nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2012‒01‒03
ten papers chosen by
Maximo Rossi
University of the Republic

  1. Average and marginal returns to upper secondary schooling in Indonesia By Pedro Carneiro; Michael Lokshin; Cristobal Ridao-Cano; Nithin Umapathi
  2. Child Poverty Measurement: the Case of Afghanistan By Mario Biggeri; Jean-Francois Trani; Vincenzo Mauro
  3. Intergenerational Persistence in Income and Social Class: The Impact of Within-Group Inequality By Blanden, Jo; Gregg, Paul; Macmillan, Lindsey
  4. Black-White Marital Matching: Race, Anthropometrics, and Socioeconomics By Chiappori, Pierre-André; Oreffice, Sonia; Quintana-Domeque, Climent
  5. Can Compulsory Military Service Increase Civilian Wages? Evidence from the Peacetime Draft in Portugal By David Card; Ana Rute Cardoso
  6. Educational Reform and Labor Market Outcomes: the Case of Argentina's Ley Federal de Educacion By Maria Laura Alzua; Leonardo Gasparini; Francisco Haimovich
  7. Educational upgrading and returns to skills in Latin America : evidence from a supply-demand framework, 1990-2010 By Gasparini, Leonardo; Galiani, Sebastian; Cruces, Guillermo; Acosta, Pablo
  8. First-Round Impacts of the 2008 Chilean Pension System Reform By Jere R. Behrman; Maria Cecilia Calderon; Olivia S. Mitchell; Javiera Vasquez; David Bravo
  9. Socioeconomic Heterogeneity in the Effect of Health Shocks on Earnings. Evidence from Population-Wide Data on Swedish Workers By Lundborg, Petter; Nilsson, Martin; Vikström, Johan
  10. Income redistribution: how to divide the pie? By Neustadt, Ilja; Zweifel, Peter

