nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2013‒05‒19
sixteen papers chosen by
Maximo Rossi
University of the Republic

  1. The Marginal Income Effect of Education on Happiness: Estimating the Direct and Indirect Effects of Compulsory Schooling on Well-Being in Australia By Powdthavee, Nattavudh; Lekfuangfu, Warn N.; Wooden, Mark
  2. Outsourcing, Occupational Restructuring, and Employee Well-Being: Is There a Silver Lining? By Böckerman, Petri; Maliranta, Mika
  3. Rising Inequalities in Income and Health in China: Who is left behind? By Steef Baeten; Tom Van Ourti; Eddy Van Doorslaer
  4. Health and Wealth on the Roller-Coaster: Ireland, 2003-2011 By David Madden
  5. Job Spells, Employer Spells, and Wage Returns to Tenure By Devereux, Paul J.; Hart, Robert A.; Roberts, J. Elizabeth
  6. Social Networks and Labor Market Inequality between Ethnicities and Races By Ott Toomet; Marco van der Leij; Meredith Rolfe
  7. The Effects of International Migration on the Well-Being of Native Populations in Europe By Betz, William; Simpson, Nicole B.
  8. Female Labour Supply, Human Capital and Welfare Reform By Blundell, Richard; Costa Dias, Monica; Meghir, Costas; Shaw, Jonathan
  9. Happiness and Job Satisfaction in Urban China: A Comparative Study of Two Generations of Migrants and Urban Locals By Haining Wang; Zhiming Cheng; Russell Smyth
  10. Can Basic Entrepreneurship Transform the Economic Lives of the Poor? By Bandiera, Oriana; Burgess, Robin; Das, Narayan; Gulesci, Selim; Rasul, Imran; Sulaiman, Munshi
  11. Do Higher Corporate Taxes Reduce Wages? Micro Evidence from Germany By Fuest, Clemens; Peichl, Andreas; Siegloch, Sebastian
  12. Income and Wealth in the Irish Longitudinal Study on Ageing By O'Sullivan, Vincent; Nolan, Brian; Barrett, Alan
  13. New Developments in the Measurement of Welfare and Well-being By Bernard M.S. van Praag; Erik J.S. Plug
  14. Does High Home-Ownership Impair the Labor Market? By David G. Blanchflower; Andrew J. Oswald
  15. Maternal Employment and Childhood Obesity: A European Perspective By Gwozdz, Wencke; Sousa-Poza, Alfonso; Reisch, Lucia A.; Ahrens, Wolfgang; De Henauw, Stefaan; Eiben, Gabriele; Fernández-Alvira, Juan M.; Hadjigeorgiou, Charalampos; Kovács, Eva; Lauria, Fabio; Veidebaum, Toomas; Williams, Garrath; Bammann, Karin
  16. Top Incomes, Rising Inequality, and Welfare By Kevin J. Lansing; Agnieszka Markiewicz

  1. By: Powdthavee, Nattavudh (London School of Economics); Lekfuangfu, Warn N. (University College London); Wooden, Mark (Melbourne Institute of Applied Economic and Social Research)
    Abstract: Many economists and educators favour public support for education on the premise that education improves the overall well-being of citizens. However, little is known about the causal pathways through which education shapes people's subjective well-being (SWB). This paper explores the direct and indirect well-being effects of extra schooling induced through compulsory schooling laws in Australia. We find the net effect of schooling on later SWB to be positive, though this effect is larger and statistically more robust for men than for women. We then show that the compulsory schooling effect on male's SWB is indirect and is mediated through income.
    Keywords: schooling, indirect effect, well-being, mental health, windfall income, HILDA survey
    JEL: I20 I32 C36
    Date: 2013–04
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp7365&r=ltv
  2. By: Böckerman, Petri (Labour Institute for Economic Research); Maliranta, Mika (ETLA - The Research Institute of the Finnish Economy)
    Abstract: This paper examines the relationship between outsourcing and various aspects of employee well-being by devoting special attention to the role of occupational restructuring as a conveying mechanism. Using linked employer-employee data, we find that offshoring involves job destruction, especially when the destination is a low-wage country. In such circumstances, staying employees' job satisfaction is reduced. However, the relationship between outsourcing and employee well-being is not entirely negative. Our evidence also shows that offshoring to high-wage countries stimulates the vertical mobility of employees in affected firms in a manner that improves perceived well-being, particularly in terms of better prospects for promotion.
