nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2009‒07‒17
eight papers chosen by
Maximo Rossi
University of the Republic

  1. Work and Money : Payoffs by Ethnic Identity and Gender By Amelie Constant; Klaus F. Zimmermann
  2. To what extent do rising mortality inequalities by education and marital status attenuate the general mortality decline? The case of Finland in 1971-2030 By Vladimir M. Shkolnikov; Evgueni M. Andreev; Dmitri A. Jdanov; Domantas Jasilionis; Tapani Valkonen
  4. Religion, Human Capital Investments and the Family in the United States By Lehrer, Evelyn L.
  5. Inequality and Specialization: The Growth of Low-Skill Service Jobs in the United States By Autor, David; Dorn, David
  6. Educational Mismatch: Are High-Skilled Immigrants Really Working at High-Skilled Jobs and the Price They Pay If They Aren't? By Chiswick, Barry R.; Miller, Paul W.
  7. Wage Dispersion in a Partially Unionized Labor Force By John T. Addison; Ralph W. Bailey; W. Stanley Siebert
  8. Inequality and Unemployment in a Global Economy By Helpman, Elhanan; Itskhoki, Oleg; Redding, Stephen J

  1. By: Amelie Constant; Klaus F. Zimmermann
    Abstract: Upon arrival in the host country, immigrants undergo a fundamental identity crisis. Their ethnic identity being questioned, they can be classified into four states - assimilation, integration, separation and marginalization. This is suggested by the ethnosizer, a newly established measure to parameterize a person's ethnic identity, using individual information on language, culture, societal interaction, history of migration, and ethnic self-identification. In what state individuals end up varies among immigrants even from the same country. Moreover, the quest for ethnic identity affects women and men differentially. This paper contends that ethnic identity can significantly affect the attachment to and performance of immigrants in the host country labor market, beyond human capital and ethnic origin characteristics. Empirical estimates for immigrants in Germany show that ethnic identity is important for the decision to work and significantly and differentially affects the labor force participation of men and women. Women who exhibit the integrated identity are more likely to work than women who are German assimilated; this does not hold for men. However, once we control for selection in the labor market and a slew of individual and labor market characteristics, ethnic identity does not significantly affect the earnings of men or women immigrant workers.
    Keywords: Ethnosizer, ethnicity, ethnic identity, immigrant assimilation, integration, ethnic earnings
    JEL: F22 J15 J16 Z10
    Date: 2009
  2. By: Vladimir M. Shkolnikov (Max Planck Institute for Demographic Research, Rostock, Germany); Evgueni M. Andreev (Max Planck Institute for Demographic Research, Rostock, Germany); Dmitri A. Jdanov (Max Planck Institute for Demographic Research, Rostock, Germany); Domantas Jasilionis (Max Planck Institute for Demographic Research, Rostock, Germany); Tapani Valkonen
    Abstract: This study examines the relationship between growing inequality within the population, and the general mortality decline in Finland after 1971. The general mortality trend is considered as a simultaneous shift of population groups toward lower mortality over time, with the group-specific mortality rates linked to the mortality trend in the best practice (vanguard) group. The inequality measure accounting for all groups and their population weights reveals increases in both relative and absolute mortality inequalities. Changes in population composition by education and by marital status tend to compensate each other and the combined change does not produce significant effect on the total mortality. The widening of mortality inequalities produces important impact on the total mortality trend. The modeling allows to quantify this impact. If mortality inequalities remained frozen after 2000, the total mortality in 2026-30 would be by about one quarter lower compared to trend-based expectations.
