nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2013‒09‒06
seven papers chosen by
Maximo Rossi
University of the Republic

  1. Minimum Wage and Job Mobility By Céspedes, Nikita; Sánchez, Alan
  2. Education, income, and the distribution of happiness By Owen, Ann; Phillips, Anne
  3. Inequality-adjusted gender wage differentials in Germany By Ekaterina Selezneva; Philippe Van Kerm
  4. Is there a Double-Negative Effect? Gender and Ethnic Wage Differentials. By Piazzalunga, Daniela
  5. Job, Employment and Occupation Flows Over the Business Cycle By Lodewijk Visschers; Carlos Carrillo-Tudela
  6. Top Incomes, Rising Inequality, and Welfare By Kevin J. Lansing; Agnieszka Markiewicz
  7. Measuring capabilities with random scale models. Women’s freedom of movement By Andreassen, Leif; Dagsvik, John; Di Tommaso, Maria Laura

  1. By: Céspedes, Nikita (Banco Central de Reserva del Perú; PUCP); Sánchez, Alan (GRADE)
    Abstract: We study the effects of the minimum wage in over employment and income by considering a monthly database that captures seven minimum wage changes registered between 2002 and 2011. We estimate that about 1 million workers have an income by main occupation in the neighbourhood of the minimum wage. We found that the minimum wage-income elasticity is statistically significant; the evidence also suggests that those who receive low incomes and those working in small businesses are the most affected by increases in the minimum wage. Employment effects are monotonically decreasing in absolute terms by firm size: moderate in big firms and higher in small firms. Results are robust when assessing the job-to-job transitions. Finally, we present evidence that supports the hypothesis that the minimum wage in Peru is correlated with income. The movement of income distribution in the context of changes in the minimum wage as well as the results provided by a model that captures the drivers of income justify this result.
    Keywords: Minimum wage, Labor mobility, Income dynamics, Informality
    JEL: E24 E26 J20 J21 J61
    Date: 2013–08
    URL: http://d.repec.org/n?u=RePEc:rbp:wpaper:2013-012&r=ltv
  2. By: Owen, Ann; Phillips, Anne
    Abstract: We study happiness inequality in the United States using data from the 2005 to 2010 Behavioral Risk Factor Surveillance System (BRFSS). We aggregate individual level data to the state level and study how the average life satisfaction of various income, education, and life satisfaction groups changes with the average life satisfaction of the state. We find that the life satisfaction of the least happy does not increase in equal proportion with the average happiness of society, suggesting that increasing happiness levels are likely to lead to greater happiness inequality. However, the life satisfaction of the poorest and least educated does increase in equal proportions with average life satisfaction. Taken together, these results indicate that directed policies aimed at increasing the income of the poor or education levels of the least educated could result in less inequality in the distribution of welfare.
    Keywords: happiness inequality; happiness of poor; happiness of educated
    JEL: D3 I0 I24
    Date: 2013–07
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:49387&r=ltv
  3. By: Ekaterina Selezneva (IOS Regensburg); Philippe Van Kerm
    Abstract: This paper exploits data from the German Socio-Economic Panel (SOEP) to re-examine the gender wage gap in Germany on the basis of inequality-adjusted measures of wage differentials which fully account for gender differences in pay distributions. The inequality-adjusted gender pay gap measures are significantly larger than suggested by standard indicators, especially in East Germany. Women appear penalized twice, with both lower mean wages and greater wage inequality. A hypothetical risky investment question collected in 2004 in the SOEP is used to estimate individual risk aversion parameters and benchmark the ranges of inequality-adjusted wage differentials measures.
    Keywords: gender gap, wage differentials, wage inequality, expected utility, risk aversion, East and West Germany, SOEP, Singh-Maddala distribution, copula-based selection model
    JEL: D63 J31 J70
    Date: 2013–08
    URL: http://d.repec.org/n?u=RePEc:ost:wpaper:334&r=ltv
  4. By: Piazzalunga, Daniela (University of Turin)
    Abstract: This paper investigates the gender and ethnic wage differentials for female Immigrants, applying the Oaxaca ecomposition to estimate the level of discrimination. The gender pay gap is quite small (7.42%), but it's not explained by observable differences, whilst the ethnic wage gap is larger (27.11%), but the explained components account for about 30%. Ultimately, we will evaluate how the multiple levels of discrimination (due to being a woman and a foreigner at the same time) intersect, following the decomposition suggested by Shamsuddin (1998). The double - negative effect is estimated to be 56 - 62%.
    Date: 2013–07
    URL: http://d.repec.org/n?u=RePEc:uto:dipeco:201337&r=ltv
  5. By: Lodewijk Visschers (Universidad Carlos III); Carlos Carrillo-Tudela (Essex)
    Abstract: We study, empirically and theoretically, the flows from and to unemployment, and from job to job, and relate these to occupational mobility. We are also particularly interested in the cyclical patterns of these flows. Using the Survey of Income and Program Participation, we document patterns of job mobility with and without occupational change, and in particular, focus on these workers’ subsequent labor market outcomes. We then model these flows in an adaptation of Carrillo-Tudela and Visschers (2011, 2013) that incorporates on-the-job search. Due to its block-recursive structure, the model stays tractable, even when the agents are subject to aggregate productivity shocks. We investigate whether the observed patterns of occupational mobility are consistent with an attachment to occupations growing with occupational tenure, also when incorporating job-to-job transitions; whether this attachment is in line with estimated returns to occupational human capital; and how this attachment varies over the business cycle, and over the life cycle. We then plan to relate our outcomes to the overall strength of reallocative forces for workers, and what role the business cycle plays in this.
    Date: 2013
    URL: http://d.repec.org/n?u=RePEc:red:sed013:165&r=ltv
  6. By: Kevin J. Lansing (FRB San Francisco and Norges Bank); Agnieszka Markiewicz (Erasmus University Rotterdam)
    Abstract: This paper develops a general-equilibrium production model of skill-biased technological change that approximates the dramatic upward shift in the share of total income going to the top decile of U.S. households since 1980. Under realistic assumptions, we show that all agents in the economy can benefit from the technology change, provided that the observed rise in U.S. 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 Complementarity, Redistribution, Welfare
    JEL: D31 E32 E44 H23 O33
    Date: 2013–07–01
    URL: http://d.repec.org/n?u=RePEc:san:cdmawp:1304&r=ltv
  7. By: Andreassen, Leif; Dagsvik, John; Di Tommaso, Maria Laura (University of Turin)
    Abstract: Sen’s capability approach distinguishes between what people are free to do and to be (their ‘capabilities’) and what they do and who they are (their ‘functionings’). In the capability approach,individuals’ well-being is evaluated not only in terms of achieved functionings, but also in terms of the freedom to choose between different functionings. I t implies that individuals with the same observed functionings may have different well-being because their choice sets (i.e. capabilities) are different. The measurement of capabilities is difficult because they are not observed. In this paper, we measure the capability of Italian women to move freely even if we only observe the realized choices. In order to distinguish between the latent capabilities of movement and the observed functionings, we adopt a new methodology based on the theory of random scale models. The data set is selected from a domestic violence survey of 25,000 Italian women for year 20 06. We demonstrate that such models can offer a suitable framework for measuring well-being freedom and therefore capabilities. In particular, we find out that the percentage of women who are predicted to be restricted in their freedom of movement is about 25% . Moreover, if all women were unconstrained, 16.4 percent of them would choose to do more activities, i.e to have more freedom of movement.
    Date: 2013–07
    URL: http://d.repec.org/n?u=RePEc:uto:dipeco:201334&r=ltv

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