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on Unemployment, Inequality and Poverty |
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Issue of 2015‒10‒25
25 papers chosen by |
| By: | Castleman, Tony (George Washington University); Foster, James (George Washington University); Smith, Stephen C. (George Washington University) |
| Abstract: | Headcount measures of poverty are by far the most common tools for evaluating poverty and gauging progress in global development goals. The headcount ratio, or the prevalence of poverty, and the headcount, or the number of the poor, both convey tangible information about poverty. But both ignore the depth of poverty, so they arguably present distorted views of the spatial distribution of poverty as well as the extent of progress against poverty over time. Additionally, headcount measures can provide incentives for policymakers and NGOs to focus their efforts on the least poor, an observation well understood among policymakers themselves. While other poverty measures mitigate these problems by capturing the intensity as well as the prevalence of poverty, they are often not central to policy discourse because they are perceived to be too "unintuitive" to have traction. There is a need for poverty measures that go beyond traditional headcount measures, but retain their direct interpretation. This paper presents person equivalent (p. e.) headcount measures, which do just that. Our approach draws on the logic of full‐time equivalent jobs, adult equivalent incomes, and other constructs in economics. An initial period is used to calibrate the average depth of poverty among the poor, which then becomes the "person equivalent" underlying the p. e. headcount and the p. e. headcount ratio. We illustrate our methods using $1.25 a day poverty data from 78 countries as provided by the World Bank, and show how the new measures map out different pictures of poverty and progress than traditional headcount measures. Overall, the picture is one of a more rapid decline in global poverty, but with significant redistributions of its burden across regions and countries. For example, p. e. headcounts are much higher than traditional headcounts in Latin America and the Caribbean and Sub Saharan Africa; in South Asia and East Asia and the Pacific the reverse is true. In Kenya the traditional headcount rose by 8 million and the p. e. headcount rose by 11 million; in South Africa the p. e. headcount fell by more than the traditional headcount. We discuss properties of the new measures, outline some generalizations and conclude with recommendations for using this approach in development goals to track progress and direct policy. |
| Keywords: | poverty measurement, headcount, poverty gap, FGT indices, development goals, inclusive growth, multidimensional poverty |
| JEL: | I32 O15 D63 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9402&r=all |
| By: | Pedro Portugal; Pedro S. Raposo; Anabela Carneiro |
| Abstract: | Using an unusually rich matched employer-employee-job title data set for Portugal, this paper evaluates the sources of wage losses of workers displaced due to firm closure based on the comparison of workers’ wages differentials before and after displacement. Potential wage losses of displaced workers can be related to firm, job title, and match heterogeneity in the pre- and post-displacement jobs. In this vein, we estimate a threeway high-dimensional fixed effects regression model that enables us to decompose the sources of the wage losses into the contribution of firm, job title, and match fixed effects. The worker-firm match plays a very sizable role. We found that the allocation of workers into poorer matches accounts for 38 percent of the total average wage loss. Sorting among firms accounts for 36 percent. Job downgrading also plays a significant role in explaining the wage loss of displaced workers, accounting for the remaining 26 percent. |
| JEL: | E21 E60 F40 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ptu:wpaper:w201511&r=all |
| By: | Edward L. Glaeser; Giacomo A. M. Ponzetto; Yimei Zou |
