nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2010‒12‒04
six papers chosen by
Maximo Rossi
University of the Republic

  1. Social Spending Generosity and Income Inequality: A Dynamic Panel Approach By Judith Niehues
  2. Are Women More Sensitive to the Decision-Making Context? By Luis Miller; Paloma Ubeda
  3. Democracy, Property Rights, Income Equality, and Corruption By Bin Dong; Benno Torgler
  4. On the Distributive Effects of Terms of Trade Shocks: The Role of Non-tradable Goods By Sebastian Galiani; Daniel Heymann; Nicolas E Magud
  5. Troubling tradeoffs in the Human Development Index By Ravallion, Martin
  6. I Would if I Could: Precarious Employment and Childbearing Intentions in Italy By Francesca Modena; Fabio Sabatini

  1. By: Judith Niehues
    Abstract: This paper explores whether more generous social spending polices in fact lead to less income inequality, or if redistributive outcomes are offset by behavioral disincentive effects. To account for the inherent endogeneity of social policies with regard to inequality levels, I apply the System GMM estimator and use the presumably random incidence of certain diseases as instruments for social spending levels. The regression results suggest that more social spending effectively reduces inequality levels. The result is robust with respect to the instrument count and different data restrictions. Looking at the structure of benefits, particularly unemployment benefits and public pensions are responsible for the inequality reducing impact. More targeted benefits, however, do not significantly reduce income inequality. Rather, their positive effect on pre-government income inequality hints at substantial disinctive effects.
    Keywords: Social Benefits, Redistribution, Income Inequality, System GMM
    JEL: D31 D60 H20
    Date: 2010
    URL: http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp336&r=ltv
  2. By: Luis Miller (Centre for Experimental Social Sciences, Nuffield College, University of Oxford); Paloma Ubeda (LINEEX, ERI-CESS, University of Valencia)
    Abstract: We conduct an experiment to assess gender differences across different economic contexts. Specifically, we test whether women are more sensitive to the decision-making context in situations in which different fairness principles can be used. We find that women adopt more often than men conditional fairness principles that require information about the context. Furthermore, while most men adopt only one decision principle, most women switch between multiple decision principles. These results complement and reinforce Croson and Gneezy's organizing explanation of greater context sensitivity of women.
    Keywords: Context-sensitivity, Distributive Justice, Gender differences
    JEL: C91 D63
    Date: 2010–11
    URL: http://d.repec.org/n?u=RePEc:cex:dpaper:2010004&r=ltv
  3. By: Bin Dong; Benno Torgler
    Abstract: This paper presents theoretical and empirical evidence on the nexus between corruption and democracy. We establish a political economy model where the effect of democracy on corruption is conditional on income distribution and property rights protection. Our empirical analysis with cross-national panel data provides evidence that is consistent with the theoretical prediction. Moreover, the effect of democratization on corruption depends on the protection of property rights and income equality which shows that corruption is a nonlinear function of these variables. The results indicate that democracy will work better as a control of corruption if the property right system works and there is a low level of income inequality. On the other hand if property rights are not secured and there is strong income inequality, democracy may even lead to an increase of corruption. In addition, property rights protection and the mitigation of income inequality contribute in a strong manner to the reduction of corruption.
    Keywords: Corruption; Democracy; Income inequality; Property rights
    JEL: D73 H11 P16
    Date: 2010–11
    URL: http://d.repec.org/n?u=RePEc:cra:wpaper:2010-23&r=ltv
  4. By: Sebastian Galiani; Daniel Heymann; Nicolas E Magud
    Abstract: We introduce non-tradable goods to the Heckscher-Ohlin-Samuelson (HOS) model to study the distributive effects of terms of trade shocks. We show that the employment of resources in activities producing exclusively for the local market induces a crucial association between domestic spending and factor demand and prices, which is absent in the usual HOS framework. Specifically, in a two-sector economy (producing only exportable and non-tradable goods) there are no redistributive effects of external terms of trade shifts-i.e. no Stolper-Samuelson-type of effect. By extending the model to the domestic production of a third, importable good, we show that distributional tensions arise. Distributional conflicts occur within urban labor groups (skilled vs. unskilled) and not only between the "traditional" rural vs. urban factors. Finally, export taxes are imposed to re-distribute the effects of external shocks. We show that the ability of the government to cushion the impact of the terms of trade shift on the economy’s income distribution depends crucially on the use of the tax revenues.
    Keywords: Export taxes , Exports , External shocks , Labor productivity , Terms of trade , Trade models ,
    Date: 2010–10–25
    URL: http://d.repec.org/n?u=RePEc:imf:imfwpa:10/241&r=ltv
  5. By: Ravallion, Martin
    Abstract: The 20th Human Development Report has introduced a new version of its famous Human Development Index (HDI). The HDI aggregates country-level attainments in life expectancy, schooling and income per capita. Each year's rankings by the HDI are keenly watched in both rich and poor countries. The main change in the 2010 HDI is that it relaxes its past assumption of perfect substitutability between its three components. However, most users will probably not realize that the new HDI has also greatly reduced its implicit weight on longevity in poor countries, relative to rich ones. A poor country experiencing falling life expectancy due to (say) a collapse in its health-care system could still see its HDI improve with even a small rate of economic growth. By contrast, the new HDI's valuations of the gains from extra schooling seem unreasonably high -- many times greater than the economic returns to schooling. These troubling tradeoffs could have been largely avoided using a different aggregation function for the HDI, while still allowing imperfect substitution. While some difficult value judgments are faced in constructing and assessing the HDI, making its assumed tradeoffs more explicit would be a welcome step.
    Keywords: Economic Theory&Research,Inequality,Rural Poverty Reduction,Debt Markets,Labor Policies
    Date: 2010–11–01
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:5484&r=ltv
  6. By: Francesca Modena; Fabio Sabatini
    Abstract: This paper carries out an investigation into the socio-economic determinants of childbearing decisions made by couples in Italy. The analysis accounts for the characteristics of both possible parents. Our results do not support established theoretical predictions according to which the increase in the opportunity cost of motherhood connected to higher female labour participation is responsible for the fall in fertility. On the contrary, the instability of women’s work status (i.e. having occasional, precarious, and low-paid positions) is revealed as a significant dissuasive factor in the decision to have children. Couples in which there is an unemployed woman are less likely to plan childbearing as well. Other relevant explanatory variables are women’s age, men’s work status and education, women’s citizenship, marital status and perceived economic wellbeing.
    Keywords: Fertility, family planning, parenthood, childbearing, participation, job instability, precarious employment, Italy.
    JEL: C25 J13
    Date: 2010
    URL: http://d.repec.org/n?u=RePEc:trn:utwpde:1013&r=ltv

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