nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2011‒05‒24
six papers chosen by
Maximo Rossi
University of the Republic

  1. Firm-level Evidence on Gender Wage Discrimination in the Belgian Private Economy By Vincent VANDENBERGHE
  2. Biased Perceptions of Income Distribution and Preferences for Redistribution: Evidence from a Survey Experiment By Cruces, Guillermo; Perez Truglia, Ricardo; Tetaz, Martin
  3. Who Benefits from KIPP? By Angrist, Joshua; Dynarski, Susan; Kane, Thomas J.; Pathak, Parag A.; Walters, Christopher R.
  4. Job Loss in the Great Recession: Historical Perspective from the Displaced Workers Survey, 1984-2010 By Farber, Henry
  5. On the Role of Capital Gains in Swedish Income Inequality By Roine, Jesper; Waldenström, Daniel
  6. An Assessment of the Effectiveness of Anti-Poverty Programs in the United States By Yonatan Ben-Shalom; Robert A. Moffitt; John Karl Scholz

  1. By: Vincent VANDENBERGHE (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: In this paper we explore a matched employer-employee data set to investigate the presence of gender wage discrimination in the Belgian private economy labour market. Contrary to many existing papers, we analyse gender wage discrimination using an independent productivity measure. Using firm-level data, we are able to compare direct estimates of a gender productivity differential with those of a gender wage differential. We take advantage of the panel structure to identify gender-related differences from within-firm variation. Moreover, inspired by recent developments in the production function estimation literature, we address the problem of endogeneity of the gender mix using a structural production function estimator (Olley & Pakes, 1996; Levinsohn & Petrin, 2003) alongside IV-GMM methods where lagged value of labour inputs are used as instruments. Our results suggest that there is no gender wage discrimination inside private firms located in Belgium, on the contrary.
    Keywords: gender wage discrimination; labour productivity; structural production function estimation; IV-GMM; firm-level panel data
    JEL: J24 C52 D24
    Date: 2011–04–29
    URL: http://d.repec.org/n?u=RePEc:ctl:louvir:2011016&r=ltv
  2. By: Cruces, Guillermo (CEDLAS-UNLP); Perez Truglia, Ricardo (Harvard University); Tetaz, Martin (CEDLAS-UNLP)
    Abstract: Individual perceptions of income distribution play a vital role in political economy and public finance models, yet there is little evidence regarding their origins or accuracy. This study examines how individuals form these perceptions and posits that systematic biases arise from the extrapolation of information extracted from reference groups. A tailored household survey provides original evidence on the significant biases in individuals’ evaluations of their own relative position in the distribution. Furthermore, the data supports the hypothesis that the selection process into the reference groups is the source of those biases. Finally, this study also assesses the practical relevance of these biases by examining their impact on attitudes towards redistributive policies. An experimental design incorporated into the survey provides consistent information on the own ranking within the income distribution to a randomly selected group of respondents. Confronting agents’ biased perceptions with this information has a significant effect on their stated preferences for redistribution. Those who had overestimated their relative position and thought of themselves relatively richer than they were demand higher levels of redistribution when informed of their true ranking. This relationship between biased perceptions and political attitudes provides an alternative explanation for the relatively low degree of redistribution observed in modern democracies.
    Keywords: perceptions of income distribution, limited information, preferences for redistribution, field experiment
    JEL: D31 D83 H24 H53 I30
    Date: 2011–05
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp5699&r=ltv
  3. By: Angrist, Joshua (MIT); Dynarski, Susan (University of Michigan); Kane, Thomas J. (Harvard University); Pathak, Parag A. (MIT); Walters, Christopher R. (MIT)
    Abstract: The nation's largest charter management organization is the Knowledge is Power Program (KIPP). KIPP schools are emblematic of the No Excuses approach to public education, a highly standardized and widely replicated charter model that features a long school day, an extended school year, selective teacher hiring, strict behavior norms, and a focus on traditional reading and math skills. No Excuses charter schools are sometimes said to focus on relatively motivated high achievers at the expense of students who are most diffiult to teach, including limited English proficiency (LEP) and special education (SPED) students, as well as students with low baseline achievement levels. We use applicant lotteries to evaluate the impact of KIPP Academy Lynn, a KIPP school in Lynn, Massachusetts that typifies the KIPP approach. Our analysis focuses on special needs students that may be underserved. The results show average achievement gains of 0.36 standard deviations in math and 0.12 standard deviations in reading for each year spent at KIPP Lynn, with the largest gains coming from the LEP, SPED, and low-achievement groups. The average reading gains are driven almost completely by SPED and LEP students, whose reading scores rise by roughly 0.35 standard deviations for each year spent at KIPP Lynn.
    Keywords: human capital, charter schools, achievement
    JEL: I21 I28
    Date: 2011–05
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp5690&r=ltv
  4. By: Farber, Henry (Princeton University)
    Abstract: The Great Recession from December 2007 to June 2009 is associated with a dramatic weakening of the labor market from which the labor market is now only slowly recovering. The unemployment rate remains stubbornly high and durations of unemployment are unprecedentedly long. I use data from the Displaced Workers Survey (DWS) from 1984-2010 to investigate the incidence and consequences of job loss from 1981-2009. In particular, the January 2010 DWS, which captures job loss during the 2007-2009 period, provides a window through which to examine the experience of job losers in the Great Recession and to compare their experience to that of earlier job losers. These data show a record high rate of job loss, with almost one in six workers reporting having lost a job in the 2007-2009 period. The consequences of job loss are also very serious during this period with very low rates of reemployment, difficulty finding full-time employment, and substantial earnings losses.
    Keywords: displacement, job loss, unemployment
    JEL: J63 J64
    Date: 2011–05
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp5696&r=ltv
  5. By: Roine, Jesper (SITE, Stockholm School of Economics); Waldenström, Daniel (Department of Economics)
    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:uunewp:2011_007&r=ltv
  6. By: Yonatan Ben-Shalom; Robert A. Moffitt; John Karl Scholz
    Abstract: We assess the effectiveness of means-tested and social insurance programs in the United States. We show that per capita expenditures on these programs as a whole have grown over time but expenditures on some programs have declined. The benefit system in the U.S. has a major impact on poverty rates, reducing the percent poor in 2004 from 29 percent to 13.5 percent, estimates which are robust to different measures of the poverty line. We find that, while there are significant behavioral side effects of many programs, their aggregate impact is very small and does not affect the magnitude of the aggregate poverty impact of the system. The system reduces poverty the most for the disabled and the elderly and least for several groups among the non-elderly and non-disabled. Over time, we find that expenditures have shifted toward the disabled and the elderly, and away from those with the lowest incomes and toward those with higher incomes, with the consequence that post-transfer rates of deep poverty for some groups have increased. We conclude that the U.S. benefit system is paternalistic and tilted toward the support of the employed and toward groups with special needs and perceived deservingness.
    JEL: H53 I3
    Date: 2011–05
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:17042&r=ltv

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