nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2013‒05‒11
nine papers chosen by
Maximo Rossi
University of the Republic

  1. How does subjective well-being evolve with age? A literature review By López Ulloa, Beatriz Fabiola; Møller, Valerie; Sousa-Poza, Alfonso
  2. Within-establishment wage inequality and satisfaction By Poggi, Ambra
  3. Do Extended Unemployment Benefits Lengthen Unemployment Spells? Evidence from Recent Cycles in the U.S. Labor Market By Farber, Henry; Valletta, Robert G.
  4. The Making of Middle Class in Africa: Evidence from DHS Data By Ncube, Mthuli; Shimeles, Abebe
  5. Evaluating antipoverty transfer programmes in Latin America and sub-Saharan Africa: Better policies? Better politics? By Barrientos, Armando; Villa, Juan M.
  6. A Multidimensional Perspective of Poverty, and its Relation with the Informal Labor Market: An Application to Ecuadorian and Turkish Data. By Armagan Tuna Aktuna Gunes; Carla Canelas
  7. Flexibility of the labor market. By Santos Raposo, P.M.
  8. Sorting via Screening versus Signaling: A Theoretic and Experimental Comparison By Werner Güth; Fabian Winter
  9. Gender Differences in Life Satisfaction and Social Participation By Humpert, Stephan

