nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2015‒07‒18
ten papers chosen by
Maximo Rossi
Universidad de la República

  1. When Experienced and Decision Utility Concur: The Case of Income Comparisons By Clark, Andrew E.; Senik, Claudia; Yamada, Katsunori
  2. The perception of inequality of opportunity in Europe By Paolo Brunori
  3. On the Origins of Risk-Taking By Black, Sandra E.; Devereux, Paul J.; Lundborg, Petter; Majlesi, Kaveh
  4. Modelling the Joint Distribution of Income and Wealth By Jäntti, Markus; Sierminska, Eva; Van Kerm, Philippe
  5. The Anatomy of Job Polarisation in the UK By Salvatori, Andrea
  6. Birth Weight in the Long-Run By Bharadwaj, Prashant; Lundborg, Petter; Rooth, Dan-Olof
  7. Does the Gender Composition of Scientific Committees Matter? By Bagues, Manuel F.; Sylos-Labini, Mauro; Zinovyeva, Natalia
  8. Not Working at Work: Loafing, Unemployment and Labor Productivity By Michael C. Burda; Katie Genadek; Daniel S. Hamermesh;
  9. Fiscal Policy, Inequality and the Ethnic Divide in Guatemala By Maynor Cabrera; Nora Lustig; Hilcias Moran
  10. The Return to Labor Market Mobility: An Evaluation of Relocation Assistance for the Unemployed By Caliendo, Marco; Künn, Steffen; Mahlstedt, Robert

