nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2014‒12‒03
twelve papers chosen by
Maximo Rossi
Universidad de la República

  1. Theories of Accounting: Evolution & Developments, Income-Determination and Diversities in Use By Angus O. Unegbu
  2. The effect of unconditional cash transfers on adult labour supply: A unitary discrete choice model for the case of Ecuador By Mideros A.; O'Donoghue C.
  3. Evidence and Persistence of Education Inequality in an Early-Tracking System - The German Case By Annabelle Krause; Simone Schüller
  4. Mapping and Understanding Ethnic Disparities in Length of Schooling: The Case of Ningxia Autonomous Region, China By Gustafsson, Björn Anders; Sai, Ding
  5. Gary Becker's Contributions in Health Economics By Soares, Rodrigo R.
  6. The Brazilian Wage Curve: New Evidence from the National Household Survey By Baltagi, Badi H.; Rokicki, Bartlomiej; Barreiro de Souza, Kênia
  7. The Gender Pay Gap Across Countries: A Human Capital Approach By Polachek, Solomon; Xiang, Jun
  8. Love Thy Neighbor: Religion and Prosocial Behavior By Heineck, Guido
  9. Demographics and Entrepreneurship By James Liang; Hui Wang; Edward P. Lazear
  10. Wealth Inequality in the United States since 1913: Evidence from Capitalized Income Tax Data By Emmanuel Saez; Gabriel Zucman
  11. Why You Can't Find a Taxi in the Rain and Other Labor Supply Lessons from Cab Drivers By Henry S. Farber
  12. It's Where You Work: Increases in Earnings Dispersion across Establishments and Individuals in the US By Erling Barth; Alex Bryson; James C. Davis; Richard Freeman

  1. By: Angus O. Unegbu
    Abstract: Accounting frameworks follow stipulations of existing Accounting Theories. This exploratory research sets out to trace the evolution of accounting theories of Charge and Discharge Syndrome and the Corollary of Double Entry. Furthermore, it dives into the theories of Income Determination, garnishing it with areas of diversities in the use of Accounting Information while review of theories of recent growths and developments in Accounting are not left out. The method of research adopted is exploratory review of existing accounting literature. It is observed that the emergence of these theories exist to minimize fraud, errors, misappropriations and pilfering of Corporate assets. It is recommended that implementation prescriptions of these theories by International Financial Reporting Standard Committee and Practicing Accountants should be adhered to and simplified so as to avoid confusing and scandalous reporting of financial statements
    Date: 2014–11
  2. By: Mideros A.; O'Donoghue C. (UNU-MERIT)
    Abstract: We examine the effect of unconditional cash transfers by a unitary discrete labour supply model. We argue that there is no negative income effect of social transfers in the case of poor adults because leisure could not be assumed to be a normal good under such conditions. Using data from the national employment survey of Ecuador ENEMDUR we estimate the effect of the Bono de Desarrollo Humano BDH. Results show that cash transfers, unconditional in labour, do not produce labour disincentives in the case of household heads, but may be paying for housework and childcare provided by partners and single adults. However, labour market and care work gender inequality must be addressed by complementary policies.
    Keywords: Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes; Fiscal Policies and Behavior of Economic Agents: General; Time Allocation and Labor Supply; Microeconomic Analyses of Economic Development;
    JEL: H24 H30 J22 O12
    Date: 2014
  3. By: Annabelle Krause (IZA); Simone Schüller (FBK-IRVAPP and IZA)
    Abstract: This article reviews empirical evidence on the early tracking system in Germany and the educational inequalities associated with it. Overall, the literature confirms the existence of considerable social, ethnic, gender- and age-related inequalities in secondary school track placement. Studies on tracking timing and track allocation mechanisms reveal that postponement of the selection decision and binding teacher recommendations may reduce certain (mainly social) inequalities. Furthermore, recent evidence concerning long-term consequences of tracking on labor market outcomes suggests that sizeable built-in flexibilities in the German system succeed in compensating for initial (age-related) education inequalities. The paper concludes with an outline and discussion of the most promising pathways for future research in order to help design inequality-reducing policy recommendations.
