nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2011‒04‒16
eight papers chosen by
Maximo Rossi
University of the Republic

  1. Quality and quantity: The role of social interactions in individual health By Fiorillo Damiano; Sabatini Fabio
  2. Personality Characteristics and the Decision to Become and Stay Self-Employed By Marco Caliendo; Frank M. Fossen; Alexander S. Kritikos
  3. Segmented Life-cycle Labor Markets – Portuguese Evidence By Ana Paula Martins
  4. Happiness on Tap: Piped Water Adoption in Urban Morocco By Florencia DEVOTO; Esther DUFLO; Pascaline DUPAS; William PARIENTE; Vincent PONS
  5. Is part-time sick leave helping the unemployed? By Andrén, Daniela
  6. Gender and Cooperation in Children: Experiments in Colombia and Sweden By Cárdenas, Juan-Camilo Cárdenas; Dreber, Anna Dreber; von Essen, Emma; Ranehill, Eva
  7. Will GDP Growth Increase Happiness in Developing Countries? By Clark, Andrew E.; Senik, Claudia
  8. An Overview of The Changing Body: Health, Nutrition, and Human Development in the Western World Since 1700 By Robert W. Fogel; Nathaniel Grotte

  1. By: Fiorillo Damiano; Sabatini Fabio
    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: I12 I18 Z1
    Date: 2011–03
  2. By: Marco Caliendo; Frank M. Fossen; Alexander S. Kritikos
    Abstract: This paper systematically investigates whether different kinds of personality characteristics influence entrepreneurial development. On the basis of a large, representative household panel survey, we examine the extent to which the Big Five traits and further personality characteristics, which are more specifically related to entrepreneurial tasks, influence entry into self-employment and survival of self-employed persons in Germany. The empirical analysis reveals that among the specific characteristics in particular "risk attitudes" and "locus of control" have strong effects on entry and survival. With respect to the Big Five approach, in particular the traits "openness to experience" and "extraversion" and to a lower extent "agreeableness" and "neuroticism" help to explain entrepreneurial development. The explanatory power of the Big Five is comparable to one of the most prominent determinants of entrepreneurship – education – and approximately three times larger than parental self-employment.
    Date: 2011
  3. By: Ana Paula Martins
    Abstract: The paper contrasts the pattern of returns to human capital in different economic sectors. As job mobility, especially across sectors, is limited, it is argued that coefficients of experience in earnings regressions may capture or be interpreted as the growth rate – net of depreciation – of earnings ability propitiated by schooling when years of education are also included in the right hand-side of the equation. As a consequence, under long-term contracts, labor market equilibrium is compatible with different “gross” rates of return to schooling, provided initial earnings levels allow for the same accumulated present value. That implies a special relation between the intercept and experience coefficient of earnings regressions performed for different sectors. Additionally, implications of (log-stable) nonstationary environments for rate of return inference from log-earnings regressions – appropriate for pooled (or panel) estimation and nominal earnings information - are also investigated. Then, the trend coefficient measures the (steady-state) nominal productivity growth; the experience coefficients approximate individuals’ earnings profiles growth rates net of the human capital depreciation rate; schooling’s, the nominal rate of return in the economy net of the nominal productivity growth rate. Tests of the hypothesises are provided, along with the inspection of the determinants – including financial ratios and productive organization indicators, calculated from aggregate balance sheet information - of the observed differences across industries. A study of the estimated variances of rate of return estimates was also conducted, as an attempt to capture features of financial risk in human capital investment.
    Keywords: Returns to Schooling; Earnings/Wage Growth; Wage Determinants; Segmented Labor Markets. Industry-Specific Human Capital. Human Capital Risk. Financial Structure and Performance. Weighted Principal Components.
    JEL: J24 J31 J42 I2 G30 C13 C39
    Date: 2011–04–05
  4. By: Florencia DEVOTO (Paris School of Economics and J-PAL); Esther DUFLO (MIT and NBER); Pascaline DUPAS (UCLA and NBER); William PARIENTE (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Vincent PONS (MIT (Massachusetts Institute of Technology))
