New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2012‒01‒10
nine papers chosen by

  1. Educational Upgrading and Returns to Skills in Latin America: Evidence from a Supply-Demand Framework, 1990-2010 By Gasparini, Leonardo; Galiani, Sebastián; Cruces, Guillermo; Acosta, Pablo A.
  2. Relative deprivation, reference groups and the assessment of standard of living By Silber, Jacques; Verme, Paolo
  3. Job Separations and Informality in the Russian Labor Market By Lehmann, Hartmut; Razzolini, Tiziano; Zaiceva, Anzelika
  4. Tax Evasion, Minimum Wage Non-Compliance and Informality By Basu, Arnab K.; Chau, Nancy; Siddique, Zahra
  5. Fighting Youth Unemployment: The Effects of Active Labor Market Policies By Caliendo, Marco; Künn, Steffen; Schmidl, Ricarda
  6. Do Cash Transfers Improve Birth Outcomes? Evidence from Matched Vital Statistics, Social Security and Program Data By Amarante, Veronica; Manacorda, Marco; Miguel, Edward; Vigorito, Andrea
  7. Retirement and Home Production: A Regression Discontinuity Approach By Stancanelli, Elena G. F.; van Soest, Arthur
  8. Women Empowerment and Economic Development By Esther Duflo
  9. Gender Differences in Rates of Job Dismissal: Why Are Men More Likely to Lose Their Jobs? By Wilkins, Roger; Wooden, Mark