| Abstract: | Should China build mega-cities or a network of linked middle-sized metropolises? Can Europe's mid-sized cities compete with global agglomeration by forging stronger inter-urban links? This paper examines these questions within a model of recombinant growth and endogenous local amenities. Three primary factors determine the trade-off between networks and big cities: local returns to scale in innovation, the elasticity of housing supply, and the importance of local amenities. Even if there are global increasing returns, the returns to local scale in innovation may be decreasing, and that makes networks more appealing than mega-cities. Inelastic housing supply makes it harder to supply more space in dense confines, which perhaps explains why networks are more popular in regulated Europe than in the American Sunbelt. Larger cities can dominate networks because of amenities, as long as the benefits of scale overwhelm the downsides of density. In our framework, the skilled are more likely to prefer mega-cities than the less skilled, and the long-run benefits of either mega-cities or networks may be quite different from the short-run benefits. |
| Keywords: | Cities, Networks, Growth, Migration |
| JEL: | R10 R58 F15 O18 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1489&r=all |
| By: | O'Donnell, Gus (House of Lords); Oswald, Andrew J. (University of Warwick) |
| 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: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9401&r=all |
| By: | Manuel Arellano (CEMFI, Centro de Estudios Monetarios y Financieros); Richard Blundell (University College London); Stéphane Bonhomme (University of Chicago) |
| Abstract: | We develop a new quantile-based panel data framework to study the nature of income persistence and the transmission of income shocks to consumption. Log-earnings are the sum of a general Markovian persistent component and a transitory innovation. The persistence of past shocks to earnings is allowed to vary according to the size and sign of the current shock. Consumption is modeled as an age-dependent nonlinear function of assets and the two earnings components. We establish the nonparametric identification of the nonlinear earnings process and the consumption policy rule. Exploiting the enhanced consumption and asset data in recent waves of the Panel Study of Income Dynamics, we find nonlinear persistence and conditional skewness to be key features of the earnings process. We show that the impact of earnings shocks varies substantially across earnings histories, and that this nonlinearity drives heterogeneous consumption responses. The transmission of shocks is found to vary systematically with assets. |
| Keywords: | Earnings dynamics, consumption, panel data, quantile regression, latent variables. |
| JEL: | C23 D31 D91 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:cmf:wpaper:wp2015_1506&r=all |
| By: | Sandra E. Black; Paul J. Devereux; Petter Lundborg; Kaveh Majlesi |
| Abstract: | Wealth 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 administrative data on the net wealth of a large sample of Swedish adoptees merged with similar information for their biological and adoptive parents. Comparing the relationship between the wealth of adopted and biological parents and that of the adopted child, we find that, even prior to any inheritance, there is a substantial role for environment and a much smaller role for genetics. We also examine the role played by bequests and find that, when they are taken into account, the role of adoptive parental wealth becomes much stronger. Our findings suggest that wealth transmission is not primarily because children from wealthier families are inherently more talented or more able but that, even in relatively egalitarian Sweden, wealth begets wealth. |
| Keywords: | Nature versus nurture; Wealth transmission |
| JEL: | G11 J01 J13 J62 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201516&r=all |
| By: | John T. Addison; Pedro Portugal; Hugo Vilares |
| Abstract: | We estimate the impact of union density on wages using matched employer-employee contract data for Portugal. We extend omitted variable bias decomposition procedure of Gelbach (2016) to obtain the contribution of worker, firm, and job-title heterogeneity to the union wage premium. The principal result is the dominance of the allocation or workers among firms with different wage policies. The unobserved skills of union workers have a modest impact on wages; unions do not place their members into higher job-titles along the job career hierarchy; the wage cushion enables firms to partially undo the bargained wage; and, while fringes matter, matching does not. |
| JEL: | J31 J33 J41 J51 J52 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ptu:wpaper:w201512&r=all |
| By: | Cruces Guillermo; Fields Gary S.; Jaume David; Viollaz Mariana |
| Abstract: | Between 2000 and 2012, Panama boasted the strongest economic growth in Latin America. The growth experience was not uniform: the 2000.02 period was marked by slow or negative growth rates, after which growth was exceptionally rapid. Although the interna |
| Keywords: | Economic growth, Income distribution, Labor market, Poverty, Public welfare |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2015-080&r=all |
