nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2009‒02‒28
eight papers chosen by
Maximo Rossi
University of the Republic

  1. Active Labor Market Policy Evaluations: A Meta-Analysis By Card, David; Kluve, Jochen; Weber, Andrea
  2. Happiness and Economic Growth: Does the Cross Section Predict Time Trends? Evidence from Developing Countries By Easterlin, Richard A.; Sawangfa, Onnicha
  3. Measuring Inequality Using Censored Data: A Multiple Imputation Approach By Jenkins, Stephen P.; Burkhauser, Richard V.; Feng, Shuaizhang; Larrimore, Jeff
  4. Socioeconomic Differences in Health over the Life Cycle in an Egalitarian Country By Hans van Kippersluis; Owen O'Donnell; Eddy van Doorslaer; Tom Van Ourti
  5. The Plant Size-Place Effect: Agglomeration and Monopsony in Labour Markets By Alan Manning
  6. New Market Power Models and Sex Differences in Pay By Michael R. Ransom; Ronald L. Oaxaca
  7. Human security and social quality: contrasts and complementaries By D. Gasper; Laurent J.G. van der Maesen; Thanh-Dam Truong; Alan Walker
  8. Labour Markets in EMU - What has Changed and What Needs to Change By Bertola, Giuseppe

  1. By: Card, David (University of California, Berkeley); Kluve, Jochen (RWI Essen); Weber, Andrea (University of California, Berkeley)
    Abstract: This paper presents a meta-analysis of recent microeconometric evaluations of active labor market policies. Our sample consists of 199 program estimates drawn from 97 studies conducted between 1995 and 2007. In about one-half of these cases we have both a short-term impact estimate (for a one-year post-program horizon) and a medium-term estimate (two-year horizon). We characterize the program estimates according to the type and duration of the program, the characteristics of the participants, and the evaluation methodology. Heterogeneity in all three dimensions affects the likelihood that an impact estimate is significantly positive, significantly negative, or statistically insignificant. Comparing program types, subsidized public sector employment programs have the least favorable impact estimates. Job search assistance programs have relatively favorable short-run impacts, whereas classroom and on-the-job training programs tend to show better outcomes in the medium-run than the short-run. Programs for youths are less likely to yield positive impacts than untargeted programs, but there are no large or systematic differences by gender. Methodologically, we find that the outcome variable used to measure program effectiveness matters. Evaluations based on registered unemployment durations are more likely to show favorable short-term impacts. Controlling for the outcome measure, and the type of program and participants, we find that experimental and non-experimental studies have similar fractions of significant negative and significant positive impact estimates, suggesting that the research designs used in recent non-experimental evaluations are unbiased.
    Keywords: active labor market policy, program evaluation, meta-analysis
    JEL: J00 J68
    Date: 2009–02
  2. By: Easterlin, Richard A. (University of Southern California); Sawangfa, Onnicha (University of Southern California)
    Abstract: Based on point-of-time comparisons of happiness in richer and poorer countries, it is commonly asserted that economic growth will have a significant positive impact on happiness in poorer countries, if not richer. The time trends of subjective well-being (SWB) in 13 developing countries, however, are not significantly related to predictions derived from the cross sectional relation of happiness to GDP per capita. The point-of-time comparison leads to the expectation that the same absolute increase in GDP per capita will have a bigger impact on SWB in a poorer than a richer country. In fact there is no significant relation between actual trends in SWB and those predicted from the cross sectional relationship. Nor is a higher percentage rate of growth in GDP per capita significantly positively associated with a greater improvement in SWB. In the developing countries studied here a greater increase in happiness does not accompany more rapid economic growth. These conclusions hold true for two measures of SWB that are separately analyzed, overall life satisfaction and satisfaction with finances. The two SWB measures themselves, however, typically trend similarly within a country, providing mutually supporting evidence of the trend in well-being.
    Keywords: happiness, economic growth, developing countries
    JEL: I31 D60 O5 O10
    Date: 2009–02
  3. By: Jenkins, Stephen P. (University of Essex); Burkhauser, Richard V. (Cornell University); Feng, Shuaizhang (Princeton University); Larrimore, Jeff (Cornell University)
    Abstract: To measure income inequality with right censored (topcoded) data, we propose multiple imputation for censored observations using draws from Generalized Beta of the Second Kind distributions to provide partially synthetic datasets analyzed using complete data methods. Estimation and inference uses Reiter’s (Survey Methodology 2003) formulae. Using Current Population Survey (CPS) internal data, we find few statistically significant differences in income inequality for pairs of years between 1995 and 2004. We also show that using CPS public use data with cell mean imputations may lead to incorrect inferences about inequality differences. Multiply-imputed public use data provide an intermediate solution.
    Keywords: income inequality, topcoding, partially synthetic data, CPS, Current Population Survey, Generalized Beta of the Second Kind distribution
    JEL: D31 C46 C81
    Date: 2009–02
  4. By: Hans van Kippersluis (Erasmus University Rotterdam); Owen O'Donnell (University of Macedonia, Thessaloniki, Greece); Eddy van Doorslaer (Erasmus University Rotterdam); Tom Van Ourti (Erasmus University Rotterdam)