    Keywords: globalization, outsourcing, offshoring, downsizing, working conditions, subjective well-being, job satisfaction
    JEL: J28 F23
    Date: 2013–05
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp7399&r=ltv
  3. By: Steef Baeten (Institute for Health Policy and Management, Erasmus University Rotterdam); Tom Van Ourti (Erasmus School of Economics (EUR)); Eddy Van Doorslaer (Erasmus School of Economics (EUR))
    Abstract: During the last decades, China has experienced double-digit economic growth rates and rising inequality. This paper implements a new decomposition on the China Health and Nutrition panel Survey (1991-2006) to examine the extent to which changes in level and distribution of incomes and in income mobility are related to health disparities between rich and poor. We find that health disparities in China relate to rising income inequality and in particular to the adverse health and income experience of older (wo)men, but not to the growth rate of average incomes over the last decades. These findings suggest that replacement incomes and pensions at older ages may be one of the most important policy levers in combating health disparities between rich and poor Chinese.
    Keywords: China, income growth, income inequality, income mobility, health inequality
    JEL: C00 D30 D63 I14 I15
    Date: 2012–09–10
    URL: http://d.repec.org/n?u=RePEc:dgr:uvatin:2012091&r=ltv
  4. By: David Madden (University College Dublin)
    Abstract: This paper reviews developments in income and health poverty in Ireland over the 2003-2011 period using data from the Survey of Income and Living Conditions (SILC). It also examines developments in the correlation between the two. Income poverty fell up to and including 2009, after which this trend is reversed. Health poverty shows less of a trend over the period though there is some evidence of a reduction in health inequality from 2006. Movements in bi-dimensional poverty are mostly driven by income poverty, but there is evidence of a reduction in the correlation between health and income poverty over the period.
    Keywords: multidimensional poverty; dominance
    JEL: I12 I31 I32
    Date: 2013–05–15
    URL: http://d.repec.org/n?u=RePEc:ucn:wpaper:201305&r=ltv
  5. By: Devereux, Paul J. (University College Dublin); Hart, Robert A. (University of Stirling); Roberts, J. Elizabeth (University of Stirling)
    Abstract: We show that the distinction between job spells and employer spells matters for returns to tenure. Employer spells encompass between-job wage movements linked to promotions or demotions while job spells don't. Using a 1% sample of the British workforce over the period 1975-2010, we find that a significant proportion of the return to employer tenure arises due to job changes within employer spells. Conditional on tenure with employer, the return to job tenure is negative. This suggests that any positive effects of job-specific human capital on wage growth within jobs are outweighed by the effects of job changes within firms.
    Keywords: job spells, employer spells, wage-tenure profiles
    JEL: J31 J24
    Date: 2013–05
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp7384&r=ltv
  6. By: Ott Toomet (Tartu University); Marco van der Leij (University of Amsterdam); Meredith Rolfe (London School of Economics)
    Abstract: This paper analyzes the relationship between unexplained racial/ethnic wage differentials on the one hand and social network segregation, as measured by inbreeding homophily, on the other hand. Our analysis is based on both U.S. and Estonian surveys, supplemented with Estonian telephone communication data. In case of Estonia we consider the regional variation in economic performance of the Russian minority, and in the U.S. case we consider the regional variation in black-white differentials. Our analysis finds a strong relationship between the size of the differential and network segregation: regions with more segregated social networks exhibit larger unexplained wage gaps.
    Keywords: social networks, wage differential, homophily, segregation, race, minorities
    JEL: J71 J31 Z13
    Date: 2012–11–13
    URL: http://d.repec.org/n?u=RePEc:dgr:uvatin:2012120&r=ltv
  7. By: Betz, William (Colgate University); Simpson, Nicole B. (Colgate University)
    Abstract: With worldwide migration becoming increasingly prevalent in policy agendas over the past several decades, understanding the effects that migrants have on a host country's population continues to be an important research agenda. There is a large literature documenting the effects that migrants have on native wages, tax burden, unemployment, etc. However, very little is understood about how migrants affect the happiness, or subjective well-being, of natives. This paper uses the European Social Survey to analyze the effects of aggregate immigration inflows on the subjective well-being of native-born populations in a panel of 26 countries between 2002 and 2010. We find that recent immigrant flows have a nonlinear, yet overall positive impact on the well-being of natives. Specifically, we find that immigrant flows from two years prior have larger positive effects on natives' well-being than immigrant inflows from one year prior. Our findings are very small in magnitude and in practical application; only large immigrant flows would affect native well-being significantly.
