nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2009‒05‒02
seven papers chosen by
Maximo Rossi
University of the Republic

  1. Effects of Family-friendly Fringe Benefits on Wages in Japan By Michiyo Hashiguchi
  2. "My Father was right": The transmission of values between generations By Luc Arrondel
  3. Schooling Inequality, Crises, and Financial Liberalization in Latin America By Jere R. Behrman; Nancy Birdsall; Gunilla Pettersson
  4. Older or Wealthier? The Impact of Age Adjustments on the Wealth Inequality Ranking of Countries By Ingvild Almås and Magne Mogstad
  5. Technological Change and Earnings Polarization: Implications for Skill Demand and Economic Growth By David Autor
  6. Frame-of-reference bias in subjective welfare regressions By Beegle, Kathleen; Himelein, Kristen; Ravallion, Martin
  7. An Incentive Theory of Matching By Brown, Alessio J G; Merkl, Christian; Snower, Dennis J.

  1. By: Michiyo Hashiguchi (Osaka School of International Public Policy (OSIPP),Osaka University)
    Abstract: This paper analyses the effect of family-friendly policies on wages. Using the full treatment effect model, the survey on Company Fringe Benefits 2002 was analysed. While the gender wage gap was confirmed, the effect of family-friendly policies on wages was found to differ from males to females. For instance, childcare and elder care related policies tended to be used mostly by females. As a result, these policies only had a negative impact on female wages. In turn, results of probit estimates indicated that productive workers tend to use more childcare and elder care related policies. It is suggested, therefore, that rewards and retention strategies should be provided to ensure productive workers.
    Keywords: family-friendly, fringe benefits, gender, leave, policy
    Date: 2009–02
  2. By: Luc Arrondel
    Abstract: Research using French data has often found that parents' saving behaviour influences that of their children. This article attempts to explain this phenomenon using data from a unique French survey set up by Delta and TNS-Sofres in 2002. This survey contains information on both preference and saving information for two generations of respondents.Savings preferences of parents and children, concerning risk attitudes and time discounting, are significantly correlated. The correlation coefficient is 0.25, so that the concordance, while significant, is not complete. The analogous correlation between wealth levels is 0.22. This coefficient is corrected for the differences in age of the two generations, and concerns coexisting generations, i.e. before the most significant intergenerational transfers have taken place. Over 40% of this elasticity results (directly or indirectly) from the levels of permanent income of the two generations. Education and preferences further explain around 20% each, and intergenerational transfers that have already taken place around 13%. The contribution of savers' preferences is also around 13%, we control for the effect of permanent income. Even though it is only one of a number of channels of influence, the transmission of preferences therefore plays a non- negligible role in the transmission of wealth inequalities.
    Date: 2009
  3. By: Jere R. Behrman; Nancy Birdsall; Gunilla Pettersson
    Abstract: Latin America is characterized by high and persistent schooling, land, and income inequalities and extreme income concentration. In a highly unequal setting, powerful interests are more likely to dominate politics, pushing for policies that protect privileges rather than foster competition and growth. As a result, changes in policies that political elites resist may be postponed in high-inequality countries to the detriment of overall economic performance. This paper examines the relationship between structural, high inequality—measured by high levels of schooling inequality—and liberalization of the financial sector for a sample of 37 developing and developed countries for the period 1975 to 2000. Liberalization of the financial sector can be broadly thought of in the Latin American pre-2000 context as opening credit markets that earlier were largely restricted, including by ending directed credit. For our measure of structural inequality we use data on schooling Gini coefficients that have not previously been used in this context. In our sample, we find that increases in financial liberalization were associated with bank crises and other domestic and external shocks, and that higher schooling inequality reduces the impetus for liberalization brought on by bank crises.
    Keywords: Latin America, education, inequality, financial liberalization
    Date: 2009–03
  4. By: Ingvild Almås and Magne Mogstad (Statistics Norway)
    Abstract: Differences in individual wealth holdings are widely viewed as a driving force of economic inequality. However, as this finding relies on cross-section data, we may confuse older with wealthier. We propose a new method to adjust for age effects in cross-sections, which eliminates transitory wealth inequality due to age, yet preserves inequality arising from other factors. This new method is superior to existing methods, like the much used Paglin-Gini, which is shown to have several problems. A new cross-country comparable database reveals that the choice of method is empirically important: Existing methods yield erroneous wealth inequality rankings of countries.
    Keywords: Wealth inequality; Life cycle; Age adjustments; Gini coefficient.
    JEL: D31 D63 D91 E21
    Date: 2009–04
  5. By: David Autor (Massachusetts Institute for Technology)
    Abstract: Part of the Supplemental Materials for INNOVATION AND U.S. COMPETITIVENESS, The Conference Board report #R-1441-09-RR. About the Report: The Conference Board has recently undertaken a project on innovation and competitiveness, with funding from Microsoft Corporation. The goal of the project is to provide an overview of the current state of knowledge on the nature of innovation, and its role in stimulating economic growth and improved living standards in the U.S. The project draws on experts across the academic, corporate, and policy arenas, in addition to The Conference Board’s own analysis, surveys, and focus groups of the business community. Such experts met in February 2007 to present and discuss various aspects of the innovation process and measurement thereof. Each presenter wrote a summary piece focusing on his respective area of expertise. These summary documents underpin the content in Innovation and U.S. Competitiveness; however the conclusions drawn are those of The Conference Board alone. These papers are retained for reference in The Conference Board Economics Program Working Paper Series.
    Date: 2008–12
  6. By: Beegle, Kathleen; Himelein, Kristen; Ravallion, Martin
    Abstract: Past research has found that subjective questions about an individuals'economic status do not correspond closely to measures of economic welfare based on household income or consumption. Survey respondents undoubtedly hold diverse ideas about what it means to be"poor"or"rich."Further, this heterogeneity may be correlated with other characteristics, including welfare, leading to frame-of-reference bias. To test for this bias, vignettes were added to a nationally representative survey of Tajikistan, in which survey respondents rank the economic status of the theoretical vignette households, as well as their own. The vignette rankings are used to reveal the respondent's own scale. The findings indicate that respondents hold diverse scales in assessing their welfare, but that there is little bias in either the economic gradient of subjective welfare or most other coefficients on covariates of interest. These results provide a firmer foundation for standard survey methods and regression specifications for subjective welfare data.
    Keywords: Access to Finance,Rural Poverty Reduction,,Housing&Human Habitats,Poverty Lines
    Date: 2009–04–01
  7. By: Brown, Alessio J G; Merkl, Christian; Snower, Dennis J.
    Abstract: This paper presents a theory explaining the labor market matching process through microeconomic incentives. There are heterogeneous variations in the characteristics of workers and jobs, and firms face adjustment costs in responding to these variations. Matches and separations are described through firms' job offer and firing decisions and workers' job acceptance and quit decisions. This approach obviates the need for a matching function. On this theoretical basis, we argue that the matching function is vulnerable to the Lucas critique. Our calibrated model for the U.S. economy can account for important empirical regularities that the conventional matching model cannot.
    Keywords: Adjustment costs; employment; Firing; Incentives; Job acceptance; Job offers; Matching; quits; unemployment
    JEL: E24 E32 J63 J64
    Date: 2009–04

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