    Keywords: Finland, differential mortality, education, marital status
    JEL: J1 Z0
    Date: 2009–06
  3. By: Angus Deaton (Research Program in Development Studies Center for Health and Wellbeing Princeton University); Jean Drèze (Department of Economics, Delhi School of Economics, Delhi, India)
    Abstract: The Indian economy has recently grown at historically unprecedented rates and is now one of the fastest-growing economies in the world. Real GDP per head grew at 3.95 percent a year from 1980 to 2005, and at 5.4 percent a year from 2000 to 2005. Measured at international prices, real per capita income in India, which was two-thirds of Kenya’s in 1950, and about the same as Nigeria’s, is now two and a half times as large as per capita income in both countries. Real per capita consumption has also grown rapidly, at 2.2 percent a year in the 1980s, at 2.5 percent a year in the 1990s, and at 3.9 percent a year from 2000 to 2005. Although the household survey data show much slower rates of per capita consumption growth than do these national accounts estimates, even these slower growth rates are associated with a substantial decrease in poverty since the early 1980s, Deaton and Drèze (2002), Himanshu (2007). Yet, per capita calorie intake is declining, as is the intake of many other nutrients; indeed fats are the only major nutrient group whose per capita consumption is unambiguously increasing. Today, more than three quarters of the population live in households whose per capita calorie consumption is less than 2,100 in urban areas and 2,400 in rural areas – numbers that are often cited as “minimum requirements” in India. A related concern is that anthropometric indicators of nutrition in India, for both adults and children, are among the worst in the world. Furthermore, the improvement of these measures of nutrition appears to be slow relative to what might be expected in the light of international experience and of India’s recent high rates of economic growth. Indeed, according to the National Family Health Survey, the proportion of underweight children remained virtually unchanged between 1998-99 and 2005-06 (from 47 to 46 percent for the age group of 0-3 years). 2 Undernutrition levels in India remain higher even than for most countries of sub-Saharan Africa, even though those countries are currently much poorer than India, have grown much more slowly, and have much higher levels of infant and child mortality. In this paper, we do not attempt to provide a complete and fully documented story of poverty, nutrition and growth in India. In fact, we doubt that such an account is currently possible. Instead, our aim is to present the most important facts, to point to a number of unresolved puzzles, and to present an outline of a coherent story that is consistent with the facts. As far as the decline in per capita calorie consumption is concerned, our leading hypothesis, on which much work remains to be done, is that while real incomes and real wages have increased (leading to some nutritional improvement), there has been an offsetting reduction in calorie requirements, due to declining levels of physical activity and possibly also to various improvements in the health environment. The net effect has been a slow reduction in per capita calorie consumption. Whatever the explanation, there is historical evidence of related episodes in other countries, for example in Britain from 1775 to 1850, where in spite of rising real wages, there was no apparent increase in the real consumption of food, Clark et al (1995). Per capita calorie consumption also appears to have declined in contemporary China in the 1980s and 1990s (a period of rapid improvement in nutrition indicators such as height and weight), see Du, Lu, Zhai and Popkin (2002). One of our main points is that, just as there is no tight link between incomes and calorie consumption, there is no tight link between the numbers of calories consumed and nutritional or health status. Although the number of calories is important, so are other factors, such as a balanced diet containing a reasonable proportion of fruits, vegetables, and fats, not just calories from cereals, as are factors that affect the need for and retention of calories, such as activity 3 levels, clean water, sanitation, good hygiene practices, and vaccinations. Because of changes in these other factors, the fact that people are increasingly choosing away from a diet that is heavy in cereals does not imply that nutritional status will automatically get worse. Nor should a reduction in calories associated with lower activity levels be taken to mean that Indians are currently adequately nourished; nothing could be further from the truth. We start by documenting the decline in per capita calorie consumption (Section 2.1), as well as the state of malnutrition (Section 2.2). We then look at possible reasons for the reduction in calories (Section 3.1), and try to tease out how it fits into the general picture of economic growth and malnutrition in India (Section 3.2). Section 4 concludes. We emphasize at the outset that our analysis covers the period up to 2006, so that we do not discuss what has happened to calorie consumption or to nutritional status in the subsequent two years, during which there has been a marked increase in the price of food, both in India and around the world.
    Date: 2008–08
  4. By: Lehrer, Evelyn L. (University of Illinois at Chicago)
    Abstract: This paper critically reviews what is known, based on analyses of micro-level U.S. data, about the role of religion in various interrelated decisions that people make over the life cycle, including investments in secular human capital, cohabitation, marriage, divorce, family size and employment. It also identifies gaps in our knowledge, and suggests agenda items for future research in the field. These include use of statistical models that allow for non-linearities in the effects associated with religious participation; consideration of contextual effects; and analyses that address anomalies found in earlier work regarding patterns of non-marital sex and divorce among conservative Protestants. Further work is also needed to increase our understanding of the role that religious factors are playing as various dimensions of the second demographic transition, along with elements of "American exceptionalism," continue to unfold in the U.S.
