nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2011‒03‒05
nine papers chosen by
Maximo Rossi
University of the Republic

  1. Inheritances and the Distribution of Wealth Or Whatever Happened to the Great Inheritance Boom? By Edward N. Wolff; Maury Gittleman
  2. Do Exporters Share Part of their Rents with their Employees? Evidence from Austrian Manufacturing Firms By Robert Stehrer; Sandra M. Leitner
  3. Does a Better Job Match Makes Women Happier?: Work Orientations, Work-Care Choices and Subjective Well-Being in Germany By Ruud Muffels; Bauke Kemperman
  4. Retirement and Subjective Well-Being By Bonsang, Eric; Klein, Tobias J.
  5. The Development of Egalitarianism, Altruism, Spite and Parochialism in Childhood and Adolescence By Fehr, Ernst; Rützler, Daniela; Sutter, Matthias
  6. What active labor market policy works in a recession? By Forslund, Anders; Fredriksson, Peter; Vikström, Johan
  7. The threat effect of participation in active labor market programs on job search behavior of migrants in Germany By Bergemann, Annette; Caliendo, Marco; van den Berg, Gerard J.; Zimmermann, Klaus F.
  8. Inequality of Happiness in US: 1972-2008 By Indranil Dutta; James Foster
  9. Income and Ideology: How Personality Traits, Cognitive Abilities, and Education Shape Political Attitudes By Rebecca Morton; Jean-Robert Tyran; Erik Wengström

