nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2015‒02‒16
nine papers chosen by
Maximo Rossi
Universidad de la República

  1. The Effect of Unemployment Benefits on the Duration of Unemployment Insurance Receipt: New Evidence from a Regression Kink Design in Missouri, 2003-2013 By David Card; Zhuan Pei; Andrew Johnston; Pauline Leung; Alexandre Mas
  2. Why are there so few women in executive positions? An analysis of gender differences in the life-cycle of executive employment By Anders Frederiksen; Timothy Halliday
  3. Biased Perceptions of Income Inequality and Redistribution By Engelhardt, Carina; Wagener, Andreas
  4. Evidence-Based Scientific Policy Advice By Klaus F. Zimmermann
  5. The effect of extended unemployment insurance benefits: evidence from the 2012-2013 phase-out By Farber, Henry S.; Rothstein, Jesse; Valletta, Robert G.
  6. Bargaining and Wage Rigidity in a Matching Model for the US By Malcomson, James; Mavroeidis, Sophocles
  7. A Question of Degree: The Effects of Degree Class on Labor Market Outcomes By Feng, Andy; Graetz, Georg
  8. Latin American Inequality: Colonial Origins, Commodity Booms, or a Missed 20th Century Leveling? By Jeffrey G. Williamson
  9. Distributional Impact of Commodity Price Shocks: Australia over a Century By Sambit Bhattacharyya; Jeffrey G. Williamson

  1. By: David Card (UC Berkeley, NBER, and IZA); Zhuan Pei (Brandeis University); Andrew Johnston (University of Pennsylvania); Pauline Leung (Princeton University); Alexandre Mas (Princeton University, NBER, and IZA)
    Abstract: We provide new evidence on the effect of the unemployment insurance (UI) weekly benefit amount on unemployment insurance spells based on administrative data from the state of Missouri covering the period 2003-2013. Identification comes from a regression kink design that exploits the quasi-experimental variation around the kink in the UI benefit schedule. We find that UI durations are more responsive to benefit levels during the recession and its aftermath, with an elasticity between 0.65 and 0.9 as compared to about 0.35 pre-recession.Length: 29 pages
    Date: 2015–01
  2. By: Anders Frederiksen (Aarhus University); Timothy Halliday (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.
    Date: 2015–02
  3. By: Engelhardt, Carina; Wagener, Andreas
    Abstract: When based on perceived rather than on objective income distributions, the Meltzer-Richards hypothesis and the POUM hypothesis work quite well empirically: there exists a positive link between perceived inequality or perceived upward mobility and the extent of redistribution in democratic regimes though such a link does not exist when objective measures of inequality and social mobility are used. These observations highlight that political preferences and choices might depend more on perceptions than on factual data.
    JEL: H53 D72 D31
    Date: 2014
  4. By: Klaus F. Zimmermann
    Abstract: While policy measures affect the welfare of nations, the practice of policy advice is determined by complex rules. Evidence-based scientific policy advice gives weight to hard empirical facts and restrictions. The lecture discusses challenges and conditions for success and provides suggestions to improve the implementation of such a strategy.
    Keywords: role of economists, methodology of policy advice, labor reform policies
    JEL: A11 B4 J48
    Date: 2014
  5. By: Farber, Henry S. (Princeton University); Rothstein, Jesse (UC 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.
    Date: 2015–01
  6. By: Malcomson, James (University of Oxford); Mavroeidis, Sophocles (University of Oxford)
    Abstract: The Mortensen and Pissarides (1994) matching model with all wages negotiated each period is shown inconsistent with macroeconomic wage dynamics in the US. This applies even when heterogeneous match productivities, time to build vacancies and credible bargaining are incorporated. Wage rigidity consistent with micro evidence that wages of job changers are more flexible than those of job stayers allows the model to capture these dynamics and is not inconsistent with parameter calibrations in the literature. Such wage rigidity affects only the timing of wage payments over the duration of matches, so conclusions about characteristics based on calibrations continue to apply.
    Keywords: matching frictions, wage bargaining, wage rigidity
    JEL: E2 J3 J6
    Date: 2015–01
  7. By: Feng, Andy (Singapore Ministry of Trade and Industry); Graetz, Georg (Uppsala University)
    Abstract: How does measured performance at university affect labor market outcomes? We show that degree class – a coarse measure of student performance used in the UK – causally affects graduates' industry and hence expected wages. To control for unobserved ability, we employ a regression discontinuity design that utilizes rules governing the award of degrees. A First Class (Upper Second) increases the probability of working in a high-wage industry by thirteen (eight) percentage points, and leads to three (seven) percent higher expected wages. The results point to the importance of statistical discrimination, heuristic decision making, and luck in the labor market.
    Keywords: high skill wage inequality, regression discontinuity design, statistical discrimination
    JEL: C26 I24 J24 J31
    Date: 2015–01
  8. By: Jeffrey G. Williamson
    Abstract: Most analysts of the modern Latin American economy have held the pessimistic belief in historical persistence -- they believe that Latin America has always had very high levels of inequality, and that it’s the Iberian colonists’ fault. Thus, modern analysts see today a more unequal Latin America compared with Asia and most rich post-industrial nations and assume that this must always have been true. Indeed, some have argued that high inequality appeared very early in the post-conquest Americas, and that this fact supported rent-seeking and anti-growth institutions which help explain the disappointing growth performance we observe there even today. The recent leveling of inequality in the region since the 1990s seems to have done little to erode that pessimism. It is important, therefore, to stress that this alleged persistence is based on an historical literature which has made little or no effort to be comparative, and it matters. Compared with the rest of the world, inequality was not high in the century following 1492, and it was not even high in the post-independence decades just prior Latin America’s belle époque and start with industrialization. It only became high during the commodity boom 1870-1913, by the end of which it had joined the rich country unequal club that included the US and the UK. Latin America only became relatively high between 1913 and the 1970s when it missed the Great Egalitarian Leveling which took place almost everywhere else. That Latin American inequality has its roots in its colonial past is a myth.
    JEL: D3 N16 N36 O15
    Date: 2015–01
  9. By: Sambit Bhattacharyya; Jeffrey G. Williamson
    Abstract: This paper studies the distributional impact of commodity price shocks over both the short and very long run.  Using a GARCH model, we find that Australia experienced more volatility than many commodity exporting developing countries over the periods 1865-1940 and 1960-2007.  A single equation error correction model suggests that commodity price shocks increase the income share of the top 1, 0.05, and 0.01 percents in the short run.  The very top end of the income distribution benefits from commodity booms disproportionately more than ther est of the society.  The short run effect is mainly driven by wool and mining and not agricultural commodities.  A sustained increase in the price of renewables (wool ) reduces inequality whereas the same for non-renewable resources (minerals) increases inequality.  We expect that the initial distribution of land and mineral resources explains the asymmetric result.
    Keywords: commodity price shocks, commodity exporters, top incomes, inequality
    JEL: F14 F43 N17 O13
    Date: 2013–07–23

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.