nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2013‒03‒09
nine papers chosen by
Maximo Rossi
University of the Republic

  1. Social spending, taxes and income redistribution in Uruguay By Bucheli, Marisa; Lustig, Nora; Rossi, Maximo; Amabile, Florencia
  2. How reliable and consistent are subjective measures of welfare in Europe and Central Asia ? evidence from the second life in transition survey By Cojocaru, Alexandru; Diagne, Mame Fatou
  3. Is the persistent gender gap in income and wages due to unequal family responsibilities? By Angelov, Nikolay; Johansson, Per; Lindahl, Erica
  4. Ethnic Diversity and Preferences for Redistribution: Reply By Dahlberg, Matz; Edmark, Karin; Lundqvist, Heléne
  5. The unfairness of (poverty) targets By Allwine, Melanie; Rigolini, Jamele; Lopez-Calva, Luis F.
  6. Paid parental leave to immigrants: An obstacle to labor market entrance? By Vikman, Ulrika
  7. A test of the Becker-Tomes model of human capital transmission using microdata on four generations By Lindahl, Mikael; Palme, Mårten; Sandgren Massih, Sofia; Sjögren, Anna
  8. Fewer School Days, More Inequality By Daiji Kawaguchi
  9. Cooperation in teams: the role of identity, punishment and endowment distribution By Weng, Qian; Carlsson, Fredrik

  1. By: Bucheli, Marisa; Lustig, Nora; Rossi, Maximo; Amabile, Florencia
    Abstract: How much redistribution does Uruguay accomplish through social spending and taxes? How progressive are revenue collection and social spending? A standard fiscal incidence analysis shows that Uruguay achieves a nontrivial reduction in inequality and poverty when all taxes and transfers are combined. In comparison with five other countries in Latin America, it ranks first (poverty reduction) and second (inequality reduction), and first in terms of poverty reduction effectiveness and third in terms of overall (including transfers in-kind) inequality reduction effectiveness. Direct taxes are progressive and indirect taxes are regressive. Social spending on direct transfers, contributory pensions, education and health is quite progressive in absolute terms except for tertiary education, which is almost neutral in relative terms.
    Keywords: Rural Poverty Reduction,Emerging Markets,Debt Markets,Services&Transfers to Poor,Economic Theory&Research
    Date: 2013–03–01
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:6380&r=ltv
  2. By: Cojocaru, Alexandru; Diagne, Mame Fatou
    Abstract: This paper analyzes the reliability and consistency of subjective well-being measures. Using the Life in Transition Survey, which was administered in 34 countries of Europe and Central Asia in 2006 and 2010, the paper evaluates subjective well-being measures (satisfaction with life and subjective relative income position) against objective measures of welfare based on consumption and assets. It uses the different formulations of life satisfaction in the survey to test robustness to alternative framing and scaling. It also explores within-household differences in subjective well-being assessments. The analysis finds that subjective relative income is weakly correlated with household relative welfare position as measured by consumption or assets. Life satisfaction, by contrast, is highly correlated with objective and subjective measures of household welfare. It generally reflects cross-country differences in average consumption, assets, or per capita gross domestic product, although Central Asian countries report much higher life satisfaction levels than their incomes would suggest. Two alternative measures of life satisfaction are highly correlated and the correspondence between verbal and numeric scales is strong within a country or groupings of similar countries. Within households, subjective assessments of relative income are roughly consistent but measurement error is correlated with individual characteristics (gender and age of respondents), which could cause systematic biases in the analysis.
    Keywords: Access to Finance,Economic Theory&Research,Rural Poverty Reduction,Investment and Investment Climate,Inequality
    Date: 2013–02–01
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:6359&r=ltv
  3. By: Angelov, Nikolay (IFAU - Institute for Evaluation of Labour Market and Education Policy); Johansson, Per (IFAU - Institute for Evaluation of Labour Market and Education Policy); Lindahl, Erica (IFAU - Institute for Evaluation of Labour Market and Education Policy)
    Abstract: We compare the income and wage trajectories of women in relation to their male partners before and after parenthood. Focusing on the within-couple gap allows us to control for both observed and unobserved attributes of the spouse and to estimate both short-and long-term effects of entering parenthood. Our main finding is that 15 years after the first child was born, the male-female gender gaps in income and wages have increased with 35 and 10 percentage points, respectively. In line with a collective labor supply model, the magnitude of these effects depends on relative incomes or wages within the family.
