nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2015‒04‒25
eight papers chosen by
Maximo Rossi
Universidad de la República

  1. Labor Market Slack and Monetary Policy By David G. Blanchflower; Andrew T. Levin
  2. Urbanization, Natural Amenities, and Subjective Well-Being: Evidence from U.S. Counties By Winters, John V.; Li, Yu
  3. The Half-Life of Happiness: Hedonic Adaptation in the Subjective Well-Being of Poor Slum Dwellers to a Large Improvement in Housing By Sebastian Galiani; Paul J. Gertler; Raimundo Undurraga
  4. Health and Inequality By Owen O'Donnell; Eddy Van Doorslaer; Tom Van Ourti
  5. Forbidden Fruits: The Political Economy of Science, Religion, and Growth By Roland Bénabou; Davide Ticchi; Andrea Vindigni
  6. The Health Returns to Education - What can we learn from Twins? By Petter Lundborg
  7. Sorting through affirmative action: Three field experiments in Colombia By Ibañez, Marcela; Rai, Ashok; Riener, Gerhard
  8. Benefit Incidence with Incentive Effects, Measurement Errors and Latent Heterogeneity: A Case Study for China By Martin Ravallion; Shaohua Chen

  1. By: David G. Blanchflower; Andrew T. Levin
    Abstract: In the wake of a severe recession and a sluggish recovery, labor market slack cannot be gauged solely in terms of the conventional measure of the unemployment rate (that is, the number of individuals who are not working at all and actively searching for a job). Rather, assessments of the employment gap should reflect the incidence of underemployment (that is, people working part time who want a full-time job) and the extent of hidden unemployment (that is, people who are not actively searching but who would rejoin the workforce if the job market were stronger). In this paper, we examine the evolution of U.S. labor market slack and show that underemployment and hidden unemployment currently account for the bulk of the U.S. employment gap. Next, using state-level data, we find strong statistical evidence that each of these forms of labor market slack exerts significant downward pressure on nominal wages. Finally, we consider the monetary policy implications of the employment gap in light of prescriptions from Taylor-style benchmark rules.
    JEL: E24 E32 E52 E58 J21
    Date: 2015–04
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:21094&r=ltv
  2. By: Winters, John V. (Oklahoma State University); Li, Yu (Oklahoma State University)
    Abstract: This paper examines the effects of county-level urbanization and natural amenities on subjective well-being (SWB) in the U.S. SWB is measured using individual-level data from the Behavioral Risk Factor Surveillance System (BRFSS) which asks respondents to rate their overall life satisfaction. Using individual-level SWB data allows us to control for several important individual characteristics. The results suggest that urbanization lowers SWB, with relatively large negative effects for residents in dense counties and large metropolitan areas. Natural amenities also affect SWB, with warmer winters having a significant positive effect on self-reported life-satisfaction. Implications for researchers and policymakers are discussed.
    Keywords: subjective well-being, urbanization, population density, amenities, quality of life
    JEL: I00 Q00 R00
    Date: 2015–04
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp8966&r=ltv
  3. By: Sebastian Galiani; Paul J. Gertler; Raimundo Undurraga
    Abstract: A fundamental question in economics is whether happiness increases pari passu with improvements in material conditions or whether humans grow accustomed to better conditions over time. We rely on a large-scale experiment to examine what kind of impact the provision of housing to extremely poor populations in Latin America has on subjective measures of well-being over time. The objective is to determine whether poor populations exhibit hedonic adaptation in happiness derived from reducing the shortfall in the satisfaction of their basic needs. Our results are conclusive. We find that subjective perceptions of well-being improve substantially for recipients of better housing but that after, on average, eight months, 60% of that gain disappears.
    JEL: I31
    Date: 2015–04
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:21098&r=ltv
  4. By: Owen O'Donnell (Erasmus University Rotterdam, The Netherlands, and University of Macedonia, Greece); Eddy Van Doorslaer (Erasmus University Rotterdam); Tom Van Ourti (Erasmus University Rotterdam)
    Abstract: This discussion paper led to a chapter in: (A.B. Atkinson, F.J. Bourguigson (Eds.)), 2014, 'Handbook of Income Distribution', volume 2B, North Holland, Elsevier, chapter 18, 143 pages.<P> We examine the relationship between income and health with the purpose of establishing the extent to which the distribution of health in a population contributes to income inequality and is itself a product of that inequality. The evidence supports a significant and substantial impact of ill-health on income mainly operating through employment, although it is difficult to gauge the magnitude of the contribution this makes to income inequality. Variation in exposure to health risks early in life is a potentially important mechanism through which health may generate, and possibly sustain, economic inequality. If material advantage can be excercised within the domain of health, then economic inequality will generate health inequality. In high income countries, the evidence that income (wealth) does have a causal impact on health in adulthood is weak. But this may simply reflect the difficulty of identifying a relationship that, should it exist, is likely to emerge over the lifetime as poor material living conditions slowly take their toll on health. There is little credible evidence to support the claim that the economic inequality in society threatens the health of all its members, or that relative income is a determinant of health.
