nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2010‒09‒11
eight papers chosen by
Maximo Rossi
University of the Republic

  1. Knowledge of Catalan, public/private sector choice and earnings: Evidence from a double sample selection model By Antonio Di Paolo
  2. Health Outcomes and Socio-Economic Status among the Elderly in China: Evidence from the CHARLS Pilot By Strauss, John; Lei, Xiaoyan; Park, Albert; Shen, Yan; Smith, James P.; Yang, Zhe; Zhao, Yaohui
  3. Household Choices and Child Development By Del Boca, Daniela; Flinn, Christopher; Wiswall, Matthew
  4. Social Networks, Job Search Methods and Reservation Wages: Evidence for Germany By Caliendo, Marco; Schmidl, Ricarda; Uhlendorff, Arne
  5. Minimum Wages, Labor Market Institutions, and Female Employment and Unemployment: A Cross-Country Analysis By Addison, John T.; Ozturk, Orgul Demet
  6. Fatal Attraction? Access to Early Retirement and Mortality By Kuhn, Andreas; Wuellrich, Jean-Philippe; Zweimüller, Josef
  7. The Medium Run Effects of Educational Expansion: Evidence from a Large School Construction Program in Indonesia By Esther Duflo
  8. Women as Policy Makers: Evidence from a Randomized Experiment By Esther Duflo; Raghabendra Chattopadhyay

