nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2011‒05‒07
nine papers chosen by
Maximo Rossi
University of the Republic

  1. Direct evidence on income comparisons and their welfare effects By Claudia Senik
  2. Unemployment Duration of Spouses: Evidence From France By Stefania Marcassa
  3. "Half empty or half full": The importance of the definition of part-time sick leave when estimating its effects By Andrén, Daniela
  4. On the Role of Capital Gains in Swedish Income Inequality By Roine, Jesper; Waldenström, Daniel
  5. Formation and Persistence of Oppositional Identities By Bisin, Alberto; Patacchini, Eleonora; Verdier, Thierry; Zenou, Yves
  6. Income shocks and adolescent mental health By Baird, Sarah; de Hoop, Jacobus; Ozler, Berk
  7. Commitment to Equity Assessment (CEQ) A Diagnostic Framework to Assess Governments' Fiscal Policies Handbook By Nora Lustig
  8. The Decline in Inequality in Latin America: How Much, Since When and Why By Nora Lustig; Luis F. López Calva; Eduardo Ortiz-Juarez
  9. Employment in Black Urban Labor Markets: Problems and Solutions By Judith K. Hellerstein; David Neumark

  1. By: Claudia Senik (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, Université Paris-Sorbonne - Ministère de l'Education nationale, de l'Enseignement supérieur et de la Recherche, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris)
    Abstract: This paper provides direct evidence that comparisons exert a significant effect on subjective well-being. It also evaluates the relative importance of different types of benchmarks. Internal comparisons to one's own past living standard outweigh any other comparison benchmarks. Local comparisons (to one's parents, former colleagues or high school mates) are more powerful than self-ranking in the social ladder. The impact of comparisons is asymmetric: under-performing one's benchmark always has a greater welfare effect than out-performing it (in absolute value). Comparisons which reduce satisfaction also increase the demand for income redistribution, but there, the relative impact of subjective ranking is preponderant.
    Keywords: subjective well-being ; income comparisons ; demand for income redistribution ; internal and external benchmarks ; transition
    Date: 2011–04–22
    URL: http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-00588023&r=ltv
  2. By: Stefania Marcassa (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: This paper presents the results of an econometric analysis of the conditional probability of leaving unemployment for four waves of French married men and women entering unemployment from 1991 to 2002. The effect of spouse's hourly earnings on unemployment duration is found to be asymmetric for men and women. In particular, an elasticity of 0.38 for men and -0.15 for women are found to be significant for the entire sample. Individual data from the French Labor Force Survey are used with accurate information on spell durations, and labor earnings of the spouses. Parametric estimation techniques are used.
    Keywords: unemployment duration, hazard models, labor earnings, marriage, France
    Date: 2011–04–26
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00588695&r=ltv
  3. By: Andrén, Daniela (Department of Business, Economics, Statistics and Informatics)
    Abstract: This paper analyzes the impact of the definition of part-time sick leave (PTSL) when analyzing the effect of PTSL on employees’ probability to fully recover lost work capacity. Using a random sample of 3,607 employees, we estimate an econometric model that aims to answer the hypothetical question of what happens to an employee who has lost his/her work capacity if he/she instead of continuing to be sicklisted full time starts working some hours. The estimated treatment parameters vary across definitions, yet all results show that, regardless of the timing of the intervention, PTSL had a positive effect on the probability of full recovery of lost work capacity one year after the spell started. Moreover, the most attractive definition shows the highest impact: About 48% of those with a reduced degree of sick leave from full time to part time during the spell were recovered about one year after the spell started, and only about 6% of them would have been better off had they remained on full-time.
    Keywords: part-time sick leave; full-time sick leave; selection; treatment and control groups; unobserved heterogeneity; treatment effects
    JEL: I12 J21 J28
    Date: 2011–03–15
    URL: http://d.repec.org/n?u=RePEc:hhs:oruesi:2011_004&r=ltv
  4. By: Roine, Jesper (SITE, Stockholm School of Economics); Waldenström, Daniel (Uppsala Center for Labor Studies)
    Abstract: Realized capital gains are typically disregarded in the study of income inequality. We show that in the case of Sweden this severely underestimates the actual increase in inequality and, in particular, top income shares during recent decades. Using micro panel data to average incomes over longer periods and re-rank individuals according to income excluding capital gains, we show that capital gains indeed are a reoccurring addition to rather than a transitory component in top incomes. Doing the same for lower income groups, however, makes virtually no difference. We also try to find the roots of the recent surge in capital gains-driven inequality in Sweden since the 1980s. While there are no evident changes in terms of who earns these gains (high wage earners vs. top capital income earners), the primary driver instead seems to be the drastic asset price increases on the post-1980 deregulated financial markets.
    Keywords: Top incomes; Income inequality; Capital gains; Capital income; Sweden; Welfare state
    JEL: D31
    Date: 2011–04–13
    URL: http://d.repec.org/n?u=RePEc:hhs:uulswp:2011_008&r=ltv
  5. By: Bisin, Alberto (New York University); Patacchini, Eleonora (La Sapienza University of Rome, Einaudi Institute for Economics and Finance (EIEF) and CEPR.); Verdier, Thierry (Paris School of Economics (PSE) and CEPR); Zenou, Yves (Dept. of Economics, Stockholm University)
