nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2012‒12‒06
twelve papers chosen by
Maximo Rossi
University of the Republic

  1. The Intergenerational Transmission of Occupational Preferences, Segregation, and Wage Inequality: Empirical Evidence from Three Countries By Veronika V. Eberharter
  2. Implicit redistribution in the Chilean Social Insurance System By Eduardo Fajnzylber
  3. The Asset Price Meltdown and the Wealth of the Middle Class By Edward N. Wolff
  4. Preferences for Redistribution in Europe By Javier Olivera
  5. Workplace heterogeneity and the rise of West German wage inequality By Card, David; Heining, Jörg; Kline, Patrick
  6. Social Networks and Labor Market Inequality between Ethnicities and Races By Ott Toomet; Marco van der Leij; Meredith Rolfe
  7. Evaluating workfare when the work is unpleasant : evidence for India's national rural employment guarantee scheme By Lagrange, Arthur Alik; Ravallion, Martin
  8. Evidence for a ‘Midlife Crisis’ in Great Apes Consistent with the U-Shape in Human Well-Being By Weiss, Alexander; King, James E.; Inoue-Murayama, Miho; Matsuzawa, Tetsuro; Oswald, Andrew J.
  9. Mapping and measuring the distribution of household wealth: A cross-country analysis By Frank A Cowell; Eleni Karagiannaki; Abigail McKnight
  10. Movin' on Up: Hierarchical Occupational Segmentation and Gender Wage Gaps By Shatnawi, Dina; Oaxaca, Ronald L.; Ransom, Michael R.
  11. Happy Taxpayers? Income Taxation and Well-Being By Akay, Alpaslan; Bargain, Olivier; Dolls, Mathias; Neumann, Dirk; Peichl, Andreas; Siegloch, Sebastian
  12. Ethnic Inequality By Alesina, Alberto F; Michalopoulos, Stelios; Papaioannou, Elias

  1. By: Veronika V. Eberharter
    Abstract: Based on longitudinal data (CNEF 1980-2010) the paper analyzes the structuring effects of individual and family background characteristics on occupational preferences, and the influence of occupational segregation on gender wage differentials in Germany, Great Britain, and the United States. Notwithstanding the country differences concerning welfare state regimes, institutional settings of the labor markets, and family role patterns, the results confirm the hypotheses of the intergenerational transmission of occupational status, and occupational segregation. The decomposition analysis shows that gender wage differentials are mainly determined by structural differences in the occupational distribution.
    Keywords: occupational segregation, occupational choice, intergenerational occupational mobility, wage differentials
    JEL: J24 J31 J62
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp506&r=ltv
  2. By: Eduardo Fajnzylber (Escuela de Gobierno, Universidad Adolfo Ibáñez)
    Date: 2012–03
    URL: http://d.repec.org/n?u=RePEc:uai:wpaper:wp_019&r=ltv
  3. By: Edward N. Wolff
    Abstract: I find that median wealth plummeted over the years 2007 to 2010, and by 2010 was at its lowest level since 1969. The inequality of net worth, after almost two decades of little movement, was up sharply from 2007 to 2010. Relative indebtedness continued to expand from 2007 to 2010, particularly for the middle class, though the proximate causes were declining net worth and income rather than an increase in absolute indebtedness. In fact, the average debt of the middle class actually fell in real terms by 25 percent. The sharp fall in median wealth and the rise in inequality in the late 2000s are traceable to the high leverage of middle class families in 2007 and the high share of homes in their portfolio. The racial and ethnic disparity in wealth holdings, after remaining more or less stable from 1983 to 2007, widened considerably between 2007 and 2010. Hispanics, in particular, got hammered by the Great Recession in terms of net worth and net equity in their homes. Households under age 45 also got pummeled by the Great Recession, as their relative and absolute wealth declined sharply from 2007 to 2010.
    JEL: D31 J15
    Date: 2012–11
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:18559&r=ltv
  4. By: Javier Olivera (UCD Geary Institute, University College Dublin)
    Abstract: This paper analyses the determinants of preferences for redistribution in a pool of 33 European countries over the period 2002-2010. We find that income inequality affects positively the individual demand for redistribution and that the actual level of redistribution implemented in the country decreases the support for more redistribution. Furthermore, a fixed effect model applied to pseudo panels constructed over that period confirms that increases in income inequality over time raise the demand for redistribution. This result is predicted by standard political economy models but has found little empirical support. We show that at least in Europe growing income inequality leads to more individual support for redistribution.
