nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2011‒04‒09
eight papers chosen by
Maximo Rossi
University of the Republic

  1. Income Segregation and Suburbanization in France : a discrete choice approach By Florence Goffette-Nagot; Yves Schaeffer
  2. The emergence of norms from conflicts over just distributions By Luis Miller; Heiko Rauhut; Fabian Winter
  3. "Beauty Is the Promise of Happiness"? By Hamermesh, Daniel S.; Abrevaya, Jason
  4. Health and Well-Being in the Crisis By Askitas, Nikos; Zimmermann, Klaus F.
  5. Youth Unemployment and Crime: New Lessons Exploring Longitudinal Register Data By Grönqvist, Hans
  6. Identification Problems in Personality Psychology By Borghans, Lex; Golsteyn, Bart H. H.; Heckman, James; Humphries, John Eric
  7. Productivity or discrimination? An economic analysis of excess-weight penalty in the Swedish labor market By Dackehag, Margareta; Gerdtham, Ulf-G; Nordin, Martin
  8. Quality and quantity: the role of social interactions in individual health By Damiano, Fiorillo; Fabio, Sabatini

  1. By: Florence Goffette-Nagot (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure de Lyon); Yves Schaeffer (CEMAGREF - institut de recherche en sciences et technologies pour l'environnement - CEMAGREF)
    Abstract: This paper focuses on residential sorting by social and ethnic status in large French urban areas. Our objective is to assess the relative importance of two major determinants of segregation stressed by the economic literature (Bartolome and Ross, 2003 ; Brueckner et al., 1999) : (i) "Alonso sorting over space", due to the trade-off between land consumption and accessibility to the central city and (ii) "Tiebout sorting over jurisdictions", due to the taste for local public goods and by extension for all kinds of local public amenities (e.g. neighborhood externalities). Our methodology draws on Schmidheiny (2006). First, a conditional logit model is estimated for each urban area, in which moving households are assumed to sort based on jurisdiction distance to the central city and jurisdiction mean of households' incomes (as a proxy for the level of public amenities). Second, our estimation results are used to simulate the counterfactual residential patterns that would prevail if, alternatively, one or the other of these mechanisms were inactive (setting the coefficients of the corresponding variables to zero). The contribution of each mechanism to the observed social and ethnic segregation is finally appreciated by comparing the values of dissimilarity indexes computed on the basis of the counterfactual households distributions and on the observed households distribution. "Tiebout-sorting" emerges as the primary cause of social segregation among wage-earning households. On the contrary, "Alonso-sorting" appears to be the main driver of segregation between economically active and inactive households, as well as between Frenchcitizen and Foreign-citizen households.
    Keywords: Income segregation; Ethnic segregation; Suburbanization; Local amenities; Migrations; Conditional logit; French urban areas
    Date: 2011
  2. By: Luis Miller (CESS, Nuffield College, Oxford, Great Britain); Heiko Rauhut (ETH Zurich, Swiss Federal Institute of Technology); Fabian Winter (Max Planck Institute of Economics, Jena, Germany)
    Abstract: Why is it that well-intentioned actions can create persistent conflicts? While norms are widely regarded as a source for cooperation, this article proposes a novel theory in which the emergence of norms can be understood as a bargaining process in which normative conflicts explain the finally emerging norm. The theory is tested with a dynamical experiment on conflicts over the consideration of equality, effort or efficiency for the distribution of joint earnings. Normative conflict is measured by the number of rejected offers in a recursive bargaining game. The emerging normative system is analyzed by feedback cycles between micro- and macro-level. It is demonstrated that more normative cues cause more normative conflict. Further, under the structural conditions of either simple or complex situations, the convergence towards a simple and widely shared norm is likely. In contrast, in moderately complex situations, convergence is unlikely and several equally reasonable norms co-exist. The findings are discussed with respect to the integration of sociological conflict theory with the bargaining concept in economic theory.
    Keywords: social norms, normative conflict, bargaining, cooperation, experiment
    JEL: C91 D63
    Date: 2011–04–04
  3. By: Hamermesh, Daniel S. (University of Texas at Austin); Abrevaya, Jason (University of Texas at Austin)
    Abstract: We measure the impact of individuals' looks on their life satisfaction or happiness. Using five data sets from the U.S., Canada, the U.K., and Germany, we construct beauty measures in different ways that allow putting a lower bound on the true effects of beauty on happiness. Personal beauty raises happiness, with a one standard-deviation change in beauty generating about 0.10 standard deviations of additional satisfaction/happiness among men, 0.12 among women. Accounting for a wide variety of covariates, including those that might be affected by differences in beauty, and particularly effects in the labor and marriage markets, the impact among men is more than halved, among women slightly less than halved. The majority of the effect of beauty on happiness may work through its effects on economic outcomes.
    Keywords: life satisfaction, measurement error, looks
    JEL: I30 J10 C20
    Date: 2011–03
