New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2010‒02‒27
eight papers chosen by

  1. A Detailed Decomposition of Changes in Wage Inequality in Reunified Post-Transition Germany 1999-2006: Accounting for Sample Selection By Usamah Al-farhan
  2. Women between Part-Time and Full-Time Work: The Influence of Changing Hours of Work on Happiness and Life-Satisfaction By Vanessa Gash; Antje Mertens; Laura Romeu Gordo
  3. Rates of Return to University Education: The Regression Discontinuity Design By Fan, Elliott; Meng, Xin; Wei, Zhichao; Zhao, Guochang
  4. Family Values and the Regulation of Labor By Alesina, Alberto; Algan, Yann; Cahuc, Pierre; Giuliano, Paola
  5. Are Happiness and Productivity Lower among University Students with Newly-Divorced Parents? An Experimental Approach By Proto, Eugenio; Sgroi, Daniel; Oswald, Andrew J.
  6. Transport Infrastructure and Poverty Infrastructure By Sununtar Setboonsarng
  7. Drivers and barriers to educational success - evidence from the longitudinal study of young people in England. By Chowdry, H.; Crawford, C.; Goodman, A.
  8. Genes, economics, and happiness By Jan-Emmanuel De Neve; James H. Fowler; Bruno S. Frey

  1. By: Usamah Al-farhan
    Abstract: In this article, I analyze the changes in wage inequality in the eastern region, western region and reunified Germany a decade after reunification. For that purpose, I use data from the German Socio-Economic Panel for the period 1999 – 2006, and implement the decomposition methodologies of Fields (2003) and Yun (2006). I find that during the sub-period 1999-2002 each of the characteristics effect, coefficient effect and residual<br /> effect contributed to the increasing levels of wage inequality in Germany. On the other hand, the relative stability in wage inequality during the sub-period 2002-2006 was caused by the fact that the characteristics effect and the residual effect influenced wage inequality negatively, whereas the coefficient effect maintained a positive influence in both the western region, eastern region and in reunified Germany alike. Hence, I conclude that after 1999, changes in wage inequality in Germany can be explained by both; changes in workers characteristics and changes in the wage structure, and not by changes in the wage structure alone, as the case has been during the transition process in the first decade after reunification
    Keywords: Wages, Inequality, Decomposition, Transition, Characteristics effect, Coefficient effect, Residual effect, Selection bias, Maximum Likelihood
    JEL: D30 J31
    Date: 2010
  2. By: Vanessa Gash; Antje Mertens; Laura Romeu Gordo
    Abstract: This paper asks whether part-time work makes women happy. Previous research on labour supply has assumed that as workers freely choose their optimal working hours on the basis of their innate preferences and the hourly wage rate, outcome reflects preference. This paper tests this assumption by measuring the impact of changes in working-hours on life satisfaction in two countries (the UK and Germany using the German Socio-Economic Panel and the British Household Panel Survey). We find decreases in working-hours bring about positive and significant improvement on well-being for women.
    Keywords: Temporary Employment, Unemployment, Health
    JEL: J41 J64 I10
    Date: 2010
  3. By: Fan, Elliott (Australian National University); Meng, Xin (Australian National University); Wei, Zhichao (Brown University); Zhao, Guochang (Australian National University)
    Abstract: Estimating the rate of return to a university degree has always been difficult due to the problem of omitted variable biases. Benefiting from a special feature of the University Admission system in China, which has clear cutoffs for university entry, combined with a unique data set with information on individual National College Entrance Examination (NCEE) scores, we estimate the Local Average Treatment Effects (LATE) of university education based on a Regression Discontinuity design. To the best of our knowledge, this is the first study to use RD design to estimate the causal effect of a university education on earnings. Our results show that the rates of return to 4-year university education relative to 3-year college education are 40 and 60 per cent for the compliers in the male and female samples, respectively, which are much larger than the simple OLS estimations revealed in previous literature. Since in our sample a large proportion of individuals are compliers (45 per cent for males and 48 per cent for females), the LATEs estimated in this paper have a relatively general implication. In addition, we find that the LATEs are likely to be larger than ATEs, suggesting that the inference drawn from average treatment effects might understate the true effects of the university expansion program introduced in China in 1999 and thereafter.