    Keywords: international migration, happiness, life satisfaction
    JEL: F22 I31 O15
    Date: 2013–04
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp7368&r=ltv
  8. By: Blundell, Richard (University College London); Costa Dias, Monica (Institute for Fiscal Studies, London); Meghir, Costas (Yale University); Shaw, Jonathan (Institute for Fiscal Studies, London)
    Abstract: We consider the impact of tax credits and income support programs on female education choice, employment, hours and human capital accumulation over the life-cycle. We analyze both the short run incentive effects and the longer run implications of such programs. By allowing for risk aversion and savings, we quantify the insurance value of alternative programs. We find important incentive effects on education choice and labor supply, with single mothers having the most elastic labor supply. Returns to labor market experience are found to be substantial but only for full-time employment, and especially for women with more than basic formal education. For those with lower education the welfare programs are shown to have substantial insurance value. Based on the model, marginal increases to tax credits are preferred to equally costly increases in income support and to tax cuts, except by those in the highest education group.
    Keywords: labour supply, human capital, welfare reform
    JEL: J22 J24 H31
    Date: 2013–04
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp7375&r=ltv
  9. By: Haining Wang; Zhiming Cheng; Russell Smyth
    Abstract: This study investigates determinants of happiness and job satisfaction of urban locals, first-generation migrants and new-generation migrants in China's urban workforce. We present evidence to suggest that new-generation migrants are less satisfied with their jobs and lives than first-generation migrants, despite having higher income. This finding is consistent with aspirations rising faster than income in China's fast growing urban economy.
    Keywords: China; Migrants; Subjective wellbeing
    JEL: J28
    Date: 2013–05
    URL: http://d.repec.org/n?u=RePEc:mos:moswps:2013-08&r=ltv
  10. By: Bandiera, Oriana (London School of Economics); Burgess, Robin (London School of Economics); Das, Narayan (Bangladesh Rural Advancement Committee (BRAC)); Gulesci, Selim (Bocconi University); Rasul, Imran (University College London); Sulaiman, Munshi (Bangladesh Rural Advancement Committee (BRAC))
    Abstract: The world's poorest people lack capital and skills and toil for others in occupations that others shun. Using a large-scale and long-term randomized control trial in Bangladesh this paper demonstrates that sizable transfers of assets and skills enable the poorest women to shift out of agricultural labor and into running small businesses. This shift, which persists and strengthens after assistance is withdrawn, leads to a 38% increase in earnings. Inculcating basic entrepreneurship, where severely disadvantaged women take on occupations which were the preserve of non-poor women, is shown to be a powerful means of transforming the economic lives of the poor.
    Keywords: asset transfers, capital constraints, vocational training, occupational choice, structural change, poverty
    JEL: O12 I30 D50
    Date: 2013–05
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp7386&r=ltv
  11. By: Fuest, Clemens (ZEW Mannheim); Peichl, Andreas (IZA); Siegloch, Sebastian (IZA)
    Abstract: Because of endogeneity problems very few studies have been able to identify the incidence of corporate taxes on wages. We circumvent these problems by using an 11-year panel of data on 11,441 German municipalities' tax rates, 8 percent of which change each year, linked to administrative matched employer-employee data. Consistent with our theoretical model, we find a negative effect of corporate taxation on wages: a 1 euro increase in tax liabilities yields a 77 cent decrease in the wage bill. The direct wage effect, arising in a collective bargaining context, dominates, while the conventional indirect wage effect through reduced investment is empirically small due to regional labor mobility. High and medium-skilled workers, who arguably extract higher rents in collective agreements, bear a larger share of the corporate tax burden.
    Keywords: business tax, wage incidence, administrative data, local taxation
    JEL: H2 H7 J3
    Date: 2013–05
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp7390&r=ltv
  12. By: O'Sullivan, Vincent (Trinity College Dublin); Nolan, Brian (University College Dublin); Barrett, Alan (ESRI, Dublin)
    Abstract: Between 2009 and 2011, data were collected under the first wave of The Irish Longitudinal Study on Ageing (TILDA). Over 8,500 people aged 50 and over and living in Ireland were interviewed on a wide range of topics covering socioeconomic and health issues. Our primary goals in this paper are (a) to present details on two of the variables which will be of particular interest to economists, namely income and wealth and (b) to discuss issues in relation to their use, in particular with respect to missing data. We describe how the income and wealth data were collected. We assess the quality of the income data by comparing them to those obtained through the European Union Statistics on Income and Living Conditions (EU-SILC). We find that the distribution of income in the TILDA sample resembles closely that found in a comparable sample from the EU-SILC. We undertake two pieces of analysis, by way of demonstrating potential applications of the data. First, we examine the joint distribution of income and assets and find that there is a small but non-negligible number of people who have low levels of income but high levels of assets and another similarly sized group in the opposite situation. Second, we consider the relationship between income/wealth and life satisfaction, another variable captured in TILDA. We find that income and housing wealth both affect life satisfaction but that the influence of income is much larger.
