nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2014‒09‒05
five papers chosen by
Maximo Rossi
Universidad de la República

  1. Does Labor Legislation Benefit Workers? Well-Being after an Hours Reduction By Daniel S. Hamermesh; Daiji Kawaguchi; Jungmin Lee
  2. Income Inequality and Political Polarization: Time Series Evidence Over Nine Decades By Duca, John V.; Saving, Jason L.
  3. Gender and occupational wage gaps in Romania: from planned equality to market inequality? By Daniela Andrén; Thomas Andrén
  4. Online networks and subjective well-being By Sabatini, Fabio; Sarracino, Francesco
  5. Unobservable, but Unimportant? The Influence of Personality Traits (and Other Usually Unobserved Variables) for the Evaluation of Labor Market Policies By Marco Caliendo; Robert Mahlstedt; Oscar A. Mitnik

  1. By: Daniel S. Hamermesh; Daiji Kawaguchi; Jungmin Lee
    Abstract: Are workers in modern economies working “too hard”—would they be better off if an equilibrium with fewer work hours were achieved? We examine changes in life satisfaction of Japanese and Koreans over a period when hours of work were cut exogenously because employers suddenly faced an overtime penalty that had become effective with fewer weekly hours per worker. Using repeated cross sections we show that life satisfaction in both countries may have increased relatively among those workers most likely to have been affected by the legislation. The same finding is produced using Korean longitudinal data. In a household model estimated over the Korean cross-section data we find some weak evidence that a reduction in the husband’s work hours increased his wife’s well-being. Overall these results are consistent with the claim that legislated reductions in work hours can increase workers’ happiness.
    JEL: E24 J23
    Date: 2014–08
  2. By: Duca, John V. (Federal Reserve Bank of Dallas); Saving, Jason L. (Federal Reserve Bank of Dallas)
    Abstract: Rising income inequality and political polarization have led some to hypothesize that the two are causally linked. Properly interpreting such correlations is complicated by the multiple factors that drive each of these phenomena, potential feedbacks between inequality and polarization, measurement issues, and statistical challenges for modeling non-stationary variables. We find that a more precise measure of inequality (the inverted Pareto-Lorenz coefficient) is statistically related to polarization while a less precise one (top 1% income share) is not, and that there are bi-directional feedbacks between polarization and inequality. Findings support a nuanced view of the links between polarization and inequality.
    Keywords: political polarization; inequality
    JEL: D31 D63 D72
    Date: 2014–01–01
  3. By: Daniela Andrén; Thomas Andrén
    Abstract: In Romania, the communist regime promoted an official policy of gender equality for more than 40 years, providing equal access to education and employment, and restricting pay differentiation based on gender. After its fall in December 1989, the promotion of equal opportunities and treatment for women and men did not constitute a priority for any of the governments of the 1990s. This paper analyzes both gender and occupational wage gaps before and during the first years of transition to a market economy, and finds that the communist institutions did succeed in eliminating the gender wage differences in female- and male-dominated occupations, but not in gender-integrated occupations. During both regimes, wage differences were in general much higher among workers of the same gender working in different occupations than between women and men working in the same occupational group, and women experienced a larger variation of occupational wage differentials than men.
    Keywords: Romania, female- and male-dominated occupations, gender wage gap, occupational wage gap.
    JEL: J24 J31 J71 J78 P26 P27
    Date: 2014–08–25
  4. By: Sabatini, Fabio; Sarracino, Francesco
    Abstract: We argue that the use of online networks may threaten subjective well-being in several ways, due to the inherent attributes of Internet-mediated interaction and through its effects on social trust and sociability. We test our hypotheses on a representative sample of the Italian population. We find a significantly negative correlation between online networking and well-being. This result is partially confirmed after accounting for endogeneity. We explore the direct and indirect effects of the use of social networking sites (SNS) on well-being in a SEM analysis. We find that online networking plays a positive role in subjective well-being through its impact on physical interactions, whereas SNS use is associated with lower social trust. The overall effect of networking on individual welfare is significantly negative.
    Keywords: social participation; online networks; Facebook; social trust; social capital; subjective well-being; hate speech; broadband; digital divide
    JEL: O32 O33 Z13
    Date: 2014–08–25
  5. By: Marco Caliendo; Robert Mahlstedt; Oscar A. Mitnik
    Abstract: Many commonly used treatment effects estimators rely on the unconfoundedness assumption ("selection on observables") which is fundamentally non-testable. When evaluating the effects of labor market policies, researchers need to observe variables that affect both treatment participation and labor market outcomes. Even though in many countries it is possible to access (very) informative administrative data, concerns about the validity of the unconfoundedness assumption remain. The main concern is that the observed characteristics of the individuals may not be enough to properly address potential selection bias. This is especially relevant in light of the research on the influence of personality traits and attitudes on economic outcomes. We exploit a unique dataset that contains a rich set of administrative information on individuals entering unemployment in Germany, as well as several usually unobserved characteristics like personality traits, attitudes, expectations, and job search behavior. This allows us to empirically assess how estimators based on the unconfoundedness assumption perform when alternatively including or not these usually unobserved variables. Our findings indicate that these variables play a significant role for selection into treatment and labor market outcomes, but do not make for the most part a significant difference in the estimation of treatment effects, compared to specifications that include detailed labor market histories. This suggests that rich administrative data may be good enough to draw policy conclusions on the effectiveness of active labor market policies.
    Keywords: Matching, Unconfoundedness, Unobervables, Selection Bias, Heterogeneity, Personality Traits, Active Labor Market Policy
    JEL: C21 D4 J68
    Date: 2014

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