nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2013‒10‒02
six papers chosen by
Maximo Rossi
University of the Republic

  1. Education Policy and Intergenerational Transfers in Equilibrium By Brant Abbott; Giovanni Gallipoli; Costas Meghir; Gianluca Violante
  2. Wage, Income and Consumption Inequality in Japan, 1981-2008: from Boom to Lost Decades By Jeremy Lise; Nao Sudo; Michio Suzuki; Ken Yamada; Tomoaki Yamada
  3. Intergenerational Persistence in Income and Social Class: The Impact of Within-Group Inequality By Jo Blanden; Paul Gregg; Lindsey Macmillan
  4. Is there a Double-Negative Effect? Gender and Ethnic Wage Differentials By Daniela Piazzalunga
  5. Fractionalization and Well-Being: Evidence from a new South African data set By Timothy Hinks
  6. The Intergenerational Dynamics of Social Inequality: Empirical Evidence from Europe and the United States By Veronika V. Eberharter

  1. By: Brant Abbott (University of British Columbia); Giovanni Gallipoli (University of British Columbia); Costas Meghir (Yale University, IFS and NBER); Gianluca Violante (New York University, CEPR and NBER)
    Abstract: This paper compares partial and general equilibrium effects of alternative financial aid policies intended to promote college participation. We build an overlapping generations life-cycle, heterogeneous-agent, incomplete-markets model with education, labor supply, and consumption/saving decisions. Altruistic parents make inter vivos transfers to their children. Labor supply during college, government grants and loans, as well as private loans, complement parental transfers as sources of funding for college education. We find that the current financial aid system in the U.S. improves welfare, and removing it would reduce GDP by two percentage points in the long-run. Any further relaxation of government-sponsored loan limits would have no salient effects. The short-run partial equilibrium effects of expanding tuition grants (especially their need-based component) are sizeable. However, long-run general equilibrium effects are 3-4 times smaller. Every additional dollar of government grants crowds out 20-30 cents of parental transfers.
    Keywords: Education, Financial Aid, Inter vivos Transfers, Credit Constraints, Equilibrium
    JEL: E24 I22 J23 J24
    Date: 2013–09
    URL: http://d.repec.org/n?u=RePEc:hka:wpaper:2013-010&r=ltv
  2. By: Jeremy Lise (University College London); Nao Sudo (Bank of Japan); Michio Suzuki (University of Tokyo); Ken Yamada (Singapore Management University); Tomoaki Yamada (Meiji University)
    Abstract: In this paper we document the main features of the distributions of wages, earnings, consumption and wealth in Japan since the early 1980s using four main data sources: the Basic Survey on Wage Structure (BSWS), the Family Income and Expenditure Survey (FIES), the National Survey of Family Income and Expenditure (NSFIE) and the Japanese Panel Survey of Consumers (JPSC). We present an empirical analysis of inequality that specifically considers the path from individual wages and earnings, to household earnings, after-tax income, and finally consumption. We find that household earnings inequality rose substantially over this period. Inequality in disposable income and in consumption also rose over this period but to a lesser extent, suggesting taxes and transfers as well as insurance channels available to households help to insulate household consumption from shocks to wages. We find the same pattern in inequality trends when we look over the life cycle of households as we do over time in the economy. Additionally we find that there are notable differences in the inequality trends for wages and hours between men and women over this period. Keywords: inequality trends; life-cycle inequality; wage dynamics.
    Keywords: inequality trends; life-cycle inequality; wage dynamics
    JEL: D31 D91 E23
    Date: 2013–09
    URL: http://d.repec.org/n?u=RePEc:hka:wpaper:2013-011&r=ltv
  3. By: Jo Blanden; Paul Gregg; Lindsey Macmillan
    Abstract: Family income is found to be more closely related to sons' earnings for a cohort born in 1970 compared to one born in 1958. This result is in stark contrast to the finding on the basis of social class; intergenerational mobility for this outcome is found to be unchanged. Our aim here is to explore the reason for this divergence. We derive a formal framework which relates mobility in measured family income/earnings to mobility in social class. Building on this framework we then test a number of alternative hypotheses to explain the difference between the trends, finding evidence of an increase in the intergenerational persistence of the permanent component of income that is unrelated to social class. We reject the hypothesis that the observed decline in income mobility is a consequence of the poor measurement of permanent family income in the 1958 cohort.
    Keywords: Intergenerational income mobility, social class fluidity, income inequality
    JEL: J13 J31 Z13
    Date: 2013–09
    URL: http://d.repec.org/n?u=RePEc:cep:cepdps:dp1242&r=ltv
  4. By: Daniela Piazzalunga
    Abstract: This paper investigates the gender and ethnic wage differentials for female immigrants, applying the Oaxaca decomposition 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%.
    Keywords: Immigration, gender, wage discrimination, Oaxaca decomposition, double-negative effect
    JEL: J16 J31 J61 J71
    Date: 2013
    URL: http://d.repec.org/n?u=RePEc:cca:wchild:11&r=ltv
  5. By: Timothy Hinks (University of the West of England, Bristol)
    Abstract: This paper aims to test whether a number of fractionalization variables that capture cultural and economic diversity have any impact on reported satisfaction as well as happiness. Controlling for standard economic and non-economic variables, we test whether (i) ethno-linguistic, (ii) religious and (iii) income fractionalization at the cluster level have any impact on well-being. The findings indicate that income fractionalization consistently predicts lower subjective life satisfaction when the individual's household income is controlled for, and that religious fractionalization is correlated with lower life satisfaction. Ethno-linguistic fractionalization though does not correlate with life satisfaction. Extensions of the model include adding interaction terms which indicate that ethno-linguistic fractionalization is important to specific ethno-linguistic groups.
    URL: http://d.repec.org/n?u=RePEc:uwe:wpaper:20121202&r=ltv
  6. By: Veronika V. Eberharter
    Abstract: Based on nationally representative data from the German Socio-Economic Panel (SOEP), the Panel Study of Income Dynamics (PSID), and the British Household Panel Survey (BHPS) we analyze the intergenerational transmission of economic and social (dis-)advantages in Germany, the United States and Great Britain. We test with the hypotheses that the extent and the determinants of intergenerational income mobility and the relative risk of poverty differ with respect to the existing welfare state regime, family role patterns, and social policy design. The empirical results indicate a higher intergenerational income elasticity in the United States than in Germany and Great Britain, and country differences concerning the influence of individual and parental socio-economic characteristics, and social exclusion attributes on intergenerational income mobility and the relative risk of poverty.
    Keywords: Social and economic inequality, intergenerational income mobility, poverty, social exclusion
    JEL: D31 J24 J62
    Date: 2013
    URL: http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp588&r=ltv

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