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on Unemployment, Inequality and Poverty |
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Issue of 2014‒05‒04
seven papers chosen by |
| By: | Clark, Andrew E. (Paris School of Economics); D'Ambrosio, Conchita (University of Luxembourg) |
| Abstract: | We review the survey and experimental findings in the literature on attitudes to income inequality. We interpret the latter as any disparity in incomes between individuals. We classify these findings into two broad types of individual attitudes towards the income distribution in a society: the normative and the comparative view. The first can be thought of as the individual's disinterested evaluation of income inequality; on the contrary, the second view reflects self-interest, as individual's inequality attitudes depend not only on how much income they receive but also on how much they receive compared to others. We conclude with a number of extensions, outstanding issues and suggestions for future research. |
| Keywords: | attitudes, distribution, experiments, income inequality, life satisfaction, reference groups |
| JEL: | C91 D31 D63 I31 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8136&r=ltv |
| By: | Powdthavee, Nattavudh (London School of Economics); Wooden, Mark (Melbourne Institute of Applied Economic and Social Research) |
| Abstract: | Very little is known about how the differential treatment of sexual minorities could influence subjective reports of overall well-being. This paper seeks to fill this gap. Data from two large surveys that provide nationally representative samples for two different countries – Australia (the HILDA Survey) and the UK (the UK Household Longitudinal Study) – are used to estimate a simultaneous equations model of life satisfaction. The model allows for self-reported sexual identity to influence a measure of life satisfaction both directly and indirectly through seven different channels: (i) income; (ii) employment; (iii) health (iv) partner relationships; (v) children; (vi) friendship networks; and (vii) education. Lesbian, gay and bisexual persons are found to be significantly less satisfied with their lives than otherwise comparable heterosexual persons. In both countries this is the result of a combination of direct and indirect effects. |
| Keywords: | sexual orientation, sexual minorities, discrimination, life satisfaction, HILDA Survey, UKHLS |
| JEL: | I31 J71 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8127&r=ltv |
| By: | Akay, Alpaslan (Department of Economics, School of Business, Economics and Law, Göteborg University); Bargain, Olivier; Zimmermann, Klaus F. |
| Abstract: | This paper examines whether the subjective well-being of migrants is responsive to fluc- tuations in macroeconomic conditions in their country of origin. Using the German Socio- Economic Panel for the years 1984 to 2009 and macroeconomic variables for 24 countries of origin, we exploit country-year variation for identification of the effect and panel data to control for migrants' observed and unobserved characteristics. We find strong (mild) evidence that migrants' well-being responds negatively (positively) to an increase in the GDP (un- employment rate) of their home country. That is, we originally demonstrate that migrants regard home countries as natural comparators and, thereby, suggest an original assessment of the migration’s relative deprivation motive. We also show that migrants are positively affected by the performances of the German regions in which they live (a ‘signal effect’).We demonstrate that both effects decline with years-since-migration and with the degree of assimilation in Germany, which is consistent with a switch of migrants' reference point from home countries to migration destinations. Results are robust to the inclusion of country-time trends, to control for remittances sent to relatives in home countries and to a correction for selection into return migration. We derive important implications for labor market and migration policies. |
| Keywords: | migrants; well-being; GDP; unemployment; relative concerns/deprivation |
| JEL: | C90 D63 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0592&r=ltv |
| By: | Powdthavee, Nattavudh (London School of Economics); Stutzer, Alois (University of Basel) |
| Abstract: | Are people condemned to an inherent level of experienced happiness? A review of the economic research on subjective well-being gives reason to the assessment that happiness can change. First, empirical findings clearly indicate that people are not indifferent to adverse living conditions when reporting their subjective well-being as observed for limited freedom of choice, low levels of democratization, unemployment, low income, etc. Second, considering people's adaptation to life events and (external) conditions reveals substantial heterogeneity in the speed as well as the degree of reversion. Together, the evidence suggests that reported subjective well-being is a valuable complementary source of information about human well-being and the phenomenon of adaptation. Many challenges, of course, remain. First, we are only at the beginning of understanding variation in the process of adaptation. The modeling of happiness over the life course promises a productive perspective. Second, adaptation might well pose a challenge to individual decision-making when people are not good in predicting it. Third, adaptation might have great consequences for public policy and the idea of social welfare maximization depending on how fast and slow adapting people are treated. |
| Keywords: | adaptation, economics and happiness, life course perspective, subjective well-being |
| JEL: | D03 D60 I31 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8131&r=ltv |
| By: | Mocan, Naci (Louisiana State University); Raschke, Christian (Sam Houston State University) |
| Abstract: | The fear and hatred of others who are different has economic consequences because such feelings are likely to translate into discrimination in labor, credit, housing, and other markets. The implications range from earnings inequality to intergenerational mobility. Using German data from various years between 1996 and 2010, we analyze the determinants of racist and xenophobic feelings towards foreigners in general, and against specific groups such as Italians and Turks. We also analyze racist and anti-Semitic feelings towards German citizens who differ in ethnicity (Aussiedler from Eastern Europe) or in religion (German Jews). Individuals' perceived (or actual) economic well-being is negatively related to the strength of these feelings. Education, and having contact with foreigners mitigate racist, anti-Semitic and xenophobic feelings. People who live in states which had provided above-median support of the Nazi party in the 1928 elections have stronger anti-Semitic feelings today. The results are not gender-driven. They are not an artifact of economic conditions triggering feelings about job priority for German males, and they are not fully driven by fears about foreigners taking away jobs. The results of the paper are consistent with the model of Glaeser (2005) on hate, and with that of Akerlof and Kranton (2000, 2005) on identity in the utility function. |
| Keywords: | economic well-being, racism, anti-Semitism, foreigners, xenophobia, identity, education |
| JEL: | J15 I30 Z10 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8126&r=ltv |
| By: | Ashenfelter, Orley (Princeton University) |
| Abstract: | This paper contains a review of the early history of program evaluation research at the US Department of Labor. Some broad lessons for successful evaluation research are summarized. |
| Keywords: | program evaluation, training programs, active labor market programs |
| JEL: | B4 C21 J8 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8118&r=ltv |
| By: | Pinkovskiy, Maxim L. (Federal Reserve Bank of New York); Sala-i-Martin, Xavier X. (Federal Reserve Bank of New York) |
| Abstract: | In this paper, we try to understand whether measures of GDP per capita taken from the national accounts or measures of mean income or consumption derived from household surveys better proxy for true income per capita. We propose a data-driven method to assess the relative quality of GDP per capita versus survey means by comparing the evolution of each series to the evolution of satellite-recorded nighttime lights. Our main assumption, which is robust to a variety of specification checks, is that the measurement error in nighttime lights is unrelated to the measurement errors in either national accounts or survey means. We obtain estimates of weights on national accounts and survey means in an optimal proxy for true income; these weights are very large for national accounts and very modest for survey means. We conclusively reject the null hypothesis that the optimal weight on surveys is greater than the optimal weight on national accounts, and we generally fail to reject the null hypothesis that the optimal weight on surveys is zero. Using the estimated optimal weights, we compute estimates of true income per capita and $1-a-day poverty rates for the developing world and its regions. We obtain poverty estimates that are substantially lower and fall substantially faster than those of Chen and Ravallion (2010) specifically or of the survey-based poverty literature more generally. |
| Keywords: | economic growth; development |
| JEL: | D31 E01 O1 O4 |
| Date: | 2014–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:669&r=ltv |