nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2014‒11‒17
three papers chosen by
Maximo Rossi
Universidad de la República

  1. Income inequality, intergenerational mobility and the Great Gatsby Curve: is education the key? By John Jerrim; Lindsey Macmillan
  2. Wage Inequality and Wage Mobility in Turkey By Aysit Tansel; Basak Dalgic; Aytekin Güven
  3. New Evidence on the Gender Wage Gap in Indonesia By Taniguchi, Kiyoshi; Tuwo, Alika

  1. By: John Jerrim (Department of Quantitative Social Science, Institute of Education, University of London); Lindsey Macmillan (Department of Quantitative Social Science, Institute of Education, University of London)
    Abstract: It is widely believed that countries with greater levels of income inequality also have lower levels of intergenerational mobility. This relationship, known as the Great Gatsby Curve (GGC), has been prominently cited by high-ranking public policy makers, best-selling authors and Nobel Prize winning academics. Yet relatively little cross-national work has empirically examined the mechanisms thought to underpin the GGC – particularly with regards to the role of educational attainment. This paper uses the cross-nationally comparable Programme for International Assessment of Adult Competencies (PIAAC) dataset to shed new light on this issue. We find that income inequality is associated with several key components of the intergenerational transmission process – including access to higher education, the financial returns to education, and the direct effect of parental education upon labour market earnings. Thus, consistent with theoretical models, we find that educational attainment is an important driver of the relationship between intergenerational mobility and income inequality. We hence conclude that unequal access to financial resources plays a central role in the intergenerational transmission of advantage.
    Keywords: Income inequality, intergenerational mobility, Great Gatsby Curve, PIAAC.
    JEL: I20 J62 J24
    Date: 2014–10–30
  2. By: Aysit Tansel (Department of Economics, METU; Institute for the Study of Labor (IZA) Bonn, Germany; Economic Research Forum (ERF) Cairo, Egypt); Basak Dalgic (Department of Public Finance, Hacettepe University); Aytekin Güven (Department of Economics, Abant Izzet Baysal University)
    Abstract: This paper investigates wage inequality and wage mobility in Turkey using the Surveys on Income and Living Conditions (SILC). This is the first paper that explores wage mobility for Turkey. It differs from the existing literature by providing analyses of wage inequality and wage mobility over various socioeconomic groups such as gender, age, education and sector of economic activity. We first present an overview of the evolution of wages and wage inequality over the period 2005-2011. Next, we compute several measures of wage mobility and explore the link between wage inequality and wage mobility. Further, we compute the transition matrices which show movements of individuals across the wage distribution from one period to another and investigate the determinants of transition probabilities using a multinomial logit model. The results show that overall the real wages increased over the study period and wage inequality exhibits a slight increase.. Wage inequality is one of the highest among the European Union (EU) countries. The wage mobility in Turkey is lower than what is observed in the European Union countries although it increases as time horizon expands. Wage mobility has an equalizing impact on the wage distribution, however; this impact is not substantial enough to overcome the high and persistent wage inequality in Turkey.
    Keywords: Wage Inequality, Wage Mobility, Heterogeneity, Turkey.
    JEL: D31 D63 J31 J60
    Date: 2014–11
  3. By: Taniguchi, Kiyoshi (Asian Development Bank); Tuwo, Alika (World Bank, Jakarta Country Office)
    Abstract: Indonesia has been experiencing impressive economic growth and rapid urbanization in recent years. However, urbanization could affect income inequality through people’s movement from rural to urban areas. Using the 2010 National Labor Force Survey (Sakernas) in Indonesia, this study examines how monthly wages are distributed between male and female workers and tests whether a wage gap exists between them. Regression results reveal that urbanization tends to benefit male workers more favorably, in terms of monthly wages, than female workers. The wage gap tends to be wider among younger workers, particularly among those who are underemployed and severely underemployed. It is also greater among public sector workers than those in the private sector. Gender wage gap in Indonesia is mainly due to gender discrimination. An act to equalize opportunity and wages among workers, especially in the public sector, is proposed.
    Keywords: gender; wage distribution; gender wage gap; Indonesia; urbanization; inclusive growth; migration
    JEL: E24 J16 J31 R23
    Date: 2014–10–28

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