nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2010‒03‒20
eight papers chosen by
Maximo Rossi
University of the Republic

  1. Start-Up Subsidies for the Unemployed: Long-Term Evidence and Effect Heterogeneity By Caliendo, Marco; Künn, Steffen
  2. Revisiting the Income-Health Nexus: The Importance of Choosing the "Right" Indicator By Ziebarth, Nicolas R.; Frick, Joachim R.
  3. Increasing Income Inequality: Productivity, Bargaining and Skill-Upgrading By Frederiksen, Anders; Poulsen, Odile
  4. Happy house: Spousal weight and individual well-being By Andrew E. Clark; Fabrice Etilé
  5. Occupational segregation of immigrant women in Spain By Coral del Río; Olga Alonso-Villar
  6. The Effects of Daughters on Health Choices and Risk Behaviour By N Powdthavee; S Wu; A Oswald
  7. Unemployment and Temporary Jobs in the Crisis: Comparing France and Spain By Samuel Bentolila; Pierre Cahuc; Juan José Dolado; Thomas Le Barbanchon, .
  8. "Recent Trends in Household Wealth in the United States-- Rising Debt and the Middle-Class Squeeze--An Update to 2007" By Edward N. Wolff

  1. By: Caliendo, Marco (IZA); Künn, Steffen (IZA)
    Abstract: Turning unemployment into self-employment has become an increasingly important part of active labor market policies (ALMP) in many OECD countries. Germany is a good example where the spending on start-up subsidies for the unemployed accounted for nearly 17% of the total spending on ALMP in 2004. In contrast to other programs – like vocational training, job creation schemes, or wage subsidies – the empirical evidence on the effectiveness of such schemes is still scarce; especially regarding long-term effects and effect heterogeneity. This paper aims to close this gap. We use administrative and survey data from a large sample of participants in two distinct start-up programs and a control group of unemployed individuals. We find that over 80% of participants are integrated in the labor market and have relatively high labor income five years after start-up. Additionally, participants are much more satisfied with their current occupational situation compared to previous jobs. Based on conditional propensity score matching methods we estimate the long-term effects of the programs against non-participation. Our results show that both programs are effective with respect to income and employment outcomes in the long-run. Moreover, we consider effect heterogeneity with respect to several dimensions and show that start-up subsidies for the unemployed tend to be most effective for disadvantaged groups in the labor market.
    Keywords: start-up subsidies, self-employment, evaluation, long-term effects, effect heterogeneity
    JEL: J68 C14 H43
    Date: 2010–02
  2. By: Ziebarth, Nicolas R. (DIW Berlin); Frick, Joachim R. (DIW Berlin)
    Abstract: We show that the choice of the welfare measure has a substantial impact on the degree of welfare-related health inequality. Combining various income and wealth measures with different health measures, we calculate 80 health concentration indices. The influence of the welfare measure is more pronounced when using subjective health measures than when using objective health measures.
    Keywords: health inequality, concentration index, income measurement, SOEP
    JEL: D31 I10 I12
    Date: 2010–02
  3. By: Frederiksen, Anders (Aarhus School of Business); Poulsen, Odile (University of East Anglia)
    Abstract: In recent decades most developed countries have experienced an increase in income inequality. In this paper, we use an equilibrium search framework to shed additional light on what is causing an income distribution to change. The major benefit of the model is that it can accommodate shocks to the skill composition in the market, employee bargaining power and productivity. Further, when our model is subjected to skill-upgrading and changes in employee bargaining power, it is capable of predicting the recent changes observed in the Danish income distribution. In addition, the model emphasizes that shocks to the employees’ relative productivity, i.e., skill-biased technological change, are unlikely to have caused the increase in income inequality.
    Keywords: income inequality, two-sector search model, bargaining power, skill-biased technological change
    JEL: J3 J6 M5
    Date: 2010–02
  4. By: Andrew E. Clark; Fabrice Etilé
