nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2008‒12‒07
five papers chosen by
Maximo Rossi
University of the Republic

  1. Measuring Wellbeing in the SOEP By Ulrich Schimmack
  2. Ranking Intersecting Lorenz Curves By Helbing, Steffen; Aaberge, Rolf
  3. Rank, Income and Income Inequality in Urban China By Gustafsson, Björn; Sai, Ding
  4. Education and Mobility By Machin, Stephen; Pelkonen, Panu; Salvanes, Kjell G.
  5. Who compares to whom? The anatomy of income comparisons in Europe By Andrew E. Clark; Claudia Senik

  1. By: Ulrich Schimmack
    Abstract: I define wellbeing as preference realization. Wellbeing can be measured with affective (the amount of pleasant versus unpleasant experiences) and cognitive (satisfaction with life in general and life domains) measures. Since its inception 25 years ago, the SOEP has included cognitive measures of wellbeing. In 2007, the SOEP included four items (happy, sad, angry, afraid) as an affective measure of wellbeing. This paper examines similarities and differences between cognitive and affective measures of wellbeing. In the end, I propose a wellbeing index that combines information from measures of life satisfaction, average domain satisfaction, and affect balance.
    Keywords: General welfare, quality of life, happiness, wellbeing
    JEL: I31
    Date: 2008
    URL: http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp145&r=ltv
  2. By: Helbing, Steffen (IZA); Aaberge, Rolf (Statistics Norway)
    Abstract: This paper is concerned with the problem of ranking Lorenz curves in situations where the Lorenz curves intersect and no unambiguous ranking can be attained without introducing weaker ranking criteria than first-degree Lorenz dominance. To deal with such situations two alternative sequences of nested dominance criteria between Lorenz curves are introduced. At the limit the systems of dominance criteria appear to depend solely on the income share of either the worst-off or the best-off income recipient. This result suggests two alternative strategies for increasing the number of Lorenz curves that can be strictly ordered; one that places more emphasis on changes that occur in the lower part of the income distribution and the other that places more emphasis on changes that occur in the upper part of the income distribution. Both strategies turn out to depart from the Gini coefficient; one requires higher degree of downside and the other higher degree of upside inequality aversion than what is exhibited by the Gini coefficient. Furthermore, it is demonstrated that the sequences of dominance criteria characterize two separate systems of nested subfamilies of inequality measures and thus provide a method for identifying the least restrictive social preferences required to reach an unambiguous ranking of a given set of Lorenz curves. Moreover, it is demonstrated that the introduction of successively more general transfer principles than the Pigou-Dalton principle of transfers forms a helpful basis for judging the normative significance of higher degrees of Lorenz dominance. The dominance results for Lorenz curves do also apply to generalized Lorenz curves and thus provide convenient characterizations of the corresponding social welfare orderings.
    Keywords: Lorenz curve, Lorenz dominance, partial orderings, Gini coefficient, rank-dependent measures of inequality, generalized Gini families of inequality measures, general principles of transfers
    JEL: D31 D63
    Date: 2008–11
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp3852&r=ltv
  3. By: Gustafsson, Björn (Göteborg University); Sai, Ding (Chinese Academy of Social Sciences)
    Abstract: While some workers in China attain senior professional level and senior cadre level status (Chuzhang and above), others attain middle rank including middle rank of professional and cadre (Kezhang). This aspect of the Chinese labor force has attracted surprisingly little attention in the literature, a fact which this paper aims to rectify. We define various segments of the urban population in work-active ages and use data from the Chinese Income Project (CHIP) covering eastern, central and western China for 1995 and 2002. For 2002, persons of high rank make up 3 percent and persons of middle rank make up 14 percent of persons in work-active ages. Factors that affect a person's likelihood of having high or middle rank are investigated by estimating a multinomial probit model. We find that education, age and gender strongly affect the probability of being employed as a worker of high rank. There is relatively little income inequality among workers of high rank as well as among workers of middle rank. Mean income and household wealth per capita of highly-ranked workers developed more favorably than for other segments of the population studied, and personal income is more polarized by segment in 2002 than in 1995. Workers of high rank, and to a lesser degree, workers of middle rank, are among the winners in economic terms while the increasingly large category of non-workers are the losers. Rates of return to education have increased but income function analysis indicates that this provides only a partial explanation for the increased favorable income situation for workers of high and middle ranks.
    Keywords: China, rank, income, income inequality
    JEL: J21 J31 J41 P31
    Date: 2008–11
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp3843&r=ltv
  4. By: Machin, Stephen (University College London); Pelkonen, Panu (London School of Economics); Salvanes, Kjell G. (Norwegian School of Economics and Business Administration)
    Abstract: We show that the length of compulsory education has a causal impact on regional labour mobility. The analysis is based on a quasi-exogenous staged Norwegian school reform, and register data on the whole population. Based on the results, we conclude that part of the US-Europe difference, as well as the European North-South difference in labour mobility, is likely to be due to differences in levels of education in the respective regions.
    Keywords: labour market, mobility, education
    JEL: I28 J24 J61
    Date: 2008–11
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp3845&r=ltv
  5. By: Andrew E. Clark; Claudia Senik
    Abstract: This paper provides unprecedented direct evidence on the intensity and direction of income comparisons. Income comparisons are considered to be important by a considerable majority of Europeans. They are associated with both lower levels of self-reported satisfaction and a greater demand for income redistribution. Colleagues are the most frequently-cited reference group, and the most innocuous one; comparisons to friends are both less widespread and much more toxic for satisfaction. This set of findings is consistent with information effects, as professional reference groups may represent a source of information about one's future prospects rather than a simple benchmark for comparisons.
    Date: 2008
    URL: http://d.repec.org/n?u=RePEc:pse:psecon:2008-65&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.