nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2012‒09‒09
nine papers chosen by
Maximo Rossi
University of the Republic

  1. Negative Income Taxes, Inequality, and Poverty By Constantine Angyridis; Brennan S. Thompson
  2. FDI and Income Inequality - Evidence from Latin American Economies By Dierk Herzer; Philipp Hühne; Peter Nunnenkamp
  3. Decomposing wage discrimination in Germany and Austria with counterfactual densities By Thomas Grandner; Dieter Gstach
  4. Effectiveness of interventions aimed at improving women's employability and quality of work : a critical review By Todd, Petra E.
  5. The Genesis of the Golden Age - Accounting for the Rise in Health and Leisure By Carl-Johan Dalgaard; Holger Strulik
  6. Wages and Informality in Developing Countries By Costas Meghir; Renata Narita; Jean-Marc Robin
  7. Risks and Returns to Educational Fields: A Financial Asset Approach to Vocational and Academic Education By Daniela Glocker; Johanna Storck
  8. Targeting the Poor: A Macroeconomic Analysis of Cash Transfer Programs By Eduardo Zilberman; Tiago Berriel
  9. Estimating the External Returns to Education: Evidence from China By Wen Fan; Yuanyuan Ma

  1. By: Constantine Angyridis (Department of Economics, Ryerson University); Brennan S. Thompson (Department of Economics, Ryerson University)
    Keywords: negative income taxes, inequality, poverty, heterogeneous agents, Lorenz dominance
    Date: 2012–08
  2. By: Dierk Herzer; Philipp Hühne; Peter Nunnenkamp
    Abstract: We analyze whether foreign direct investment (FDI) has contributed to the typically wide income gaps in five Latin American host countries. We perform country-specific and panel cointegration techniques to assess the long-run impact of inward FDI stocks on income inequality among households in Bolivia, Chile, Colombia, Mexico and Uruguay. The panel cointegration analysis reveals a significant and positive effect on income inequality. Furthermore, FDI contributed to widening income gaps in all individual sample countries, except for Uruguay. Our findings are robust to the choice of different estimation methods. There is no evidence for reverse causality
    Keywords: FDI, income inequality, cointegration techniques, Latin America
    JEL: F21 D31
    Date: 2012–08
  3. By: Thomas Grandner (Vienna University of Economics and Business); Dieter Gstach (Vienna University of Economics and Business)
    Abstract: Using income and other individual data from EU-SILC for Germany and Austria, we analyze wage discrimination for three break-ups: gender, sector of employment, and country of origin. Using the method of Machado and Mata [2005] the discrimination over the whole range of the wage distribution is estimated. Significance of results is checked via confidence interval estimates along the lines of Melly [2006]. To narrow down the extent of discrimination both basic decomposition possibilities are compared. The economies of Germany and Austria appear structurally very similar. Especially the institutional setting of the labor markets seem to be closely comparable. One would, therefore, expect to find similar levels and structures of wage discrimination. Our findings deviate from this conjecture significantly.
    Keywords: Wage discrimination, decomposition, quantile-regression
    JEL: J31 J71
    Date: 2012–08
  4. By: Todd, Petra E.
    Abstract: This paper examines the effectiveness of a variety of policy interventions that have been tried in developing and transition economies with the goal of improving women's employability and quality of work. The programs include active labor market programs, education and training programs, programs that facilitate work (such as childcare subsidies, parental leave programs and land titling programs), microfinance programs, entrepreneurship and leadership programs, and conditional cash transfer programs. Some of these policy interventions were undertaken to increase employment, some to increase female employment, and some for other reasons. All of these programs have been subjected to impact evaluations of different kinds and some also to rigorous cost-benefit analyses. Many were found to be effective in increasing women's quantity of work as measured by increased rates of labor market participation and number of hours worked. In some cases, the programs also increased women's quality of work, for example, by increasing the capacity for women to work in the formal rather than the informal sector where wages are higher and where women are more likely to have access to health, retirement, and other benefits.
    Keywords: Labor Markets,Labor Policies,Poverty Impact Evaluation,Poverty Monitoring&Analysis,Population Policies
    Date: 2012–09–01
  5. By: Carl-Johan Dalgaard (Department of Economics, University of Copenhagen); Holger Strulik (University of Goettingen, Department of Economics)
