New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2012‒03‒08
nine papers chosen by

  1. The Rise and Fall of Income Inequality in Mexico: 1989-2010 By Raymundo M. Campos-Vazquez; Gerardo Esquivel; Nora Lustig
  2. Social Policies and the Fall in Inequality in Brazil: Achievements and Challenges By Pedro H. G. Ferreira de Souza
  3. Poverty, Inequality and Social Policies in Brazil, 1995-2009 By Pedro H. G. Ferreira de Souza
  4. Genes, Economics and Happiness By Nicholas A. Christakis; Jan-Emmanuel De Neve; James H. Fowler; Bruno S. Frey
  5. Happiness as a Driver of Risk-Avoiding Behavior By Jan-Emmanuel De Neve; Robert J. B. Goudie; Sach Mukherjee; Andrew J. Oswald; Stephen Wu
  6. Reforming an Insider-Outsider Labor Market: The Spanish Experience By Bentolila, Samuel; Jimeno, Juan Francisco.; Dolado, Juan José
  7. Explaining the Spread of Temporary Jobs and its Impact on Labor Turnover By Cahuc, Pierre; Charlot, Olivier; Malherbet, Franck
  8. Total Work and Gender: Facts and Possible Explanations By Michael Burda; Daniel S. Hamermesh; Philippe Weil
  9. Toward an Understanding of Why People Discriminate: Evidence from a Series of Natural Field Experiments By Uri Gneezy; John List; Michael K. Price

