nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2015‒10‒04
nine papers chosen by
Maximo Rossi
Universidad de la República

  1. Does worker wellbeing affect workplace performance? By Alex Bryson; John Forth; Lucy Stokes
  2. Racial Discrimination in Local Public Services: A Field Experiment in the US By Corrado Giulietti; Mirco Tonin; Michael Vlassopoulos
  3. Your American Dream is Not Mine! A New Approach to Estimating Intergenerational Mobility Elasticities By Yonghong An; Wang Le; Ruli Xiao
  4. Employment and wage insurance within firms: Worldwide evidence By Ellul, Andrew; Pagano, Marco; Schivardi, Fabiano
  5. Birth Order and Health of Newborns: What Can We Learn from Danish Registry Data? By Anne Ardila Brenøe; Ramona Molitor
  6. Is there an Advantage to Working? The Relationship between Maternal Employment and Intergenerational Mobility By Martha H. Stinson; Peter Gottschalk
  7. Income Inequality and Violent Crime: Evidence from Mexico's Drug War By Ted Enamorado; Luis Felipe López-Calva; Carlos Rodríguez-Castelán; Hernán Winkler
  8. European identity and redistributive preferences By Joan Costa-i-Font; Frank Cowell
  9. The Wage Impact of the Marielitos: A Reappraisal By George J. Borjas

