nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2013‒05‒24
six papers chosen by
Maximo Rossi
University of the Republic

  1. Income Comparisons, Income Formation, and Subjective Well-Being: New Evidence on Envy versus Signaling By Heinz Welsch; Jan Kühling
  2. Subjective Well-Being and Income: Is There Any Evidence of Satiation? By Betsey Stevenson; Justin Wolfers
  3. Is the persistent gender gap in income and wages due to unequal family responsibilities? By Angelov, Nikolay; Johansson, Per; Lindahl, Erica
  4. Subjective and Objective Indicators of Racial Progress * By Betsey Stevenson; Justin Wolfers
  5. Mobility in China By Yi Chen; Frank A Cowell
  6. Employment Reallocation and Unemployment Revisited: A Quantile Regression Approach By T. Panagiotidis; G. Pelloni

  1. By: Heinz Welsch; Jan Kühling
    Abstract: Drawing on the distinction between envy and signaling effects in income comparison, this paper uses 307,465 observations for subjective well-being and its covariates from Germany, 1990-2009, to study whether the nature of income comparison has changed in the process of economic development, and how such changes are related to changes in the nature of income formation. By conceptualizing a person’s comparison income as the income predicted by an earnings equation, we find that, while in 1990-1999 envy has been the dominant concern in West Germany and signaling the dominant factor in East Germany, income comparison was non-existing in 2000-2009. We also find that the earnings equation reflects people’s ability more accurately in the second than in the first period. Together, these findings suggest that comparing one’s income with people of the same ability is important only when ability is insufficiently reflected in own income.
    Keywords: Income comparison, envy, signaling, subjective well-being, income formation
    JEL: D31 I31 J31 P36 Z13
    Date: 2013
  2. By: Betsey Stevenson; Justin Wolfers
    Abstract: Many scholars have argued that once “basic needs†have been met, higher income is no longer associated with higher in subjective well-being. We assess the validity of this claim in comparisons of both rich and poor countries, and also of rich and poor people within a country. Analyzing multiple datasets, multiple definitions of “basic needs†and multiple questions about well-being, we find no support for this claim. The relationship between well-being and income is roughly linear-log and does not diminish as incomes rise. If there is a satiation point, we are yet to reach it.
    Keywords: Subjective well-being, happiness, satiation, basic needs, Easterlin paradox
    JEL: D6 I3 N3 O1 O4
    Date: 2013–05
  3. By: Angelov, Nikolay (Uppsala Center for Labor Studies); Johansson, Per (Uppsala Center for Labor Studies); Lindahl, Erica (IFAU)
    Abstract: We compare the income and wage trajectories of women in rela- tion 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 eects of entering parenthood. Our main nding is that 15 years after the rst 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 mag- nitude of these eects depends on relative incomes or wages within the family.
    Keywords: Gender gap; Quantile regression; Income; Wages
    JEL: C21 D13 J21
    Date: 2013–02–14
  4. By: Betsey Stevenson; Justin Wolfers
    Abstract: Progress in closing differences in many objective outcomes for blacks relative to whites has slowed, and even worsened, over the past three decades. However, over this period the racial gap in wellbeing has shrunk. In the early 1970s data revealed much lower levels of subjective wellâ€being among blacks relative to whites. Investigating various measures of wellâ€being, we find that the wellâ€being of blacks has increased both absolutely and relative to that of whites. While a racial gap in wellâ€being remains, twoâ€fifths of the gap has closed and these gains have occurred despite little progress in closing other racial gaps such as those in income, employment, and education. Much of the current racial gap in wellâ€being can be explained by differences in the objective conditions of the lives of black and white Americans. Thus making further progress will likely require progress in closing racial gaps in objective circumstances.
    Keywords: Subjective wellâ€being, life satisfaction, happiness, race
    JEL: D6 I32 J1 J7 K1
    Date: 2013–03
  5. By: Yi Chen; Frank A Cowell
    Abstract: We examine the evidence on rank and income mobility in China during the decades immediately preceding and immediately following the millennium using panel data from the China Health and Nutrition Survey. We show that rank mobility changed markedly over the period: in this respect China is becoming markedly more rigid. By contrast income mobility has carried on increasing; so has income inequality.
    Keywords: Mobility Measurement, Income Distribution
    JEL: D63
    Date: 2013–04
  6. By: T. Panagiotidis; G. Pelloni
    Abstract: This study revisits the sectoral shifts hypothesis for the US for the period 1948 to 2011. A quantile regression approach is employed in order to investigate the asymmetric nature of the relationship between sectoral employment and unemployment. Significant asymmetries emerge. Lilien’s dispersion index is significant only for relatively high levels of unemployment and becomes insignificant for low levels suggesting that reallocation affects unemployment only when the latter is high. More job reallocation is associated with higher unemployment.
    JEL: C22 C50 E24
    Date: 2013–05

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