    Keywords: Redistribution, Income Inequality, Social Preferences, Pseudo-Panels
    JEL: D31 D63 D72 H20
    Date: 2012–11–20
    URL: http://d.repec.org/n?u=RePEc:ucd:wpaper:201225&r=ltv
  5. By: Card, David; Heining, Jörg (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Kline, Patrick
    Abstract: "We study the role of establishment-specific wage premiums in generating recent increases in West German wage inequality. Models with additive fixed effects for workers and establishments are fit in four distinct time intervals spanning the period 1985-2009. Unlike standard wage models, specifications with both worker and plant-level heterogeneity components can explain the vast majority of the rise in wage inequality. Our estimates suggest that the increasing variability of West German wages results from a combination of rising heterogeneity between workers, rising variability in the wage premiums at different establishments, and increasing assortativeness in the matching of workers to plants. We use the models to decompose changes in wage gaps between different education levels, occupations, and industries, and in all three cases find a growing contribution of plant heterogeneity and rising assortativeness between workers and establishments." (Author's abstract, IAB-Doku) ((en))
    Keywords: Lohnunterschied - Ursache, Betrieb, Lohnstruktur, Lohnhöhe, Lohnzulage, Lohnentwicklung, Beschäftigtenstruktur, Heterogenität, matching - Qualität, Lohnfindung, Integrierte Erwerbsbiografien, erwerbstätige Männer, Lohnunterschied - Entwicklung, Lohndifferenzierung, Qualifikationsniveau, Berufsgruppe, Wirtschaftszweige, Tarifbindung, Gewinnbeteiligung, Westdeutschland
    JEL: J01 J3 J4
    Date: 2012–11–13
    URL: http://d.repec.org/n?u=RePEc:iab:iabdpa:201226&r=ltv
  6. By: Ott Toomet (Tartu University); Marco van der Leij (University of Amsterdam); Meredith Rolfe (London School of Economics)
    Abstract: This paper analyzes the relationship between unexplained racial/ethnic wage differentials on the one hand and social network segregation, as measured by inbreeding homophily, on the other hand. Our analysis is based on both U.S. and Estonian surveys, supplemented with Estonian telephone communication data. In case of Estonia we consider the regional variation in economic performance of the Russian minority, and in the U.S. case we consider the regional variation in black-white differentials. Our analysis finds a strong relationship between the size of the differential and network segregation: regions with more segregated social networks exhibit larger unexplained wage gaps.
    Keywords: social networks; wage differential; homophily; segregation; race; minorities
    JEL: J71 J31 Z13
    Date: 2012–11–13
    URL: http://d.repec.org/n?u=RePEc:dgr:uvatin:20120120&r=ltv
  7. By: Lagrange, Arthur Alik; Ravallion, Martin
    Abstract: Prevailing practices in evaluating workfare programs have ignored the disutility of the type of work done, with theoretically ambiguous implications for the impacts on poverty. In the case of India's National Rural Employment Guarantee Scheme, past assessments have relied solely on household consumption per person as the measure of economic welfare. The paper generalizes this measure to allow for the disutility of casual manual work. The new measure is calibrated to the distribution of the preference parameters implied by maximization of an idiosyncratic welfare function assuming that there is no rationing of the available work. The adjustment implies a substantially more"poor-poor"incidence of participation in the scheme than suggested by past methods. However, the overall impacts on poverty are lower, although still positive. The main conclusions are robust to a wide range of alternative parameter values and to allowing for involuntary unemployment using a sample of (self-declared) un-rationed workers.
    Keywords: Rural Poverty Reduction,Economic Theory&Research,Labor Markets,Services&Transfers to Poor
    Date: 2012–11–01
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:6272&r=ltv
  8. By: Weiss, Alexander (University of Edinburgh); King, James E. (University of Arizona); Inoue-Murayama, Miho (Kyoto University); Matsuzawa, Tetsuro (Kyoto University); Oswald, Andrew J. (University of Warwick)
    Abstract: Recently, economists and behavioral scientists have studied the pattern of human well-being over the lifespan. In dozens of countries, and for a large range of well-being measures, including happiness and mental health, well-being is high in youth, falls to a nadir in midlife, and rises again in old age. The reasons for this U-shape are still unclear. Present theories emphasize sociological and economic forces. In this study we show that a similar U-shape exists in 508 great apes (two samples of chimpanzees and one sample of orangutans) whose well-being was assessed by keepers familiar with the individual apes. This U-shaped pattern or ‘midlife crisis’ emerges with or without use of parametric methods. Our results imply that human well-being’s curved shape is not uniquely human and that, while it may be partly explained by aspects of human life and society, its origins may lie partly in the biology we share with closely related great apes. These findings have implications across scientific and social-scientific disciplines and potentially in identifying ways to enhance the well-being of humans and apes.
