nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2014‒09‒25
four papers chosen by
Maximo Rossi
Universidad de la República

  1. The gustibus errari (pot)est”:utility misprediction, preferences for well-being and life satisfaction". By Bechetti, Leonardo; Conzo, Pierluigi
  2. World Income Inequality Databases: an assessment of WIID and SWIID By Jenkins, Stephen P.
  3. Changes in Bargaining Status and Intra-Plant Wage Dispersion in Germany. A Case of (Almost) Plus Ça Change? By John T. Addison; Arnd Kölling; Paulino Teixeira
  4. Food Comes First, Then Morals: Redistribution Preferences, Altruism and Group Heterogeneity in Western Europe By David Rueda

  1. By: Bechetti, Leonardo; Conzo, Pierluigi (University of Turin)
    Abstract: The life satisfaction literature generally focuses on how life events affect subjective well-being. Through a contingent valuation survey we test whether well-being preferences have significant impact on life satisfaction. A sample of respondents is asked to simulate a policymaker decision consisting in allocating scarce financial resources among 11 well-being domains. Consistently with the utility misprediction hypothesis, we find that the willingness to invest more in the economic well-being domain is negatively correlated with life satisfaction. Our findings are shown to be robust when we account for unobservables related to economic fragility and non-random sample selection. Revers e causality and omitted variable bias are controlled for with instrumental variables and a sensitivity analysis on departures from exogeneity assumptions. Subsample estimates document that the less educated are more affected by the problem.
    Date: 2014–07
    URL: http://d.repec.org/n?u=RePEc:uto:dipeco:201421&r=ltv
  2. By: Jenkins, Stephen P.
    Abstract: This article assesses two secondary data compilations about income inequality – the World Income Inequality Database (WIIDv2c), and the Standardized World Income Inequality Database (SWIIDv4.0) which is based on WIID but with all observations multiply-imputed. WIID and SWIID are convenient and accessible sources for researchers seeking cross- national data with global coverage for relatively long time periods. Against these benefits must be set costs arising from lack of data comparability and quality and also, in the case of SWIID, questions about its imputation model. WIID and SWIID users need to recognize this benefit-cost trade-off and ensure their substantive conclusions are robust to potential data problems. I provide detailed description of the nature and contents of both sources plus illustrative regression analysis. From a data issues perspective, I recommend WIID over SWIID, though my support for use of WIID is conditional.
    Date: 2014–09–10
    URL: http://d.repec.org/n?u=RePEc:ese:iserwp:2014-31&r=ltv
  3. By: John T. Addison (University of South Carolina, Durham University, University of Coimbra and IZA Bonn); Arnd Kölling (Berlin School of Economics and Law); Paulino Teixeira (GEMF/Faculty of Economics, University of Coimbra and IZA Bonn)
    Abstract: Recent studies have pointed to the association between declining collective bargaining coverage and rising overall wage inequality. This association holds more or less across-the-board, at least for broad swathes of recent history. That said, the exact contribution of deununionization is a matter of debate, perhaps no more so than in Germany, our case study. The present paper takes a less conventional approach to this particular source of rising inequality by examining intra-plant wage dispersion in the wake of establishments either exiting from or entering into collective agreements. Several measures of inequality are constructed for German establishments over the twelve-year period 1996-2008, an interval of continuously declining union representation. Using linked employer-employee data, our estimation strategy hinges upon the identification of comparable groups of establishments and on both instantaneous and medium- to long-term changes in the wage structure. A modest widening effect on dispersion of exiting from a sectoral agreement is detected in the data once we effect a comparison across observationally-equivalent individuals. The converse does not apply in respect of joiners. The scale of the former effect casts doubt on some of the more exaggerated claims of the importance of deunionization to wage inequality and the resurgence of Germany more generally.
    Keywords: Germany, collective bargaining, deunionization, intra-plant wage inequality, sectoral agreement exits and accessions.
    JEL: J31 J51 J53
    Date: 2014–08
    URL: http://d.repec.org/n?u=RePEc:gmf:wpaper:2014-15.&r=ltv
  4. By: David Rueda (Department of Politics & IR and Nuffield College, University of Oxford)
    Abstract: Altruism is an important omitted variable in much of the Political Economy literature. While material self-interest is the base of most approaches to redistribution (first affecting preferences and then politics and policy), there is a paucity of research on inequality aversion. I propose that other-regarding concerns influence redistribution preferences and that (1) they matter most to those in less material need and (2) they are conditional on the identity of the poor. Altruism is a luxury good most relevant to the rich, and it is most influential when the recipients of benefits are similar to those financing them. Using data from the European Social Survey from 2002 to 2010, I will show that group homogeneity magnifies (or limits) the importance of altruism for the rich. In making these distinctions between the poor and the rich, the arguments in this paper challenge some influential approaches to the politics of inequality.
    Keywords: social policy; welfare state
    Date: 2014
    URL: http://d.repec.org/n?u=RePEc:cge:wacage:200&r=ltv

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