nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2010‒09‒18
four papers chosen by
Maximo Rossi
University of the Republic

  1. Selective Reductions in Labor Taxation, Labour Market Adjustments and Macroeconomic Performance By Anna Batyra; Henri R. Sneessens
  2. Family Allowances and Child School Attendance: An ex-ante Evaluation of Alternative Schemes in Uruguay By Veronica Amarante; Rodrigo Arim; Gioia de Melo; Andrea Vigorito
  3. The Dilemma of Delegating Search: Budgeting in Public Employment Services By Addison, John T.; Altemeyer-Bartscher, Martin; Kuhn, Thomas
  4. Happiness and Financial Satisfaction in Israel: Effects of Religiosity, Ethnicity, and War By van Praag, Bernard M. S.; Romanov, Dmitri; Ferrer-i-Carbonell, Ada

  1. By: Anna Batyra; Henri R. Sneessens (CREA, University of Luxembourg)
    Abstract: We use a calibrated general equilibrium model with heterogeneous labor and search to evaluate the quantitative effects of various labor tax cut scenarios. The focus is on skill heterogeneity combined with downward wage rigidities at the low end of the skill ladder. Workers can take jobs for which they are overeducated. We compare targeted and nontargeted tax cuts, both with or without over-education effects. Introducing over-education changes substantially the employment, productivity and welfare effects of a tax cut, although tax cuts targeted on the least skilled workers always have larger effects.
    Keywords: Minimum Wage, Job Creation, Job Destruction, Job Competition, Search Unemployment, Taxation, Computable General Equilibrium Models
    JEL: C68 E24 J64
    Date: 2010
  2. By: Veronica Amarante; Rodrigo Arim; Gioia de Melo; Andrea Vigorito
    Abstract: Asignaciones Familiares is a child allowances program that was incepted in Uruguay in 1942 and significantly modified in 2008. The program is focused on children aged 0 to 18 and aims at alleviating poverty and promoting school attendance particularly among teen-agers. This paper presents an ex-ante evaluation on the effects of this reform on teenager school attendance, poverty, inequality and adult labour supply. Our ex-ante estimated effects indicate that teenage school attendance rates may increase by six to eight percentage points as a result of the new program, and that this change in school attendance shows a progressive pattern. The program also significantly reduces extreme poverty, and to a lesser extent, the intensity and severity of poverty. Effects on poverty incidence and inequality are of small magnitude. Finally, the transfer may influence adult labor supply, inducing a reduction of work hours for household heads and spouses.
    Keywords: Impact Evaluation, Conditional Cash Transfers, School Attendance, Poverty, Inequality
    JEL: I38 I32
    Date: 2010
  3. By: Addison, John T. (University of South Carolina); Altemeyer-Bartscher, Martin (Chemnitz University of Technology); Kuhn, Thomas (Chemnitz University of Technology)
    Abstract: The poor performance often attributed to many public employment services may be explained in part by a delegation problem between the central office and local job centers. In markets characterized by frictions, job centers function as match-makers, linking job seekers with relevant vacancies. Because their search intensity in contacting employers and collecting data is not verifiable by the central authority, a typical moral hazard problem can arise. To overcome the delegation problem and provide high-powered incentives for high levels of search effort on the part of job centers, we propose output-related schemes that assign greater staff capacity to agencies achieving high strike rates.
    Keywords: matching unemployment, public employment service, delegation problem, moral hazard, search theory
    JEL: J64 D82
    Date: 2010–09
  4. By: van Praag, Bernard M. S. (University of Amsterdam); Romanov, Dmitri (Central Bureau of Statistics, Israel); Ferrer-i-Carbonell, Ada (IAE Barcelona (CSIC))
    Abstract: We analyze individual satisfaction with life as a whole and satisfaction with the personal financial situation for Israeli citizens of Jewish and Arab descent. Our data set is the Israeli Social Survey (2006). We are especially interested in the impact of the religions Judaism, Islam and Christianity, where we are able to differentiate between individuals who vary in religiosity between secular and ultra-orthodox. We find a significant effect of religiosity on happiness. With respect to Jewish families it is most striking that the impact of family size on both life and financial satisfaction seems to vary with religiosity. This might be a reason for differentiation in family equivalence scales. For Arab families we did not find this effect. First-generation immigrants are less happy than second-generation immigrants, while there is no significant difference between second-generation families and native families. The effect of the Lebanon War is much less than expected.
    Keywords: happiness, subjective well-being, financial satisfaction, Israel, religion, immigration, terrorism
    JEL: H56 I31 N35 N45 R23 Z12
    Date: 2010–09

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