nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2015‒02‒05
fourteen papers chosen by
Maximo Rossi
Universidad de la República

  1. Economic growth evens-out happiness: evidence from six surveys By Andrew E. Clark; Sarah Flèche; Claudia Senik
  2. Adaptation to poverty in long-run panel data By Andrew E. Clark; Conchita D’Ambrosio; Simone Ghislandi
  3. What can life satisfaction data tell us about discrimination against sexual minorities? A structural equation model for Australia and the United Kingdom By Nattavudh Powdthavee; Mark Wooden
  4. Do we value mobility? By Yoram Amiel; Michele Bernasconi; Frank A. Cowell; Valentino Dardanoni
  5. Back to baseline in Britain: adaptation in the British household panel survey By Andrew E. Clark; Yannis Georgellis
  6. Why Are There So Few Women in Executive Positions? An Analysis of Gender Differences in the Life-Cycle of Executive Employment By Frederiksen, Anders; Halliday, Timothy J.
  7. Female labour supply, human capital and welfare reform By Richard Blundell; Costas Meghir; Jonathan Shaw; Monica Costa Dias
  8. Locus of control and its intergenerational implications for early childhood skill formation By Warn N. Lekfuangfu; Francesca Cornaglia; Nattavudh Powdthavee; Nele Warrinnier
  9. Can Online Learning Bend the Higher Education Cost Curve? By David J. Deming; Claudia Goldin; Lawrence F. Katz; Noam Yuchtman
  10. 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
  11. The relationship between EU indicators of persistent and current poverty By Stephen P. Jenkins; Philippe van Kerm
  12. The Effect of Extended Unemployment Insurance Benefits: Evidence from the 2012-2013 Phase-Out By Farber, Henry; Rothstein, Jesse; Valletta, Robert G.
  13. The Stress Cost of Children By Buddelmeyer, Hielke; Hamermesh, Daniel S.; Wooden, Mark
  14. Inequality and Crises Revisited By Salvatore Morelli; Anthony B. Atkinsony

  1. By: Andrew E. Clark; Sarah Flèche; Claudia Senik
    Abstract: In spite of the great U-turn that saw income inequality rise in Western countries in the 1980s, happiness inequality has fallen in countries that have experienced income growth (but not in those that did not). Modern growth has reduced the share of both the “very unhappy” and the “perfectly happy”. Lower happiness inequality is found both between and within countries, and between and within individuals. Our cross-country regression results argue that the extension of various public goods helps to explain this greater happiness homogeneity. This new stylised fact arguably comes as a bonus to the Easterlin paradox, offering a somewhat brighter perspective for developing countries.
    Keywords: Happiness; inequality; economic growth; development; Easterlin paradox
    JEL: D31 D6 I31 O15
    Date: 2014–10
  2. By: Andrew E. Clark; Conchita D’Ambrosio; Simone Ghislandi
    Abstract: We consider the link between poverty and subjective well-being, and focus in particular on potential adaptation to poverty. We use panel data on almost 54,000 individuals living in Germany from 1985 to 2012 to show first that life satisfaction falls with both the incidence and intensity of contemporaneous poverty. We then reveal that there is little evidence of adaptation within a poverty spell: poverty starts bad and stays bad in terms of subjective well-being. We cannot identify any cause of poverty entry which explains the overall lack of poverty adaptation.
    Keywords: Income; Poverty; Subjective well-being; Adaptation; SOEP
    JEL: D60 I31
    Date: 2014–11
  3. By: Nattavudh Powdthavee; Mark Wooden
    Abstract: Very little is known about how the differential treatment of sexual minorities could influence subjective reports of overall well-being. This paper seeks to fill this gap. Data from two large surveys that provide nationally representative samples for two different countries – Australia (the HILDA Survey) and the UK (the UK Household Longitudinal Study) – are used to estimate a simultaneous equations model of life satisfaction. The model allows for self-reported sexual identity to influence a measure of life satisfaction both directly and indirectly through seven different channels: (i) income; (ii) employment; (iii) health (iv) partner relationships; (v) children; (vi) friendship networks; and (vii) education. Lesbian, gay and bisexual persons are found to be significantly less satisfied with their lives than otherwise comparable heterosexual persons. In both countries this is the result of a combination of direct and indirect effects.