  1. By: Raymundo M. Campos-Vazquez (El Colegio de México); Gerardo Esquivel (El Colegio de México); Nora Lustig (Tulane University)
    Abstract: Inequality in Mexico rose between 1989 and 1994 and declined between 1994 and 2010. We examine the role of market forces (demand and supply of labour by skill), institutional factors (minimum wages and unionization rate), and public policy (cash transfers) in explaining changes in inequality. We apply the ‘re-centered influence function’ method to decompose changes in hourly wages into characteristics and returns. The main driver is changes in returns. Returns rose (1989-1994) due to institutional factors and labor demand. Returns declined (1994-2006) due to changes in supply and --to a lesser extent--in demand; institutional factors were not relevant. Government transfers contributed to the decline in inequality, especially after 2000.
    Keywords: inequality, wages, disposable income, labor markets, Mexico
    JEL: D31 D60 J20 J31 O54
    Date: 2012–01
  2. By: Pedro H. G. Ferreira de Souza (Institute for Applied Economic Research (IPEA))
    Abstract: By the end of the first decade of the 21st century, the most usual international depiction of Brazil is that of a burgeoning, upcoming country. Although in many ways frankly exaggerated, this marks a stark contrast with a not-so-distant past. This turnaround has had a lot to do with favourable international circumstances, but it also owes a lot to extensive reforms that made possible something that was almost unprecedented in Brazil: pro-poor growth. (?)
    Keywords: Social Policies and the Fall in Inequality in Brazil: Achievements and Challenges
    Date: 2012–02
  3. By: Pedro H. G. Ferreira de Souza (Institute for Applied Economic Research (IPEA))
    Abstract: Since the mid-1990s, Brazil has undergone extensive reforms that have finally reversed the dismaying economic performance of the 1980s. In particular, poverty and inequality indicators have improved dramatically, especially since the late-2000s. This paper provides an overview of such recent trends and discusses the role played by four major government interventions: public education, the minimum wage law, Social Security pensions and Social Assistance transfers. Additionally, available data sets and methods for policy evaluation are also discussed. (?)
    Keywords: Poverty, Inequality and Social Policies in Brazil, 1995-2009
    Date: 2012–02
  4. By: Nicholas A. Christakis; Jan-Emmanuel De Neve; James H. Fowler; Bruno S. Frey
    Abstract: A major finding from research into the sources of subjective well-being is that individuals exhibit a "baseline" level of happiness. We explore the influence of genetic variation by employing a twin design and genetic association study. We first show that about 33% of the variation in happiness is explained by genes. Next, using two independent data sources, we present evidence that individuals with a transcriptionally more efficient version of the serotonin transporter gene (SLC6A4) report significantly higher levels of life satisfaction. These results are the first to identify a specific gene that is associated with happiness and suggest that behavioral models benefit from integrating genetic variation.
    Keywords: wellbeing, socio-demographics, happiness, genetics, life satisfaction
    JEL: A12 D03 D87 Z00
    Date: 2012–02
  5. By: Jan-Emmanuel De Neve; Robert J. B. Goudie; Sach Mukherjee; Andrew J. Oswald; Stephen Wu
    Abstract: Most governments try to discourage their citizens from taking extreme risks with their health and lives. Yet, for reasons not understood, many people continue to do so. We suggest a new approach to this longstanding question. First, we show that expected-utility theory predicts that 'happier' people will be less attracted to risky behaviors. Second, using BRFSS data on seatbelt use in a sample of 300,000 Americans, we document evidence strongly consistent with that prediction. Our result is demonstrated with various methodological approaches, including Bayesian model-selection and instrumental-variable estimation (based on unhappiness caused by widowhood). Third, using data on road accidents from the Add Health data set, we find strongly corroborative longitudinal evidence. These results suggest that government policy may need to address the underlying happiness of individuals rather than focus on behavioural symptoms.
    Keywords: subjective well-being, risky behaviors, effects of well-being, rational carelessness
    Date: 2012–02
  6. By: Bentolila, Samuel; Jimeno, Juan Francisco.; Dolado, Juan José
    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.
    Date: 2012–01
  7. By: Cahuc, Pierre (Ecole Polytechnique, Paris); Charlot, Olivier (University of Cergy-Pontoise); Malherbet, Franck (University of Rouen)
    Abstract: This paper provides a simple model which explains the choice between permanent and temporary jobs. This model, which incorporates important features of actual employment protection legislations neglected by the economic literature so far, reproduces the main stylized facts about entries into permanent and temporary jobs observed in Continental European countries. We show that the stringency of legal constraints on the termination of permanent jobs has a strong positive impact on the turnover of temporary jobs. We also find that job protection has very small effects on total employment but induces large substitution of temporary jobs for permanent jobs which significantly reduces aggregate production.
    Keywords: temporary jobs, employment protection legislation
    JEL: J63 J64 J68
    Date: 2012–02
  8. By: Michael Burda; Daniel S. Hamermesh; Philippe Weil
    Abstract: Time-diary data from 27 countries show a negative relationship between real GDP per capita and female-male differences in total work time—work for pay and work at home. In rich non-Catholic countries on four continents men and women do about the same average amount of total work. Survey results demonstrate, however, that labor economists, macroeconomists, sociologists and the general public believe that women work more. The widespread average equality does not arise from gender differences in the price of time, from intra-family bargaining or from spousal complementarity. Several theories, including ones based on social norms, might explain these findings and are consistent with cross-national evidence from the World Values Surveys and sets of microeconomic data from Australia and Germany.
    Keywords: time use, gender differences, household production, paid work
    JEL: J22 J16 D13
    Date: 2012–02
  9. By: Uri Gneezy; John List; Michael K. Price
    Abstract: Social scientists have presented evidence that suggests discrimination is ubiquitous: women, nonwhites, and the elderly have been found to be the target of discriminatory behavior across several labor and product markets. Scholars have been less successful at pinpointing the underlying motives for such discriminatory patterns. We employ a series of field experiments across several market and agent types to examine the nature and extent of discrimination. Our exploration includes examining discrimination based on gender, age, sexual orientation, race, and disability. Using data from more than 3000 individual transactions, we find evidence of discrimination in each market. Interestingly, we find that when the discriminator believes the object of discrimination is controllable, any observed discrimination is motivated by animus. When the object of discrimination is not due to choice, the evidence suggests that statistical discrimination is the underlying reason for the disparate behavior.
    JEL: C93 J71
    Date: 2012–02

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