  1. By: Edward N. Wolff (New York University); Maury Gittleman (U.S. Bureau of Labor Statistics)
    Abstract: We found that on average over the period from 1989 to 2007, 21 percent of American households at a given point of time received a wealth transfer and these accounted for 23 percent of their net worth. Over the lifetime, about 30 percent of households could expect to receive a wealth transfer and these would account for close to 40 percent of their net worth near time of death. However, there is little evidence of an inheritance “boom.” In fact, from 1989 to 2007, the share of households reporting a wealth transfer fell by 2.5 percentage points. The average value of inheritances received among all households did increase but at a slow pace, by 10 percent, and wealth transfers as a proportion of current net worth fell sharply over this period from 29 to 19 percent or by 10 percentage points. We also found, somewhat surprisingly, that inheritances and other wealth transfers tend to be equalizing in terms of the distribution of household wealth. Indeed, the addition of wealth transfers to other sources of household wealth has had a sizeable effect on reducing the inequality of wealth.
    Keywords: Inheritance, household wealth, inequality
    JEL: D31 J15
    Date: 2011–02
  2. By: Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw); Sandra M. Leitner
    Abstract: This paper looks at the influence globalization exerts on wage negotiation processes and outcomes. Specifically, it establishes whether, compared to their purely domestically oriented counterparts, exporters share a higher fraction of the rents they generate with their employees. The analysis uses a panel of Austrian manufacturing firms between 2002 and 2006 and demonstrates that, in general, Austrian exporters do not share a higher part of their rents with their employees. Moreover, the analysis also takes into account that exporters are a very heterogeneous group, broadly differing in terms of the degree to which they trade internationally or to which they earn rents from their export activities. Against that backdrop, it determines whether rent-sharing systematically differs by the degree of internationalization of exporters. The results emphasize that particularly the most export-oriented firms are able to cut down on rent-sharing which corroborates the idea that exporters can credibly and effectively exploit their threat-points of either outsourcing or offshoring part of their production which induces employees to concede to more moderate wage changes so as to avert the potential loss of employment.
    Keywords: wage determination, rent-sharing, internationalization, firm-level analysis
    JEL: F16 J31 L6
    Date: 2011–02
  3. By: Ruud Muffels; Bauke Kemperman
    Abstract: The study examines the effects of work orientations and work-leisure choices alongside the effect of genes or personality traits on subjective well-being (SWB). The former effects are assumed to be mediated by the match between women’s preferred and actual number of working hours indicating labor market and time constraints. Data come from 24 waves of the German (SOEP) Household Panel (1984-2007). Random and fixed-effect panel regression models are estimated. Work orientations and work-leisure choices indeed matter for women’s SWB but the effects are strongly mediated by the job match especially for younger birth cohorts and higher educated women. Therefore, apart from the impact of genes or personality traits preferences and choices as well as labor market and time constraints matter significantly for the well-being of women, providing partial support to the role (scarcity-expansion) theory and the combination pressure thesis while at the same time challenging set-point theory
    Keywords: Subjective well-being, set-point theory, life satisfaction, preference formation theory, role (scarcity-expansion) theory, job match, work-leisure choices, panel regression models
    JEL: I32 J21 J24 J64
    Date: 2011
  4. By: Bonsang, Eric (ROA, Maastricht University); Klein, Tobias J. (Tilburg University)
    Abstract: We provide an explanation for the common finding that the effect of retirement on life satisfaction is negligible. For this we use subjective well-being measures for life and domains of life satisfaction that are available in the German Socio-Economic Panel (GSOEP) and show that the effect of voluntary retirement on satisfaction with current household income is negative, while the effect on satisfaction with leisure is positive. At the same time, the effect on health satisfaction is positive but small. Following the life domain approach we then argue that these effects offset each other for an average individual and that therefore the overall effect is negligible. Furthermore, we show that it is important to distinguish between voluntary and involuntary retirement. The effect of involuntary retirement is negative because the adverse effect on satisfaction with household income is bigger, the favorable effect on satisfaction with leisure is smaller, and the effect on satisfaction with health is not significantly different from zero. These results turn out to be robust to using different identification strategies such as fixed effects and first differences estimation, as well as instrumental variables estimation using eligibility ages and plant closures as instruments for voluntary and involuntary retirement.
    Keywords: retirement, subjective well-being, satisfaction measurement
    JEL: J26 J14
    Date: 2011–02
  5. By: Fehr, Ernst (University of Zurich); Rützler, Daniela (University of Innsbruck); Sutter, Matthias (University of Innsbruck)
    Abstract: We study how the distribution of other-regarding preferences develops with age. Based on a set of allocation choices, we can classify each of 717 subjects, aged 8 to 17 years, as either egalitarian, altruistic, or spiteful. Varying the allocation recipient as either an in-group or an out-group member, we can also study how parochialism develops with age. We find a strong decrease in spitefulness with increasing age. Egalitarianism becomes less frequent, and altruism much more prominent, with age. Women are more frequently classified as egalitarian than men, and less often as altruistic. Parochialism first becomes significant in the teenage years.
    Keywords: other-regarding preferences, egalitarianism, altruism, spite, parochialism, experiments with children and adolescents
    JEL: C91
    Date: 2011–02
  6. By: Forslund, Anders (IFAU - Institute for Labour Market Policy Evaluation); Fredriksson, Peter (Department of Economics, Stockholm University); Vikström, Johan (IFAU - Institute for Labour Market Policy Evaluation)
    Abstract: This paper discusses the case for expanding active labor market policy in recession. We find that there is reasonable case for relying more heavily on certain kinds of programs. The argument is tied to the varying size of the lock-in effect in boom and recession. If programs with relatively large lock-in effects should ever be used, they should be used in a downturn. The reason is simply that the cost of forgoing search time is lower in recession. We also provide new evidence on the relative effectiveness of different kinds of programs over the business cycle. In particular we compare an on-the-job training scheme with (traditional) labor market training. We find that labor market training is relatively more effective in recession. This result is consistent with our priors since labor market training features relative large lock-in effects.
    Keywords: Active labor market policy; business cycle; unemployment
    JEL: J08 J64 J68
    Date: 2011–01–26
  7. By: Bergemann, Annette (Department of Economics, University of Mannheimn); Caliendo, Marco (DIW Berlin); van den Berg, Gerard J. (IFAU - Institute forLabour Market Policy Evaluation); Zimmermann, Klaus F. (University of Bonn)
    Abstract: Labor market programs may affect unemployed individuals’ behavior before they enroll. Such ex ante effects may differ according to ethnic origin. We apply a novel method that relates self-reported perceived treatment rates and job search behav­ioral outcomes, such as the reservation wage or search intensity, to each other. We compare German native workers with migrants with a Turkish origin or Central and Eastern European (including Russian) background. Job search theory is used to de­rive theoretical predictions. We examine the omnibus ex ante effect of the German ALMP system, using the novel IZA Evaluation Data Set, which includes self-reported assessments of the variables of interest as well as an unusually detailed amount of in­formation on behavior, attitudes and past outcomes. We find that the ex ante threat effect on the reservation wage and search effort varies considerably among the groups considered.
    Keywords: Immigrants; policy evaluation; reservation wage; search effort; expectations; unemploy­ment duration; program evaluation; active labor market policy.
    JEL: C21 D83 D84 J61 J64
    Date: 2011–02–07
  8. By: Indranil Dutta; James Foster
    Date: 2011
  9. By: Rebecca Morton (Department of Politics, New York University); Jean-Robert Tyran (Department of Economics, University of Vienna); Erik Wengström (Department of Economics, University of Copenhagen)
    Abstract: We find that cognitive abilities, educational attainment, and some personality traits indirectly affect ideological preferences through changes in income. The effects of changes in personality traits on ideology directly and indirectly through income are in the same direction. However, the indirect effects of cognitive abilities and education often offset the direct effects of these variables on ideological preferences. That is, increases in cognitive abilities and education significantly increase income, which reduces the tendency of individuals to express leftist preferences. These indirect effects are in some cases sizeable relative to direct effects. The indirect effects of cognitive abilities through income overwhelm the direct effects such that increasing IQ increases rightwing preferences. For ideological preferences over economic policy the indirect effects of advanced education also overwhelm the direct effects, such that individuals with higher education are more likely to express rightwing preferences than those with lower education.
    Date: 2011–01

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