nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2010‒07‒17
seven papers chosen by
Maximo Rossi
University of the Republic

  1. Some Evidence on the Importance of Sticky Wages By Alessandro Barattieri; Susanto Basu; Peter Gottschalk
  2. Stronger sex but earlier death: A multi-level socioeconomic analysis of gender differences in mortality in Austria By Martin Gächter; Peter Schwazer; Engelbert Theurl
  3. The Wage-Productivity Gap Revisited: Is the Labour Share Neutral to Employment? By Marika Karanassou; Hector Sala
  4. The State of Collective Bargaining and Worker Representation in Germany: The Erosion Continues By Addison, John T.; Bryson, Alex; Teixeira, Paulino; Pahnke, André; Bellmann, Lutz
  5. Social Preferences in Childhood and Adolescence: A Large-Scale Experiment By Sutter, Matthias; Feri, Francesco; Kocher, Martin G.; Martinsson, Peter; Nordblom, Katarina; Rützler, Daniela
  6. Fair and Unfair Income Inequalities in Europe By Checchi, Daniele; Peragine, Vitorocco; Serlenga, Laura
  7. Distributional effects in household models: separate spheres and income pooling.. By Browning, Martin; Chiappori, Pierre-André; Lechene, Valérie

  1. By: Alessandro Barattieri (Boston College); Susanto Basu (Boston College; NBER); Peter Gottschalk (Boston College)
    Abstract: Nominal wage stickiness is an important component of recent medium-scale structural macroeconomic models, but to date there has been little microeconomic evidence supporting the as- sumption of sluggish nominal wage adjustment. We present evidence on the frequency of nominal wage adjustment using data from the Survey of Income and Program Participation (SIPP) for the period 1996-1999. The SIPP provides high-frequency information on wages, employment and demographic characteristics for a large and representative sample of the US population. The main results of the analysis are as follows. 1) After correcting for measurement error, wages appear to be very sticky. In the average quarter, the probability that an individual will experience a nominal wage change is between 5 and 18 percent, depending on the samples and assumptions used. 2) The frequency of wage adjustment does not display significant seasonal patterns. 3) There is little heterogeneity in the frequency of wage adjustment across industries and occupations 4) The hazard of a nominal wage change first increases and then decreases, with a peak at 12 months. 5) The probability of a wage change is positively correlated with the unemployment rate and with the consumer price inflation rate.
    Keywords: Wage stickiness, micro-level evidence, measurement error
    JEL: E24 E32 J30
  2. By: Martin Gächter; Peter Schwazer; Engelbert Theurl
    Abstract: Gender inequalities in mortality/life expectancy have been a major area of research in the social sciences since the 1970s. However, the questions posed and the research strategies used are still in a state of flux. In the present paper we shed some light on two related questions: (i) Which socioeconomic variables determine the gender gap in mortality? (ii) Are male and female mortality rates determined by different socioeconomic factors and in different shapes? We use aggregated data from Austria both at the community and district level covering the time period 1969 - 2004. Our two-level empirical design combined with a panel structure at the districts level reveals additional evidence on these questions compared to previous studies at the regional level. By using weighted regression analysis (panel fixed effects, pooled and cross section) we find that the gender gap is negatively associated with higher average net income, a higher educational level, a higher share of immigrants and better familial integration. In general, males are more sensitive with respect to social and economic conditions compared to females, leading to a narrowing gap in mortality when living conditions improve. These results are also confirmed by our Blinder-Oaxaca Decomposition.
    Keywords: mortality, gender mortality gap, life expectancy, Austria
    JEL: I12 I18 J16
    Date: 2010–07
  3. By: Marika Karanassou (Queen Mary, University of London and IZA); Hector Sala (Universitat Autònoma de Barcelona and IZA)
    Abstract: This paper challenges the prevailing view of the neutrality of the labour income share to labour demand, and investigates its impact on the evolution of employment. Whilst maintaining the assumption of a unitary long-run elasticity of wages with respect to productivity, we demonstrate that productivity growth affects the labour share in the long run due to frictional growth (that is, the interplay of wage dynamics and productivity growth). In the light of this result, we consider a stylised labour demand equation and show that the labour share is a driving force of employment. We substantiate our analytical exposition by providing empirical models of wage setting and employment equations for France, Germany, Italy, Japan, Spain, the UK, and the US over the 1960-2008 period. Our findings show that the timevarying labour share of these countries has significantly influenced their employment trajectories across decades. This indicates that the evolution of the labour income share (or, equivalently, the wage-productivity gap) deserves the attention of policy makers.
    Keywords: Wages, Productivity, Labour income share, Employment
    JEL: E24 E25 O47
    Date: 2010–07
  4. By: Addison, John T. (University of South Carolina); Bryson, Alex (National Institute of Economic and Social Research); Teixeira, Paulino (University of Coimbra); Pahnke, André (IAB, Nürnberg); Bellmann, Lutz (IAB, Nürnberg)
    Abstract: This paper investigates trends in collective bargaining and worker representation in Germany from 2000 to 2008. It seeks to update and widen earlier analyses pointing to a decline in collective bargaining, while providing more information on the dual system as a whole. Using data from the IAB Employment Panel and the German Employment Register, we report evidence of a systematic and continuing erosion of the dual system. Not unnaturally the decline is led by developments in western Germany. Arguably, the path of erosion will continue until rough and ready convergence is reached with eastern Germany. Expressed differently, if the process of decentralization underpinning these developments once was ‘regulated’ it no longer appears to be so.
    Keywords: erosion of the dual system, collective bargaining/works council coverage, eastern and western Germany, institutional transitions, permanent stayers, newly-founded firms, closing/failing firms
    JEL: J50 J53
    Date: 2010–06
  5. By: Sutter, Matthias (University of Innsbruck); Feri, Francesco (University of Innsbruck); Kocher, Martin G. (University of Munich); Martinsson, Peter (University of Gothenburg); Nordblom, Katarina (Göteborg University); Rützler, Daniela (University of Innsbruck)
    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: children, social preferences, age, gender, experiment
    JEL: C91 D63 D64
    Date: 2010–06
  6. By: Checchi, Daniele (University of Milan); Peragine, Vitorocco (University of Bari); Serlenga, Laura (University of Bari)
    Abstract: This paper analyses the extent of income inequality and opportunity inequality in 25 European countries. The present work contributes to understanding the origin of standard income inequality, helping to identify potential institutional setups that are associated to opportunity inequality. We distinguish between ex ante and ex post opportunity inequality. We find that ex ante equality of opportunity exhibits positive correlation with public expenditure in education, whereas ex post equality of opportunity is also positively associated to union presence and to fiscal redistribution.
    Keywords: inequality of opportunity, income inequality
    JEL: D31 D63 J62
    Date: 2010–06
  7. By: Browning, Martin; Chiappori, Pierre-André; Lechene, Valérie
    Abstract: We derive distributional effects for a non-cooperative alternative to the unitary model of household behaviour. We consider the Nash equilibria of a voluntary contributions to public goods game. Our main result is that, in general, the two partners either choose to contribute to different public goods or they contribute to at most one common good. The former case corresponds to the separate spheres case of Lundberg and Pollak (1993). The second outcome yields (local) income pooling. A household will be in different regimes depending on the distribution of income within the household. Any bargaining model with this non-cooperative case as a breakdown point will inherit the local income pooling. We conclude that targeting benefits such as child benefits to one household member may not always have an effect on outcomes.
    JEL: D10 C71 C72
    Date: 2010

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