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on Unemployment, Inequality and Poverty |
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Issue of 2015‒05‒30
eight papers chosen by |
| By: | Stephen P Jenkins |
| Abstract: | This paper 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 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sticas:case186&r=ltv |
| By: | Farber, Henry (Princeton University) |
| Abstract: | The Great Recession from December 2007 to June 2009 is associated with a dramatic weakening of the labor market from which, by some measures, it has not completely recovered. I use data from the Displaced Workers Survey (DWS) from 1984-2014 to investigate the incidence and consequences of job loss from 1981-2013. In particular, the 2010, 2012, and 2014 DWSs provide a window through which to examine the experience of job losers in the Great Recession and its aftermath and to compare their experience to that of earlier job losers. These data show a record high rate of job loss in the Great Recession, with almost one in six workers reporting having lost a job in the 2007-2009 period, that has not yet returned to pre-recession levels. The employment consequences of job loss are also very serious during this period with very low rates of reemployment and difficulty finding full-time employment. The reduction in weekly earnings for those job losers during the 2007-2013 period who were able to find new employment are not unusually large by historical standards. |
| Keywords: | job loss, unemployment, wage loss |
| JEL: | J63 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9069&r=ltv |
| By: | Marinescu, Ioana E. (Harris School, University of Chicago); Triyana, Margaret (Nanyang Technological University, Singapore) |
| Abstract: | What are the sources of wage growth in developing countries? In the US, general labor market experience is the key source of wage growth, with job seniority playing a smaller role. By contrast, in Indonesia, the 10-year return to seniority is 24 to 29%, which is higher than the return to experience. Furthermore, we estimate a 35% return to ten years of tenure in the formal sector, with no significant return to tenure in the informal sector. The difference in the sources of wage growth in Indonesia versus the US may be a reflection of Indonesia's lower level of development. |
| Keywords: | experience, formality, informality, wages, tenure |
| JEL: | J31 O1 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9066&r=ltv |
| By: | Joseph E. Stiglitz |
| Abstract: | A significant amount of the increase in the wealth income ratio in recent decades is due to an increase in the value of land. We present a series of models that explain why land prices may have increased. These models help us understand the increase in both the wealth income ratio and wealth inequality. One model focuses on certain locations as being positional good. In another, we show that land bubbles are a natural part of market economies, and that on “bubble paths”, wealth may increase, even as the real wealth of the economy diminishes. Focusing on long run equilibrium, we show that a tax on the returns on land (including capital gains) can lead to higher incomes and less inequality. We show the links between the increases in land values and the financial system, demonstrating how changes in the rules governing that sector and the conduct of monetary policy may increase inequality. Given the large amount of life cycle savings, the traditional division of society into the owners of capital and workers or creditors and debtors may no longer provide the most insights for understanding the impact of policies on distribution. The relevant division is between capitalists, who pass on their wealth from generation to generation, and workers, and between the owners of equity and the holders of debt instruments. These distinctions are important for tax, financial and monetary policy. In our simple model, a lowering of interest rates benefits holders of equity— the capitalists—but hurts holders of government bonds, disproportionately life-cycle savers, and thus increases inequality. Similarly, a lowering of collateral requirements or of banks’ capital adequacy requirements does not result in an increase in the overall efficiency of the economy, but leads to more inequality. |
| JEL: | D31 E21 E22 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21192&r=ltv |
| By: | Thomas Buser (University of Amsterdam, the Netherlands); Anna Dreber (Stockholm School of Economics, Sweden); Johanna Mollerstrom (George Mason University, United States) |
| Abstract: | Women are often less willing than men to compete, even in tasks where there is no gender gap in performance. Also, many people experience competitive contexts as stressful and previous research has documented that men and women sometimes react differently to acute stressors. We use two laboratory experiments to investigate whether factors related to stress can help explain the gender gap in competitiveness. Experiment 1 studies whether stress responses (measured with salivary cortisol and through self-assessment) to taking part in a mandatory competition predict individual willingness to participate in a voluntary competition. We find that while the mandatory competition does increase stress levels, there is no gender difference in this reaction. Cortisol response does not predict willingness to compete for men but is positively and significantly correlated with choosing to enter the voluntary competition for women. In Experiment 2 we exogenously induce stress using the cold-pressor task. We find no causal effect of stress on competitiveness for the sample as a whole and only tentative evidence of a positive effect for women. In summary, even though there are some gender differences in the relation between stress responses and the decision to enter a competition or not, these cannot explain the general gender gap in willingness to compete that is generally found in the literature and which we replicate. |
| Keywords: | gender; competitiveness; stress; cortisol; lab experiment |
| JEL: | C91 D03 J16 J24 J33 |
| Date: | 2015–05–19 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20150059&r=ltv |
| By: | A.B. Atkinson; Anne-Catherine Guio; Eric Marlier |
| Abstract: | This paper brings together two approaches to the monitoring of household living standards: the macro-economic (national accounts) analysis of aggregates and the social indicators based on household microdata (European Union Statistics on Income and Living Conditions [EU-SILC]). Both are essential. The national accounts are necessary to provide an overall perspective; the distributional data in EU-SILC are necessary to measure income poverty. The progress, or lack of progress, in reducing income poverty has to be seen in relation to what is happening to the level of real incomes. We begin with the EU-SILC-based headline at-risk-of-poverty indicator, and then consider its relation to the level of household real income as presented in the national accounts. Moving step by step, we seek to identify the reasons for differences between EU-SILC and national accounts measures of real incomes. From this, we make a number of recommendations about possible improvements in the underlying data and in the construction of the social indicators. The substantive results help illuminate the differing experience of the pre-crisis period 2005 to 2008 and the subsequent three year period 2008 to 2011 (income reference years). |
| Keywords: | poverty, inequality, national accounts, social indicators |
| JEL: | D31 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sticas:case188&r=ltv |
| By: | James A. Robinson; Ragnar Torvik; Thierry Verdier |
| Abstract: | We develop a model of the political consequences of public income volatility. As is standard, political incentives create inefficient policies, but we show that making income uncertain creates specific new effects. Future volatility reduces the benefit of being in power, making policy more efficient. Yet at the same time it also reduces the re-election probability of an incumbent and since some of the policy inefficiencies are concentrated in the future, this makes inefficient policy less costly. We show how this model can help think about the connection between volatility and economic growth and in the case where volatility comes from volatile natural resource prices, a characteristic of many developing countries, we show that volatility in itself is a source of inefficient resource extraction. |
| JEL: | D72 D78 Q2 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21205&r=ltv |
| By: | Acemoglu, Daron (MIT); Autor, David (MIT); Dorn, David (University of Zurich); Hanson, Gordon H. (University of California, San Diego); Price, Brendan (MIT) |
| Abstract: | Even before the Great Recession, U.S. employment growth was unimpressive. Between 2000 and 2007, the economy gave back the considerable employment gains achieved during the 1990s, with a historic contraction in manufacturing employment being a prime contributor to the slump. We estimate that import competition from China, which surged after 2000, was a major force behind both recent reductions in U.S. manufacturing employment and - through input-output linkages and other general equilibrium channels - weak overall U.S. job growth. Our central estimates suggest job losses from rising Chinese import competition over 1999 through 2011 in the range of 2.0 to 2.4 million. |
| Keywords: | trade flows, labor demand |
| JEL: | F16 J23 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9068&r=ltv |