  1. By: Clark, Andrew E. (Paris School of Economics); Senik, Claudia (Paris School of Economics); Yamada, Katsunori (Kindai University)
    Abstract: While there is now something of a consensus in the literature on the economics of happiness that income comparisons to others help determine subjective wellbeing, debate continues over the relative importance of own and reference-group income, in particular in research on the Easterlin paradox. The variety of results in this domain have produced some scepticism regarding happiness analysis, and in particular with respect to the measurement of reference-group income. We here use data from an original Internet survey in Japan to compare the results from happiness regressions to those from hypothetical-choice experiments. The trade-off between own and others' income (showing the importance of absolute and relative income) is similar in these two sets of results. This kind of validation of experienced utility via direct comparison with decision utility remains rare in this literature.
    Keywords: satisfaction, income comparisons, reference-group income, discrete-choice experiments
    JEL: D31 D63 I3 J31
    Date: 2015–07
  2. By: Paolo Brunori (University of Bari)
    Abstract: Does the way scholars measure inequality of opportunity correspond to how people perceive it? To answer this question we must first clarify how scholars define and measure inequality of opportunity, we will then discuss the possible mechanisms linking objective measures and subjective perception of the phenomenon, and finally we test our hypothesis by merging data coming from two sources: the European Union Statistics on Income and Living Conditions (2011) and the International Social Survey Programme data (2009). We show that individual perception of unequal opportunity is heterogeneous across countries and among individuals. Moreover, the prevailing perception of the degree of unequal opportunity in a large sample of respondents is only weakly correlated with its objective measure. We estimate a multilevel model considering both individual and country level controls to explain individual perception of unequal opportunity. Our estimates suggest that one of the most adopted measure of inequality of opportunity has no role in explaining its perception. Conversely, other country level variables and personal experiences of intergenerational social mobility are important determinants of how inequality of opportunity is perceived.
    Keywords: Inequality of opportunity, inequality perception, intergenerational mobility, attribution theory.
    Date: 2015–06
  3. By: Black, Sandra E. (University of Texas at Austin); Devereux, Paul J. (University College Dublin); Lundborg, Petter (Lund University); Majlesi, Kaveh (Lund University)
    Abstract: Risk-taking behavior is highly correlated between parents and their children; however, little is known about the extent to which these relationships are genetic or determined by environmental factors. We use data on stock market participation of Swedish adoptees and relate this to the investment behavior of both their biological and adoptive parents. We find that stock market participation of parents increases that of children by about 34% and that both pre-birth and post-birth factors are important. However, once we condition on having positive financial wealth, we find that nurture has a much stronger influence on risk-taking by children, and the evidence of a relationship between stock-holding of biological parents and their adoptive children becomes very weak. We find similar results when we study the share of financial wealth that is invested in stocks. This suggests that a substantial proportion of risk-attitudes and behavior is environmentally determined.
    Keywords: intergenerational mobility, nature versus nurture, portfolio allocation
    JEL: G11 J01
    Date: 2015–07
  4. By: Jäntti, Markus (SOFI, Stockholm University); Sierminska, Eva (LISER (CEPS/INSTEAD)); Van Kerm, Philippe (LISER (CEPS/INSTEAD))
    Abstract: This paper considers a parametric model for the joint distribution of income and wealth. The model is used to analyze income and wealth inequality in five OECD countries using comparable household-level survey data. We focus on the dependence parameter between the two variables and study whether accounting for wealth and income jointly reveals a different pattern of social inequality than the traditional 'income only' approach. We find that cross-country variations in the dependence parameter effectively accounts only for a small fraction of cross-country differences in a bivariate measure of inequality. The index appears primarily driven by differences in inequality in the wealth distribution.
    Keywords: income, wealth, inequality, copula, multivariate Gini
    JEL: C1 D31 J10
    Date: 2015–07
  5. By: Salvatori, Andrea (ISER, University of Essex)
    Abstract: This paper presents new evidence on the evolution of job polarisation over time and across skill groups in the UK between 1979 and 2012. The UK has experienced job polarisation in each of the last three decades, with growth in top jobs always exceeding that in bottom ones. Overall, top occupations have gained over 80% of the employment shares lost by middling occupations. The decline of middling occupations is entirely accounted for by non-graduates who have seen their relative numbers decrease and the distribution of their employment shift towards the bottom of the occupational skill distribution. The increase at the top is entirely accounted for by compositional changes, as a result of the increase in the number of graduates since the 1990s. Employment has not polarised for graduates, but has become less concentrated in top occupations, especially in the 2000s. The paper also documents that job polarisation has not been matched by wage polarisation across the occupational distribution in any decade and discusses how these new findings relate to the existing evidence for the US and to the prevailing technology-based explanation for job polarisation. Overall, the importance of occupational changes between skill groups and the performance of occupational wages over time cast doubts on the role of technology as the main driver of polarisation in the UK. In particular, the evidence suggests that supply-side changes are likely to be important factors in explaining why high-skill occupations continued to grow in the 2000s even as they stalled in the US.
    Keywords: job polarisation, wage inequality, occupational mobility, routine employment, skill biased technological change
    JEL: J21 J23 J24 O33
    Date: 2015–07
  6. By: Bharadwaj, Prashant (University of California, San Diego); Lundborg, Petter (Lund University); Rooth, Dan-Olof (Linnaeus University)
    Abstract: We study the effect of birth weight on long-run outcomes, including permanent income, income across various stages of the lifecycle, education, social benefits take-up, and adult mortality. For this purpose, we have linked a unique dataset on nearly all Swedish twins born between 1926-1958, containing information on birth weight, to administrative records spanning nearly entire life time labor market histories. We find that birth weight positively affects permanent income and income across large parts of the life cycle, although there is some evidence of a fade out after age 50. Our results indicate that lower birth weight children are more likely to avail of social insurance programs such as unemployment and sickness insurance and that birth weight matters for adult mortality. We supplement our main analysis with more recent data, which enables us to study how the impact of birth weight on income and education of young adults has changed across cohorts born almost 50 years apart.
    Keywords: birth weight, early life, permanent income, unemployment sickness absence, life-cycle, mortality
    JEL: I10 I18
    Date: 2015–07
  7. By: Bagues, Manuel F. (Aalto University); Sylos-Labini, Mauro (University of Pisa); Zinovyeva, Natalia (Aalto University)
    Abstract: An increasing number of countries are introducing gender quotas in scientific committees. We analyze how a larger presence of female evaluators affects committee decision-making using information on 100,000 applications to associate and full professorships in all academic disciplines in two countries, Italy and Spain. These applications were assessed by 8,000 evaluators who were selected through a random draw. A larger number of women in evaluation committees does not increase either the quantity or the quality of female candidates who qualify. If anything, when evaluators' are not familiar with candidates' research area, gender-mixed committees tend to be less favorable towards female candidates than all-male committees, with the exception of evaluations to full professorships in Spain. Data from 300,000 individual voting reports suggests that men become less favorable towards female candidates as soon as a woman joins the committee.
    Keywords: scientific committees, gender discrimination, randomized natural experiment
    JEL: J71 J16
    Date: 2015–07
  8. By: Michael C. Burda; Katie Genadek; Daniel S. Hamermesh;
    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: 2015–07
  9. By: Maynor Cabrera (Fedes); Nora Lustig (Department of Economics, Tulane University); Hilcias Moran (Bank of Guatemala, Guatemala)
    Abstract: Guatemala is one of the most unequal countries in Latin America and has the highest incidence of poverty. The indigenous population is more than twice as likely of being poor than the nonindigenous group. Fiscal incidence analysis based on the 2009-2010 National Survey of Family Income and Expenditures shows that taxes and transfers do almost nothing to reduce inequality and poverty overall or along ethnic and rural- urban lines. Persistently low tax revenues are the main limiting factor. Tax revenues are not only low but also regressive. Consumption taxes are regressive enough to offset the benefits of cash transfers: poverty after taxes and cash transfers is higher than market income poverty.
    Keywords: inequality, poverty, ethnic divide, fiscal incidence, taxes, social spending, Guatemala
    JEL: D31 H22 I14
  10. By: Caliendo, Marco (University of Potsdam); Künn, Steffen (IZA); Mahlstedt, Robert (University of Potsdam)
    Abstract: In many European countries, labor markets are characterized by high regional disparities in terms of unemployment rates on the one hand and low geographical mobility among the unemployed on the other hand. This is somewhat surprising and raises the question of why only minor shares of unemployed job seekers relocate in order to find employment. The German active labor market policy offers a subsidy covering moving costs to incentivize unemployed job seekers to search/accept jobs in distant regions. Based on administrative data, this study provides the first empirical evidence on the impact of this subsidy on participants' prospective labor market outcomes. We use an instrumental variable approach to take endogenous selection based on observed and unobserved characteristics into account when estimating causal treatment effects. We find that unemployed job seekers who participate in the subsidy program and move to a distant region receive higher wages and find more stable jobs compared to non-participants. We show that the positive effects are (to a large extent) the consequence of a better job match due to the increased search radius of participants.
    Keywords: evaluation, active labor market policy, labor market mobility, Instrumental variable approach
    JEL: J61 J64 J68 D04 C26
    Date: 2015–07

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