nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2015‒07‒11
eight papers chosen by
Maximo Rossi
Universidad de la República

  1. Adaptation to Poverty in Long-Run Panel Data By Clark, Andrew E.; D'Ambrosio, Conchita; Ghislandi, Simone
  2. Do more of those in misery suffer from poverty, unemployment or mental illness? By Sarah Flèche; Richard Layard
  3. Rising Aspirations Dampen Satisfaction By Clark, Andrew E.; Kamesaka, Akiko; Tamura, Teruyuki
  4. Remittances and Relative Concerns in Rural China By Akay, Alpaslan; Bargain, Olivier; Giulietti, Corrado; Robalino, Juan David; Zimmermann, Klaus F.
  5. A Tax Benefit Model for Policy Evaluation in Luxembourg: LuxTaxBen By Islam, Nizamul; Flood, Lennart
  6. The Employment Effects of State Hiring Credits By Neumark, David; Grijalva, Diego
  7. The Selection of High-Skilled Migrants By Parey, Matthias; Ruhose, Jens; Waldinger, Fabian; Netz, Nicolai
  8. Family Values and the Regulation of Labor By Alberto Alesina; Yann Algan; Pierre Cahuc; null null

  1. By: Clark, Andrew E.; D'Ambrosio, Conchita; Ghislandi, Simone
    Abstract: We consider the link between poverty and subjective well-being, and focus in particular on potential adaptation to poverty. We use panel data on almost 54,000 individuals living in Germany from 1985 to 2012 to show first that life satisfaction falls with both the incidence and intensity of contemporaneous poverty. We then reveal that there is little evidence of adaptation within a poverty spell: poverty starts bad and stays bad in terms of subjective well-being. We cannot identify any cause of poverty entry which explains the overall lack of poverty adaptation.
    Keywords: income, poverty, subjective well-being, adaptation, SOEP
    Date: 2015–05
    URL: http://d.repec.org/n?u=RePEc:cpm:docweb:1508&r=ltv
  2. By: Sarah Flèche; Richard Layard
    Abstract: Studies of deprivation usually ignore mental illness. This paper uses household panel data from the USA, Australia, Britain and Germany to broaden the analysis. We ask first how many of those in the lowest levels of life-satisfaction suffer from unemployment, poverty, physical ill health, and mental illness. The largest proportion suffer from mental illness. Multiple regression shows that mental illness is not highly correlated with poverty or unemployment, and that it contributes more to explaining the presence of misery than is explained by either poverty or unemployment. This holds both with and without fixed effects.
    Keywords: Mental health; life-satisfaction; wellbeing; poverty; unemployment
    JEL: I31 I32
    Date: 2015–06
    URL: http://d.repec.org/n?u=RePEc:ehl:lserod:62589&r=ltv
  3. By: Clark, Andrew E.; Kamesaka, Akiko; Tamura, Teruyuki
    Abstract: It is commonly-believed that education is a good thing for individuals. Yet its correlation with subjective well-being is most often only weakly positive, or even negative, despite the many associated better individual-level outcomes We here square the circle using novel Japanese data on happiness aspirations. If reported happiness comes from a comparison of outcomes to aspirations, then any phenomenon raising both at the same time will have only a muted effect on reported well-being. We find that around half of the happiness effect of education is cancelled out by higher aspirations, and suggest a similar dampening effect for income.
    Keywords: education; satisfaction; aspirations; income
    Date: 2015–05
    URL: http://d.repec.org/n?u=RePEc:cpm:docweb:1507&r=ltv
  4. By: Akay, Alpaslan (University of Gothenburg); Bargain, Olivier (University of Aix-Marseille II); Giulietti, Corrado (IZA); Robalino, Juan David (Cornell University); Zimmermann, Klaus F. (IZA and University of Bonn)
    Abstract: The paper investigates the impact of remittances on the relative concerns of households in rural China. Using the Rural to Urban Migration in China (RUMiC) dataset we estimate a series of well-being functions to simultaneously explore the relative concerns with respect to income and remittances. Our results show that although rural households experience substantial utility loss due to income comparisons, they gain utility by comparing their remittances with those received by their reference group. In other words, we find evidence of a "status-effect" with respect to income and of a "signal-effect" with respect to remittances. The magnitudes of these two opposite effects are very similar, implying that the utility reduction due to relative income is compensated by the utility gain due to relative remittances. This finding is robust to various specifications, controlling for the endogeneity of remittances and selective migration, as well as a measure of current migrants' net remittances calculated using counterfactual income and expenditures.
    Keywords: positional concerns, remittances, subjective well-being
    JEL: C90 D63
    Date: 2015–06
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp9163&r=ltv
  5. By: Islam, Nizamul (LISER (CEPS/INSTEAD)); Flood, Lennart (University of Gothenburg)