    Keywords: Sexual orientation; sexual minorities; discrimination; life satisfaction; HILDA survey; UKHLS
    JEL: I31 J71
    Date: 2014–05
  4. By: Yoram Amiel; Michele Bernasconi; Frank A. Cowell; Valentino Dardanoni
    Abstract: Is there a trade-off between people's preference for income equality and income mobility? Testing for the existence of such a trade-off is difficult because mobility is a multifaceted concept. We analyse results from a questionnaire experiment based on simple precise concepts of income inequality and income mobility. We fnd no direct trade-off in preference between mobility and equality, but an indirect trade-off, applying when more income mobility can only be obtained at the expense of some income inequality. Mobility preference - but not equality preference - appears to be driven by personal experience of mobility.
    JEL: N0
    Date: 2013–04
  5. By: Andrew E. Clark; Yannis Georgellis
    Abstract: We look for evidence of adaptation in wellbeing to major life events using eighteen waves of British panel data. Adaptation to marriage, divorce, birth of child and widowhood appears to be rapid and complete; this is not so for unemployment. These findings are remarkably similar to those in previous work on German panel data. Equally, the time profiles with life satisfaction as the wellbeing measure are very close to those using a twelve-item scale of psychological functioning. As such, the phenomenon of adaptation may be a general one, rather than being found only in German data or using single-item wellbeing measures.
    Keywords: life satisfaction; anticipation; adaptation; baseline satisfaction; labour market and life events
    JEL: I31 J12 J13 J62 J63 J64
    Date: 2013–07
  6. By: Frederiksen, Anders (Aarhus University); Halliday, Timothy J. (University of Hawaii at Manoa)
    Abstract: "Glass ceilings" and "sticky floors" are typical explanations for the low representation of women in top executive positions, but a focus on gender differences in promotions provides only a partial explanation. We consider the life-cycle of executive employment, which allows for a full characterization of the gender composition of executive management. We establish that there are few women in executive management because they have lower levels of human capital, are underrepresented in lower-level jobs, and are less likely to be perceived as high-productivity employees. We do not find that women have uniformly unfavorable promotion and demotion probabilities.
    Keywords: discrimination, dynamics, gender
    JEL: J71 J62
    Date: 2015–01
  7. By: Richard Blundell; Costas Meghir; Jonathan Shaw; Monica Costa Dias
    Abstract: We consider the impact of tax credits and income support programs on female education choice, employment,hours and human capital accumulation over the life-cycle. We analyze both the short run incentive effects and the longer run implications of such programs. By allowing for risk aversion and savings,we quantify the insurance value of alternative programs. We find important incentive effects on education choice and labor supply, with single mothers having the most elastic labor supply. Returns to labor market experience are found to be substantial but only for full-time employment, and especially for women with more than basic formal education. For those with lower education the welfare programs are shown to have substantial insurance value. Based on the model, marginal increases to tax credits are preferred to equally costly increases in income support and to tax cuts, except by those in the highest education group.
    JEL: J1
    Date: 2013–04
  8. By: Warn N. Lekfuangfu; Francesca Cornaglia; Nattavudh Powdthavee; Nele Warrinnier
    Abstract: We propose a model in which parents have a subjective belief about the impact of their investment on the early skill formation of their children. This subjective belief is determined in part by locus of control (LOC), i.e., the extent to which individuals believe that their actions can influence future outcomes. Using a unique British cohort survey, we show that maternal LOC measured during the 1st trimester strongly predicts early and late child cognitive and noncognitive outcomes. Further, we utilize the variation in maternal LOC to improve the specification typically used in the estimation of parental investment effects on child development.
