nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2015‒06‒27
nine papers chosen by
Maximo Rossi
Universidad de la República

  1. Does Worker Wellbeing Affect Workplace Performance? By Bryson, Alex; Forth, John; Stokes, Lucy
  2. The “Squeezed Middle” in the Great Recession: A Comparative European Analysis of the Distribution of Economic Stress By Christopher T. Whelan; Brian Nolan; Bertrand Maítre
  3. Misperceiving Inequality By Gimpelson, Vladimir; Treisman, Daniel
  4. The Effect of a Sibling's Gender on Earnings, Education and Family Formation By Peter, Noemi; Lundborg, Petter; Webbink, Dinand
  5. Suicide, Age, and Wellbeing: an Empirical Investigation By Anne Case; Angus Deaton
  6. Human Capital Quality and Aggregate Income Differences: Development Accounting for U.S. States By Eric A. Hanushek; Jens Ruhose; Ludger Woessmann
  7. Welfare Rules, Incentives, and Family Structure By Moffitt, Robert A.; Phelan, Brian J.; Winkler, Anne E.
  8. Not Working at Work: Loafing, Unemployment and Labor Productivity By Burda, Michael C.; Genadek, Katie R.; Hamermesh, Daniel S.
  9. Why Work More? The Impact of Taxes, and Culture of Leisure on Labor Supply in Europe By Naci H. Mocan; Luiza Pogorelova

