nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2012‒03‒14
six papers chosen by
Maximo Rossi
University of the Republic

  1. Educational Upgrading and Returns to Skills in Latin America. Evidence from a Supply-Demand Framework, 1990-2010 By Leonardo Gasparini; Sebastián Galiani; Guillermo Cruces; Pablo Acosta
  2. Labour Market Penalties of Mothers: the Role of Reconciliation Policies By Lia Pacelli; Silvia Pasqua; Claudia Villosio
  3. Employment and Distribution Effects of the Minimum Wage By Fabián Slonimczyk; Peter Skott
  4. Understanding Material Deprivation in Europe: A Multilevel Analysis By Christopher T. Whelan; Bertrand Maître
  5. Trends in Tariff Reforms and Trends in the Structure of Wages By Sebastián Galiani; Guido Porto
  6. The Intergenerational Transmission of Education: Evidence from Taiwanese Adoptions By Hammitt, James; Liu, Jin-Tan; Tsou, Meng-Wen

  1. By: Leonardo Gasparini (CEDLAS - UNLP); Sebastián Galiani (Washington University in St. Louis); Guillermo Cruces (CEDLAS-UNLP and CONICET); Pablo Acosta (World Bank, Human Development, Latin America and Caribbean Region)
    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. Supplyside factors seem to have limited explanatory power relative to demandside factors, and are only relevant to explain part of the fall in wage premia for highschool 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 (nontertiary educated) workforce, although employment patterns by sector suggest that other withinsector forces are also at play, such as technological diffusion or skill mismatches that may reduce the labor productivity of highlyeducated workers.
    Date: 2012–03
    URL: http://d.repec.org/n?u=RePEc:dls:wpaper:0127&r=ltv
  2. By: Lia Pacelli; Silvia Pasqua; Claudia Villosio
    Abstract: A key issue in increasing women’s participation in productive activities is the possibility of achieving a high work-life balance, both in terms of personal wellbeing and in terms of fair career prospects. The crucial event that challenges any level of work-life balance working women achieve is motherhood. We analyse how motherhood affects women's working career, both in terms of participation and in terms of wages, compared to “non-mothers”. The country chosen for the analysis is Italy, a paradigmatic example of low participation rate, scant childcare, high wage inequality and a cultural environment that considers childcare a predominantly “female affair”. While most of the literature focuses either on wages or on participation, we consider both dimensions in a country where female participation is low, thus contributing to filling the gap in the literature of studies of this kind referred to southern European countries. We confirm that the probability of leaving employment significantly increases for new mothers (career-break job penalty); however, this is mitigated by higher job quality and human capital endowment, and by childcare accessibility. Crucially, the availability of part-time jobs reduces the probability of mothers moving out of the labour force. Furthermore, women not leaving employment after becoming mothers face a decrease in wage levels and growth compared to non-mothers, and there are no signs of this gap closing five years after childbirth (family wage gap). Again, part-time employment plays a crucial role, as the family wage gap penalty emerges only among women working full-time both before and after childbirth; a part-time job over the whole period or even only after childbirth prevents any wage gap from opening up between such working mothers and non-mothers. A decisive fact in this context is that in Italy part-time jobs are (scant but) well paid and protected, unlike most other countries.
    Keywords: motherhood, part-time jobs, wage penalty, working career, reconciliation policies
    JEL: J13 J31
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:cca:wplabo:121&r=ltv
  3. By: Fabián Slonimczyk (Higher School of Economics, Moscow); Peter Skott (University of Massachusetts Amherst)
    Abstract: This paper analyzes the effects of the minimum wage on wage inequality, relative employment and over-education. We show that over-education can be generated endogenously and that an increase in the minimum wage can raise both total and low-skill employment, and produce a fall in inequality. Evidence from the US suggests that these theoretical results are empirically relevant. The over-education rate has been increasing and our regression analysis suggests that the decrease in the minimum wage may have led to a deterioration of the employment and relative wage of low-skill workers. JEL Categories: J31, J41, J42
    Keywords: Minimum wage, earnings inequality,monopsony, effeciency wage, over-education
    Date: 2012–02
    URL: http://d.repec.org/n?u=RePEc:ums:papers:2012-5&r=ltv
  4. By: Christopher T. Whelan (School of Sociology and Geary Institute, University College Dublin); Bertrand Maître (Economic and Social Research Institute, Dublin)