    Keywords: Tracking, Educational inequality, School system, Germany
    JEL: I24 I28 J24
    Date: 2014–11
  4. By: Gustafsson, Björn Anders (University of Gothenburg); Sai, Ding (Chinese Academy of Social Sciences)
    Abstract: Disparities in length of schooling between the largest Muslim minority in China, the Hui, and the Han majority are investigated. We use household data collected in Ningxia autonomous region in 2007. It is found that compared with Han persons of the same age and gender, Hui persons have shorter educations with the exception of young and middle-aged urban males who have twelve years of schooling, on average. Particularly noteworthy is that as many as 45 percent of adult rural Hui females are not literate. Possible reasons for the shorter educations of Hui in many segments of the population are numerous. We show that the incentive to invest in length of schooling is smaller among Hui than Han as the association between education and income is weaker. We also report that Hui parents spend fewer resources on education than Han parents and that fewer years of schooling for Hui in the first generation helps to explain why Hui persons in the second generation have shorter educations.
    Keywords: China, schooling, Hui ethnicity, Han ethnicity, Ningxia, inequality
    JEL: I24 J15 P35
    Date: 2014–10
  5. By: Soares, Rodrigo R. (Sao Paulo School of Economics)
    Abstract: This short essay reviews Gary Becker's contributions and influence in health economics. It was originally prepared for the collection of short papers in honor of Gary Becker that is scheduled to appear in the inaugural issue of the Journal of Demographic Economics.
    Keywords: Gary Becker, health, human capital
    JEL: I1 J1
    Date: 2014–10
  6. By: Baltagi, Badi H. (Syracuse University); Rokicki, Bartlomiej (Warsaw University); Barreiro de Souza, Kênia (CEDEPLAR/UFMG)
    Abstract: This paper reconsiders the Brazilian wage curve using individual data from the National Household Survey at 27 Federative Units over the period 2002 - 2009. We find evidence in favor of the Brazilian wage curve with an unemployment elasticity of -0.08 when the lagged unemployment rate is used as an instrument for current unemployment rate. We also find that males in Brazil are significantly more responsive to local unemployment rates (-0.13) than their female counterparts. In fact, we find that the unemployment elasticity for women is statistically insignificant. Applying gender specific unemployment rates, the elasticity for men decreases to -0.09, while the elasticity for women remains statistically insignificant. This paper also finds that the estimates for Brazilian wage curve are completely different for the case of formal and informal workers.
    Keywords: wage curve, fixed effects, regional labor markets, household surveys, informal workers
    JEL: C26 J30 J60
    Date: 2014–09
  7. By: Polachek, Solomon (Binghamton University, New York); Xiang, Jun (Rutgers University)
    Abstract: The gender wage gap varies across countries. For example, among OECD nations women in Australia, Belgium, Italy and Sweden earn 80% as much as males, whereas in Austria, Canada and Japan women earn about 60%. Current studies examining cross-country differences focus on the impact of labor market institutions such as minimum wage laws and nationwide collective bargaining. However, these studies neglect labor market institutions that affect women's lifetime work behavior – a factor crucially important in gender wage gap studies that employ individual data. This paper explicitly concentrates on labor market institutions that are related to female lifetime work that affect the gender wage gap across countries. Using ISSP (International Social Survey Programme), LIS (Luxembourg Income Study) and OECD wage data for 35 countries covering 1970-2002, we show that the gender pay gap is positively associated with the fertility rate, positively associated with the husband-wife age gap at first marriage, and positively related to the top marginal tax rate, all factors which negatively affect women's lifetime labor force participation. In addition, we show that collective bargaining, as found in previous studies, is negatively associated with the gender pay gap.
    Keywords: gender, pay, human capital, international differences
    JEL: J3 J7 I3 H8 F55
    Date: 2014–10
  8. By: Heineck, Guido (University of Bamberg)
    Abstract: There is a long tradition in psychology, the social sciences and, more recently though, economics to hypothesize that religion enhances prosocial behavior. Evidence from both survey and experimental data however yield mixed results and there is barely any evidence for Germany. This study adds to this literature by exploring data from the German Socio-Economic Panel (SOEP), which provides both attitudinal (importance of helping others, of being socially active) and behavioral components of prosociality (volunteering, charitable giving and blood donations). Results from analyses that avoid issues of reverse causality suggest mainly for moderate, positive effects of individuals' religious involvement as measured by church affiliation and church attendance. Despite the historic divide in religion, results in West and East Germany do not differ substantially.