  1. By: Bryson, Alex (National Institute of Economic and Social Research (NIESR)); Forth, John (National Institute of Economic and Social Research (NIESR)); Stokes, Lucy (National Institute of Economic and Social Research (NIESR))
    Abstract: This paper uses linked employer-employee data to investigate the relationship between employees' subjective well-being and workplace performance in Britain. The analyses show a clear, positive and statistically-significant relationship between the average level of job satisfaction at the workplace and workplace performance. This finding is present in both cross-sectional and panel analyses and is robust to various estimation methods and model specifications. In contrast, we find no association between levels of job-related affect and workplace performance.
    Keywords: subjective wellbeing, job satisfaction, job-related affect, workplace performance
    JEL: J28
    Date: 2015–06
  2. By: Christopher T. Whelan (School of Sociology and Geary Institute for Public Policy, University College Dublin); Brian Nolan (Department of Social Policy and Intervention and Institute for New Economic Thinking at the Oxford Martin School, University of Oxford); Bertrand Maítre (Economic & Social Research Institute, Dublin)
    Abstract: In this paper we analyse variation on the impact of the Great Recession on economic stress across income classes for a range of advanced European countries. Our analysis shows that conclusions relating to trends in polarisation versus middle class squeeze are highly dependent on specification of welfare regime and are significantly driven by exacerbation of the degree of within regime heterogeneity introduced by the changing circumstances in Iceland, Ireland and Greece. Each exhibited substantial increases in levels of economic stress. However, changes in the pattern of income class differentiation were somewhat different. In Iceland while all classes experienced significant increases in stress levels, a form of middle class squeeze was observed. For Ireland the pattern of change involved a contrast between the three lowest and the two highest classes. In this case polarization does not exclude middle class squeeze. For Greece we observe a more hierarchically differentiated pattern of change although, as in the Irish case, there is a contrast between the three highest and the two lowest income classes. Changes in the distribution of household equivalent income played no role in explaining the changing distribution of economic stress across income classes once the impact of material deprivation was taken into account. These findings bring out the extent to which the impact of the Great Recession varied even among the hardest-hit countries, and even more so between them and the countries where it represented a less dramatic, though still very substantial, macroeconomic shock. They also serve to highlight the advantages of going beyond reliance on income in seeking to understand the impact of such a shock.
    Keywords: ‘middle class squeeze’, polarization, income class, Great Recession, economic stress
    Date: 2015–06–18
  3. By: Gimpelson, Vladimir (CLMS, Higher School of Economics, Moscow); Treisman, Daniel (University of California, Los Angeles)
    Abstract: Since Aristotle, a vast literature has suggested that economic inequality has important political consequences. Higher inequality is thought to increase demand for government income redistribution in democracies and to discourage democratization and promote class conflict and revolution in dictatorships. Most such arguments crucially assume that ordinary people know how high inequality is, how it has been changing, and where they fit in the income distribution. Using a variety of large, cross-national surveys, we show that, in recent years, ordinary people have had little idea about such things. What they think they know is often wrong. Widespread ignorance and misperceptions of inequality emerge robustly, regardless of the data source, operationalization, and method of measurement. Moreover, we show that the perceived level of inequality – and not the actual level – correlates strongly with demand for redistribution and reported conflict between rich and poor. We suggest that most theories about political effects of inequality need to be either abandoned or reframed as theories about the effects of perceived inequality.
    Keywords: inequality, income distribution, biased perceptions, preferences for redistribution
    JEL: D31 D63 D83 H24 H54 I30
    Date: 2015–06
  4. By: Peter, Noemi (University of Bern); Lundborg, Petter (Lund University); Webbink, Dinand (Erasmus University Rotterdam)
    Abstract: We examine how the gender of a sibling affects earnings, education and family formation. Identification is complicated by parental preferences: if parents prefer certain sex compositions over others, children's gender affects not only the outcomes of other children but also the very existence of potential additional children. We address this problem by looking at dizygotic twins. In these cases, the two children are born at the same time, so parents cannot make decisions about one twin based on the gender of the other twin. We find that the gender of the sibling influences both men and women, but in a different way. Men with brothers earn more and are more likely to get married and have children than men with sisters. Women with sisters obtain lower education and give birth earlier than women with brothers. Our analysis shows that the family size channel cannot explain the findings. Instead, the most likely explanation is that siblings affect each other via various social mechanisms.
    Keywords: sibling gender, sex composition, twins, income, schooling, fertility
    JEL: J00 J24 J16
    Date: 2015–06
  5. By: Anne Case; Angus Deaton
    Abstract: Suicide rates, life evaluation, and measures of affect are all plausible measures of the mental health and wellbeing of populations. Yet in the settings we examine, correlations between suicide and measured wellbeing are at best inconsistent. Differences in suicides between men and women, between Hispanics, blacks, and whites, between age groups for men, between countries or US states, between calendar years, and between days of the week, do not match differences in life evaluation. By contrast, reports of physical pain are strongly predictive of suicide in many contexts. The prevalence of pain is increasing among middle-aged Americans, and is accompanied by a substantial increase in suicides and deaths from drug and alcohol poisoning. Our measure of pain is now highest in middle age—when life evaluation and positive affect are at a minimum. In the absence of the pain epidemic, suicide and life evaluation are likely unrelated, leaving unresolved whether either one is a useful overall measure of population wellbeing.
    JEL: I12 I3
    Date: 2015–06
  6. By: Eric A. Hanushek; Jens Ruhose; Ludger Woessmann
    Abstract: Although many U.S. state policies presume that human capital is important for state economic development, there is little research linking better education to state incomes. In a complement to international studies of income differences, we investigate the extent to which quality-adjusted measures of human capital can explain within-country income differences. We develop detailed measures of state human capital based on school attainment from census micro data and on cognitive skills from state- and country-of-origin achievement tests. Partitioning current state workforces into state locals, interstate migrants, and immigrants, we adjust achievement scores for selective migration. We use the new human capital measures in development accounting analyses calibrated with standard production parameters. We find that differences in human capital account for 20-35 percent of the current variation in per-capita GDP among states, with roughly even contributions by school attainment and cognitive skills. Similar results emerge from growth accounting analyses.
    JEL: I25 J24 O47
    Date: 2015–06
  7. By: Moffitt, Robert A. (Johns Hopkins University); Phelan, Brian J. (DePaul University); Winkler, Anne E. (University of Missouri-St. Louis)
    Abstract: In this study we provide a new examination of the incentive effects of welfare rules on family structure. Focusing on the AFDC and TANF programs, we first emphasize that the literature, by and large, has assumed that the rules of those programs make a key distinction between married women and cohabiting women, but this is not a correct interpretation. In fact, it is the biological relationship between the children and any male in the household that primarily determines how the family is treated. In an empirical analysis conducted over the period 1996 to 2004 that correctly matches family structure outcomes to welfare rules, we find significant effects of several welfare policies on family structure, both work-related policies and family-oriented policies, effects that are stronger than in most past work. Many of our significant effects show that these rules led to a decrease in single motherhood and an increase in biological partnering. For all of our results, our findings indicate that the impact of welfare rules crucially hinges on the biological relationship of the male partner to the children in the household.
    Keywords: welfare, family
    JEL: I3 J1
    Date: 2015–06
  8. By: Burda, Michael C. (Humboldt University Berlin); Genadek, Katie R. (University of Minnesota); Hamermesh, Daniel S. (Royal Holloway; University of Texas at Austin)
    Abstract: Using the American Time Use Survey (ATUS) 2003-12, we estimate time spent by workers in non-work while on the job. Non-work time is substantial and varies positively with the local unemployment rate. While the average time spent by workers in non-work conditional on any positive non-work rises with the unemployment rate, the fraction of workers who report time in non-work varies pro-cyclically, declining in recessions. These results are consistent with a model in which heterogeneous workers are paid efficiency wages to refrain from loafing on the job. That model correctly predicts relationships of the incidence and conditional amounts of non-work with wage rates and measures of unemployment benefits in state data linked to the ATUS, and it is consistent with observed occupational differences in non-work.
    Keywords: time use, non-work, loafing, shirking, efficiency wage, labor productivity
    JEL: J22 E24
    Date: 2015–06
  9. By: Naci H. Mocan; Luiza Pogorelova
    Abstract: We use micro data from the European Social Survey to investigate the impact of “culture of leisure” and taxes on labor force participation and hours worked of second-generation immigrants who reside in 26 European countries. These individuals are born in Europe, and they have been exposed to institutional, legal and labor market structures of their countries, including the tax rates. Fathers of these individuals are first-generation immigrants who migrated from 81 different countries. We construct measures of “taste for leisure” in the country of origin of each immigrant father. We employ average and marginal taxes for each country of residence, and control for a large set of individual characteristics, in addition to attributes of the country of residence and country of ancestry. The results show that for women, both taxes and culture of leisure impact participation and hours worked. For men, taxes influence labor supply both at the intensive and the extensive margins, but culture of leisure has no impact.
    JEL: H2 J22 J61 Z1
    Date: 2015–06

This nep-ltv issue is ©2015 by Maximo Rossi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.