nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2014‒08‒02
five papers chosen by
Maximo Rossi
Universidad de la República

  1. Employment and Wage Insurance within Firms: Worldwide Evidence By Andrew Ellul; Marco Pagano; Fabiano Schivardi
  2. Women’s wages and fertility revisited. Evidence from Norway By Tom Kornstad; Marit Rønsen
  3. The middle class in contemporary South Africa: Comparing rival approaches By Ronelle Burger; Cindy Lee Steenekamp; Servaas van der Berg; Asmus Zoch
  4. The Direct Effect of Obesity on Emotional Well-Being: Evidence from Mexico By Olivier Bargain; Jinan Zeidan
  5. Self discrimination: A field experiment on obesity By Antonios Proestakis; Pablo Branas-Garza; Praveen Kujal

  1. By: Andrew Ellul (Indiana University); Marco Pagano (Università di Napoli Federico II CSEF, EEIF, CEPR and ECGI); Fabiano Schivardi (LUISS, EIEF and CEPR)
    Abstract: We investigate the determinants of firms’ implicit employment and wage insurance to employees against industry-level and idiosyncratic shocks. We rely on differences between family and non-family firms to identify the supply of insurance, and between national public insurance programs to gauge workers’ demand for insurance. Using firm-level data from 41 countries, we find that family firms provide greater employment protection but less wage stability. Employment protection comes at a price: family firms pay 5 percent lower wages, controlling for country, industry and time effects. The additional protection afforded by family firms is greater, and the wage discount larger, the less generous the public unemployment insurance program, indicating that firm and government employment insurance are substitutes. The cross-country evidence is broadly confirmed by Italian employee-employer matched data, which also show that in family firms the adjustment to shocks occurs mostly through the hiring margin, while separations are not responsive to shocks. JEL Classification: G31, G32, G38, H25, H26, M40.
    Keywords: risk-sharing, insurance, social security, unemployment, wages, family firms.
    Date: 2014–07–22
  2. By: Tom Kornstad; Marit Rønsen (Statistics Norway)
    Abstract: Since the 1960s, Beckers’ New Home Economics has provided a central theoretical framework for studies of fertility behaviour. New Home Economics predict a negative effect of female wages on fertility. This prediction has been tested in a number of studies over the past decades, but the results are far from unanimous. In this paper we review past evidence of the impact of female wages on their childbearing behaviour and supply new evidence from Norway. We estimate a simultaneous hazard rate model of transitions to first, second and third birth, including predicted wage as a time-dependent variable. Using a very large dataset covering all women born in Norway during the period 1955-74, we find that timing of births is associated with wage changes. The wage effect on the log hazard is U-shaped for all the four 5-year cohorts we are studying, but the effect varies across cohorts and parity. We also find that the relationship between timing of births and wages are not very sensitive to the omission of the women’s non-labour income.
    Keywords: female fertility; wages; non-labor income; hazard model
    JEL: J13 J30
    Date: 2014–06
  3. By: Ronelle Burger (Department of Economics, University of Stellenbosch); Cindy Lee Steenekamp (Department of Political Science, University of Stellenbosch); Servaas van der Berg (Department of Economics, University of Stellenbosch); Asmus Zoch (Department of Economics, University of Stellenbosch)
    Abstract: In the light of the economic, political and social significance of the middle class for South Africa’s emerging democracy, we critically examine contrasting conceptualisa-tions of social class. We compare four rival approaches to empirical estimation of class: an occupational skill measure, a vulnerability indictor, an income polarisation approach and subjective social status. There is considerable variation in who is classified as middle class based on the definition that is employed and, in particular, a marked difference between subjective and objective notions of social class. We caution against overoptimistic predictions based on the growth of the black middle class. While the surge in the black middle class is expected to help dismantle the association between race and class in South Africa, the analysis suggests that notions of identity may adjust more slowly to these new realities and consequently, racial integration and social cohesion may emerge with a substantial lag.
    Keywords: middle class, social class, South Africa
    JEL: D31 I31 J15
    Date: 2014
  4. By: Olivier Bargain (Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS); Jinan Zeidan (Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS)
    Abstract: Obesity spreads more easily if is not perceived negatively. This may be the case among the poor, for whom fatness can be an external sign of wealth. We estimate the direct effect of overweight on emotional well-being in Mexico, a country facing the highest obesity rate in the world. Individual fatness is instrumented using variation in genetic predisposition. Results confirm a positive or insignificant effects of obesity among the poor and point to a depressing effect among the rich. This is consistent with contrasted norms, related to unequal development levels, which may exacerbate health inequality and justify targeted communication by health authorities.
    Keywords: emotional well-being, obesity, waist-to-height ratio
    JEL: D1 I12 I31
    Date: 2014–07–16
  5. By: Antonios Proestakis (Institute for Health and Consumer Protection); Pablo Branas-Garza (Middlesex University); Praveen Kujal (Middlesex University)
    Abstract: Empirical evidence suggests that physical characteristics such as obesity can result in a salary gap in the work place. It is, however, not clear how much of this (gap) is due to factors emanating from the demand or supply side of the market. In this paper we use a field experiment to study whether a part of this wage gap can be attributed to personality traits of individuals on the supply side. Monitors randomly select individuals to respond to a questionnaire. Individuals can make money requests for completing the questionnaire. In the questionnaire they also self-report several personality chracteristics. We find that the more obese individuals perceive themselves to be, lesser is the money they request. The negative association between money requests and obesity is mostly driven by female participants. The effect of (self-perceived) non-obese individuals is asymmetric across gender. Self perceived "normal" females, perceived thin by the monitors, request more, meanwhile, males in this category request less relative to those that do not overstate their obesity levels. Our results suggest that lower salary request may anchor obese individuals to lower thresholds and may partly explain the wage gap.
    Date: 2014–07

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