nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2014‒07‒28
seven papers chosen by
Maximo Rossi
Universidad de la República

  1. National Happiness and Genetic Distance: A Cautious Exploration By Proto, Eugenio; Oswald, Andrew J.
  2. Redistributive Effects of Income Tax Rates and Tax Base 1984-2009: Evidence from Japanese Tax Reforms By Miyazaki, Takeshi; Kitamura, Yukinobu
  3. Achieving Escape Velocity: Neighborhood and School Interventions to Reduce Persistent Inequality By Fryer, Roland Gerhard; Katz, Lawrence F.
  4. The Gender Wage Gap: Does a Gender Gap in Reservation Wages Play a Part? By Caliendo, Marco; Lee, Wang-Sheng; Mahlstedt, Robert
  5. Labor Market Slack in the United Kingdom By David N. F. Bell; David G. Blanchflower
  6. Unemployment or Overeducation: Which is a Worse Signal to Employers? By Baert, Stijn; Verhaest, Dieter
  7. Do Hiring Credits Work in Recessions? Evidence from France By Cahuc, Pierre; Carcillo, Stéphane; Le Barbanchon, Thomas

  1. By: Proto, Eugenio (University of Warwick); Oswald, Andrew J. (University of Warwick)
    Abstract: This paper examines a famous puzzle in social science. Why do some nations report such high happiness? Denmark, for instance, regularly tops the league table of rich nations' well-being; Great Britain and the US enter further down; France and Italy do relatively poorly. Yet the explanation for this ranking – one that holds even after adjustment for GDP and socio-economic and cultural variables – remains unknown. We explore a new avenue. Using data on 131 countries, we document a range of evidence consistent with the hypothesis that certain nations may have a genetic advantage in well-being.
    Keywords: well-being, international, happiness, genes, GDP
    JEL: I30 I31
    Date: 2014–07
  2. By: Miyazaki, Takeshi; Kitamura, Yukinobu
    Abstract: The primary objective of this paper is to examine how and to what extent changes in income tax rates and income tax deductions affect income inequality from longitudinal perspectives, by using microdata from Japanese individuals and households. The findings of this paper could shed light on the effects of tax rates and tax deduction on tax progressivity. First, redistributive effects of the Japanese income tax are likely to decline for the period 1984-2009. Second, the income tax reforms, i.e., reduction in tax rates and increase in tax base, give rise to greater redistributive effects of income tax rates and lower redistributive effects of tax base. Third, progressivity measures show the same trends with respect to the redistributive effects of tax changes on pretax income over the period.
    Keywords: Income taxation, redistribution, tax deduction, tax rates
    JEL: D3 H2 H24
    Date: 2014–06
  3. By: Fryer, Roland Gerhard; Katz, Lawrence F.
    Abstract: This paper reviews the evidence on the efficacy of neighborhood and school interventions in improving the long-run outcomes of children growing up in poor families. We focus on studies exploiting exogenous sources of variation in neighborhoods and schools and which examine at least medium-term outcomes. Higher-quality neighborhoods improve family safety, adult subjective well-being and health, and girls' mental health. But they have no detectable impact on youth human capital, labor market outcomes, or risky behaviors. In contrast, higher-quality schools can improve children's academic achievement and can have longer-term positive impacts of increasing educational attainment and earnings and reducing incarceration and teen pregnancy.
    Date: 2013
  4. By: Caliendo, Marco (University of Potsdam); Lee, Wang-Sheng (Deakin University); Mahlstedt, Robert (IZA)
    Abstract: This paper focuses on re-examining the gender wage gap and the potential role that reservation wages play. Based on two waves of rich data from the IZA Evaluation Dataset Survey we examine the importance of gender differences in reservation wages to explain the gender gap in realized wages for a sample of newly unemployed individuals actively searching for a full-time job in Germany. The dataset includes measures for education, socio-demographics, labor market history, psychological factors and job search characteristics allowing us to perform a decomposition analysis including these potentially influential factors. Our results suggest that the gender wage gap disappears once we control for reservation wages. We also find a close correspondence between the two gaps for certain subgroups. For example, those with low labor market experience show no gender gap in reservation wages and also no corresponding gap in observed wages. In an attempt to better understand how the initial gender gap in reservation wages arises, we also decompose the gender gap in reservation wages and draw some preliminary conclusions on the nature of the unobservable traits that reservation wages might be capturing.
    Keywords: wages, gender gap, reservation wages, discrimination
    JEL: J16 J31
    Date: 2014–07
  5. By: David N. F. Bell (University of Stirling, Scotland); David G. Blanchflower (Peterson Institute for International Economics)
    Abstract: This paper examines the amount of slack in the UK labor market. It examines the downward adjustments made by the Monetary Policy Committee (MPC) to both unemployment and underemployment, which in our view are invalid. Without any evidence the MPC in its assessment of the output gap reduces the level of unemployment because of its claim that long-term unemployment has no effect on wages. We produce contrary evidence. The MPC further reduces the level of underemployment in the United Kingdom by half. We present arguments as to why we also think this inappropriate. We set out arguments on why we believe the level of slack is greater than the MPC calibrates. Consistent with that is the fact that real wages in the United Kingdom continue to fall.
    Keywords: wages, underemployment, unemployment
    JEL: J01 J11 J21 J23 J38 J64
    Date: 2014–07
  6. By: Baert, Stijn (Ghent University); Verhaest, Dieter (K.U.Leuven)
    Abstract: This study aims at estimating the stigma effect of unemployment and overeducation within one framework. To this end, we conduct a field experiment in the Belgian labour market. We send out trios of fictitious male job applications to real vacancies. These applications differ only by the labour market history of the candidates. By monitoring the subsequent reactions from the employer side, we find evidence for a larger stigma effect of unemployment than overeducation. The stigma effect of overeducation is found to occur for permanent contract jobs but not temporary ones.
    Keywords: unemployment signalling, overeducation signalling, transitions in youth
    JEL: J24 J60 C93
    Date: 2014–07
  7. By: Cahuc, Pierre (Ecole Polytechnique, Paris); Carcillo, Stéphane (OECD); Le Barbanchon, Thomas (CREST)
    Abstract: This paper evaluates the impact of an unexpected temporary hiring credit targeted at workers paid below 1.6 times the minimum wage in firms with less than 10 employees in France from December 2008 to December 2009. Using rich administrative data covering all French firms, we find that the program has had a strong and rapid impact on employment. The net cost per job created for the government was around zero. The employment effect was stronger in areas where recruitment was easier. Although the hiring credit was not conditional on net job creation, it did not increase churning of workers. Nevertheless, we estimate that a credit conditional on net job creation above the employment growth threshold of -1%; would have maximized job creation, and created 1.8 times more jobs, at constant budget, provided that take-up had remained the same.
    Keywords: hiring credit, labor demand
    JEL: C31 C93 J6
    Date: 2014–07

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