nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2010‒12‒23
nine papers chosen by
Maximo Rossi
University of the Republic

  1. Inequality, income and poverty: comparative global evidence By Augustin Kwasi Fosu
  2. Part time employment and happiness: A cross-country analysis By Jenny Willson; Andy Dickerson
  3. Trust, Positive Reciprocity, and Negative Reciprocity: Do These Traits Impact Entrepreneurial Dynamics? By Marco Caliendo; Frank Fossen; Alexander Kritikos
  4. Doing good with other people's money: A charitable giving experiment with students in environmental sciences and economics By Frederik Carlsson; Mitesh Kataria; Elina Lampi; M. Vittoria Levati
  5. Does Entitlement Crowd Out Efficiency or Equality Seeking? - Selling the Roles in Generosity Game Experiments - By Agnes Bäker; Werner Güth; Kerstin Pull; M. Stadler
  6. A Flying Start? Long Term Consequences of Maternal Time Investments in Children During Their First Year of Life By Carneiro, Pedro; Loken, Katrine V.; Salvanes, Kjell G.
  7. A note on Fairness and Redistribution By Rafael Di Tella; Juan Dubra
  8. Growth, Income Distribution, and Poverty: A Review By Arne Bigsten; Jörgen Levin
  9. Weights in multidimensional indices of well-being: an overview By Koen DECANCQ; María Ana LUGO

