New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2012‒12‒10
eight papers chosen by

  1. GINI DP 34: Bounds of Unfair Inequality of Opportunity: Theory and Evidence for Germany and the US By Niehues, J. (Judith); Andreas Peichl
  2. GINI Intermediate Report WP 6: Policy analysis By Ive Marx; Tim Rie
  3. Charitable Bequests and Wealth at Death By Atkinson, Anthony B.; Backus, Peter G.; Micklewright, John
  4. Minimum Wages and Wage Inequality: Some Theory and an Application to the UK By Richard Dickens; Alan Manning; Tim Butcher
  5. Welfare Migration By Corrado Giulietti; Jackline Wahba
  6. A Note on the Impact of Economic Regulation on Life Satisfaction By Bodo Knoll; Hans Pitlik; Martin Rode
  7. One Man's Blessing, Another Woman's Curse? Family Factors and the Gender-Earnings Gap of Doctors By Schurer, Stefanie; Kuehnle, Daniel; Scott, Anthony; Cheng, Terence Chai
  8. An ex-post view of inequality of opportunity in France and its regions By Jean-François Carpantier; Christelle Sapata

  1. By: Niehues, J. (Judith); Andreas Peichl (Institute for the Study of Labor (IZA))
    Abstract: Previous estimates of inequality of opportunity (IOp) are lower bounds because of the unobservability of the full set of endowed characteristics beyond the sphere of individual responsibility. Knowing the true size of unfair IOp, however, is important for the acceptance of (some) inequality and the design of redistributive policies as underestimating the true amount of IOp might lead to too little redistribution. This paper is the …first to suggest an upper bound estimator. We illustrate our approach by comparing Germany and the US based on harmonized micro data. We …find significant, sizeable and robust differences between lower and upper bound estimates – both for gross and net earnings based on either periodical or permanent income – for both countries. We discuss the cross-country differences and (surprising) similarities in IOp in the light of differences in social mobility and persistence. JEL Codes: D63, H2, J62, J7
    Keywords: Equality of Opportunity; Earnings Inequality; Mobility; Circumstances; Family Background; Redistribution
    Date: 2012–05
  2. By: Ive Marx (Centre for Social Policy, University of Antwerp); Tim Rie (Centrum voor Sociaal Beleid Herman Deleeck, Universiteit Antwerpen)
    Abstract: Introduction Attention to policy runs through the entire GINI project and the aim has been to produce policy relevant output in several ways. First, policy variables feature in the ‘drivers of inequality’ work package examining the factors behind changes in inequality. Second, the GINI research on income inequality, educational inequalities, social impacts and political/cultural impacts (i.e. within the other work packages) is to be developed to produce implications for policy. Third, the country reports cover policy changes and the implications thereof. Fourth, the final report will draw out the larger implications in a coherent way. As clearly stated in the project proposal, the “Policy” work package (WP6), focuses on a further set of specific policy issues which are very important to address in the context of the project and also in the context of current policy debates, particularly within the EU2020 framework. The new strategy includes seven flagship initiatives, including a European platform against poverty and social exclusion. According to the headline target for this flagship initiative, the Member States are committed to raise at least 20 million people from the risk of poverty and social exclusion by 2020. As we indicated from the start of the project, the principal focus would be on policies, particularly income policies, aimed at improving the plight of those least well off, as these are also focus of the Europe 2020 objectives, particularly with respect to social inclusion. Main points of focus (‘tasks’) were listed under the following headings. Task 6.1: Constraints imposed by rising economic inequality Task 6.2. Redistributing income and work The level and adequacy of minimum income protection packages Universalism vs. targeting in redistributive policies Incrementalism vs. innovation in minimum protection and redistribution Direct income support vs. activation and empowerment for economic self-reliance Task 6.3 Towards an integrated approach
    Date: 2012–10
  3. By: Atkinson, Anthony B. (Nuffield College, Oxford); Backus, Peter G. (University of Barcelona); Micklewright, John (Institute of Education, University of London)
    Abstract: Charitable bequests are a major source of income for charities but surprisingly little is known about them. The aim of this paper is to propose a multi-stage framework for analysing the bequest decision and to examine the evidence for Great Britain provided by new data on estates. The novelty of the framework is that it distinguishes between the different steps that lead to a charitable bequest. Our new data for Britain have the advantage of covering the whole population, in contrast to much of the US literature based on the small fraction of the population covered by estate tax returns. We focus on the relationship with wealth at death, on the form of the bequest, and on the different causes to which people bequeath.
