nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2012‒11‒03
nine papers chosen by
Maximo Rossi
University of the Republic

  1. Declining inequality in Latin America in the 2000s : the cases of Argentina, Brazil, and Mexico By Lustig, Nora; Lopez-Calva, Luis F.; Ortiz-Juarez, Eduardo
  2. The Economics of Child Well-Being By Gabriella Conti; James J. Heckman
  3. Heterogeneity in subjective wellbeing : an application to occupational allocation in Africa By Falco, Paolo; Maloney, William F.; Rijkers, Bob; Sarrias, Mauricio
  4. Parent Transmit Happiness along with Associated Values and Behaviors to Their Children: A Lifelong Happiness Divided? By Bruce Headey; Ruud Muffels; Gert G. Wagner
  5. Top incomes, rising inequality, and welfare By Kevin J. Lansing; Agnieszka Markiewicz
  6. Does the stork deliver happiness? Parenthood and life satisfaction By Gregori Baetschmann; Kevin E. Staub; Raphael Studer
  7. Employment and Labor Regulation: Evidence from Manufacturing Firms in Bolivia, 1988-2007 By Beatriz Muriel; Carlos Gustavo Machicado
  8. Multidimensional Measurement of Poverty in Pakistan: Provincial Analysis By Masood, Sarwar; Muhammad, Waqas; Amir , Aslam
  9. Resilience to Economic Shocks and the Long Reach of Childhood Bullying By Nattavudh Powdthavee

