nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2012‒04‒23
fifteen papers chosen by
Maximo Rossi
University of the Republic

  1. Measuring Segregation: Basic Concepts and Extensions to Other Domains By SILBER Jacques
  2. Peer Effects: Evidence from Secondary School Transition in England By Gibbons, Steve; Telhaj, Shqiponja
  3. Identification of income-leisure preferences and evaluation of income tax policy By Charles Manski
  4. Welfare Migration By Giulietti, Corrado; Wahba, Jackline
  5. Robust Estimation of Wage Dispersion with Censored Data: An Application to Occupational Earnings Risk and Risk Attitudes By Pollmann, Daniel; Dohmen, Thomas; Palm, Franz C.
  6. Benchmarking Regions: Estimating the Counterfactual Distribution of Labor Market Outcomes By Fitzenberger, Bernd; Furdas, Marina
  7. Immigration, Obesity and Labor Market Outcomes in the UK By Averett, Susan; Argys, Laura; Kohn, Jennifer L.
  8. Education, Health and Mortality: Evidence from a Social Experiment By Meghir, Costas; Palme, Mårten; Simeonova, Emilia
  9. Heterogeneity in Human Capital Investments: High School Curriculum, College Major, and Careers By Joseph G. Altonji; Erica Blom; Costas Meghir
  10. A subgroup decomposition of inequality of poverty in Cameroon By BILOA ESSIMI Jean Aristide, BEJA; CHAMENI NEMBUA Célestin, CNC; MIAMO WENDJI Clovis, MWC
  11. Wage Discrimination over the Business Cycle By Biddle, Jeff E.; Hamermesh, Daniel S.
  12. Trends in Occupational Segregation by Gender 1970-2009: Adjusting for the Impact of Changes in the Occupational Coding System By Francine D. Blau; Peter Brummund; Albert Yung-Hsu Liu
  13. El Impacto Distributivo de las Políticas Sociales By Sebastián Galiani; Leonardo Gasparini
  14. Educational Signaling, Credit Constraints and Inequality Dynamics By Marcello D'Amato; Dilip Mookherjee
  15. Going regional. The effectiveness of different tax-benefit policies in combating child poverty in Spain By Canto, Olga; Adiego, Marta; Ayala, Luis; Levy, Horacio; Paniagua, Milagros

  1. By: SILBER Jacques
    Abstract: This paper presents the main concepts used in measuring segregation. First it shows that the cardinal as well as the ordinal approach to the measurement of occupational segregation, when only two groups are considered (generally men and women), borrowed many ideas from the income inequality measurement literature. Second, it shows that more recent advances in segregation measurement, that were the consequence of an extension of segregation measures to the case of multi-group segregation and more recently to the analysis of ordinal segregation, could be the basis for additional approaches to the measurement of economic inequality, in particular inequality in life chances, health and happiness, and eventually also to the study of polarization. Finally because the measurement of spatial segregation is a field in itself, this paper only marginally mentions concepts that have been introduced in this no less fascinating domain.
    Keywords: health inequality; inequality in hapiness; inequality in life chances; multidimensional segregation; occupational segregation; ordinal segregation; polarization; residential segregation
    JEL: D31 D63 J15 R23
    Date: 2012–04
  2. By: Gibbons, Steve (London School of Economics); Telhaj, Shqiponja (London School of Economics)
    Abstract: We study the effects of peers on school achievement, with detailed data on children making the same primary to secondary school transition in consecutive years in England. Our estimates show that secondary school composition, on entry at age 12, affects achievement at age 14, although the effect sizes are small. These secondary school peer effects originate in peer characteristics encapsulated in family background and early achievements (age 7), rather than subsequent test score gains in primary school. Our specifications control for individual unobservables and school fixed effects and trends, rendering peer group composition conditionally uncorrelated with student's characteristics.