  1. By: Augustin Kwasi Fosu
    Abstract: Analysing a large sample of 1980-2004 unbalanced panel data, the current study presents comparative global evidence on the role of (income) inequality in poverty reduction. The evidence involves both an indirect channel via the tendency of high inequality to decrease the rate at which income is transformed to poverty reduction, and the tendency of rising inequality to increase poverty. Based on the basic-needs approach, an analysis-of-covariance model is estimated, with the headcount measure of poverty as the dependent variable, and the Gini coefficient and PPP-adjusted mean income as explanatory variables. The study finds that the responsiveness of poverty to income growth is a decreasing function of inequality, and that the income elasticity of poverty is actually smaller than the inequality elasticity. Thus, income distribution can play a more important role than might be traditionally acknowledged. Found also is a large variation across regions (and countries) in the poverty effects of inequality. A version of this paper has been accepted for publication in Social Science Quarterly.
    Date: 2010
  2. By: Jenny Willson; Andy Dickerson (Department of Economics, The University of Sheffield)
    Abstract: The relationship between part time employment and job satisfaction is analysed for mothers in Germany, Denmark, the Netherlands, Finland, France, Spain and the UK. The impact of working part time on subjective life satisfaction and mental well-being is additionally analysed for British mothers. Cultural traditions concerning women’s role in society, and institutional differences between the countries are exploited. Results indicate that poor quality jobs can diminish any positive well-being repercussions of part time employment. The results additionally suggest that part time mothers in the UK experience higher levels of job satisfaction but not of overall life satisfaction as compared to their full time counterparts.
    Keywords: part time work, job satisfaction, well being
    JEL: J28 J16 J13 I31
    Date: 2010–12
  3. By: Marco Caliendo; Frank Fossen; Alexander Kritikos
    Abstract: Experimental evidence reveals that there is a strong willingness to trust and to act in both positively and negatively reciprocal ways. So far it is rarely analyzed whether these variables of social cognition influence everyday decision making behavior. We focus on entrepreneurs who are permanently facing exchange processes in the interplay with investors, sellers, and buyers, as well as needing to trust others and reciprocate with their network. We base our analysis on the German Socio-Economic Panel and recently introduced questions about trust, positive reciprocity, and negative reciprocity to examine the extent that these variables influence the entrepreneurial decision processes. More specifically, we analyze whether i) the willingness to trust other people influences the probability of starting a business; ii) trust, positive reciprocity, and negative reciprocity influence the exit probability of entrepreneurs; and iii) willingness to trust and to act reciprocally influences the probability of being an entrepreneur versus an employee or a manager. Our findings reveal that, in particular, trust impacts entrepreneurial development. Interestingly, entrepreneurs are more trustful than employees, but much less trustful than managers.
    Keywords: Entrepreneurship, trust, reciprocity
    JEL: D81 J23 M13 L26
    Date: 2010
  4. By: Frederik Carlsson (Department of Economics, University of Gothenburg); Mitesh Kataria (Max Planck Institute of Economics, Strategic Interaction Group, Jena); Elina Lampi (Department of Economics, University of Gothenburg); M. Vittoria Levati (Max Planck Institute of Economics, Strategic Interaction Group, Jena)
    Abstract: We augment a standard dictator game to investigate how preferences for an environmental project relate to willingness to limit others' choices. We explore this issue by distinguishing three student groups: economists, environmental economists, and environmental social scientists. We find that people are generally disposed to grant freedom of choice, but only within certain limits. In addition, our results are in line with the widely held belief that economists are more selfish than other people. Yet, against the notion of consumer sovereignty, economists are not less likely to restrict others' choices and impose restrictions closer to their own preferences than the other student groups.
    Keywords: dictator game, charitable giving, social preferences, paternalism
    JEL: C92 D64
    Date: 2010–12–15
  5. By: Agnes Bäker (Eberhard Karls Universität Tübingen); Werner Güth (Max Planck Institute of Economics, Strategic Interaction Group); Kerstin Pull (Eberhard Karls Universität Tübingen); M. Stadler (Eberhard Karls Universität Tübingen)
    Abstract: In generosity games, one agreement payoff is exogenously given, whereas the other is endogenously determined by the proposer's choice of the "pie" size. This has been shown to induce pie choices which are either efficiency or equality seeking. In our experiment, before playing the generosity game, participants are asked to buy their role via a random price mechanism. This should entitle them to exploit the chances which their role provides and at the same time avoid the selection bias of competitive auctions. We find that entitlement crowds out equality seeking and strengthens efficiency seeking. Interpreting participants' willingness to pay as an aspiration level of how much they want to earn, our design further allows us to test for satisficing behavior. Indeed, we find evidence for satisficing behavior in the data.
    Keywords: Entitlement, Generosity Game, Efficiency Seeking, Inequity Aversion, Satisficing
    JEL: C7 C91
    Date: 2010–12–14
  6. By: Carneiro, Pedro (University College London); Loken, Katrine V. (University of Bergen); Salvanes, Kjell G. (Norwegian School of Economics and Business Administration)
    Abstract: We study the impact on children of increasing the time that the mother spends with her child in the first year by exploiting a reform that increased paid and unpaid maternity leave in Norway. The reform increased maternal leave on average by 4 months and family income was unaffected. The increased time with the child led to a 2.7 percentage points decline in high school dropout. For mothers with low education we find a 5.2 percentage points decline. The effect is also especially large for children of mothers who, prior to the reform, would take very low levels of unpaid leave.
    Keywords: adult outcomes, time with mother, maternity leave
    JEL: J13
    Date: 2010–12
  7. By: Rafael Di Tella (Harvard Business School, Business, Government and the International Economy Unit); Juan Dubra (Universidad de Montevideo)
    Abstract: We note some problems in Alesina and Angeletos (2005) and suggest a way to maintain the key insight of that paper, which is that a demand for fairness could lead to different economic systems such as those observed in France versus the US (multiple equilibria).
    Keywords: Inequality, taxation, redistribution, political economy.
    JEL: D31 E62 H2 P16
    Date: 2010–12
  8. By: Arne Bigsten; Jörgen Levin
    Abstract: This paper reviews recent research dealing with the relationships between economic growth, income distribution, and poverty. This generally fails to find any systematic pattern of change in income distribution during recent decades. Neither does it find any systematic link from fast growth to increasing inequality. The level of initial income inequality is not a robust explanatory factor of growth, but some recent empirical studies have found a negative impact of asset inequality on growth. [Discussion Paper No.2001/129]
    Keywords: pro-poorgrowth,incomedistribution,poverty,survey
    Date: 2010
  9. By: Koen DECANCQ; María Ana LUGO
    Abstract: Multidimensional indices are becoming increasingly important instruments to assess the well-being of societies. They move beyond the focus on a single indicator and yet, are easy to present and communicate. A crucial step in the construction of a multidimensional index of well-being is the selection of the relative weights for the different dimensions. The aim of this paper is to study the role of these weights and to critically survey eight different approaches to set them. We categorize the approaches in three classes: data-driven, normative and hybrid weighting, and compare their respective advantages and drawbacks.
    Keywords: composite indicator, multidimensional well-being index, weights.
    JEL: I31 C43 O1
    Date: 2010–03

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