    Abstract: In this paper, taking advantage of the inclusion of a special module on material deprivation in EU-SILC 2009, we provide a comparative analysis of patterns of deprivation. Our analysis identifies six relatively distinct dimensions of deprivation with generally satisfactory overall levels of reliability and mean levels of reliability across counties. Multi-level analysis based on 28 European countries reveals systematic variation across countries in the relative importance of with and between country variation. The basic deprivation dimension is the sole dimension to display a graduated pattern of variation a across countries. It also reveals the highest correlations with national and household income, the remaining deprivation dimensions and economic stress. It comes closest to capturing an underlying dimension of generalized deprivation that can provide the basis for a comparative European analysis of exclusion from customary standards of living. A multilevel analysis revealed that a range of household and household reference person socio-economic factors were related to basic deprivation and controlling for contextual differences in such factors allowed us to account for substantial proportions of both within and between country variance. The addition of macro-economic factors relating to average levels of disposable income and income inequality contributed relatively little further in the way of explanatory power. Further analysis revealed the existence of a set of significant interactions between micro socio-economic attributes and country level gross national disposable income per capita. The impact of socio-economic differentiation was significantly greater where average income levels were lower. Or, in other words, the impact of the latter was greater for more disadvantaged socio-economic groups. Our analysis supports the suggestion that an emphasis on the primary role of income inequality to the neglect of differences in absolute levels of income may be misleading in important respects.
    Keywords: deprivation, economics, income, socio-economic differentiation, multi-level analysis
    Date: 2012–02–21
    URL: http://d.repec.org/n?u=RePEc:ucd:wpaper:201205&r=ltv
  5. By: Sebastián Galiani (Department of Economics, Washington University in St Louis); Guido Porto (Development Research Group, The World Bank)
    Abstract: This paper provides new evidence on the impacts of trade reforms on wages. We first introduce a model of trade that combines a non-competitive wage setting mechanism due to unions with a factor abundance hypothesis. The predictions of the model are then econometrically investigated using Argentine data. Instead of achieving identification by comparing industrial wages before and after one episode of trade liberalization, our strategy exploits the recent historical record of policy changes adopted by Argentina: from significant protection in the early 1970s, to the first episode of liberalization during the late 1970s, then back to a slowdown of reforms during the 1980s, and finally to the second episode of liberalization in the 1990s. These swings in trade policy represent broken trends in trade reforms that we can compare with observed trends in wages and wage inequality. We use unusual historical data sets of trends in tariffs, wages, and wage inequality to examine the structure of wages in Argentina and to explore how it is affected by tariff reforms. We find that i) trade liberalization, ceteris paribus, reduces wages; ii) industry tariffs reduce the industry skill premium; iii) conditional on the structure of tariffs at the industry level, the average tariff in the economy is positively associated with the aggregate skill premium. These findings suggest that the observed trends in wage inequality in Latin America can be reconciled with the Stolper-Samuelson predictions in a model with unions.
    Keywords: Trade liberalization, Stolper-Samuelson, Wage inequality, non-competitive wages and unions.
    JEL: F14 F16
    Date: 2011–10
    URL: http://d.repec.org/n?u=RePEc:dls:wpaper:0124&r=ltv
  6. By: Hammitt, James; Liu, Jin-Tan; Tsou, Meng-Wen
    Abstract: This paper examines the causal effect of parental schooling on children’s schooling using a large sample of adoptees from Taiwan. Using birth-parents’ education to help control for selective placement of children with adoptive parents, we find that adoptees raised with more highly educated parents have higher educational attainment, measured by years of schooling and probability of university graduation. We also find evidence that adoptive father’s schooling is more important for sons’ and adoptive mother’s schooling is more important for daughters’ educational attainment. These results support the notion that family environment (nurture) is important in determining children’s educational outcomes, independent of genetic endowment.
    Keywords: intergenerational transmission, education, schooling, adoption
    Date: 2011–12
    URL: http://d.repec.org/n?u=RePEc:tse:wpaper:25462&r=ltv

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