nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2008‒08‒21
six papers chosen by
Maximo Rossi
University of the Republic

  1. Health and Income Poverty in Ireland, 2003-2006 By David Madden
  2. DOES IMMIGRATION AFFECT THE PHILLIPS CURVE? SOME EVIDENCE FOR SPAIN By Samuel Bentolila; Juan J. Dolado; Juan F. Jimeno
  3. Labour supply and taxes By Costas Meghir; David Phillips
  4. WORKER RESPONSES TO SHIRKING UNDER SHARED CAPITALISM By Richard Freeman; Douglas Kruse; Joseph Blasi
  5. Estimating Trends in US Income Inequality Using the Current Population Survey: The Importance of Controlling for Censoring By Richard V. Burkhauser; Shuaizhang Feng; Stephen P. Jenkins; Jeff Larrimore
  6. Harming the Best: How Schools Affect the Black-White Achievement Gap By Eric A. Hanushek; Steven G. Rivkin

  1. By: David Madden (University College of Dublin)
    Abstract: Recent advances in the measurement of bi-dimensional poverty are applied to a measure of poverty which incorporates income and health poverty. The correlation between income and poverty is examined using the Receiver Operating Characteristics curve. Following from this unidimensional and bi-dimensional poverty indices are calculated for Ireland for the years 2003-2006. Individual and bi-dimensional indices generally show a decline over the period with the biggest decline between 2003 and 2004. The results are generally not sensitive to the degree of poverty aversion or the substitutability between the different dimensions of poverty.
    Keywords: receiver operating characteristic, multidimensional poverty
    JEL: I12 I31 I32
    Date: 2008–07–20
    URL: http://d.repec.org/n?u=RePEc:ucn:wpaper:200815&r=ltv
  2. By: Samuel Bentolila; Juan J. Dolado; Juan F. Jimeno (CEMFI, Centro de Estudios Monetarios y Financieros)
    Abstract: The Phillips curve has flattened in Spain over 1995-2006: unemployment has fallen by 15 percentage points, with roughly constant inflation. This change has been more pronounced than elsewhere. We argue that this stems from the immigration boom in Spain over this period. We show that the New Keynesian Phillips curve is shifted by immigration if natives’ and immigrants’ labor supply or bargaining power differ. Estimation of the curve for Spain indicates that the fall in unemployment since 1995 would have led to an annual increase in inflation of 2.5 percentage points if it had not been largely offset by immigration.
    Keywords: Phillips curve, immigration.
    JEL: E31 J64
    Date: 2007–12
    URL: http://d.repec.org/n?u=RePEc:cmf:wpaper:wp2007_0718&r=ltv
  3. By: Costas Meghir (Institute for Fiscal Studies and University College London); David Phillips (Institute for Fiscal Studies)
    Abstract: <p><p>In this paper we provide an overview of the literature relating labour supply to taxes and welfare benefits with a focus on presenting the empirical consensus. We begin with a basic continuous hours model, where individuals have completely free choice over their hours of work. We then consider fixed costs of work, the complications introduced by the benefits system, dynamic aspects of labour supply and we place the analysis in the context of the family. The key conclusion of this work is that in order to estimate the impact of tax reform and be able to generalise results, a structural approach that takes account of many of these issues is desirable. We then discuss the 'new Tax Responsiveness' literature which uses the response of taxable income to the marginal tax rate as a summary statistic of the behavioural response to taxation. Underlying this approach is the unsatisfactory nature of using hours as a proxy for labour effort for those with high levels of autonomy on the job and who already work long hours, such as the self employed or senior executives. After discussing relevant theory we then provide a summary of empirical estimates and the methodology underlying the studies. Our conclusion is that hours of work are relatively inelastic for men, but are a little more responsive for married women and lone mothers. On the other hand, participation is quite sensitive to taxation and benefits for women. Within this paper we present new estimates form a discrete participation model for both married and single men based on the numerous reforms over the past two decades in the UK. We find that the participation of low education men is somewhat more responsive to incentives than previously thought. For men with high levels of education, participation is virtually unresponsive; here the literature on taxable income suggests that there may be significant welfare costs of taxation, although much of this seems to be a result of shifting income and consumption to non-taxable forms as opposed to actual reductions in work effort.</p></p>
