nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2015‒02‒22
ten papers chosen by
Maximo Rossi
Universidad de la República

  1. The Income Distribution in the UK: A Picture of Advantage and Disadvantage By Jenkins, Stephen P.
  2. Unobservable, but Unimportant? The Influence of Personality Traits (and Other Usually Unobserved Variables) for the Estimation of Treatment Effects By Caliendo, Marco; Mahlstedt, Robert; Mitnik, Oscar
  3. Returns to Skills around the World: Evidence from PIAAC By Wößmann, Ludger; Hanushek, Eric A.; Schwerdt, Guido; Wiederhold, Simon
  4. Are Comparisons Luxuries? Subjective Poverty and Positional Concerns in Indonesia By Jinan Zeidan
  5. Statistical Methods for Distributional Analysis By Franck A. Cowell; Emmanuel Flachaire
  6. Gary Becker: Model Economic Scientist By Heckman, James J.
  7. Tackling social exclusion : evidence from Chile By Carneiro, Pedro; Galasso, Emanuela; Ginja, Rita
  8. Subsidized Start-Ups out of Unemployment: A Comparison to Regular Business Start-Ups By Caliendo, Marco; Hogenacker, Jens; Künn, Steffen; Wießner, Frank
  9. Unequal Bequests By Francesconi, Marco; Pollak, Robert; Tabasso, Domenico
  10. Local Segregation and Well-Being By Coral del Río; Olga Alonso-Villar

