nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2010‒06‒26
eight papers chosen by
Maximo Rossi
University of the Republic

  1. Human Development Trends since 1970: A Social Convergence Story By George Gray Molina and Mark Purser
  2. Social preferences in childhood and adolescence – A large-scale experiment By Matthias Sutter; Francesco Feri; Martin G. Kocher; Peter Martinsson; Katarina Nordblom; Daniela Rützler
  3. The Crime Reducing Effect of Education By Machin, Stephen; Marie, Olivier; Vujić, Sunčica
  4. Quantile Treatment Effects in the Regression Discontinuity Design: Process Results and Gini Coefficient By Frölich, Markus; Melly, Blaise
  5. Disease Prevalence, Disease Incidence, and Mortality in the United States and in England By Banks, James; Muriel, Alastair; Smith, James P.
  6. Are Happiness and Productivity Lower among University Students with Newly-Divorced Parents? An Experimental Approach By Sgroi, Daniel; Proto, Eugenio; Oswald, Andrew J.
  7. The Impact of Immigration on the Structure of Wages: Theory and Evidence from Britain By Manacorda, Marco; Manning, Alan; Wadsworth, Jonathan
  8. Building Bridges Between Structural and Program Evaluation Approaches to Evaluating Policy By James J. Heckman

  1. By: George Gray Molina and Mark Purser (Niehaus Center for Globalization and Governance, Princeton University; Human Development Report Office, UNDP)
    Abstract: This paper uses a unique data set of the Human Development Index to describe long-run human development trends for 111 countries, from 1970 to 2005. The first part of the paper shows trends by region, period and index subcomponent. We find that 110 of the 111 countries show progress in their HDI levels over a 35-year period. HDI growth is fastest for low-HDI and middle-HDI countries in the pre-1990 period. The life-expectancy and education subcomponents grow faster than income. The assessment of HDI progress is sensitive to choice of measurement. The second part of the paper focuses on the differences between income and non-income determinants of human development. First, HDI growth converges, both absolutely and conditionally, when running HDI growth rates on initial levels of HD. Second, we find that the income and non-income components of HDI change have a near-zero correlation. Third, we look at determinants of the non-income components of the HDI. We find that income is not a significant determinant of HDI change once we include urbanization, fertility and female schooling. Fourth, we test the effects of institutions, geography and gender on HDI growth. We find that the most robust predictors of HDI growth are fertility and female schooling. We check this result using years of women’s suffrage as an instrument for changes in gender relations, and find that it is a significant predictor of HDI progress for the whole sample.
    Keywords: human development, education, health and demographic trends, cross-country comparisons, measurement and analysis of poverty
    JEL: O15 N30 O50 I32
    Date: 2010–06
  2. By: Matthias Sutter; Francesco Feri; Martin G. Kocher; Peter Martinsson; Katarina Nordblom; Daniela Rützler
    Abstract: Social preferences have been shown to be an important determinant of economic decision making for many adults. We present a large-scale experiment with 883 children and adolescents, aged eight to seventeen years. Participants make decisions in eight simple, one-shot allocation tasks, allowing us to study the distribution of social preference types across age and across gender. Our results show that when children and teenagers grow older, inequality aversion becomes a gradually less prominent motivating force of allocation decisions. At the same time, efficiency concerns increase in importance for boys, and maximin-preferences turn more important in shaping decisions of girls.
    Keywords: Social preferences, children, age, gender, experiment
    JEL: C91 D63 D64
    Date: 2010–06
  3. By: Machin, Stephen (University College London); Marie, Olivier (ROA, Maastricht University); Vujić, Sunčica (London School of Economics)
    Abstract: In this paper, we present evidence on empirical connections between crime and education, using various data sources from Britain. A robust finding is that criminal activity is negatively associated with higher levels of education. However, it is essential to ensure that the direction of causation flows from education to crime. Therefore, we identify the effect of education on participation in criminal activity using changes in compulsory school leaving age laws over time to account for the endogeneity of education. In this causal approach, for property crimes, the negative crime-education relationship remains strong and significant. The implications of these findings are unambiguous and clear. They show that improving education can yield significant social benefits and can be a key policy tool in the drive to reduce crime.
    Keywords: crime, education, offenders
    JEL: I2 K42
    Date: 2010–06
  4. By: Frölich, Markus (University of Mannheim); Melly, Blaise (Brown University)