  1. By: López Ulloa, Beatriz Fabiola; Møller, Valerie; Sousa-Poza, Alfonso
    Abstract: This literature review provides an overview of the theoretical and empirical research in several disciplines on the relation between ageing and subjective well-being, i.e., how subjective well-being evolves across the lifespan. Because of the different methodologies, data sets and samples used, comparison among disciplines and studies is difficult. However, extant studies do show either a U-shaped, inverted U-shaped or linear relation between ageing and subjective well-being. --
    Keywords: Life satisfaction,Ageing,U-shape
    Date: 2013
  2. By: Poggi, Ambra
    Abstract: The aim of this paper is to provide fresh empirical evidence of the mechanisms through which wage inequality affects worker satisfaction. Theoretically, wages of others may affect workers' utility for two main reasons: Workers may derive well-being from their social status (comparison hypothesis) and/or they may use others wages to help predict their own future wage (information hypothesis). Both hypotheses are tested. To achieve her aims, the author models individual utility from pay as a function of a worker's own wage and the earnings of all other workers within the same establishment, and she estimates the model using British employer-employee data. Incomplete information about others wages is assumed. The author finds that the comparison effects matter. Of most interest, she provides some first evidence about a positive relation between well-being and inequality. Her results are robust within the different specifications and different definitions of the reference group. --
    Keywords: satisfaction,comparison income,co-workers,inequality,incomplete information
    JEL: J28 J31 J33 C25
    Date: 2013
  3. By: Farber, Henry (Princeton University); Valletta, Robert G. (Federal Reserve Bank of San Francisco)
    Abstract: In response to the Great Recession and sustained labor market downturn, the availability of unemployment insurance (UI) benefits was extended to historical highs in the United States. We exploit variation in the timing and size of UI benefit extensions across states to estimate the overall impact of these extensions on unemployment duration, comparing the experience with the prior extension of benefits during the much milder downturn in the early 2000s. Using monthly matched individual data from the U.S. Current Population Survey (CPS) for the periods 2000-2005 and 2007-2012, we estimate the effects of UI extensions on unemployment transitions and duration. We rely on individual variation in benefit availability based on the duration of unemployment spells and the length of UI benefits available in the state and month, conditional on state economic conditions and individual characteristics. We find a small but statistically significant reduction in the unemployment exit rate and a small increase in the expected duration of unemployment arising from both sets of UI extensions. The effect on exits and duration is primarily due to a reduction in exits from the labor force rather than a decrease in exits to employment (the job finding rate). The magnitude of the overall effect on exits and duration is similar across the two episodes of benefit extensions. Although the overall effect of UI extensions on exits from unemployment is small, it implies a substantial effect of extended benefits on the steady-state share of unemployment in the cross-section that is long-term.
    Keywords: unemployment, unemployment insurance, unemployment duration
    JEL: J64 J65
    Date: 2013–04
  4. By: Ncube, Mthuli (African Development Bank); Shimeles, Abebe (African Development Bank)
    Abstract: This paper presents evidence on the making of the middle class in Africa by exploiting a comparable micro data from the Demographic and Health Surveys (DHS) for thirty-seven countries over two decades consisting of over seven hundred thousand household histories. We constructed a pseudo-panel to examine the dynamics of middle class in blocks of four periods covering the period 1990-2011. A key finding is that there was significant mobility of the middle class to the upper class in the last two decades with very few slipping back to poverty with obvious difference across countries. The paper approached the making of a middle class in Africa from institutional and policy perspectives. Initial conditions such as level of development in early decades, quality of institutions and most of all ethnic fractionalization play a significant role in determining the growth of the middle class in recent years. In addition we found evidence suggesting that the size of the middle class is higher in countries where mutual trust among citizens tends to be stronger. The role of education feature prominently in the making of the middle class. In about 30 of the 83 country-level regression decompositions we conducted for the asset index, the contribution of education exceeded 25% in explaining the overall variance in the asset index. The 'premium' (or 'return') individuals obtain from achieving primary, secondary and tertiary level of education is unambiguously high compared with no education, but the effect decreases as the mean level of schooling increases.
    Keywords: middle class, asset index, multiple correspondence analysis, regression decomposition
    JEL: D31 J15
    Date: 2013–04
  5. By: Barrientos, Armando; Villa, Juan M.
    Abstract: The paper provides a comparative analysis of the incidence of evaluation methods in antipoverty transfer programmes in Latin America and sub-Saharan Africa. The paper identifies two broad explanations for the incidence of evaluation in antipoverty transfe
    Keywords: impact evaluation, poverty, antipoverty transfers, Latin America, sub-Saharan Africa
    Date: 2013
  6. By: Armagan Tuna Aktuna Gunes (Centre d'Economie de la Sorbonne - Paris School of Economics); Carla Canelas (Centre d'Economie de la Sorbonne - Paris School of Economics)
    Abstract: In this paper, we study the links between time use, informal labor market, and poverty measures in two countries that strongly differ on their level of development, by means of a multidimensional poverty index, and a bivariate probit model to assess the changes in the joint probability of working in the informal sector while being considered poor.
    Keywords: Poverty, informality, time use.
    JEL: D0 D3
    Date: 2013–03
  7. By: Santos Raposo, P.M. (Tilburg University)
    Abstract: This dissertation is comprised of three essays about flexibility of the labor market. It is possible to distinguish three broad research themes in the thesis: hours, unemployment and wage losses of displaced workers. Overall, it is difficult to draw general conclusions regarding such different specific topics. Fewer hours will allow for the same work to be shared by more workers. However, unemployment duration is longer (not only in Europe but also in the U.S.) and flexibility is needed in terms of increasing labor mobility and therefore reducing the duration of the unemployment spell. The information that is passed to the employer through the schooling signal does not promote more job offers to the more educated unemployed. This finding raises the importance of discussing the interest of providing vocational training in order to help these workers to find a job. In terms of earnings losses of displaced workers we know that these losses are large and persistent. These losses are largely explained by the long-term joblessness. The wage losses experienced by the displaced worker are explained by the allocation into lower-paid job titles and sorting into low wage firms.
    Date: 2013
  8. By: Werner Güth (Max Planck Institute of Economics, Strategic Interaction Group); Fabian Winter (Max Planck Institute of Economics, Strategic Interaction Group)
    Abstract: Similar to Kübler et al. (2008, GEB 64, p. 219-236), we compare sorting in games with asymmetric incomplete information theoretically and experimentally. Rather than distinguishing two very different sequential games, we use the same game format and capture the structural difference of screening and signaling only via their payoff specification. The experiment thus relies on the same verbal instructions. Although the equilibrium outcomes coincide, greater efficiency losses off the equilibrium play due to sorting under signaling, compared to screening, is predicted and confirmed experimentally.
    Keywords: sorting, screening, signaling, wage bargaining, off-equilibrium play
    JEL: C9 D82 J24 J40
    Date: 2013–04–24
  9. By: Humpert, Stephan
    Abstract: This paper deals with the effects of social participation activities on life satisfaction. Using the German General Social Survey (ALLBUS) for 2010, I present gender specific differences for several social activities, such as club memberships of political, welfare, health or more leisure time orientated groups. These activities have different impacts on male or female satisfaction. While sports and civic engagements improve only female life satisfaction, men are more affected by charity organizations or leisure time activities, such as hobbies. It is an interesting result that political activities and trade unions have no, or even negative effects on life satisfaction.
    Keywords: Subjective Well-Being; Social Participation; German General Social Survey (ALLBUS);
    JEL: D60 I31 O52 Z13
    Date: 2013–05–06

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