nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2012‒09‒22
eleven papers chosen by
Maximo Rossi
University of the Republic

  1. Rising Inequalities in Income and Health in China: Who is left behind? By Steef Baeten; Tom Van Ourti; Eddy Van Doorslaer
  2. Convergence or Divergence? Immigrant Wage Assimilation Patterns in Germany By Michael Zibrowius
  3. American Incomes 1774-1860 By Peter H. Lindert; Jeffrey G. Williamson
  4. Russian Inequality on the Eve of Revolution By Steven Nafziger; Peter H. Lindert
  5. Trade policy and wage inequality : a structural analysis with occupational and sectoral mobility By Artuc, Erhan; McLaren, John
  6. The Transferable Scars: A Longitudinal Evidence of Psychological Impact of Past Parental Unemployment on Adolescents in the United Kingdom By Nattavudh Powdthavee; James Vernoit
  7. Higher and Higher? - Performance Pay and Wage Inequality in Germany By Katrin Sommerfeld
  8. Measuring Vulnerability to Poverty Using Long-Term Panel Data By Katja Landau; Stephan Klasen; Walter Zucchini
  9. The United States Labor Market: Status Quo or A New Normal? By Edward P. Lazear; James R. Spletzer
  10. Self investments of adolescents and their cognitive development By D. Del Boca; C. Monfardini; C. Nicoletti
  11. Wages, Employment, and Statistical Discrimination: Evidence from the Laboratory By David L. Dickinson; Ronald L. Oaxaca