  1. By: Alex Bryson; John Forth; Lucy Stokes
    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: 2015–07
  2. By: Corrado Giulietti; Mirco Tonin; Michael Vlassopoulos
    Abstract: Discrimination in access to public services can act as a major obstacle towards addressing racial inequality. We examine whether racial discrimination exists in access to a wide spectrum of public services in the US. We carry out an email correspondence study in which we pose simple queries to more than 19,000 local public service providers. We find that emails are less likely to receive a response if signed by a black-sounding name compared to a white-sounding name. Given a response rate of 72% for white senders, emails from putatively black senders are almost 4 percentage points less likely to receive an answer. We also find that responses to queries coming from black names are less likely to have a cordial tone. Further tests suggest that the differential in the likelihood of answering is due to animus towards blacks rather than inferring socioeconomic status from race.
    Keywords: discrimination, public services provision, school districts, libraries, sheriffs, field experiment, correspondence study
    Date: 2015–09
  3. By: Yonghong An (Texas A&M University); Wang Le (The University of Alabama); Ruli Xiao (Indiana University)
    Abstract: This paper provides a new framework to estimate intergenerational mobility elasticities (IGE) of children's income with respect to parental income. Our approach is nonparametric allowing for heterogeneity in IGEs and nonlinearity by leaving the relationship unspecified, while acknowledging the latent nature of both child and parental permanent incomes. Our approach also addresses life-cycle bias directly in estimation without requiring knowledge of permanent income as the previous literature does. We confirm some of the previous findings and also have some novel results. First, we uncover that the association between observed annual income and permanent income varies over the life cycle; and that the observed patterns differ over generations, although the latter result is statistically insignificant due to large variances. Second, we find strong evidence that there exists substantial heterogeneity in IGEs across population and that the mobility function is nonlinear. The implied IGE exhibits a Ushape pattern with "twin-peaks". Specifically, there is a considerable degree of mobility among the broadly defined middle class, but both the children of high and low income fathers are more likely to be high and low income adults, respectively. This result suggests that the U.S. is indeed the "land of opportunity" to live out the "American Dream", just not for everyone! These results survive a battery of robustness checks. Finally, we also find that there exist a great deal of within-group heterogeneity. Our approach is also immediately applicable in many other similar contexts both within and outside labor economics.
    Date: 2015–09
  4. By: Ellul, Andrew; Pagano, Marco; Schivardi, Fabiano
    Abstract: We investigate the determinants of firms' implicit insurance to employees, using a difference-indifference approach: we rely on differences between family and non-family firms to identify the supply of insurance, and exploit variation in unemployment insurance across and within countries to gauge workers' demand for insurance. Using a firm-level panel from 41 countries, we find that family firms feature more stable employment, greater wage flexibility and lower labor cost than non-family ones. Employment stability in family firms is greater, and the wage discount larger, in countries with more generous public unemployment insurance: private and public provision of employment insurance are substitutes.
    Keywords: risk-sharing,insurance,social security,unemployment,wages,family firms
    JEL: G31 G32 G38 H25 H26 M40
    Date: 2015
  5. By: Anne Ardila Brenøe (Department of Economics, University of Copenhagen); Ramona Molitor (Department of Business Administration University of Copenhagen and Economics, University of Passau)
    Abstract: Research has shown a strong negative correlation between birth order and cognitive test scores, IQ, and educational outcomes. We ask whether birth order differences in health are present at birth using matched administrative data for more than 1,000,000 children born in Denmark between 1981 and 2010. Using family fixed effects models, we find a positive and robust birth order effect; earlier born children are less healthy at birth. Looking at the potential mechanisms, we find that during earlier pregnancies women have higher labor market attachment, behave more risky in terms of smoking, receive more prenatal care, and are diagnosed with more medical pregnancy complications. Yet, none of these factors explain the birth order differences at birth. Combining our results with findings from the medical literature, we propose that biology is driving the early life advantage (nature). Finally, we show that these birth order differences at birth do not explain the negative birth order effect in educational performace, suggesting that nurture rather than nature is an important player later in life.
    Keywords: Birth order, parity, child health, fetal health, health at birth, education
    JEL: I10 I12 J12 J13
    Date: 2015–09–22
  6. By: Martha H. Stinson; Peter Gottschalk
    Abstract: We investigate the question of whether investing in a child’s development by having a parent stay at home when the child is young is correlated with the child’s adult outcomes. Specifically, do children with stay-at-home mothers have higher adult earnings than children raised in households with a working mother? The major contribution of our study is that, unlike previous studies, we have access to rich longitudinal data that allows us to measure both the parental earnings when the child is very young and the adult earnings of the child. Our findings are consistent with previous studies that show insignificant differences between children raised by stay-at-home mothers during their early years and children with mothers working in the market. We find no impact of maternal employment during the first 5 years of a child’s life on earnings, employment, or mobility measures of either sons or daughters. We do find, however, that maternal employment during children’s high school years is correlated with a higher probability of employment as adults for daughters and a higher correlation between parent and daughter earnings ranks.
    Keywords: human capital, child development, female labor supply
    JEL: J13 J22 J24
    Date: 2015–09
  7. By: Ted Enamorado (Princeton University); Luis Felipe López-Calva (World Bank); Carlos Rodríguez-Castelán (World Bank); Hernán Winkler (World Bank)
    Abstract: Evidence of a causal effect of inequality on crime is scarce in developing countries. This paper estimates the effect in a unique context: Mexico's Drug War. The analysis exploits a unique dataset containing inequality and crime statistics for more than 2,000 Mexican municipalities over a 20-year period. An instrumental variable for the Gini coefficient combines the initial income distribution at the municipality level with national trends. The results indicate that a one-point increment in the Gini between 2006-2010 translates into an increase of over 10 drug-related homicides per 100,000 inhabitants. These effects are smaller between 1990 and 2005. The fact that the effect found during the Drug War is substantially higher is likely because the cost of crime decreased with the proliferation of gangs (lowering the marginal cost of criminal behavior), which, combined with rising inequality in some municipalities, increased the expected net benefit of criminal acts after 2005.
    JEL: C26 D74 H70 I3 O54
    Date: 2015–09–25
  8. By: Joan Costa-i-Font; Frank Cowell
    Abstract: How important is spatial identity in shifting preferences for redistribution? This paper takes advantage of withincountry variability in the adoption of a single currency as an instrument to examine the impact of the rescaling of spatial identity in Europe. We draw upon data from the last three decades of waves of the European Values Survey and we examine the impact of joining the single currency on preferences for re-distribution. Our instrumentation strategy relies on using the exogenous effect of joining a common currency, alongside a battery of robustness checks and alternative instruments. Our findings suggest that joining the euro has a boosting effect on European identity; an opposite and comparable effect is found for national pride. We find that European identity increases preferences for redistribution, and that national pride exerts an equivalent reduction in preferences for redistribution.
    Keywords: Spatial identity; Europe; welfare state support
    JEL: D69 H53 O52
    Date: 2015–07
  9. By: George J. Borjas
    Abstract: This paper brings a new perspective to the analysis of the Mariel supply shock, revisiting the question and the data armed with the accumulated insights from the vast literature on the economic impact of immigration. A crucial lesson from this literature is that any credible attempt to measure the wage impact of immigration must carefully match the skills of the immigrants with those of the pre-existing workforce. The Marielitos were disproportionately low-skill; at least 60 percent were high school dropouts. A reappraisal of the Mariel evidence, specifically examining the evolution of wages in the low-skill group most likely to be affected, quickly overturns the finding that Mariel did not affect Miami’s wage structure. The absolute wage of high school dropouts in Miami dropped dramatically, as did the wage of high school dropouts relative to that of either high school graduates or college graduates. The drop in the relative wage of the least educated Miamians was substantial (10 to 30 percent), implying an elasticity of wages with respect to the number of workers between -0.5 and -1.5. In fact, comparing the magnitude of the steep post-Mariel drop in the low-skill wage in Miami with that observed in all other metropolitan areas over an equivalent time span between 1977 and 2001 reveals that the change in the Miami wage structure was a very unusual event. The analysis also documents the sensitivity of the estimated wage impact to the choice of a placebo. The measured impact is much smaller when the placebo consists of cities where pre-Mariel employment growth was weak relative to Miami.
    JEL: J2 J31 J61
    Date: 2015–09

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