nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2015‒01‒14
four papers chosen by
Maximo Rossi
Universidad de la República

  1. Perception Of Inequality And Social Mobility By Vladimir E. Gimpelson; Galina A. Monusova
  2. How's Life at Home? New Evidence on Marriage and the Set Point for Happiness By Shawn Grover; John F. Helliwell
  3. Does the Choice of Well-Being Measure Matter Empirically?: An Illustration with German Data By Koen Decancq; Dirk Neumann
  4. Trends in Earnings Inequality and Earnings Instability among U.S. Couples: How Important Is Assortative Matching? By Hryshko, Dmytro; Juhn, Chinhui; McCue, Kristin

  1. By: Vladimir E. Gimpelson (National Research University Higher School of Economics); Galina A. Monusova
    Abstract: This paper explores the perceptions of inequality and their associations with social mobility exploiting the ISSP and LiTS cross-country data sets. These perceptions vary across countries as well as across individuals within countries. We try to explain this variation by examining the diverse opportunities for vertical social mobility available to individuals. The main research question raised in the paper is whether our perception of income differentiation is driven by experience of past mobility and availability of the upward leading instruments. In other words, is a more socially mobile society more tolerant to income inequality than a less mobile and segmented one? The intuitive answer seems to be an obvious “yes”, but empirical evidence is still scarce.
    Keywords: Perception of inequality, redistribution, social mobility, cross country data
    JEL: I31 J62 D31 D63
    Date: 2014
  2. By: Shawn Grover; John F. Helliwell
    Abstract: Subjective well-being research has often found that marriage is positively correlated with well-being. Some have argued that this correlation may be result of happier people being more likely to marry. Others have presented evidence suggesting that the well-being benefits of marriage are short-lasting. Using data from the British Household Panel Survey, we control individual pre-marital well-being levels and find that the married are still more satisfied, suggesting a causal effect, even after full allowance is made for selection effects. Using new data from the United Kingdom's Annual Population Survey, we find that the married have a less deep U-shape in life satisfaction across age groups than do the unmarried, indicating that marriage may help ease the causes of the mid-life dip in life satisfaction and that the benefits of marriage are unlikely to be short-lived. We explore friendship as a mechanism which could help explain a causal relationship between marriage and life satisfaction, and find that well-being effects of marriage are about twice as large for those whose spouse is also their best friend. Finally, we use the Gallup World Poll to show that although the overall well-being effects of marriage appear to vary across cultural contexts, marriage eases the middle-age dip in life evaluations for all regions except Sub-Saharan Africa.
    JEL: I31 J12 J16
    Date: 2014–12
  3. By: Koen Decancq; Dirk Neumann
    Abstract: We discuss and compare fiÂ…ve measures of individual well-being, namely income, an objective composite well-being index, a measure of subjective well-being, equivalent income, and a well-being measure based on the von Neumann-Morgenstern utilities of the individuals. After examining the information requirements of these measures, we illustrate their implementation using data from the German Socio-Economic Panel (SOEP) for 2010. We fiÂ…nd sizeable differences in the characteristics of the individuals identiÂ…ed as worst of according to the different well-being measures. Less than 1% of the individuals belong to the bottom decile according to all Â…five measures. Moreover, the measures lead to considerably different well-being rankings of the individuals. These Â…findings highlight the importance of the choice of well-being measure for policy making.
    Keywords: Income, composite well-being index, life satisfaction, equivalent income, von Neumann-Morgenstern utility function, worst off, Germany
    JEL: D31 D63 I30
    Date: 2014
  4. By: Hryshko, Dmytro (University of Alberta); Juhn, Chinhui (University of Houston); McCue, Kristin (U.S. Census Bureau)
    Abstract: We examine changes in inequality and instability of the combined earnings of married couples over the 1980-2009 period using two U.S. panel data sets: Social Security earnings data matched to Survey of Income and Program Participation panels (SIPP-SSA) and the Panel Study of Income Dynamics. Relative to male earnings inequality, the inequality of couples' earnings is both lower in levels and rises by a smaller amount. We also find that couples' earnings instability is lower in levels compared to male earnings instability and actually declines in the SIPP-SSA data. While wives' earnings played an important role in dampening the rise in inequality and year-to-year variation in resources at the family level, we find that marital sorting and coordination of labor supply decisions at the family level played a minor role. Comparing actual couples to randomly paired simulated couples, we find very similar trends in earnings inequality and instability.
    Keywords: inequality, instability, matching
    JEL: J1 J2 J3
    Date: 2014–12

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