nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2014‒05‒24
six papers chosen by
Maximo Rossi
University of the Republic

  1. Wealth Gradients in Early Childhood Cognitive Development in Five Latin American Countries By Renos Vakis; Christina Paxson; Daniela Marshall; Karen Macours; Florencia López Bóo; David Bravo; Raquel Bernal; Rodrigo Azuero; María Caridad Araujo; Jere R. Behrman; Norbert Schady
  2. Racial Discrimination in the U.S. Labor Market: Employment and Wage Differentials by Skill By Daniel Borowczyk-Martins; Jake Bradley; Linas Tarasonis
  3. Multidimensional poverty targeting By Jean-Yves DUCLOS; Abdelkrim ARAAR; Luca TIBERTI
  4. Does Grief Transfer across Generations? - In-Utero Deaths and Child Outcomes By Sandra E Black; Paul J Devereux; Kjell G Salvanes
  5. Endophilia or Exophobia: Beyond Discrimination By Feld, Jan; Salamanca, Nicolás; Hamermesh, Daniel S.
  6. The Distance between Perception and Reality in the Social Domains of Life By Eduardo Lora

  1. By: Renos Vakis; Christina Paxson; Daniela Marshall; Karen Macours; Florencia López Bóo; David Bravo; Raquel Bernal; Rodrigo Azuero; María Caridad Araujo; Jere R. Behrman; Norbert Schady
    Abstract: Research from the United States shows that gaps in early cognitive and non-cognitive ability appear early in the life cycle. Little is known about this important question for developing countries. This paper provides new evidence of sharp differences in cognitive development by socioeconomic status in early childhood for five Latin American countries. To help with comparability, we use the same measure of receptive language ability for all five countries. We find important differences in development in early childhood across countries, and steep socioeconomic gradients within every country. For the three countries where we can follow children over time, there are few substantive changes in scores once children enter school. Our results are robust to different ways of defining socioeconomic status, to different ways of standardizing outcomes, and to selective non-response on our measure of cognitive development.
    Keywords: Poverty, Cognitive development
    Date: 2014–01
    URL: http://d.repec.org/n?u=RePEc:idb:brikps:83776&r=ltv
  2. By: Daniel Borowczyk-Martins (University of Bristol); Jake Bradley (University of Bristol); Linas Tarasonis (Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS)
    Abstract: In the US labor market the average black worker is exposed to a lower employment rate and earns a lower wage compared to his white counterpart. Lang and Lehmann (2012) argue that these mean differences mask substantial heterogeneity along the distribution of workers’ skill. In particular, they argue that black-white wage and employment gaps are smaller for high-skill workers. In this paper we show that a model of employer taste-based discrimination in a labor market characterized by search frictions and skill complementarities in production can replicate these regularities. We estimate the model with US data using methods of indirect inference. Our quantitative results portray the degree of employer prejudice in the US labor market as being strong and widespread, and provide evidence of an important skill gap between black and white workers. We use the model to undertake a structural decomposition and conclude that discrimination resulting from employer prejudice is quantitatively more important than skill differences to explain wage and employment gaps. In the final section of the paper we conduct a number of counterfactual experiments to assess the effectiveness of different policy approaches aimed at reducing racial differences in labor market outcomes.
    Keywords: employment and wage differentials, discrimination, job search
    JEL: J31 J64 J71
    Date: 2014–04
    URL: http://d.repec.org/n?u=RePEc:aim:wpaimx:1413&r=ltv
  3. By: Jean-Yves DUCLOS (Université Laval); Abdelkrim ARAAR (FERDI); Luca TIBERTI (FERDI)
    Abstract: The importance of taking into account multidimensionality in poverty measurement has been recently emphasized. The poverty alleviation literature has not, however, yet addressed the important issue of policy design for efficient multidimensional poverty reduction. From a positive perspective, it is regularly observed that different poverty dimensions are often correlated and mutually reinforced, especially over time. From a normative perspective, it can be argued that, in addition to being concerned with impacts on multiple dimensions of poverty, policy should also consider impacts on their joint distribution. The paper integrates these two perspectives into a consistent policy evaluation framework. Targeting dominance techniques are also proposed to assess the normative robustness of targeting strategies. The analytical results are applied to data from Vietnam and South Africa and illustrate the role of both normative and positive perspectives in designing efficient multidimensional poverty targeting policies.