  1. By: Steef Baeten (Institute for Health Policy and Management, Erasmus University Rotterdam); Tom Van Ourti (Erasmus School of Economics (EUR)); Eddy Van Doorslaer (Erasmus School of Economics (EUR))
    Abstract: During the last decades, China has experienced double-digit economic growth rates and rising inequality. This paper implements a new decomposition on the China Health and Nutrition panel Survey (1991-2006) to examine the extent to which changes in level and distribution of incomes and in income mobility are related to health disparities between rich and poor. We find that health disparities in China relate to rising income inequality and in particular to the adverse health and income experience of older (wo)men, but not to the growth rate of average incomes over the last decades. These findings suggest that replacement incomes and pensions at older ages may be one of the most important policy levers in combating health disparities between rich and poor Chinese.
    Keywords: China; income growth; income inequality; income mobility; health inequality
    JEL: C00 D30 D63 I14 I15
    Date: 2012–09–10
    URL: http://d.repec.org/n?u=RePEc:dgr:uvatin:20120091&r=ltv
  2. By: Michael Zibrowius
    Abstract: Using a rich panel data set, I estimate wage assimilation patterns for immigrants in Germany as an example of a key European destination country. This study contributes to the literature by performing separate estimations by skill groups. Comparisons with similar natives reveal that immigrants’ experience earnings profiles are flatter on average, although clear differences exist between skill groups. The effect of time spent in the host country is significantly positive and thus partly offsetting the diverging trend in the experience earnings profiles. Still, wage differences between natives and immigrants remain. They are particularly noticeable for highly skilled immigrants, the group needed most in Germany’s skill intensive labor market.
    Keywords: international migration, wage differentials, assimilation, longitudinal data
    JEL: F22 J31 J61
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp479&r=ltv
  3. By: Peter H. Lindert; Jeffrey G. Williamson
    Abstract: Building what we call social tables, this paper quantifies the level and inequality of American incomes from 1774 to 1860. In 1774 the American colonies had average incomes exceeding those of the Mother Country, even when slave households are included in the aggregate. Between 1774 and 1790, this income advantage over Britain was lost, due to the severe dislocation caused by the fight for Independence. Then between 1790 and 1860 US income per capita grew even faster than previous scholars have estimated. We also find that the South was initially much richer than the North on the eve of Revolution, but then suffered a severe reversal of fortune, so that by 1840 its white population was already poorer than free Northerners. In terms of inequality, our estimates suggest that American colonists had much more equal incomes than did households in England and Wales around 1774. Indeed, New England and the Middle Colonies appear to have been more egalitarian than anywhere else in the measureable world. Income inequality rose dramatically between 1774 and 1860, especially in the South. The paper uses an open-source style, since our data processing is posted on http://gpih.ucdavis.edu (click on the folder “American incomes 1774-1870”). Detailed defense of the 1774 and 1800 benchmarks can be found in our previous NBER working paper (17211, July 2011), although the estimates reported here are revised. The 1860 estimates are completely new.
    JEL: N11 N91 O47 O51
    Date: 2012–09
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:18396&r=ltv
  4. By: Steven Nafziger; Peter H. Lindert
    Abstract: Just how unequal were the incomes of different classes of Russians on the eve of Revolution, relative to other countries, to Russia’s earlier history, and to Russia’s income distribution today? Careful weighing of an eclectic data set provides provisional answers. We provide detailed income estimates for economic and social classes in each of the 50 provinces of European Russia. In 1904, on the eve of military defeat and the 1905 Revolution, Russian income inequality was middling by the standards of that era, and less severe than inequality has become today in such countries as China, the United States, and Russia itself. We also note how the interplay of some distinctive fiscal and relative-price features of Imperial Russia might have shaped the now-revealed level of inequality.
    JEL: N30 N33 O15
    Date: 2012–09
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:18383&r=ltv
  5. By: Artuc, Erhan; McLaren, John
    Abstract: A number of authors have argued that a worker's occupation of employment is at least as important as the worker's industry of employment in determining whether the worker will be hurt or helped by international trade. This paper investigates the role of occupational mobility on the effects of trade shocks on wage inequality in a dynamic, structural econometric model of worker adjustment. Each worker in the model can switch either industry, occupation, or both, paying a time-varying cost to do so in a rational-expectations optimizing environment. The authors find that the costs of switching industry and occupation are both high, and of similar magnitude, but in simulations they find that a worker's industry of employment is much more important than either the worker's occupation or skill class in determining whether he or she is harmed by a trade shock.
    Keywords: Labor Markets,Labor Policies,Economic Theory&Research,Housing&Human Habitats,Work&Working Conditions
    Date: 2012–09–01
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:6194&r=ltv
  6. By: Nattavudh Powdthavee; James Vernoit
    Abstract: Using a longitudinal data of British youths, this paper explores the consequences of past parental unemployment on the current happiness and self-esteem of the children. We find that a past unemployment spell of the father has important consequences for their children and leads to them having both lower subjective well-being and self-confidence. In addition, this paper also presents evidence that both subjective well-being and self-confidence responds differently to maternal unemployment compared to paternal unemployment. In our final table, we show changes in adolescents' well-being and self-esteem predicts educational attainments at 16. Together these findings offer new evidence of unemployment scarring on children's livelihood.
    Keywords: Unemployment, scarring, children, happiness, self-esteem, noncognitive skills
    JEL: D1 I3 J6
    Date: 2012–09
    URL: http://d.repec.org/n?u=RePEc:cep:cepdps:dp1165&r=ltv
  7. By: Katrin Sommerfeld
    Abstract: Performance pay is of growing importance to the wage structure as it applies to a rising share of employees. At the same time wage dispersion is growing continuously. This leads to the question of how the growing use of performance pay schemes is related to the increase in wage inequality? German SOEP data for the years 1984 to 2009 confirm the large increase in the application of performance pay schemes. This in turn led to an upward shift of the wage distribution by about one log point. However, it did not contribute to the growth in wage inequality. Even though wage inequality grew within the group of employees who receive performance pay, it grew even more so within the group who do not receive it. Still, the wage difference between both wage schemes remained flat over the distribution. The empirical analysis employs sequential decompositions in a quantile regression framework.
    Keywords: Performance pay, wage structure, quantile regression, sequential decomposition
    JEL: J31 J33 C21
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp476&r=ltv
  8. By: Katja Landau; Stephan Klasen; Walter Zucchini
    Abstract: We investigate the accuracy of ex ante assessments of vulnerability to income poverty using cross-sectional data and panel data. We use long-term panel data from Germany and apply di erent regression models, based on household covariates and previous-year equivalence income, to classify a household as vulnerable or not. Predictive performance is assessed using the Receiver Operating Characteristics (ROC), which takes account of false positive as well as true positive rates. Estimates based on cross-sectional data are much less accurate than those based on panel data, but for Germany, the accuracy of vulnerability predictions is limited even when panel data are used. In part this low accuracy is due to low poverty incidence and high mobility in and out of poverty.
    Keywords: vulnerability, poverty, ROC, German panel data
    JEL: C23 C52 I32 O29
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp481&r=ltv
  9. By: Edward P. Lazear; James R. Spletzer
    Abstract: The recession of 2007-09 witnessed high rates of unemployment that have been slow to recede. This has led many to conclude that structural changes have occurred in the labor market and that the economy will not return to the low rates of unemployment that prevailed in the recent past. Is this true? The question is important because central banks may be able to reduce unemployment that is cyclic in nature, but not that which is structural. An analysis of labor market data suggests that there are no structural changes that can explain movements in unemployment rates over recent years. Neither industrial nor demographic shifts nor a mismatch of skills with job vacancies is behind the increased rates of unemployment. Although mismatch increased during the recession, it retreated at the same rate. The patterns observed are consistent with unemployment being caused by cyclic phenomena that are more pronounced during the current recession than in prior recessions.
    JEL: E24 J6 M5
    Date: 2012–09
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:18386&r=ltv
  10. By: D. Del Boca; C. Monfardini; C. Nicoletti
    Abstract: While a large literature has focused on the impact of parental investments on child cognitive development, very little is known about the role of child's own investments. Information on how children invest their time separately from parents is probably little informative for babies and toddlers, but it becomes more and more important in later stages of life, such as adolescence, when children start to take decisions independently. By using the Child Development Supplement of the PSID (Panel Study of Income Dynamics), we model the production of cognitive ability of adolescents and extend the set of inputs to include the child's own time investments. Looking at investments during adolescence, we find that child's investments matter more than mother's investments. On the contrary, looking at investments during childhood, it is the mother's investments that are more important. Our results are obtained accounting for potential unobserved child's and family's endowments and are robust across several specifications and samples, e.g. considering and not considering father's investments and non-intact families.
    JEL: J13 D1
    Date: 2012–09
    URL: http://d.repec.org/n?u=RePEc:bol:bodewp:wp848&r=ltv
  11. By: David L. Dickinson; Ronald L. Oaxaca
    Abstract: When membership in a particular group conveys valuable information about an individual’s skills, productivity, or other human capital characteristics, a non-prejudiced agent may still find it rational to statistically discriminate. We frame statistical discrimination in a labor market setting for a series of laboratory experiments. A main objective of our experiments is to examine how varying productivity risk along several dimensions impacts outcomes across worker groups. Our design expands upon existing research by generating laboratory data both on wage contracts and unemployment rates of directly competing worker groups. We find some evidence for statistical wage discrimination against workers with identical expected productivity but higher productivity variance. However, those same subjects are less likely to be unemployed, suggesting that our employers view hiring choice and wage contracts as substitutable. These laboratory results have interesting implications for labor markets where employers select from workers belonging to distinct statistical groups, and suggest that statistical discrimination based on wages alone may overestimate the true effect of such discrimination. Key Words:
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:apl:wpaper:12-03&r=ltv

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