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on Unemployment, Inequality and Poverty |
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Issue of 2012‒10‒27
fourteen papers chosen by |
| By: | Xavier Ramos (Universitat Autonòma de Barcelona, IZA and EQUALITAS); Dirk Van de gaer (Sherppa, IAE and CORE) |
| Abstract: | We put together the different conceptual issues involved in measuring inequality of opportunity, discuss how these concepts have been translated into computable measures, and point out the problems and choices researchers face when implementing these measures. Our analysis identities and suggests several new possibilities to measure inequality of opportunity. The approaches are illustrated with a selective survey of the empirical literature on income inequality of opportunity. |
| Keywords: | equality of opportunity, measurement, compensation, responsibility, effort, circumstances. |
| JEL: | D3 D63 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2012-259&r=ltv |
| By: | Blundell, Richard William; Pistaferri, Luigi; Saporta-Eksten, Itay |
| Abstract: | In this paper we examine the link between wage inequality and consumption inequality using a life cycle model that incorporates household consumption and family labor supply decisions. We derive analytical expressions based on approximations for the dynamics of consumption, hours, and earnings of two earners in the presence of correlated wage shocks, non-separability and asset accumulation decisions. We show how the model can be estimated and identifi…ed using panel data for hours, earnings, assets and consumption. We focus on the importance of family labor supply as an insurance mechanism to wage shocks and fi…nd strong evidence of smoothing of male’s and female’s permanent shocks to wages. Once family labor supply, assets and taxes are properly accounted for their is little evidence of additional insurance. |
| Keywords: | Consumption; Inequality; Labor Supply |
| JEL: | E21 J22 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9172&r=ltv |
| By: | David G. Blanchflower; Andrew J. Oswald; Sarah Stewart-Brown |
| Abstract: | Humans run on a fuel called food. Yet economists and other social scientists rarely study what people eat. We provide simple evidence consistent with the existence of a link between the consumption of fruit and vegetables and high well-being. In cross-sectional data, happiness and mental health rise in an approximately dose-response way with the number of daily portions of fruit and vegetables. The pattern is remarkably robust to adjustment for a large number of other demographic, social and economic variables. Well-being peaks at approximately 7 portions per day. We document this relationship in three data sets, covering approximately 80,000 randomly selected British individuals, and for seven measures of well-being (life satisfaction, WEMWBS mental well-being, GHQ mental disorders, self-reported health, happiness, nervousness, and feeling low). Reverse causality and problems of confounding remain possible. We discuss the strengths and weaknesses of our analysis, how government policy-makers might wish to react to it, and what kinds of further research -- especially randomized trials -- would be valuable. |
| JEL: | I1 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18469&r=ltv |
| By: | Francisco Ferreira (IWorld Bank and IZA); Maria Ana Lugo (IWorld Bank) |
| Abstract: | Widespread agreement that poverty is a multifaceted phenomenon, encompassing deprivations along multiple dimensions, clashes with often vociferous disagreement about how best to measure these deprivations. Drawing on the recent literature, this short note proposes three methodological alternatives to the false dichotomy between scalar indices of multidimensional poverty, on the one hand, and a “dashboard†approach that looks only at marginal distributions, on the other. These alternatives include simple Venn diagrams of the overlap of deprivations across dimensions, multivariate stochastic dominance analysis, and the analysis of copula functions, which capture the extent of interdependency across dimensions. Examples from the literature on both developing and developed countries are provided. |
| Keywords: | Multidimensional poverty, dependency structure, copulas. |
| JEL: | I32 O15 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2012-251&r=ltv |
| By: | Hunt, Jennifer (Rutgers University) |
| Abstract: | Using a state panel based on census data from 1940-2010, I examine the impact of immigration on the high school completion of natives in the United States. Immigrant children could compete for schooling resources with native children, lowering the return to native education and discouraging native high school completion. Conversely, native children might be encouraged to complete high school in order to avoid competing with immigrant high-school dropouts in the labor market. I find evidence that both channels are operative and that the net effect is positive, particularly for native-born blacks, though not for native-born Hispanics. An increase of one percentage point in the share of immigrants in the population aged 11-64 increases the probability that natives aged 11-17 eventually complete 12 years of schooling by 0.3 percentage points, and increases the probability for native-born blacks by 0.4 percentage points. I account for the endogeneity of immigrant flows by using instruments based on 1940 settlement patterns. |
| Keywords: | immigration, education |
| JEL: | J15 I21 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6904&r=ltv |
| By: | Conti, Gabriella (University of Chicago); Heckman, James J. (University of Chicago) |