    Abstract: We study the demand for household water connections in urban Morocco, and the effect of such connections on household welfare. In the northern city of Tangiers, among homeowners without a private connection to the city’s water grid, a random subset was offered a simplified procedure to purchase a household connection on credit (at a zero percent interest rate). Take-up was high, at 69%. Because all households in our sample had access to the water grid through free public taps (often located fairly close to their homes), household connections did not lead to any improvement in the quality of the water households consumed; and despite significant increase in the quantity of water consumed, we find no change in the incidence of waterborne illnesses. Nevertheless, we find that households are willing to pay a substantial amount of money to have a private tap at home. Being connected generates important time gains, which are used for leisure and social activities, rather than productive activities. Because water is often a source of tension between households, household connections improve social integration and reduce conflict. Overall, within 6 months, self-reported well-being improved substantially among households in the treatment group, despite the financial cost of the connection. Our results suggest that facilitating access to credit for households to finance lump sum quality-of-life investments can significantly increase welfare, even if those investments do not result in income or health gains.
    Date: 2011–04–01
  5. By: Andrén, Daniela (Department of Business, Economics, Statistics and Informatics)
    Abstract: Using a discrete choice one-factor model, we estimate mean treatment parameters and distributional treatment parameters to analyze the effects of degree of sick leave on the probability of full recovery of lost work capacity for employed and unemployed individuals, respectively. Our results indicate that one year after the sick leave spell started, the average potential impact of part-time sick listing on an individual randomly chosen from the population on sick leave was positive for both groups, but the average effect on those who actually were on part-time sick leave was positive only for the employed, and negative for the unemployed.
    Keywords: unemployed; part-time sick leave; selection; unobserved heterogeneity; treatment effects
    JEL: I12 J21 J28
    Date: 2011–03–31
  6. By: Cárdenas, Juan-Camilo Cárdenas (Universidad de los Andes); Dreber, Anna Dreber (Institute for Financial Research (SIFR)); von Essen, Emma (Dept. of Economics, Stockholm University); Ranehill, Eva (Stockholm School of Economics)
    Abstract: We compare how children aged 9-12 in Colombia and Sweden cooperate in a Prisoner’s Dilemma. We introduce a new measurement device for cooperation that can be easily understood by children. There is some evidence of more cooperation in Sweden than in Colombia. Girls in Colombia are less cooperative than boys, whereas our results indicate the opposite in Sweden. Girls are in general more cooperative with boys than with girls. Relating cooperation to competitiveness, this appears to be task and country dependent.
    Keywords: Cooperation; children; gender differences; experiment
    JEL: C91 J16
    Date: 2011–04–11
  7. By: Clark, Andrew E.; Senik, Claudia
    Abstract: This paper asks what low-income countries can expect from growth in terms of happiness. It interprets the set of available international evidence pertaining to the relationship between income growth and subjective well-being. Conforming to the Easterlin paradox, higher income always correlates with higher happiness, except in one case: whether national income growth yields higher well-being is still hotly debated; essentially, the question is whether the correlation coefficient is “too small to matter”. The explanations for the small correlation between income growth and subjective well-being over time appeal to the nature of growth itself (e.g. negative side-effects such as pollution), and to the psychological importance of relative concerns and adaptation. The available evidence contains two important lessons: income comparisons do seem to affect subjective well-being even in very poor countries; however, adaptation may be more of a rich country phenomenon. Our stand is that the idea that growth will increase happiness in low-income countries cannot be rejected on the basis of the available evidence. First, cross-country time-series analyses are based on aggregate measures, which are less reliable than individual ones. Second, development is a qualitative process that involves take-offs and thresholds. Such regime changes are eye-visible through the lens of subjective satisfaction measures. The case of Transition countries is particularly impressive in this respect: average life satisfaction scores closely mirror changes in GDP for about the first ten years of the transition process, until the regime becomes more stable. If subjective measures of well-being were made available in low-income countries, they would certainly help measuring and monitoring the different stages and dimensions of the development process.
    Date: 2010–11
  8. By: Robert W. Fogel; Nathaniel Grotte
    Abstract: This summary of The Changing Body: Health, Nutrition, and Human Development in the Western World since 1700 (Cambridge) was prepared for presentation at the University of Alabama at Birmingham School of Public Health in March 2011. The book is built on the authors’ work with 300 years of height and nutrition data and discusses their findings in the context of technophysio evolution, a uniquely modern form of rapid physiological development, the result of humanity’s ability to control its environment and create technological innovations to adapt to it.
    JEL: I1 N31 N33
    Date: 2011–04

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