  1. By: Pedro Carneiro (Institute for Fiscal Studies and University College London); Michael Lokshin; Cristobal Ridao-Cano; Nithin Umapathi (Institute for Fiscal Studies and World Bank)
    Abstract: <p>This paper estimates average and marginal returns to schooling in Indonesia using a non-parametric selection model. Identification of the model is given by exogenous geographic variation in access to upper secondary schools. We find that the return to upper secondary schooling varies widely across individuals: it can be as high as 50 percent per year of schooling for those very likely to enroll in upper secondary schooling, or as low as -10 percent for those very unlikely to do so. Average returns for the student at the margin are well below those for the average student attending upper secondary schooling.</p>
    Date: 2011–11
  2. By: Mario Biggeri (Università degli Studi di Firenze, Dipartimento di Scienze Economiche); Jean-Francois Trani; Vincenzo Mauro
    Abstract: This paper examines child poverty from a multidimensional perspective. The main goal is to apply a general methodology in order to measure child poverty as a deprivation of capabilities and achieved functionings. In the capability perspective, child poverty is intended as the lack of freedom to choose to do and to be what children have reason to value. Although the various approaches to conceptualising, defining and measuring poverty, several researchers underline the need for children to be separated from their adult nexus, and treated according to their own specificities. The case study is focused on Afghan children, and it is based on a survey carried out by Handicap International that took into consideration many dimensions of children’s wellbeing, including concepts that are usually missing in standard surveys.
    Keywords: Afghanistan, Multidimensional poverty measurement, Capability Approach, Children
    JEL: O53 I3 I32 J13
    Date: 2011
  3. By: Blanden, Jo (University of Surrey); Gregg, Paul (University of Bristol); Macmillan, Lindsey (University of Bristol)
    Abstract: Family income is found to be more closely related to sons' earnings for a cohort born in 1970 compared to one born in 1958. This result is in stark contrast to the finding on the basis of social class; intergenerational mobility for this outcome is found to be unchanged. Our aim here is to explore the reason for this divergence. We derive a formal framework which relates mobility in measured family income/earnings to mobility in social class. Building on this framework we then test a number of alternative hypotheses to explain the difference between the trends, finding evidence of an increase in the intergenerational persistence of the permanent component of income that is unrelated to social class. We reject the hypothesis that the observed decline in income mobility is a consequence of the poor measurement of permanent family income in the 1958 cohort.
    Keywords: intergenerational income mobility, social class fluidity, income inequality
    JEL: J13 J31 Z13
    Date: 2011–12
  4. By: Chiappori, Pierre-André (Columbia University); Oreffice, Sonia (Universidad de Alicante); Quintana-Domeque, Climent (Universidad de Alicante)
    Abstract: We analyze the interaction of race with physical and socioeconomic characteristics in the U.S. marriage market, using the Panel Study of Income Dynamics from 1999 to 2009 for black, white, and inter-racial couples. We consider the anthropometric characteristics of both spouses, together with their wage and education, and estimate who inter-racially marries whom along these dimensions. Distinctive patterns arise by gender and race for inter-married individuals: the black women who inter-marry are the thinner and more educated in their group; instead, white women are the fatter and less educated; black or white men who inter-marry are poorer and thinner. While women in "mixed" couples find a spouse who is poorer but thinner than if they intra-married, black men match with a white woman who is more educated than if they intra-married, and a white man finds a thinner spouse in a black woman.
    Keywords: interracial couples, marriage market, BMI, wages, education
    JEL: D1 J1
    Date: 2011–12
  5. By: David Card; Ana Rute Cardoso
    Abstract: Although military conscription was widespread during most of the past century, credible evidence on the effects of mandatory service is limited. We provide new evidence on the long-term effects of peacetime conscription, using longitudinal data for Portuguese men born in 1967. These men were inducted at a relatively late age (21), allowing us to use pre-conscription wages to control for ability differences between conscripts and non-conscripts. We find that the average impact of military service for men who were working prior to age 21 is close to zero throughout the period from 2 to 20 years after their service. These small average effects arise from a significant 4-5 percentage point impact for men with only primary education, coupled with a zero-effect for men with higher education. The positive impacts for less-educated men suggest that mandatory service can be a valuable experience for those who might otherwise spend their careers in low-level jobs.
    JEL: J24 J31
    Date: 2011–12
  6. By: Maria Laura Alzua; Leonardo Gasparini; Francisco Haimovich
    Abstract: In the nineties Argentina implemented a large education reform (Ley Federal de Educación – LFE) that mainly implied the extension of compulsory education in two additional years. The timing in the implementation substantially varied across provinces, providing a source of identification for unraveling the causal effect of the reform. The estimations from difference-in-difference models suggest that the LFE had an overall positive although mild impact on education and labor outcomes. The impact on the income-deprived youths was small for education outcomes and null for labor outcomes.
    Keywords: Education, reform, labor market, wages, employment, Argentina
    JEL: I2 I3
    Date: 2011
  7. By: Gasparini, Leonardo; Galiani, Sebastian; Cruces, Guillermo; Acosta, Pablo
    Abstract: It has been argued that a factor behind the decline in income inequality in Latin America in the 2000s was the educational upgrading of its labor force. Between 1990 and 2010, the proportion of the labor force in the region with at least secondary education increased from 40 to 60 percent. Concurrently, returns to secondary education completion fell throughout the past two decades, while the 2000s saw a reversal in the increase in the returns to tertiary education experienced in the 1990s. This paper studies the evolution of wage differentials and the trends in the supply of workers by educational level for 16 Latin American countries between 1990 and 2000. The analysis estimates the relative contribution of supply and demand factors behind recent trends in skill premia for tertiary and secondary educated workers. Supply-side factors seem to have limited explanatory power relative to demand-side factors, and are only relevant to explain part of the fall in wage premia for high-school graduates. Although there is significant heterogeneity in individual country experiences, on average the trend reversal in labor demand in the 2000s can be partially attributed to the recent boom in commodity prices that could favor the unskilled (non-tertiary educated) workforce, although employment patterns by sector suggest that other within-sector forces are also at play, such as technological diffusion or skill mismatches that may reduce the labor productivity of highly-educated workers.
    Keywords: Labor Markets,Labor Policies,Economic Theory&Research,Inequality,Tertiary Education
    Date: 2011–12–01
  8. By: Jere R. Behrman (University of Pennsylvania); Maria Cecilia Calderon (Population Council); Olivia S. Mitchell (Wharton School, University of Pennsylvania); Javiera Vasquez (Universidad de Chile); David Bravo (Universidad de Chile)
    Abstract: Chile’s innovative privatized pension system has been lauded as possible model for Social Security system overhauls in other countries, yet it has also been critiqued for not including a strong safety net for the uncovered sector. In response, the Bachelet government in 2008 implemented reforms to rectify this shortcoming. Here we offer the first systematic effort to directly evaluate the reform’s impacts, focusing on the new Basic Solidarity Pension for poor households with at least one person age 65+. Using the Social Protection Survey, we show that targeted poor households received about 2.4 percent more household annual income, with little evidence of crowding-out of private transfers. We also suggest that recipient household welfare probably increased due to slightly higher expenditures on basic consumption including healthcare, more leisure hours, and improved self-reported health. While measured short-run effects are small, follow-ups will be essential to gauge longer-run outcomes.
    Date: 2011–09
  9. By: Lundborg, Petter (Lunds University); Nilsson, Martin (Uppsala Center for Labor Studies); Vikström, Johan (Uppsala Center for Labor Studies)
    Abstract: In this paper, we estimate socioeconomic heterogeneity in the effect of unexpected health shocks on labor market outcomes, using register-based data on the entire population of Swedish workers. We effectively exploit a Difference-in-Difference-in-Differences design, in which we compare the change in labor earnings across treated and control groups with high and low education levels. If the anticipation effects are similar for individuals with high and low education, any difference in the estimates across socioeconomic groups could plausibly be given a causal interpretation. Our results suggest a large amount of heterogeneity in the effects, in which individuals with a low education level suer relatively more from a given health shock. These results hold across a wide range of different types of health shocks and become more pronounced with age. Our results suggest that socioeconomic heterogeneity in the effect of health shocks offers one explanation for how the socioeconomic gradient in health arises.
    Keywords: Health; Health Shocks; Socioeconomic Status; Life-cycle
    JEL: I10 I12 I14
    Date: 2011–11–03
  10. By: Neustadt, Ilja; Zweifel, Peter
    Abstract: In this paper, we elicit preferences of Swiss citizens for the allocation of income redistribution to different uses through a Discrete Choice Experiment performed in 2008. Neustadt and Zweifel (2009} provide an estimate of the total desired amount of income redistribution as a share of disposable income. Here, we estimate marginal willingness-to-pay values for types of recipients (old-age pensioners, people with ill health, the unemployed, working poor, and families with children) and their nationality (Swiss, citizens of western European countries, others). Hypotheses derived from the insurance motive for redistribution receive some empirical support.
    Keywords: Income redistribution; preferences; willingness to pay; discrete choice experiments; conjoint analysis; social status
    JEL: D63 H29 C35 C93
    Date: 2011–10–06

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