    Keywords: rate of return to education, regression discontinuity design, China
    JEL: I21 I28 J24
    Date: 2010–02
  4. By: Alesina, Alberto (Harvard University); Algan, Yann (Sciences Po, Paris); Cahuc, Pierre (Ecole Polytechnique, Paris); Giuliano, Paola (University of California, Los Angeles)
    Abstract: Flexible labor markets require geographically mobile workers to be efficient. Otherwise, firms can take advantage of the immobility of workers and extract monopsony rents. In cultures with strong family ties, moving away from home is costly. Thus, individuals with strong family ties rationally choose regulated labor markets to avoid moving and limiting the monopsony power of firms, even though regulation generates lower employment and income. Empirically, we do find that individuals who inherit stronger family ties are less mobile, have lower wages, are less often employed and support more stringent labor market regulations. There are also positive cross-country correlations between the strength of family ties and labor market rigidities. Finally, we find positive correlations between labor market rigidities at the beginning of the twenty first century and family values prevailing before World War II, which suggests that labor market regulations have deep cultural roots.
    Keywords: family values, labor regulation
    JEL: E0 P16 Z10 Z13
    Date: 2010–02
  5. By: Proto, Eugenio (University of Warwick); Sgroi, Daniel (University of Warwick); Oswald, Andrew J. (University of Warwick)
    Abstract: We live in a high-divorce age. It is now common for university faculty to have students who are touched by a recent divorce. It is likely that parents themselves worry about effects on their children. Yet there has been almost no formal research into the important issue of how recent parental-divorce affects students at university. This paper designs such a study. In it, to avoid 'priming', we measure students' happiness with life before we inquire into their family background. We also measure student achievement in a randomized-trial productivity task. Our results seem both of scientific interest and of potential interest to parents. This study finds no evidence that students suffer after parental divorce
    Keywords: labor productivity, divorce, well-being, happiness, experimental economics
    JEL: J24 C91
    Date: 2010–02
  6. By: Sununtar Setboonsarng
    Abstract: The main issues surrounding this concern and provides a range of policy, regulatory, and institutional measures that could help strengthen the impact of transport infrastructure on poverty reduction are summarized.
    Keywords: institutional measures, policy, transport, infrastructure, gender dimensions, poverty reduction, investment, income, India, Thailand, rural, savings, developing countries
    Date: 2010
  7. By: Chowdry, H.; Crawford, C.; Goodman, A.
    Abstract: This study examined why young people from poor families have lower attainment in school, are more likely to become NEET (Not in Education, Employment or Training) after compulsory education, and are more likely to participate in a range of risky behaviours whilst teenagers. The Longitudinal Study of Young People in England is combined with school and neighbourhood information to document the links between lower socio-economic position and poorer outcomes: identifying the key factors amongst parental education and material resources; school and neighbourhood peer groups; and the attitudes and beliefs of young people and their parents that help sustain those links.
    Date: 2009–04–30
  8. By: Jan-Emmanuel De Neve; James H. Fowler; Bruno S. Frey
    Abstract: Research on happiness has produced valuable insights into the sources of subjective well-being. A major finding from this literature is that people exhibit a 'baseline' happiness that shows persistent strength over time, and twin studies have shown that genes play a significant role in explaining the variance of baseline happiness between individuals. However, these studies have not identified which genes might be involved. This article presents evidence of a specific gene that predicts subjective well-being. Using data from the National Longitudinal Study of Adolescent Health, we show that individuals with a transcriptionally more efficient version of the serotonin transporter gene (5HTT) are significantly more likely to report higher levels of life satisfaction. Having one or two alleles of the more efficient type raises the average likelihood of being very satisfied with one's life by 8.5% and 17.3%, respectively. This result may help to explain the stable component of happiness and suggests that genetic association studies can help us to better understand individual heterogeneity in subjective well- being.
    Keywords: Happiness, subjective well-being, genetics
    JEL: A12 Z00
    Date: 2010–02

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