nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2012‒03‒28
twelve papers chosen by
Maximo Rossi
University of the Republic

  1. Uruguayâ..s Income Inequality and Political Regimes during 1981â..2010 By Amarante, Veronica; Vigorito, Andrea
  2. Inequality in Education: Evidence for Latin America By Cruces, Guillermo; Gasparini, Leonardo
  3. Race, Poverty, and Deprivation in South Africa By Carlos Gradín
  4. Women's Empowerment and Economic Development By Duflo, Esther
  5. Occupational Segregation by Race and Ethnicity in the US: Differences across States By Carlos Gradín; Coral del Río; Olga Alonso-Villar
  6. Gender inequality in the labor market in Serbia By Reva, Anna
  7. A New Way of Monitoring the Quality of Urban Life By Eduardo Lora; Andrew Powell
  8. Envy, Guilt, and the Phillips Curve By Ahrens, Steffen; Snower, Dennis J.
  9. Occupational segregation by gender and ethnic group in Great Britain’s Labor market By Daniel Guinea Martin; Ricardo Mora; Javier Ruiz Castillo
  10. 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
  11. Occupational Segregation Measures: A Role for Status By Coral del Río; Olga Alonso-Villar
  12. Does India's employment guarantee scheme guarantee employment ? By Dutta, Puja; Murgai, Rinku; Ravallion., Martin; van de Walle, Dominique

