nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2013‒01‒07
eight papers chosen by
Maximo Rossi
University of the Republic

  1. Social Spending and Income Redistribution in Argentina During the 2000s: the Rising Role of Noncontributory Pensions. Extended Version By Nora Lustig; Carola Pessino
  2. Violent Conflict and Gender Inequality: An Overview By Mayra Buvinic; Monica Das Gupta; Ursula Casabonne; Philip Verwimp
  3. The Growth of Low Skill Service Jobs and the Polarization of the U.S. Labor Market By Autor, David; Dorn, David
  4. How Different Are the Wage Curves for Formal and Informal Workers? Evidence from Turkey By Badi H. Baltagi; Yusuf Soner Baskaya; Timur Hulagu
  5. Recent Developments in the Economics of Happiness: A Selective Overview By Stutzer, Alois; Frey, Bruno S.
  6. Growth and Income Redistribution Components of Changes in Poverty: A Decomposition Analysis for Ireland, 1987-2005 By Wasiu Adekunle Are
  7. The Role of Parental Income over the Life Cycle: A Comparison of Sweden and the UK By Björklund, Anders; Jäntti, Markus; Nybom, Martin
  8. Losing Heart? The Effect of Job Displacement on Health By Sandra E. Black; Paul J. Devereux; Kjell G. Salvanes

