nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2009‒11‒21
eleven papers chosen by
Maximo Rossi
University of the Republic

  1. The quality of the Catalan and Spanish education systems: A perspective from PISA By Ciccone, Antonio; Garcia-Fontes, Walter
  2. The Gender Pay Gap across Countries: A Human Capital Approach By Solomon W. Polachek; Jun Xiang
  3. Children, Happiness and Taxation By Leonardo Becchetti; Elena Giachin Ricca; Alessandra Pelloni
  4. 20 Years of German Unification: Evidence on Income Convergence and Heterogeneity By Tilman Brück; Heiko Peters
  5. Why do women in former communist countries look unhappy? A demographic perspective By Junji Kageyama
  6. Happiness, self-rated health, and income inequality: Evidence from nationwide surveys in Japan By Oshio, Takashi; Kobayashi, Miki
  7. Sundays Are Blue: Aren’t They? - The Day-of-the-Week Effect on Subjective Well-Being and Socio-Economic Status By Akay, Alpaslan; Martinsson, Peter
  8. Individual Attitudes towards Skilled Migration: an Empirical Analysis across Countries By Giovanni Facchini; Anna Maria Mayda
  9. Altruism and Social Integration. By Pablo Brañas-Garza; Ramón Cobo-Reyes; María Paz Espinosa; Natalia Jiménez; Jaromír Kovárík; Giovanni Ponti
  10. The Wages of Sin By Lena Edlund; Joseph Engelberg; Christopher A. Parsons
  11. Family Violence and Football: The Effect of Unexpected Emotional Cues on Violent Behavior By David Card; Gordon Dahl

  1. By: Ciccone, Antonio (Universitat Pompeu Fabra); Garcia-Fontes, Walter (Universitat Pompeu Fabra)
    Abstract: For Catalonia and Spain, public perception is that the PISA reports show that their education systems are underperforming. The goal of this chapter is to quantify how much of the Catalan and Spanish PISA score can be attributed to the education levels of parents and what part must instead be explained by other factors. To do so we use standard statistical techniques to examine how the Catalan and Spanish PISA score would have compared with other countries and regions if all had the same parental education levels and immigration levels. For Spain the main results show that there is a sizable increase in PISA scores relative to the rest of Europe when parental schooling is accounted for. But Spain's performance is rather poor to start out with and only rises to somewhat above average when accounting for parental education levels. For Catalonia accounting for parental education levels leads to small improvements in the PISA score compared to other Spanish regions and to Flanders, Lombardy, and Denmark. Moreover, immigration or the concentration of immigrants at some schools accounts for little of the below average performance of Catalonia.
    Keywords: Catalan education systems; Spanish education systems;
    Date: 2009–07–17
  2. By: Solomon W. Polachek; Jun Xiang
    Abstract: The gender wage gap varies across countries. For example, among OECD nations women in Australia, Belgium, Italy and Sweden earn 80% as much as males, whereas in Austria, Canada and Japan women earn about 60%. Current studies examining cross-country differences focus on the impact of labor market institutions such as minimum wage laws and nationwide collective bargaining. However, these studies neglect labor market institutions that affect women’s lifetime work behavior -- a factor crucially important in gender wage gap studies that employ individual data. This paper explicitly concentrates on labor market institutions that are related to female lifetime work that affect the gender wage gap across countries. Using ISSP (International Social Survey Programme), LIS (Luxembourg Income Study) and OECD wage data for 35 countries covering 1970-2002, we show that the gender pay gap is positively associated with the fertility rate (treated exogenously and endogenously with religion as the instrument), positively associated with the husbandwife age gap at first marriage, and positively related to the top marginal tax rate, all factors which negatively affect women’s lifetime labor force participation. In addition, we show that collective bargaining, as found in previous studies, is negatively associated with the gender pay gap.
    Date: 2009
  3. By: Leonardo Becchetti; Elena Giachin Ricca; Alessandra Pelloni
    Abstract: Empirical analyses on the determinants of life satisfaction often include the impact of the number of children variable among controls without fully discriminating between its two (socio-relational and pecuniary) components. In our empirical analysis on the German Socioeconomic Panel we show that, when introducing household income without correction for the number of members, the pecuniary effect prevails and the sign is negative while, when we equivalise income with the most commonly adopted equivalence scales, the non pecuniary (socio-relational) effect emerges and the impact of the variable is positive and significant above a minimal scale elasticity threshold. We further reject slope homogeneity and show that the positive relational effect is stronger for males, below median income households and East Germans. We interpret these subsample split results as driven by heterogeneous opportunity costs. Our empirical results give rise to a paradox: why people have children if the overall (pecuniary plus relational) effect on life satisfaction is negative? We provide in the paper some interpretations consistent with our findings. Some of them are based on motivational complexity. This implies that demographic policies and the paradox are strictly connected. Effectiveness of tax/subsidies impacting on fertility crucially depends on whether the children paradox may be solved within the self-interested rationality paradigm.
