nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2014‒02‒02
six papers chosen by
Maximo Rossi
University of the Republic

  1. Direct Evidence on Income Comparisons and Subjective Well-Being By Pannenberg, Markus; Goerke, Laszlo
  2. Education and Intergenerational Mobility: Help or Hindrance? By Jo Blanden; Lindsey Macmillan
  3. Consistent comparisons of attainment and shortfall inequality: A critical examination By Bosmans K.G.M.
  4. Distributional effects of a minimum wage in a welfare state: The case of Germany By Müller, Kai-Uwe; Steiner, Viktor
  5. Is the United States Still a Land of Opportunity? Recent Trends in Intergenerational Mobility By Raj Chetty; Nathaniel Hendren; Patrick Kline; Emmanuel Saez; Nicholas Turner
  6. Poverty and Social Impact Analysis:Universal Primary Education in Uganda: Equity in Opportunities and Human Capital Investment By Jean-Yves Duclos; Angela Kiconco; Sebastian Levine; Joseph Enyimu; Alex Warren Rodriguez; Albert Musisi

  1. By: Pannenberg, Markus; Goerke, Laszlo
    Abstract: Subjective well-being (SWB) is generally argued to rise with relative income. However, direct evidence is scarce on whether and how intensively individuals undertake income comparisons, to whom they relate, and what they perceive their relative income to be. In this paper, novel data with direct information on income comparison intensity and perceived relative income with respect to predetermined reference groups is used to provide evidence on the relationship between income comparisons and SWB. We find negative correlations between comparison intensity and SWB for co-workers, people in the same occupation and friends. For job-related reference groups income comparisons are mostly upwards and perceiving to earn less than the reference group has a strong negative effect on SWB. --
    JEL: D31 D62 I31
    Date: 2013
  2. By: Jo Blanden (Department of Economics, University of Surrey); Lindsey Macmillan (Department of Quantitative Social Science, Institute of Education, University of London)
    Abstract: Evidence on intergenerational income mobility in the UK is dated. This paper seeks to update our knowledge by introducing new estimates of mobility for later measures of earnings in the 1958 and 1970 birth cohorts. Given poor or non-existent data on more recent cohorts we adopt an indirect approach to assessing more recent mobility trends. This exploits the close link between income persistence across generations and the gap in educational achievement by family background (referred to as educational inequality). We gather a comprehensive set of data which measures educational inequality for different cohorts at different points in the education system. We conclude that educational inequality has declined for cohorts born after 1980, and this is associated with rising average educational achievement. In contrast, evidence on high attainment does not reveal that educational inequality has declined; this suggests that policy seeking to promote equality of opportunity should encourage students to aim high.
    Keywords: intergenerational income mobility, educational inequality, children
    JEL: J62 J13
    Date: 2014–01–23
  3. By: Bosmans K.G.M. (GSBE)
    Abstract: An inequality measure is consistent if it ranks distributions the same irrespective of whether health quantities are represented in terms of attainment or shortfalls. This consistency property severely restricts the set of admissible inequality measures. We show that, within a more general setting of separate measures for attainments and shortfalls, the consistency property is a combination of two conditions. The first is a compelling rationality condition that says that the attainment measure should rank attainment distributions as the shortfall measure ranks shortfall distributions. The second is an overly demanding condition that says that the attainment measure and the shortfall measure should be identical. By dropping the latter condition, the restrictions onthe admissible inequality measures disappear.
    Keywords: Distribution: Other; Equity, Justice, Inequality, and Other Normative Criteria and Measurement; Health and Inequality;
    JEL: D39 I14 D63
    Date: 2013
  4. By: Müller, Kai-Uwe; Steiner, Viktor
    Abstract: A popular argument for a federal minimum wage is that it will prevent in-work poverty and reduce income inequality. We examine this assertion for Germany, a welfare state with a relative generous means-tested social minimum and high marginal tax rates. Our analysis is based on a microsimulation model that accounts for the interactions between wages, the tax-benefit system and net incomes at the household level as well as employment and price effects on the distribution of incomes induced by the introduction of a minimum wage. We show that the impact of even a relatively high federal minimum wage on disposable incomes is small because low wage earners are scattered over the whole income distribution and wage increases would to a large extent be offset by reductions in means-tested welfare transfers and high marginal tax rates. Taking into account negative employment effects and increases in consumer prices induced by the minimum wage would wipe out any positive direct effects on net incomes of households affected by the minimum wage. --
    Keywords: minimum wage,employment effects,income distribution,inequality,microsimulation
    JEL: I32 H31 J31
    Date: 2013
  5. By: Raj Chetty; Nathaniel Hendren; Patrick Kline; Emmanuel Saez; Nicholas Turner
    Abstract: We present new evidence on trends in intergenerational mobility in the U.S. using administrative earnings records. We find that percentile rank-based measures of intergenerational mobility have remained extremely stable for the 1971-1993 birth cohorts. For children born between 1971 and 1986, we measure intergenerational mobility based on the correlation between parent and child income percentile ranks. For more recent cohorts, we measure mobility as the correlation between a child’s probability of attending college and her parents’ income rank. We also calculate transition probabilities, such as a child’s chances of reaching the top quintile of the income distribution starting from the bottom quintile. Based on all of these measures, we find that children entering the labor market today have the same chances of moving up in the income distribution (relative to their parents) as children born in the 1970s. However, because inequality has risen, the consequences of the “birth lottery” – the parents to whom a child is born – are larger today than in the past.
    JEL: H0 J0
    Date: 2014–01
  6. By: Jean-Yves Duclos; Angela Kiconco; Sebastian Levine; Joseph Enyimu; Alex Warren Rodriguez; Albert Musisi
    Abstract: This paper assesses the effectiveness and progressivity of Uganda’s Universal Primary Education program since it was first introduced in 1997, by examining factors driving primary school attendance, grade delay and drop out trends for children between the ages of 6 and 12 over the past two decades. Our findings reveal that primary school attendance has been progressive over time and, in recent years, pro-poor, in the sense that the poorest people have been its major beneficiaries. However, both demand and supply-side factors affecting the provision and use of primary education still stand in the way of achieving optimal and equitable participation from UPE. Our analysis also suggests that policies targeting the poor as well as the poorer parts of the country could yield considerable additional benefits, in terms of greater progressiveness and propoorness of the UPE policy.
    Keywords: Universal Primary Education; Uganda; Poverty and Social Impact analysis
    Date: 2013

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