  1. By: Amarante, Veronica; Vigorito, Andrea
    Abstract: This study assesses the evolution of inequality in Uruguay during 1981-2010, considered as subperiods built on the basis of the main policy regimes observed: extreme right (1981-84), centre-right (1985-89), right (1990-2004), and centre-left (2005-10). Income inequality diminished during the restoration of democracy, but started to grow steadily in the mid-1990s and despite recent redistributive reforms, continued to grow, albeit modestly, until 2007. In 2008 inequality lessened, continuing this trend through 2009 and 2010.Trade liberalization, suppression of centralized wage-setting mechanisms, the drop in minimum wages and the lack of a social protection system oriented to the most deprived households explain the rise in inequality during the last decade. In a context of a stable macroeconomic system, the recent fall in inequality resulted from a reduction in labour income inequality and the introduction of noncontributory public transfers schemes.
    Keywords: inequality, Uruguay, transfers, wage-setting mechanisms, returns to education, political regimes
    Date: 2011
  2. By: Cruces, Guillermo; Gasparini, Leonardo
    Abstract: This paper provides original empirical evidence on the evolution of education inequality for the Latin American countries over the decades of 1990 and 2000. The analysis covers a wide range of issues on the differences in educational outcomes and opportunities across the population, including inequality in years of education, gaps in school enrolment, wage skill differentials and public social expenditure. The evidence indicates a significant difference between the 1990s and the 2000s in terms of both the assessment of the equity of the education expansion and its impact on the income distribution. In particular, changes in the 2000s seem to have had an equalizing impact on earnings, given the more pro-poor pattern of the education upgrading and a more stable or even increasing relative demand for low-skill labour.
    Keywords: education, inequality, enrolment, wage premium, Latin America
    Date: 2011
  3. By: Carlos Gradín
    Abstract: The aim of this paper is to explain why poverty and material deprivation in South Africa are significantly higher among those of African descent than among whites. To do so, we estimate the conditional levels of poverty and deprivation Africans would experience had they the same characteristics as whites. By comparing the actual and counterfactual distributions, we show that the racial gap in poverty and deprivation can be attributed to the cumulative disadvantaged characteristics of Africans, such as their current level of educational attainment, demographic structure, and area of residence, as well as to the inertia of past racial inequalities. Progress made in the educational and labor market outcomes of Africans after Apartheid explains the reduction in the racial poverty differential.
    Keywords: poverty, deprivation, race, decomposition, South Africa, households’ characteristics.
    JEL: D31 D63 I32 J15 J71 J82 O15
    Date: 2011–12
  4. By: Duflo, Esther
    Abstract: Women’s 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.
    Keywords: gender equality; women's empowerment
    JEL: D1 O12 O15
    Date: 2012–01
  5. By: Carlos Gradín; Coral del Río; Olga Alonso-Villar
    Abstract: Using the 2005–2007 American Community Survey, this paper analyzes the extent of geographical disparities in occupational segregation by race and ethnicity across the United States. Although the unconditional analysis shows great geographical variation in segregation, with the largest levels in the Southwest, the analysis of segregation conditioned on the distribution of characteristics reveals that segregation of workers with similar characteristics is generally greater in the East Central region. To quantify conditional segregation, this paper adapts a propensity score technique that simultaneously controls for several characteristics, allowing the identification of the factors that explain the geographical variation of unconditional segregation.
    Keywords: occupational segregation; race; ethnicity; states; United States
    JEL: J15 J71 D63
    Date: 2011–11
  6. By: Reva, Anna
    Abstract: This paper presents a broad overview of labor market indicators for men and women in Serbia with a focus on employment patterns, entrepreneurship and career advancement as well as earnings differentials. The analysis relies primarily on the results of the Labor Force Surveys conducted in Serbia in April 2008 and October 2009. The findings show that although the overall labor market situation in Serbia is difficult, women are in a much more disadvantageous position than men. Women are much less likely to be employed, start a business or advance in the political arena. Furthermore, there is a significant wage gap between men and women in a number of sectors and occupational groups with low educated women being particularly disadvantaged. The results of the Oaxaca-Blinder decomposition demonstrate that the wage gap is indicative of discrimination of women in the labor market as earnings differentials cannot be explained by differences in observed characteristics of male and female employees. Based on the obtained results, the paper outlines four broad areas that require the attention of policy-makers: employment generation; enhancement of education outcomes; improvement of the regulatory environment and support to women's business and political careers; and promotion of transparent performance setting mechanisms.
    Keywords: Labor Markets,Population Policies,Gender and Development,Population&Development,Gender and Law
    Date: 2012–03–01
  7. By: Eduardo Lora; Andrew Powell
    Abstract: A growing number of cities around the world have established systems of monitoring the quality of urban life. Many of those systems combine objective and subjective information and attempt to cover a wide variety of topics. This paper introduces a simple method that takes advantage of both types of information and provides criteria to identify and rank the issues of potential importance for urban dwellers. The method combines the so-called ‘hedonic price’ and ‘life satisfaction’ approaches to value public goods. Pilot case results for six Latin American cities are summarized and policy applications are discussed.
    Keywords: urban economics, quality of life, Latin America, public goods, hedonic price method, life satisfaction method
    Date: 2011
  8. By: Ahrens, Steffen; Snower, Dennis J.
    Abstract: We incorporate inequity aversion into an otherwise standard New Keynesian dynamic equilibrium model with Calvo wage contracts and positive inflation. Workers with relatively low incomes experience envy, whereas those with relatively high incomes experience guilt. The former seek to raise their income, and latter seek to reduce it. The greater the inflation rate, the greater the degree of wage dispersion under Calvo wage contracts, and thus the greater the degree of envy and guilt experienced by the workers. Since the envy effect is stronger than the guilt effect, according to the available empirical evidence, a rise in the inflation rate leads workers to supply more labor over the contract period, generating a significant positive long-run relation between inflation and output (and employment), for low inflation rates. This Phillips curve relation, together with an inefficient zero-inflation steady state, provides a rationale for a positive long-run inflation rate. Given standard calibrations, optimal monetary policy is associated with a long-run inflation rate around 2 percent.
    Keywords: fairness; inequity aversion; inflation; long-run Phillips curve
    JEL: D03 E20 E31
    Date: 2012–02
  9. By: Daniel Guinea Martin; Ricardo Mora; Javier Ruiz Castillo
    Abstract: In this paper we study occupational segregation by gender and ethnic group in England and Wales using data from the 2001 Census. We assess in an integrated framework the relative importance of each source of segregation and whether they combine into a double disadvantage effect or are independent processes. The analysis exploits the decomposability properties of the Mutual Information segregation index. These same properties allow measuring the effect on segregation of the distinctions between (i) Manual vs. Non-manual occupations; (ii) Full- vs. Part-time jobs, and (iii) human capital categories. Finally, we extend the usual notion of occupational segregation among the employed population to include the segregation of the entire non-student population of working age due to differences in the distribution of demographic groups over labor market participation categories. Among the main conclusions, the following three are emphasized. (1) The role of gender is much greater than the role of ethnic group in accounting for occupational segregation, and both constitute independent processes. (2) All the distinctions mentioned above with the exception of human capital have a substantial effect on segregation by gender. However, the Manual vs. Non-manual and the Fullvs. Part-time distinctions have a negligible effect on segregation by ethnic group. (3) The segregation induced by labor market participation decisions in England and Wales is about 20 per cent greater than the usual occupational segregation
    Keywords: Segregation, Ethnic and gender, Labor market, Occupations, Great Britain
    Date: 2011–11
  10. By: Amarante, Veronica; Manacorda, Marco; Miguel, Edward; Vigorito, Andrea
    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: birth outcomes; welfare transfers
    JEL: I38 J13 J88
    Date: 2012–01
  11. By: Coral del Río; Olga Alonso-Villar
    Abstract: This paper defines local segregation measures which are sensible to status differences among organizational units. So far as we know, this is the first time that status-sensitive segregation measures are offered in a multigroup context by invoking a cardinal measure of status. These measures allow aggregating employment gaps of a target group penalizing its concentration in low-status occupations. They are intended to complement, rather than substitute, previous local segregation measures. The usefulness of these tools is illustrated in the case of occupational segregation by race and ethnicity in the U.S.
    Keywords: Segregation measures; occupations; status; U.S.
    JEL: D63 J0 J15 J71
    Date: 2011–11
  12. By: Dutta, Puja; Murgai, Rinku; Ravallion., Martin; van de Walle, Dominique
    Abstract: In 2005 India introduced an ambitious national anti-poverty program, now called the Mahatma Gandhi National Rural Employment Guarantee Scheme. The program offers up to 100 days of unskilled manual labor per year on public works projects for any rural household member who wants such work at the stipulated minimum wage rate. The aim is to dramatically reduce poverty by providing extra earnings for poor families, as well as empowerment and insurance. If the program worked in practice the way it is designed, then anyone who wanted work on the scheme would get it. However, analysis of data from India's National Sample Survey for 2009/10 reveals considerable un-met demand for work in all states. The authors confirm expectations that poorer families tend to have more demand for work on the scheme, and that (despite the un-met demand) the self-targeting mechanism allows it to reach relatively poor families and backward castes. The extent of the un-met demand is greater in the poorest states -- ironically where the scheme is needed most. Labor-market responses to the scheme are likely to be weak. The scheme is attracting poor women into the workforce, although the local-level rationing processes favor men.
    Keywords: Rural Poverty Reduction,Labor Markets,Services&Transfers to Poor,Poverty Monitoring&Analysis
    Date: 2012–03–01

This nep-ltv issue is ©2012 by Maximo Rossi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.