nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2014‒08‒28
five papers chosen by
Maximo Rossi
Universidad de la República

  1. Volatility and Inequality as Constraints to Shared Prosperity : Paraguay Equity Assessment By Santiago Garriga; Luis Felipe Lopez-Calva; Maria Ana Lugo; Alejandro Medina Giopp; Miriam Muller; Liliana D. Sousa
  2. Routinization and the Decline of the U.S. Minimum Wage By Finn Martensen
  3. Locus of Control and Its Intergenerational Implications for Early Childhood Skill formation By Francesca Cornaglia; Warn N. Lekfuangfu; Nattavudh Powdthavee; Nele Warrinnier
  4. How Far Away Is a Single European Labor Market? By Krause, Annabelle; Rinne, Ulf; Zimmermann, Klaus F.
  5. How useful is inequality of opportunity as a policy construct ? By Kanbur, Ravi; Wagstaff, Adam

  1. By: Santiago Garriga; Luis Felipe Lopez-Calva; Maria Ana Lugo; Alejandro Medina Giopp; Miriam Muller; Liliana D. Sousa
    Keywords: Poverty Reduction - Rural Poverty Reduction Economic Theory and Research Macroeconomics and Economic Growth - Regional Economic Development Services and Transfers to Poor
    Date: 2014–06
  2. By: Finn Martensen (Department of Economics, University of Konstanz, Germany)
    Abstract: The U.S. minimum wage declined in real terms since the late 1970s. In the same time, the wage of the least skilled workers fell in real terms, while the wage of the highest skilled workers increased. To shed light on these issues, I use a simple model of routinization. High-ability workers, after having received additional education, can substitute low-ability co-workers by machines. Technical progress results in more high-ability workers receiving additional education and in a declining wage for low-ability workers. A government opposes both unemployment and wage inequality. I calibrate the model and show that technical progress induces the government to lower the minimum wage. Hence, the model contributes to understand the decline in the U.S. minimum wage.
    Keywords: Minimum wage, Routinization, Education, Wage inequality, Unemployment
    JEL: E24 I24 J31 J88
    Date: 2014–08–15
  3. By: Francesca Cornaglia; Warn N. Lekfuangfu; Nattavudh Powdthavee; Nele Warrinnier
    Abstract: We propose a model in which parents have a subjective belief about the impact of their investment on the early skill formation of their children. This subjective belief is determined in part by locus of control (LOC), i.e., the extent to which individuals believe that their actions can influence future outcomes. Using a unique British cohort survey, we show that maternal LOC measured during the 1st-trimester strongly predicts early and late child cognitive and noncognitive outcomes. Further, we utilize the variation in maternal LOC to improve the specification typically used in the estimation of parental investment effects on child development.
    Keywords: Locus of control, parental investment, human capital accumulation, early skill formation, ALSPAC
    JEL: J01 I31
    Date: 2014–08
  4. By: Krause, Annabelle (IZA); Rinne, Ulf (IZA); Zimmermann, Klaus F. (IZA and University of Bonn)
    Abstract: A Single European Labor Market, particularly involving the free movement of workers within Europe, has been a goal of the European community since the 1950s. Whereas it may entail opportunities and drawbacks alike, the benefits – such as greater economic welfare for most citizens – are supposed to outweigh the losses. However, over fifty years after the aim was first established, a Single European Labor Market has not yet been achieved. This paper gives an overview of current European macroeconomic trends, with a particular focus on the Great Recession, and also explores the drivers of and obstacles to labor mobility. Complementarily, it analyzes the results of a unique opinion survey among labor market experts, as well as formulates policy recommendations to enhance mobility. The development of a Single European Labor Market is also discussed in relation to the German model.
    Keywords: European labor market integration, worker mobility, economic crisis, economic migration, German model
    JEL: J40 J61 J68
    Date: 2014–08
  5. By: Kanbur, Ravi; Wagstaff, Adam
    Abstract: The academic literature on equality of opportunity has burgeoned. The concepts and measures have begun to be used by policy institutions, including in specific sectors such as health and education. It is argued that one advantage of focusing on equality of opportunity is that policy makers are more responsive to that discourse than to equality of outcomes per se. This paper presents a critique of equality of opportunity in the policy context. Although the empirical analysis to which the literature has given rise is useful and is to be welcomed, current methods for quantifying and implementing the concept with a view to informing the policy discourse face a series of fundamental questions that remain unanswered. Without a full appreciation of these difficulties, the methods may prove to be misleading in the policy context.
    Keywords: Health Monitoring&Evaluation,Gender and Law,Human Rights,Equity and Development,Poverty Impact Evaluation
    Date: 2014–07–01

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