  1. By: Lustig, Nora; Lopez-Calva, Luis F.; Ortiz-Juarez, Eduardo
    Abstract: Between 2000 and 2010, the Gini coefficient declined in 13 of 17 Latin American countries. The decline was statistically significant and robust to changes in the time interval, inequality measures, and data sources. In-depth country studies for Argentina, Brazil, and Mexico suggest two main phenomena underlie this trend: a fall in the premium to skilled labor and more progressive government transfers. The fall in the premium to skills resulted from a combination of supply, demand, and institutional factors. Their relative importance depends on the country.
    Keywords: Rural Poverty Reduction,Inequality,Poverty Impact Evaluation,Labor Policies,Labor Markets
    Date: 2012–10–01
  2. By: Gabriella Conti; James J. Heckman
    Abstract: This paper 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 paper concludes with some open questions and suggestions for future research.
    JEL: D03 D04 I21 J13
    Date: 2012–10
  3. By: Falco, Paolo; Maloney, William F.; Rijkers, Bob; Sarrias, Mauricio
    Abstract: Using an extraordinarily rich panel dataset from Ghana, this paper explores the nature of self-employment and informality in developing countries through the analysis of self-reported happiness with work and life. Subjective job satisfaction measures allow assessment of the relative desirability of different jobs in ways that, conditional wage comparisons cannot. By exploiting recent advances in mixed (random parameter) ordered probit models, the distribution of subjective well-being across sectors of employment is quantified. There is little evidence for the overall inferiority of the small firm informal sector: there is not a robust average satisfaction premium for formal work vs. self-employment or informal salaried work, and owners of informal firms that employ others are on average significantly happier than workers in the formal private sector. Moreover, the estimated distribution of parameters predicting satisfaction reveal substantial heterogeneity in subjective well-being within sectors that conventional fixed parameter models, such as standard ordered probit models, cannot detect: Whatever the average satisfaction premium in a sector, all job categories contain both relatively happy and disgruntled workers. Specifically, roughly 67, 50, 40 and 59 percent prefer being a small-firm employer, sole proprietor, informal salaried, civic worker respectively, than formal work. Hence, there is a high degree of overlap in the distribution of satisfaction across sectors. The results are robust to the inclusion of fixed effects and alternate measures of satisfaction. Job characteristics, self-perceived autonomy and experimentally elicited measures of attitudes toward risk do not appear to explain these distributional patterns.
    Keywords: Labor Markets,Labor Policies,Labor Management and Relations,Work&Working Conditions,Educational Policy and Planning
    Date: 2012–10–01
  4. By: Bruce Headey; Ruud Muffels; Gert G. Wagner
    Abstract: There are strong two-way links between parent and child happiness (life satisfaction), even for ‘children’ who have grown up, moved to their own home and partnered themselves. German panel evidence shows that transmission of (un)happiness from parents to children is partly due to transmission of values and behaviors known to be associated with happiness (Headey, Wagner and Muffels, 2010, 2012). These values and behaviors include giving priority to pro-social and family values, rather than material values, maintaining a preferred balance between work and leisure, active social and community participation, and regular exercise. Both parents have about equal influence on the values and behaviors which children adopt. However, the life satisfaction of adult ‘children’ continues to be directly influenced by the life satisfaction of their mothers, with the influence of fathers being only indirect, via transmission of values and behaviors. There appears to be a lifelong happiness dividend (or unhappiness dividend) due to parenting.
    Keywords: Life satisfaction, inter-generational transmission, German panel survey (SOEP)
    Date: 2012
  5. By: Kevin J. Lansing (Federal reserve Bank of San Francisco and Norges Bank (Central Bank of Norway)); Agnieszka Markiewicz (Erasmus University Rotterdam)
    Abstract: This paper develops a general-equilibrium model of skill-biased technological change that approximates the observed shifts in the shares of wage and non-wage income going to the top decile of U.S. households since 1980. Under realistic assumptions, we find that all agents can benefit from the technology change, provided that the observed rise in redistributive transfers over this period is taken into account. We show that the increase in capital’s share of total income and the presence of capital-entrepreneurial skill complementarity are two key features that help support the wages of ordinary workers as the new technology diffuses.
    Keywords: Income inequality, Skill-biased technological change, Capital-skill complementarity, Redistribution, Welfare.
    JEL: E32 E44 H23 O33
    Date: 2012–10–23
  6. By: Gregori Baetschmann; Kevin E. Staub; Raphael Studer
    Abstract: This paper examines the relationship between parenthood and life satisfaction using longitudinal data on women from the German Socio-Economic Panel. Previous studies have focused on satisfaction differences between parents and comparable childless adults, mostly finding small and often negative effects of parenthood. These comparisons of ex-post similar individuals are problematic if a self-selection into motherhood exists. In this study we examine the selection issue in detail by exploiting the extended longitudinal dimension of the panel to track self-reported life satisfaction of women eventually to become mothers and of women eventually attaining a completed fertility of zero. We document that these groups' satisfaction paths diverge around five years before mothers' first birth, even after adjusting for differences in observables. In our estimations, we employ matching and regression techniques which account for this selection into motherhood. We find motherhood to be associated with substantial positive satisfaction gains.
    Keywords: Happiness, subjective well-being, children, fertility, mother- hood, parenthood, life cycle, selection, matching, fixed effects
    JEL: D10 J11 J12 J13
    Date: 2012–10
  7. By: Beatriz Muriel (Institute for Advanced Development Studies); Carlos Gustavo Machicado (Institute for Advanced Development Studies)
    Abstract: This paper analyzes employment in Bolivian registered manufacturing firms during 1988 to 2007, establishing its relationship with labor regulation. Estimating job flows, we find that firms with high temporary worker rates (less labor regulation costs) are those with both higher job reallocation rates and higher net employment growth, and only they contributed to employment growth during the country economic downturn, 1998-1999. In addition, estimating demand functions, we find the following effects of recent changes in labor norms: i) the compulsory basic salary rise in 2006-2009 entailed costs in terms of job losses, 5.6 percent for production workers and 4.8 percent for non-production workers; iii) the major labor costs derived from the new pension law, enacted in 2010, decreased employment demand around 1 percent; and, iv) labor protection policies decreased production workers demand.
    Keywords: job flows, labor demand, labor regulation, translog function, unbalanced panel
    JEL: D24 J01 J23 K31
    Date: 2012–07
  8. By: Masood, Sarwar; Muhammad, Waqas; Amir , Aslam
    Abstract: This paper has estimated multidimensional poverty for four provinces of Pakistan using PSLM dataset for years 2005-06 by applying Alkire and Foster (2007) methodology. Nine dimensions were selected for this study: Housing, Electricity, Water, Asset, Sanitation, Education, Expenditure, Empowerment and Land. Results found that overall Balochistan shows the worst picture, followed by NWFP, Sindh and Punjab. In urban areas of different provinces Balochistan is more multidimensionally poor followed by NWFP, Sindh and Punjab. As far as the rural area is concerned Balochistan is multidimensionally poor followed by Sindh, NWFP and then Punjab. Result shows that the most pervasive level of poverty exists in rural areas of different provinces. The analysis of contribution of each dimension in multidimensional poverty at different cutoffs showed that the major contributors are, land, empowerment, housing, assets and sanitation. This study also presents an empirical evidence of significant lack of overlap in the identification by the monetary and multidimensional approach in case of Pakistan.
    Keywords: Pakistan; Multidimensional Poverty; Provincial Analysis
    JEL: P36 D6 I3 I32
    Date: 2012–10–22
  9. By: Nattavudh Powdthavee
    Abstract: This paper investigates whether people's ability to withstand and adapt to one of the most important economic shocks - job loss - is determined early on in childhood. Using nationally representative longitudinal data that tracks almost 3,000 children into adulthood, we show that the negative effect of unemployment on mental health and life satisfaction is almost four times larger for workers who had been bullied a lot in their early life. We also find zero adaptation to unemployment for these individuals over time. Although the results should be viewed as illustrative and more research is needed, their potential implications for economists and policy makers are discussed.
    Keywords: Resilience, adaptation, happiness, unemployment, childhood, well-being
    JEL: D03 I19 J64
    Date: 2012–10

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