nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2012‒12‒15
six papers chosen by
Maximo Rossi
University of the Republic

  1. Intergenerational Earnings Mobility and Preferences for Redistribution By Thomas Siedler; Bettina Sonnenberg
  2. Changes in the Income Distribution and Aggregate Consumption By Luigi Pistaferri; Itay Saporta-Eksten
  3. On 'Consistent' Poverty By Rod Hick
  4. Effects of siblings and birth order on income redistribution preferences: Evidence based on Japanese General Social Survey By Eiji Yamamura
  5. Understanding the Mechanisms through Which an Influential Early Childhood Program Boosted Adult Outcomes By James J. Heckman; Rodrigo Pinto; Peter A. Savelyev
  6. Getting back into the Labor Market: The Effects of Start-Up Subsidies for Unemployed Females By Marco Caliendo; Steffen Künn

  1. By: Thomas Siedler; Bettina Sonnenberg
    Abstract: This paper analyzes the extent to which intergenerational upward and downward mobility in earnings are related to individuals’ preferences for redistribution. A novel survey question from the German Socio-Economic Panel Study—whether the taxes paid by unskilled workers are too high, adequate or too low—are used to elicit attitudes toward redistribution. Intergenerational mobility with regard to long-term earnings is measured using a rich panel data spanning an observation window of 22 years. The results reveal that intergenerational mobility is significantly related to preferences for redistribution. The empirical results yield strong and robust support for Piketty’s (1995) rational-learning theory: individuals who experience upward (downward) intergenerational mobility are less (more) likely to favor redistribution taxation policies.
    Keywords: labour, family and networks, subjective indicators
    JEL: J62 H23
    Date: 2012
  2. By: Luigi Pistaferri; Itay Saporta-Eksten
    Abstract: Since the late 1970s there has been a remarkable and persistent increase in wage inequality in the US and other industrialized countries. Researchers have also documented an increase in the dispersion of individual earnings, household (pooled) earnings, household disposable income, and (less consistently) consumption. Some of the changes in inequality are exogenous and reflect transformations in labor markets and institutions,1 while others are endogenous and reflect individual and household behavioural responses to such changes in terms of labor supply, asset accumulation, and participation in government insurance programs. The first goal of this paper is to discuss what we know about the effect of shifts in the distribution of income on aggregate consumption. We focus in particular on changes in inequality, volatility, and expectations, and highlight the pervasive role of heterogeneity. Our second goal is to asses the role of changes in the income distribution in explaining the joint evolution of aggregate consumption and income over the Great Recession.
    Keywords: Income distribution; Aggregate consumption
    JEL: D31 D91
    Date: 2012–10
  3. By: Rod Hick
    Abstract: The measurement of poverty as 'consistent' poverty offers a solution to one of the primary problems of poverty measurement within Social Policy of the last three decades. Often treated as if they were synonymous, 'indirect' measures of poverty, such as low income measures, and 'direct' measures, such as indices of material deprivation, identify surprisingly different people as being poor. In response to this mismatch, a team of Irish researchers put forward a measure which identified respondents in as being in poverty when they experienced both a low standard of living, as measured by deprivation indicators, and a lack of resources, as measured by a low income line. Importantly, they argued that the two measures required an equal weight. In this paper, I present a reconsideration of the consistent poverty measure from both conceptual and empirical perspectives. In particular, I examine the claim that low income and material deprivation measures should be given an 'equal weight'. I argue that, from a conceptual perspective, the nature of the indicators at hand means that a deprivation-led measurement approach might be understood to align with the definition of poverty which Nolan and Whelan outline and, from an empirical perspective, that it is the material deprivation measure - and not the low income measure - which is particularly effective in identifying individuals at risk of multiple forms of deprivation.
    Keywords: consistent poverty, low income, material deprivation, conceptualisation and measurement of poverty
    JEL: I32
    Date: 2012–12
  4. By: Eiji Yamamura
    Abstract: The Japanese General Social Survey was used to determine how individual preferences for income redistribution are affected by family structure, such as the number of siblings and birth order where individuals grow up. After controlling for various individual characteristics, the important findings were as follows. (1) The first-born child was less likely to prefer income redistribution when the child was male. However, such a tendency was not observed when the child was female. (2) The larger the number of elder brothers, the more likely an individual preferred income redistribution. However, the number of elder sisters did not affect the preference. (3) The number of younger siblings did not affect the preference for redistribution regardless of the sibling’s sex. These findings regarding the effect of birth order are not consistent with evidence provided by another study conducted in a European country.
    Keywords: Inequality aversion; Redistribution; Family structure; Birth order; Siblings.
    JEL: D19 D30 D63 J13
    Date: 2012–11–23
  5. By: James J. Heckman; Rodrigo Pinto; Peter A. Savelyev
    Abstract: A growing literature establishes that high quality early childhood interventions targeted toward disadvantaged children have substantial impacts on later life outcomes. Little is known about the mechanisms producing these impacts. This paper uses longitudinal data on cognitive and personality traits from an experimental evaluation of the influential Perry Preschool program to analyze the channels through which the program boosted both male and female participant outcomes. Experimentally induced changes in personality traits explain a sizable portion of adult treatment effects.
    JEL: I21 I28 I29 J13 J15 J16 J24 O15
    Date: 2012–11
  6. By: Marco Caliendo; Steffen Künn
    Abstract: A shortage of skilled labor and low female labor market participation are problems many developed countries have to face. Beside activating inactive women, one possible solution is to support the re-integration of unemployed women. Due to female-specific labor market constraints (preferences for exible working hours, discrimination), this is a difficult task, and the question arises whether active labor market policies (ALMP) are an appropriate tool to do so. Promoting self-employment among the unemployed might be promising. Starting their own business might give women more independence and exibility in allocating their time to work and family. Access to long-term informative data allows us to close existing research gaps, and we investigate the impact of two start-up programs on long-run labor market and fertility outcomes of female participants. We find that start-up programs persistently integrate former unemployed women into the labor market and partly improve their income situations. The impact on fertility is less detrimental than for traditional ALMP programs.
    Keywords: Start-Up Subsidies, Evaluation, Long-Term Effects, Female Labor-Force Participation, Fertility
    JEL: J68 C14 H43
    Date: 2012

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