    Keywords: Gender gap; quantile regression; wages
    JEL: C21 D13 J21
    Date: 2013–01–30
    URL: http://d.repec.org/n?u=RePEc:hhs:ifauwp:2013_003&r=ltv
  4. By: Dahlberg, Matz (Uppsala Center for Fiscal Studies); Edmark, Karin (Uppsala Center for Fiscal Studies); Lundqvist, Heléne (Uppsala Center for Fiscal Studies)
    Abstract: In a comment to Dahlberg, Edmark and Lundqvist (2012), Nekby and Pettersson-Lidbom (2012) argue (i) that the refugee placement program should be measured with contracted rather than actually placed refugees, and claim that the correlation between the two measures is insignificant and close to zero; (ii) that instead of using the rotating individual panel, we should have used the full cross-sections in combination with municipality fixed effects; and (iii) that immigrants should be de ned based on country of birth rather than citizenship. In this response, we discuss why we (i) do not agree that contracted refugees is the preferred measure, and we show that the correlation be- tween the two measures is highly significant and large; (ii) do not agree that the full cross-sections can be used; and (iii) do agree that defining immigrants according to country of birth is preferred. In a re-analysis, the conclusion from Dahlberg, Edmark and Lundqvist (2012) that ethnic diversity has a statistically and economically significant negative eect on preferences for redistribution is only marginally affected.
    Keywords: Income redistribution; ethnic heterogeneity; immigration
    JEL: D31 D64 Z13
    Date: 2013–02–07
    URL: http://d.repec.org/n?u=RePEc:hhs:uufswp:2013_002&r=ltv
  5. By: Allwine, Melanie; Rigolini, Jamele; Lopez-Calva, Luis F.
    Abstract: Adopted on September 8, 2000, the United Nations Millennium Declaration stated as its first goal that countries"...[further] resolve to halve, by the year 2015, the proportion of the world's people whose income is less than one dollar a day and the proportion of people who suffer from hunger..."Each country committed to achieve the stated goal, regardless of their initial conditions in terms of poverty and inequality levels. This paper presents a framework to quantify how much initial conditions affect poverty reduction, given a level of"effort"(growth). The framework used in the analysis allows for the growth elasticity of poverty to vary according to changes in the income distribution along the dynamic path of growth and redistribution, unlike previous examples in the literature where this is assumed to be constant. While wealthier countries did perform better in reducing poverty in the last decade and a half (1995-2008), assuming equal initial conditions, the situation reverses: the paper finds a statistically significant negative relation between initial average income and poverty reduction performance, with the poorest countries in the sample going from the worst to the best performers in poverty reduction. The analysis also quantifies how much poorer countries would have scored better, had they had the same level of initial average income as wealthier countries. The results suggest a remarkable change in poverty reduction performance, in addition to the reversal of ranks from worst to best performers. The application of this framework goes beyond poverty targets and the Millennium Development Goals. Given the widespread use of targets to determine resource allocation in education, health, or decentralized social expenditures, it constitutes a helpful tool to measure policy performance toward all kinds of goals. The proposed framework can be useful to evaluate the importance of initial conditions on outcomes, for a wide array of policies.
    Keywords: Achieving Shared Growth,Regional Economic Development,Rural Poverty Reduction,Poverty Monitoring&Analysis,Services&Transfers to Poor
    Date: 2013–02–01
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:6361&r=ltv
  6. By: Vikman, Ulrika (IFAU - Institute for Evaluation of Labour Market and Education Policy)
    Abstract: This paper evaluates how access to paid parental leave affects labor market entrance for immigrating mothers with small children. Paid parental leave together with job protection may increase labor force participation among women but if it is too generous it may create incentives to stay out of the labor force. This incentive effect may be especially true for mothers immigrating to a country where having small children automatically makes the mothers eligible for the benefit. To evaluate the differences in the assimilation process for those who have access to the parental leave benefit and those who do not, Swedish administration data is used in a difference-in-differences specification to control for both time in the country and the age of the youngest child. The results show that labor market entrance is delayed for mothers and that they are less likely to be a part of the labor force for up to seven years after theír residence permit if they had access to parental leave benefits when they came to Sweden. This reduction in the labor force participation is to some extent driven by unemployment since the effect on employment is smaller. But there is still an effect on employment of 3 percentage points lower participation rates 2-6 years after immigration.
