophone wage gap better reflects the changing welfare of Francophones than the Quebec measure. Over half of the reduction in the Canadian Francophone wage gap is explained by rising Francophone education levels. In Quebec, the declining number and relative wages of Anglophone workers is best explained by a falling demand for English-speaking labour.
    JEL: J2 J7 R23
    Date: 2008–07

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