nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2011‒12‒19
eleven papers chosen by
Maximo Rossi
University of the Republic

  1. Wealth inequality in Europe and the delusive egalitarianism of Scandinavian countries By Skopek, Nora; Buchholz, Sandra; Blossfeld, Hans-Peter
  2. New Developments in the Measurement of Welfare and Well-Being By Bernard M.S. van Praag; Erik J.S. Plug
  3. GINI DP 12: Factor Components of Inequality. A Cross-Country Study By Cecilia Garcia Peñalosa; Orgiazzi, E.
  4. Do More-Schooled Women have Fewer Children and Delay Childbearing? Evidence from a Sample of U.S. Twins By Vikesh Amin; Jere R. Behrman
  5. Reforming an Insider-Outsider Labor Market: The Spanish Experience By Bentolila, Samuel; Dolado, Juan José; Jimeno, Juan F.
  6. Changes in Job Structure and Rising Wage Inequality in Urban China, 1995-2007 By Xing, Chunbing
  7. Poverty and Aspirations Failure By Dalton, P.S.; Ghosal, S.
  8. Trends in U. S. family income mobility, 1969-2006 By Katharine Bradbury
  9. Minimum Wages, Labor Market Institutions, and Female Employment By Addison, John T.; Ozturk, Orgul Demet
  10. Is there an Anti-labor Bias of Taxes? A Survey of the Evidence from Latin America and Around the World By Adriana Kugler
  11. Work Values in Western and Eastern Europe By Benno Torgler