    Keywords: peer effects, schools, education
    JEL: I2
    Date: 2012–03
  3. By: Charles Manski (Institute for Fiscal Studies and Northwestern University)
    Abstract: <p>The merits of alternative income tax policies depend on the population distribution of preferences for income and leisure. Standard theory, which supposes that persons want more income and more leisure, does not predict how they resolve the tension between these desires. Empirical studies of labor supply have imposed strong preference assumptions that lack foundation. This paper examines anew the problem of inference on income-leisure preferences and considers the implications for evaluation of tax policy. I first perform a basic revealed-preference analysis assuming only that persons prefer more income and leisure. This shows that observation of a person's time allocation under a status quo tax policy may bound his allocation under a proposed policy or may have no implications, depending on the tax schedules and the person's status quo time allocation. I next explore the identifying power of two classes of assumptions that restrict the distribution of income-leisure preferences. One assumes that groups of persons who face different choice sets have the same preference distribution. The second restricts the shape of this distribution. The generic finding is partial identification of preferences. This implies partial prediction of tax revenue under proposed policies and partial knowledge of the welfare function for utilitarian policy evaluation. </p>
    Date: 2012–03
  4. By: Giulietti, Corrado (IZA); Wahba, Jackline (University of Southampton)
    Abstract: This chapter reviews and discusses major theories and empirical studies about the welfare magnet hypothesis, i.e. whether immigrants are more likely to move to countries with generous welfare systems. Although economic theory predicts that welfare generosity affects the number, composition and location of immigrants, the empirical evidence is rather mixed. We offer possible explanations for the existence of such mixed evidence and highlight that the literature so far has overlooked the presence of different migration regimes, as well as the possibility of reverse causality between welfare spending and immigration.
    Keywords: welfare spending, immigration
    JEL: H53 J61 J68
    Date: 2012–03
  5. By: Pollmann, Daniel (ROA, Maastricht University); Dohmen, Thomas (ROA, Maastricht University); Palm, Franz C. (Maastricht University)
    Abstract: We present a semiparametric method to estimate group-level dispersion, which is particularly effective in the presence of censored data. We apply this procedure to obtain measures of occupation-specific wage dispersion using top-coded administrative wage data from the German IAB Employment Sample (IABS). We then relate these robust measures of earnings risk to the risk attitudes of individuals working in these occupations. We find that willingness to take risk is positively correlated with the wage dispersion of an individual's occupation.
    Keywords: dispersion estimation, earnings risk, censoring, quantile regression, occupational choice, sorting, risk preferences, SOEP, IABS
    JEL: C14 C21 C24 J24 J31 D01 D81
    Date: 2012–03
  6. By: Fitzenberger, Bernd (University of Freiburg); Furdas, Marina (University of Freiburg)
    Abstract: This paper develops and implements a new benchmarking approach for labor market regions. Based on panel data for regions, we use nonparametric matching techniques to account for observed labor market characteristics and for spatial proximity. As the benchmark, we estimate the counterfactual distribution of labor market outcomes for a region based on outcomes of similar regions. This allows to measure both the rank (relative performance) and the absolute performance based on the actual outcome for a region. Our outcome variable of interest is the hiring rate among the unemployed. We implement different similarity measures to account for differences in labor market conditions and spatial proximity, and we choose the tuning parameters in our matching approach based on a cross-validation procedure. The results show that both observed labor market characteristics and spatial proximity are important features to successfully match regions. Specifically, the modified Zhao (2004) distance measure and geographic distance in logs work best in our applications. Our estimated performance measures remain quite stable over time.
    Keywords: matching function, regional employment offices, performance measurement, nonparametric matching, conditional quantile positions
    JEL: C14 J68 R50
    Date: 2012–04
  7. By: Averett, Susan (Lafayette College); Argys, Laura (University of Colorado Denver); Kohn, Jennifer L. (Drew University)
    Abstract: We estimate the dual effects of immigration and obesity on labor market outcomes in the UK. There is only one other paper that has estimated these dual effects on a sample of immigrants to the US. We use the British Household Panel Survey, which contains information on height and weight for 2004 and 2006, along with immigration status and labor market outcomes. This was a period of increased immigration to the UK resulting in large part from the accession of new EU member states, though our sample includes both recent arrivals and those who have been in the UK for decades. We first analyze an immigrant-only sample and then expand the sample to compare the experience of these immigrants to natives with similar weight and other observable characteristics. We find support for the "healthy immigrant hypothesis" that suggests that immigrants are less likely to be obese than natives, and also evidence of an assimilation effect in which immigrants' weight increases with their time in the UK. The results indicate a wage premium and higher proportions of white collar work for immigrant men, but a wage penalty and lower proportions of white collar work for overweight and obese immigrant men. We find weaker but still negative associations between weight and labor market outcomes for immigrant women. Data limitations preclude efforts to address endogeneity, so these findings should be viewed as associations that support the need for better data for additional analysis of the dual effects of immigration and obesity on labor market outcomes.