    Abstract: We develop a behavioural micro simulation model (LuxTaxBen) that contains very precise information on income tax rules, as well as eligibility-rules for a number of welfare programs, such as social assistance, housing allowance etc. The model has been built specifically for analysing the Luxembourgish tax-transfer system whereby one can generate disposable income for various combinations of hours of work and welfare. It can be used for calculating accurate (net) household incomes conditional on labour supply while income tax rules and the various welfare benefit-levels are complicated functions of earned and unearned income. The LuxTaxBen is capable to handle almost all parts of the Luxembourg tax and transfer systems. Such a model has a great potential to be used for evaluating the effects of tax-benefit policy reforms and other changes on poverty, inequality, incentives and the governmental budget. It provides the users the opportunity to simulate the new rules in the Luxembourg tax-transfer system. The model consists of a number of modules such as module for child benefit, housing allowance, fees for child care. It is constructed in an integrated way so all the modules can be used together. This means that it is possible to analyses the interaction between the different transfer systems.
    Keywords: micro simulation, distributional and behavioural effect, welfare
    JEL: C8 D31 H24
    Date: 2015–06
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp9152&r=ltv
  6. By: Neumark, David (University of California, Irvine); Grijalva, Diego (Universidad San Francisco de Quito)
    Abstract: State and federal policymakers grappling with the aftermath of the Great Recession sought ways to spur job creation, in many cases adopting hiring credits to encourage employers to create new jobs. However, there is virtually no evidence on the effects of these kinds of counter-recessionary hiring credits – the only evidence coming from much earlier studies of the federal New Jobs Tax Credit in the 1970s. This paper provides evidence on the effects of state hiring credits on job growth. For many of the types of hiring credits we examine we do not find positive effects on job growth. However, some specific types of hiring credits – most notably including those targeting the unemployed, those that allow states to recapture credits when job creation goals are not met, and refundable hiring credits – appear to have succeeded in boosting job growth, more so during the Great Recession period or perhaps recessions generally. At the same time, some credits appear to generate hiring without increasing employment or to generate much more hiring than net employment growth, consistent with these credits leading to churning of employees that raises the costs of producing jobs via hiring credits.
    Keywords: labor demand, hiring credits, employment growth
    JEL: J23
    Date: 2015–06
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp9146&r=ltv
  7. By: Parey, Matthias (University of Essex); Ruhose, Jens (Ifo Institute for Economic Research); Waldinger, Fabian (University of Warwick); Netz, Nicolai (DZHW-German Centre for Research on Higher Education and Science Studies)
    Abstract: We measure selection of high-skilled migrants from Germany using predicted earnings. Migrants to less equal countries are positively selected relative to non-migrants, while migrants to more equal countries are negatively selected, consistent with the prediction in Borjas (1987). Positive selection to less equal countries is driven by university quality and grades, and negative selection to more equal countries by university subject and gender. Migrants to the U.S. are highly positively selected and concentrated in STEM fields. Our results highlight the relevance of the Borjas model for high-skilled individuals when credit constraints and other migration barriers are unlikely to be binding.
    Keywords: international migration, high-skilled migrants, selection, inequality, Roy/Borjas model
    JEL: F22 J24 J31 J61
    Date: 2015–06
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp9164&r=ltv
  8. By: Alberto Alesina (2441/4ia9erre4r9nva2eh5b5sac29o); Yann Algan (Département d'économie); Pierre Cahuc (Department of Economics); null null (Anderson School of Management - Global Economics and Management)
    Abstract: To be efficient, flexible labor markets require geographically mobile workers. Otherwise firms can take advantage of workers' immobility and extract rents at their expense. In cultures with strong family ties, moving away from home is costly. Thus, to limit the rents of firms and to avoid moving, individuals with strong family ties rationally choose regulated labor markets, even though regulation generates higher unemployment and lower incomes. Empirically, we find that individuals who inherit stronger family ties are less mobile, have lower wages and higher unemployment, and support more stringent labor market regulations. We find a positive association between labor market rigidities at the beginning of the 21st century and family values prevailing before World War II, and between family structures in the Middle Ages and current desire for labor market regulation. Both results suggest that labor market regulations have deep cultural roots.
    Keywords: Regulation of labor; Family values; Labor market; Market regulation
    JEL: J2 K2 Z0
    Date: 2015–04
    URL: http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/20g3idj0jd9iqosvjjdcbu44lu&r=ltv

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 http://nep.repec.org. For comments please write to the director of NEP, Marco Novarese at <director@nep.repec.org>. 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.