nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2013‒09‒28
seven papers chosen by
Maximo Rossi
University of the Republic

  1. Middle-income traps : a conceptual and empirical survey By Im, Fernando Gabriel; Rosenblatt, David
  2. The Heterogeneous Impact of Conditional Cash Transfers By Sebastian Galiani; Patrick J. McEwan
  3. Bargaining and the Gender Wage Gap: A Direct Assessment By Card, David; Cardoso, Ana Rute; Kline, Patrick
  4. The relative income and relative deprivation hypotheses : a review of the empirical literature By Verme, Paolo
  5. Economic Conditions at Birth, Birth Weight, Ability, and the Causal Path to Cardiovascular Mortality By van den Berg, Gerard J.; Modin, Bitte
  6. Measuring Investment in Human Capital Formation: An Experimental Analysis of Early Life Outcomes By Orla Doyle; Colm Harmon; James J. Heckman; Caitriona Logue; Seong Moon
  7. Labor Market Policies and IMF Advice in Advanced Economies during the Great Recession By Olivier J. Blanchard; Florence Jaumotte; Prakash Loungani

  1. By: Im, Fernando Gabriel; Rosenblatt, David
    Abstract: In recent years, the term"middle-income trap"has entered common parlance in the development policy community. The term itself often has not been precisely defined in the incipient literature. This paper discusses in more detail definitional issues on the so-called middle-income trap. The paper presents evidence in terms of both absolute and relative thresholds. To get a better understanding of whether the performance of the middle-income trap has been different from other income categories, the paper examines historical transition phases in the inter-country distribution of income based on previous work in the literature. Transition matrix analysis provides little support for the idea of a middle-income trap. Analysis of cross-country patterns of growth provides additional support for the conclusions in the paper, which closes with a general discussion of potential policy implications.
    Keywords: Economic Conditions and Volatility,Economic Theory&Research,Income,Inequality,Poverty Impact Evaluation
    Date: 2013–09–01
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:6594&r=ltv
  2. By: Sebastian Galiani (University of Maryland); Patrick J. McEwan (Wellesley College)
    Abstract: The Honduran PRAF experiment randomly assigned conditional cash transfers to 40 of 70 poor municipalities, within five strata defined by a poverty proxy. Using census data, we show that eligible children were 8 percentage points more likely to enroll in school and 3 percentage points less likely to work. The effects were much larger in the two poorest strata, and statistically insignificant in the other three (the latter finding is robust to the use of a separate regression-discontinuity design). Heterogeneity confirms the importance of judicious targeting to maximize the impact and cost-effectiveness of CCTs. There is no consistent evidence of effects on ineligible children or on adult labor supply.
    JEL: H00
    Date: 2013–09
    URL: http://d.repec.org/n?u=RePEc:dls:wpaper:0149&r=ltv
  3. By: Card, David (University of California, Berkeley); Cardoso, Ana Rute (IAE Barcelona (CSIC)); Kline, Patrick (University of California, Berkeley)
    Abstract: An influential recent literature argues that women are less likely to initiate bargaining with their employers and are (often) less effective negotiators than men. We use longitudinal wage data from Portugal, matched to balance sheet information on employers, to measure the relative bargaining power of men and women and assess the impact of the gender gap in bargaining strength on the male-female wage gap. We show that a model with additive fixed effects for workers and gender-specific fixed effects for firms provides a close approximation to the wage structure for both men and women. Building on this model we present three complementary approaches to identifying the impact of differential bargaining strength. First, we perform a simple decomposition by assigning the firm-specific wage premiums for one gender to the other. Second, we relate the wage premiums for men and women to measures of employer profitability. Third, we show that changes in firm-specific profitability have a smaller effect on the wage growth of female than male employees. All three approaches suggest that women are paid only 85-90% of the premiums that men earn at more profitable firms. Overall, we estimate that the shortfall in women‘s relative bargaining power explains around 3 percentage points – or 10-15% – of the gender wage gap in Portugal.
    Keywords: wage differentials, discrimination, gender, linked employer-employee data
    JEL: J16 J31 J71
    Date: 2013–08
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp7592&r=ltv
  4. By: Verme, Paolo
