nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2009‒11‒14
fifteen papers chosen by
Maximo Rossi
University of the Republic

  1. Will growth and technology destroy social interaction? The inverted U-shape hypothesis By Antoci Angelo; Sabatini Fabio; Sodini Mauro
  2. Measuring Inequality of Well-Being with a Correlation-Sensitive Multidimensional Gini Index By Koen Decancq; Maria Ana Lugo
  3. Welfare state context, female earnings and childbearing By Gunnar Andersson; Michaela Kreyenfeld; Tatjana Mika
  4. The Gender and Generational Consquences of the Demographic Transition and Population Policy: An Assessment of the Micro and Macro Linkages By T. Paul Schultz
  5. Family Networks and School Enrolment: Evidence from a Randomized Social Experiment By Angelucci, Manuela; De Giorgi, Giacomo; Rangel, Marcos A.; Rasul, Imran
  6. The Rate of Return to the High/Scope Perry Preschool Program By Heckman, James J.; Moon, Seong Hyeok; Pinto, Rodrigo; Savelyev, Peter A.; Yavitz, Adam
  7. Happiness in Europe: Cross-Country Differences in the Determinants of Subjective Well-Being By Pedersen, Peder J.; Schmidt, Torben Dall
  8. The Extent of Collective Bargaining and Workplace Representation: Transitions between States and their Determinants. A Comparative Analysis of Germany and Great Britain By Addison, John T.; Bryson, Alex; Teixeira, Paulino; Pahnke, André; Bellmann, Lutz
  9. Health and Income: A Robust Comparison of Canada and the US By Duclos, Jean-Yves; Échevin, Damien
  10. Distributional change, reference groups and the measurement of relative deprivation By Silber, Jacques; Verme, Paolo
  11. Work Disability, Work, and Justification Bias in Europe and the U.S. By Arie Kapteyn; James P. Smith; Arthur Van Soest
  12. A cross-country analysis of the risk factors for depression at the micro and macro level By Natalia Melgar; Máximo Rossi
  13. Gender, education and reciprocal generosity: Evidence from 1,500 experiment subjects By Pablo Brañas-Garza; Juan C. Cárdenas; Máximo Rossi
  14. Horizontal Inequity in Access to Health Care in Four South American Cities By Ana Balsa; Máximo Rossi; Patricia Triunfo
  15. Trends in the Level and Distribution of Income Support By Robert A. Moffitt; John Karl Scholz

  1. By: Antoci Angelo; Sabatini Fabio; Sodini Mauro
    Abstract: This paper addresses two hot topics of the contemporary debate, social capital and economic growth. Our theoretical analysis sheds light on decisive but so far neglected issues: how does social capital accumulate over time? Which is the relationship between social capital, technical progress and economic growth in the long run? The analysis shows that the economy may be attracted by alternative steady states, depending on the initial social capital endowments and cultural exogenous parameters representing the relevance of social interaction and trust in well-being and production. When material consumption and relational goods are substitutable, the choice to devote more and more time to private activities may lead the economy to a “social poverty trap”, where the cooling of human relations causes a progressive destruction of the entire stock of social capital. In this case, the relationship of social capital with technical progress is described by an inverted U-shaped curve. However, the possibility exists for the economy to follow a virtuous trajectory where the stock of social capital endogenously and unboundedly grows.
    Keywords: Relational goods, social capital, economic growth, technical change
    JEL: Z13
    Date: 2009–10
  2. By: Koen Decancq; Maria Ana Lugo
    Abstract: We propose to measure inequality of well-being with a multidimensional generalization of the Gini coefficient. We derive two inequality indices from their underlying social evaluation functions. These functions are conceived as a double aggregation functions: one across the dimensions of well-being, and another across the individuals. They differ only with respect to the sequencing of aggregations. We argue that the sequencing that does not exclude the Gini index to be sensitive to the correlation between the dimensions is more attractive. We illustrate both Gini indices using Russian household data on three dimensions of well-being: expenditure, health and education.