    Keywords: aging, primate, satisfaction, evolution, affect
    JEL: I31
    Date: 2012–11
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp7009&r=ltv
  9. By: Frank A Cowell; Eleni Karagiannaki; Abigail McKnight
    Abstract: In this paper we compare the level, composition and distribution of household wealth in five industrial countries: the UK, US, Italy, Finland and Sweden. We exploit the harmonized data within the Luxembourg Wealth Study, which we have extended to allow us to examine trends in the UK and the US between the mid-1990s and the mid-2000s. Remaining differences between surveys, variable definitions and coverage are highlighted to the extent that they impact on cross-country comparisons. We find that the Nordic countries have lower average wealth holdings, smaller absolute gaps between low wealth and high wealth households but high relative measures of wealth inequality. Italian households hold very little debt and are much more likely to own their homes outright, leading to relatively high median levels of wealth. In contrast American households tend to hold much more housing debt well into retirement. Increases in owner occupation and house prices 2000-05 in the UK has led to substantial increases in wealth, particularly median wealth holdings and this had led to falls in relative measures of wealth inequality such as the Gini coefficient even though absolute gaps between high and low wealth households have grown substantially. We show that there are underlying country differences in terms of distributions of age, household composition, educational attainment and income as well as wealth and debt portfolios. Educational loans are increasing in their size and prevalence in some countries and look set to create some marked differences in the distribution of wealth for different age cohorts.
    Keywords: household wealth, wealth inequality, debt, housing assets, educational loans, age-wealth profiles
    JEL: C81 D31 D63 I24 I31
    Date: 2012–11
    URL: http://d.repec.org/n?u=RePEc:cep:sticas:case165&r=ltv
  10. By: Shatnawi, Dina (Naval Postgraduate School); Oaxaca, Ronald L. (University of Arizona); Ransom, Michael R. (Brigham Young University)
    Abstract: Our study evaluates and extends existing wage decomposition methodologies that seek to measure the contributions of endowments, pure wage discrimination, and job segregation. Of particular interest is the model of hierarchical segregation in Baldwin, Butler, and Johnson (2001). We employ data from a regional supermarket that faced a Title VII class-action lawsuit to examine how standard wage specifications integrated with a model of hierarchical segregation might perform in wage decompositions. Our results show that a common misspecification of the wage structure leads to false inferences about the presence of pure wage discrimination. We demonstrate the generalizability of our methodology using CPS data.
    Keywords: gender discrimination, job segregation, wage decompositions
    JEL: J71
    Date: 2012–11
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp7001&r=ltv
  11. By: Akay, Alpaslan (IZA); Bargain, Olivier (University of Aix-Marseille II); Dolls, Mathias (IZA); Neumann, Dirk (IZA); Peichl, Andreas (IZA); Siegloch, Sebastian (IZA)
    Abstract: This paper offers a first empirical investigation of how labor taxation (income and payroll taxes) affects individuals' well-being. For identification, we exploit exogenous variation in tax rules over time and across demographic groups using 26 years of German panel data. We find that the tax effect on subjective well-being is significant and positive when controlling for income net of taxes. This interesting result is robust to numerous specification checks. It is consistent with several possible channels through which taxes affect welfare including public goods, insurance, redistributive taste and tax morale.
    Keywords: subjective well-being, taxation, public goods
    JEL: H21 H41 I38
    Date: 2012–11
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp6999&r=ltv
  12. By: Alesina, Alberto F; Michalopoulos, Stelios; Papaioannou, Elias
    Abstract: This study explores the consequences and origins of contemporary differences in well-being across ethnic groups within countries. We construct measures of ethnic inequality combining ethnolinguistic maps on the spatial distribution of groups with satellite images of light density at night. Ethnic inequality is strongly inversely related to per capita income; this pattern holds when we condition on the overall degree of spatial inequality -that is also associated with underdevelopment. We further show that differences in geographic endowments across ethnic homelands explain a sizable portion of contemporary ethnic inequality. This deeply rooted inequality in geographic attributes across ethnic regions is also negatively related to comparative development. We also show that ethnic inequality goes in tandem with lower levels development within countries. Using micro-level data from the Afrobarometer surveys we show that individuals from the same ethnic group are worse off when they reside in districts with a high degree of ethnic inequality.
    Keywords: development; diversity; ethnicity; geography; inequality
    JEL: O10 O40 O43
    Date: 2012–11
    URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:9225&r=ltv

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