nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2012‒08‒23
seven papers chosen by
Maximo Rossi
University of the Republic

  1. Inequality in Education: Evidence for Latin America By Guillermo Cruces; Carolina García Domench; Leonardo Gasparini
  2. An Integrated Approach for the Measurement of Inequality, Poverty and Richness By Nuno Crespo; Sandrina B. Moreira; Nádia Simões
  3. Factor Shares and Income Inequality: Empirical Evidence from Germany 2002-2008 By Martin Adler; Kai Daniel Schmid
  4. GINI DP 40: Multidimensional Poverty Measurement in Europe: An Application of the Adjusted Headcount Approach By Christopher Whelan; Brian Nolan; Bertrand Maitre
  5. Redistributive preferences, redistribution, and inequality: Evidence from a panel of OECD countries By Andreas Kuhn
  6. GINI DP 38: Inequality and Happiness: A Survey By Ada Ferrer-i-carbonell; Ramos, X. (Xavier)
  7. Trends in individual income growth: measurement methods and British evidence By JENKINS Stephen P.; VAN KERM Philippe

  1. By: Guillermo Cruces (CEDLAS-UNLP, CONICET and IZA); Carolina García Domench (CEDLAS-UNLP); Leonardo Gasparini (CEDLAS-UNLP)
    Abstract: This paper provides original empirical evidence on the evolution of education inequality for all Latin American countries over the decades of 1990 and 2000. The analysis covers a wide range of issues on differences in educational outcomes and opportunities across the population, including inequality in years of education, gaps in school enrollment, 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, the changes in the 2000s seem to have had a full 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 labor.
    Keywords: education, inequality, enrollment, wage premium, Latin America
    JEL: I24 I25 I28 O15
    Date: 2012–08
  2. By: Nuno Crespo (ISCTE-IUL, Business School, Department of Economics and BRU-IUL); Sandrina B. Moreira (Instituto Politécnico de Setúbal (ESCE - IPS), Department of Economics and Management and BRU-IUL); Nádia Simões (ISCTE-IUL, Business School, Department of Economics and BRU-IUL)
    Abstract: We propose a new and integrated approach to the measurement of inequality in income distribution, poverty, and richness. In the context of the poverty and richness measures, we consider the three dimensions usually analysed – incidence, intensity, and severity. The proposed broad set of indicators is easy to calculate and is based on a neutral income inequality concept. The method also allows an objective interpretation of the values for each measure, a decomposition according to households’ characteristics, and an immediate comparison of the results between countries and time periods. We illustrate the application of the measures with data from Portugal.
    Keywords: Income Inequality, Poverty, Richness, Measurement
    JEL: D30 D31
    Date: 2012–06–15
  3. By: Martin Adler; Kai Daniel Schmid
    Abstract: We examine the interplay between changes in the functional distribution of income and the distribution of market income among households. We use micro data from the German Socio-Economic Panel as well as macro data from the German Federal Statistical Office from 2002 to 2008. We categorize and evaluate the implications of changes in the functional distribution of income upon the distribution of income among individuals on the basis of a simple theoretic framework that links the degree of the concentration of income from asset flows among individuals to the (structural) relationship between individuals' levels of market income and their respective income shares from asset flows. Our empirical analysis offers two insights: First, the relative rise of income from asset flows reported by German National Accounting Statistics is also evident in the micro data taken from the German Socio-Economic Panel. Second, rising capital income shares are associated with an increasing concentration of market income.
    Keywords: Factor shares, income distribution, inequality, market income
    JEL: D31 D33 E6 E25
    Date: 2012
  4. By: Christopher Whelan (Newman Building, School of Sociology); Brian Nolan (School of Applied Social Science, University College Dublin); Bertrand Maitre (The Economic and Social Research Institute)
    Abstract: As awareness of the limitations of relying solely on income to measure poverty and social exclusion has become more widespread, attention has been increasingly focused on multi-dimensional approaches. To date efforts to measure multidimensional poverty and social exclusion in rich countries have been predominantly ad hoc and have relied on data that are far from ideal. Here we apply the approach recently developed by Alkire and Foster, characterized by a range of desirable axiomatic properties but mostly discussed so far in a development context, to European countries, exploiting the potential of harmonized microdata on deprivation newly available for the European Union. The analysis seeks to overcome the limitations of the union and intersection approaches that have characterized many earlier studies. Multidimensional poverty is characterized and decomposed in terms of the contribution of different deprivation dimensions, and an account of cross-national and socio-economic variation in risk levels is presented that is in line with theoretical expectations. Multilevel analysis of multi-dimensional poverty provides the basis for assessment of the role of macro and micro characteristics and their interaction in relation to levels and patterns of multidimensional poverty and social exclusion. Key words: Poverty Measurement; Multidimensional poverty; Deprivation; Social exclusion; EU poverty target.
    Date: 2012–07
  5. By: Andreas Kuhn
    Abstract: This paper describes individuals' inequality perceptions, distributional norms, and redistributive preferences in a panel of OECD countries, primarily focusing on the association between these subjective measures and the effective level of inequality and redistribution. Not surprisingly, the effective level of redistribution (after tax-and-transfer inequality) is positively (negatively) correlated with redistributive preferences. There is also evidence showing that the subjective and objective dimension of inequality and redistribution are, at least partially, linked with individuals' political preferences and their voting behavior. The association between objective and subjective measures of inequality and redistribution vanishes, however, once more fundamental country characteristics are taken into account. This suggests that these characteristics explain both redistributive preferences as well as the effective level of redistribution and after tax-and-transfer inequality.
    Keywords: Inequality perceptions, distributional norms, redistributive preferences, inequality, redistribution, political preferences
    JEL: D31 D63 J31
    Date: 2012–07
  6. By: Ada Ferrer-i-carbonell (Campus U.A.B., Institut d'Anàlisi Econòmica, IAE(CSIC)); Ramos, X. (Xavier)
    Abstract: In recent years there has been an accumulation of empirical evidence suggesting that individuals dislike inequality (Alesina and Giuliano, 2011 and Dawes et al., 2007). The literature has built upon estimating the degree of this dislike as well as its causes. The use of self-reported measures of satisfaction or well-being as a proxy for utility has been one of the empirical strategies used to this end. In this survey we review the papers that estimate or examine the relationship between inequality and self-reported happiness, and find that inequality reduces happiness in Western societies. The evidence for non-Western societies is more mixed and less reliable. Notwithstanding that, trust in the institutions seems to play an important role in shaping the relationship between income inequality and subjective wellbeing. We conclude with suggestions for further research.
    Date: 2012–05
  7. By: JENKINS Stephen P.; VAN KERM Philippe
    Abstract: Assessments of whose income growth is the greatest and whose is the smallest are typically based on comparisons of income changes for income groups (e.g. rich versus poor) or income values (e.g. quantiles). However, income group and quantile composition changes over time because of income mobility. To summarize patterns of income growth while also tracking the fortunes of the same individuals, a longitudinal perspective is required. For this case, we develop dominance conditions and summary indices for comparisons of distributions of individual income growth, together with associated methods of estimation and inference. Using these methods and data from the British Household Panel Survey, we study individual income growth for periods between 1991 and 2005. We show that income growth was signi?cantly more pro-poor in the early years of the Labour government than in earlier Conservative years.
    Keywords: individual income growth; pro-poor growth; progressive income growth; income mobility; mobility profile; British Household Panel Survey
    JEL: D31 D63 I32
    Date: 2011–02

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