    Keywords: Multidimensional inequality, Single parameter Gini Index, Correlation increasing majorization, Russia
    JEL: D63 I31 O52
    Date: 2009
  3. By: Gunnar Andersson (Max Planck Institute for Demographic Research, Rostock, Germany); Michaela Kreyenfeld (Max Planck Institute for Demographic Research, Rostock, Germany); Tatjana Mika
    Abstract: This paper investigates the role of female earnings in childbearing decisions in two very different European contexts. By applying event history techniques to German and Danish register data during 1981-2001, we demonstrate how female earnings relate to first, second and third birth rates. Our study shows that female earnings are rather positively associated with fertility in Denmark, while the relationship is the opposite in West Germany. We interpret our findings based on our observation that Danish social policies tend to encourage Danish women to become established in the labor market before having children, while German policies during the 1980s and 1990s were not designed to encourage maternal employment.
    Keywords: Denmark, fertility
    JEL: J1 Z0
    Date: 2009–10
  4. By: T. Paul Schultz (Yale University, Economic Growth Center)
    Abstract: The demographic transition changes the age composition of a population, affecting resource allocations at the household and aggregate level. If age profiles of income, consumption, savings and investments were stable and estimable for the entire population, they might suggest how the demographic transition would affects inputs to growth. However, existing macro and micro simulations are estimated from unrepresentative samples of wage earners that do not distinguish sex, schooling, etc. The “demographic dividend” is better evaluated through case studies of household surveys and long-run social experiments. Matlab, Bangladesh, extended a family planning and maternal and child health program to half the villages in its district in 1977, and recorded fertility in the program villages was 16 percent lower than in control villages for the following two decades until 1996. Households in program villages realized health and productivity gains that were concentrated among women, while child survival and schooling increased, and household physical assets were 25 percent greater per adult than in control villages.
    Keywords: Fertility decline, demographic transition, intergenerational transfers, gender
    JEL: J13 J21 J68 O15
    Date: 2009–10
  5. By: Angelucci, Manuela (University of Arizona); De Giorgi, Giacomo (Stanford University); Rangel, Marcos A. (Harris School, University of Chicago); Rasul, Imran (University College London)
    Abstract: We present evidence on whether and how a household's behavior is influenced by the presence and characteristics of its extended family. Using data from the PROGRESA program in Mexico, we exploit information on the paternal and maternal surnames of heads and spouses in conjunction with the Spanish naming convention to identify the inter and intra generational family links of each household to others in the same village. We then exploit the randomized research design of the PROGRESA evaluation data to identify whether the treatment effects of PROGRESA transfers on secondary school enrolment vary according to the characteristics of extended family. We find PROGRESA only raises secondary enrolment among households that are embedded in a family network. Eligible but isolated households do not respond. The mechanism through which the extended family influences household schooling choices is the redistribution of resources within the family network from eligibles that receive de facto unconditional cash transfers from PROGRESA, towards eligibles on the margin of enrolling children into secondary school.
    Keywords: extended family network, PROGRESA, resource sharing, schooling
    JEL: I21 J12 O12
    Date: 2009–10
  6. By: Heckman, James J. (University of Chicago); Moon, Seong Hyeok (University of Chicago); Pinto, Rodrigo (University of Chicago); Savelyev, Peter A. (University of Chicago); Yavitz, Adam (University of Chicago)
    Abstract: This paper estimates the rate of return to the High/Scope Perry Preschool Program, an early intervention program targeted toward disadvantaged African-American youth. Estimates of the rate of return to the Perry program are widely cited to support the claim of substantial economic benefits from preschool education programs. Previous studies of the rate of return to this program ignore the compromises that occurred in the randomization protocol. They do not report standard errors. The rates of return estimated in this paper account for these factors. We conduct an extensive analysis of sensitivity to alternative plausible assumptions. Estimated social rates of return generally fall between 7-10 percent, with most estimates substantially lower than those previously reported in the literature. However, returns are generally statistically significantly different from zero for both males and females and are above the historical return on equity. Estimated benefit-to-cost ratios support this conclusion.
    Keywords: rate of return, cost-benefit analysis, standard errors, Perry Preschool Program, compromised randomization, early childhood intervention programs, deadweight costs
    JEL: D62 I22 I28
    Date: 2009–10
  7. By: Pedersen, Peder J. (University of Aarhus); Schmidt, Torben Dall (University of Southern Denmark)
    Abstract: The purpose in the present paper is to use individual panel data in the European Community Household Panel to analyse the impact on self-reported satisfaction from a number of economic and demographic variables. The paper contributes to the ongoing discussion of the relationship between life satisfaction and income. The panel property of the data makes it possible to study also the impact on satisfaction from income changes as well as the impact from acceleration in income and changes in labour market status on changes in satisfaction. A number of demographic variables and individual attitude indicators are also entered into the analysis of both the level of satisfaction and the change in satisfaction from one wave of the survey to the next. We find a strong impact from the level of income in all countries, an impact from change and acceleration in income for a smaller number of countries, a strong impact from most changes in labour market status and finally important effects from a number of demographic variables.