    Keywords: Immigrant assimilation; labor market entrance; paid parental leave benefit
    JEL: J13 J15 J21
    Date: 2013–02–01
    URL: http://d.repec.org/n?u=RePEc:hhs:ifauwp:2013_004&r=ltv
  7. By: Lindahl, Mikael (Uppsala University, CESifo, IFAU, IZA and UCLS); Palme, Mårten (Dept. of Economics, Stockholm University); Sandgren Massih, Sofia (Uppsala University); Sjögren, Anna (IFAU, UCLS and SOFI Stockholm University)
    Abstract: We estimate the well-known Becker-Tomes (1986) model of intergenerational transmission of human capital. A Swedish data set which links individual measures on educational attainments of four generations, enables us to use great grandparents’ education as an instrumental variable. This approach was suggested already in Becker- Tomes (1986) but, because of the lack of data, never implemented. The identifying assumption, which holds within the Becker-Tomes framework, is that great grandparents’ education is unrelated to great grandchild’s education, conditional on the education of the parent and grandparent. We test the prediction that the structural parameter for grandparents’ education enters with a negative sign in an intergenerational regression model where the education of a child is linearly related to the education of the parent and the education of the grandparent. We fail to find empirical support for the model’s predictions.
    Keywords: The Becker-Tomes model; Human capital transmission; Multigenerational effects
    JEL: D31 J62
    Date: 2013–01–16
    URL: http://d.repec.org/n?u=RePEc:hhs:sunrpe:2013_0002&r=ltv
  8. By: Daiji Kawaguchi
    Abstract: This paper examines how the intensity of compulsory education affects the time use and academic achievement of children with different socioeconomic backgrounds. The impact is identified off the school-day reduction of Japan in 2002 that resulted when all Saturdays were set as public-school holidays. An analysis of time diaries and test scores before and after the school-day reduction reveals that the socioeconomic gradient of 9th graders' study time becomes 80% steeper and the socioeconomic gradient of academic achievements of 8th and 10th graders becomes 20-30% steeper. Intensive compulsory education contributes to equalizing the academic performances of children with different socioeconomic backgrounds.
    Keywords: Compulsory Education, Inequality, Socioeconomic Gradient
    JEL: I24 I28
    Date: 2013–01
    URL: http://d.repec.org/n?u=RePEc:hst:ghsdps:gd12-271&r=ltv
  9. By: Weng, Qian (Department of Economics, School of Business, Economics and Law, Göteborg University); Carlsson, Fredrik (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Common identity and peer punishment have been identified as important means to reduce free riding and to promote cooperation in teamwork settings. This paper examines the relative importance of these two mechanisms, as well as the importance of income distribution in team cooperation. In a repeated public good experiment, conditions vary among different combinations of homogenous or heterogeneous endowment, strong or weak identity, and absence or presence of peer punishment. We find that without punishment, strong identity can counteract the negative impact of endowment heterogeneity on cooperation. Moreover, punishment increases cooperation irrespective of income distribution and identity strength, and cooperation is similar across all treatments with punishment. These findings provide important implications for management policy makers in organizations: implementing ex ante income heterogeneity within teams should be done with caution, and a very strong peer punishment mechanism is more effective in enhancing cooperation over common identity when both are viable.<p>
    Keywords: Endowment distribution; identity; punishment; cooperation; public goods experiment
    JEL: C91 D63 H41 M54
    Date: 2013–01–23
    URL: http://d.repec.org/n?u=RePEc:hhs:gunwpe:0551&r=ltv

This nep-ltv issue is ©2013 by Maximo Rossi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at http://nep.repec.org. For comments please write to the director of NEP, Marco Novarese at <director@nep.repec.org>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.