nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2009‒04‒18
ten papers chosen by
Maximo Rossi
University of the Republic

  1. The Econometrics of Social Networks By Yann Bramoullé; Bernard Fortin
  2. Patriotism, Taxation and International Mobility By Qari, Salmai; Konrad, Kai A.; Geys, Benny
  3. Risk Attitude and Wage Growth: Replication and Reconstruction By Budria, Santiago; Diaz-Serrano, Luis; Ferrer-i-Carbonell, Ada; Hartog, Joop
  4. Delinquent Networks By Ballester, Coralio; Calvó-Armengol, Antoni; Zenou, Yves
  5. Understanding Inter-Industry Wage Structures in the Euro Area By Genre, Véronique; Kohn, Karsten; Momferatou, Daphne
  6. Do attitudes toward gender equality really differ between Norway and Sweden? By Jakobsson, Niklas; Kotsadam, Andreas
  7. Risk Aversion and Expected Utility of Consumption over Time By Johansson-Stenman, Olof
  8. Do Women Supply more Public Goods than Men? By Andersen, Steffen; Bulte, Erwin; Gneezy, Uri; List, John A.
  9. Business Cycle Dependent Unemployment Insurance By Torben M. Andersen; Michael Svarer
  10. Wage Risk and Employment Risk over the Life Cycle By Hamish Low; Costas Meghir; Luigi Pistaferri