    Keywords: satisfaction, income, labour market status, health
    JEL: C23 D31 I31 J28
    Date: 2009–10
  8. By: Addison, John T. (University of South Carolina); Bryson, Alex (National Institute of Economic and Social Research); Teixeira, Paulino (University of Coimbra); Pahnke, André (IAB, Nürnberg); Bellmann, Lutz (IAB, Nürnberg)
    Abstract: Industrial relations are in flux in many nations, perhaps most notably in Germany and the Britain. That said, comparatively little is known in any detail of the changing pattern of the institutions of collective bargaining and worker representation in Germany and still less in both countries about firm transitions between these institutions over time. The present paper maps changes in the importance of the key institutions, 1998-2004, and explores the correlates of two-way transitions, using successive waves of the German IAB Establishment Panel and both cross-sectional and panel components of the British Workplace Employment Relations Survey. We identify the workplace correlates of the demise of collective bargaining in Britain and the erosion of sectoral bargaining in Germany, and identify the respective roles of behavioral and compositional change.
    Keywords: union recognition, union coverage, sectoral and firm-level collective bargaining, works councils, joint consultative committees, changes in collective bargaining/worker representation states, bargaining transitions and their determinants
    JEL: J50 J53
    Date: 2009–10
  9. By: Duclos, Jean-Yves (Université Laval); Échevin, Damien (University of Sherbrooke)
    Abstract: This paper uses sequential stochastic dominance procedures to compare the joint distribution of health and income across space and time. It is the first application of which we are aware of methods to compare multidimensional distributions of income and health using procedures that are robust to aggregation techniques. The paper’s approach is more general than comparisons of health gradients and does not require the estimation of health equivalent incomes. We illustrate the approach by contrasting Canada and the US using comparable data. Canada dominates the US over the lower bi-dimensional welfare distribution of health and income, though not generally in terms of the uni-dimensional distribution of health or income. The paper also finds that welfare for both Canadians and Americans has not unambiguously improved during the last decade over the joint distribution of income and health, in spite of the fact that the uni-dimensional distributions of income have clearly improved during that period.
    Keywords: health inequality, self-reported health status, income distribution, stochastic dominances, social welfare
    JEL: I10 I32 I38 D63 D30 H51
    Date: 2009–10
  10. By: Silber, Jacques (Bar-Ilan University); Verme, Paolo (University of Torino)
    Abstract: This paper attempts to explicitly integrate the idea of reference group when measuring relative deprivation. It assumes that in assessing her situation in society an individual compares herself with individuals whose environment can be considered as being similar to hers. By environment we mean the set of people with a similar set of observable characteristics such as human capital, household attributes and location. We therefore propose to measure relative deprivation by comparing the actual income of an individual with the one he could have expected on the basis of the level of these characteristics. We then aggregate these individual comparisons by computing an index of "distributional change" that compares, on a non anonymous basis, the distributions of the actual and "expected" incomes. At the difference of other approaches to relative deprivation our measure takes into account not only the difference between the actual and "expected" individual incomes but also that between the actual and "expected" individual ranks. We applied our approach to Moldova, the poorest country in Europe, using a survey which covered a period of six years (from 2000 to 2005). We then observed that our measure of deprivation, when compared to other possible measures of deprivation, had a higher correlation with the answers given by individuals in the survey we used to a question on their assessment of their housing living conditions (a higher number corresponding to a worse subjective situation).
    Keywords: Deprivation; Inequality ; Reference group
    JEL: D31 D63 I32 O15
    Date: 2009–10
  11. 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 the authors 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, they find differences in response scales across countries, partly related to social insurance generosity and employment protection. Furthermore, they find significant evidence of justification bias in the U.S. but not in Europe, suggesting differences in social norms concerning work.