    Keywords: income, wealth, health, inequality
    JEL: D31 I14 J3
    Date: 2013–10–15
    URL: http://d.repec.org/n?u=RePEc:tin:wpaper:20130170&r=ltv
  5. By: Roland Bénabou; Davide Ticchi; Andrea Vindigni
    Abstract: We analyze the joint dynamics of religious beliefs, scientific progress and coalitional politics along both religious and economic lines. History offers many examples of the recurring tensions between science and organized religion, but as part of the paper's motivating evidence we also uncover a new fact: in both international and cross-state U.S. data, there is a significant and robust negative relationship between religiosity and patents per capita. The political-economy model we develop has three main features: (i) the recurrent arrival of scientific discoveries that generate productivity gains but sometimes erode religious beliefs; (ii) a government, endogenously in power, that can allow such innovations to spread or instead censor them; (iii) a religious organization or sector that may invest in adapting the doctrine to new knowledge. Three long-term outcomes emerge. First, a "Secularization" or "Western-European" regime with declining religiosity, unimpeded science, a passive Church and high levels of taxes and transfers. Second, a "Theocratic" regime with knowledge stagnation, extreme religiosity with no modernization effort, and high public spending on religious public goods. In-between is a third, "American" regime that generally (not always) combines scientific progress and stable religiosity within a range where religious institutions engage in doctrinal adaptation. It features low overall taxes, together with fiscal advantages or societal laws benefiting religious citizens. Rising income inequality can, however, lead some of the rich to form a successful Religious-Right alliance with the religious poor and start blocking belief-eroding discoveries and ideas.
    JEL: E02 H11 H41 N0 O3 O43 P16 Z1 Z12
    Date: 2015–04
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:21105&r=ltv
  6. By: Petter Lundborg (Free University Amsterdam)
    Abstract: This paper estimates the health returns to education, using data on identical twins. I adopt a twin-differences strategy in order to obtain estimates that are not biased by unobserved family background and genetic traits that may affect both education and health. I further investigate to what extent within-twin-pair differences in schooling correlates with within-twin-pair differences in early life health and parent-child relations. The results suggest a causal effect of education on health. Higher educational levels are found to be positively related to self-reported health but negatively related to the number of chronic conditions. Lifestyle factors, such as smoking and overweight, are found to contribute little to the education/health gradient. I am also able to rule out occupational hazards and health insurance coverage as explanations for the gradient. In addition, I find no evidence of heterogenous effects of education by parental education. Finally, the results suggest that factors that may vary within twin pairs, such as birth weight, early life health, parental treatment and relation with parents, do not predict within-twin pair differences in schooling, lending additional credibility to my estimates and to the general vailidy of using a twin-differences design to study the returns to education.
    Keywords: health production; education; schooling; twins; siblings; returns to education; ability bias
    JEL: I12 I11 J14 J12 C41
    URL: http://d.repec.org/n?u=RePEc:tin:wpaper:20080027&r=ltv
  7. By: Ibañez, Marcela; Rai, Ashok; Riener, Gerhard
    Abstract: Affirmative action to promote women's employment is a intensely debated policy. Do affirmative action policies attract women and does it come at a cost of deterring high qualified men? In three field experiments in Colombia we compare characteristics of job-seekers who are told of the affirmative action selection criterion before they apply with those who are only told after applying. We find that the gains in attracting female applicants far outweigh the losses in male applicants. Affirmative action is more effective in areas with larger female discrimination and deters male job-seekers from areas with low discrimination.
    Keywords: Field experiment,Affirmative action,Labor market,Gender participation gap
    JEL: J21 J24 J48 C93
    Date: 2015
    URL: http://d.repec.org/n?u=RePEc:zbw:dicedp:183&r=ltv
  8. By: Martin Ravallion; Shaohua Chen
    Abstract: In what is probably the largest cash transfer program in the world today China’s Dibao program aims to fill all poverty gaps. In theory, the program creates a poverty trap, with 100% benefit withdrawal rate (BWR). But is that what we see in practice? The paper proposes an econometric method of estimating the mean BWR allowing for incentive effects, measurement errors and correlated latent heterogeneity. Under the method’s identifying assumptions, a feasible instrumental variables estimator corrects for incentive effects and measurement errors, and provides a bound for the true value when there is correlated incidence heterogeneity. The results suggest that past methods of assessing benefit incidence using either nominal official rates or raw tabulations from survey data are deceptive. The actual BWR appears to be much lower than the formal rate, and is also lower than the rate implied by optimal income tax models for poverty reduction. The paper discusses likely reasons based on qualitative observations from field work. The program’s local implementation appears to matter far more than incentives implied by its formal rules.
    JEL: H22 I32 I38 O12
    Date: 2015–04
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:21111&r=ltv

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