nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2015‒10‒17
ten papers chosen by

  1. Intergenerational Mobility and the Timing of Parental Income By Pedro Carneiro; Italo Lopez Garcia; Kjell G. Salvanes; Emma Tominey
  2. Appraising Cross-National Income Inequality Databases: An Introduction By Francisco H. G. Ferreira; Nora Lustig; Daniel Teles
  3. Inequality and Fiscal Redistribution in Middle Income Countries: Brazil, Chile, Colombia, Indonesia, Mexico, Peru and South Africa - Working Paper 410 By Nora Lustig
  4. Toward an International Comparison of Economic and Educational Mobility: Recent Findings from the Japan Child Panel Survey By Hideo Akabayashi; Ryosuke Nakamura; Michio Naoi; Chizuru Shikishima
  5. FIntertemporal pro-poorness By Florent Bresson; Jean-Yves Duclos; Flaviana Palmisano
  6. Toward Better Global Poverty Measures - Working Paper 417 By Martin Ravallion
  7. National Well-being Policy and a Weighted Approach to Human Feelings By Oswald, Andrew J; O’Donnell, Gus
  8. Smoking Bans, Cigarette Prices and Life Satisfaction By Reto Odermatt; Alois Stutzer
  9. Mapping the Occupational Segregation of White Women in the U.S.: Differences across Metropolitan Areas By Olga Alonso-Villar; Coral del Río
  10. A global count of the extreme poor in 2012 : data issues, methodology and initial results By Ferreira,Francisco H. G.; Chen,Shaohua; Dabalen,Andrew L.; Dikhanov,Yuri M.; Hamadeh,Nada; Jolliffe,Dean Mitchell; Narayan,Ambar; Prydz,Espen Beer; Revenga,Ana L.; Sangraula,Prem; Serajuddin,Umar; Yoshida,Nobuo

  1. By: Pedro Carneiro; Italo Lopez Garcia; Kjell G. Salvanes; Emma Tominey
    Abstract: We extend the standard intergenerational mobility literature by modelling individual outcomes as a function of the whole history of parental income, using data from Norway. We find that, conditional on permanent income, education is maximized when income is balanced between the early childhood and middle childhood years. In addition, there is an advantage to having income occur in late adolescence rather than in early childhood. These result are consistent with a model of parental investments in children with multiple periods of childhood, income shocks, imperfect insurance, dynamic complementarity, and uncertainty about the production function and the ability of the child.
    Keywords: Child human capital; intergenerational mobility; parental income timing; semiparametric estimation.
    JEL: J24 E24
    Date: 2015–10
  2. By: Francisco H. G. Ferreira (Development Research Group, World Bank); Nora Lustig (Department of Economics, Tulane University); Daniel Teles (Department of Economics, Tulane University)
    Abstract: In response to a growing interest in comparing inequality levels and trends across countries, a number of cross-national inequality databases are now available. These databases differ considerably in purpose, coverage, data sources, inclusion and exclusion criteria, and quality of documentation. A special issue of the \Journal of Economic Inequality, which this paper introduces, is devoted to an assessment of the merits and shortcomings of eight such databases. Five of these sets are microdata-based: CEPALSTAT, Income Distribution Database (IDD), LIS, PovcalNet, and Socio-Economic Database for Latin America and the Caribbean (SEDLAC); two are based on secondary sources: "All the Ginis" (ATG) and the World Income Inequality Database (WIID); and one is generated in full through multiple-imputation methods: the Standardized World Income Inequality Database (SWIID). Although there is much agreement across these databases, there is also a non-trivial share of country/year cells for which substantial discrepancies exist. In some cases, different databases would lead users to radically different conclusions about inequality dynamics in certain countries and periods. The methodological differences that lead to these discrepancies often appear to be driven by a fundamental trade-off between a wish for broader coverage on the one hand, and for greater comparability on the other. These differences across databases place considerable responsibility on both producers and users: on the former, to better document and explain their assumptions and procedures, and on the latter, to understand the data they are using, rather than merely taking them as true because available.
