nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2011‒02‒12
five papers chosen by
Maximo Rossi
University of the Republic

  1. Equality of Opportunity and the Distribution of Long-Run Income in Sweden By Björklund, Anders; Jäntti, Markus; Roemer, John E.
  2. Job Search and Job Finding in a Period of Mass Unemployment: Evidence from High-Frequency Longitudinal Data By Alan B. Krueger; Andreas Mueller
  3. Democracy, Property Rights, Income Equality, and Corruption By Bin Dong; Benno Torgler
  4. The Effects of Childhood Health on Adult Health and SES in China By James P. Smith; Yan Shen; John Strauss; Zhe Yang; Yaohui Zhao
  5. Do Positional Concerns Destroy Social Capital: Evidence from 26 Countries By Fischer, Justina A.V.; Torgler, Benno

  1. By: Björklund, Anders (SOFI, Stockholm University); Jäntti, Markus (Abo Academy of Finland); Roemer, John E. (Yale University)
    Abstract: Equality of opportunity is an ethical goal with almost universal appeal. The interpretation taken here is that a society has achieved equality of opportunity if it is the case that what individuals accomplish, with respect to some desirable objective, is determined wholly by their choices and personal effort, rather than by circumstances beyond their control. We use data for Swedish men born between 1955 and 1967 for whom we measure the distribution of long-run income, as well as several important background circumstances, such as parental education and income, family structure and own IQ before adulthood. We address the question: in Sweden, given its present constellation of social policies and institutions, to what extent is existing income inequality due to circumstances, as opposed to 'effort'? Our results suggest that several circumstances, importantly both parental income and own IQ, are important for long-run income inequality, but that variations in individual effort account for the most part of that inequality.
    Keywords: equality of opportunity, family background, inequality, long-run income
    JEL: D31 D63 J62 C14
    Date: 2011–01
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp5466&r=ltv
  2. By: Alan B. Krueger (Princeton University); Andreas Mueller (Stockholm University)
    Abstract: This paper presents findings from a survey of 6,025 unemployed workers who were interviewed every week for up to 24 weeks in the fall of 2009 and spring of 2010. Our main findings are: (1) the amount of time devoted to job search declines sharply over the spell of unemployment; (2) the self-reported reservation wage predicts whether a job offer is accepted or rejected; (3) the reservation wage is remarkably stable over the course of unemployment for most workers, with the notable exception of workers who are over age 50 and those who had nontrivial savings at the start of the study; (4) many workers who seek full-time work will accept a part-time job that offers a wage below their reservation wage; and (5) the amount of time devoted to job search and the reservation wage help predict early exits from Unemployment Insurance (UI).
    Keywords: unemployment, wages, job search
    JEL: H31 J08 J29 J64
    Date: 2011–01
    URL: http://d.repec.org/n?u=RePEc:pri:indrel:1283&r=ltv
  3. By: Bin Dong (The School of Economics and Finance, Queensland University of Technology); Benno Torgler (The School of Economics and Finance, Queensland University of Technology, CREMA – Centre for Research in Economics, Management and the Arts and CESifo)
    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 rights 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: 2011–01
    URL: http://d.repec.org/n?u=RePEc:fem:femwpa:2011.08&r=ltv
  4. By: James P. Smith; Yan Shen; John Strauss; Zhe Yang; Yaohui Zhao
    Abstract: In this paper, the authors model the consequences of childhood health on adult health and socioeconomic status outcomes in China using a new sample of middle aged and older Chinese respondents. Modeled after the American Health and Retirement Survey (HRS), the CHARLS Pilot survey respondents are forty-five years and older in two quite distinct provinces- Zhejiang, a high growth industrialized province on the East Coast and Gansu, a largely agricultural and poor province in the West. Childhood health in CHARLS relies on two measures that proxy for different dimensions of health during the childhood years. The first is a retrospective self-evaluation using a standard five-point scale (excellent, very good, good, fair, or poor) of general state of one's health when one was less than 16 years old. The second is adult height often thought to be a good measure of levels of nutrition during early childhood and the prenatal period. They relate both these childhood health measures to adult health and SES outcomes during the adult years. They find strong effects of childhood health on adult health outcomes particularly among Chinese women and strong effects on adult BMI particularly for Chinese men.
    Date: 2010–11
    URL: http://d.repec.org/n?u=RePEc:ran:wpaper:809&r=ltv
  5. By: Fischer, Justina A.V.; Torgler, Benno
    Abstract: Research on the effects of positional concerns on individuals’ attitudes and behavior is sorely lacking. To address this deficiency, we use the International Social Survey Programme 1998 data on 25’000 individuals from 26 countries to investigate the impact of relative income position on three facets of social capital, covering horizontal and vertical trust as well as norm compliance. Testing relative deprivation theory, we identify a deleterious positional income effect for persons below the reference income, particularly for their social trust and confidence in secular institutions. Also often a social capital-lowering effect of relative income advantage occurs, while a rise in absolute income almost always contributes positively. These results indicate that a rise in income inequality in society too large is rather detrimental to the formation of social capital.
    Keywords: Relative income; positional concerns; social capital; social norms; deprivation theory
    JEL: I30 D31 Z13
    Date: 2011–02–03
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:28650&r=ltv

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