nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2009‒05‒30
ten papers chosen by
Maximo Rossi
University of the Republic

  1. Transitional Labour Markets, from theory to policy application. Can transitional labour markets contribute to a less traditional gender division of labour ? By Janine Leschke; Maria Jepsen
  2. Are Happier People Better Citizens? By Cahit Guven
  3. Why Is The World Getting Older? The Influence of Happiness on Mortality By Cahit Guven; Rudolph Saloumidis
  4. Unemployment Compensation and High European Unemployment: A Reassessment with New Benefit Indicators By David R. Howell and Miriam Rehm
  5. Where Angels Fear to Trade: The Role of Religion in Household Finance By Renneboog, L.D.R.; Spaenjers, C.
  6. The effect of social diversity on volunteering: Evidence from New Zealand By Jeremy Clark; Bonggeun Kim
  7. Government Information Transparency By Facundo Albornoz; Joan Esteban; Paolo Vanin
  8. What is an award worth? An econometric assessment of the impact of awards on employee performance By Susanne Neckermann; Reto Cueni; Bruno S. Frey
  9. Marry for What? Caste and Mate Selection in Modern India By Banerjee, Abhijit; Duflo, Esther; Ghatak, Maitreesh; Lafortune, Jeanne
  10. History without Evidence: Latin American Inequality since 1491 By Jeffrey G. Williamson

