nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2011‒06‒11
six papers chosen by
Maximo Rossi
University of the Republic

  1. Rising food prices and household welfare: Evidence from Brazil in 2008 By Francisco H. G. Ferreira; Anna Fruttero; Phillippe Leite; Leonardo Lucchetti
  2. Measuring mobility By Frank A. Cowell; Emmanuel Flachaire
  3. The Contribution of the Minimum Wage to U.S. Wage Inequality over Three Decades: A Reassessment By David H. Autor; Alan Manning; Christopher L. Smith
  4. What Explains the German Labor Market Miracle in the Great Recession? By Michael C. Burda; Jennifer Hunt
  5. The State of Collective Bargaining and Worker Representation in Germany: The Erosion Continues By John T. Addison; Alex Bryson; Paulino Teixeira; André Pahnke; Lutz Bellmann
  6. On the origins of gender roles: women and the plough By Alesina, Alberto F; Giuliano, Paola; Nunn, Nathan

  1. By: Francisco H. G. Ferreira (World Bank); Anna Fruttero (World Bank); Phillippe Leite (World Bank); Leonardo Lucchetti (University of Illinois at Urbana-Champaign)
    Abstract: Food price inflation in Brazil in the twelve months to June 2008 was 18 percent, while overall inflation was 5.3 percent. This paper uses spatially disaggregated monthly data on consumer prices and two different household surveys to estimate the welfare consequences of these food price increases, and their distribution across households. Because Brazil is a large food producer, with a predominantly wage-earning agricultural labor force, our estimates include general equilibrium effects on market and transfer incomes, as well as the standard estimates of changes in consumer surplus. While the expenditure (or consumer surplus) effects were large, negative and markedly regressive everywhere, the market income effect was positive and progressive, particularly in rural areas. Because of this effect on the rural poor, and of the partial protection afforded by increases in two large social assistance benefits, the overall impact of higher food prices in Brazil was U-shaped, with the middle-income groups suffering larger proportional losses than the very poor. Nevertheless, since Brazil is 80 percent urban, higher food prices still led to a greater incidence and depth of poverty at the national level.
    Keywords: Food prices, welfare, poverty, inequality, price change incidence curve, Brazil.
    JEL: D31 I38 O15
    Date: 2011
  2. By: Frank A. Cowell (STICERD, London School of Economics); Emmanuel Flachaire (GREQAM, Aix-Marseille University)
    Abstract: Our new approach to mobility measurement involves separating out the valuation of positions in terms of individual status (using income, social rank, or other criteria) from the issue of movement between positions. The quantification of movement is addressed using a general concept of distance between positions and a parsimonious set of axioms that characterise the distance concept and yield a class of aggregative indices. This class of indices induces a superclass of mobility measures over the different status concepts consistent with the same underlying data. We investigate the statistical inference of mobility indices using two well-known status concepts, related to income mobility and rank mobility.
    Keywords: Mobility measures, axiomatic approach, bootstrap.
    JEL: D63
    Date: 2011
  3. By: David H. Autor; Alan Manning; Christopher L. Smith
    Abstract: We reassess the effect of state and federal minimum wages on U.S. earnings inequality, attending to two issues that appear to bias earlier work: violation of the assumed independence of state wage levels and state wage dispersion, and errors-in-variables that inflate impact estimates via an analogue of the well known division bias problem. We find that the minimum wage reduces inequality in the lower tail of the wage distribution (the 50/10 wage ratio), but the impacts are typically less than half as large as those reported in the literature and are almost negligible for males. Nevertheless, the estimated effects extend to wage percentiles where the minimum is nominally non-binding, implying spillovers. We structurally estimate these spillovers and show that their relative importance grows as the nominal minimum wage becomes less binding. Subsequent analysis underscores, however, that spillovers and measurement error (absent spillovers) have similar implications for the effect of the minimum on the shape of the lower tail of the measured wage distribution. With available precision, we cannot reject the hypothesis that estimated spillovers to non-binding percentiles are due to reporting artifacts. Accepting this null, the implied effect of the minimum wage on the actual wage distribution is smaller than the effect of the minimum wage on the measured wage distribution.
    Keywords: Wage structure, inequality, minimum wage
    JEL: E24 J3 J31
    Date: 2010–11
  4. By: Michael C. Burda; Jennifer Hunt
    Abstract: Germany experienced an even deeper fall in GDP in the Great Recession than the United States with little employment loss. Employers’ reticence to hire in the preceding expansion - associated in part with a lack of confidence it would last - contributed to an employment shortfall equivalent to 40 percent of the missing employment decline in the recession. Another 20 percent may be explained by wage moderation. A third important element was the widespread adoption of working time accounts, which permit employers to avoid overtime pay if hours per worker average to standard hours over a window. We find that this provided disincentives for employers to lay off workers in the downturn. While the overall cuts in hours per worker were consistent with the severity of the Great Recession, reduction of working time account balances substituted for traditional government-sponsored short time work.
    Keywords: unemployment, Germany, Great Recession, short time work, working time accounts, Hartz reforms, extensive vs. intensive employment margin
    JEL: E24 E65 J23 J33
    Date: 2011–06
  5. By: John T. Addison (Moore School of Business, University of South Carolina, GEMF, and IZA); Alex Bryson (National Institute of Economic and Social Research and CEP); Paulino Teixeira (Faculdade de Economia/GEMF, University of Coimbra, and IZA); André Pahnke (Institut für Arbeitsmarkt- und Berufsforschung, Bundesagentur für Arbeit); Lutz Bellmann (Friedrich-Alexander-Universität Erlangen-Nürnberg, Institut für Arbeitsmarkt- und Berufsforschung, Bundesagentur für Arbeit, and IZA)
    Abstract: This paper investigates trends in collective bargaining and worker representation in the German private sector from 2000 to 2008. It seeks to update and widen earlier analyses pointing to a decline in collective bargaining, while providing more information on the dual system as a whole. Using data from the IAB Employment Panel and the German Employment Register, we report evidence of a systematic and continuing erosion of the dual system. Not unnaturally the decline is led by developments in western Germany. One conjecture is that the path of erosion will continue until rough and ready convergence is reached with eastern Germany in a sharp reversal of other post-unification trends.
    Keywords: Trends in collective bargaining and worker representation; Transitions, establishment data.
    JEL: J51 J53
    Date: 2011–05
  6. By: Alesina, Alberto F; Giuliano, Paola; Nunn, Nathan
    Abstract: This paper seeks to better understand the historical origins of current differences in norms and beliefs about the appropriate role of women in society. We test the hypothesis that traditional agricultural practices influenced the historical gender division of labor and the evolution and persistence of gender norms. We find that, consistent with existing hypotheses, the descendants of societies that traditionally practiced plough agriculture, today have lower rates of female participation in the workplace, in politics, and in entrepreneurial activities, as well as a greater prevalence of attitudes favoring gender inequality. We identify the causal impact of traditional plough use by exploiting variation in the historical geo-climatic suitability of the environment for growing crops that differentially benefited from the adoption of the plough. Our IV estimates, based on this variation, support the findings from OLS. To isolate the importance of cultural transmission as a mechanism, we examine female labor force participation of second-generation immigrants living within the US.
    Keywords: beliefs; Culture; gender roles.; values
    JEL: J16 N30
    Date: 2011–06

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