    Abstract: The paper provides a review of the empirical literature in economics that has attempted to test the relative income hypothesis as put forward by Duesemberry (1949) and the relative deprivation hypothesis as formalized by Runciman (1966). It is argued that these two hypotheses and the empirical models used to test them are essentially similar and make use of the same relative income concept. The review covers the main intellectual contributions that led to the formulation and tests of these hypotheses, the main formulations of the utility and econometric equations used in empirical studies, the main econometric issues that complicate tests of the hypotheses, and the empirical results found in the literature. The majority of studies uses absolute and relative income together as explanatory factors in utility models and finds absolute income to have a positive and significant effect on utility (happiness). The majority of studies also finds relative income to be a significant factor in explaining utility but the sign of this relation varies across studies. The source of this variation is complex to detect given that few results are directly comparable across studies because of differences in model specifications.
    Keywords: Inequality,Economic Theory&Research,Labor Policies,Poverty Impact Evaluation,Rural Poverty Reduction
    Date: 2013–09–01
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:6606&r=ltv
  5. By: van den Berg, Gerard J. (University of Mannheim); Modin, Bitte (Centre for Health Equity Studies - CHESS)
    Abstract: We analyze interaction effects of birth weight and the business cycle at birth on individual cardiovascular (CV) mortality later in life. In addition, we examine to what extent these long-run effects run by way of cognitive ability and education and to what extent those mitigate the long-run effects. We use individual records of Swedish birth cohorts from 1915–1929 covering birth weight, family characteristics, school grades, sibling identifiers, and outcomes later in life including the death cause. The birth weight distribution does not vary over the business cycle. The association between birth weight (across the full range) and CV mortality rate later in life is significantly stronger if the individual is born in a recession. This is not explained by differential fertility by social class over the cycle. Ability itself, as measured at age 10, varies with birth weight and the cycle at birth. But the long-run effects of early-life conditions appear to mostly reflect direct biological mechanisms. We do not find evidence of indirect pathways through ability or education, and the long-run effects are not mitigated by education.
    Keywords: longevity, genetic determinants, health, business cycle, life expectancy, cardiovascular disease, school grades, siblings, fetal programming, cause of death, life course, developmental origins, nature and nurture, cognitive ability, education, stratified partial likelihood, recession
    JEL: I10 I12 I21 I31 J10 J13 N34 C41 E32
    Date: 2013–08
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp7605&r=ltv
  6. By: Orla Doyle; Colm Harmon; James J. Heckman; Caitriona Logue; Seong Moon
    Abstract: The literature on skill formation and human capital development clearly demonstrates that early investment in children is an equitable and efficient policy with large returns in adulthood. Yet little is known about the mechanisms involved in producing these long-term effects. This paper presents early evidence on the nature of skill formation based on an experimentally designed, five-year home visiting program in Ireland targeting disadvantaged families - Preparing for Life (PFL). We examine the impact of investment between utero to 18 months of age on a range of parental and child outcomes. Using the methodology of Heckman et al. (2010a), permutation testing methods and a stepdown procedure are applied to account for the small sample size and the increased likelihood of false discoveries when examining multiple outcomes. The results show that the program impact is concentrated on parental behaviors and the home environment, with little impact on child development at this early stage. This indicates that home visiting programs can be effective at offsetting deficits in parenting skills within a relatively short timeframe, yet continued investment may be required to observe direct effects on child development. While correcting for attrition bias leads to some changes in the precision of estimates, overall the results are quite similar.
    JEL: C12 C93 J13 J24
    Date: 2013–08
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:19316&r=ltv
  7. By: Olivier J. Blanchard; Florence Jaumotte; Prakash Loungani
    Abstract: This paper does two things. First, it articulates what are the main implications of theoretical and empirical research for design of labor market policies and labor market institutions. Second, in this light, the paper analyzes the IMF’s labor market recommendations since the beginning of the crisis, both in general, and more specifically in program countries
    Keywords: Labor market policy;Developed countries;Economic recession;Unemployment;Minimum wage;Wage bargaining;Technical Assistance;Fund role;Unemployment, labor market institutions, Great Recession
    Date: 2013–03–29
    URL: http://d.repec.org/n?u=RePEc:imf:imfsdn:13/02&r=ltv

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