    Abstract: This paper shows nonparametric identification of quantile treatment effects (QTE) in the regression discontinuity design. The distributional impacts of social programs such as welfare, education, training programs and unemployment insurance are of large interest to economists. QTE are an intuitive tool to characterize the effects of these interventions on the outcome distribution. We propose uniformly consistent estimators for both potential outcome distributions (treated and non-treated) for the population of interest as well as other function-valued effects of the policy including in particular the QTE process. The estimators are straightforward to implement and attain the optimal rate of convergence for one-dimensional nonparametric regression. We apply the proposed estimators to estimate the effects of summer school on the distribution of school grades, complementing the results of Jacob and Lefgren (2004).
    Keywords: quantile treatment effect, causal effect, endogeneity, regression discontinuity
    JEL: C13 C14 C21
    Date: 2010–06
  5. By: Banks, James (Institute for Fiscal Studies, London); Muriel, Alastair (Institute for Fiscal Studies, London); Smith, James P. (RAND)
    Abstract: We find disease incidence and prevalence are both higher among Americans in age groups 55-64 and 70-80 indicating that Americans suffer from higher past cumulative disease risk and experience higher immediate risk of new disease onset compared to the English. In contrast, age specific mortality rates are similar in the two countries with an even higher risk among the English after age 65. Our second aim explains large financial gradients in mortality in the two countries. Among 55-64 year olds, we estimate similar health gradients in income and wealth in both countries, but for 70-80 year old, we find no income gradient in UK. Standard behavioral risk factors (work, marriage, obesity, exercise, and smoking) almost fully explain income gradients among 55-64 years old in both countries and a significant part among Americans 70-80 years old. The most likely explanation of no English income gradient relates to their income benefit system. Below the median, retirement benefits are largely flat and independent of past income and hence past health during the working years. Finally, we report evidence using a long panel of American respondents that their subsequent mortality is not related to large changes in wealth experienced during the prior ten year period.
    Keywords: health
    JEL: I10
    Date: 2010–06
  6. By: Sgroi, Daniel (Department of Economics, University of Warwick); Proto, Eugenio (Department of Economics, University of Warwick); Oswald, Andrew J. (Department of Economics, University of Warwick and and Warwick Business School)
    Abstract: We live in a high-divorce age. Parents worry about the possibility of negative effects upon their children. This paper tests whether recent parental-divorce has deleterious consequences for grown children. Under controlled conditions, it measures students’ happiness with life, and their productivity in a standardized laboratory task. No negative effects from divorce can be detected. If anything, happiness and productivity are greater, particularly among males, if they have experienced parental divorce. Using longitudinal BHPS data -- to control for fixed effects -- we cross-check this result on happiness. Again, the evidence suggests that young people’s mental well-being improves after parental divorce.
    Keywords: Labor productivity ; divorce ; well-being ; happiness ; experimental economics JEL Codes: D03 ; J24 ; C91
    Date: 2010
  7. By: Manacorda, Marco; Manning, Alan; Wadsworth, Jonathan
    Abstract: Immigration to the UK, particularly among more educated workers, has risen appreciably over the past 30 years and as such has raised labor supply. However studies of the impact of immigration have failed to find any significant effect on the wages of native-born workers in the UK. This is potentially puzzling since there is evidence that changes in the supply of educated natives have significant effects on their wages. Using a pooled time series of British crosssectional micro data on male wages and employment from the mid-1970s to the mid-2000s, this paper offers a resolution to this puzzle, namely that in the UK natives and foreign born workers are imperfect substitutes. We show that immigration has primarily reduced the wages of immigrants - and in particular of university educated immigrants - with little discernable effect on the wages of the native-born.
    Keywords: Immigration; Returns to education; Wages
    JEL: J6
    Date: 2010–06
  8. By: James J. Heckman
    Abstract: This paper compares the structural approach to economic policy analysis with the program evaluation approach. It offers a third way to do policy analysis that combines the best features of both approaches. We illustrate the value of this alternative approach by making the implicit economics of LATE explicit, thereby extending the interpretability and range of policy questions that LATE can answer.
    JEL: C21 D6 H43
    Date: 2010–06

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