    Abstract: A strong relationship between health and socioeconomic status is firmly established. Yet, partly due to the multidimensional and dynamic nature of the variables, the causal mechanisms connecting them are poorly understood. This paper argues that adoption of a life-cycle perspective is essential to uncover these causal pathways. A life-cycle perspective also allows investigation of whether the socioeconomically disadvantaged, on top of a lower health level, experience a sharper deterioration of their health over the life cycle. We show that in the Netherlands, as in the US, the socioeconomic gradient in health widens until late-middle age and narrows thereafter. The analysis and the available evidence suggests that the widening gradient is attributable both to health-related withdrawal from the labor force, resulting in lower incomes, and the cumulative protective effect of education on health outcomes. The less educated suffer a double health penalty in that they begin adult life with a slightly lower health level, which subsequently declines at a faster rate. The observed narrowing of the gradient in old age is partly an artefact stemming from the fact that only the most healthy of the disadvantaged survive into old age. It also reflects that after middle age, withdrawal from the labor force increasingly occurs for non health-related reasons.
    Keywords: Health; Socioeconomic Status; Life Cycle
    JEL: D30 D31 I10 I12
    Date: 2009–01–19
  5. By: Alan Manning (London School of Economics)
    Abstract: This paper shows, using data from both the US and the UK, that average plant size is larger in denser markets. However, many popular theories of agglomeration – spillovers, cost advantages and improved match quality – predict that establishments should be smaller in cities. The paper proposes a theory based on monopsony in labour markets that can explain the stylized fact – that firms in all labour markets have some market power but that they have less market power in cities. It also presents evidence that the labour supply curve to individual firms is more elastic in larger markets.
    Keywords: Agglomeration, Labour Markets, Monopsony, monopsony papers
    JEL: J21 J42 R23
    Date: 2008–12
  6. By: Michael R. Ransom (Brigham Young University and IZA); Ronald L. Oaxaca (University of Arizona and IZA)
    Abstract: In the context of certain general equilibrium search models, it is possible to infer the elasticity of labor supply to the firm from the elasticity of the quit rate with respect to the wage. We use this framework to estimate the elasticity of labor supply for men and women workers at a chain of grocery stores operating in the southwestern United States, identifying separation elasticities from differences in wages and separation rates across different job titles within the firm. We estimate elasticities of labor supply to the firm of about 2.7 for men and about 1.5 for women, suggesting significant wage-setting power for the firm. Since women have lower elasticities of labor supply to the firm, a Robinson-style monopsony model might explain lower relative pay of women in the grocery industry. The wage gaps we observe among workers in US retail grocery stores are close to what the monopsony model predicts for the elasticities we have estimated.
    Keywords: monopsony papers
    Date: 2008–12
  7. By: D. Gasper; Laurent J.G. van der Maesen; Thanh-Dam Truong; Alan Walker
    Abstract: Two authors who have been leaders of the ‘social quality approach’ that emerged in European social policy circles in the 1990s, and two authors who have worked with the ‘human development’ and ‘human security’ approaches that emerged in international development policy circles in the 1980s and 90s, collaborate in this paper in order to outline and compare the two traditions. The ‘human development’ tradition has focused on the quality of individual human lives, understood as influenced by interconnections that transcend conventional disciplinary boundaries; its ‘human security’ branch goes deeper into study of human vulnerability and the textures of daily life. The ‘social quality’ tradition tries to understand individual lives as lived within a societal fabric, to identify and measure key elements of that fabric, and to develop a correspondingly grounded public policy approach. The paper is a first step in a project to assess the possible complementarity, in theorising and practical application, of these two streams of work.
    Keywords: Quality of life, social quality approach, human security, human development approach, ‘the social’
    Date: 2008
  8. By: Bertola, Giuseppe
    Abstract: This paper reviews theoretical and empirical aspects of the interaction between Europe’s Economic and Monetary Union and recent labour market developments. Policies meant to increase and stabilize labour incomes also tend to reduce employment and productivity: theory suggests that the latter effects should be sharper and more relevant within an integrated market area, making it harder for National policy makers to address the consequences of financial and other market imperfections. Empirical patterns of policy and outcome indicators in member and non-member countries of EMU are consistent with that theoretical mechanism. In the data, tighter economic integration is associated with better employment performance, substantial deregulation, sharper disemployment effects of remaining regulatory differences, and somewhat higher inequality and larger private financial market volume.
    Keywords: economic integration; labour market policies
    JEL: J5 J8
    Date: 2008–11

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