  1. By: Jenkins, Stephen P. (London School of Economics)
    Abstract: This chapter describes the UK income distribution and how it has evolved over the last 50 years. It also includes some comparisons with the income distributions of other rich countries. Multiple perspectives on the distribution are provided: there is evidence about real income levels and inequality, and the prevalence of affluence and of poverty.
    Keywords: inequality, poverty, affluence, income distribution, United Kingdom
    JEL: D31 I32
    Date: 2015–02
  2. By: Caliendo, Marco; Mahlstedt, Robert; Mitnik, Oscar
    Abstract: A large and highly used number of treatment effects estimators rely on the unconfoundedness assumption ("selection on observables") which is fundamentally non testable. When evaluating the effects of labor market policies, researchers need to observe both variables that affect treatment participation and labor market outcomes. Even though many countries now offer access to (very) informative administrative data concerns about the validity of the unconfoundedness assumption remain. The main concern is that the observable characteristics of the individuals may not be enough to properly address potential selection bias. This is especially relevant in light of the research about the influence of personality traits on economic outcomes. We exploit a unique dataset that contains a rich set of administrative information of individuals entering unemployment in Germany, as well as several usually not observed characteristics like personality traits, attitudes, expectations, and job search behavior. This allows us to empirically assess how estimators based on the unconfoundedness assumption perform when alternatively including or not these usually not observed variables. Our results suggest that these variables, which appear as relevant for the participation probabilities, do not matter for the estimation of effects of the programs evaluated.
    JEL: C14 J68 D03
    Date: 2014
  3. By: Wößmann, Ludger; Hanushek, Eric A.; Schwerdt, Guido; Wiederhold, Simon
    Abstract: Existing estimates of the labor-market returns to human capital give a distorted picture of the role of skills across different economies. International comparisons of earnings analyses rely almost exclusively on school attainment measures of human capital, and evidence incorporating direct measures of cognitive skills is mostly restricted to early-career workers in the United States. Analysis of the new PIAAC survey of adult skills over the full lifecycle in 22 countries shows that the focus on early-career earnings leads to underestimating the lifetime returns to skills by about one quarter. On average, a one-standard-deviation increase in numeracy skills is associated with an 18 percent wage increase among prime-age workers. But this masks considerable heterogeneity across countries. Eight countries, including all Nordic countries, have returns between 12 and 15 percent, while six are above 21 percent with the largest return being 28 percent in the United States. Estimates are remarkably robust to different earnings and skill measures, additional controls, and various subgroups. Intriguingly, returns to skills are systematically lower in countries with higher union density, stricter employment protection, and larger public-sector shares.
    JEL: I20 J31 I21
    Date: 2014
  4. By: Jinan Zeidan (Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS)
    Abstract: We explore (i) the usual determinants of happiness in Indonesia, with a special focus on the role of various measures of absolute income; (ii) the presence of relativistic concerns or positive external effects in shaping attitudes to subjective well-being; and (iii) whether this potential effect changes sign with income level. Additional evidence offered by our investigation relates to the effect of past income levels as well as to that of aspirations. In line with other literature from poor contexts, we find that the subjective well-being of Indonesians is positively affected by the comparison with the income of people around them. This positive influence is unambiguously more important for the poor than for the rich. This pattern is consistent through different measures of well-being and holds also when accounting for past income levels, and lagged income expectations.
    Keywords: Indonesia, subjective well-being, external effects, positional concerns
    JEL: O12 I30 I31
    Date: 2015–02
  5. By: Franck A. Cowell (STICERD London School of Economics; Université du Québec à Montréal CREM & GERAD); Emmanuel Flachaire (Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS Institut Universitaire de France)
    Abstract: This Chapter is about the techniques, formal and informal, that are commonly used to give quantitative answers in the field of distributional analysis - covering subjects including inequality, poverty and the modelling of income distributions. It deals with parametric and non-parametric approaches and the way in which imperfections in data may be handled in practice.
    Keywords: goodness of fit, parametric modelling, non-parametric methods, dominance criteria, welfare indices, inequality measure, poverty measure, influence function, hypothesis testing, confidence intervals, bootstrap
    JEL: D31 D63 C10
    Date: 2015–02
  6. By: Heckman, James J. (University of Chicago)
    Abstract: This paper presents Gary Becker's approach to conducting creative, empirically fruitful economic research. It describes the traits and methodology that made him such a productive and influential scholar.
    Keywords: empirical economics, human capital, discrimination
    JEL: B31 D13 J13 J24
    Date: 2015–02
  7. By: Carneiro, Pedro; Galasso, Emanuela; Ginja, Rita
    Abstract: This paper studies an innovative welfare program in Chile that combines a period of frequent home visits to households in extreme poverty, with guaranteed access to social services. Program impacts are identified using a regression discontinuity design, exploring the fact that program eligibility is a discontinuous function of an index of family income and assets. The analysis finds strong and lasting impacts of the program on the take-up of subsidies and employment services. These impacts are concentrated among families who had little access to the welfare system prior to the intervention.
    Keywords: Poverty Monitoring&Analysis,Health Monitoring&Evaluation,Gender and Law,Social Inclusion&Institutions,Health Systems Development&Reform
    Date: 2015–01–01
  8. By: Caliendo, Marco (University of Potsdam); Hogenacker, Jens (ConVista Consulting AG); Künn, Steffen (IZA); Wießner, Frank (Catholic University of Eichstätt)
    Abstract: Offering unemployed individuals a subsidy to become self-employed is a widespread active labor market policy strategy. Previous studies have illustrated its high effectiveness to help participants escaping unemployment and improving their labor market prospects compared to other unemployed individuals. However, the examination of start-up subsidies from a business perspective has only received little attention to date. Using a new dataset based on a survey allows us to compare subsidized start-ups out of unemployment with regular business founders, with respect to not only personal characteristics but also business outcomes. The results indicate that previously unemployed entrepreneurs face disadvantages in variables correlated with entrepreneurial ability and access to capital. 19 months after start-up, the subsidized businesses experience higher survival, but lag behind regular business founders in terms of income, business growth and innovation. Moreover, we show that expected deadweight losses related to start-up subsidies occur on a (much) lower scale than usually assumed.
    Keywords: innovation, deadweight effects, entrepreneurship, start-up subsidies, evaluation
    JEL: C14 L26 J68
    Date: 2015–01
  9. By: Francesconi, Marco (University of Essex); Pollak, Robert (Washington University, St. Louis); Tabasso, Domenico (University of Geneva)
    Abstract: Using data from the Health and Retirement Study (HRS), we make two contributions to the literature on end-of-life transfers. First, we show that unequal bequests are much more common than generally recognized, with one-third of parents with wills planning to divide their estates unequally among their children. These plans for unequal division are particularly concentrated in complex families, that is, families with stepchildren and families with genetic children with whom the parent has had no contact (e.g., children from previous marriages). We find that in complex families past and current contact between parents and children reduces or eliminates unequal bequests. Second, although the literature focuses on the bequest intentions of parents who have made wills, we find that many elderly Americans have not made wills. Although the probability of having a will increases with age, 30 percent of HRS respondents aged 70 and over have no wills. Of HRS respondents who died between 1995 and 2010, 38 percent died intestate (i.e., without wills). Thus, focusing exclusively on the bequest intentions of parents who have made wills provides an incomplete and misleading picture of end-of-life transfers.
    Keywords: bequests, intergenerational transfers, altruism, exchange, evolutionary motives, family structure
    JEL: D13 J12 K36
    Date: 2015–01
  10. By: Coral del Río; Olga Alonso-Villar
    Abstract: This paper deals with the quantification of the well-being loss/gain of a demographic group associated with its occupational segregation, an issue that, as far as we know, has not been formally tackled in the literature. For this purpose, this paper proposes several properties to take into account when measuring this phenomenon. Building on standard assumptions of social welfare functions, it also defines and characterizes a parameterized family of indices that satisfy those properties. In particular, the indices are equal to zero when either the group has no segregation or all occupations have the same wage, and the indices increase when individuals of the group move into occupations that have higher wages than those left behind. In addition, ceteris paribus, the indices increase more the lower the wage is of the occupation left behind, and consider small improvements for many people to be more important than large improvements for a few.
    Keywords: Segregation measures; occupations; well-being
    JEL: D63 J15 J16
    Date: 2015–02

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