nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2010‒06‒04
eleven papers chosen by
Maximo Rossi
University of the Republic

  1. Social Relationships and Trust By Christine Binzel; Dietmar Fehr
  2. Choices Which Change Life Satisfaction: Revising SWB Theory to Account for Change By Bruce Headey; Ruud Muffels; Gert G. Wagner
  3. The job creation effect of R&D expenditures By Francesco Bogliacino; Marco Vivarelli
  4. Reconciling Pro-Social vs. Selfish Behavior: Evidence for the Role of Self-Control By Kristian Ove R. Myrseth; Peter Martinsson; Conny Wollbrant
  5. Mentoring, Educational Services, and Economic Incentives Longer-term Evidence on Risky Behaviors from a Randomized Trial By Núria Rodriguez-Planas
  6. Child Care Provision: Semiparametric Evidence from a Randomized Experiment in Mexico By Dubois, Pierre; Rubio-Codina, Marta
  7. The Meaning(s) of Happiness By Kamvar, Sep; Mogilner, Cassie; Aaker, Jennifer
  8. When Is Happiness about How Much You Earn? The Effect of Hourly Payment on the Money-Happiness Connection By DeVoe, Sanford E.; Pfeffer, Jeffrey
  9. The Online Laboratory: Conducting Experiments in a Real Labor Market By Horton, John J.; Rand, David G.; Zeckhauser, Richard
  10. Female Employment and Fertility in Rural China By Fang, Hai; Eggleston, Karen N.; Rizzo, John A.; Zeckhauser, Richard
  11. Accounting for Unobserved Country Heterogeneity in Happiness Research: Country Fixed Effects versus Region Fixed Effects By Justina AV Fischer

  1. By: Christine Binzel; Dietmar Fehr
    Abstract: While social relationships play an important role for individuals to cope with missing market institutions, they also limit individuals' range of trading partners. This paper aims at understanding the determinants of trust at various social distances when information asymmetries are present. Among participants from an informal housing area in Cairo we find that the increase in trust following a reduction in social distance comes from the fact that trustors are much more inclined to follow their beliefs when interacting with their friend. When interacting with an ex-ante unknown agent instead, the decision to trust is mainly driven by social preferences. Nevertheless, trustors underestimate their friend's intrinsic motivation to cooperate, leading to a loss in social welfare. We relate this to the agents' inability to signal their trustworthiness in an environment characterized by strong social norms.
    Keywords: Trust, hidden action, social distance, solidarity, reciprocity, economic development
    JEL: C72 C93 D82 O12
    Date: 2010
    URL: http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1007&r=ltv
  2. By: Bruce Headey; Ruud Muffels; Gert G. Wagner
    Abstract: Using data from the long-running German Socio-Economic Panel (SOEP) 1984-2008, this paper analyses the effects of individual preferences and choices on subjective well-being (SWB). It is shown that preferences and choices relating to life goals/values, partner’s personality, hours of work, social participation and healthy lifestyle all have substantial effects on life satisfaction. The results have negative implications for the still dominant theory of SWB, set-point theory. This theory holds that adult SWB does not change in the medium or long term, although temporary fluctuations occur due to specific life events. Set-point theory has come under increasing criticism in recent years, primarily due to unmistakable evidence in SOEP that, during the last 25 years, up to a third of the population has recorded substantial and apparently permanent changes in life satisfaction. It is becoming clear that the main challenge now for SWB researchers is to develop a new theory which can account for medium and long term change, and not merely stability in SWB. Set-point theory is limited precisely because it is purely a theory of stability. The paper is based on a specially constructed SOEP file in which data are divided into five 5-year periods in order to facilitate analysis of medium term change.
