nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2015‒03‒05
seven papers chosen by
Maximo Rossi
Universidad de la República

  1. An economic analysis of proposals to improve coverage of longevity risk By David Boisclair; Jean-Yves Duclos; Steeve Marchand; Pierre-Carl Michaud
  2. How Job Changes Affect People's Lives - Evidence from Subjective Well-being Data By Adrian Chadi; Clemens Hetschko
  3. The Stress Cost of Children By Hielke Buddelmeyer; Daniel S. Hamermesh; Mark Wooden
  4. The impact of child care costs and availability on mothers’ labor supply By Daniela Del Boca
  5. Marriage Dynamics, Earnings Dynamics, and Lifetime Family Income By Ivan Vidangos; Joseph Altonji
  6. Does Protecting Older Workers from Discrimination Make It Harder to Get Hired? Revised with Additional Analysis of SIPP Data and Appendix of Disability Laws By David Neumark; Joanne Song; Patrick Button
  7. Does Early Educational Tracking Increase Migrant-Native Achievement Gaps? Differences-In-Differences Evidence Across Countries By Jens Ruhose; Guido Schwerdt

  1. By: David Boisclair; Jean-Yves Duclos; Steeve Marchand; Pierre-Carl Michaud
    Abstract: We use simulation methods to analyze the impacts of certain proposed reforms to improve the coverage of longevity risk. This risk, which may in principle be adequately covered by classic defined-benefit pension plans, has been of particular interest in Quebec for some years now, notably due to the decline in the participation to such plans. Recent proposals which aim to increase the coverage of longevity risk mostly deal with expansion of the “2nd pillar" of the retirement income system, currently comprised of the Quebec Pension Plan. We therefore consider a key proposal of the D’Amours committee (the longevity pension), in addition to two other proposals: that of Mintz and Wilson, which aims to increase the generosity of the current regime, and that of Wolfson, which introduces a concept of contribution and benefit rates differentiated by income. Using data from Statistics Canada surveys, we analyze the internal rate of return (IRR) of these proposals for various types of individuals taking into consideration inequality in life expectancy, temporal variability of income, and interactions with taxation and the different retirement income support programs. We contrast the results with those obtained when opting instead for additional contributions into existing voluntary savings vehicles combined with a basic annuity purchased at retirement.
    Keywords: longevity risk, retirement savings, inequality, life expectancy,
    JEL: I14 J18 J26 J32
    Date: 2015–02–25
  2. By: Adrian Chadi (Institute for Labour Law and Industrial Relations in the EU, University of Trier); Clemens Hetschko (School of Business and Economics, Freie Universitaet Berlin)
    Abstract: For representative German panel data, we document that voluntary job switching is associated with higher levels of life satisfaction, though only for some time, whereas forced job changes do not affect life satisfaction clearly. Using plant closures as an exogenous trigger of switching to a new employer, we find that job mobility turns out to be harmful for satisfaction with family life. By investigating people’s lives beyond their workplaces, our study complements research on the well-being impact of labour mobility, suggesting some positive welfare effects of flexible labour markets, but also a previously undocumented potential for negative implications.
    Keywords: life satisfaction, satisfaction with family life, job changes, honeymoon-hangover effect, employment protection legislation
    JEL: I31 J28 J61 J63
    Date: 2015–02
  3. By: Hielke Buddelmeyer (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne; and Institute for the Study of Labor (IZA)); Daniel S. Hamermesh (Department of Economics and CentER, Tilburg University; Department of Economics, The University of Melbourne; CESifo (Munich); Centre for Economic Policy Research (London); and Institute for the Study of Labor (IZA)); Mark Wooden (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne; and Institute for the Study of Labor (IZA))
    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: Births, children, financial stress, GSOEP, HILDA Survey, time stress
    JEL: J12 J13
    Date: 2015–01
  4. By: Daniela Del Boca
    Abstract: In this paper we review recent literature on the link between child care and women’s labor supply. The growing labor market participation of women has raised many concerns since it implies less time spent with the children and greater reliance on external forms of care. Focusing on studies examining the US, Canada and several European countries, we compare and discuss their methodologies and empirical results as well as their implications for child care policies. Most of the results suggest that the impact of child care availability and costs are stronger for mothers' labor supply among more disadvantaged backgrounds. Child care programs aimed at lower income and less educated families have important implications for EU targets on child poverty and mothers’ employment.
    Keywords: child care, household choices, mothers’ labor supply
    JEL: J13 I2
    Date: 2015–03
  5. By: Ivan Vidangos (Federal Reserve Board); Joseph Altonji (Yale University)
    Abstract: We examine what determines the family income that individuals experience over their adult lives. To this end, we estimate a dynamic model of earnings, marriage, and divorce. The model also includes fertility. We explore the determinants of the earnings over a career of single and married men and women using a model of wages, employment, work hours, and earnings. We use the model to address a number of important questions in labor and family economics, including the effects of education and unobserved permanent characteristics on marital status and on spouse characteristics conditional on marriage. We also explore the dynamic response of wage rates, hours, earnings, marriage, and spouse characteristics and family income to various shocks and measure the relative contributions of the shocks to the variance of family income in a given year and over a lifetime.
    Date: 2014
  6. By: David Neumark (University of California–Irvine, National Bureau of Economic Research, and Institute for the Study of Labor); Joanne Song (State University of New York–Buffalo); Patrick Button (University of California–Irvine)
    Abstract: We explore the effects of disability discrimination laws on hiring of older workers. A concern with antidiscrimination laws is that they may reduce hiring by raising the cost of terminations and – in the specific case of disability discrimination laws – raising the cost of employment because of the need to accommodate disabled workers. Moreover, disability discrimination laws can affect nondisabled older workers because they are fairly likely to develop work-related disabilities, yet are not protected by these laws. Using state variation in disability discrimination protections, we find little or no evidence that stronger disability discrimination laws lower the hiring of nondisabled older workers. We similarly find no evidence of adverse effects of disability discrimination laws on hiring of disabled older workers.
    Date: 2015–02
  7. By: Jens Ruhose (Ifo Institute and IZA, Munich, Germany); Guido Schwerdt (Department of Economics, University of Konstanz, Germany)
    Abstract: We study whether early tracking of students based on ability increases migrant-native achievement gaps. To eliminate confounding impacts of unobserved country traits, we employ a differences-in-differences strategy that exploits international variation in the age of tracking as well as student achievement before and after potential tracking. Based on pooled data from 12 large-scale international student assessments, we show that cross-sectional estimates are likely to be downward-biased. Our differences-in-differences estimates suggest that early tracking does not significantly affect overall migrant-native achievement gaps, but we find evidence for a detrimental impact for less integrated migrants.
    Keywords: Immigration, educational inequalities, educational tracking, differences-in-differences
    JEL: I21 J15 I28
    Date: 2015–03–01

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