nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2015‒06‒05
seven papers chosen by
Maximo Rossi
Universidad de la República

  1. The Stress Cost of Children By Hielke Buddelmeyer; Daniel S. Hamermesh; Mark Wooden
  2. 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
  3. Stress Reactions Cannot Explain the Gender Gap in Willingness to Compete By Buser, Thomas; Dreber, Anna; Mollerstrom, Johanna
  4. By Choice and by Necessity: Entrepreneurship and Self-Employment in the Developing World By David Margolis
  5. Unions and Collective Bargaining in the Wake of the Great Recession By John T. Addison; Pedro Portugal; Hugo Vilares
  6. Female Labor Force Participation in Latin America: Evidence of Deceleration By Leonardo Gasparini; Mariana Marchionni; Nicolás Badaracco; Joaquín Serrano
  7. Person Equivalent Headcount Measures of Poverty By Tony Castleman; James Foster; Stephen C. Smith

  1. By: Hielke Buddelmeyer; Daniel S. Hamermesh; Mark Wooden
    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.
    JEL: I31 J12 J13
    Date: 2015–05
  2. By: Sebastian Galiani (University of Maryland and NBER); Paul J. Gertler (UC Berkeley and NBER); Raimundo Undurraga (New York University)
    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 wellbeing improve substantially for recipients of better housing but that after, on average, eight months, 60% of that gain disappears.
    JEL: I31
    Date: 2015–05
  3. By: Buser, Thomas (School of Economics); Dreber, Anna (Department of Economics); Mollerstrom, Johanna (Interdisciplinary Center for Economics Science (ICES))
    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 differences; Competitiveness; Experiment; Cortisol; Stress
    JEL: C90 C91 J16 J71
    Date: 2015–06–01
  4. By: David Margolis (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics, IZA - Institute for the Study of Labor)
    Abstract: Over half of all workers in the developing world are self-employed. Although some self-employment is chosen by entrepreneurs with well-defined projects and ambitions, roughly two thirds results from individuals having no better alternatives. The importance of self-employment in the overall distribution of jobs is determined by many factors, including social protection systems, labor market frictions, the business environment, and labor market institutions. However, self-employment in the developing world tends to be low productivity employment, and as countries move up the development path, the availability of wage employment grows and the mix of jobs changes.
    Date: 2014–06
  5. By: John T. Addison; Pedro Portugal; Hugo Vilares
    Abstract: This paper provides the first definitive estimates of union density in Portugal, 2010-2012, using a unique dataset. The determinants of union density at firm level are first modeled. Next, estimatesof the union wage gap are provided for different ranges of union density. Since these estimates fully reflect the reality of an industrial relations system in which collective agreements areextended to nonunion workers and firms, the final issue examined is contract coverage. The pronounced reduction in the number of industry-wide agreements and extension ordinances inrecent years has been uncritically equated with a fall in coverage. However, the authors show that the number of workers covered by new and existing agreements has remained largelyunaffected by economic crisis. The reduced frequency of new agreements and extensions is instead attributed to downward nominal wage rigidity in deflationary times, rather than (as yet)the expression of a crisis in collective bargaining.
    JEL: J31 J52 J53
    Date: 2015
  6. By: Leonardo Gasparini (CEDLAS-UNLP and CONICET); Mariana Marchionni (CEDLAS-UNLP and CONICET); Nicolás Badaracco (CEDLAS-UNLP); Joaquín Serrano (CEDLAS-UNLP and CONICET)
    Abstract: This paper documents changes in female labor force participation (LFP) in Latin America exploiting a large database of microdata from household surveys of 15 countries in the period 1992-2012. We find evidence for a significant deceleration in the rate of increase of female LFP in the 2000s, breaking the marked increasing pattern that characterized the region for at least 50 years. The paper documents and characterizes this fact and examines various factors that could be driving the deceleration. Through a set of simple decompositions the paper helps to disentangle whether the patterns in female LFP are mainly accounted for by changes in the distribution of some direct determinants of the labor supply decision (e.g. education), or instead they are chiefly the consequence of some more profound transformation in behavior.
    JEL: J2 J1
    Date: 2015–03
  7. By: Tony Castleman (Institute for International Economic Policy, George Washington University); James Foster (Elliott School of International Affairs, George Washington University and the Oxford Poverty and Human Development Initiative (OPHI), Oxford Department of International Development, Queen Elizabeth House, University of Oxford); Stephen C. Smith (George Washington University)
    Abstract: Headcount measures of poverty are by far the most common tools for evaluating poverty and gauging progress in global development goals. The headcount ratio, or the prevalence of poverty, and the headcount, or the number of the poor, both convey tangible information about poverty. But both ignore the depth of poverty, so they arguably present distorted views of the spatial distribution of poverty as well as the extent of progress against poverty over time. Additionally, headcount measures can provide incentives for policymakers to focus their efforts on the least poor, an observation well understood among policymakers themselves. While other poverty measures mitigate these problems by capturing the intensity as well as the prevalence of poverty, they are often dismissed from the policy discourse as being too “unintuitive†to have traction. There is a need for poverty measures that go beyond traditional headcount measures, but retain their direct interpretation. This paper presents person equivalent (p. e.) headcount measures, which do just that. Our approach draws on the logic of full-time equivalent jobs, adult equivalent incomes, and other constructs in economics. An initial period is used to calibrate the average depth of poverty among the poor, which then becomes the “person equivalent†underlying the p. e. headcount and the p. e. headcount ratio. We illustrate our methods using $1.25 a day poverty data from 80 countries as provided by the World Bank, and show how the new measures map out different pictures of poverty and progress than traditional headcount measures. Overall, the picture is one of a more rapid decline in global poverty, but with significant redistributions of its burden across regions and countries. For example, p. e. headcounts are much higher than traditional headcounts in Latin America and the Caribbean and Sub Saharan Africa; in South Asia and East Asia and the Pacific the reverse is true. In Nigeria the traditional headcount rose by 28 million and the p. e. headcount rose by 50 million; in South Africa the p. e. headcount fell by more than the traditional headcount. We discuss properties of the new measures, outline some generalizations and conclude with recommendations for using this approach in development goals to track progress and direct policy.
    Keywords: Poverty measurement, headcount, poverty gap, FGT indices, development goals, inclusive growth, multidimensional poverty
    JEL: I32 O15 D63
    Date: 2015–05

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