    Keywords: inequality comparisons, inequality databases, international inequality
    JEL: D31 I32
    Date: 2015–10
  3. By: Nora Lustig
    Abstract: This paper examines the redistributive impact of fiscal policy for Brazil, Chile, Colombia, Indonesia, Mexico, Peru and South Africa using comparable fiscal incidence analysis with data from around 2010. The largest redistributive effect is in South Africa and the smallest in Indonesia. Success in fiscal redistribution is driven primarily by redistributive effort (share of social spending to GDP in each country) and the extent to which transfers/subsidies are targeted to the poor and direct taxes targeted to the rich. While fiscal policy always reduces inequality, this is not the case with poverty. Fiscal policy increases poverty in Brazil and Colombia (over and above market income poverty) due to high consumption taxes on basic goods. The marginal contribution of direct taxes, direct transfers and inkind transfers is always equalizing. The marginal effect of net indirect taxes is unequalizing in Brazil, Colombia, Indonesia and South Africa. Total spending on education is pro-poor except for Indonesia, where it is neutral in absolute terms. Health spending is pro-poor in Brazil, Chile, Colombia and South Africa, roughly neutral in absolute terms in Mexico, and not pro-poor in Indonesia and Peru.
    Keywords: fiscal incidence, social spending, inequality, developing countries
    JEL: H22 D31 I3
    Date: 2015–08
  4. By: Hideo Akabayashi (Faculty of Economics, Keio University); Ryosuke Nakamura (Faculty of Economics, Fukuoka University); Michio Naoi (Faculty of Economics, Keio University); Chizuru Shikishima (Department of Psychology, Faculty of Liberal Arts, Teikyo)
    Abstract: In past decades, income inequality has risen in most developed countries. There is growing interest among economists in international comparisons of economic and educational mobility. This is aided by the availability of internationally comparable, large-scale data. The present paper aims to make three contributions. First, we introduce the Japan Child Panel Survey (JCPS), the first longitudinal survey of school-age children that includes cognitive and non-cognitive measures, and rich household information. The JCPS was developed to measure dynamic inter-relationships between children's academic and social outcomes, their family background, and local policy and environment, in a way that allows comparison of the results with international data. Second, based on JCPS data, we present selected results of the dynamics of inequality in multiple indicators of children's educational and behavioral outcomes. We found that changes in cognitive achievement across parental income groups, the degree of mobility of cognitive test scores, and the correlation between the difficulty score and parental education in Japan are similar to other countries, such as the United States, United Kingdom, Australia, and Germany. Finally we discuss issues underlying the globalization of education research based on our experiences with the JCPS. We discuss reasons and strategies for further globalization of education research in Japan, and propose suggestions as to how Japanese education research can move toward better international collaboration, particularly in research on economic and educational mobility.
    Keywords: Economic Inequality, Family Background, Educational Inequality and Mobility, Panel Data, Cognitive and Non-cognitive Abilities
    JEL: D31 I24 J13
    Date: 2015–09–29
  5. By: Florent Bresson (Universit Ìe d’Auvergne & CNRS); Jean-Yves Duclos (Universitè Laval and FERDI); Flaviana Palmisano (Universit Ìe du Luxembourg)
    Abstract: A long-lasting scientific and policy debate queries the impact of growth on distribution. A specific branch of the micro-oriented literature, known as ‘pro-poor growth’, seeks in particular to understand the impact of growth on poverty. Much of that literature supposes that the distributional im- pact should be measured in an anonymous fashion. The income dynamics and mobility impacts of growth are thus ignored. The paper extends this framework in two important manners. First, the paper uses an ‘intertempo- ral pro-poorness’ formulation that accounts separately for anonymous and mobility growth impacts. Second, the paper’s treatment of mobility encom- passes both the benefit of “mobility as equalizer†and the variability cost of poverty transiency. Several decompositions are proposed to measure the importance of each of these impacts of growth on the pro-poorness of distri- butional changes. The framework is applied to panel data on 23 European countries drawn from the ‘European Union Statistics on Income and Living Conditions’ (EU-SILC) survey.
    Keywords: pro-poorness, income mobility, growth, poverty dynamics
    JEL: D63 I32
    Date: 2015–07
  6. By: Martin Ravallion
    Abstract: While much progress has been made over the last 25 years in measuring global poverty, there are a number of challenges ahead. The paper discusses three sets of problems: (i) how to allow for social effects on welfare, recognizing the identification issues involved; (ii) the need to monitor progress in raising the consumption floor above its biological level, in addition to counting the number of people living near the floor; and (iii) addressing the longstanding concerns about prevailing approaches to making inter-country comparisons of price levels facing poor people. Some suggestions are offered for operational solutions, building on past research.