    Keywords: SWB, set-point theory, life goals, individual choice, panel regression analysis, SOEP
    JEL: I31 J1 Z13
    Date: 2010
    URL: http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp302&r=ltv
  3. By: Francesco Bogliacino (JRC-IPTS); Marco Vivarelli (Università Cattolica, Milano; CSGR-Warwick University; IZA, Bonn)
    Abstract: In this study we use a unique database covering 25 manufacturing and service sectors for 15 European countries over the period 1996-2005, for a total of 2,295 observations, and apply GMM-SYS panel estimations of a demand-for-labour equation augmented with technology. We find that R&D expenditures -fostering product innovation- have a job-creating effect, in accordance with the previous theoretical and empirical literature discussed in the paper. Interestingly enough, the labour-friendly nature of R&D emerges in both the flow and the stock specifications. These findings provide further justification for the European Lisbon-Barcelona targets.
    Keywords: Technological change, corporate R&D, employment, product innovation, GMM-SYS
    JEL: O33
    Date: 2010–04
    URL: http://d.repec.org/n?u=RePEc:ipt:wpaper:201004&r=ltv
  4. By: Kristian Ove R. Myrseth (ESMT European School of Management and Technology); Peter Martinsson (University of Gothenburg); Conny Wollbrant (University of Gothenburg)
    Abstract: We test the proposition that individuals may experience a self-control conflict between short-term temptation to be selfish and better judgment to act pro-socially. Using a dictator game and a public goods game, we manipulated the likelihood that individuals identified self-control conflict, and we measured their trait ability to implement self-control strategies. Consistent with our hypothesis, we find that trait self-control exhibits a positive and significant correlation with pro-social behavior in the treatment that raises likelihood of conflict identification, but not in the treatment that reduces likelihood of conflict identification.
    Keywords: self-control, pro-social behavior, altruism, experiment
    JEL: D01 D64 D70
    Date: 2010–05–19
    URL: http://d.repec.org/n?u=RePEc:esm:wpaper:esmt-10-003&r=ltv
  5. By: Núria Rodriguez-Planas
    Abstract: This paper is the first to use a randomized trial in the US to analyze the short- and long- term impacts of an afterschool program that offered disadvantaged high-school youth: mentoring, educational services, and financial rewards to attend program activities, complete high-school and enroll in post-secondary education on youths' engagement in risky behaviors, such as substance abuse, criminal activity, and teenage childbearing. Outcomes were measured at three different points in time, when youths were in their late-teens, and when they were in their early- and their late- twenties. Overall the program was unsuccessful at reducing risky behaviors. Heterogeneity matters in that perverse effects are concentrated among certain subgroups, such as males, older youths, and youths from sites where youths received higher amount of stipends. We claim that this evidence is consistent with different models of youths' behavioral response to economic incentives. In addition, beneficial effects found in those sites in which QOP youths represented a large fraction of the entering class of 9th graders provides hope for these type of programs when operated in small communities and supports the hypothesis of peer effects.
    Keywords: After-school program, short-, medium- and long-term effects, behavioral models, peer effects, criminal activity, teen childbearing and substance abuse.
    JEL: C93 I21 I22 I28 J24
    Date: 2010–05–27
    URL: http://d.repec.org/n?u=RePEc:aub:autbar:829.10&r=ltv
  6. By: Dubois, Pierre; Rubio-Codina, Marta
    Date: 2010–04
    URL: http://d.repec.org/n?u=RePEc:tse:wpaper:21935&r=ltv
  7. By: Kamvar, Sep (Stanford University); Mogilner, Cassie (Stanford University); Aaker, Jennifer (Stanford University)
    Abstract: An examination of emotions reported on 12 million personal blogs along with the results of three experiments reveal that the meaning of happiness is not fixed; instead, it shifts as people age. Whereas younger people are more likely to associate happiness with excitement, older people are more likely to associate happiness with feeling peaceful. This change is driven by increased feelings of connectedness (to others and to the present moment) as one ages.