    Keywords: income, wealth, ageing
    JEL: D31 J14
    Date: 2013–05
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp7393&r=ltv
  13. By: Bernard M.S. van Praag (University of Amsterdam); Erik J.S. Plug (University of Amsterdam)
    Abstract: This paper is dating from 1995, when it has been presented at the Ragnar Frisch Centennial Memorial Conference in Oslo. It has never been published before. In this paper for the first time the Cantril ladder question data have been employed in the way which later has become known as happiness economics. After two introductory sections 1and 2, Section 3 explains the Leyden School methodology to estimate financial satisfaction or in traditional terms a (cardinal) welfare function of money. In Section 4 the Cantril ladder question is employed to estimate a function of satisfaction with life as a whole. It is found that well-being is quadratic in the number of children, leading to an optimum number of children, given income and given the fact of a one-breadwinner- or two- breadwinners-family. In Section 5 the effects of children on financial satisfaction and on satisfaction with life as a whole are compared. With respect to financial satisfaction it is found that the more children there are the smaller financial satisfaction. Comparison of the two effects makes it possible to distinguish between the monetary cost associated with having children and the non-monetary benefits caused by having children. Part of this paper is based on Plug and Van Praag (1995).
    Keywords: happiness economics, Leyden School, Cantril Ladder, family equivalence scales, costs and benefits of children
    JEL: B50 D19 J1 D6
    Date: 2012–01–16
    URL: http://d.repec.org/n?u=RePEc:dgr:uvatin:2012005&r=ltv
  14. By: David G. Blanchflower (Peterson Institute for International Economics); Andrew J. Oswald (University of Warwick)
    Abstract: The authors explore the hypothesis that high home-ownership damages the labor market. The results are relevant to, and may be worrying for, a range of policymakers and researchers. The authors find that rises in the home-ownership rate in a US state are a precursor to eventual sharp rises in unemployment in that state. The elasticity exceeds unity: A doubling of the rate of home-ownership in a US state is followed in the long-run by more than a doubling of the later unemployment rate. What mechanism might explain this? The authors show that rises in home-ownership lead to three problems: (i) lower levels of labor mobility, (ii) greater commuting times, and (iii) fewer new businesses. The argument is not that owners themselves are disproportionately unemployed. Evidence suggests, instead, that the housing market can produce negative 'externalities' upon the labor market. The time lags are long. That gradualness may explain why these important patterns are so little-known.
    Keywords: Natural rate of unemployment, labor market, housing market, structural, business cycles, mobility
    JEL: I1 I3
    Date: 2013–05
    URL: http://d.repec.org/n?u=RePEc:iie:wpaper:wp13-3&r=ltv
  15. By: Gwozdz, Wencke (Copenhagen Business School); Sousa-Poza, Alfonso (University of Hohenheim); Reisch, Lucia A. (Copenhagen Business School); Ahrens, Wolfgang (University of Bremen); De Henauw, Stefaan (Ghent University); Eiben, Gabriele (University of Gothenburg); Fernández-Alvira, Juan M. (University of Zaragoza); Hadjigeorgiou, Charalampos (affiliation not available); Kovács, Eva (affiliation not available); Lauria, Fabio (affiliation not available); Veidebaum, Toomas (affiliation not available); Williams, Garrath (Lancaster University); Bammann, Karin (University of Bremen)
    Abstract: The substantial increase in female employment rates in Europe over the past two decades has often been linked in political and public rhetoric to negative effects on child development, including obesity. We analyse this association between maternal employment and childhood obesity using rich objective reports of various anthropometric and other measures of fatness from the IDEFICS study of children aged 2-9 in 16 regions of eight European countries. Based on such data as accelerometer measures and information from nutritional diaries, we also investigate the effects of maternal employment on obesity's main drivers: calorie intake and physical activity. Our analysis provides little evidence for any association between maternal employment and childhood obesity, diet or physical activity.
    Keywords: maternal employment, children, obesity, Europe
    JEL: I12 J13 J22
    Date: 2013–04
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp7371&r=ltv
  16. By: Kevin J. Lansing (Federal Reserve Bank of San Francisco, and Norges Bank); Agnieszka Markiewicz (Erasmus University Rotterdam)
    Abstract: This paper develops a general-equilibrium model of skill-biased technological change that approximates the observed shifts in the shares of wage and non-wage income going to the top decile of U.S. households since 1980. Under realistic assumptions, we find that all agents can benefit from the technology change, provided that the observed rise in redistributive transfers over this period is taken into account. We show that the increase in capital’s share of total income and the presence of capital-entrepreneurial skill complementarity are two key features that help support the wages of ordinary workers as the new technology diffuses.
    Keywords: Income Inequality, Skill-biased Technological Change, Capital-skill
    JEL: E32 E44 H23 O33
    Date: 2012–10–26
    URL: http://d.repec.org/n?u=RePEc:dgr:uvatin:2012114&r=ltv

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