New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2011‒08‒09
seven papers chosen by

  1. Can a click buy a little happiness? The impact of business-to-consumer e-commerce on subjective well-being By Sabatini Fabio
  2. Severance Pay Mandates: Firing Costs, Hiring Costs, and Firm Avoidance Behaviors By Parsons, Donald O.
  3. The Feasibility and Importance of Adding Measures of Actual Experience to Cross-Sectional Data Collection By Blau, Francine D.; Kahn, Lawrence M.
  4. Exploring the impacts of public childcare on mothers and children in Italy: does rationing play a role? By Ylenia Brilli; Daniela Del Boca; Chiara Pronzato
  5. Multidimensional Indices of Achievements and Poverty: What Do We Gain and What Do We By Nora Lustig
  6. The effect of education policy on crime: an intergenerational perspective By Costas Meghir; Mårten Palme; Marieke Schnabel
  7. Disability, health and retirement in the United Kingdom By James Banks; Richard Blundell; Antoine Bozio; Carl Emmerson

  1. By: Sabatini Fabio
    Abstract: This paper presents the first empirical investigation into the effect of e-shopping on subjective well-being. The analysis relies on a nationally and regionally representative dataset from Italy (n = 4,130) drawn from the 2008 wave of the Survey of Household Income and Wealth (SHIW) carried out by the Bank of Italy. Probit, OLS regressions and instrumental variables estimates show that e-shopping is strongly and positively associated with subjective well-being.
    Date: 2011–07
  2. By: Parsons, Donald O. (George Washington University)
    Abstract: The potentially adverse labor market effects of severance pay mandates are a continuing source of policy concern. In a seminal study, Lazear (1990) found that contract avoidance of severance pay firing costs was theoretically simple – a bonding scheme would do – but that empirically the labor market distortions were large. Subsequent empirical work resolved the apparent paradox – firing cost effects are modest even without firm avoidance activities. To explore why that should be so, formal measures of severance-induced firing costs and hiring costs are derived. Firing costs are, it turns out, systematically less than benefit generosity alone would imply. Moreover their interrelationship with hiring costs, often employed in empirical studies as a substitute measure, is complex, with co-movements varying in sign and magnitude across policy parameters and the economic environment. Although the analysis assumes a fixed benefit mandate, the cost measures are easily extended to assess the impact of service-linked severance benefits on age-specific employment levels. The model permits design of a cohort-neutral severance mandate – which is not a flat rate structure.
    Keywords: severance pay, firing costs, hiring costs, layoff, employment, insurance, savings, moral hazard
    JEL: J65 J41 J33
    Date: 2011–07
  3. By: Blau, Francine D. (Cornell University); Kahn, Lawrence M. (Cornell University)
    Abstract: We use Michigan Panel Study of Income Dynamics data and data from a 2008 telephone survey of adults conducted by Westat for the Princeton Data Improvement Initiative (PDII) to explore the importance and feasibility of adding retrospective questions about actual work experience to cross-sectional data sets. We demonstrate that having such actual experience data is important for analyzing women's post-school human capital accumulation, residual wage inequality, and the gender pay gap. Further, our PDII survey results show that it is feasible to collect actual experience data in cross-sectional telephone surveys like the March Current Population Survey annual supplement.
    Keywords: gender, microeconomic data collection, human capital, work experience
    JEL: C81 J16 J24
    Date: 2011–07
  4. By: Ylenia Brilli; Daniela Del Boca; Chiara Pronzato
    Abstract: This paper investigates the effects of public childcare availability in Italy on mothers' working status and children's scholastic achievements. We use a newly available dataset containing individual standardized test scores of pupils attending second grade of primary school in 2008-09 in conjunction with data on public childcare availability. Public childcare coverage in Italy is scarce (12.7 percent versus the OECD average of 30 percent) and the service is "rationed": each municipality allocates the available slots according to eligibility criteria. We contribute to the existing literature taking into account rationing in public childcare access and the functioning of childcare market. Our estimates indicate that childcare availability has positive and significant effects on both mothers' working status and children's language test scores. The effects are stronger when the degree of rationing is high and for low educated mothers and children living in lower income areas of the country.
    Keywords: childcare; female employment; child cognitive outcomes
    JEL: J13 D1 H75
    Date: 2011
  5. By: Nora Lustig (Department of Economics, Tulane University)
    Abstract: Poverty and wellbeing are multi-dimensional. Nobody questions that deprivations and achievements go beyond income. There is, however, sharp disagreement on whether the various dimensions of poverty and wellbeing can be aggregated into a single, multi-dimensional index in a meaningful way. Is aggregating dimensions of poverty and wellbeing useful? Is it sensible? Here I summarize and contrast three key papers that respond these questions in strikingly different ways. The papers are: The HDI 2010: New Controversies, Old Critiques by Jeni Klugman, Francisco Rodríguez and Hyung-Jin Choi; Understandings and Misunderstandings of Multidimensional Poverty Measurement by Sabina Alkire and James Foster; and, On Multidimensional Indices of Poverty by Martin Ravallion.
    Keywords: poverty measurement, multidimensional poverty, deprivation, axioms, Human Development Index, capabilities, substitutability, trade-offs, welfare, country classifications
    JEL: I3 I32 D60 D63 O1
    Date: 2011–06
  6. By: Costas Meghir (Institute for Fiscal Studies and Yale University); Mårten Palme (Institute for Fiscal Studies and University of Stockholm); Marieke Schnabel
    Abstract: <p>The Swedish comprehensive school reform implied an extension of the number of years of compulsory school from 7 or 8 to 9 for the entire nation and was implemented as a social experiment by municipality between 1949 and 1962. A previous study (Meghir and Palme, 2005) has shown that this reform significantly increased the number of years of schooling as well as labor earnings of the children who went through the post reform </p><p>school system, in particular for individuals originating from homes with low educated fathers. This study estimates the impact of the reform on criminal behavior: both within the generation directly affected by the reform as well as their children. We use census data on all born in Sweden between 1945 and 1955 and all their children merged with individual register data on all convictions between 1981 and 2008. We find a significant inverse effect of the reform on criminal behavior of men and on sons to fathers who went through the new school system.</p>
    Date: 2011–07
  7. By: James Banks (Institute for Fiscal Studies and University of Manchester); Richard Blundell (Institute for Fiscal Studies and University College London); Antoine Bozio (Institute for Fiscal Studies); Carl Emmerson (Institute for Fiscal Studies)
    Abstract: <p>This paper examines changes in health and disability related transfers in the UK over the last thirty years, and describes how they are related to changes in labour force participation. The objective is to present a comprehensive description of the reforms to the institutional setting, along with available time series coming from administrative data on benefit receipt, cross-section or panel data on self-reported health and their interactions with labour force status. By providing systematic evidence on institutions and data, we hope to help future research providing a fuller picture of the trends over this period. We also present evidence on the impact of two large reforms to disability benefits in the UK.</p>
    Date: 2011–07

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