nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2010‒04‒11
four papers chosen by
Maximo Rossi
University of the Republic

  1. Agenda 2020: Strategies to Achieve Full Employment in Germany By Schneider, Hilmar; Zimmermann, Klaus F.
  2. Polarization and Rising Wage Inequality: Comparing the U.S. and Germany By Antonczyk, Dirk; DeLeire, Thomas; Fitzenberger, Bernd
  3. Recent Advances in the Economics of Individual Subjective Well-Being By Stutzer, Alois; Frey, Bruno S.
  4. Do Strikes Kill? Evidence from New York State By Jonathan Gruber; Samuel A. Kleiner

  1. By: Schneider, Hilmar (IZA); Zimmermann, Klaus F. (IZA, DIW Berlin and Bonn University)
    Abstract: This strategy paper by the Institute for the Study of Labor (IZA) shows ways in which Germany once more can attain full employment in the coming decade. Much of what the previous government's "Agenda 2010" has put into motion has clearly steered labor market development in the right direction. The reforms are one of the main reasons why Germany has been more resistant to the recent financial and economic crisis than other countries. While these achievements should not be called into question, further action is necessary. The IZA concept includes the following elements: (1) Education reform: Early childhood education must be improved. Social background should no longer determine future career prospects. More independence and competition between schools and universities would improve the quality of education. Selection of students into different secondary school tracks should occur at a higher age. The dual system of apprenticeship training could be shortened. College tuition fees could be replaced by a graduate tax. (2) Welfare state reform: A consistent implementation of the principle of reciprocity would create additional employment incentives and make working for a living worthwhile again even for the low-skilled. Workfare is socially just and promotes independence rather than producing dependency. Child benefits should be granted primarily as vouchers. (3) Job placement reform: The problem groups of the labor market need one-stop support tailored to their individual needs as soon as they become unemployed. IZA proposes the creation of job centers that act independently from local and federal authorities in order to avoid the organizational maze of unclear responsibilities. (4) Immigration policy reform: Germany needs high-skilled immigrants to cope with demographic change and skilled labor shortages. A selection system for permanent immigrants and a market-based solution for temporary immigrants would substantially increase the economic benefits of immigration and create additional momentum for the realization of full employment.
    Keywords: labor market policy, Agenda 2010, Hartz reforms, workfare, job center, education, demography, migration policy
    JEL: J08 J18 J21 J24 J38 J61 J68 I28 I38
    Date: 2010–03
    URL: http://d.repec.org/n?u=RePEc:iza:izapps:pp15&r=ltv
  2. By: Antonczyk, Dirk (University of Freiburg); DeLeire, Thomas (University of Wisconsin-Madison); Fitzenberger, Bernd (University of Freiburg)
    Abstract: This paper compares trends in wage inequality in the U.S. and Germany using an approach developed by MaCurdy and Mroz (1995) to separate age, time, and cohort effects. Between 1979 and 2004, wage inequality increased strongly in both the U.S. and Germany but there were various country specific aspects of this increase. For the U.S., we find faster wage growth since the 1990s at the top (80% quantile) and the bottom (20% quantile) compared to the median of the wage distribution, which is evidence for polarization in the U.S. labor market. In contrast, we find little evidence for wage polarization in Germany. Moreover, we see a large role played by cohort effects in Germany, while we find only small cohort effects in the U.S. Employment trends in both countries are consistent with polarization since the 1990s. We conclude that although there is evidence in both the U.S. and Germany which is consistent with a technology-driven polarization of the labor market, the patterns of trends in wage inequality differ strongly enough that technology effects alone cannot explain the empirical findings.
    Keywords: wage inequality, polarization, international comparison, cohort study, quantile regression
    JEL: J30 J31
    Date: 2010–03
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp4842&r=ltv
  3. By: Stutzer, Alois (University of Basel); Frey, Bruno S. (University of Zurich)
    Abstract: Over the last decades, empirical research on subjective well-being in the social sciences has provided a major new stimulus to the discourse on individual happiness. Recently this research has also been linked to economics where reported subjective wellbeing is often taken as a proxy measure for individual welfare. In our review, we intend to provide an evaluation of where the economic research on happiness stands and of three directions it might develop. First, it offers new ways for testing the basic assumptions of the economic approach and for going about a new understanding of utility. Second, it provides a new possibility for the complementary testing of theories across fields in economics. Third, we inquire how the insights gained from the study of individual happiness in economics affect public policy.
    Keywords: economics, happiness, life satisfaction, survey data, income, public goods, unemployment
    JEL: A10 D60 H41 I31
    Date: 2010–03
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp4850&r=ltv
  4. By: Jonathan Gruber; Samuel A. Kleiner
    Abstract: Concerns over the impacts of hospital strikes on patient welfare led to substantial delay in the ability of hospitals to unionize. Once allowed, hospitals unionized rapidly and now represent one of the largest union sectors of the U.S. economy. Were the original fears of harmful hospital strikes realized as a result? In this paper we analyze the effects of nurses’ strikes in hospitals on patient outcomes. We utilize a unique dataset collected on nurses’ strikes over the 1984 to 2004 period in New York State, and match these strikes to a restricted use hospital discharge database which provides information on treatment intensity, patient mortality and hospital readmission. Controlling for hospital specific heterogeneity, patient demographics and disease severity, the results show that nurses’ strikes increase in-hospital mortality by 19.4% and 30-day readmission by 6.5% for patients admitted during a strike, with little change in patient demographics, disease severity or treatment intensity. This study provides some of the first analytical evidence on the effects of health care strikes on patients, and suggests that hospitals functioning during nurses’ strikes are doing so at a lower quality of patient care.
    JEL: I12 I23 J52 J62
    Date: 2010–03
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:15855&r=ltv

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