nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2013‒12‒20
four papers chosen by
Maximo Rossi
University of the Republic

  1. Has job polarisation squeezed the American middle class? By Michael Boehm
  2. Income inequality and the welfare state: How redistributive is the public sector? By Obst, Thomas
  3. Social Mobility at the Top: Why Are Elites Self-Reproducing? By Elise S. Brezis; Joël Hellier
  4. Childcare Availability and Female Labor Force Participation: An Empirical Examination of the Chile Crece Contigo Program By James Manley; Felipe Vasquez

  1. By: Michael Boehm
    Abstract: Job polarisation has had strong effects on US workers' relative wages, according to research by Michael Boehm. His study examines whether the decline in manufacturing and clerical jobs has been responsible for the lagging wages of middle-skill workers in the United States. Comparing the occupational choices and earnings of survey respondents in the 1980s and today, he shows that labour market returns to middle-skill jobs have declined relative to high- and low-skill jobs.
    Keywords: Job polarization, wage inequality, talent allocation, Roy model
    JEL: J21 J23 J24 J31
    Date: 2013–12
  2. By: Obst, Thomas
    Abstract: This paper explores the nexus between the phenomenon of increasing income inequality and redistributive effects of the public sector. In an empirical analysis of seven OECD countries the redistributive effect will be examined by measuring the difference between inequality of market incomes and disposable incomes. Moreover, this paper will try to estimate the redistributive effect of public goods. The period of investigation is between the mid 1980s and the mid 2000s. The paper suggests that the public sector still reduces market income inequality significantly but to a lower extent than in the previous decades and with greater variation across different welfare regimes. Public goods further reduce income inequality considerably. However, the estimation and allocation process of these in-kind benefits involves several methodological issues that need to be taken into account when evaluating the empirical results. Furthermore, the empirical analysis indicates that market forces drove greater income inequality until the mid 1990s, and structural changes in tax and transfer systems reinforced this trend from the mid 1990s onwards. --
    Keywords: income inequality,welfare state,public sector,redistribution,tax and transfer systems,public goods,market and disposable income
    JEL: H23 H41 H53
    Date: 2013
  3. By: Elise S. Brezis (Bar-Ilan University); Joël Hellier
    Abstract: This paper proposes an explanation for the decrease in social mobility that has occurred in the last two decades in a number of advanced economies, as well as for the divergence in mobility dynamics across countries. Within an intergenerational framework, we show that a two-tier higher education system with standard and elite universities generates social stratification, high social immobility and self-reproduction of the elite. Moreover, we show that the higher the relative funding for elite universities, the higher the elite self-reproduction, and the lower social mobility. We also analyse the impacts of changes in the weight of the elite and of the middle class upon social mobility. Our findings provide theoretical bases for the inverted-U profile of social mobility experienced in several countries since World War II and to the ‘Great Gatsby Curve’ relating social mobility to inequality.
    Keywords: Elite, Higher Education, Selection, Social mobility, Social stratification
    JEL: I21 J62 O15 Z13
    Date: 2013–12
  4. By: James Manley (Department of Economics, Towson University); Felipe Vasquez (School of Business and Economics, Universidad del Desarrollo)
    Abstract: Few works have examined the relationship between maternal participation in the labor force and the availability of child care in developing countries. Existing papers also tend to rely on relatively simplistic, correlative analysis of the data rather than modeling the joint decision to invest in formal childcare and to choose a level of labor supply. This paper takes advantage of a policy-induced positive shock in the provision of child care to apply instrumental variables in a simultaneous equations context, resulting in estimates that are more rigorous than any currently available in a developing country context. Policymakers are able to optimize their policy choices if they have better information on the elasticity of labor supply with respect to the cost of child care, and we find no evidence that the program is associated with an increase in women's labor supply.
    Keywords: Female Labor Supply, Child Care, Labor Force, Chile, CASEN, JUNJI.
    JEL: J13 J22 O12 H42
    Date: 2013–12

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