    Abstract: We develop a dynamic model of identity formation that explains why ethnic minorities may choose to adopt oppositional identities (i.e. some individuals may reject or not the dominant culture) and why this behavior may persist over time. We first show that the prevalence of an oppositional culture in the minority group cannot always be sustained in equilibrium. Indeed, because the size of the majority group is larger, there is an “imposed” process of exposition to role models from the majority group that favors the diffusion of mainstream values in the minority community. In spite of this, an oppositional culture in the minority group can nevertheless be sustained in steady-state if there is enough cultural segmentation in terms of role models, or if the size of the minority group is large enough, or if the degree of oppositional identity it implies is high enough. We also demonstrate that the higher the level of harassment and the number of racist individuals in the society, the more likely an oppositional minority culture will emerge. We finally show that ethnic identity and socialization effort can be more intense in mixed rather than segregated neighborhoods.
    Keywords: Ethnicity; role models; peer effects; cultural transmission; racism
    JEL: A14 J15
    Date: 2011–04–26
    URL: http://d.repec.org/n?u=RePEc:hhs:sunrpe:2011_0016&r=ltv
  6. By: Baird, Sarah; de Hoop, Jacobus; Ozler, Berk
    Abstract: In this paper, the authors investigate the effect of positive income shocks on the mental health of adolescent girls using experimental evidence from a cash transfer program in Malawi. They find that the provision of monthly cash transfers had a strong beneficial impact on the mental health of school-age girls during the two-year intervention. Among baseline schoolgirls who were offered unconditional cash transfers, the likelihood of suffering from psychological distress was 38 percent lower than the control group, while the same figure was 17 percent if the cash transfers offers were made conditional on regular school attendance. The authors find no impact on the mental health of girls who had already dropped out of school at baseline. The beneficial effects of cash transfers were limited to the intervention period and dissipated quickly after the program ended.
    Keywords: Health Monitoring&Evaluation,Disease Control&Prevention,Health Systems Development&Reform,Mental Health,Population Policies
    Date: 2011–04–01
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:5644&r=ltv
  7. By: Nora Lustig (Department of Economics, Tulane University)
    Abstract: Fiscal policy can change poverty and inequality substantially or little depending on the government’s redistributive effort. We develop a diagnostic framework to assess how aligned fiscal policies are with supporting a minimum living standard and human capital accumulation, as well as reducing inequality. The Commitment to Equity Assessment (CEQ) evaluates efforts based on whether governments: i. collect and allocate enough resources to support a minimum living standard for all; ii. collect and distribute resources equitably; iii. ensure spending is fiscally sustainable and that programs are of good quality and incentive compatible; iv. collect and publish relevant information as well as are subject to independent evaluations. The CEQ relies on inequality, poverty and tax and benefit incidence analyses.
    Keywords: poverty, inequality, fiscal incidence, social policy, Latin America
    JEL: H5 H51 H52 H53 O15
    Date: 2011–04
    URL: http://d.repec.org/n?u=RePEc:tul:wpaper:1119&r=ltv
  8. By: Nora Lustig (Department of Economics, Tulane University); Luis F. López Calva (Poverty in the Latin America and the Caribbean Vicepresidency, World Bank); Eduardo Ortiz-Juarez (RBLAC-UNDP, Mexico and World Bank)
    Abstract: Between 2000 and 2009, the Gini coefficient declined in 13 of 17 Latin American countries for which comparable data exist. The decline was statistically significant and robust to changes in the time interval, inequality measures and data sources. In depth country studies for Argentina, Brazil, Mexico and Peru suggest that there are two phenomena which underlie this trend: (i) a fall in the premium to skilled labor (as measured by returns to education); and (ii) higher and more progressive government transfers. The fall in the premium to skills results from a combination of supply and demand factors and, in Argentina and, to a lesser extent, in Brazil, from more active labor market policies as well.
    Keywords: Income inequality, wage gap, government transfers, Latin America
    JEL: O15 H53 J48
    Date: 2011–04
    URL: http://d.repec.org/n?u=RePEc:tul:wpaper:1118&r=ltv
  9. By: Judith K. Hellerstein; David Neumark
    Abstract: Blacks in the United States are poorer than whites and have much lower employment rates. “Place-based” policies seek to improve the labor markets in which blacks – especially low-income urban blacks – tend to reside. We first review the literature on spatial mismatch, which provides much of the basis for place-based policies. New evidence demonstrates an important racial dimension to spatial mismatch, and this “racial mismatch” suggests that simply creating more jobs where blacks live, or moving blacks to where jobs are located, is unlikely to make a major dent in black employment problems. We also discuss new evidence of labor market networks that are to some extent stratified by race, which may help explain racial mismatch. We then turn to evidence on place-based policies. Many of these, such as enterprise zones and Moving to Opportunity (MTO), are largely ineffective in increasing employment, likely because spatial mismatch is not the core problem facing urban blacks, and because, in the case of MTO, the role of labor market networks was weakened. Finally, we discuss policies focused on place that also target incentives and other expenditures on the residents of the targeted locations, which may do more to take advantage of labor market networks.
    JEL: J15 J18 J7
    Date: 2011–04
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:16986&r=ltv

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