| By: | Cruces Guillermo; Fields Gary S.; Jaume David; Viollaz Mariana |
| Abstract: | In the 2000s, Costa Rica experienced moderate economic growth and a general improvement in labour market conditions. From 2000 to 2012, Costa Rica grew at the Latin American average. Most labour market indicators improved during 2001.09 and 2010.12 (t |
| Keywords: | Economic growth, Income distribution, Labor market, Poverty, Public welfare |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2015-074&r=all |
| By: | Cruces Guillermo; Fields Gary S.; Jaume David; Viollaz Mariana |
| Abstract: | During the 2000s, Brazil experienced slow economic growth and a substantial improvement in labour market indicators. From 2001 to 2012, Brazil grew less than the Latin American average. However, the unemployment rate decreased, the employment composition |
| Keywords: | Economic development, Income distribution, Labor market, Poverty, Public welfare |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2015-071&r=all |
| By: | Cruces Guillermo; Fields Gary S.; Jaume David; Viollaz Mariana |
| Abstract: | Between 2000 and 2013, Colombia experienced rapid economic growth. The country suffered a slowdown at the beginning of the period and during the international crisis of 2008, but during both slowdowns, the growth rate never turned negative. Most labour ma |
| Keywords: | Economic growth, Income distribution, Labor market, Poverty, Public welfare |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2015-073&r=all |
| By: | Cruces Guillermo; Fields Gary S.; Jaume David; Viollaz Mariana |
| Abstract: | The Uruguayan story was one of declines in the early years of the 2000s in most indicators, followed by improvements in all of them. Economic growth was negative in the early years due to a severe economic crisis, positive and rapid thereafter except duri |
| Keywords: | Economic growth, Income distribution, Labor market, Poverty, Public welfare |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2015-083&r=all |
| By: | Cruces Guillermo; Fields Gary S.; Jaume David; Viollaz Mariana |
| Abstract: | During the 2000s Honduras grew less than the average Latin American country and labour market indicators moved, in general, in a worsening direction. The only exceptions were the reduction in the unemployment rate and the improvements in the mix of employ |
| Keywords: | Economic growth, Income distribution, Labor market, Poverty, Public welfare |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2015-078&r=all |
| By: | Cruces Guillermo; Fields Gary S.; Jaume David; Viollaz Mariana |
| Abstract: | During the 2000s Mexico grew less than the average for Latin America. Labour market indicators exhibited mixed changes, with improvements over the period for some of them and deterioration for others. The country was severely hurt by the international cri |
| Keywords: | Income distribution, Labor market, Poverty, Public welfare |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2015-079&r=all |
| By: | Amrita Ahuja; Sarah Baird (George Washington University); Joan Hamory Hicks (University of California, Berkeley); Michael Kremer (Harvard University); Edward Miguel (University of California, Berkeley); Shawn Powers |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2014-22&r=all |
| By: | Cruces Guillermo; Fields Gary S.; Jaume David; Viollaz Mariana |
| Abstract: | During the 2000s Chile achieved rapid economic growth and improved most labour market indicators: the unemployment rate fell; the mix of employment by occupational position and sector improved; the educational level of the employed population, the percent |
| Keywords: | Economic growth, Income distribution, Labor market, Poverty, Public welfare |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2015-072&r=all |
| By: | Cruces Guillermo; Fields Gary S.; Jaume David; Viollaz Mariana |
| Abstract: | Argentina experienced a decline in the early years of the 2000s, from 2000 to 2002, in GDP and in most labour market indicators, followed by improvements in nearly all of them, tracing out a U-shaped pattern. The international crisis of 2008 impacted nega |
| Keywords: | Economic growth, Income distribution, Labor market, Poverty, Public welfare |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2015-069&r=all |
| By: | Ricardo Bebczuk (CEDLAS - UNLP); Leonardo Gasparini (CEDLAS - UNLP); Noelia Garbero (CEDLAS - UNLP); Julian Amendolaggine (CEDLAS - UNLP) |