    Keywords: immigrant, obesity, labor market outcomes
    JEL: I10 J15 J31
    Date: 2012–03
  8. By: Meghir, Costas (Yale University); Palme, Mårten (Stockholm University); Simeonova, Emilia (Tufts University)
    Abstract: We study the effect of a compulsory education reform in Sweden on adult health and mortality. The reform was implemented by municipalities between 1949 and 1962 as a social experiment and implied an extension of compulsory schooling from 7 or 8 years depending on municipality to 9 years nationally. We use detailed individual data on education, hospitalizations, labor force participation and mortality for Swedes born between 1946 and 1957. Individual level data allow us to study the effect of the education reform on three main groups of outcomes: (i) mortality until age 60 for different causes of death; (ii) hospitalization by cause and (iii) exit from the labor force primarily through the disability insurance program. The results show reduced male mortality up to age fifty for those assigned to the reform, but these gains were erased by increased mortality later on. We find similar patterns in the probability of being hospitalized and the average costs of inpatient care. Men who acquired more education due to the reform are less likely to retire early.
    Keywords: causal effects of education, compulsory schooling laws, comprehensive school reforms, education reform, returns to schooling
    JEL: I12 I18 I21
    Date: 2012–04
  9. By: Joseph G. Altonji; Erica Blom; Costas Meghir
    Abstract: Motivated by the large differences in labor market outcomes across college majors, we survey the literature on the demand for and return to high school and post-secondary education by field of study. We combine elements from several papers to provide a dynamic model of education and occupation choice that stresses the roles of specificity of human capital and uncertainty about preferences, ability, education outcomes, and labor market returns. The model implies an important distinction between the ex ante and ex post returns to education decisions. We also discuss some of the econometric difficulties in estimating the causal effects of field of study on wages in the context of a sequential choice model with learning. Finally, we review the empirical literature on choice of curriculum and the effects of high school courses and college major on labor market outcomes.
    JEL: I21 J24
    Date: 2012–04
    Abstract: This paper studies multi-dimensional aspects of deprivation associated to the living conditions and inequality status in Cameroon. The study employs the fuzzy-set framework to analyze deprivation and inequalities through Dagum sub group decomposition. Results in deprivation analysis and inequalities related reveal some new insights about the poverty situation in the country, which contrasts with the results available from traditional poverty analysis. We observe respectively, high deprivation degrees for household ‘essential’ items such as health, education and housing and a small Gini index for inequalities of deprivation. Decomposition by group reveals that within groups inequalities are as important as the between groups.
    Keywords: Fuzzy-sets; Poverty; Inequality; Sub-group-Decomposition; Cameroon
    JEL: D63 D01 I32
    Date: 2012
  11. By: Biddle, Jeff E. (Michigan State University); Hamermesh, Daniel S. (University of Texas at Austin)
    Abstract: Using CPS data from 1979-2009 we examine how cyclical downturns and industry-specific demand shocks affect wage differentials between white non-Hispanic men and women, Hispanics and non-Hispanic whites, and African-Americans and non-Hispanic whites. Women's relative earnings are harmed by negative shocks; the wage disadvantage of African-Americans drops with negative shocks, which have slight negative effects on Hispanics' relative wages. Negative shocks also increase the earnings disadvantage of bad-looking workers. A theory of job search suggests two opposite-signed mechanisms that affect these wage differentials. It suggests greater absolute effects among job-movers, which is verified using the longitudinal component of the CPS.