    Keywords: work limiting disability, vignettes, reporting bias
    JEL: J28 I12 C81
    Date: 2009–08
  12. By: Natalia Melgar (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República); Máximo Rossi (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: Past research has provided evidence of the role of personal characteristics as risk factors for depression. However, few researches examined jointly the impact of each characteristic and whether country attributes change the probability of being depressed. This is due to the use of single-country databases. Our aim is to extend previous findings by employing a much larger dataset and including the above-mentioned country effects. We estimate probit models with country effects and we also explore linkages between specific environmental factors and depression. The dataset for this research comes from the 2007 GALLUP Public Opinion Poll that allows us to consider a large and widely heterogeneous set of micro-data. Findings indicate that depression is positively related to being a woman, adulthood, divorce, widowhood, unemployment and low income. Moreover, we provide evidence of the significant association between economic performance and depression. Inequality raises the probability of being depressed, specially, for those living in urban areas. Finally, some population’s characteristics facilitate depression (age distribution and religious affiliation).
    Keywords: depression, health, well-being, cross-country research
    JEL: D01 I10 I12 J18 Z13
    Date: 2009–09
  13. By: Pablo Brañas-Garza (Universidad de Granada- España); Juan C. Cárdenas (Universidad de los Andes- Colombia); Máximo Rossi (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: There is not general consensus about if women are more or less generous than men. Although the number of papers supporting more generous females is a bit larger than the opposed it is not possible to establish any definitive and systematic gender bias. This paper provides new evidence on this topic using a unique experimental dataset. We used data from a field experiment conducted under identical conditions (and monetary payoffs) in 6 Latin American cities, Bogotá, Buenos Aires, Caracas, Lima, Montevideo and San José. Our dataset amounted to 3,107 experimental subjects who played the Trust Game. We will analyze the determinants of behavior of second movers, that is, what determines reciprocal generosity. In sharp contrast to previous papers we found that males are more generous than females. In the light of this result, we carried out a systematic analysis of individual features (income, education, age, etc.) for females and males separately. We found differential motivations for women and men. Third, we see that (individual) education enhances prosocial behavior. Lastly, we see that subjects’ expectations are crucial.
    Keywords: reciprocal altruism, gender, education
    JEL: C93 D64 J16
    Date: 2009–08
  14. By: Ana Balsa (Health Economics Research Group, Department of Sociology, University of Miami); Máximo Rossi (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República); Patricia Triunfo (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: This paper analyzes and compares socioeconomic inequalities in the use of healthcare services by the elderly in four South-American cities: Buenos Aires, Santiago, Montevideo and San Pablo. We use data from SABE, a survey on Health, Well-being and Aging administered in 2000. After having accounted for socioeconomic inequalities in healthcare needs, we find socioeconomic inequities favoring the rich in the use of preventive services (mammograms, pap tests, breast examinations, and prostate exams) in all of the studied cities. We also find inequities in the likelihood of having a medical visit in Santiago and Montevideo, and in some measures of quality of access in Santiago, Sao Paulo, and Buenos Aires. Santiago depicts the highest inequities in medical visits and Uruguay the worse indicators in mammograms and pap scans tests. For all cities, inequities in preventive services at least double inequities in other services. We do not find evidence of a trade-off between levels of access and equity in access to healthcare services. The decomposition of healthcare inequalities suggests that inequities within each health system are more important than between systems.
    Keywords: inequalities, healthcare, medical visit, preventive services
    JEL: I1 I11 I12 I18
    Date: 2009–08
  15. By: Robert A. Moffitt; John Karl Scholz
    Abstract: Means-tested and social insurance programs in the U.S. have been transformed over the last 25 years, with expansions in Medicare and Medicaid, the Earned Income Tax Credit, and Supplemental Security Income, and with contractions in Temporary Assistance for Needy Families. We examine the effect of these changes on benefits received by families. We find that transfer program expenditures in total rose from 1984 to 2004 but the increase was spread unevenly across different demographic groups and income classes. Very poor elderly, disabled, and childless families received greatly increased expenditures, mostly arising from Social Security, SSDI, SSI, and the health programs. Very poor single parent and two-parent households experienced declines in expenditures, driven largely by lower recipiency rates, benefit receipt, or both in the AFDC/TANF and Food Stamp programs. For example, AFDC-TANF participation for one-adult families with children and market income below 50 percent of the poverty line fell from 62 percent in 1984 to 24 percent in 2004. However, expenditures received by one- and two-parent households further up the income scale increased, largely because of expansions of the EITC. Thus there was a redistribution of income from the very poor to the near-poor and nonpoor for these one- and two-parent households, as well as an overall relative redistribution from them to the elderly, disabled, and childless.
    JEL: H53 I3
    Date: 2009–11

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