    Keywords: Absolute poverty, relative poverty, consumption floor, Purchasing Power Parity, International Comparison Program.
    JEL: I32 E31 O10
    Date: 2015–09
  7. By: Oswald, Andrew J (Department of Economics University of Warwick, CAGE and IZA); O’Donnell, Gus (House of Lords, Frontier Economics)
    Abstract: Governments are becoming interested in the concept of human well-being and how truly to assess it. As an alternative to traditional economic measures, some nations have begun to collect information on citizens’ happiness, life satisfaction, and other psychological scores. Yet how could such data actually be used? This paper is a cautious attempt to contribute to thinking on that question. It suggests a possible weighting method to calculate first-order changes in society’s well-being, discusses some of the potential principles of democratic ‘well-being policy’, and (as an illustrative example) reports data on how sub-samples of citizens believe feelings might be weighted.
    Keywords: Life satisfaction ; anxiety ; happiness ; national well-being ; mental health
    JEL: I31 I38 Z18
    Date: 2015
  8. By: Reto Odermatt; Alois Stutzer
    Abstract: The consequences of tobacco control policies for individual welfare are difficult to assess, even more so when related consumption choices challenge people's willpower. We therefore evaluate the impact of smoking bans and cigarette prices on subjective well-being by analyzing data for 40 European countries and regions between 1990 and 2011. We exploit the staggered introduction of bans and apply an imputation strategy to study the effect of anti-smoking policies on people with different propensities to smoke. We find that higher cigarette prices reduce the life satisfaction of likely smokers. Overall, smoking bans are barely related to subjective well-being, but increase the life satisfaction of smokers who would like to quit smoking. The latter finding is consistent with cue-triggered models of addiction and the idea of bans as self-control devices.
    Keywords: Smoking bans; cigarette prices; life satisfaction; addiction; self-control
    JEL: D03 D62 H25 H30 I18
    Date: 2015–10
  9. By: Olga Alonso-Villar; Coral del Río
    Abstract: This paper investigates the occupational segregation of white women in the U.S. at a metropolitan area level. Our results show substantial variation across areas and suggest that the national scale does not reveal the real situation of white women. The proportion of white women who would have to shift occupations to achieve zero segregation ranges between 20% in some areas and 40% in others. The consequences that occupational segregation has in terms of earnings also vary dramatically within the country, which suggests that in dealing with labor inequalities, local authorities should play an active role.
    Date: 2015–10
  10. By: Ferreira,Francisco H. G.; Chen,Shaohua; Dabalen,Andrew L.; Dikhanov,Yuri M.; Hamadeh,Nada; Jolliffe,Dean Mitchell; Narayan,Ambar; Prydz,Espen Beer; Revenga,Ana L.; Sangraula,Prem; Serajuddin,Umar; Yoshida,Nobuo
    Abstract: The 2014 release of a new set of purchasing power parity conversion factors (PPPs) for 2011 has prompted a revision of the international poverty line. In order to preserve the integrity of the goalposts for international targets such as the Sustainable Development Goals and the World Bank?s twin goals, the new poverty line was chosen so as to preserve the real purchasing power of the earlier $1.25 line (in 2005 PPPs) in poor countries. Using the new 2011 PPPs, the new line equals $1.90 per person per day. The higher value of the line in US dollars reflects the fact that the new PPPs yield a relatively lower purchasing power of that currency vis-à-vis those of most poor countries. Because the line was designed to preserve real purchasing power in poor countries, the revisions lead to relatively small changes in global poverty incidence: from 14.5 percent in the old method to 14.2 percent in the new method for 2011. In 2012, the new reference year for the global count, the authors find 12.8 percent of the world?s population, or 902 million people, are living in extreme poverty. There are changes in the regional composition of poverty, but they are also relatively small. This paper documents the detailed methodological decisions taken in the process of updating both the poverty line and the consumption and income distributions at the country level, including issues of inter-temporal and spatial price adjustments. It also describes various caveats, limitations, perils and pitfalls of the approach taken.
    Keywords: Pro-Poor Growth,Poverty Reduction Strategies,Regional Economic Development,Rural Poverty Reduction
    Date: 2015–10–03

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