    Date: 2009–05
    URL: http://d.repec.org/n?u=RePEc:ecl:stabus:2026&r=ltv
  8. By: DeVoe, Sanford E. (University of Toronto); Pfeffer, Jeffrey (Stanford University)
    Abstract: We argue that the strength of the relationship between income and happiness can be influenced by exposure to organizational practices, such as being paid by the hour, that promote an economic evaluation of time use. Using cross-sectional data from the US, two studies found that income was more strongly associated with happiness for individuals paid by the hour compared to their non-hourly counterparts. Using panel data from the United Kingdom, Study 3 replicated these results for a multi-item General Health Questionnaire measure of subjective well-being. Study 4 showed that experimentally manipulating the salience of someone's hourly wage rate caused non-hourly paid participants to evince a stronger connection between income and happiness, similar to those participants paid by the hour. Although there were highly consistent results across multiple studies employing multiple methods, overall the effect size was not large.
    Date: 2009–05
    URL: http://d.repec.org/n?u=RePEc:ecl:stabus:2024&r=ltv
  9. By: Horton, John J. (Harvard University); Rand, David G. (Harvard University); Zeckhauser, Richard (Harvard University)
    Abstract: Online labor markets have great potential as platforms for conducting experiments, as they provide immediate access to a large and diverse subject pool and allow researchers to conduct randomized controlled trials. We argue that online experiments can be just as valid--both internally and externally--as laboratory and field experiments, while requiring far less money and time to design and to conduct. In this paper, we first describe the benefits of conducting experiments in online labor markets; we then use one such market to replicate three classic experiments and confirm their results. We confirm that subjects (1) reverse decisions in response to how a decision-problem is framed, (2) have pro-social preferences (value payoffs to others positively), and (3) respond to priming by altering their choices. We also conduct a labor supply field experiment in which we confirm that workers have upward sloping labor supply curves. In addition to reporting these results, we discuss the unique threats to validity in an online setting and propose methods for coping with these threats. We also discuss the external validity of results from online domains and explain why online results can have external validity equal to or even better than that of traditional methods, depending on the research question. We conclude with our views on the potential role that online experiments can play within the social sciences, and then recommend software development priorities and best practices.
    JEL: C70 C91 C92 C93 J20
    Date: 2010–04
    URL: http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp10-017&r=ltv
  10. By: Fang, Hai (U CO, Denver); Eggleston, Karen N. (Walter H Shorenstein Asia-Pacific Research Center, Stanford U); Rizzo, John A. (Stony Brook U, SUNY); Zeckhauser, Richard (Harvard U)
    Abstract: Data on 2,288 married women from the 2006 China Health and Nutrition Survey are deployed to study how off-farm female employment affects fertility. Such employment reduces a married woman's actual number of children by 0.64, her preferred number by 0.48, and her probability of having more than one child by 54.8 percent. Causality flows in both directions; hence, we use well validated instrumental variables to estimate employment status. China has deep concerns with both female employment and population size. Moreover, female employment is growing quickly. Hence, its implications for fertility must be understood. Ramifications for China's one-child policy are discussed.
    JEL: J13 J18 O15
    Date: 2010–03
    URL: http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp10-011&r=ltv
  11. By: Justina AV Fischer (Faculty of Economics, University of Rome "Tor Vergata")
    Abstract: Many empirical studies are ambiguous about whether good formal institutions are conducive to subjective well-being or not. Possibly, this ambiguity is caused by cross-section models that do not account for unobserved cultural and institutional effects. Using the World Value Survey 1980-2005, this paper supports a positive relation in a country panel framework that accounts for unobserved, time-invariant country heterogeneity. This study also shows that using supra-national region dummies (by geography or language) in a country-random effects model appears to be a sufficient substitution for omitted country fixed effects.
    Keywords: Happiness, life satisfaction, well-being, quality of life, institutions, democracy, rule of law, political constraints, policy implications, panel econometrics
    JEL: I31 H10 H40 C33
    Date: 2010–05–28
    URL: http://d.repec.org/n?u=RePEc:rtv:ceisrp:164&r=ltv

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