    Keywords: religiosity, religion
    JEL: J1 J2
    Date: 2009–07
  5. By: Autor, David (MIT); Dorn, David (CEMFI, Madrid)
    Abstract: After a decade in which wages and employment fell precipitously in low-skill occupations and expanded in high-skill occupations, the shape of U.S. earnings and job growth sharply polarized in the 1990s. Employment shares and relative earnings rose in both low and high-skill jobs, leading to a distinct U-shaped relationship between skill levels and employment and wage growth. This paper analyzes the sources of the changing shape of the lower-tail of the U.S. wage and employment distributions. A first contribution is to document a hitherto unknown fact: the twisting of the lower tail is substantially accounted for by a single proximate cause − rising employment and wages in low-education, in-person service occupations. We study the determinants of this rise at the level of local labor markets over the period of 1950 through 2005. Our approach is rooted in a model of changing task specialization in which "routine" clerical and production tasks are displaced by automation. We find that in labor markets that were initially specialized in routine-intensive occupations, employment and wages polarized after 1980, with growing employment and earnings in both high-skill occupations and low-skill service jobs.
    Keywords: skill demand, job tasks, inequality, polarization, technological change, occupational choice
    JEL: E24 J24 J31 J62 O33
    Date: 2009–07
  6. By: Chiswick, Barry R. (University of Illinois at Chicago); Miller, Paul W. (University of Western Australia)
    Abstract: This paper examines the incidence of the mismatch of the educational attainment and the occupation of employment, and the impact of this mismatch on the earnings, of high-skilled adult male immigrants in the US labor market. Analyses for high-skilled adult male native-born workers are also presented for comparison purposes. The results show that over-education is widespread in the high-skilled US labor market, both for immigrants and the native born. The extent of over-education declines with duration in the US as high-skilled immigrants obtain jobs commensurate with their educational level. Years of schooling that are above that which is usual for a worker's occupation are associated with very low increases in earnings. Indeed, in the first 10 to 20 years in the US years of over-education among high-skilled workers have a negative effect on earnings. This ineffective use of surplus education appears across all occupations and high-skilled education levels. Although schooling serves as a pathway to occupational attainment, earnings appear to be more closely linked to a worker's occupation than to the individual's level of schooling.
    Keywords: immigrants, skill, schooling, occupations, earnings, rates of return
    JEL: I21 J24 J31 J61 F22
    Date: 2009–07
  7. By: John T. Addison; Ralph W. Bailey; W. Stanley Siebert
    Abstract: Taking as our point of departure a model proposed by David Card (2001), we suggest new methods for analyzing wage dispersion in a partially unionized labor market. Card's method disaggregates the la- bor population into skill categories, which procedure entails some loss of information. Accordingly, we develop a model in which each worker individually is assigned a union-membership probability and predicted union and nonunion wages. The model yields a natural three-way de- composition of variance. The decomposition permits counterfactual analysis, using concepts and techniques from the theory of factorial experimental design. We examine causes of the increase in U.K. wage dispersion between 1983 and 1995. Of the factors initially considered, the most influential was a change in the structure of remuneration inside both the union and nonunion sectors. Next in importance was the decrease in union membership. Finally, exogenous changes in la- bor force characteristics had, for most groups considered, only a small negative effect. We supplement this preliminary three-factorial analy- sis with a ?ve-factorial analysis that allows us to examine effects from the wage-equation parameters in greater detail.
    Keywords: wage dispersion, three-way variance decomposition, bivariate kernal density smoothing, union membership, deunionization, factorial experimental design
    JEL: D3 J31 J51
    Date: 2009–06
  8. By: Helpman, Elhanan; Itskhoki, Oleg; Redding, Stephen J
    Abstract: This paper develops a new framework for examining the distributional consequences of international trade that incorporates firm and worker heterogeneity, search and matching frictions in the labor market, and screening of workers by firms. Larger firms pay higher wages and exporters pay higher wages than non-exporters. The opening of trade enhances wage inequality and raises unemployment, but expected welfare gains are ensured if workers are risk neutral. And while wage inequality is larger in a trade equilibrium than in autarky, reductions of trade impediments can either raise or reduce wage inequality.
    Keywords: International Trade; Risk; Unemployment; Wage Inequality
    JEL: E24 F12 F16
    Date: 2009–07

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