    JEL: D63 H21 I38
    Date: 2014–05
    URL: http://d.repec.org/n?u=RePEc:fdi:wpaper:1589&r=ltv
  4. By: Sandra E Black (University of Texas); Paul J Devereux (University College Dublin); Kjell G Salvanes (Norwegian School of Economics)
    Abstract: While much is now known about the effects of physical health shocks to pregnant women on the outcomes of the in-utero child, we know little about the effects of psychological stresses. One clear form of stress to the mother comes from the death of a parent. We examine the effects of the death of the mother’s parent during pregnancy on both the short-run and the long-run outcomes of the infant. Our primary specification involves using mother fixed effects— comparing the outcomes of two children with the same mother but where a parent of the mother died during one of the pregnancies—augmented with a control for whether there is a death around the time of the pregnancy in order to isolate true causal effects of a bereavement during pregnancy. We find small negative effects on birth outcomes, and these effects are bigger for boys than for girls. The effects on birth outcomes seems to be driven by deaths due to cardiovascular causes suggesting that sudden deaths are more difficult to deal with. However, we find no evidence of adverse effects on adult outcomes. The results are robust to alternative specifications.
    Keywords: Intergenerational Transmission, Fetal Origins
    Date: 2014–03–19
    URL: http://d.repec.org/n?u=RePEc:ucn:wpaper:201405&r=ltv
  5. By: Feld, Jan (Department of Economics, School of Business, Economics and Law, Göteborg University); Salamanca, Nicolás (Ph.D. candidate in economics, Maastricht University); Hamermesh, Daniel S. (Sue Killam Professor of Economics, University of Texas at Austin; prof in economics, Royal Holloway University of London; and research assoc, IZA and NBER)
    Abstract: The discrimination literature treats outcomes as relative. But does a differential arise because agents discriminate against others—exophobia—or because they favor their own kind—endophilia? Using a field experiment that assigned graders randomly to students' exams that did/ did not contain names, on average we find favoritism but no discrimination by nationality, and some evidence of favoritism for the opposite gender. We identify distributions of individuals' preferences for favoritism and discrimination. We show that a changing correlation between them generates perverse changes in market differentials and that their relative importance informs the choice of a base group in adjusting wage differentials.
    Keywords: favoritism; discrimination; field experiment; wage differentials; economics of education
    JEL: B40 I24 J71
    Date: 2014–05
    URL: http://d.repec.org/n?u=RePEc:hhs:gunwpe:0593&r=ltv
  6. By: Eduardo Lora
    Abstract: The distance between perception and reality with respect to the social domains of life is often striking. Using survey data collected on Latin American countries, this paper provides an overview of the main empirical findings on the gaps between perception and reality in four social domains--health, employment, the perception of security, and social ranking. The overview emphasizes the psychological biases that may explain the gaps. Biases associated with cultural values are very relevant with respect to health and job satisfaction. Cultural differences across countries are pronounced in perceptions of health, while cultural differences across socioeconomic groups are more apparent with respect to job satisfaction. Affect and availability heuristics are the dominant sources of bias in the case of perceptions of security. The formation of subjective social rankings appears to be less culturally dependent but more dependent on the socioeconomic development in the country. The gaps between objective and subjective indicators in the social domains of life are a rich source of data to help understand how perceptions are formed, identify important aspects of people's lives that do not appear in official indicators, inform public debate on social policy, and shed light on public attitudes on key social issues.
    Keywords: Social Development, IDB-WP-423
    Date: 2013–08
    URL: http://d.repec.org/n?u=RePEc:idb:brikps:82188&r=ltv

This nep-ltv issue is ©2014 by Maximo Rossi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at http://nep.repec.org. For comments please write to the director of NEP, Marco Novarese at <director@nep.repec.org>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.