  1. By: Yann Bramoullé; Bernard Fortin
    Abstract: In a social network, agents have their own reference group that may influence their behavior. In turn, the agents' attributes and their behavior affect the formation and the structure of the social network. We survey the econometric literature on both aspects of social networks and discuss the identification and estimation issues they raise.
    Keywords: Social network, peer effects, identification, network formation, pair-wise regressions, separability, mutual consent
    JEL: D85 L14 Z13 C3
    Date: 2009
  2. By: Qari, Salmai (WZB - Social Science Research Center Berlin); Konrad, Kai A. (WZB - Social Science Research Center Berlin); Geys, Benny (WZB - Social Science Research Center Berlin)
    Abstract: For patriotic citizens, living in their native country is intrinsically preferable compared to living in the diaspora. In this paper, we analyze the implications of such a patriotic lock-in in a world with international migration and redistributive taxation. In a formal model of redistribution with international migration and fiscal competition we derive the main hypothesis: that countries with a more patriotic population should have higher redistributive taxes. Using ISSP survey data and combining them with OECD taxation data, we find robust evidence suggesting that a) higher patriotism is associated with higher tax burdens, and b) this relation is stronger for the upper-middle range of the income distribution.
    Keywords: patriotism, international mobility, taxation, redistribution, fiscal competition
    JEL: H20 H73
    Date: 2009–04
  3. By: Budria, Santiago (University of Madeira); Diaz-Serrano, Luis (Universitat Rovira i Virgili); Ferrer-i-Carbonell, Ada (IAE Barcelona (CSIC)); Hartog, Joop (University of Amsterdam)
    Abstract: We replicate Shaw (1996) who found that individual wage growth is higher for individuals with greater preference for risk taking. Expanding her dataset with more American observations and data for Germany, Spain and Italy, we find mixed support for the earlier results. We present and estimate a new model and find that in particular the wage level is sensitive to attitudes towards risk taking.
    Keywords: wage growth, risk, post-school investment
    JEL: J24 J30
    Date: 2009–04
  4. By: Ballester, Coralio (University of Alicante); Calvó-Armengol, Antoni (Universitat Autònoma de Barcelona); Zenou, Yves (Stockholm University)
    Abstract: Delinquents are embedded in a network of relationships. Social ties among delinquents are modeled by means of a graph where delinquents compete for a booty and benefit from local interactions with their neighbors. Each delinquent decides in a non-cooperative way how much delinquency effort he will exert. Using the network model developed by Ballester et al. (2006), we characterize the Nash equilibrium and derive an optimal enforcement policy, called the key-player policy, which targets the delinquent who, once removed, leads to the highest aggregate delinquency reduction. We then extend our characterization of optimal single player network removal for delinquency reduction, the key player, to optimal group removal, the key group. We also characterize and derive a policy that targets links rather than players. Finally, we endogenize the network connecting delinquents by allowing players to join the labor market instead of committing delinquent offenses. The key-player policy turns out to be much more complex since it depends on wages and on the structure of the network.
    Keywords: social networks, delinquency decision, key group, NP-hard problem, crime policies
    JEL: A14 C72 K42 L14
    Date: 2009–04
  5. By: Genre, Véronique (European Central Bank); Kohn, Karsten (KfW Bankengruppe); Momferatou, Daphne (European Central Bank)
    Abstract: This paper focuses on the euro area wage structure and its potential determinants from a sectoral viewpoint. Merging information from the OECD Structural Analysis database with data from the EU Labour Force Survey, we construct a cross-country panel of 22 industries in 8 euro area countries for 1991-2002. Data inspection confirms the existence of a fairly stable inter-industry wage structure that is similar across countries. We then apply panel data techniques to identify factors explaining inter-industry wage differentials in the euro area. Both workforce characteristics (e.g., human capital variables) and firm-related characteristics (e.g., capital intensity, productivity) contribute significantly. However, considerable wage heterogeneity across sectors remains. Idiosyncratic sector and country specifics, reflecting different socio-cultural and institutional backgrounds, appear to bear a major role. While our empirical analysis only uses direct evidence from workforce and firm-related characteristics, we also try to relate the remaining heterogeneity to institutional characteristics, based on related literature.
    Keywords: euro area, inter-industry wage differentials, panel estimation, firm and workforce characteristics, labour market institutions
    JEL: J31 J24 J51
    Date: 2009–04
  6. By: Jakobsson, Niklas (Department of Economics, School of Business, Economics and Law, Göteborg University); Kotsadam, Andreas (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Using survey data from Norway and Sweden, we assess people’s attitudes towards gender equality. Previous studies argue that these attitudes are more egalitarian in Sweden than in Norway. Similar to previous research, we find that Swedes are more positive towards gender equality in general. However, we find no differences regarding views on egalitarian sharing of household responsibilities, and Norwegians are actually more supportive of government intervention to increase gender equality. This suggests that the lower support for gender equality in Norway is less robust than previously thought and that there is a larger scope for advancing the gender revolution in Norway via government policies than in Sweden.<p>
    Keywords: attitudes; norms; gender equality
    JEL: I20 Z13
    Date: 2009–04–06
  7. By: Johansson-Stenman, Olof (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: The calibration theorem by Rabin (2000) implies that seemingly plausible smallstake choices under risk imply implausible large-stake risk aversion. This theorem is derived based on the expected utility of wealth model. However, Cox and Sadiraj (2006) show that such implications do not follow from the expected utility of income model. One may then wonder about the implications for more applied consumption analysis. The present paper therefore expresses utility as a function of consumption in a standard life cycle model, and illustrates the implications of this model with experimental small- and intermediate-stake risk data from Holt and Laury (2002). The results suggest implausible risk aversion parameters as well as unreasonable implications for long term risky choices. Thus, the conventional intertemporal consumption model under risk appears to be inconsistent with the data.<p>
    Keywords: Expected utility of income; expected utility of final wealth; dynamic consumption theory; asset integration; time inconsistency; narrow bracketing
    JEL: D81 D91
    Date: 2009–04–06
  8. By: Andersen, Steffen (Department of Economics, Copenhagen Business School); Bulte, Erwin (Department of Economics, Copenhagen Business School); Gneezy, Uri (Department of Economics, Copenhagen Business School); List, John A. (Department of Economics, Copenhagen Business School)
    Abstract: na
    Keywords: na
    JEL: G10
    Date: 2009–04–06
  9. By: Torben M. Andersen; Michael Svarer
    Abstract: The consequences of cylical contingencies in unemployment insurance systems are considered in a search-matching model allowing for shifts between “good” and “bad” states of nature. An argument for state contingencies is that insurance arguments are stronger and incentive effects weaker in "bad" than in "good" states of nature. We con.rm this and show that cyclically dependent benefit levels not only provide better insurance but may have structural effects implying that the structural (average) unemployment rate decreases, although the variability of unemployment may increase
    Date: 2009–03
  10. By: Hamish Low; Costas Meghir; Luigi Pistaferri
    Abstract: We specify a structural life-cycle model of consumption, labour supply and job mobility in an economy with search frictions that allows us to distinguish between different sources of risk and to estimate their effects. The sources of risk are shocks to productivity, job destruction, the process of job arrival when employed and unemployed and match level heterogeneity. In contrast to simpler models that attribute all income fluctuations to shocks, our framework disentangles variability due to shocks from variability due to the responses to these shocks. Estimates of productivity risk, once we control for employment risk and for individual labour supply choices, are substantially lower than estimates that attribute all wage variation to productivity risk. Increases in productivity risk impose a considerable welfare loss on individuals and induce substantial precautionary saving. Increases in employment risk have large effects on output and, primarily through this channel, affect welfare. The welfare value of government p rogram s such as food stamps which partially insure productivity risk is greater than the value of unemployment insurance which provides (partial) insurance against employment risk and no insurance against persistent shocks.
    JEL: D91 E21 H31 J64
    Date: 2009–04

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