nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2015‒11‒01
six papers chosen by

  1. Intergenerational mobility and the timing of parental income By Pedro Carneiro; Italo Lopez Garcia; Kjell G. Salvanes; Emma Tominey
  2. Employment and Wage Insurance within Firms: Worldwide Evidence By Andrew Ellul; Marco Pagano; Fabiano Schivardi
  3. Earnings and consumption dynamics: a nonlinear panel data framework By Manuel Arellano; Richard Blundell; Stéphane Bonhomme
  4. Innovation and Top Income Inequality By Ufuk Akcigit; Richard Blundell; David Hemous; Antonin Bergeaud; Philippe Aghion
  5. Fiscal Redistribution In Middle Income Countries:: Brazil, Chile, Colombia, Indonesia, Mexico, Peru and South Africa By Nora Lustig
  6. Mapping the occupational segregation of white women in the US: Differences across metropolitan areas By Olga Alonso-Villar; Coral Del Río

  1. By: Pedro Carneiro (Institute for Fiscal Studies and University College London); Italo Lopez Garcia (Institute for Fiscal Studies); Kjell G. Salvanes (Institute for Fiscal Studies); Emma Tominey (Institute for Fiscal Studies and University of York)
    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.
    Date: 2015–10
  2. By: Andrew Ellul (Indiana University); Marco Pagano (University of Naples Federico II); Fabiano Schivardi (Bocconi University)
    Abstract: We investigate the determinants of firms’ implicit employment and wage insurance to employees, using a difference-in-difference approach: we rely on differences between family and non-family firms to identify the supply of insurance, and exploit variation in unemployment insurance programs across and within countries to gauge workers’ demand for insurance. Using a firm-level panel from 41 countries, we find that family firms provide more stable employment than nonfamily ones, and in exchange they obtain both greater wage flexibility and lower labor cost: on average, their real wages are 5 percent lower, controlling for country, industry and time effects. The additional employment security provided by family firms is greater, and the wage discount larger, the less generous is public unemployment insurance: private and public provision of employment insurance appear to be substitutes.
    Keywords: risk-sharing, insurance, social security, unemployment, wages, family firms.
    JEL: G31 G32 G38 H25 H26 M40
    Date: 2015
  3. By: Manuel Arellano (Institute for Fiscal Studies and CEMFI); Richard Blundell (Institute for Fiscal Studies and IFS and UCL); Stéphane Bonhomme (Institute for Fiscal Studies and 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
  4. By: Ufuk Akcigit (University of Pennsylvania); Richard Blundell (University College London); David Hemous (INSEAD); Antonin Bergeaud (Banque de France and Ecole polytechnique); Philippe Aghion (Harvard University)
    Abstract: In this paper we use cross-state panel data to show a positive and significant correlation between innovativeness and top income inequality in the United States over the past decades. Our instrumentation at cross-state level suggests that this correlation (partly) reflects a causality from innovativeness to top income inequality. Next, using cross commuting zones (CZ) data, we show that innovativeness is positively and significantly correlated with social mobility, and that this correlation is driven mainly by entrant innovators and less so by incumbent innovators. In addition, the positive effects of innovation on the top 1% income share and on social mobility are both dampened in states with higher lobbying intensity. Overall, our findings are in line with the Schumpeterian view whereby the rise in top income shares in developed countries and particularly in the US over the past decades, is at least partly related to innovation-led growth, where innovation itself fosters social mobility at the top through the process of creative destruction.
    Date: 2015
  5. 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 in-kind 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.<BR>Ce document de travail examine l’impact redistributif des politiques budgétaires au Brésil, au Chili, en Colombie, en Indonésie, au Mexique, au Pérou et en Afrique du Sud en utilisant la technique d’analyse d’incidence sur des données aux alentours de l’année 2010. L’impact de la redistribution est le plus important en Afrique du Sud, et le plus faible en Indonésie. La performance de la redistribution est principalement déterminée par l’effort redistributif (part de la dépense sociale dans le PIB de chaque pays) et par la mesure dans laquelle les taxes et transferts sont ciblés vers les plus pauvres et les impôts directs vers les plus riches. Les politiques budgétaires réduisent systématiquement les inégalités, mais pas la pauvreté. La dépense publique augmente la pauvreté au Brésil, en Colombie (au-delà même de la pauvreté mesurée avant redistribution) à cause de la forte taxation des biens élémentaires. L‘impact marginal des taxes directes, des transferts directs et des transferts en nature a toujours un impact progressif. L’impact marginal des taxes indirectes est régressif au Brésil, en Colombie, en Indonésie et en Afrique du Sud. Les dépenses totales d’éducation sont plus favorables aux pauvres, sauf en Indonésie, où elles sont neutres en termes absolus. Les dépenses de santé sont plus favorables aux pauvres au Brésil, au Chili, en Colombie et en Afrique du Sud, globalement neutres en termes absolus et favorables aux pauvres en Indonésie et au Pérou.
    Keywords: developing countries, social spending, inequality
    JEL: D31 H22 I3
    Date: 2015–10–26
  6. By: Olga Alonso-Villar; Coral Del Río
    Abstract: This paper seeks to investigate the occupational segregation of white women in the U.S. at the local labor market level, exploring whether the segregation of this group is a homogeneous phenomenon across the country or there are important disparities in the opportunities that these women meet with across American urban areas. As opposed to other studies that are based on pair-wise comparisons between groups (e.g., white women versus white men, white women versus black women, and so on) and calculate an index?mainly the index of dissimilarity?for each of these comparisons, this paper use segregation measures that permit one to offer a single value for white women (Alonso-Villar and Del Río, 2010). The results based on 273 metropolitan areas show substantial variation across areas. The proportion of white women working in a metropolitan area who would have to shift occupations to achieve zero segregation without changing the occupational structure of the area ranges between 20% and roughly 40%. An important contribution of this paper is that, apart from quantifying the extent of segregation, it also assesses the consequences of that segregation taking into account the ?quality? of occupations that the group tends to fill or not to fill. The analysis reveals that although segregation brings white women as a whole a per capita estimated gain of 1% of the average wage of the country, in some MAs these women have gains of around 21% of the average wage in the area while in others they instead have losses of 11%. Therefore, an analysis of segregation of white women at the national level seems to mask the real situation of this group. Apart from the disadvantages that white women face in terms of receiving lower wages than their male counterparts working in the same occupation and MA, the occupational distribution of these women remains an issue to deal with in many local labor markets. This paper goes one step further by attempting to explain the disparities that exist across areas. By undertaken both counterfactual and regression analyses, it investigates whether the spatial disparities that exist in the gains/losses of white women associated to their segregation arise from territorial differences in a) the educational level of white women, b) the gender-race composition of the labor force, c) the relative pay of occupations, d) the industrial structure, and e) the state in which the area is located. The analysis shows that differences among states are significant even after controlling for demographic, educational, industrial, and earning variables.
    Keywords: Occupational segregation; well-being; metropolitan areas; gender; race
    JEL: R23 J15 J16 J71 D63
    Date: 2015–10

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