    Keywords: gender, race, ethnicity
    JEL: E29 J71
    Date: 2012–03
  12. By: Francine D. Blau; Peter Brummund; Albert Yung-Hsu Liu
    Abstract: In this paper, we develop a gender-specific crosswalk based on dual-coded Current Population Survey data to bridge the change in the Census occupational coding system that occurred in 2000 and use it to provide the first analysis of the trends in occupational segregation by sex for the 1970-2009 period based on a consistent set of occupational codes and data sources. We show that our gender-specific crosswalk more accurately captures the trends in occupational segregation that are masked using the aggregate crosswalk (based on combined male and female employment) provided by the U.S. Census Bureau. Using the 2000 occupational codes, we find that segregation by sex declined over the period but at a diminished pace over the decades, falling by 6.1 percentage points over the 1970s, 4.3 percentage points over the 1980s, 2.1 percentage points over the 1990s, and only 1.1 percentage points (on a decadal basis) over the 2000s. A primary mechanism by which occupational segregation was reduced over the 1970-2009 period was through the entry of new cohorts of women, presumably better prepared than their predecessors and/or encountering less labor market discrimination; during the 1970s and 1980s, however, there were also decreases in occupational segregation within cohorts. Reductions in segregation were correlated with education, with the largest decrease among college graduates and very little change in segregation among high school dropouts.
    JEL: J16 J24 J62 J71
    Date: 2012–04
  13. By: Sebastián Galiani (Washington University in Saint Louis); Leonardo Gasparini (CEDLAS - UNLP)
    Abstract: El objetivo de este trabajo es reseñar brevemente los métodos tradicionales de evaluación del impacto distributivo de las políticas públicas y discutir algunos de los avances más relevantes en los últimos veinte años. El trabajo se concentra en la evaluación de programas sociales, dejando de lado otras intervenciones públicas y su financiamiento. El trabajo resume los progresos a nivel internacional con algunas referencias a la experiencia argentina.
    Date: 2012–03
  14. By: Marcello D'Amato (Università di Salerno, and CSEF); Dilip Mookherjee (Boston University)
    Abstract: We present a dynamic OLG model of educational signaling, inequality and mobility with missing credit markets. Agents are characterized by two sources of unobserved heterogeneity: ability and parental income, consistent with empirical evidence on returns to schooling. Both quantity and quality of human capital evolve endogenously. The model generates a Kuznets inverted-U pattern in skill premia similar to historical US and UK experience. In the first (resp. later) phase the skill premium rises (falls), social returns to education exceed (falls below) private returns: under-investment owing to financial imperfections dominate (are dominated by) over-investment owing to signaling distortions. There always exist Pareto-improving policy interventions reallocating education between poor and rich children. JEL Classification:
    Date: 2012–04–11
  15. By: Canto, Olga; Adiego, Marta; Ayala, Luis; Levy, Horacio; Paniagua, Milagros
    Abstract: In recent years, child-related policies in Spain have experienced relevant changes at different government levels. The central government implemented a new universal child benefit at birth and reformed some of the most relevant policies for children living in low income households. Also, many regional governments (Comunidades Autnomas) have implemented their own policies to support families with children with different schemes in terms of design and generosity. All these policies have increased social protection expenditure aimed at families and children in Spain as a whole along the last decade (one of the lowest in the EU). So far, however, little is known about their impact on child poverty in Spain. Making use of the tax-benefit microsimulation model for the European Union EUROMOD this paper simulates the eligibility and receipt of most of the existing monetary child-related policies at all government levels and assesses their real (for central government policies) or potential (for regional policies) effect on the reduction of child poverty in Spain. Our results underline that, even after the introduction of a universal lump-sum benefit for newborns at the central government level in 2007, in aggregate terms, central government tax credits are the main child-related policy in Spain. Results also underline that central government policies have a considerably larger role in reducing poverty risk even if policies in some regions perform best than others. In general, our simulations suggest that regional benefits and tax credits reinforce and complement the focus of central government policies on younger children, who, on the other hand, seem to be less vulnerable to poverty than older children in Spain.
    Date: 2012–03–01

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