    Keywords: charitable donations, bequests, wealth, death, estate tax, NGOs
    JEL: D12 D31 D64 L31
    Date: 2012–11
  4. By: Richard Dickens (Department of Economics, University of Sussex, UK); Alan Manning (Centre for Economic Performance, London School of Economics, UK); Tim Butcher (Secretariat, Low Pay Commission, UK)
    Abstract: Research suggests that, at the levels set in countries like the US and the UK, minimum wages have little effect on employment but do have impacts on wage inequality. However we lack models that can explain these facts – this paper presents one based on imperfect labour markets. The paper also investigates the impact of the UK’s National Minimum Wage on wage inequality finding it can explain a sizeable part of the evolution of wage inequality in the bottom half of the distribution in the period 1998-2010. We also present evidence that the impact of the NMW reaches up to 40% above the NMW in 2010 which corresponds to the 25th percentile. These spillovers are larger in low-wage segments.
    Keywords: Minimum Wage, Wage Inequality
    JEL: J38
    Date: 2012–12
  5. By: Corrado Giulietti (IZA - Institute for the Study of Labor); Jackline Wahba (University of Southampton and IZA)
    Abstract: This chapter reviews and discusses major theories and empirical studies about the welfare magnet hypothesis, i.e. whether immigrants are more likely to move to countries with generous welfare systems. Although economic theory predicts that welfare generosity affects the number, composition and location of immigrants, the empirical evidence is rather mixed. We offer possible explanations for the existence of such mixed evidence and highlight that the literature so far has overlooked the presence of different migration regimes, as well as the possibility of reverse causality between welfare spending and immigration.
    Keywords: immigration, welfare spending
    JEL: H53 J61 J68
    Date: 2012–11
  6. By: Bodo Knoll; Hans Pitlik (WIFO); Martin Rode
    Abstract: Are people happier if they experience freedom from regulation, and how do individual attitudes towards liberalisation influence personal life satisfaction? Based on data from European and World Values Surveys and the Economic Freedom of the World project we find evidence for positive effects of low regulation and pro-market attitudes on life satisfaction. Paradoxically, people who are opposed to market oriented policies sometimes benefit most from deregulation.
    Keywords: government, regulation, life satisfaction, attitudes, ideology
    Date: 2012–11–26
  7. By: Schurer, Stefanie (Victoria University of Wellington); Kuehnle, Daniel (University of Erlangen-Nuremberg); Scott, Anthony (Melbourne Institute of Applied Economic and Social Research); Cheng, Terence Chai (Melbourne Institute of Applied Economic and Social Research)
    Abstract: Using data from a new longitudinal survey of doctors from Australia, the authors test whether observed large gender-pay gaps among general practitioners (GPs) are the result of women's larger willingness to interrupt their careers. On average, female GPs earn A$83,000 or 54% less than male GPs. The difference between men and women with children is A$105,000, and A$45,000 for men and women without children. Of this gap, 66-75% is explained by differences in observable characteristics such as hours worked. The family gap emerges also within the sexes. Female GPs with children experience an earnings penalty of A$15,000-A$25,000 in comparison to women without children; almost 100% of this difference is due to observable characteristics such as hours worked and career interruptions. Male GPs with children experience a family premium of A$35,000 in comparison to men without children, indicating the presence of a breadwinner effect that exacerbates the gender-earnings gap.
    Keywords: gender-earnings gap, family-earnings gap, labour force attachment, decomposition methods, family physicians, MABEL
    JEL: J24
    Date: 2012–11
  8. By: Jean-François Carpantier (Universite Catholique de Louvain); Christelle Sapata (Facultés Universitaires de Saint Louis)
    Abstract: This paper proposes an ex-post measure of inequality of opportunity in France and its regions by assessing the inequality between individuals exerting the same effort. To this end, we define a fair income that fulfils ex-post equality of opportunity requirements. Unfairness is measured by an unfair Gini based on the distance between the actual income and the fair income. Our findings reveal that the measures of ex-post inequality of opportunity largely vary across regions, and that this is due to di_erences in reward schemes and in the impact of the non responsibility factors of income. We find that most regions have actual incomes closer to fair incomes than to average income, excepted Ile de France where the actual income looks poorly related to effort variables. Finally, we find that income inequality and inequality of opportunity are positively correlated among regions.
    Keywords: Inequality of Opportunity, Fairness, Regional Inequalities
    JEL: D31 D63 J62
    Date: 2012–12

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