    Keywords: Equivalised income, scale elasticities, life satisfaction
    JEL: A13 D61 D10 J17
    Date: 2009
  4. By: Tilman Brück; Heiko Peters
    Abstract: We analyse the convergence and heterogeneity of living standards between East and West Germany since unification. Based on data from the German Socio-Economic Panel (GSOEP), we compare total individual income of permanent adult residents, including retirees and the unemployed, of East and West Germany over the fifteen years for which data are available. Using a fixed effects vector decomposition method, we estimate the gross total income difference between East and West Germans taking unobserved heterogeneity into account. Our analysis demonstrates that the negative income gap has decreased from 33 per cent in 1992 to 22 per cent in 2002, rising again to 26 per cent in 2007. Hence some convergence took place in nominal terms since unification. Constructing income gaps by decennial cohorts, we discover that the most recent cohorts have the highest negative income gap. This probably reflects out-migration from East Germany by the young and highly skilled. On the basis of quantile regressions we find a positive income gap at the beginning of the 1990s for the lower income deciles (that is higher incomes in East Germany). This was due to retirees in the East with relative long employment histories receiving transfer payments by western standards. The income gap is insignificant when accounting for heterogeneity at the area level by including area level variables to our regression.
    Keywords: Unification, living standards, income inequality, distribution, GSOEP, Germany
    JEL: D31 I31 P23
    Date: 2009
  5. By: Junji Kageyama (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: This paper investigates the causes of the positive correlation between happiness and the sex gap in happiness between women and men observed in Europe. Departing from a variety of hypotheses that are based on the sex differences at the individual level, this paper tests whether the positive correlation can be explained by the sex difference in life expectancy. The mechanisms working behind are as follows. First, national average happiness affects the sex gap in life expectancy negatively because men are more fragile to stress (unhappiness). Second, the sex difference in life expectancy influences the sex gap in happiness negatively because it affects the chance of being a widow for women. Using a 3SLS approach, it found that both effects are significant and that the direct effects between happiness and the happiness gap are insignificant. These results indicate that the positive correlation between happiness and the happiness gap is an artifact of the demographic compositional effect resulted from the sex gap in life expectancy.
    Keywords: Europe, economic and social development, life expectancy
    JEL: J1 Z0
    Date: 2009–11
  6. By: Oshio, Takashi; Kobayashi, Miki
    Abstract: We examine how regional inequality affects happiness and self-rated health at an individual level by using micro data from nationwide surveys in Japan. Individuals who live in the area of high inequality tend to report themselves as both unhappy and unhealthy, even after controlling for various individual and regional characteristics and taking into account the correlation between the two subjective outcomes. We also investigate how their sensitivities to regional inequality change by key individual attributes. People with an unstable work status are most affected by inequality when assessing both happiness and health.
    Keywords: happiness, self-rated health, income inequality
    Date: 2009–08
  7. By: Akay, Alpaslan (Department of Economics, School of Business, Economics and Law, Göteborg University); Martinsson, Peter (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: This paper analyses whether individuals are influenced by the day of the week when reporting subjective well-being. By using a large panel data set and controlling for observed and unobserved individual characteristics, we find a large day-of the-week effect. Overall, we find a ‘blue’ Sunday effect with the lowest level of subjective well-being. The day-of-the-week effect differs with certain socio-economic and demographic factors such as employment, marital status and age. The paper concludes with recommendations for future analyses of subjective well-being data and design of data collections.<p>
    Keywords: subjective well-being; day-of-the-week effect
    JEL: C23 D60 I31
    Date: 2009–11–13
  8. By: Giovanni Facchini (Erasmus University Rotterdam, University of Milan, CEPR, LdA and CES-Ifo); Anna Maria Mayda (Georgetown University, CEPR, IZA, CReAM and LdA)
    Abstract: It is commonly argued that skilled immigration benefits the destination country through several channels. Yet, only a small group of countries reports to have policies in place aimed at increasing the intake of skilled immigrants. Why? In this paper we analyze the factors that affect a direct measure of individual attitudes towards skilled migration, focusing on two main channels: the labor market and the welfare state. We find that more educated natives are less likely to favor skilled immigration - consistent with the labor-market channel – while richer people are more likely to do so – in accordance with the welfare state channel under the tax adjustment model. Our findings thus suggest that the labor market competition threat perceived by skilled natives in the host countries might be driving the observed cautious policies.
