nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2013‒11‒22
seven papers chosen by
Maximo Rossi
University of the Republic

  1. Do Remittances Reduce Poverty and Inequality in the Western Balkans? Evidence from Macedonia. By Petreski, Marjan; Jovanovic, Branimir
  2. Firm Dynamics, Job Turnover, and Wage Distributions in an Open Economy By Cosar, A. Kerem; Guner, Nezih; Tybout, James
  3. Altruism in Networks By Renaud Bourlès; Yann Bramoullé
  4. Poverty Prospects in Europe : Assessing Progress towards the Europe 2020 Poverty and Social Exclusion Targets in New European Union Member States By World Bank
  5. Individual Behavior as a Pathway between Early-Life Shocks and Adult Health: Evidence from Hunger Episodes in Post-War Germany By Kesternich, Iris; Siflinger, Bettina; Smith, James P.; Winter, Joachim K.
  6. Senior poverty in Canada: A decomposition analysis By Schirle, Tammy
  7. Shared prosperity and the mitigation of poverty : in practice and in precept By Basu, Kaushik

  1. By: Petreski, Marjan; Jovanovic, Branimir
    Abstract: The objective of this study is to investigate whether remittances in Macedonia affect poverty and inequality. Using two household surveys, one conducted in 2008, one in 2012, we find that remittances reduce both poverty and inequality. The inequality-reducing effect has been particularly present in 2012.
    Keywords: remittances, poverty, income inequality, self-employment, Macedonia
    JEL: O15
    Date: 2013
  2. By: Cosar, A. Kerem (University of Chicago Booth School of Business); Guner, Nezih (MOVE, Barcelona); Tybout, James (Pennsylvania State University)
    Abstract: This paper explores the combined effects of reductions in trade frictions, tariffs, and firing costs on firm dynamics, job turnover, and wage distributions. It uses establishment-level data from Colombia to estimate an open economy dynamic model that links trade to job flows in a new way. The fitted model captures key features of Colombian firm dynamics and labor market outcomes, as well changes in these features during the past 25 years. Counterfactual experiments imply that integration with global product markets has increased both average income and job turnover in Colombia. In contrast, the experiments find little role for this country's labor market reforms in driving these variables. The results speak more generally to the effects of globalization on labor markets in Latin America and elsewhere.
    Keywords: international trade, firm dynamics, size distribution, labor market frictions, inequality
    JEL: F12 F16 E24 J64 L11
    Date: 2013–11
  3. By: Renaud Bourlès (AMSE - Aix-Marseille School of Economics - Aix-Marseille Univ. - Centre national de la recherche scientifique (CNRS) - École des Hautes Études en Sciences Sociales [EHESS] - Ecole Centrale Marseille (ECM)); Yann Bramoullé (AMSE - Aix-Marseille School of Economics - Aix-Marseille Univ. - Centre national de la recherche scientifique (CNRS) - École des Hautes Études en Sciences Sociales [EHESS] - Ecole Centrale Marseille (ECM))
    Abstract: We provide the first theoretical analysis of altruism in networks. Agents are embedded in a fixed, weighted network and care about their direct friends. Given some initial distribution of incomes, they may decide to support their poorer friends. We study the resulting non-cooperative transfer game. Our analysis highlights the importance of indirect gifts, where an agent gives to a friend because his friend himself has a friend in need. We uncover four main features of this interdependence. First, we show that there is a unique profile of incomes after transfers, for any network and any utility functions. Uniqueness in transfers holds on trees, but not on arbitrary networks. Second, there is no waste in transfers in equilibrium. In particular, transfers flow through indirect paths of highest altruistic strength. Third, a negative shock on one agent cannot benefit others and tends to affect socially closer agents first. In addition, an income redistribution that decreases inequality ex-ante can increase inequality ex-post. Fourth, altruistic networks decrease income inequality. In contrast, more altruistic or more homophilous networks can increase inequality.
    Keywords: private transfers; social networks; altruism; income redistribution; income inequality
    Date: 2013–11
  4. By: World Bank
    Keywords: Poverty Reduction - Rural Poverty Reduction Poverty Reduction - Achieving Shared Growth Social Protections and Labor - Labor Policies Poverty Monitoring and Analysis Health Systems Development and Reform Health, Nutrition and Population
    Date: 2013–06
  5. By: Kesternich, Iris (University of Munich); Siflinger, Bettina (University of Mannheim); Smith, James P. (RAND); Winter, Joachim K. (University of Munich)
    Abstract: We investigate long-run effects of episodes of hunger experienced as a child on health status and behavioral outcomes in later life. We combine self-reported data on hunger experiences from SHARELIFE, a retrospective survey conducted as part of SHARE in Europe in 2009, with administrative data on food supply (caloric rations) in post-war Germany. The data suggest that individual behavior is a pathway between early life shocks and adult health: We find that those who experienced hunger spend a larger fraction of income on food. Taken together, our results confirm that in addition to the well-documented biological channel from early life circumstances to adult health, there is also a behavioral pathway.
    Keywords: war, health, income
    JEL: I10
    Date: 2013–11
  6. By: Schirle, Tammy
    Abstract: Using 1977-1979, 1994-1996, and 2006-2008 data from the SCF and SLID, a decomposition analysis of senior poverty rates is conducted to determine whether changes in seniors’ characteristics, and changes in the extent to which characteristics affect senior’s likelihood of poverty, can help explain historical changes in senior poverty rates. The results show that changes in characteristics can explain relatively small changes in senior poverty rates, with changes in education levels playing a significant role. Changes in the extent to which characteristics affect seniors’ likelihood of poverty are shown to be much more important. Overall, the results confirm the importance of retirement income policy for the structure of senior poverty in Canada.
    Keywords: Seniors, poverty, retirement
    JEL: J14 J18 J26 I32
    Date: 2013–04–29
  7. By: Basu, Kaushik
    Abstract: The World Bank Group recently adopted two overarching goals -- the end of extreme, chronic poverty in the world by 2030 and the promotion of shared prosperity in every society. The paper examines the normative properties of these goals, their strengths and weaknesses, and their implications for actual policymaking, especially in the presence of globalization. This is closely related to the age-old debate on growth versus direct welfare interventions as instruments for countering poverty. The paper analyzes past trends on poverty and tries to shed new light on this old debate.
    Keywords: Rural Poverty Reduction,Achieving Shared Growth,Services&Transfers to Poor,Economic Theory&Research,Inequality
    Date: 2013–11–01

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