  1. By: Janine Leschke (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, ETUI - European Trade Union Institute); Maria Jepsen (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, ETUI - European Trade Union Institute)
    Abstract: Much of the gender inequality in the labour market is brought about by women's dual role as worker and (potential) carer. In this regard transitional arrangements can contribute to mitigate the risks associated with parenthood and to distribute risks more equally. This paper looks at these issues in light of the transitional labour market (TLM) concept. The first section discusses various gender-equality models which imply different ways of organising, for example, childcare, parental leave and flexible working time. Sections two and three look at gender inequalities in labour market outcomes and discuss transitional arrangements that can contribute to the achievement of more gender equality in six countries taken as examples. The last section discusses the results of the labour market and institutional analysis in light of the TLM concept.
    Keywords: Gender, labour market, transitional labour markets, childcare, parental leave, flexible working time.
    Date: 2009–04
  2. By: Cahit Guven
    Abstract: This paper presents evidence on causal influence of happiness on social capital and trust using German Socio-Economic Panel. Exploiting the unexplained cross-sectional variation in individual happiness (residuals) in 1984 to eliminate the endogeneity problem, the paper nds that happier people trust others more, and importantly, help create more social capital. Specifically, they have a higher desire to vote, perform more volunteer work, and more frequently participate in public activities. They also have a higher respect for law and order, hold more association memberships, are more attached to their neighborhood, and extend more help to others. Residual happiness appears to be an indicator of optimism, and has an inverse U-shaped relationship with social capital measures. The findings also suggest that the relationship between happiness and social capital strengthened in the world in the last decade.
    Keywords: happiness, trust, social capital, optimism.
    JEL: Z13
  3. By: Cahit Guven; Rudolph Saloumidis
    Abstract: World life expectancy has risen by around 20 years in the last 50 years. This period has also witnessed rising happiness levels around the world suggesting that happiness might be one of the causes behind the decline in mortality. We investigate the relationship between happiness and mortality using the German Socio-Economic Panel. We consider doctor visits, self-reported health, and presence of chronic illness as health measures. After controlling for initial health conditions, we find that happiness extends life expectancy. 10 percent increase in happiness decreases probability of death by four percent, and this effect is more pronounced for men and younger people. Happiness plays a more important role for chronically ill people in decreasing mortality than for those who are not chronically ill. The positive influence of happiness on mortality can offset the negative impact of chronic illness. Marriage decreases mortality and this effect appears to work through increased happiness.
    Keywords: happiness; mortality; health; chronic illness.
    JEL: I10 I12
  4. By: David R. Howell and Miriam Rehm (New School for Social Research, New York, NY)
    Keywords: european unemployment;
    Date: 2009–04
  5. By: Renneboog, L.D.R.; Spaenjers, C. (Tilburg University, Center for Economic Research)
    Abstract: Although the relationship between religion and economic development on the macro-level has been investigated, it is less clear how religious background influences economic attitudes and financial decision-making on the level of the individual or household, the micro-level. We use panel data from the extensive DNB Household Survey, covering the period from 1995 to 2008, to investigate whether – and through which channel – religious denomination affects household finance in the Netherlands. We find evidence that, in general, religious households care more about saving, are more risk-averse, consider themselves more trusting, have a more external locus of control, and have a stronger bequest motive. Furthermore, Catholics and Protestants have longer planning horizons, and Protestants and Evangelicals seem to have a greater sense of individual financial responsibility. Most of these factors matter for household financial decision-making, albeit to differing degrees. Using our religion variables as instruments for economic attitudes (and controlling for demographic and background risk characteristics), we demonstrate that the above-mentioned differences in economic beliefs and preferences explain the higher propensity to save by religious households in general and the lower investments in risky assets by Catholic households.
    Keywords: Economic Attitudes; Culture; Religion; Household finance; Portfolio choice; Trust.
    JEL: A1 D1 Z1
    Date: 2009
  6. By: Jeremy Clark (University of Canterbury); Bonggeun Kim
    Abstract: We survey the emerging empirical literature that identifies a negative relationship between heterogeneity of race, ethnicity, income etc. at the neighborhood level, and individuals’ likelihood of contributing money or time to public goods or of trusting their neighbors. One problem in this literature is that the “neighborhoods” used are often by necessity overly broad, and arguably not those that individuals experience day to day. We present a simple model showing the effect of neighbourhood definition when measuring the effect of heterogeneity on peoples’ actions or attitudes. The broad definitions commonly used could produce a spurious negative effect of heterogeneity. With these limitations in view, we use panel data from the 1996, 2001 and 2006 censuses in New Zealand to test whether heterogeneity by race/ethnicity, birthplace, income or language negatively affect New Zealander’s probability of volunteering. Using cross sectional analysis, we estimate the effect of each kind of heterogeneity on volunteering at the “meshblock” (tract) and broader “area unit” levels. We control for confounding neighbourhood characteristics such as household income and deprivation, employment and education status, and religious affiliation. We next address the issue of endogenous self-selection to neighbourhood by comparing cross sectional and fixed effects analysis over the three years of the census. In results, we find that the size of neighbourhood unit significantly affects the estimated effects of heterogeneity on volunteering. Second, in cross sectional analysis at the meshblock level, volunteering appears reduced by heterogeneity of race/ethnicity and language, not affected by heterogeneity of birthplace, and increased by heterogeneity of household income. Third, in fixed effects analysis only racial/ethnic heterogeneity retains a direct negative effect on volunteering.
    Keywords: heterogeneity; volunteering
    JEL: D13 D64 H31
    Date: 2009–05–14
  7. By: Facundo Albornoz; Joan Esteban; Paolo Vanin
    Abstract: This paper studies a model of announcements by a privately in- formed government about the future state of the economic activity in an economy subject to recurrent shocks and with distortions due to income taxation. Although transparent communication would ex ante be desirable, we find that even a benevolent government may ex-post be non-informative, in an attempt to countervail the tax distortion with a `second best' compensating distortion in information. This re- sult provides a rationale for independent national statistical offices, committed to truthful communication. We also find that whether inequality in income distribution favors or harms government trans- parency depends on labor supply elasticity.
    Keywords: Government announcements, Cheap talk, Asymmetric information, Inequality
    JEL: D82 E61
    Date: 2009–05
  8. By: Susanne Neckermann; Reto Cueni; Bruno S. Frey
    Abstract: Behavioral economics documents the importance of status and self-image concerns in the workplace, but is largely silent about how to instrumentalize them to induce effort. Awards - widespread in the corporate sector and elsewhere - are motivators that derive their value from such social concerns. Panel data from the call center of a large international bank allow us to estimate the impact of receiving an award on effort. The performance of winners proves to be significantly higher than that of comparable nonrecipients after the award has been presented. This increase in work effort is sizeable, robust, and not driven by reverse causation.
    Keywords: Awards, motivation, non-monetary compensation, event-study, incentives
    JEL: C23 J33 M52
    Date: 2009–05
  9. By: Banerjee, Abhijit; Duflo, Esther; Ghatak, Maitreesh; Lafortune, Jeanne
    Abstract: This paper studies the role played by caste, education and other social and economic attributes in arranged marriages among middle-class Indians. We use a unique data set on individuals who placed matrimonial advertisements in a major newspaper, the responses they received, how they ranked them, and the eventual matches. We estimate the preferences for caste, education, beauty, and other attributes. We then compute a set of stable matches, which we compare to the actual matches that we observe in the data. We find the stable matches to be quite similar to the actual matches, suggesting a relatively frictionless marriage market. One of our key empirical findings is that there is a very strong preference for within-caste marriage. However, because both sides of the market share this preference and because the groups are fairly homogeneous in terms of the distribution of other attributes, in equilibrium, the cost of wanting to marry within-caste is low. This allows caste to remain a persistent feature of the Indian marriage market.
    Keywords: caste; Gale-Shapley Algorithm; marriage markets
    JEL: D10 J12 O12
    Date: 2009–05
  10. By: Jeffrey G. Williamson
    Abstract: Most analysts of the modern Latin American economy hold to a pessimistic belief in historical persistence -- they believe that Latin America has always had very high levels of inequality, suggesting it will be hard for modern social policy to create a more egalitarian society. This paper argues that this conclusion is not supported by what little evidence we have. The persistence view is based on an historical literature which has made little or no effort to be comparative. Modern analysts see a more unequal Latin America compared with Asia and the rich post-industrial nations and then assume that this must always have been true. Indeed, some have argued that high inequality appeared very early in the post-conquest Americas, and that this fact supported rent-seeking and anti-growth institutions which help explain the disappointing growth performance we observe there even today. This paper argues to the contrary. Compared with the rest of the world, inequality was not high in pre-conquest 1491, nor was it high in the postconquest decades following 1492. Indeed, it was not even high in the mid-19th century just prior Latin America’s belle époque. It only became high thereafter. Historical persistence in Latin American inequality is a myth.
    Keywords: Inequality, development, Latin America
    JEL: N16 N36 O15 D3
    Date: 2009–05–25

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