    Keywords: Labour Supply, Income taxation, Welfare Benefits, Tax Credits, Incentive Effects
    JEL: J22 H24 H31
    Date: 2008–03
    URL: http://d.repec.org/n?u=RePEc:ifs:ifsewp:08/04&r=ltv
  4. By: Richard Freeman; Douglas Kruse; Joseph Blasi
    Abstract: Group incentive systems have to overcome the free rider or 1/N problem, which gives workers an incentive to shirk, if they are to succeed. This paper uses new questions on responses to shirking from the General Social Survey and a special NBER survey of workers at over 300 worksites in 14 companies that have some form of group incentive pay to examine how well workers can monitor their peers and what they do when the peers are not working up to speed. The paper finds that: 1) most workers say that they can detect fellow employees who shirk; 2) many report that they would speak to the shirker or report the behavior or a supervisor, and many report that they did so in the past; 3) the proportion that takes action against shirkers is greatest among workers paid under group incentive systems, in smaller companies, and in companies with good employee-management relations; 4) group incentives interact with high-performance human resource policies such as employee involvement teams, training, task variety, low levels of supervision, and good fixed wages to induce more workers to act against shirking; 5) workers in workplaces where there is more anti-shirking behavior report that co-workers work harder, encourage other workers more, and report that their workplace facility is more effective in ways that should raise productivity and profits.
    JEL: J33 J54 L23
    Date: 2008–08
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:14227&r=ltv
  5. By: Richard V. Burkhauser; Shuaizhang Feng; Stephen P. Jenkins; Jeff Larrimore
    Abstract: Using internal and public use March Current Population Survey (CPS) data, we analyze trends in US income inequality (1975-2004). We find that the upward trend in income inequality prior to 1993 significantly slowed thereafter once we control for top coding in the public use data and censoring in the internal data. Because both series do not capture trends at the very top of the income distribution, we use a multiple imputation approach in which values for censored observations are imputed using draws from a Generalized Beta distribution of the Second Kind (GB2) fitted to internal data. Doing so, we find income inequality trends similar to those derived from unadjusted internal data. Our trend results are generally robust to the choice of inequality index, whether Gini coefficient or other commonly-used indices. When we compare our best estimates of the income shares held by the richest tenth with those reported by Piketty and Saez (2003), our trends fairly closely match their trends, except for the top 1 percent of the distribution. Thus, we argue that if United States income inequality has been substantially increasing since 1993, such increases are confined to this very high income group.
    JEL: C81 D31
    Date: 2008–08
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:14247&r=ltv
  6. By: Eric A. Hanushek; Steven G. Rivkin
    Abstract: Sizeable achievement differences by race appear in early grades, but substantial uncertainty exists about the impact of school quality on the black-white achievement gap and particularly about its evolution across different parts of the achievement distribution. Texas administrative data show that the overall growth in the achievement gap between third and eighth grade is higher for students with higher initial achievement and that specific teacher and peer characteristics including teacher experience and peer racial composition explain a substantial share of the widening. The adverse effect of attending school with a high black enrollment share appears to be an important contributor to the larger growth in the achievement differential in the upper part of the test score distribution. This evidence reaffirms the major role played by peers and school quality, but also presents a policy dilemma. Teacher labor market complications, current housing patterns, legal limits in segregation efforts, and uncertainty about the overall effects of specific desegregation programs indicate that effective policy responses will almost certainly involve a set of school improvements beyond simple changes in peer racial composition and the teacher experience distribution.
    JEL: H4 I2 I28 J18
    Date: 2008–08
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:14211&r=ltv

This nep-ltv issue is ©2008 by Maximo Rossi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at http://nep.repec.org. For comments please write to the director of NEP, Marco Novarese at <director@nep.repec.org>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.