  1. By: Antonio Di Paolo (Departament d'Economia Aplicada, Universitat Autònoma de Barcelona (UAB); Campus de Bellaterra, Edifici B 08193 Bellaterra (Cerdanyola), Spain. Institut d’Economia de Barcelona, Universitat de Barcelona.)
    Abstract: This paper explores the earnings return to Catalan knowledge for public and private workers in Catalonia. In doing so, we allow for a double simultaneous selection process. We consider, on the one hand, the non-random allocation of workers into one sector or another, and on the other, the potential self-selection into Catalan proficiency. In addition, when correcting the earnings equations, we take into account the correlation between the two selectivity rules. Our findings suggest that the apparent higher language return for public sector workers is entirely accounted for by selection effects, whereas knowledge of Catalan has a significant positive return in the private sector, which is somewhat higher when the selection processes are taken into account.
    Keywords: Language, Sector Choice, Earnings, Simultaneous Selection, Catalonia
    JEL: J24 J45 J70 C31
    Date: 2010–09
    URL: http://d.repec.org/n?u=RePEc:xrp:wpaper:xreap2010-9&r=ltv
  2. By: Strauss, John (University of Southern California); Lei, Xiaoyan (Peking University); Park, Albert (University of Oxford); Shen, Yan (Peking University); Smith, James P. (RAND); Yang, Zhe (Peking University); Zhao, Yaohui (Peking University)
    Abstract: We are concerned in this paper with measuring health outcomes among the elderly in Zhejiang and Gansu provinces, China, and examining the relationships between different dimensions of health status and measures of socio-economic status (SES). We use the China Health and Retirement Longitudinal Study (CHARLS) pilot data to document health conditions among the elderly in Gansu and Zhejiang provinces, where the survey was fielded. We use a very rich set of health indicators that include both self-reported measures and biomarkers. We also examine correlations between these health outcomes and two important indicators of socioeconomic status (SES): education and log of per capita expenditure (log pce), our preferred measure of household resources. While there exists a very large literature that examines the relationships between SES and health measures, little has been done on Chinese data to see whether correlations reported in many other countries are replicated in China, particularly so for the aged. In general education tends to be positively correlated with better health outcomes, as it is in other countries. However, unmeasured community influences turn out to be highly important, much more so than one usually finds in other countries. While it is not yet clear which aspects of communities matter and why they matter, we set up an agenda for future research on this topic. We also find a large degree of under-diagnosis of hypertension, a major health problems that afflicts the aged. This implies that the current health system is not well prepared to address the rapid aging of the Chinese population, at least not in Gansu and Zhejiang.
    Keywords: health, China
    JEL: I10
    Date: 2010–08
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp5152&r=ltv
  3. By: Del Boca, Daniela (University of Turin); Flinn, Christopher (New York University); Wiswall, Matthew (New York University)
    Abstract: The growth in labor market participation among women with young children has raised concerns about the potential negative impact of the mother's absence from home on child outcomes. Recent data show that mother's time spent with children has declined in the last decade, while the indicators of children's cognitive and noncognitive outcomes have worsened. The objective of our research is to estimate a model of the cognitive development process of children nested within an otherwise standard model of household life cycle behavior. The model generates endogenous dynamic interrelationships between the child quality and employment processes in the household, which are found to be consistent with patterns observed in the data. The estimated model is used to explore the effects of schooling subsidies and employment restrictions on household welfare and child development.
    Keywords: time allocation, child development, household labor supply
    JEL: J13 D1
    Date: 2010–08
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp5155&r=ltv
  4. By: Caliendo, Marco (IZA); Schmidl, Ricarda (IZA); Uhlendorff, Arne (University of Mannheim)
    Abstract: In this paper we analyze the relationship between social networks and the job search behavior of unemployed individuals. It is believed that networks convey useful information in the job search process such that individuals with larger networks should experience a higher productivity of informal search. Hence, job search theory suggests that individuals with larger networks use informal search channels more often and substitute from formal to informal search. Due to the increase in search productivity, it is also likely that individuals set higher reservation wages. We analyze these relations using a novel data set of unemployed individuals in Germany containing extensive information on job search behavior and direct measures for the social network of individuals. Our findings confirm theoretical expectations. Individuals with larger networks use informal search channels more often and shift from formal to informal search. We find that informal search is mainly considered a substitute for passive, less cost intensive search channels. In addition to that, we find evidence for a positive relationship between the network size and reservation wages.
    Keywords: job search behavior, unemployment, social networks
    JEL: J64
    Date: 2010–09
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp5165&r=ltv
  5. By: Addison, John T. (University of South Carolina); Ozturk, Orgul Demet (University of South Carolina)
    Abstract: This paper estimates the effect of minimum wage regulation in 16 OECD countries, 1970-2008. Our treatment is motivated by Neumark and Wascher's (2004) seminal cross-country study using panel methods to estimate minimum wage effects among teenagers and young adults. Apart from the longer time interval examined here, a major departure of the present study is the focus on prime-age females, a group typically neglected in the component minimum wage literature. Another is our deployment of time-varying policy and institutional regressors. Yet another is our examination of unemployment and participation outcomes in addition to employment effects. We report strong evidence of adverse employment effects among adult females and lower participation, even if the unemployment effects are muted. Although we report some similar findings to Neumark and Wascher as to the role of labor market institutions and policies, we do not observe the same patterns in the institutional data; in particular, we can reject for our target group their finding of stronger disemployment effects in countries with the least regulated markets.
    Keywords: minimum wages, wage fixing machinery, prime-age females, employment, unemployment, participation, cross-section time-series data, OECD countries, labor market flexibility, labor market institutions and policies
    JEL: J20 J38 J48 J58 J88
    Date: 2010–09
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp5162&r=ltv
  6. By: Kuhn, Andreas (University of Zurich); Wuellrich, Jean-Philippe (University of Zurich); Zweimüller, Josef (University of Zurich)
    Abstract: We estimate the causal effect of early retirement on mortality for blue-collar workers. To overcome the problem of endogenous selection, we exploit an exogenous change in unemployment insurance rules in Austria that allowed workers in eligible regions to withdraw from the workforce up to 3.5 years earlier than those in non-eligible regions. For males, instrumental-variable estimates show a significant 2.4 percentage points (about 13%) increase in the probability of dying before age 67. We do not find any adverse effect of early retirement on mortality for females. Death causes indicate a significantly higher incidence of cardiovascular disorders among eligible workers, suggesting that changes in health-related behavior explain increased mortality among male early retirees.
    Keywords: early retirement, mortality, premature death, health behavior, endogeneity, instrumental variable
    JEL: I1 J14 J26
    Date: 2010–08
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp5160&r=ltv
  7. By: Esther Duflo
    Abstract: This paper studies the medium run consequences of an increase in the rate of accumulation of human capital in a developing country. From 1974 to 1978, the Indonesian government built over 61,000 primary schools. The school construction program led to an increase in education among individuals who were young enough to attend primary school after 1974, but not among the older cohorts. 2SLS estimates suggest that an increase of 10 percentage points in the proportion of primary school graduates in the labor force reduced the wages of the older cohorts by 3.8% to 10% and increased their formal labor force participation by 4% to 7%. I propose a two-sector model as a framework to interpret these findings. The results suggest that physical capital did not adjust to the faster increase in human capital. [Working Paper No. 002]
    Keywords: returns to education, medium run, transitional dynamics
    Date: 2010
    URL: http://d.repec.org/n?u=RePEc:ess:wpaper:id:2787&r=ltv
  8. By: Esther Duflo; Raghabendra Chattopadhyay
    Abstract: This paper uses political reservations for women in India to study the impact of women’s leadership on policy decisions. In 1998, one third of all leadership positions of Village Councils in West Bengal were randomly selected to be reserved for a woman: in these councils only women could be elected to the position of head. Village Councils are responsible for the provision of many local public goods in rural areas. Using a data set we collected on 165 Village Councils, we compare the type of public goods provided in reserved and unreserved Villages Councils. We show that women invest more in infrastructure that is directly relevant to the needs of rural women (water, fuel, and roads), while men invest more in education. Women are more likely to participate in the policy-making process if the leader of their village council is a woman. [Working Paper No. 001]
    Keywords: Gender, Decentralization, Affirmative action, Political Economy
    Date: 2010
    URL: http://d.repec.org/n?u=RePEc:ess:wpaper:id:2786&r=ltv

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