  1. By: Nora Lustig (Tulane University and Center for Global Development and Inter-American Dialogue); Carola Pessino (Department of Economics at the Universidad del CEMA, Argentina and Center for Global Development, Washington, DC)
    Abstract: Between 2003 and 2009, Argentina’s social spending as a share of GDP increased by 7.6 percentage points. Marginal benefit incidence analysis for 2003, 2006, and 2009 suggests that the contribution of cash transfers to the reduction of disposable income inequality and poverty rose markedly between 2006 and 2009 primarily due to the launching of a noncontributory pension program – the pension moratorium – in 2004. Noncontributory pensions as a share of GDP rose by 2.2 percentage points between 2003 and 2009 and entailed a redistribution of income to the poor, and from the formal sector pensioners with above minimum pensions to the beneficiaries of the pension moratorium. The redistributive impact of the expansion of public spending on education and health was also sizeable and equalizing, but to a lesser degree. An assessment of fiscal funding sources puts the sustainability of the redistributive policies into question, unless nonsocial spending is significantly cut.
    Keywords: social spending, benefit incidence, inequality, poverty, Argentina.
    JEL: D31 H22 I38
    Date: 2012–11
    URL: http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2012-276&r=ltv
  2. By: Mayra Buvinic (UN Foundation and Vital Voices); Monica Das Gupta (World Bank.); Ursula Casabonne (World Bank.); Philip Verwimp (Solvay Brussels School of Economics and Management, Université Libre de Bruxelles)
    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
    URL: http://d.repec.org/n?u=RePEc:hic:wpaper:129&r=ltv
  3. By: Autor, David (MIT); Dorn, David (CEMFI, Madrid)
    Abstract: We offer an integrated explanation and empirical analysis of the polarization of U.S. employment and wages between 1980 and 2005, and the concurrent growth of low skill service occupations. We attribute polarization to the interaction between consumer preferences, which favor variety over specialization, and the falling cost of automating routine, codifiable job tasks. Applying a spatial equilibrium model, we derive, test, and confirm four implications of this hypothesis. Local labor markets that were specialized in routine activities differentially adopted information technology, reallocated low skill labor into service occupations (employment polarization), experienced earnings growth at the tails of the distribution (wage polarization), and received inflows of skilled labor.
    Keywords: skill demand, job tasks, inequality, polarization, technological change, occupational choice, service occupations
    JEL: E24 J24 J31 J62 O33
    Date: 2012–12
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp7068&r=ltv
  4. By: Badi H. Baltagi (Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244-1020); Yusuf Soner Baskaya (Türkiye Cumhuriyet Merkez Bankası); Timur Hulagu (Central Bank of Turkey)
    Abstract: This paper presents wage curves for formal and informal workers using a rich individual level data for Turkey over the period 2005-2009. The wage curve is an empirical regularity describing a negative relationship between regional unemployment rates and individuals' real wages. While this relationship has been well documented for a number of countries including Turkey, less attention has focused on how this relationship differs for informal versus formal employment. This is of utmost importance for less developed countries where informal employment plays a significant role in the economy. Using the Turkish Household Labor Force Survey for the period 2005-2009 observed over 26 NUTS-2 regions, we find that real hourly wages of informal workers in Turkey are more sensitive to variations in regional unemployment rates than wages of formal workers. This is true for all workers as well as for different gender and age groups Key Words: Formal/Informal Employment; Wage Curve; Regional Labor Markets JEL No. C26, J30, J60, O17
    Date: 2012–10
    URL: http://d.repec.org/n?u=RePEc:max:cprwps:145&r=ltv
  5. By: Stutzer, Alois (University of Basel); Frey, Bruno S. (University of Zurich)
    Abstract: What makes people happy in life? This is a crucial question that has the potential to shake up economics. In recent years, the dissatisfaction with the understanding of welfare in economics together with the new opportunities to empirically study people's subjective wellbeing have spurred impressive and stimulating new research in the often called dismal science. The economics of happiness has emerged as one of the most thriving areas in current economic research. This introductory chapter refers to important contributions to the economics of happiness that characterize the recent developments in the area. First, we refer to reviews of the literature, the measurement and the relationship of happiness research to welfare economics. Second, we emphasize four factors from the large literature on the determinants of happiness in economics, i.e. income, employment, social capital and health. In fact, the main body of research in this new area is on the preconditions or covariates of high individual well-being. Third, important studies applying the so-called Life Satisfaction Approach as an alternative valuation approach are discussed. Fourth, we point to contributions that elaborate on the understanding of utility in terms of people's adaptation to circumstances and their difficulties in predicting future utility. Fifth, we provide references to the controversial question regarding the policy consequences of this new development.
    Keywords: happiness, individual welfare, Life Satisfaction Approach, subjective well-being
    JEL: I31
    Date: 2012–12
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp7078&r=ltv
  6. By: Wasiu Adekunle Are (University College Dublin)
    Abstract: This study analysed the contribution of economic growth and redistribution components to aggregate poverty changes in Ireland from 1987-2005, using the Shapley value decomposition approach. The analysis used the household disposable income data from the Household Budget Survey to calculate poverty indices. The result of the Shapley value decomposition of poverty changes into growth and redistribution components revealed that the growth component dominates the redistribution component in bringing about the decline in poverty. This suggests that the drastic fall in absolute poverty over the survey period could be attributed to the increase in the household mean income rather than the redistributive policies of government transfer and income tax systems. We also investigated the extent to which economic growth experienced over the survey period has been pro- poor, by using the Growth Incidence Curve proposed by Ravallion and Chen (2003). It was found that economic growth was slightly pro-poor between 1987 and 1994 and generally anti-poor between 1994 and 1999.
    Keywords: economic growth, inequality, poverty decomposition, shapley value
    JEL: D31 D63 I32 P36
    Date: 2012–12–20
    URL: http://d.repec.org/n?u=RePEc:ucn:wpaper:201231&r=ltv
  7. By: Björklund, Anders (SOFI, Stockholm University); Jäntti, Markus (SOFI, Stockholm University); Nybom, Martin (SOFI, Stockholm University)
    Abstract: Research on intergenerational income mobility has shown stronger persistence between parental and offspring's income in the UK than in Sweden. We use similar data sets for the two countries to explore whether these cross-national differences show up already early in offspring's life in outcomes such as birth weight, grades at the end of compulsory school at age 16, height during adolescence, and final educational attainment. We do indeed find significant country differences in the association between parental income and these outcomes, and the associations are stronger in the UK than in Sweden. Therefore, we continue to investigate whether these differentials are large enough to account for a substantial part of the difference in intergenerational persistence estimates. We then conclude that the country differences in the intergenerational associations in birth weight and height are too weak to account for hardly any fraction of the UK-Sweden difference in intergenerational income mobility. For the more traditional human-capital variables grades and final education, however, our results suggest that the country differences can account for a substantial part of the difference in income persistence.
    Keywords: intergenerational mobility, birth weight, height, human capital
    JEL: J24
    Date: 2012–12
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp7066&r=ltv
  8. By: Sandra E. Black; Paul J. Devereux; Kjell G. Salvanes
    Abstract: Job reallocation is considered to be a key characteristic of well-functioning labor markets, as more productive firms grow and less productive ones contract or close. However, despite its potential benefits for the economy, there are significant costs that are borne by displaced workers. We study how job displacement in Norway affects cardiovascular health using a sample of men and women who are predominantly aged in their early forties. To do so we merge survey data on health and health behaviors with register data on person and firm characteristics. We track the health of displaced and non-displaced workers from 5 years before to 7 years after displacement. We find that job displacement has a negative effect on the health of both men and women. Importantly, much of this effect is driven by an increase in smoking behavior. These results are robust to a variety of specification checks.
    JEL: I10 J63
    Date: 2012–12
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:18660&r=ltv

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