| Abstract: | This study centers on the household saving rate in Latin America by constructing a new database from 27 household surveys in 10 countries. At the statistical level, about half of the households present negative saving. This fact, coupled with the discrepancy with national accounts data, suggests some degree of income underreporting and/or consumption overreporting. The estimations highlight the overriding positive role of income in shaping saving decisions. Many other controls prove to be significant as well. In terms of household saving promotion, our paper leaves little room for optimism. |
| JEL: | D91 E21 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:dls:wpaper:0189&r=all |
| By: | Sarah Baird (George Washington University); Joan Hamory Hicks (University of California, Berkeley); Michael Kremer (Harvard University); Edward Miguel (University of California, Berkeley) |
| Abstract: | This study estimates long-run impacts of a child health investment, exploiting community-wide experimental variation in school-based deworming. The program increased education among women and labor supply among men, with accompanying shifts in labor market specialization. Ten years after deworming treatment, women who were eligible as girls are 25% more likely to have attended secondary school, halving the gender gap. They reallocate time from traditional agriculture into cash crops and entrepreneurship. Men who were eligible as boys stay enrolled for more years of primary school, work 17% more hours each week, spend more time in entrepreneurship, are more likely to hold manufacturing jobs, and miss one fewer meal per week. We estimate an annualized financial internal rate of return of at least 32.2%. |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2015-16&r=all |
| By: | Cruces Guillermo; Fields Gary S.; Jaume David; Viollaz Mariana |
| Abstract: | During the 2000s Paraguay experienced slow economic growth but improved all labour market indicators. The growth process was erratic. Paraguay underwent a macroeconomic crisis at the beginning of the period, a recession as a consequence of the internation |
| Keywords: | Economic growth, Income distribution, Labor market, Poverty, Public welfare |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2015-081&r=all |
| By: | Cruces Guillermo; Fields Gary S.; Jaume David; Viollaz Mariana |
| Abstract: | Ecuador experienced moderate economic growth during the 2000s. The economy suffered a mild recession during the international crisis of 2008, but returned to pre-recession GDP per capita level in 2010. Most labour market indicators improved over the perio |
| Keywords: | Economic growth, Income distribution, Labor market, Poverty, Public welfare |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2015-076&r=all |
| By: | Cruces Guillermo; Fields Gary S.; Jaume David; Viollaz Mariana |
| Abstract: | During the 2000s Bolivia experienced moderate economic growth and improved all labour market indicators. The economy suffered a slowdown as a consequence of the international crisis of 2008, but Bolivia sustained positive growth rates during that episode. |
| Keywords: | Economic growth, Income distribution, Labor market, Poverty, Public welfare |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2015-070&r=all |
| By: | Cruces Guillermo; Fields Gary S.; Jaume David; Viollaz Mariana |
| Abstract: | During the 2000s, the Dominican Republic experienced above-average economic growth along with mixed results in labour market indicators. GDP per capita stagnated through 2004 and, for the most part, grew rapidly from 2005 through 2012. Comparing 2000 with |
| Keywords: | Economic growth, Income distribution, Labor market, Poverty, Public welfare |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2015-075&r=all |
| By: | Cruces Guillermo; Fields Gary S.; Jaume David; Viollaz Mariana |
| Abstract: | The Peruvian economy performed exceptionally well between 2000 and 2012, with a growth performance that placed the country well above the regional average and an improvement in all labour market indicators. The economy suffered a slowdown as a consequence |
| Keywords: | Economic growth, Income distribution, Labor market, Poverty, Public welfare |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2015-082&r=all |
| By: | Cruces Guillermo; Fields Gary S.; Jaume David; Viollaz Mariana |
| Abstract: | During the 2000s, El Salvador experienced slow economic growth for Latin American standards. The country underwent a recession during the international crisis of 2008, but returned to pre-recession output level in 2011. Changes in labour market conditions |
| Keywords: | Economic growth, Income distribution, Labor market, Poverty, Public welfare |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2015-077&r=all |