nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2015‒03‒27
seven papers chosen by
Maximo Rossi
Universidad de la República

  1. How Useful is Inequality of Opportunity as a Policy Construct? By Kanbur, Ravi; Wagstaff, Adam
  2. Correlating Social Mobility and Economic Outcomes By Güell, Maia; Pellizzari, Michele; Pica, Giovanni; Rodríguez Mora, José Vicente
  3. Equality of opportunity : theory and evidence By Ferreira,Francisco H. G.; Peragine,Vito
  4. The many dimensions of child poverty: Evidence from the UK Millennium Cohort Study By Andrew Dickerson; Gurleen Popli
  5. Inconsistent Policy Evaluation: A Case Study for a Large Workfare Program By Arthur Alik-Lagrange; Martin Ravallion
  6. Quality, Quantity and Duration of Lives By Jean-Yves Duclos; Bouba Housseini
  7. Employment protection legislation and labor court activity in Spain By Juan F. Jimeno; Marta Martínez-Matute; Juan S. Mora-Sanguinetti

  1. By: Kanbur, Ravi; Wagstaff, Adam
    Abstract: The academic literature on equality of opportunity has burgeoned. More recently, the concepts and measures have begun to be used by policy institutions, including in specific sectors like health and education. Indeed, it is argued that one advantage of focusing on equality of opportunity is that policy makers are more responsive to that discourse than on equality of outcomes per se. This paper presents a critique of equality of opportunity in the policy context. While the empirical analysis to which the literature has given rise is useful and is to be welcomed, current methods for quantifying and implementing the concept with a view to informing the policy discourse face a series of fundamental questions that remain unanswered. Without a full appreciation of these difficulties, these methods may prove to be misleading in the policy context.
    Keywords: equality of opportunity; inequality; inequality of opportunity; inequality of outcome
    JEL: D31 D63
    Date: 2015–03
  2. By: Güell, Maia; Pellizzari, Michele; Pica, Giovanni; Rodríguez Mora, José Vicente
    Abstract: We apply a novel measure of intergenerational mobility (IM) developed by Güell, Rodríguez Mora, and Telmer (2014) to a rich combination of Italian data allowing us to produce comparable measures of IM of income for 103 Italian provinces. We then exploit the large heterogeneity across Italian provinces in terms of economic and social outcomes to explore how IM correlates with a variety of outcomes. We find that (i) higher IM is positively associated with a variety of “good” economic outcomes, such as higher value added per capita, higher employment, lower unemployment, higher schooling and higher openness and (ii) that also within Italy the “the Great Gatsby Curve” exists: in provinces in which mobility is lower cross-sectional income inequality is larger. We finally explore the correlation between IM and several socio-political outcomes, such as crime and life expectancy, but we do not find any clear systematic relationship on this respect.
    Keywords: cross-sectional data analysis; intergenerational mobility; Surnames
    JEL: C31 E24 R10
    Date: 2015–03
  3. By: Ferreira,Francisco H. G.; Peragine,Vito
    Abstract: Building on earlier work by political philosophers, economists have recently sought to define a concept of equity that accommodates the fairness of reward to individual responsibility and effort, while allowing for the existence of some inequalities which are unfair and should be compensated. This paper -- commissioned as a chapter for the Oxford Handbook of Well Being and Public Policy -- provides a critical review of the economic literature on equality and inequality of opportunity. A simple'canonical model'of equal opportunity is proposed, and used to explore the two fundamental concepts in this (relatively) new theory of social justice: the principles of compensation and reward. Ex-ante and ex-post versions of the compensation principle are presented, and the tensions between them are discussed. Different approaches to the measurement of inequality of opportunity -- and empirical applications -- are reviewed, and implications for the measurement of poverty and of the rate of economic development are discussed.
    Keywords: Economic Theory&Research,Gender and Law,Inequality,Equity and Development,Poverty Impact Evaluation
    Date: 2015–03–20
  4. By: Andrew Dickerson (Department of Economics, University of Sheffield); Gurleen Popli (Department of Economics, University of Sheffield)
    Abstract: In this paper we use a multidimensional framework to characterise child poverty in the UK. We examine the interdependencies amongst the different dimensions of multidimensional poverty, and the relationship of multidimensional poverty with income poverty. We also explore the links between multidimensional poverty, income poverty, and children's cognitive and non-cognitive development. Our findings suggest that multidimensional poverty identifies many but not all of the same children classified using standard income poverty measures, although multidimensional poverty is rather more persistent over time than income poverty. Multidimensional poverty also has a detrimental impact on children's development over and above the negative impact of income poverty.
    Keywords: child poverty; multidimensional poverty; income poverty; child development
    JEL: I32 J13 J62
    Date: 2015–03
  5. By: Arthur Alik-Lagrange; Martin Ravallion
    Abstract: Evaluations of workfare programs in poor rural economies have typically ignored two features that policy makers stress: involuntary unemployment and the expected welfare losses from work requirements. The paper generalizes past evaluation theory and methods to incorporate both features, and shows that doing so can switch the policy ranking in favor of welfare over workfare. A case study for India’s massive National Rural Employment Guarantee Scheme indicates lower impacts on poverty than suggested by past methods, despite a more “poor-poor” incidence. A basic-income guarantee would dominate net workfare earnings in terms of the impact on poverty for a given budgetary outlay.
    JEL: D61 H43 H53 J08 O15
    Date: 2015–03
  6. By: Jean-Yves Duclos; Bouba Housseini
    Abstract: The evaluation of development processes and of public policies often involves comparisons of social states that differ in income distributions, population sizes and life longevity. This may require social evaluation principles to be sensitive to the quality, the quantity and the duration of lives. This paper 1) reviews some of the normative issues at stake, 2) proposes and discusses some specific methods to address them in a generalized utilitarian framework, and 3) briefly illustrates the application of some of these methods to the global distribution of incomes, population sizes and longevity over the last century. Depending on the approach taken, it is found inter alia that global social welfare in 2010 can be deemed to be between 1.8 and 407 times that of 1910, the role given to the quantity of lives being particularly important in that assessment.
    Keywords: Global welfare, critical-level utilitarianism, social evaluation, longevity, life expectancy, population size,
    JEL: D31 D63 I32 O15 Q56
    Date: 2015–03–18
  7. By: Juan F. Jimeno (Banco de España); Marta Martínez-Matute (Banco de España); Juan S. Mora-Sanguinetti (Banco de España)
    Abstract: Labor courts may introduce a significant wedge between “legal” firing costs and “effective” (post-trial) firing costs. Apart from procedural costs, there is uncertainty over judges’ rulings, in particular over the likelihood of a “fair” dismissal ultimately being ruled as “unfair”, which may increase firing costs significantly. In 2010 and 2012, reforms of Employment Protection Legislation widened the definition of fair economic dismissals in Spain. In this paper we look at Labor Court rulings on dismissals across Spanish provinces before and after the EPL reforms (2004-2014). We make this comparison taking into account a set of co-variates (local labor market conditions, characteristics of the Labor Courts, pre-trial conciliations, congestion of Labor Courts) which may determine the selection of dismissal cases ruled by Labor Courts. Our results suggest that, despite the 2010 and 2012 EPL reforms, the proportion of economic redundancies being ruled as fair by Labor Courts has not substantially increased, although it is now less negatively associated with the local unemployment rate than in the pre-reform period.
    Keywords: employment protection legislation, firing costs, unemployment.
    JEL: J52 J53 K31 K41
    Date: 2015–03

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