nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2012‒10‒06
nine papers chosen by
Maximo Rossi
University of the Republic

  1. Self Investments of Adolescents and their Cognitive Development By Del Boca, Daniela; Monfardini, Chiara; Nicoletti, Cheti
  2. Wages and Informality in Developing Countries By Costas Meghir; Renata Narita; Jean-Marc Robin
  3. In brief: Mental illness and the NHS By Richard Layard
  4. Miserable Migrants? Natural Experiment Evidence on International Migration and Objective and Subjective Well-Being By Stillman, Steven; Gibson, John; McKenzie, David; Rohorua, Halahingano
  5. Russian Jewish Immigrants in the United States: The Adjustment of their English Language Proficiency and Earnings in the American Community Survey By Chiswick, Barry R.; Larsen, Nicholas
  6. It's a Boy! Women and Non-Monetary Benefits from a Son in India By Zimmermann, Laura
  7. Do Chinese Employers Avoid Hiring Overqualified Workers? Evidence from an Internet Job Board By Shen, Kailing; Kuhn, Peter J.
  8. Do Babysitters Have More Kids? The Effects of Teenage Work Experiences on Adult Outcomes By Erdogan, Zeynep; Jacobsen, Joyce P.; Kooreman, Peter
  9. An European Distribution of Income Perspective on Portugal-EU Convergence By João Sousa Andrade; Adelaide Duarte; Marta Simões