  1. By: Gasparini, Leonardo (CEDLAS-UNLP); Galiani, Sebastián (Washington University, St. Louis); Cruces, Guillermo (CEDLAS-UNLP); Acosta, Pablo A. (World Bank)
    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: skill premia, supply and demand of labor, income inequality, Latin America
    JEL: J2 D3 I2 O5
    Date: 2011–12
  2. By: Silber, Jacques; Verme, Paolo
    Abstract: This paper proposes two new indices of relative deprivation, derived from an extension of the concept of the generalized Gini for the measurement of distributional change. Population- and income-weighted relative deprivation indices are then defined and, using panel data from the Consortium of Household Panels for European Socio-Economic Research, this paper checks which of the various ways of defining individual deprivation best fits the answers given by individuals on the degree of their satisfaction with income. The analysis finds that the deprivation indices proposed are consistently and negatively correlated with income satisfaction as reported by respondents, that income weighted measures fit better than population weighted measures, and that this fit improves with countries that experienced deep institutional changes such as the transitional economies of Eastern Europe.
    Keywords: Inequality,Economic Theory&Research,Poverty Impact Evaluation,Labor Policies,Emerging Markets
    Date: 2012–01–01
  3. By: Lehmann, Hartmut (University of Bologna); Razzolini, Tiziano (University of Siena); Zaiceva, Anzelika (University of Modena and Reggio Emilia)
    Abstract: In the years 2003-2008 the Russian economy experienced a period of strong and sustained growth, which was accompanied by large worker turnover and rising informality. We investigate whether the burden of informality falls disproportionately on job separators (displaced workers and quitters) in the Russian labor market in the form of informal employment and undeclared wages in formal jobs. We also pursue the issues whether displaced workers experience more involuntary informal employment than workers who quit and whether informal employment persists. We find a strong positive link between separations and informal employment as well as shares of undeclared wages in formal jobs. Our results also show that displacement entraps some of the workers in involuntary informal employment. Those who quit, in turn, experience voluntary informality for the most part, but there seems a minority of quitting workers who end up in involuntary informal jobs. This scenario does not fall on all separators but predominantly on those with low human capital. Finally, informal employment is indeed persistent since separating from an informal job considerably raises the probability to be informal in the subsequent job.
    Keywords: job separations, informality, Russia
    JEL: J64 J65 P50
    Date: 2011–12
  4. By: Basu, Arnab K. (College of William and Mary); Chau, Nancy (Cornell University); Siddique, Zahra (IZA)
    Abstract: We study the impact of tax and minimum wage reforms on the incidence of informality. To gauge the incidence of informality, we use measures of the extent of tax evasion, the extent of minimum wage non-compliance, and the size of the informal workforce. Our approach allows us to examine (i) the distinction between determinants of firm-level reported wage distribution and actual wage distribution, (ii) the complementarity of tax and minimum wage enforcement, (iii) the impact that a minimum wage reform has on tax and minimum wage compliance, and (iv) the impact that a tax policy reform has on tax and minimum wage compliance. We conclude with the design of optimal minimum wage and tax policies (even in the complete absence of minimum wage enforcement). We do so based on two objectives derived from popular concerns associated with an unchecked expansion of informality: tax revenue maximization, and poverty alleviation among workers.
    Keywords: tax evasion, minimum wage reform, flat tax reform, poverty, informality
    JEL: J3 J6 O17
    Date: 2011–12
  5. By: Caliendo, Marco (University of Potsdam); Künn, Steffen (IZA); Schmidl, Ricarda (IZA)
    Abstract: A substantial number of young unemployed participate in active labor market programs (ALMP) in Germany each year. While the aims of these programs are clear – a fast re-integration into employment or enrollment in further education – a comprehensive analysis of their effectiveness has yet to be conducted. We fill this gap using administrative data on youth unemployment entries in 2002 and analyze the short- and long-term impacts for a variety of different programs. With informative data at hand we apply inverse probability weighting, thereby accounting for a dynamic treatment assignment and cyclical availability of programs. Our results indicate positive long-term employment effects for nearly all measures aimed at labor market integration. Measures aimed at integrating youths in apprenticeships are effective in terms of education participation, but fail to show any impact on employment outcomes until the end of our observation period. Public sector job creation is found to be harmful for the medium-term employment prospects and ineffective in the long-run. Our analysis further indicates that the targeting of German ALMP systematically ignores low-educated youths as neediest of labor market groups. While no employment program shows a positive impact on further education participation for any subgroup, the employment impact of participation is often significantly lower for low-educated youths.
    Keywords: youth unemployment, active labor market policy, program evaluation, propensity score weighting
    JEL: J64 J68 J13
    Date: 2011–12
  6. By: Amarante, Veronica (Universidad de la República, Uruguay); Manacorda, Marco (Queen Mary, University of London); Miguel, Edward (University of California, Berkeley); Vigorito, Andrea (Universidad de la República, Uruguay)
    Abstract: There is limited empirical evidence on whether unrestricted cash social assistance to poor pregnant women improves children's birth outcomes. Using program administrative micro-data matched to longitudinal vital statistics on the universe of births in Uruguay, we estimate that participation in a generous cash transfer program led to a sizeable 15% reduction in the incidence of low birthweight. Improvements in mother nutrition and a fall in labor supply, out-of-wedlock births and mother's smoking all appear to contribute to the effect. We conclude that, by improving child health, unrestricted unconditional cash transfers may help break the cycle of intergenerational poverty.
    Keywords: welfare transfers, birth outcomes
    JEL: J88 I38 J13
    Date: 2011–12
  7. By: Stancanelli, Elena G. F. (University of Cergy-Pontoise); van Soest, Arthur (Tilburg University)
    Abstract: Existing studies show that individuals who retire replace some private consumption by home production, but do not consider joint behaviour of couples. Here we analyze the causal effect of retirement of each partner on hours of home production of both partners in a couple. Our identification strategy exploits the earliest age retirement laws in France, enabling a fuzzy regression discontinuity approach. We find that own retirement significantly increases own hours of home production and the effect is larger for men than for women. Moreover, retirement of the female partner significantly reduces male hours of home production but not vice versa.
    Keywords: time allocation, house work, couples
    JEL: J22 J26 J14
    Date: 2011–12
  8. By: Esther Duflo
    Abstract: Women empowerment and economic development are closely related: in one direction, development alone can play a major role in driving down inequality between men and women; in the other direction, empowering women may benefit development. Does this imply that pushing just one of these two levers would set a virtuous circle in motion? This paper reviews the literature on both sides of the empowerment-development nexus, and argues that the inter-relationships are probably too weak to be self-sustaining, and that continuous policy commitment to equality for its own sake may be needed to bring about equality between men and women.
    JEL: D1 O1 O12
    Date: 2011–12
  9. By: Wilkins, Roger (Melbourne Institute of Applied Economic and Social Research); Wooden, Mark (Melbourne Institute of Applied Economic and Social Research)
    Abstract: Empirical studies have consistently reported that rates of involuntary job separation, or dismissal, are significantly lower among female employees than among males. Only rarely, however, have the reasons for this differential been the subject of detailed investigation. In this paper, household panel survey data from Australia are used that also find higher dismissal rates among men than among women. This differential, however, largely disappears once controls for industry and occupation are included. These findings suggest that the observed gender differential primarily reflects systematic differences in the types of jobs into which men and women select.
    Keywords: dismissals, gender differentials, involuntary job separations, HILDA Survey, Australia
    JEL: J16 J63 J71
    Date: 2011–12

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