| Abstract: | This chapter presents an integrated economic approach that organizes and interprets the evidence on child development. It also discusses the indicators of child well-being that are used in international comparisons. Recent evidence on child development is summarized, and policies to promote child well-being are discussed. The chapter concludes with some open questions and suggestions for future research. |
| Keywords: | child development, human capital, early childhood education |
| JEL: | J13 I21 D03 D04 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6930&r=ltv |
| By: | Arias-Vazquez, Francisco Javier (World Bank); Lee, Jean Nahrae (World Bank); Newhouse, David (World Bank) |
| Abstract: | This paper investigates the relationship between sectoral growth patterns and employment outcomes. A broad cross-country analysis reveals that in middle-income countries, employment responds more to growth in less productive and more labor-intensive sectors. Employment in middle-income countries is susceptible to a resource curse, and grows rapidly in response to manufacturing and export manufacturing growth. Within Brazil, Indonesia, and Mexico, the effects of different sectoral growth patterns are context dependent, but differences in sectoral growth effects on employment and wages are substantially reduced in states or provinces with higher measured labor mobility. Consistent with this, aggregate employment and wage effects of growth by sector are close to uniform when examined over longer time horizons, after labor has an opportunity to adjust across sectors. The results reinforce the importance of growth in more labor-intensive sectors, and suggest that job mobility may be an important mechanism to diffuse the benefits of capital-intensive growth. |
| Keywords: | economic growth, production structure, employment, unemployment, productivity |
| JEL: | O11 J20 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6926&r=ltv |
| By: | Blau, Francine D. (Cornell University); Kahn, Lawrence M. (Cornell University) |
| Abstract: | We review research on the impact of immigration on income distribution. We discuss routes through which immigration can affect income distribution in the host and source countries, including compositional effects and effects on native incomes. Immigration may affect the composition of skills among the residents of a country. Moreover, immigrants can, by changing relative factor supplies, affect native wage and employment rates and the return to capital. We then provide evidence on the level and recent increases in immigration to OECD countries and on the distribution of native and immigrant educational attainment. We next provide a decomposition of 1979-2009 changes in US wage inequality, highlighting the effects of immigration on workforce composition. We then consider the economic theory of the impact of immigration on income distribution, emphasizing labor market substitution and complementarity between natives and immigrants. Further, by changing job opportunities or child care availability, immigrants can affect family, as well as individual, income distribution. We review research methodologies used to estimate the impact of immigration on the native income distribution. These include the structural approach (estimating substitution and complementarity among factors of production, including capital and labor force groups) as well as the natural experiment approach (seeking exogenous sources of variation in immigration) to studying the labor market. We then discuss evidence on these questions for Austria, Britain, France, Germany, Hong Kong, Israel, Portugal, Spain and the United States, as well as the impact of emigration on source country income distribution. |
| Keywords: | international migration, factor income distribution |
| JEL: | D33 J61 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6921&r=ltv |
| By: | Quheng, Deng (Chinese Academy of Social Sciences); Gustafsson, Björn Anders (University of Gothenburg); Li, Shi (Beijing Normal University) |
| Abstract: | Intergenerational income elasticities are estimated using samples for urban China (covering many cities) for the years 1995 and 2002 and compared with results from other studies. We find that the income relation between the pairs: sons and fathers, sons and mothers and daughters and mothers, are in 2002 all similar in magnitude. In contrast the relation between daughters' and fathers' income is weaker. The income relationship between offspring and mothers was weaker in 1995 than in 2002. Our preferred estimates of income persistency for the son-father pairs of 0.47 for 1995 and 0.53 for 2002 are higher than what has been reported in the literature for several high-income countries with large welfare states. The strength of the income link between sons and fathers in urban China appears to be not very different from what has been reported for countries such as Brazil, Chile and the United States. |
| Keywords: | intergenerational income mobility, China |
| JEL: | D31 J62 P32 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6907&r=ltv |
| By: | Flabbi, Luca (Georgetown University); Mabli, James (Mathematica Policy Research) |
| Abstract: | Search Models of the labor market are widespread and influential but they usually ignore that labor market decisions are frequently taken at the household level. We fill this gap by developing and estimating an household search model with on-the-job search and labor supply. We build on previous work (Dey and Flinn (2008) and Guler, Guvenen and Violante (2011)) to propose a novel identification strategy of the risk aversion parameters and a specification test. We find that ignoring the household as unit of decision-making has relevant empirical consequences. In estimation, the individual search specification implies gender wage offers differentials 200% larger than the household search specification. In the application, the individual search specification implies gender differentials in lifetime utility inequality 74% larger. The results of our policy experiments emphasize the importance of looking at lifetime utility inequality measures as opposed to simply cross-sectional wage inequality measures. |
