nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2012‒02‒27
eight papers chosen by
Maximo Rossi
University of the Republic

  1. Fading Hope in the US By Ritzen, Jo; Zimmermann, Klaus F.
  2. Inequality Trends and their Determinants: Latin America over 1990-2010 By Giovanni Andrea Cornia
  3. Big ideas: wellbeing and public policy By Richard Layard
  4. The Labor Market Return to an Attractive Face: Evidence from a Field Experiment By López Bóo, Florencia; Rossi, Martín A.; Urzua, Sergio
  5. Gender Gaps in PISA Test Scores: The Impact of Social Norms and the Mother's Transmission of Role Attitudes By González de San Román, Ainara; de la Rica, Sara
  6. Calibrating a cross-European poverty line By Berthoud, Richard
  7. Positional Concerns through the Life Cycle: Evidence from Subjective Well-Being Data and Survey Experiments By Akay, Alpaslan; Martinsson, Peter
  8. Long term impacts of compensatory preschool on health and behavior: evidence from Head Start By Pedro Carneiro; Rita Ginja

  1. By: Ritzen, Jo (IZA and Maastricht University); Zimmermann, Klaus F. (IZA and University of Bonn)
    Abstract: A substantial literature claims that the strong increase in inequality over the last decade in countries such as the US would lead to a collapse of society. Fading hopes in the population seem to confirm this. The paper rejects this interpretation since the decline in hopes cannot be traced back to rising inequality.
    Keywords: confidence, ethnicity, hope, human capital, income inequality
    JEL: D31 J15
    Date: 2012–02
  2. By: Giovanni Andrea Cornia (Università degli Studi di Firenze, Dipartimento di Scienze Economiche)
    Abstract: The paper reviews the steady and widespread decline in income inequality which has taken place in most of Latin America over 2002-10 and which––if continued for another 2-3 years––would reduce the average regional income inequality to pre-liberalization levels. The paper then focuses on the factors, which may explain such inequality decline. A review of the literature and an econometric test indicate that a few complementary factors played an important role in this regard, including a drop in the skill premium following a rapid expansion of secondary education, and the adoption of a new development model by a growing number of left-of-centre governments which emphasizes fiscally-prudent but more equitable macroeconomic, tax, social expenditure and labour policies. For the region as a whole, improvements in terms of trade, migrant remittances, FDI and world growth played a less important role than expected although their impact was perceptible in countries where such transactions were sizeable.
    Keywords: income inequality, human capital inequality, policy regimes, external conditions, Latin America
    JEL: D31 E6 H53 I28 I38
    Date: 2012
  3. By: Richard Layard
    Abstract: Richard Layard outlines the development of CEP research on what makes people happy and how society might best be organised to promote happiness.
    Keywords: Wellbeing, happiness, public policy
    Date: 2012–02
  4. By: López Bóo, Florencia (Inter-American Development Bank); Rossi, Martín A. (Universidad de San Andrés); Urzua, Sergio (University of Maryland)
    Abstract: We provide new evidence on the link between beauty and hiring practices in the labor market. Specifically, we study if people with less attractive faces are less likely to be contacted after submitting a resume. Our empirical strategy is based on an experimental approach. We sent fictitious resumes with pictures of attractive and unattractive faces to real job openings in Buenos Aires, Argentina. We find that attractive people receive 36 percent more responses (callbacks) than unattractive people. Given the experimental design, this difference can be attributed to the exogenous manipulation of facial attractiveness of our fake job applicants.
    Keywords: facial attractiveness, callback rates, labor market discrimination
    JEL: J71 J78
    Date: 2012–02
  5. By: González de San Román, Ainara (University of the Basque Country); de la Rica, Sara (University of the Basque Country)
    Abstract: The existence of gender gaps in test scores has been documented in the relevant literature for a wide range of countries. In particular, the Programme for International Student Assessment (PISA) conducted by the OECD over the past ten years reveals that on average female students underperform (outperform) males in maths (reading) test scores in most of the countries that take part in the evaluation programme. We find that differences in culture and social norms across countries and across regions within the same country are crucial determinants in understanding gender differences in PISA 2009 test scores: girls perform relatively better in both maths and reading in societies where gender equality is enhanced, and the effect varies over the distribution of scores. In addition, we find substantial evidence for the intergenerational transmission of gender role attitudes, especially from mothers to daughters, as the performance of girls – not that of boys, is better in families where the mother works outside home.
    Keywords: PISA, test scores, achievement, gender differences, culture, role attitudes, intergenerational transmission
    JEL: C14 C33 I21 I24 J16
    Date: 2012–02
  6. By: Berthoud, Richard
    Abstract: How should relative poverty be defined and measured in a European Union where there are substantial variations in income between countries, as well as within countries? This paper uses objective and subjective deprivation indicators to assess the appropriate balance between national and Europe-wide relativities in explaining social exclusion. The analysis suggests that Europe-wide comparisons are more important to the perception of poverty than the convention of national relative poverty lines would have led us to expect. Even relative poverty is more prevalent in the new low-income (eastern) countries than in the old high-income (western) countries. But this is as much a political as an empirical issue.
    Date: 2012–01–31
  7. By: Akay, Alpaslan (IZA); Martinsson, Peter (University of Gothenburg)
    Abstract: This paper uses both subjective well-being and survey experimental data to analyze how people's positional concerns regarding income and goods vary with age. The subjective well-being approach is mainly based on German panel data for the period 1984-2009 (German Socio-Economic Panel), while the survey experimental approach is based on a tailor-made experimental design conducted among Swedish adults. Our analysis suggests that the degree of positional concerns is not homogenous across the life cycle. Our different analytical approaches show a robust life cycle pattern of positional concerns: young people experience no or a low degree of positional concerns, yet the level of concerns for income increases gradually and significantly with age. The results also differ across goods: while car consumption is similar to income, the positional concern for leisure time decreases through the life cycle.
    Keywords: positional concerns, life cycle, subjective well-being, survey experiment
    JEL: C90 D63
    Date: 2012–02
  8. By: Pedro Carneiro (Institute for Fiscal Studies and University College London); Rita Ginja
    Abstract: <p>This paper provides new estimates of the medium and long-term impacts of Head Start on the health and behavioral problems of its participants. We identify these impacts using discontinuities in the probability of participation induced by program eligibility rules. Our strategy allows us to identify the effect of Head Start for the set of individuals in the neighborhoods of multiple discontinuities, which vary with family size, state and year (as opposed to a smaller set of individuals neighboring a single discontinuity). Participation in the program reduces the incidence of behavioral problems, serious health problems and obesity of male children at ages 12 and 13. It also lowers depression and obesity among adolescents, and reduces engagement in criminal activities for young adults. </p>
    Date: 2012–01

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