  1. By: Skopek, Nora; Buchholz, Sandra; Blossfeld, Hans-Peter
    Abstract: Past sociological inequality research focused on (labor) market outcomes, while neglecting the even more important role of wealth. In our study we investigate the distribution of wealth among the elderly across Europe within the framework of Esping-Andersen’s typology of welfare states. Using SHARE data, our analyses suggest (1) that there is strong variation in the distribution of wealth between European countries, and (2) that patterns of wealth inequality differ strongly from patterns of income inequality. Surprisingly high levels of wealth disparity were found in the social democratic welfare regimes commonly known as very egalitarian societies. We conclude that Esping-Andersen’s scheme requires reconsideration because it is based on a one-sided understanding of social stratification not accounting for the central role of wealth in the stratification process.
    Keywords: Inequality; wealth; net worth; income; SHARE; stratification; welfare state; Europe
    JEL: D31
    Date: 2011–07
  2. By: Bernard M.S. van Praag (University of Amsterdam); Erik J.S. Plug (University of Amsterdam)
    Date: 2011–12–05
  3. By: Cecilia Garcia Peñalosa (Centre de la Vieille Charité, GREQAM); Orgiazzi, E.
    Abstract: This paper uses data from the Luxembourg Income Study to examine some of the forces that have driven changes in household income inequality over the last three decades of the 20th century. We decompose inequality for 6 countries (Canada, Germany, Norway, Sweden, the UK, and the US) into the three sources of market income: earnings, property income and income from self-employment. Our findings indicate that although changes in the distribution of earnings are an important aspect of recent increases in inequality, they are not the only one. In some countries the contribution of self-employment income to inequality has been on the rise. In others, increases in inequality in capital income –probably caused by tax changes- account for a substantial fraction of the observed changes in the distribution of income. JEL classification numbers: D31, D33
    Date: 2011–07
  4. By: Vikesh Amin (SUNY Binghamton); Jere R. Behrman (Department of Economics, University of Pennsylvania)
    Abstract: Using data on MZ (monozygotic, identical) female twins from the Minnesota Twin Registry, we estimate the causal effect of schooling on completed fertility, probability of being childless and age at first birth, using the within-MZ twins methodology. We find strong cross-sectional associations between schooling and the fertility outcomes and some evidence that more schooling causes women to have fewer children and delay childbearing, though not to the extent that interpreting cross-sectional associations as causal would imply. Our conclusions are robust when taking account of (1) endogenous within-twin pair schooling differences due to reverse causality and (2) measurement error in schooling. We also investigate possible mechanisms and find that the effect of women’s schooling on completed fertility is not mediated through husband’s schooling but rather through age at first marriage.
    Keywords: twins, twins fixed-effects, schooling, fertility
    JEL: I2 J13
    Date: 2011–12–05
  5. By: Bentolila, Samuel (CEMFI, Madrid); Dolado, Juan José (Universidad Carlos III de Madrid); Jimeno, Juan F. (Banco de Espana)
    Abstract: This paper presents a case study on reforming a very dysfunctional labor market with a deep insider-outsider divide, namely the Spanish case. We show how a dual market, with permanent and temporary employees makes real reform much harder, and leads to purely marginal changes that do not alter the fundamental features of labor market institutions. While the Great Recession and the start of the sovereign debt crisis triggered two labor reforms, the political economy equilibrium has not allowed them to be transformational enough.
    Keywords: temporary contracts, dualism, labor market reform, political economy, Great Recession
    JEL: H29 J23 J38 J41 J64
    Date: 2011–12
  6. By: Xing, Chunbing (Beijing Normal University)
    Abstract: We use household surveys from 1995, 2002, and 2007 to examine how changes in job structure contributed to China's rising urban wage inequality, considering three job characteristics: occupation, industry, and firm ownership. The explanatory power of job structure for wage inequality increased between 1995 and 2007. Both the change in relative number of jobs (composition effect) and the change in between-job and within-job wage gaps (price effect) contributed to rising wage inequality. Price effect was the major contributor, whereas composition effect played a larger role in the 1995-2002 period than in the 2002-2007 period, and at the lower-half distribution. Between-job inequality played a major role in the first period, and within-job inequality played a major role in the second period. Our results suggest that both technological change and institutional features influence job structure and wage inequality.
    Keywords: job structure, wage inequality, urban China, decomposition
    JEL: C21 J31 O15
    Date: 2011–12
  7. By: Dalton, P.S.; Ghosal, S. (Tilburg University, Center for Economic Research)
    Abstract: We develop a theoretical framework to study the psychology of poverty and 'aspirations failure'. In our framework, the rich and the poor share the same preferences - and also a behavioral bias in setting aspirations. Greater downside risks imposed by poverty exacerbates the effects of this behavioral bias: the poor are more susceptible to both an aspirations failure and pessimism about the likelihood of achieving success. Poverty limits the set of people whose life experiences the poor consider relevant for forming their own beliefs and aspirations. Mitigating behavioral poverty traps require policies which go beyond reducing material deprivation.
    Keywords: Reference-dependent Preferences;Aspirations;Persistent Poverty;Locus of control;Simillarity and Belief Formation.
    JEL: O10 O15 O12 D03
    Date: 2011
  8. By: Katharine Bradbury
    Abstract: Much of America's promise is predicated on economic mobility—the idea that people are not limited or defined by where they start, but can move up the economic ladder based on their efforts and accomplishments. Family income mobility—changes in individual families' income positions over time—is one indicator of the degree to which the eventual economic wellbeing of any family is tethered to its starting point. In the United States, family income inequality has risen from year to year since the mid-1970s; given this rising cross-sectional inequality, changes over time in mobility determine the degree to which long-term income is also increasingly unequally distributed. ; Using data from the Panel Study of Income Dynamics and a number of mobility concepts and measures drawn from the literature, this paper examines family income mobility levels and trends for U.S. working-age family heads and spouses during the time span 1969–2006, based on a post-tax, post-transfer concept of income adjusted for family size. By most measures, mobility is lower in more recent periods (1995–2005) than in the late seventies and the eighties (the 1977–1987 or 1981–1991 periods). Comparing results based on pre-government income suggests that an increasingly redistributive tax and transfer system contributed to rising mobility into the 1980s, but that its impact has since waned. Overall, the evidence indicates that over the 1969-to-2006 time span, family income mobility across the distribution decreased, families' later-year incomes increasingly depended on their starting place, and the distribution of families' lifetime incomes became less equal.
    Keywords: Income distribution ; Labor mobility ; Migration, Internal
    Date: 2011
  9. By: Addison, John T. (Department of Economics, Moore School of Business, University of South Carolina, Columbia, USA); Ozturk, Orgul Demet (Department of Economics, Moore School of Business, University of South Carolina, Columbia, USA)
    Abstract: The authors investigate the employment consequences of minimum wage regulation in 16 OECD countries, 1970-2008. Their treatment is motivated by Neumark and Wascher’s (2004) seminal cross-country study. Apart from the longer time interval examined, a major departure is the authors’ focus on prime-age females, a group often neglected in the minimum wage literature. Another is their deployment of time-varying policy and institutional regressors. The average effects they report are consistent with minimum wages causing material employment losses among the target group. Their secondary finding is that minimum wage increases are more associated with (reduced) participation rates than with elevated joblessness. Further, although the authors find common ground with Neumark and Wascher as regards the role of some individual labor market institutions and policies, they do not observe the same patterns in the institutional data. Specifically, prime-age females do not exhibit stronger employment losses in countries with the least regulated markets.
    Keywords: Minimum wages, minimum wage institutions, prime-age females, disemployment, participation, unemployment, employment protection, labor standards, labor market policies, unions
    JEL: J20 J38 J48 J58 J88
    Date: 2011–12
  10. By: Adriana Kugler
    Abstract: This paper surveys the macro and micro empirical evidence on the effects of different types of labor taxes (in particular, payroll and income taxes) on firm performance and worker behavior.
    Date: 2011–08
  11. By: Benno Torgler
    Abstract: The paper reports on work values in Europe. At the country level we find that job satisfaction is related to lower working hours, higher well-being, and a higher GDP per capita. Moving to the micro level, we turn our attention from job satisfaction to analyse empirically work centrality and work value dimensions (without exploring empirically job satisfaction) related to intrinsic and extrinsic values, power and social elements. The results indicate substantial differences between Eastern and Western Europe. Socio-demographic factors, education, income, religiosity and religious denomination are significant influences. We find additional differences between Eastern and Western Europe regarding work-leisure and work-family centrality that could be driven by institutional conditions. Furthermore, hierarchical cluster analyses report further levels of dissimilarity among European countries.
    Keywords: work values; job satisfaction; work-leisure relationship; work-family centrality; Eastern Europe; Western Europe
    JEL: P20 D10 J28 J17 J22
    Date: 2011–12

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