nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2011‒01‒16
seven papers chosen by
Maximo Rossi
University of the Republic

  1. Inequality and teenagers’ educational aspirations in urban Mexico By Aniel Altamirano; Luis Felipe López-Calva; Isidro Soloaga
  2. Happy House: Spousal Weight and Individual Well-Being By Andrew E. Clark; Fabrice Etilé
  3. Joblessness By José A. F. Machado; Pedro Portugal; Pedro S. Raposo
  4. The contribution of the minimum wage to U.S. wage inequality over three decades: a reassessment By David Autor; Alan Manning; Christopher L. Smith
  5. International Happiness By David G. Blanchflower; Andrew J. Oswald
  6. How Does Growth Affect Labor Income by Gender? A Structural Path Analysis for Tanzania By Parra, Juan Carlos; Wodon, Quentin
  7. Is there a metropolitan bias ? the inverse relationship between poverty and city size in selected developing countries By Ferre, Celine; Ferreira, Francisco H.G.; Lanjouw, Peter

  1. By: Aniel Altamirano (LAC-UNDP); Luis Felipe López-Calva (Regional Bureau for Latin America and the Caribbean-UNDP); Isidro Soloaga (El Colegio de México)
    Abstract: The goal of this paper is to assess in which way socioeconomic and other family characteristics affect youth’s aspirations for education in urban Mexico. The theoretical approach, grounded in Sen´s capabilities approach, incorporates recent developments in two strands of the literature: a) one that assesses the impact of economic mobility on individuals´ aspirations and on the impact of aspirations on individuals behavior; and b) one that stresses the importance of agency, both, as a goal itself for human development and because its instrumental value for people to achieve whatever goals or values they regard as important. What follows presents the theoretical approach and an empirical application to Mexico DF. The paper elaborates on the plausible impact of the findings for the intergenerational transmission of inequality in LAC countries.
    Keywords: inequality, education, economic mobility
    JEL: D63 H52 I21 I22
    Date: 2010–07
  2. By: Andrew E. Clark; Fabrice Etilé
    Abstract: We use life satisfaction and Body Mass Index (BMI) information from three waves of the SOEP to test for social interactions in BMI between spouses. Social interactions require that the cross-partial effect of partner's weight and own weight in the utility function be positive. Using life satisfaction as a utility proxy, semi-parametric regressions show that the correlation between satisfaction and own BMI is initially positive, but turns negative after some threshold. Critically, this latter threshold increases with partner¿s BMI when the individual is overweight. The negative well-being impact of own BMI is thus lower when the individual's partner is heavier, which is consistent with social contagion effects in weight. However, this cross-partial effect becomes insignificant in instrumental variable regressions, suggesting that the uninstrumented relationship reflects selection on the marriage market or omitted variables, rather than social interactions.
    Keywords: Obesity, subjective well-being, BMI, social interactions
    JEL: C14 I12 I3
    Date: 2010
  3. By: José A. F. Machado; Pedro Portugal; Pedro S. Raposo
    Abstract: The U.S. labor market has been experiencing unprecedented high average unemployment duration. The shift in the unemployment duration distribution can be traced back to the early nineties. In this paper, censored quantile regression methods are employed to analyze the changes in the US unemployment duration distribution. We explore the decomposition method proposed by Machado and Mata (2005) to disentangle the contribution of compositional vis-à-vis structural changes. The data used in this inquiry are taken from the nationally representative Displaced Worker Surveys of 1988 and 2008. Apart from the effect of economic improvement we find that the sensitivity of joblessness duration to education and the aging of the population were the two main forces behind the increase of the unemployment duration, in the last twenty years. We tentatively argue that firms use education as a signaling device during recessions, but the signaling power of education during the recent low-unemployment environment faded significantly.
    JEL: C14 C21 C41 J64
    Date: 2010
  4. By: David Autor; Alan Manning; Christopher L. Smith
    Abstract: We reassess the effect of state and federal minimum wages on U.S. earnings inequality, attending to two issues that appear to bias earlier work: violation of the assumed independence of state wage levels and state wage dispersion, and errors-in-variables that inflate impact estimates via an analogue of the well known division bias problem. We find that erosion of the real minimum wage raises inequality in the lower tail of the wage distribution (the 50/10 wage ratio), but the impacts are typically less than half as large as those reported in the literature and are almost negligible for males. Nevertheless, the estimated effects of the minimum wage on points of the wage distribution extend to wage percentiles where the minimum is nominally non-binding, implying spillovers. We structurally estimate these spillovers and show that their relative importance grows as the nominal minimum wage becomes less binding. Subsequent analysis underscores, however, that spillovers and measurement error (absent spillovers) have similar implications for the effect of the minimum on the shape of the lower tail of the measured wage distribution. With available precision, we cannot reject the hypothesis that estimated spillovers to non-binding percentiles are due to reporting artifacts. Accepting this null, the implied effect of the minimum wage on the actual wage distribution is smaller than the effect of the minimum wage on the measured wage distribution.
    Date: 2010
  5. By: David G. Blanchflower; Andrew J. Oswald
    Abstract: This paper describes the findings from a new, and intrinsically interdisciplinary, literature on happiness and human well-being. The paper focuses on international evidence. We report the patterns in modern data; we discuss what has been persuasively established and what has not; we suggest paths for future research. Looking ahead, our instinct is that this social-science research avenue will gradually merge with a related literature -- from the medical, epidemiological, and biological sciences -- on biomarkers and health. Nevertheless, we expect that intellectual convergence to happen slowly.
    JEL: I1 I3
    Date: 2011–01
  6. By: Parra, Juan Carlos; Wodon, Quentin
    Abstract: This paper uses structural path analysis to examine the transmission channels through which an initial shock travels through the economy to affect other accounts of a Social Accounting Matrix. The focus is on the impact of shocks on labor income by gender in Tanzania and the analysis is used to characterize what we call the concentration, strength, and speed of various transmission channels.
    Keywords: Gender; Labor income; Social Accounting Matrix; Structural Path Analysis; Tanzania
    JEL: D57 J22
    Date: 2010–08
  7. By: Ferre, Celine; Ferreira, Francisco H.G.; Lanjouw, Peter
    Abstract: This paper provides evidence from eight developing countries of an inverse relationship between poverty and city size. Poverty is both more widespread and deeper in very small and small towns than in large or very large cities. This basic pattern is generally robust to choice of poverty line. The paper shows, further, that for all eight countries, a majority of the urban poor live in medium, small, or very small towns. Moreover, it is shown that the greater incidence and severity of consumption poverty in smaller towns is generally compounded by similarly greater deprivation in terms of access to basic infrastructure services, such as electricity, heating gas, sewerage, and solid waste disposal. The authors illustrate for one country -- Morocco -- that inequality within large cities is not driven by a severe dichotomy between slum dwellers and others. The notion of a single cleavage between slum residents and well-to-do burghers as the driver of urban inequality in the developing world thus appears to be unsubstantiated -- at least in this case. Robustness checks are performed to assess whether the findings in the paper are driven by price variation across city-size categories, by the reliance on an income-based concept of well-being, and by the application of small-area estimation techniques for estimating poverty rates at the town and city level.
    Keywords: Rural Poverty Reduction,Subnational Economic Development,City Development Strategies,Regional Economic Development
    Date: 2010–12–01

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