    Keywords: Skilled Immigration, Attitudes, Immigration Policy, Political Economy
    JEL: F22 J61
    Date: 2009–11–17
  9. By: Pablo Brañas-Garza (Universidad de Granada); Ramón Cobo-Reyes (Universidad de Granada); María Paz Espinosa (The University of the Basque Country); Natalia Jiménez (Universidad de Granada); Jaromír Kovárík (The University of the Basque Country); Giovanni Ponti (Università di Ferrara and Universidad de Alicante)
    Abstract: We report on a two-stage experiment in which i) we first elicit the social network within a section of undergraduate students and ii) we then measure their altruistic attitudes by means of a standard Dictator game. We observe that more socially integrated subjects are also more altruistic, as betweenness centrality and reciprocal degree are positively correlated with the level of giving, even after controlling for framing and social distance, which have been shown to significantly affect giving in previous studies. Our findings suggest that social distance and social integration are complementary determinants of altruistic behavior.
    Keywords: Altruism, centrality, social network experiments.
    JEL: C93 D85
    Date: 2009–11–16
  10. By: Lena Edlund (Columbia University - Department of Economics); Joseph Engelberg (UNC Chapel Hill - Kenan Flagler School of Business); Christopher A. Parsons (UNC Chapel Hill - Kenan Flagler School of Business)
    Abstract: Edlund and Korn [2002] (EK) proposed that prostitutes are well paid and that the wage premium reflects foregone marriage market opportunities. However, studies of street prostitution in the U.S. have revealed only modest wages and considerable risks of disease and violence, casting doubt on EK’s premise of an unexplained wage premium. In this paper, we present evidence from high-end prostitution, the so called escort market, a market that is, if not entirely safe, notably safer than street prostitution. Analyzing wage information on more than 40,000 escorts in the U.S. and Canada collected from a web site, we find strong support for EK. First, escorts in the sample earn high wages, on average $280/hour. Second, while looks decline monotonically with age, wages follow a hump-shaped pattern, with a peak in the 26-30 age bracket, which coincides with the most intensive marriage ages for women in the U.S. Third, the age-wage profile is significantly flatter, and prices are lower (5%), despite slightly better escort characteristics, in cities that rank high in terms of conferences, suggesting that servicing men in transit is associated with less stigma. Fourth, this hump in the age-wage profile is absent among escorts for whom the marriage market penalty is lower or absent: escorts who do not provide sex and transsexuals.
    Date: 2009
  11. By: David Card; Gordon Dahl
    Abstract: Family violence is a pervasive and costly problem, yet there is no consensus on how to interpret the phenomenon of violence by one family member against another. Some analysts assume that violence has an instrumental role in intra-family incentives. Others argue that violent episodes represent a loss of control that the offender immediately regrets. In this paper we specify and test a behavioral model of the latter form. Our key hypothesis is that negative emotional cues – benchmarked relative to a rationally expected reference point – make a breakdown of control more likely. We test this hypothesis using data on police reports of family violence on Sundays during the professional football season. Controlling for location and time fixed effects, weather factors, the pre-game point spread, and the size of the local viewing audience, we find that upset losses by the home team (losses in games that the home team was predicted to win by more than 3 points) lead to an 8 percent increase in police reports of at-home male-on-female intimate partner violence. There is no corresponding effect on female-on-male violence. Consistent with the behavioral prediction that losses matter more than gains, upset victories by the home team have (at most) a small dampening effect on family violence. We also find that unexpected losses in highly salient or frustrating games have a 50% to 100% larger impact on rates of family violence. The evidence that payoff-irrelevant events affect the rate of family violence leads us to conclude that at least some fraction of family violence is better characterized as a breakdown of control than as rationally directed instrumental violence.
    Date: 2009–11

This nep-ltv issue is ©2009 by Maximo Rossi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.