| Keywords: | household search, inequality, structural estimation |
| JEL: | J64 D63 C63 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6908&r=ltv |
| By: | Mayra Buvinic; Monica Das Gupta; Ursula Casabonne; Philip Verwimp |
| Abstract: | Violent conflict, a pervasive feature of the recent global landscape, has lasting impacts on human capital, and these impacts are seldom gender neutral. Death and destruction alter the structure and dynamics of households, including their demographic profiles and traditional gender roles. To date, attention to the gender impacts of conflict has focused almost exclusively on sexual and gender-based violence. We show that a far wider set of gender issues must be considered to better document the human consequences of war and to design effective postconflict policies. The emerging empirical evidence is organized using a framework that identifies both the differential impacts of violent conflict on males and females (first-round impacts) and the role of gender inequality in framing adaptive responses to conflict (second-round impacts). War’s mortality burden is disproportionately borne by males, whereas women and children constitute a majority of refugees and the displaced. Indirect war impacts on health are more equally distributed between the genders. Conflicts create households headed by widows who can be especially vulnerable to intergenerational poverty. Second-round impacts can provide opportunities for women in work and politics triggered by the absence of men. Households adapt to conflict with changes in marriage and fertility, migration, investments in children’s health and schooling, and the distribution of labor between the genders. The impacts of conflict are heterogeneous and can either increase or decrease preexisting gender inequalities. Describing these gender differential effects is a first step toward developing evidence-based conflict prevention and postconflict policy. |
| Date: | 2012–10–15 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/129730&r=ltv |
| By: | John F. Helliwell |
| Abstract: | The paper first attempts to demonstrate the fundamental importance of the social context. The related evidence is drawn from recent theoretical and empirical advances in the study of subjective well-being. Treating people’s self-assessments of the quality of their lives as valid measures of well-being exposes the importance of the social context and suggests new ways to design better policies. The paper starts with demonstrations of the unexpectedly great well-being consequences of social and pro-social behavior. In addition, evidence is advanced to show an evolutionary fitness for social and pro-social behaviors above and beyond those flowing through their direct consequences for subjective well-being. This is followed by discussion of specific measures of the social context, of the fundamental importance of trust as social glue, and of several experiments designed to improve subjective well-being. |
| JEL: | D6 I28 N30 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18486&r=ltv |
| By: | Brunello, Giorgio (University of Padova); Langella, Monica (University of Padova) |
| Abstract: | We study the transitions from career to bridge jobs and to permanent retirement by European males aged 55 to 70 at the time of the interview in the late 2000s. We find that only 10.54 percent of the workers in our sample who were in a career job at age 50 have moved to a bridge job by the time of the interview, much less than what usually found in the United States. We also show that the exogenous increases in minimum retirement age that occurred during the past twenty years have had different effects in Central / Northern Europe (Austria, Switzerland, The Netherlands and Sweden) and in Mediterranean Europe (Italy and Spain). In the North, transitions into bridge jobs have increased, with no significant effect on transitions into retirement. In the South, transitions into permanent retirement have decreased, with no significant effect on transitions into bridge jobs. |
| Keywords: | ageing, retirement, Europe |
| JEL: | J26 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6938&r=ltv |
| By: | Carlos Gradín; Olga Cantó; Coral del Río |
| Abstract: | The current economic recession has had unequal consequences on employment depending on the country considered. It is generally accepted that the negative impact of unemployment on individual welfare can be very different depending on its duration. However, conventional statistics on unemployment do not adequately capture to what extent the recession is not only increasing the incidence of unemployment but also its severity in terms of duration in time of ongoing unemployment spells. In this paper, we follow Shorrocks’s (2009a,b) proposal of a duration-sensitive measure of unemployment in order to analyze the different dynamic characteristics of unemployment in a selected group of European Union countries during the current Great Recession. Our results add some evidence on the relevance of incorporating the duration dimension in measuring unemployment and provide a tool for dynamic analysis based on cross-sectional data. |
| Keywords: | measurement of unemployment, spell duration, European Union |
| JEL: | D30 D63 I31 J64 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:vig:wpaper:1205&r=ltv |