  4. By: Askitas, Nikos (IZA); Zimmermann, Klaus F. (IZA and University of Bonn)
    Abstract: The internet has become an important data source for the Social Sciences because these data are available without lags, can be regarded as involuntary surveys and hence have no observer effect, can be geo-labeled, are available for countries across the globe and can be viewed in continuous time scales from the micro to the macro level. The paper uses internet search data to document how the great economic crisis has affected people’s well-being and health studying the US, Germany and a cross section of the G8 countries. We investigate two types of searches which capture self-diagnosis and treatment respectively: those that contain the words ’symptoms’ and ’side effects’. Significant spikes for both types of searches in all three areas (US, Germany and the G8) are found, which are coincident with the crisis and its contagion timeline. An array of due diligence checks are performed and a number of alternative hypotheses are excluded to confirm that the search spikes imply an increase in malaise.
    Keywords: well-being, symptoms, side effects, Gallup, economic crisis, financial crisis, ill-being
    JEL: C81 E32 I1 L86
    Date: 2011–03
  5. By: Grönqvist, Hans (Swedish Institute for Social Research, Stockholm University)
    Abstract: This paper investigates the link between youth unemployment and crime using a unique combination of labor market and conviction data spanning the entire Swedish working-age population over an extended period. The empirical analysis reveals large and statistically significant effects of unemployment on several types of crime. The magnitude of the effect is similar across different subgroups of the population. In contrast to most previous studies, the results suggest that joblessness explain a meaningful portion of why male youths are overrepresented among criminal offenders. I discuss reasons for the discrepancy in the results and show that that the use of aggregated measures of labor market opportunities in past studies is likely to capture offsetting general equilibrium effects. Contrary to predictions by economic theory the effect of unemployment on crime is not mediated by income. Instead, an analysis of crimes committed during weekdays versus weekends provides suggestive evidence that unemployment increases the time that individuals have to engage in crime.
    Keywords: Unemployment; Delinquency; Age-crime profile
    JEL: J62 K42
    Date: 2011–03–30
  6. By: Borghans, Lex (Maastricht University); Golsteyn, Bart H. H. (Maastricht University); Heckman, James (University of Chicago); Humphries, John Eric (University of Chicago)
    Abstract: This paper discusses and illustrates identification problems in personality psychology. The measures used by psychologists to infer traits are based on behaviors, broadly defined. These behaviors are produced from multiple traits interacting with incentives in situations. In general, measures are determined by these multiple traits and do not identify any particular trait unless incentives and other traits are controlled for. Using two data sets, we show, as an example, that substantial portions of the variance in achievement test scores and grades, which are often used as measures of cognition, are explained by personality variables.
    Keywords: identification problem; personality; psychology; achievement test; grades
    Date: 2011–03–25
  7. By: Dackehag, Margareta (Department of Economics, Lund University); Gerdtham, Ulf-G (Department of Economics, Lund University); Nordin, Martin (Department of Economics, Lund University)
    Abstract: Using longitudinal data, this paper investigates the penalty for excess weight in the Swedish labor market, distinguishing between the productivity and the discrimination hypotheses. We analyze employment, income, and sickness absence , using the latter as a direct measure of productivity. We find that excess weight women, but not men, experience a significant employment penalty. Both genders experience a significant income penalty for obesity. We conclude that the penalties are associated with lower productivity, primarily in terms of health. We find no evidence of discrimination.
    Keywords: Employment; income; sickness absence; obesity; overweight
    JEL: I10 I12 J23 J31
    Date: 2011–04–01
  8. By: Damiano, Fiorillo; Fabio, Sabatini
    Abstract: The public health literature focusing on the detrimental effects of social isolation has shown that the quantity of social connections is positively correlated with individual health. Drawing on pooled cross-sectional data, we test this hypothesis on a representative sample of the Italian population. Our findings show that, besides the quantity of interactions, it is their quality – as measured by subjective satisfaction derived from relationships with friends – that works as the best predictor of health. We point out the existence of health disparities based on socio-economic status. Poorer and less educated individuals are exposed to a higher probability of reporting poor health conditions. The risk is even worse for unemployed and retired workers. This paper contributes to the literature in two substantive dimensions. This is the first empirical study of the relationship between social interactions and health in Italy. Second, we add to previous studies by carrying out the first assessment of the role of satisfaction in interpersonal relations.
    Keywords: Health; well-being; satisfaction; social interactions; social capital; family; Italy.
    JEL: Z12 I12 I18 Z13
    Date: 2011–03–22

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