nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2009‒05‒23
eight papers chosen by
Maximo Rossi
University of the Republic

  1. Well-being over the Life Span : Evidence from British and German Longitudinal Data By Christoph Wunder; Andrea Wiencierz; Johannes Schwarze; Helmut Küchenhoff; Sara Kleyer; Philipp Bleninger
  2. Maternal Employment and Happiness : The Effect of Non-Participation and Part-Time Employment on Mothers' Life Satisfaction By Eva M. Berger
  3. Noncognitive Skills, School Achievements and Educational Dropout By Katja Coneus; Johannes Gernandt; Marianne Saam
  4. The Effects of Mobility on Neighbourhood Social Ties By Gundi Knies
  5. Earnings Dynamics and Inequality in EU, 1994-2001 By Denisa Maria Sologon; Cathal O'Donoghue
  6. Older or Wealthier? : The Impact of Age Adjustments on the Wealth Inequality Ranking of Countries By Ingvild Almas; Magne Mogstady
  7. Performance Pay and the White-Black Wage Gap By John S. Heywood; Daniel Parent
  8. Family Ties and Political Participation By Alesina, Alberto; Giuliano, Paola

  1. By: Christoph Wunder; Andrea Wiencierz; Johannes Schwarze; Helmut Küchenhoff; Sara Kleyer; Philipp Bleninger
    Abstract: This paper applies semiparametric regression models using penalized splines to investigate the profile of well-being over the life span. Splines have the advantage that they do not require a priori assumptions about the form of the curve. Using data from the British Household Panel Survey (BHPS) and the German Socio-Economic Panel Study (SOEP), the analysis shows a common, quite similar, age-specific pattern of life satisfaction for both Britain and Germany that can be characterized by three age stages. In the first stage, life satisfaction declines until approximately the fifth life decade. In the second age stage, well-being clearly increases and has a second turning point (maximum) after which well-being decreases in the third age stage. Several reasons for the three-phase pattern are discussed. We point to the fact that neither polynomial functions of the third nor the fourth degree describe the relationship adequately: polynomials locate the minimum and the maximum imprecisely. In addition, our analysis discusses the indistinguishability of age, period, and cohort effects: we propose estimating age-period models that control for cohort effects including substantive variables, such as the life expectancy of the birth cohort, and further observed socioeconomic characteristics in the regression.
    Keywords: Subjective well-being, life satisfaction, semiparametric regression, penalized splines, age-period model, age-cohort model
    JEL: C14 C23 D10 I31
    Date: 2009
  2. By: Eva M. Berger
    Abstract: In contrast to unemployment, the effect of non-participation and parttime employment on subjective well-being has much less frequently been the subject of economists' investigations. In Germany, many women with dependent children are involuntarily out of the labor force or in part-time employment because of family constraints (e.g., due to lack of available and appropriate childcare). Using data from the German Socio-Economic Panel (SOEP) Study, this paper analyzes the impact of involuntary familyrelated non-participation and part-time employment on mothers' life satisfaction. Controlling for unobserved individual fixed effects, I find that both the pecuniary effects (foregone earnings) and the non-pecuniary effects (psychological costs) are significantly negative. Compensating income variations reveal that the residual household income would have to be raised by 182 percent (157 percent/77 percent) in order to just offset the negative effect of not being able to work because of family constraints (of being in short/long part-time employment). Moreover, in terms of overall happiness among mothers, non-participation is revealed to be a more serious problem than unemployment.
    Keywords: Subjective well-being, life satisfaction, labor force participation, part-time, maternal employment, work-family conflict
    JEL: I31 J21 J22
    Date: 2009
  3. By: Katja Coneus; Johannes Gernandt; Marianne Saam
    Abstract: We analyse the determinants of dropout from secondary and vocational education in Germany using data from the Socio-Economic Panel from 2000 to 2007. In addition to the role of classical variables like family background and school achievements, we examine the effect of noncognitive skills. Both, better school grades and higher noncognitive skills reduce the risk to become an educational dropout. The influence of school achievements on the dropout probability tends to decrease and the influence of noncognitive skills tends to increase with age.
    Keywords: Noncognitive skills, school grades, secondary education, vocational training
    JEL: I21 J13 J24
    Date: 2009
  4. By: Gundi Knies
    Abstract: This research examines the strength of people¿s ties with close neighbours and the sensitivity thereof to changes in residential mobility, access to modes of public and private transport, and changes in the availability of modern communications technologies using the German Socio-economic Panel Study (SOEP). All forms of mobility have increased over time and are negatively associated with visiting neighbours. With further increases in mobility, close neighbours may become less relevant. Nevertheless, presently the incidence of visits with neighbours is sizeable; in contrast to the frequent assertion in the literature that the neighbourhood is of no importance.
    Keywords: Neighbourhood, Social interactions, Mobility, Transport, Internet, Family ties
    JEL: J19 R29 Y8 Z13
    Date: 2009
  5. By: Denisa Maria Sologon; Cathal O'Donoghue
    Abstract: This paper uses ECHP for 14 EU countries to explore the dynamic structure of individual earnings and the extent to which changes in cross-sectional earnings inequality reflect transitory or permanent components of individual lifecycle earnings variation. Increases in inequality reflect increases in permanent differentials in four countries and increases in both components in two. Decreases in inequality reflect decreases in transitory differentials in four countries, in permanent differentials in two and in both components in rest. In general, increases in inequality are accompanied by decreases in mobility, whereas only in three countries the increase in mobility is determined by the decrease in inequality.
    Keywords: Panel data, wage distribution, inequality, mobility
    JEL: C23 D31 J31 J60
    Date: 2009
  6. By: Ingvild Almas; Magne Mogstady
    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
  7. By: John S. Heywood; Daniel Parent
    Abstract: We show that the reported tendency for performance pay to be associated with greater wage inequality at the top of the earnings distribution applies only to white workers. This results in the white-black wage differential among those in performance pay jobs growing over the earnings distribution even as the same differential shrinks over the distribution for those not in performance pay jobs. We show this remains true even when examining suitable counterfactuals that hold observables constant between whites and blacks. We explore reasons behind our finding that performance pay is associated with greater racial earnings gaps at the top of the wage distribution focusing on the interactions between discrimination, unmeasured ability and selection.
    Keywords: Racial wage differentials, compensation practices
    JEL: J15 J31 J33
    Date: 2009
  8. By: Alesina, Alberto (Harvard University); Giuliano, Paola (University of California, Los Angeles)
    Abstract: We establish an inverse relationship between family ties, generalized trust and political participation. The more individuals rely on the family as a provider of services, insurance, transfer of resources, the lower is civic engagement and political participation. The latter, together with trust, are part of what is known as social capital, therefore in this paper we contribute to the investigation of the origin and evolution of social capital over time. We establish these results using within country evidence and looking at the behavior of immigrants from various countries in 32 different destination places.
    Keywords: family ties, trust, culture
    JEL: Z10 Z13
    Date: 2009–04

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