    Abstract: We use life satisfaction and Body Mass Index (BMI) information from three waves of the GSOEP to test for social interactions in BMI between spouses. Semi-parametric regressions show that partner's BMI is, beyond a certain level, negatively correlated with own satisfaction. Own BMI is positively correlated with satisfaction in thin men, and negatively correlated with satisfaction after some threshold. Critically, this latter threshold increases with partner's BMI when the individual is overweight. The negative well-being impact of own BMI is thus lower when the individual's partner is heavier. This is consistent with social contagion effects in weight. However, instrumental variable estimates suggest that the relationship is not causal, but rather reflects selection on the marriage market.
    Date: 2010
  5. By: Coral del Río (Universidade de Vigo); Olga Alonso-Villar (Universidade de Vigo)
    Abstract: The aim of this paper is to analyze occupational segregation in the Spanish labor market from a gender and an immigration perspective. In doing so, several local and overall segregation measures are used. Our results suggest that immigrant women in Spain suffer a double segregation since segregation affects them to a greater extent than it does either native women or immigrant men. There are, however, remarkable discrepancies among the segregation of immigrant women depending on their region of origin. Thus, immigrant women from the European Union (EU) have the lowest occupational segregation, while segregation seems particularly intense in the group of women from European countries outside the EU bloc and Asia (the levels of which are higher than that of Latin American and African women).
    Keywords: immigration; gender; occupational segregation; local segregation; overall segregation
    JEL: J16 D63
    Date: 2010
  6. By: N Powdthavee; S Wu; A Oswald
    Abstract: Little is known about why some human beings make risky life-choices. This paper provides evidence that people's health decisions and addictive actions are influenced by the gender of their children. Having a daughter leads individuals -- in micro data from Great Britain and the United States -- to reduce their smoking, drinking, and drug-taking. The paper's results are consistent with the hypothesis that human beings 'self-medicate' when under stress.
    Keywords: Addictive behaviour; gender; daughters; smoking; drinking; attitudes.
    JEL: D1 I1
    Date: 2010–02
  7. By: Samuel Bentolila; Pierre Cahuc; Juan José Dolado; Thomas Le Barbanchon, .
    Abstract: Our goal here is to explain the strikingly different response of Spanish unemployment relative to other European economies, in particular France, during the ongoing recession. The Spanish unemployment rate, which fell from 22% in 1994 to 8% in 2007, reached 19% by the end of 2009, whereas the French unemployment rate has only increased by less than 2 pp. during the crisis. We argue that labor market institutions in the two economies are rather similar, except for the larger gap between dismissal costs of workers with permanent and temporary contracts in Spain, which lead to huge flows of temporary workers out of and into unemployment. We estimate in a counterfactual scenario that more than one-half of the increase in the unemployment rate would have been avoided had Spain adopted French employment protection institutions before the recession started.
    Date: 2010–02
  8. By: Edward N. Wolff
    Abstract: I find here that the early and mid-aughts (2001 to 2007) witnessed both exploding debt and a consequent "middle-class squeeze." Median wealth grew briskly in the late 1990s. It grew even faster in the aughts, while the inequality of net worth was up slightly. Indebtedness, which fell substantially during the late 1990s, skyrocketed in the early and mid-aughts; among the middle class, the debt-to-income ratio reached its highest level in 24 years. The concentration of investment-type assets generally remained as high in 2007 as during the previous two decades. The racial and ethnic disparity in wealth holdings, after stabilizing throughout most of the 1990s, widened in the years between 1998 and 2001, but then narrowed during the early and mid-aughts. Wealth also shifted in relative terms, away from young households (particularly those under age 45) and toward those in the 55–74 age group. Projections to July 2009, made on the basis of changes in stock and housing prices, indicate that median wealth plunged by 36 percent and there was a fairly steep rise in wealth inequality, with the Gini coefficient advancing from 0.834 to 0.865.
    Keywords: Household Wealth; Inequality; Racial Inequality; Portfolio Composition
    JEL: D31 J15
    Date: 2010–03

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