nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2009‒01‒17
six papers chosen by
Maximo Rossi
University of the Republic

  1. Trends in the Transitory Variance of Male Earnings in the U.S., 1991-2003: Preliminary Evidence from LEHD data By Peter Gottschalk; Erika McEntarfer; Robert Moffitt
  2. Migration in an Enlarged EU : A Challenging Solution? By Martin Kahanec; Klaus F. Zimmermann
  3. Part-Time Sick Leave as a Treatment Method? By Andrén, D; Andrén, T
  4. INSTRUMENTAL VARIABLES IN MODELS WITH MULTIPLE OUTCOMES: THE GENERAL UNORDERED CASE By James J. Heckman; Sergio Urzua; Edward Vytlacil
  5. Schools, Skills, and Synapses By James J. Heckman
  6. EARNINGS FUNCTIONS AND RATES OF RETURN By James J. Heckman; Lance J. Lochner; Petra E. Todd

  1. By: Peter Gottschalk (Boston College); Erika McEntarfer (U.S. Department of the Treasury); Robert Moffitt (Johns Hopkins University)
    Abstract: We estimate the trend in the transitory variance of male earnings in the U.S. from 1991 to 2005 using an administrative data set of Unemployment Insurance wage reports, the Longitudinal Employer-Employer Dynamics data set (LEHD), and compare the findings to those of Moffitt and Gottschalk (2008) obtained from the Michigan Panel Study of Income Dynamics (PSID). Despite substantial differences between the LEHD and the PSID in the levels of cross- sectional variances of male earnings, the changes over time in transitory variances obtained from estimating two of the models in Moffitt and Gottschalk are quite similar in the two data sets. Specifically, over the 1991-2003 period, transitory variances fell slightly, and then rose slightly, returning in 2003 to the same approximate level they had obtained in 1991. Overall, the analysis of the LEHD data confirms the findings based on the PSID that the transitory variance did not show a trend net of cycle over this period.
    Date: 2008–12–30
    URL: http://d.repec.org/n?u=RePEc:boc:bocoec:696&r=ltv
  2. By: Martin Kahanec; Klaus F. Zimmermann
    Abstract: The 2004 and 2007 enlargements of the European Union were unprecedented in a number of economic and policy aspects. This essay provides a broad and in-depth account of the effects of the post-enlargement migration flows on the receiving as well as sending countries in three broader areas: labour markets, welfare systems, and growth and competitiveness. Our analysis of the available literature and empirical evidence shows that (i) EU enlargement had a significant impact on migration flows from new to old member states, (ii) restrictions applied in some of the countries did not stop migrants from coming but changed the composition of the immigrants, (iii) any negative effects in the labour market on wages or employment are hard to detect, (iv) post-enlargement migration contributes to growth prospects of the EU, (v) these immigrants are strongly attached to the labour market, and (vi) they are quite unlikely to be among welfare recipients. These findings point out the difficulties that restrictions on the free movement of workers bring about.
    Keywords: migration, migration effects, EU Eastern enlargement, free movement of workers
    JEL: F22 J15 J61
    Date: 2008
    URL: http://d.repec.org/n?u=RePEc:diw:diwwpp:dp849&r=ltv
  3. By: Andrén, D; Andrén, T
    Abstract: This paper analyzes the effects of being on part-time sick leave compared to full-time sick leave on the probability of recovering (i.e., returning to work with full recovery of lost work capacity). Using a discrete choice one-factor model, we estimate mean treatment parameters and distributional treatment parameters from a common set of structural parameters. Our results show that part-time sick leave increases the likelihood of recovering and dominates full-time sick leave for sickness spells of 150 days or longer. For these long spells, the probability of recovering increases by 10 percentage points.
    Keywords: part-time sick leave, selection, unobserved heterogeneity, treatment effects
    JEL: I12 J21 J28
    Date: 2009–01
    URL: http://d.repec.org/n?u=RePEc:yor:hectdg:09/01&r=ltv
  4. By: James J. Heckman; Sergio Urzua; Edward Vytlacil
    Abstract: This paper develops the method of local instrumental variables for mod- els with multiple, unordered treatments when treatment choice is determined by a nonparametric version of the multinomial choice model. Responses to interventions are permitted to be heterogeneous in a general way and agents are allowed to select a treatment (e.g. participate in a program) with at least partial knowledge of the idiosyncratic response to the treatments. We define treatment effects in a general model with multiple treatments as differences in counterfactual outcomes that would have been observed if the agent faced different choice sets. We show how versions of local instrumental variables can identify the corresponding treatment parameters. Direct application of local instrumental variables identies the marginal treatment effect of one option versus the next best alternative without requiring knowledge of any structural parameters from the choice equation or any large support assumptions. Using local instrumental variables to identify other treatment parameters requires ei- ther large support assumptions or knowledge of the latent index function of the multinomial choice model.
    Date: 2008–12–15
    URL: http://d.repec.org/n?u=RePEc:ucd:wpaper:200830&r=ltv
  5. By: James J. Heckman (University of Chicago)
    Abstract: This paper discusses (a) the role of cognitive and noncognitive ability in shaping adult outcomes, (b) the early emergence of differentials in abilities between children of advantaged families and children of disadvantaged families, (c) the role of families in creating these abilities, (d) adverse trends in American families, and (e) the effective- ness of early interventions in offsetting these trends. Practical issues in the design and implementation of early childhood programs are discussed.
    Keywords: productivity, high school dropout, ability gaps, family influence, noncognitive skills, early interventions
    Date: 2008–12–15
    URL: http://d.repec.org/n?u=RePEc:ucd:wpaper:200833&r=ltv
  6. By: James J. Heckman (University of Chicago, University College Dublin, and American Bar Foundation); Lance J. Lochner (University of Western Ontario); Petra E. Todd (University of Pennsylvania)
    Abstract: The internal rate of return to schooling is a fundamental economic parameter that is often used to assess whether expenditure on education should be increased or decreased. This paper considers alternative approaches to estimating marginal internal rates of return for different schooling levels. We implement a general nonparametric approach to estimate marginal internal rates of return that take into account tuition costs, income taxes and nonlinearities in the earnings-schooling-experience relationship. The returns obtained by the more general method differ substantially from Mincer returns in levels and in their evolution over time. They indicate relatively larger returns to graduating from high school than from graduating from college, although both have been increasing over time.
    Date: 2008–12–15
    URL: http://d.repec.org/n?u=RePEc:ucd:wpaper:200831&r=ltv

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