    Keywords: Locus of control; parental investment; human capital accumulation; early skill formation; ALSPAC
    JEL: I31 J01
    Date: 2014–08
  9. By: David J. Deming; Claudia Goldin; Lawrence F. Katz; Noam Yuchtman
    Abstract: We examine whether online learning technologies have led to lower prices in higher education. Using data from the Integrated Postsecondary Education Data System, we show that online education is concentrated in large for-profit chains and less-selective public institutions. Colleges with a higher share of online students charge lower tuition prices. We present evidence that real and relative prices for full-time undergraduate online education declined from 2006 to 2013. Although the pattern of results suggests some hope that online technology can “bend the cost curve” in higher education, the impact of online learning on education quality remains uncertain.
    JEL: I22 I23
    Date: 2015–01
  10. 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: D3 J3 J31
    Date: 2014–11
  11. By: Stephen P. Jenkins; Philippe van Kerm
    Abstract: The current poverty rate and the persistent poverty rate are both included in the EU’s portfolio of primary indicators of social inclusion. We show that there is a near-linear relationship between these two indicators across EU countries drawing on empirical analysis of EU-SILC and ECHP data. Using a prototypical model of poverty dynamics, we explain how the near-linear relationship arises and show how the model can be used to predict persistent poverty rates from current poverty information. In the light of the results, we discuss whether the EU’s persistent poverty measure and the design of EU-SILC longitudinal data collection require modification.
    Keywords: Persistent poverty; income poverty; poverty; EU-SILC; Europe
    JEL: D31 I32
    Date: 2013–03
  12. By: Farber, Henry (Princeton University); Rothstein, Jesse (University of California, Berkeley); Valletta, Robert G. (Federal Reserve Bank of San Francisco)
    Abstract: Unemployment Insurance benefit durations were extended during the Great Recession, reaching 99 weeks for most recipients. The extensions were rolled back and eventually terminated by the end of 2013. Using matched CPS data from 2008-2014, we estimate the effect of extended benefits on unemployment exits separately during the earlier period of benefit expansion and the later period of rollback. In both periods, we find little or no effect on job-finding but a reduction in labor force exits due to benefit availability. We estimate that the rollbacks reduced the labor force participation rate by about 0.1 percentage point in early 2014.
    Keywords: extended unemployment benefits, job search, labor force
    JEL: J64 J65
    Date: 2015–01
  13. By: Buddelmeyer, Hielke (Melbourne Institute of Applied Economic and Social Research); Hamermesh, Daniel S. (University of Texas at Austin, Royal Holloway); Wooden, Mark (Melbourne Institute of Applied Economic and Social Research)
    Abstract: We use longitudinal data describing couples in Australia from 2001-12 and Germany from 2002-12 to examine how demographic events affect perceived time and financial stress. Consistent with the view of measures of stress as proxies for the Lagrangean multipliers in models of household production, we show that births increase time stress, especially among mothers, and that the effects last at least several years. Births generally also raise financial stress slightly. The monetary equivalent of the costs of the extra time stress is very large. While the departure of a child from the home reduces parents' time stress, its negative impacts on the tightness of the time constraints are much smaller than the positive impacts of a birth.
    Keywords: time use, children, demographic economics
    JEL: J13 J20
    Date: 2015–01
  14. By: Salvatore Morelli (CSEF, University of Naples and Institute for Economic Modelling at the INET Oxford); Anthony B. Atkinsony (Nuffeld College, University of Oxford and Institute for Economic Modelling at the INET Oxford)
    Abstract: Recent debate has suggested that growing levels or high levels of inequality may be systematically associated with the occurrence of banking crises. Using the updated version of the Chartbook of Economic Inequality, this paper provides new empirical evidence on the `level' hypothesis and reassesses the empirical validity of the `growth' hypothesis. In line with previous work, the empirical analysis on the entire set of countries and years under investigation does not provide any conclusive and compelling statistical support to either of the hypotheses. However, the apparent statistical insignificance of the findings does not rule out the economic relevance of the question at hand, given that the hypotheses cannot be rejected for important crises and countries such as the US and the UK. Hence, the overall evidence is far from being conclusive and there are several reasons to shed further light on this important research topic.
    JEL: D31 D39
    Date: 2015–01–22

This nep-ltv issue is ©2015 by Maximo Rossi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.