nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2014‒02‒15
six papers chosen by
Maximo Rossi
University of the Republic

  1. Longitudinal Evidence for a Midlife Nadir in Human Wellbeing: Results from Four Data Sets By Cheng, Terence C; Powdthavee, Nattavudh; Oswald, Andrew J
  2. The impact of redistributive policies on inequality in OECD countries By Doerrenberg, Philipp; Peichl, Andreas
  3. Does Money Make People Right-Wing and Inegalitarian? A Longitudinal Study of Lottery Winners By Powdthavee, Nattavudh; Oswald, Andrew J
  4. Life Satisfaction, Ethnicity and Neighbourhoods: Is There an Effect of Neighbourhood Ethnic Composition on Life Satisfaction? By Lucinda Platt; Gundi Knies; Alita Nandi
  5. HUMAN WELL-BEING AND IN-WORK BENEFITS: A RANDOMIZED CONTROLLED TRIAL By Dorsett, Richard; Oswald, Andrew J
  6. The Median Is the Message: A Good-Enough Measure of Material Well-Being and Shared Development Progress By Nancy Birdsall and Christian J. Meyer

  1. By: Cheng, Terence C (University of Melbourne); Powdthavee, Nattavudh (London School of Economics and Political Science); Oswald, Andrew J (Department of Economics, University of Warwick)
    Abstract: There is a large amount of cross-sectional evidence for a midlife low in the life cycle of human happiness and well-being (a ‘U shape’). Yet no genuinely longitudinal inquiry has uncovered evidence for a U-shaped pattern. Thus some researchers believe the U is a statistical artefact. We re-examine this fundamental cross-disciplinary question. We suggest a new test. Drawing on four data sets, and only within-person changes in well-being, we document powerful support for a U-shape in unadjusted longitudinal data without the need for regression equations. The paper’s methodological contribution is to exploit the first-derivative properties of a well-being equation. Key words: Life-cycle happiness ; subjective well-being ; longitudinal study ; U shape JEL classification: I31 ; D01 ; C18
    Date: 2014
    URL: http://d.repec.org/n?u=RePEc:wrk:warwec:1037&r=ltv
  2. By: Doerrenberg, Philipp; Peichl, Andreas
    Abstract: Due to behavioral effects triggered by redistributional interventions, it is still an open question whether government policies are able to effectively reduce income inequality. We contribute to this research question by using different country-level data sources to study inequality trends in OECD countries since 1980. We first investigate the development of inequality over time before analyzing the question of whether governments can effectively reduce inequality. Different identification strategies, using fixed effects and instrumental variables models, provide some evidence that governments are capable of reducing income inequality despite countervailing behavioral responses. The effect is stronger for social expenditure policies than for progressive taxation. --
    Keywords: Inequality,Redistribution,Social Expenditure,Progressive Taxation
    JEL: D31 D60 H20
    Date: 2014
    URL: http://d.repec.org/n?u=RePEc:zbw:zewdip:14012&r=ltv
  3. By: Powdthavee, Nattavudh (London School of Economics); Oswald, Andrew J (Department of Economics, 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 Key words: Voting; gender ; lottery wins ; political preferences ; income ; attitudes JEL classification: D1 ; D72 ; H1 ; J7
    Date: 2014
    URL: http://d.repec.org/n?u=RePEc:wrk:warwec:1039&r=ltv
  4. By: Lucinda Platt (Department of Social Policy, London School of Economics and Political Science); Gundi Knies (Institute for Social and Economic Research, University of Essex); Alita Nandi (Institute for Social and Economic Research, University of Essex)
    Abstract: Using a rich, nationally representative data set with a large sample of minorities and matched small area characteristics, we explore differences in life satisfaction for ethnic groups living in UK. We test the hypothesis that minorities will be less satisfied, which will in part be explained by less favourable individual and area contexts, but that living in areas with a larger proportion of own ethnic group promotes well-being. We find that satisfaction is lower among minorities, ceteris paribus, but area concentration is associated with higher life satisfaction for certain groups. We discuss the implications of our findings.
    Keywords: Life Satisfaction, Happiness, Ethnic group, Neighbourhood, Subjective well-being, UKHLS
    JEL: I31 J15 R23 O15
    Date: 2014–02
    URL: http://d.repec.org/n?u=RePEc:crm:wpaper:1407&r=ltv
  5. By: Dorsett, Richard (National Institute of Economic and Social Research); Oswald, Andrew J (Department of Economics, University of Warwick)
    Abstract: Many politicians believe they can intervene in the economy to improve people’s lives. But can they? In a social experiment carried out in the United Kingdom, extensive in-work support was randomly assigned among 16,000 disadvantaged people. We follow a sub-sample of 3,500 single parents for 5 ensuing years. The results reveal a remarkable, and troubling, finding. Long after eligibility had ceased, the treated individuals had substantially lower psychological wellbeing, worried more about money, and were increasingly prone to debt. Thus helping people apparently hurt them. We discuss a behavioral framework consistent with our findings and reflect on implications for policy Key words: JEL classification: I31 ; D03 ; D60 ; H11 ; J38
    Date: 2014
    URL: http://d.repec.org/n?u=RePEc:wrk:warwec:1038&r=ltv
  6. By: Nancy Birdsall and Christian J. Meyer
    Abstract: We argue that survey-based median household consumption expenditure (or income) per capita be incorporated into standard development indicators, as a simple, robust, and durable indicator of typical individual material well-being in a country. Using household survey data available for low- and middle-income countries from the World Bank’s PovcalNet tool, we show that as a measure of income-related well-being, it is far superior to the commonly used GDP per capita as well as survey-based measures at the mean. We also argue that survey-based median measures are “distributionaware”, i.e. when used as the denominator of various widely available indicators such as mean consumption expenditure per capita they provide a “good-enough” indicator of consumption (or income) inequality. Finally, as a post-2015 indicator of progress at the country-level in promoting shared development and reducing inequality, we propose that the rate of increase in median consumption per capita after taxes and transfers exceed the rate of increase in average consumption in the same period.
    Keywords: welfare measure, median, consumption, inequality, distribution
    JEL: D31 H22 I32 O15
    Date: 2014–01
    URL: http://d.repec.org/n?u=RePEc:cgd:wpaper:351&r=ltv

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