nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2011‒12‒05
two papers chosen by
Maximo Rossi
University of the Republic

  1. Measuring the Contribution of Social Policies to Regional Inequality Dynamic in Brazil By Raul Silveira Neto; Carlos Azzoni
  2. The Role of Job Satisfaction in Transitions into Self-Employment By Giuliano Guerra

  1. By: Raul Silveira Neto; Carlos Azzoni
    Abstract: We decompose the recent changes in regional inequality in Brazil into its components, highlighting the role of spatially blind social programs. We aggregate personal income micro data to the state level, differentiating 9 income sources, and assess the role of these components in the observed changes in regional inequality indicators. The main results indicate that the largest part of the recent reduction in regional inequality in Brazil is related to the dynamics in the market-related labor income, with manufacturing and services favoring inequality reduction. Labor income in agriculture, retirement and pensions, and property rents and other sources favored concentration. The social programs Bolsa Família and Benefícios de Prestação Continuada are responsible for more than 24% of the reduction in inequality, although they account for less than 1.7% of the disposable household income. Such positive impact on regional concentration is impressive, since the goals of the programs are clearly non-spatial.
    Date: 2011–09
  2. By: Giuliano Guerra (Institute for Economic Research (IRE), Faculty of Economics, University of Lugano, Switzerland)
    Abstract: As observed in many advanced economies experiencing an increase of self-employment rates since the late 1970s, a flourishing small- and medium-size enterprise sector is traditionally associated with positive economic development and growth. In the regional context, areas benefiting from an established entrepreneurial culture are in general more successful and innovative, as well as better equipped to sustain structural changes and to contrast unemployment. It is therefore important to investigate the reasons why individuals choose self-employment, and why they do it despite lower protection, higher risks, and possibly more effort than what is offered in a comparable wage employment position. Existing research identifies better prospects of entrepreneurial earnings as compared to wages as a major attraction towards self-employment. However, beside pecuniary motivations, other factors may be considered when it comes to occupational choice, as, among others, displacement, uncertainty, (the threat of) unemployment, and (dis-)satisfaction. Building on a job quits model, we propose a representation of transition behaviour from wage to self-employment which includes subjective evaluations of pecuniary and nonpecuniary satisfaction on the previous job. Individual microdata are drawn from the Swiss Household Panel (SHP), and cover the time period 1999–2008. Additionally, we focus on the dynamics of job satisfaction in order to highlight the role played by shocks in subjective evaluations, and introduce their interaction with levels to control for threshold effects.
    Keywords: self-employment, job satisfaction, job transition, Switzerland
    JEL: C25 J62 M13
    Date: 2011–11

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