nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2012‒05‒08
eleven papers chosen by
Maximo Rossi
University of the Republic

  1. Trends in Occupational Segregation by Gender 1970-2009: Adjusting for the Impact of Changes in the Occupational Coding System By Blau, Francine D.; Brummund, Peter; Liu, Albert Yung-Hsu
  2. The Impact of Redistributive Policies on Inequality in OECD Countries By Doerrenberg, Philipp; Peichl, Andreas
  3. Changes in China's Wage Structure By Ge, Suqin; Yang, Dennis Tao
  4. Study on Active Inclusion of Migrants By Klaus F. Zimmermann; Martin Kahanec; Corrado Giulietti; Martin Guzi; Alan Barrett; Bertrand Maître
  5. Wage and Employment Determination in Volatile Times: Sweden 1913-1939 By Holmlund, Bertil
  6. Explaining the Gender Wage Gap in Turkey Using the Wage Structure Survey By Arda Aktas; Gokce Uysal
  7. Empowering Women Through Education: Evidence from Sierra Leone By Naci H. Mocan; Colin Cannonier
  8. Evolution of poverty in Bolivia: a multidementional approach By Werner L. Hernani-Limarino; Paul Villarroel
  9. Comparing Real Wage Rates By Ashenfelter, Orley
  10. Trade and Inequality: From Theory to Estimation By Elhanan Helpman; Oleg Itskhoki; Marc-Andreas Muendler; Stephen Redding
  11. Unemployment in Bolivia By Werner L. Hernani-Limarino; Maria Villegas; Ernesto Yanez

