nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2014‒02‒08
seven papers chosen by
Maximo Rossi
University of the Republic

  1. Adaptation to Poverty in Long-Run Panel Data By Andrew E. Clark; Conchita D'ambrosio; Simone Ghislandi
  2. Labor Income Dynamics and the Insurance from Taxes, Transfers, and the Family By Blundell, Richard; Graber, Michael; Mogstad, Magne
  3. Economic Growth Evens-Out Happiness: Evidence from Six Surveys By Andrew E. Clark; Sarah Flèche; Claudia Senik
  4. Does Money Make People Right-Wing and Inegalitarian? A Longitudinal Study of Lottery Winners By Powdthavee, Nattavudh; Oswald, Andrew J.
  5. The link between family background and later lifetime income: how does the UK compare to other countries? By John Jerrim
  6. Intergenerational Mobility and Interpersonal Inequality in an African Economy By Sylvie Lambert; Martin Ravallion; Dominique Van de Walle
  7. Minimum Wage: Does It Improve Welfare in Thailand? By Del Carpio, Ximena; Messina, Julián; Sanz-de-Galdeano, Anna

  1. By: Andrew E. Clark (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA)); Conchita D'ambrosio (Université du Luxembourg - Université du Luxembourg); Simone Ghislandi (Università commerciale Luigi Bocconi - Università commerciale Luigi Bocconi)
    Abstract: We consider the link between poverty and subjective well-being, and focus in particular on potential adaptation to poverty. We use panel data on almost 45,800 individuals living in Germany from 1992 to 2011 to show first that life satisfaction falls with both the incidence and intensity of contemporaneous poverty. We then reveal that there is little evidence of adaptation within a poverty spell: poverty starts bad and stays bad in terms of subjective well-being. We cannot identify any causes of poverty entry which are unambiguously associated with adaptation to poverty.
    Keywords: Income ; Poverty ; Subjective well-being ; SOEP
    Date: 2014–01
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00925542&r=ltv
  2. By: Blundell, Richard (University College London); Graber, Michael (University College London); Mogstad, Magne (University College London)
    Abstract: What do labor income dynamics look like over the life-cycle? What is the relative importance of persistent shocks, transitory shocks and heterogeneous profiles? To what extent do taxes, transfers and the family attenuate these various factors in the evolution of life-cycle inequality? In this paper, we use rich Norwegian data to answer these important questions. We let individuals with different education levels have a separate income process; and within each skill group, we allow for non-stationarity in age and time, heterogeneous experience profiles, and shocks of varying persistence. We find that the income processes differ systematically by age, skill level and their interaction. To accurately describe labor income dynamics over the life-cycle, it is necessary to allow for heterogeneity by education levels and account for non-stationarity in age and time. Our findings suggest that the progressive nature of the Norwegian tax-transfer system plays a key role in attenuating the magnitude and persistence of income shocks, especially among the low skilled. By comparison, spouse's income matters less for the dynamics of inequality over the life-cycle.
    Keywords: income dynamics, insurance, life cycle inequality
    JEL: C33 D3 D91 J31
    Date: 2014–01
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp7916&r=ltv
  3. By: Andrew E. Clark (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA)); Sarah Flèche (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA)); Claudia Senik (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA), UP4 - Université Paris 4, Paris-Sorbonne - Université Paris IV - Paris Sorbonne - Ministère de l'Enseignement Supérieur et de la Recherche Scientifique)
    Abstract: In spite of the great U-turn that saw income inequality rise in Western countries in the 1980s, happiness inequality has dropped in countries that have experienced income growth (but not in those that did not). Modern growth has reduced the share of both the "very unhappy" and the "perfectly happy". The extension of public amenities has certainly contributed to this greater happiness homogeneity. This new stylized fact comes as an addition to the Easterlin paradox, offering a somewhat brighter perspective for developing countries.
    Keywords: Happiness ; Inequality ; Economic growth ; Development ; Easterlin paradox
    Date: 2014–01
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00936145&r=ltv
  4. By: Powdthavee, Nattavudh (London School of Economics); Oswald, Andrew J. (University of Warwick)
    Abstract: The causes of people's political attitudes are largely unknown. We study this issue by exploiting longitudinal data on lottery winners. Comparing people before and after a lottery windfall, we show that winners tend to switch towards support for a right-wing political party and to become less egalitarian. The larger the win, the more people tilt to the right. This relationship is robust to (i) different ways of defining right-wing, (ii) a variety of estimation methods, and (iii) methods that condition on the person previously having voted left. It is strongest for males. Our findings are consistent with the view that voting is driven partly by human self-interest. Money apparently makes people more right-wing.
    Keywords: voting, gender, lottery wins, political preferences, income, attitudes
    JEL: D1 D72 H1 J7
    Date: 2014–01
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp7934&r=ltv
  5. By: John Jerrim (Department of Quantitative Social Science, Institute of Education, University of London)
    Abstract: The link between family background and labour market outcomes is an issue of great academic, social and political concern. It is frequently claimed that such intergenerational associations are stronger in Britain than other countries. But is this really true? I investigate this issue by estimating the link between parental education and later lifetime income, using three cross-nationally comparable datasets covering more than 30 countries. My results suggest that the UK is broadly in the middle of the cross-country rankings, with intergenerational associations notably stronger than in Scandinavia but weaker than in Eastern Europe. Overall, I find only limited support for claims that family background is a greater barrier to economic success in Britain than other parts of the developed world.
    Keywords: intergenerational mobility, parental education, income, PIAAC, EU-SILC
    JEL: J62
    Date: 2014–02–03
    URL: http://d.repec.org/n?u=RePEc:qss:dqsswp:1402&r=ltv
  6. By: Sylvie Lambert (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Martin Ravallion (Georgetown University - Georgetown University); Dominique Van de Walle (Banque Mondiale - Banque Mondiale)
    Abstract: How much economic mobility is there across generations in a poor, primarily rural, economy? How much do intergenerational linkages contribute to current inequality? We address these questions using original survey data on Senegal that include an individualized measure of consumption. While intergenerational linkages are evident, we find a relatively high degree of mobility across generations, associated with the shift from farm to non-farm sectors and greater economic activity of women. Male-dominated bequests of land and housing bring little gain to consumption and play little role in explaining inequality, though they have important effects on sector of activity. Inheritance of non-land assets and the education and occupation of parents (especially the mother) and their choices about children's schooling are more important to adult welfare than property inheritance. Significant gender inequality in consumption is evident, though it is almost entirely explicable in terms of factors such as education and (non-land) inheritance. There are a number of other pronounced gender differences, with intergenerational linkages coming through the mother rather than the father.
    Keywords: inheritance, land, mobility, inequality, gender
    Date: 2014–01
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00933975&r=ltv
  7. By: Del Carpio, Ximena (World Bank); Messina, Julián (World Bank); Sanz-de-Galdeano, Anna (Universitat Autònoma de Barcelona)
    Abstract: We study the causal impact of the minimum wage on employment and welfare in Thailand using a difference-in-difference approach that relies on exogenous policy variation in minimum wages across provinces. We find that minimum-wage increases have small disemployment effects on female, elderly, and less-educated workers and large positive effects on the wages of prime-age male workers. As such, increases in the minimum wage are associated with increases in household consumption per capita in general, but the consumption increase is greatest among those households around the median of the distribution. In fact, rises in the minimum wage increased inequality in consumption per capita within the bottom half of the distribution.
    Keywords: minimum wage, household consumption, poverty, employment, uncovered sector
    JEL: J31 D31
    Date: 2014–01
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp7911&r=ltv

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