    Keywords: religion, prosocial behavior, Germany
    JEL: D64 Z12 Z13
    Date: 2014–09
  9. By: James Liang; Hui Wang; Edward P. Lazear
    Abstract: Entrepreneurship requires creativity and business acumen. Creativity may decline with age, but business skills increase with experience in high level positions. Having too many older workers in society slows entrepreneurship. Not only are older workers less innovative, but more significant is that when older workers occupy key positions they block younger workers from acquiring business skills. A formal theoretical structure is presented and tested using the Global Entrepreneurship Monitor data. The results imply that a one-standard deviation decrease in the median age of a country increases the rate of new business formation by 2.5 percentage points, which is about forty percent of the mean rate. Furthermore, older societies have lower rates of entrepreneurship at every age.
    JEL: J11 L26 M51
    Date: 2014–09
  10. By: Emmanuel Saez; Gabriel Zucman
    Abstract: This paper combines income tax returns with Flow of Funds data to estimate the distribution of household wealth in the United States since 1913. We estimate wealth by capitalizing the incomes reported by individual taxpayers, accounting for assets that do not generate taxable income. We successfully test our capitalization method in three micro datasets where we can observe both income and wealth: the Survey of Consumer Finance, linked estate and income tax returns, and foundations' tax records. Wealth concentration has followed a U-shaped evolution over the last 100 years: It was high in the beginning of the twentieth century, fell from 1929 to 1978, and has continuously increased since then. The rise of wealth inequality is almost entirely due to the rise of the top 0.1% wealth share, from 7% in 1979 to 22% in 2012--a level almost as high as in 1929. The bottom 90% wealth share first increased up to the mid-1980s and then steadily declined. The increase in wealth concentration is due to the surge of top incomes combined with an increase in saving rate inequality. Top wealth-holders are younger today than in the 1960s and earn a higher fraction of total labor income in the economy. We explain how our findings can be reconciled with Survey of Consumer Finances and estate tax data.
    JEL: H2 N32
    Date: 2014–10
  11. By: Henry S. Farber
    Abstract: In a seminal paper, Camerer, Babcock, Loewenstein, and Thaler (1997) find that the wage elasticity of daily hours of work New York City (NYC) taxi drivers is negative and conclude that their labor supply behavior is consistent with target earning (having reference dependent preferences). I replicate and extend the CBLT analysis using data from all trips taken in all taxi cabs in NYC for the five years from 2009-2013. The overall pattern in my data is clear: drivers tend to respond positively to unanticipated as well as anticipated increases in earnings opportunities. This is consistent with the neoclassical optimizing model of labor supply and does not support the reference dependent preferences model. I explore heterogeneity across drivers in their labor supply elasticities and consider whether new drivers differ from more experienced drivers in their behavior. I find substantial heterogeneity across drivers in their elasticities, but the estimated elasticities are generally positive and only rarely substantially negative. I also find that new drivers with smaller elasticities are more likely to exit the industry while drivers who remain learn quickly to be better optimizers (have positive labor supply elasticities that grow with experience).
    JEL: D01 D03 J22
    Date: 2014–10
  12. By: Erling Barth; Alex Bryson; James C. Davis; Richard Freeman
    Abstract: This paper links data on establishments and individuals to analyze the role of establishments in the increase in inequality that has become a central topic in economic analysis and policy debate. It decomposes changes in the variance of ln earnings among individuals into the part due to changes in earnings among establishments and the part due to changes in earnings within-establishments and finds that much of the 1970s-2010s increase in earnings inequality results from increased dispersion of the earnings among the establishments where individuals work. It also shows that the divergence of establishment earnings occurred within and across industries and was associated with increased variance of revenues per worker. Our results direct attention to the fundamental role of establishment-level pay setting and economic adjustments in earnings inequality.
    Keywords: Earnings, earnings inequality, productivity
    JEL: J3 J31 D3
    Date: 2014–11

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