  1. By: Blau, Francine D. (Cornell University); Brummund, Peter (Cornell University); Liu, Albert Yung-Hsu (Mathematica Policy Research)
    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.
    Keywords: occupations, occupational segregation, gender, discrimination
    JEL: J16 J24 J62 J71
    Date: 2012–04
  2. By: Doerrenberg, Philipp (University of Cologne); Peichl, Andreas (IZA)
    Abstract: Recent discussions about rising inequality in industrialized countries have triggered calls for more government intervention and redistribution. Due to obvious behavioral effects caused by redistribution, it is however not clear whether redistributional policies are indeed able to combat inequality. This paper contributes to this relevant research question by using different contextual country-level data sources to study inequality trends in OECD countries since the 1980s. We first investigate the development of inequality over time before analyzing the question of whether governments can effectively reduce inequality. Different identification strategies, using fixed effects and instrumental variables models, provide some evidence that governments are capable of reducing income inequality despite countervailing behavioral adjustments. The effect is stronger for social expenditure policies than for progressive taxation, which seems to trigger more inequality increasing indirect behavioral effects. Our results also suggest that the use of secondary inequality data should be handled with caution.
    Keywords: inequality, redistribution, social expenditure, progressive taxation
    JEL: D31 D60 H20
    Date: 2012–04
  3. By: Ge, Suqin (Virginia Tech); Yang, Dennis Tao (Chinese University of Hong Kong)
    Abstract: Using a national sample of Urban Household Surveys, we document several profound changes in China's wage structure during a period of rapid economic growth. Between 1992 and 2007, the average real wage increased by 202 percent, accompanied by a sharp rise in wage inequality. Decomposition analysis reveals 80 percent of this wage growth to be attributable to higher pay for basic labor, rising returns to human capital, and increases in the state-sector wage premium. Employing an aggregate production function framework, we account for the sources of wage growth and wage inequality in the face of globalization and economic transition. We find capital accumulation, skill-biased technological change, and export expansion to be the major forces behind the evolving wage structure in China.
    Keywords: wage growth, wage premium, wage inequality, capital accumulation, trade expansion, technological change, China
    JEL: J31 E24 O40
    Date: 2012–04
  4. By: Klaus F. Zimmermann (IZA); Martin Kahanec (IZA); Corrado Giulietti (IZA); Martin Guzi (IZA); Alan Barrett (ESRI); Bertrand Maître (ESRI)
    Abstract: Report prepared for the European Commission, Bonn 2012 (216 pages)
    Date: 2012–02
  5. By: Holmlund, Bertil (Uppsala University)
    Abstract: The paper studies wage and employment determination in the Swedish business sector from the mid-1910s to the late 1930s. This period includes the boom and bust cycle of the early 1920s as well as the Great Depression of the early 1930s. The events of the early 1920s are particularly intriguing, involving inflation running at an annual rate of 30 percent followed by a period of sharp deflation where nominal wages and prices fell by 30 percent and unemployment increased from 5 to 30 percent. We examine whether relatively standard wage and employment equations can account for the volatile economic development during the interwar years. By and large, the answer is a qualified yes. Industry wages were responsive to industry-specific firm performance, suggesting a significant role for 'insider forces' in wage determination. Unemployment had a strong downward impact on wages. There is evidence that reductions in working time added to wage pressure; yet estimates of labor demand equations suggest that cuts in working time may have slightly increased employment as firms substituted workers for hours.
    Keywords: wage determination, labor demand, interwar labor markets
    JEL: J23 J31 N14 N34
    Date: 2012–04
  6. By: Arda Aktas (Stony Brook University Economics Department); Gokce Uysal (Bahcesehir University Center for Economic and Social Research (Betam))
    Abstract: Gender discrimination in the labor market can take on many forms, the most prominent one being the gender gap in wages. The labor market in Turkey is not an exception. Even though the gender wage gap is 3 percent on average, a closer look reveals important differences along the wage distribution. There is virtually no gender gap at the lower end and men earn 6.47 percent more than women at the median. Surprisingly, women seem to earn 4.99 percent higher wages than men at the top of the wage distribution. Using the quantile regression method, we discuss how the labor market returns differ along the wage distribution. Secondly, we use the Machado-Mata decomposition method to reveal how much of the gender gap at each quantile can be explained by gender differences in characteristics versus gender differences in returns. We find that the gender gap actually widens when we control for basic characteristics such as age, education and tenure. In other words, controlling for gender differences in labor market characteristics reveals that there is gender discrimination in Turkey, as measured by the differences in returns.
    Keywords: Gender wage gap, quantile regression, Machado-Mata decomposition
    Date: 2011–06
  7. By: Naci H. Mocan; Colin Cannonier
    Abstract: We use data from Sierra Leone where a substantial education program provided increased access to education for primary-school age children but did not benefit children who were older. We exploit the variation in access to the program generated by date of birth and the variation in resources between various districts of the country. We find that the program has increased educational attainment and that an increase in education has changed women’s preferences. An increase in schooling, triggered by the program, had an impact on women’s attitudes towards matters that impact women’s health and on attitudes regarding violence against women. An increase in education has also reduced the number of desired children by women and increased their propensity to use modern contraception and to be tested for AIDS. While education makes women more intolerant of practices that conflict with their well-being, increased education has no impact on men’s attitudes towards women’s well-being.
    JEL: I12 I15 I18 I21 I25 I28 J13 J18
    Date: 2012–04
  8. By: Werner L. Hernani-Limarino (Fundación ARU); Paul Villarroel (Fundación ARU)
    Abstract: This document constructs a multidimentional measure of poverty for Bolivia based on the new 2008 constitution's fundamental rights, which can be measured in surveys; it also documents the changes in poverty observed in the last decade, in a multidimensional approach. Particulary, we extend the analysis made by Hernani Limarino (2010) on the evolution of poverty in monetary dimensions with a complementary analysis of five other non-monetary dimentions: access to education, short term social security (health), long term social security (pensions), housing and basic household services. The Analysis shows that non-monetary poverty has remained in high levels, and quite elusive despite the reduction in poverty according to monetary measures has decreased.
    Keywords: Bolivia, Multidimensional Poverty.
    JEL: I30 I32 I39
    Date: 2012–01
  9. By: Ashenfelter, Orley (Princeton University)
    Abstract: A real wage rate is a nominal wage rate divided by the price of a good and is a transparent measure of how much of the good an hour of work buys. It provides an important indicator of the living standards of workers, and also of the productivity of workers. In this paper I set out the conceptual basis for such measures, provide some historical examples, and then provide my own preliminary analysis of a decade long project designed to measure the wages of workers doing the same job in over 60 countries – workers at McDonald’s restaurants. The results demonstrate that the wage rates of workers using the same skills and doing the same jobs differ by as much as 10 to 1, and that these gaps declined over the period 2000-2007, but with much less progress since the Great Recession.
    Keywords: real wage rates, international comparisons, productivity
    JEL: C81 C82 D24 J31 N30 O57
    Date: 2012–04
  10. By: Elhanan Helpman; Oleg Itskhoki; Marc-Andreas Muendler; Stephen Redding
    Abstract: While neoclassical theory emphasizes the impact of trade on wage inequality between occupations and sectors, more recent theories of firm heterogeneity point to the impact of trade on wage dispersion within occupations and sectors. Using linked employer-employee data for Brazil, we show that much of overall wage inequality arises within sector-occupations and for workers with similar observable characteristics; this within component is driven by wage dispersion between firms; and wage dispersion between firms is related to firm employment size and trade participation. We then extend the heterogenous-firm model of trade and inequality from Helpman, Itskhoki, and Redding (2010) and structurally estimate it with Brazilian data. We show that the estimated model fits the data well, both in terms of key moments as well as in terms of the overall distributions of wages and employment, and find that international trade is important for this fit. In the estimated model, reductions in trade costs have a sizeable effect on wage inequality.
    Keywords: Wage inequality, international trade
    JEL: F12 F16 E24
    Date: 2012–04
  11. By: Werner L. Hernani-Limarino (Fundación ARU); Maria Villegas (Fundación ARU); Ernesto Yanez (Fundación ARU)
    Abstract: This paper attempts to evaluate the effectiveness of Bolivia’s labor market institutions, particularly the Plan Nacional de Empleo de Emergencia (PLANE). It is found that unemployment as conventionally defined may not be the most important problem in Bolivia’s labor market, as the non-salaried market is always an alternative. While un-employment durations and unemployment scarring consequences are relatively low, labor market regulations and labor market programs do not help to increase the size of the formal market, apparently as a result of Bolivia’s rigid labor markets and labor policies based mainly on temporary employment programs. Such programs, however, may have helped to smooth consumption. Given the country’s high level of infor-mality, protection policies are second best to active policies specifically designed to increase the productivity/employability of vulnerable populations.
    Keywords: Bolivia, Unemployment, Labor Policies, Impact Evaluation.
    JEL: J08 J21 J64
    Date: 2011–12

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