nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2009‒08‒16
six papers chosen by
Maximo Rossi
University of the Republic

  1. Inequality in Croatia in Comparison By Sebastian Leitner; Mario Holzner
  2. Qualified Equal Opportunity and Conditional Mobility: Gender Equity and Educational Attainmant in Canada By Gordon Anderson; Teng Wah Leo; Robert Muelhaupt
  3. The One Child Policy and Family Formation in Urban China By Gordon Anderson; Teng Wah Leo
  4. Polarization of the Poor: Multivariate Relative Poverty Measurement Sans Frontiers By Gordon Anderson
  5. Nonparametric estimation of a polarization measure By Gordon Anderson; Oliver Linton; Yoon-Jae Whang
  6. Work Disability, Work, and Justification Bias in Europe and the U.S. By Arie Kapteyn; James P. Smith; Arthur van Soest

  1. By: Sebastian Leitner (The Vienna Institute for International Economic Studies, wiiw); Mario Holzner (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: The paper analyses economic inequality in Croatia in comparison with other transition economies of Central, East and Southeast Europe. It comprises a literature review and a descriptive analysis as well as an econometric modelling exercise. The main findings are the following: Over the entire transition period, Croatia has had a rather low and remarkably stable level of income inequality. The decomposition analysis of the period 2000-2006 shows that, although the concentration of income from paid employment was rising, overall stability of income inequality was due to a reduction of the more unequally distributed income from self-employment as well as to improved targeting of public transfers in later years. By contrast, the redistributive effect of the system of public pensions is rather low and could be improved. The outcome of the econometric analysis suggests that Croatia should further aim for a high share of government expenditures and a low level of inflation, in order to achieve a reasonable redistribution of disposable income and a stable development of real income. At the same time Croatia should increase its share of exports of goods and services in GDP to raise employment in the more productive export industries. Efforts to further decrease the relatively high unemployment rate would yield positive distributional effects as well.
    Keywords: inequality, income distribution, transition economies, Croatia
    JEL: D63 O15 P36
    Date: 2009–06
  2. By: Gordon Anderson; Teng Wah Leo; Robert Muelhaupt
    Abstract: Interest in Economic and Social Mobility is rooted in a societal aspiration for equal opportunity. The aspiration is based upon an Egalitarian Political Philosophy which approves of differential outcomes when they are the consequence of differential effort and disapproves of differential outcomes when they are the consequence of differential circumstance and results in “level playing field” policies. In the absence of any other imperative, such policies would result in increased upward mobility for the poorly endowed and increased downward mobility for the richly endowed. Adding a Utilitarian imperative (the inheriting generation should not be made worse off in a first order dominance sense) to societal objectives results in a “Qualified Equal Opportunity or Conditional Mobility” policy which calls for rethinking the approach to mobility measurement. Techniques for evaluating the impact of such policies (both in terms of generational regressions and transition matrices) are proposed and exemplified in considering the issue of Gender Equity in educational attainment in Canada over the last 20 years. The evidence is that women have more than caught up with men and that, in closing the gap, it is the poorly endowed women who have made the most progress in terms of mobility whilst the mobility of males has remained relatively constant across the endowment spectrum consistent with a Qualified Equal Opportunity program.
    Keywords: Mobility and Equal Opportunity
    JEL: J62
    Date: 2009–08–06
  3. By: Gordon Anderson; Teng Wah Leo
    Abstract: The Chinese government implemented the One Child Policy (OCP) in an attempt to ameliorate the population explosion and its potential negative economic consequences on their infant economy in 1979. Here the consequences of this policy for marital matching and family size decisions are examined. A simple General Equilibrium model demonstrates how constraints on marital output on the quantity of children dimension raises the marginal benefit of increased positive assortative matching, and greater investment in children. These theoretical predictions are examined empirically in a variety of ways. The prediction of intensified positive assortative matching was examined using Distributional Overlap and Stochastic Dominance Tests and provided support for intensified assortative matching amongst the urban population. To support this positive finding, we next examined if the policy was indeed binding. The extent to which parental family size decisions were bound by the OCP were examined using Poisson regression techniques and the results suggest that the OCP principally affected the quantity of children decision by suppressing parental preference for male heirs and they suggest that after the OCP was implemented births beyond the first child are purely accidental among younger mothers. In addition, we also found some evidence of increased educational attainment among children reflecting increased parental investments in children post OCP further supporting the view that the One Child Policy altered significantly familial decisions in urban China.
    Keywords: Family Formation, Rationing, Matching
    JEL: J12
    Date: 2009–08–06
  4. By: Gordon Anderson
    Abstract: A major impediment to poverty evaluation in multivariate environments are the difficulties associated with formulating poverty frontiers. This paper proposes a new multivariate polarization measure which, in appropriate circumstances, works as a multivariate poverty measure which does not require computation of a poverty frontier. As a poverty measure it has the intuitive appeal of reflecting the degree to which societies poor and non-poor are polarized. (The measure would also have considerable application in studying multivariate convergence issues in economic growth models). The measure is exemplified in a poor-non poor country study over the period 1990-2005 based upon the joint distribution of per capita GNP and Life Expectancy. The results suggest that as a group the world’s poor are experiencing diminished poverty polarization, however within the world’s poor the African Nations are experiencing increased poverty polarization.
    Keywords: Multivariate Poverty Measurement, Polarization
    JEL: I32
    Date: 2009–08–06
  5. By: Gordon Anderson; Oliver Linton; Yoon-Jae Whang
    Abstract: This paper develops methodology for nonparametric estimation of a polarization measure due to Anderson (2004) and Anderson, Ge, and Leo (2006) based on kernel estimation techniques. We give the asymptotic distribution theory of our estimator, which in some cases is nonstandard due to a boundary value problem. We also propose a method for conducting inference based on estimation of unknown quantities in the limiting distribution and show that our method yields consistent inference in all cases we consider. We investigate the finite sample properties of our methods by simulation methods. We give an application to the study of polarization within China in recent years
    Keywords: Kernel Estimation, Inequality, Overlap coefficient, Poissonization
    JEL: C12 C13 C14
    Date: 2009–06
  6. By: Arie Kapteyn; James P. Smith; Arthur van Soest
    Abstract: To analyze the effect of health on work, many studies use a simple self-assessed health measure based upon a question such as “do you have an impairment or health problem limiting the kind or amount of work you can do?†A possible drawback of such a measure is the possibility that different groups of respondents may use different response scales. This is commonly referred to as “differential item functioning†(DIF). A specific form of DIF is justification bias: to justify the fact that they don’t work, non-working respondents may classify a given health problem as a more serious work limitation than working respondents. In this paper we use anchoring vignettes to identify justification bias and other forms of DIF across countries and socio-economic groups among older workers in the U.S. and Europe. Generally, we find differences in response scales across countries, partly related to social insurance generosity and employment protection. Furthermore, we find significant evidence of justification bias in the U.S. but not in Europe, suggesting differences in social norms concerning work.
    JEL: C81 I12 J28
    Date: 2009–08

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