    Abstract: We develop a life cycle model featuring an optimal retirement decision in the presence of physiological aging. In modeling the aging process we draw on recent advances within the fields of biology and medicine. In the model individuals decide on optimal consumption during life, the age of retirement, and (via health investments) the timing of their death. Accordingly, "years in retirement" is fully endogenously determined. Using the model we can account for the evolution of age of retirement and longevity across cohorts born between 1850 and 1940 in the US. Our analysis indicates that 2/3 of the observed increase in longevity can be accounted for by wage growth, whereas the driver behind the observed rising age of retirement appears to have been technological change in health care. Both technology and income contribute to the rise in years in retirement, but the contribution from income is slightly greater.
    Keywords: Aging, Longevity, Retirement, Health, Health Technology
    JEL: D91 I15 J17 J26
    Date: 2012–08
  6. By: Costas Meghir; Renata Narita; Jean-Marc Robin
    Abstract: It is often argued that informal labor markets in developing countries promote growth by reducing the impact of regulation. On the other hand informality may reduce the amount of social protection offered to workers. We extend the wage-posting framework of Burdett and Mortensen (1998) to allow heterogeneous firms to decide whether to locate in the formal or the informal sector, as well as set wages. Workers engage in both off the job and on the job search. We estimate the model using Brazilian micro data and evaluate the labor market and welfare effects of policies towards informality.
    JEL: J24 J3 J42 J6 O17
    Date: 2012–08
  7. By: Daniela Glocker; Johanna Storck
    Abstract: Applying a financial assets approach, we analyze the returns and earnings risk of investments into different types of human capital. Even though the returns from investing in human capital are extensively studied, little is known about the properties of the returns to different types of human capital within a given educational path. Using information from the German Micro Census, we estimate the risk and returns to around 70 fields of education and differentiate between vocational and academic education. We identify fields of education that are efficient investment goods, i.e. high returns at a given level of risk, and fields that are chosen for other (non-monetary) reasons. Furthermore, we rank fields of education by their return per unit of risk and find that university education is not always superior to other educational paths.
    Keywords: Educational choice, human capital investment, returns to schooling, mean-variance analysis
    JEL: I21 J24
    Date: 2012
  8. By: Eduardo Zilberman (Department of Economics PUC-Rio); Tiago Berriel (EPGe/FGV)
    Abstract: This paper introduces cash transfers targeting the poor in an incomplete marketsmodel with heterogeneous agents facing idiosyncratic risk. These transfers change the degree of insurance in the economy and affect precautionary motives asymmetrically,leading the poorest households to decrease savings proportionally more than their richer counterparts. In a model economy calibrated to Brazil, once the cash transfer program is adopted, wealth inequality and social welfare increase, poverty decreases,while employment and income inequality remain about the same. Imperfect access to financial markets is important for these results, whereas whether the program is funded with lump sum or distortive taxes is not.
    Date: 2012–08
  9. By: Wen Fan (University College Dublin); Yuanyuan Ma (University College Dublin)
    Abstract: Good understanding on the human capital externalities is important for both policy makers and social science researchers. Economists have speculated for at least a century that the social returns to education may exceed the private returns. In this paper, using the longitudinal data from China Health and Nutrition Survey (CHNS), we examine how individual wage changes associated with the share of college graduates in the same province across years for a person who has never moved by implementing individual fixed effects estimates. The individual fixed effect model shows that the external returns to education in China appear to be negative and on the order of -2%, which might be biased by potential endogeneity. Concerned with this problem, we then implement the IV fixed effect estimates and find positive external returns to education at about 10%. We also find this returns differ across individual heterogeneity.
    Keywords: Education, Externalities, Spillover, Signalling, China
    JEL: J0 J24 O15
    Date: 2012–08–29

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