  1. By: Del Boca, Daniela (University of Turin); Monfardini, Chiara (University of Bologna); Nicoletti, Cheti (University of York)
    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.
    Keywords: time-use, cognitive ability, child development, adolescence
    JEL: J13 D1
    Date: 2012–09
  2. By: Costas Meghir (Economics Department, Yale University); Renata Narita (World Bank); Jean-Marc Robin (Sciences Po)
    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.
    Keywords: entrepreneurship; credit constraints; business training; consulting; managerial capital
    JEL: J24 J3 J42 J6 O17
    Date: 2012–09
  3. By: Richard Layard
    Abstract: Richard Layard and colleagues reveal the shocking scale of mental illness in Britain - and how little the NHS does about it.
    Keywords: Wellbeing, mental health, NHS, government policy
    Date: 2012–09
  4. By: Stillman, Steven (University of Otago); Gibson, John (University of Waikato); McKenzie, David (World Bank); Rohorua, Halahingano (University of Waikato)
    Abstract: Over 200 million people worldwide live outside their country of birth and typically experience large gains in material well-being by moving to where incomes are higher. But effects of migration on subjective well-being are less clear, with some studies suggesting that migrants are miserable in their new locations. Observational studies are potentially biased by the self-selection of migrants so a natural experiment is used to compare successful and unsuccessful applicants to a migration lottery in order to experimentally estimate the impact of migration on objective and subjective well-being. The results show that international migration brings large improvements in objective well-being, in terms of incomes and expenditures. Impacts on subjective well-being are complex, with mental health improving but happiness declining, self-rated welfare rising if viewed retrospectively but static if viewed experimentally, self-rated social respect rising retrospectively but falling experimentally and subjective income adequacy rising. We further show that these changes would not be predicted from cross-sectional regressions on the correlates of subjective well-being in either Tonga or New Zealand. More broadly, our results highlight the difficulties of measuring changes in subjective well-being when reference frames change, as likely occurs with migration.
    Keywords: immigration, lottery, natural experiment, subjective well-being, Tonga, Pacific Islands
    JEL: I31 J61
    Date: 2012–09
  5. By: Chiswick, Barry R. (George Washington University); Larsen, Nicholas (University of Illinois at Chicago)
    Abstract: Compared to other immigrants to the United States, recent Jewish immigrants from the former Soviet Union have achieved high levels of English language proficiency and earnings. They experience disadvantages in both dimensions at arrival, but because of steeper improvements with duration in the United States, they reach parity or surpass the English proficiency and earnings of other immigrants. This pattern is seen in the most recent data, the American Community Survey, 2005 to 2009, which is studied here, but also in earlier censuses (1980-2000). The Russian Jews, whether male or female, have higher levels of schooling and English proficiency. Moreover, they appear to secure greater earnings payoffs in the US labor market from their schooling, their labor market experience in the US, and their proficiency in English. What is perhaps remarkable is that the Russian Jewish immigrants from the late 19th and early 20th centuries (1881 to 1920's) also experienced high levels of human capital accumulation and economic success (measured by earnings or occupational attainment). And their US-born children achieved even greater successes compared to other native-born children. This is not emerging from a highly selective immigrant population. The Russian Jewish migration is a mass migration influenced, in part, by refugee motivations. This leads to the obvious but still unanswered question: What is it about the Jews of the Former Russian Empire/Soviet Union that has resulted in their high levels of success in the United States over the past 25 years?
    Keywords: Soviet Jews, immigrants, earnings, schooling, English language, proficiency, American Community Survey
    JEL: F22 J61 J31 J24
    Date: 2012–09
  6. By: Zimmermann, Laura (University of Michigan)
    Abstract: Son preference is widespread in a number of developing countries. Anecdotal evidence suggests that women may contribute to the persistence of this phenomenon because they derive substantial long-run non-monetary benefits from giving birth to a son in the form of an improvement in their intra-household position. This paper tests this hypothesis in the Indian context. The results suggest that for the most part there is little evidence of substantial female benefits, and any positive impacts of having a son disappear after six months. This implies that the female-specific self-interest in a son is probably much lower than commonly assumed.
    Keywords: son preference, non-monetary benefits, bargaining power, intra-household allocation, India
    JEL: D13 J12 J13 J16
    Date: 2012–09
  7. By: Shen, Kailing (Xiamen University); Kuhn, Peter J. (University of California, Santa Barbara)
    Abstract: Can having more education than a job requires reduce one's chances of being offered the job? We study this question in a sample of applications to jobs that are posted on an urban Chinese website. We find that being overqualified in this way does not reduce the success rates of university-educated jobseekers applying to college-level jobs, but that it does hurt college-educated workers' chances when applying to jobs requiring technical school, which involves three fewer years of education than college. Our results highlight a difficult situation faced by the recent large cohort of college-educated Chinese workers: They seem to fare poorly in the competition for jobs, both when pitted against more-educated university graduates, and when pitted against less-educated technical school graduates.
    Keywords: overqualification, job search, internet, China
    JEL: J64 J24
    Date: 2012–09
  8. By: Erdogan, Zeynep (Tilburg University); Jacobsen, Joyce P. (Wesleyan University); Kooreman, Peter (Tilburg University)
    Abstract: We examine the work experiences during middle school and high school of U.S. females and males and find that most of the child-oriented work such as babysitting and camp counseling is done by females. If the type of work undertaken while young affects either development of specific human capital or preferences, then these early work experiences may have measurable effects on later life outcomes. This paper examines whether or not having a job as a teenager, and whether or not it is a child-oriented job, causes differences in labor market behavior among young adults. In addition to a set of standard controls, in order to account for the endogeneity of students’ work decisions, we utilize a set of state-level instruments, including state-level child-labor laws and indicators of relative demand for, and supply of, child-oriented workers. While the effects we find are complex and sometimes hard to interpret, they suggest that work in 10th grade has a positive causal effect on later labor market outcomes and delays family formation, but to a lesser extent when jobs were child-oriented.
    Keywords: human capital, gender, jobs while in school, labor market, family formation
    JEL: J13 J24
    Date: 2012–09
  9. By: João Sousa Andrade (GEMF and Faculty of Economics, University of Coimbra); Adelaide Duarte (GEMF and Faculty of Economics, University of Coimbra); Marta Simões (GEMF and Faculty of Economics, University of Coimbra)
    Abstract: Growth and real convergence in Portugal are usually analyzed after EU accession on January 1st 1986 based on real GDP per capita. There is however a lack of literature approaching the subject from an European distribution of income perspective and for a longer time period. We fill this gap by using all available time series information on real GDP per capita and population covering a longer period from 1950 until 2009 in order to get a broader picture of the convergence process. The analysis is based on the income distribution for the countries that compose the EU-14 group computed using each country’s mean income weighted by the respective population so that we have a distribution of income by individual. This cross-section distribution of income approach allows us to determine the shape of the distribution at each point in time and to study its evolution, and in this way to search for different convergence patterns, and thus analyze within a broader framework the Portuguese-EU convergence process. The results point to a bimodal EU-14 income distribution in 1950 and again in 2009, thus to two convergence clubs, and to two distinct convergence patterns over the whole period. From 1950 to 1974 convergence takes place, while from 1975 onwards it comes to a halt when considering the whole group. However, the same does not apply to Portugal from the 1980s until 2006, a country with a mean income lower than the EU-14 median income that continued to converge, although not necessarily due to European integration.
    Keywords: real convergence, income distribution, ?-convergence, concentration and inequality measures
    JEL: O15 O52
    Date: 2012–09

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