nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2015‒11‒07
ten papers chosen by
Maximo Rossi
Universidad de la República

  1. How Does Declining Unionism Affect the American Middle Class and Intergenerational Mobility? By Richard Freeman; Eunice Han; David Madland; Brendan V. Duke
  2. Appraising Cross-National Income Inequality Databases: An Introduction By Ferreira, Francisco H. G.; Lustig, Nora; Teles, Daniel
  3. Racial Discrimination in Local Public Services: A Field Experiment in the US By Corrado Giulietti; Mirco Tonin; Michael Vlassopoulos
  4. The Relationship between Health and Schooling: What’s New? By Michael Grossman
  5. A Global Count of the Extreme Poor in 2012: Data Issues, Methodology and Initial Results By Ferreira, Francisco H. G.; Chen, Shaohua; Dabalen, Andrew; Dikhanov, Yuri; Hamadeh, Nada; Jolliffe, Dean; Narayan, Ambar; Prydz, Espen Beer; Revenga, Ana; Sangraula, Prem; Serajuddin, Umar; Yoshida, Nobuo
  6. Early Maternal Employment and Non-cognitive Outcomes in Early Childhood and Adolescence: Evidence from British Birth Cohort Data By Andrew E. Clark; Warn N. Lekfuangfu; Nattavudh Powdthavee; George Ward
  7. Long-term Direct and Spillover Effects of Job Training: Experimental Evidence from Colombia By Adriana Kugler; Maurice Kugler; Juan Saavedra; Luis Omar Herrera Prada
  8. Does Eliminating the Earnings Test Increase the Incidence of Low Income Among Older Women? By Theodore Figinski; David Neumark
  9. Discrimination and Worker Evaluation By Costas Cavounidis; Kevin Lang
  10. Is It Harder for Older Workers to Find Jobs? New and Improved Evidence from a Field Experiment By David Neumark; Ian Burn; Patrick Button

  1. By: Richard Freeman; Eunice Han; David Madland; Brendan V. Duke
    Abstract: This paper examines unionism’s relationship to the size of the middle class and its relationship to intergenerational mobility. We use the PSID 1985 and 2011 files to examine the change in the share of workers in a middle-income group (defined by persons having incomes within 50% of the median) and use a shift-share decomposition to explore how the decline of unionism contributes to the shrinking middle class. We also use the files to investigate the correlation between parents’ union status and the incomes of their children. Additionally, we use federal income tax data to examine the geographical correlation between union density and intergenerational mobility. We find: 1) union workers are disproportionately in the middle-income group or above, and some reach middle-income status due to the union wage premium; 2) the offspring of union parents have higher incomes than the offspring of otherwise comparable non-union parents, especially when the parents are low-skilled; 3) offspring from communities with higher union density have higher average incomes relative to their parents compared to offspring from communities with lower union density. These findings show a strong, though not necessarily causal, link between unions, the middle class, and intergenerational mobility.
    JEL: J31 J51 J62
    Date: 2015–10
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:21638&r=ltv
  2. By: Ferreira, Francisco H. G. (World Bank); Lustig, Nora (Tulane University); Teles, Daniel (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 entirely 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
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp9468&r=ltv
  3. By: Corrado Giulietti (Institute for the Study of Labor (IZA)); Mirco Tonin (Free University of Bolzano‐Bozen, Faculty of Economics and Management); Michael Vlassopoulos (University of Southampton)
    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
    JEL: D73 H41 J15
    Date: 2015–10
    URL: http://d.repec.org/n?u=RePEc:bzn:wpaper:bemps33&r=ltv
  4. By: Michael Grossman
    Abstract: Many studies suggest that years of formal schooling completed is the most important correlate of good health. There is much less consensus as to whether this correlation reflects causality from more schooling to better health. The relationship may be traced in part to reverse causality and may also reflect “omitted third variables” that cause health and schooling to vary in the same direction. The past five years (2010-2014) have witnessed the development of a large literature focusing on the issue just raised. I deal with that literature and what can be learned from it in this paper. I conclude that there is enough conflicting evidence in the studies that I have reviewed to warrant more research on the question of whether more schooling does in fact cause better health outcomes.
    JEL: I10 I12
    Date: 2015–10
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:21609&r=ltv
  5. By: Ferreira, Francisco H. G. (World Bank); Chen, Shaohua (World Bank); Dabalen, Andrew (World Bank); Dikhanov, Yuri (World Bank); Hamadeh, Nada (World Bank); Jolliffe, Dean (World Bank); Narayan, Ambar (World Bank); Prydz, Espen Beer (World Bank); Revenga, Ana (World Bank); Sangraula, Prem (World Bank); Serajuddin, Umar (World Bank); Yoshida, Nobuo (World Bank)
    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 definition and 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 14.1 percent in the new method for 2011. In 2012, the new reference year for the global count, we find 12.7 percent of the world's population, or 897 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: global poverty, poverty measurement, purchasing power parity
    JEL: I3 I32 E31 F01
    Date: 2015–10
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp9442&r=ltv
  6. By: Andrew E. Clark; Warn N. Lekfuangfu; Nattavudh Powdthavee; George Ward
    Abstract: We analyse the relationship between early maternal employment and child emotional and behavioural outcomes in early childhood and adolescence. Using rich data from a cohort of children born in the UK in the early 1990s, we find little evidence of a strong statistical relationship between early maternal employment and any of the emotional outcomes. However, there is some evidence that children whose mother is in full-time employment at the 18th month have worse behavioural outcomes at ages 4, 7, and 12. We suggest that these largely insignificant results may in part be explained by mothers who return to full-time work earlier being able to compensate their children: we highlight the role of fathers' time investment and alternative childcare arrangements in this respect.
    Keywords: Child outcomes, maternal employment, well-being, conduct, ALSPAC
    JEL: D1 I3 J6
    Date: 2015–10
    URL: http://d.repec.org/n?u=RePEc:cep:cepdps:dp1380&r=ltv
  7. By: Adriana Kugler; Maurice Kugler; Juan Saavedra; Luis Omar Herrera Prada
    Abstract: We use administrative data to examine medium and long-term formal education and labor market impacts among participants and family members of a randomized vocational training program for disadvantaged youth in Colombia. In the Colombian program, vocational training and formal education are complementary investments: relative to non-participants, randomly selected participants are more likely to complete secondary school and to attend and persist in tertiary education eight years after random assignment. Complementarity is strongest among applicants with high baseline educational attainment. Training also has educational spillover effects on participants’ family members, who are more likely to enroll in tertiary education. Between three and eight years after randomization, participants are more likely to enter and remain in formal employment, and have formal sector earnings that are at least 11 percent higher than those of non-participants.
    JEL: J24 J38 J6 O17 O54
    Date: 2015–10
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:21607&r=ltv
  8. By: Theodore Figinski; David Neumark
    Abstract: Reductions in the implicit taxation of Social Security benefits from reducing or eliminating the Retirement Earnings Test (RET) are an appealing – and in many cases successful – means of encouraging labor supply of older individuals receiving benefits. The downside, however, is that the same policy reforms can encourage earlier claiming of Social Security benefits, which permanently lowers benefits paid in the future. Depending on the magnitude of the effects on earnings and how households or individuals adjust their consumption and savings decisions, the net effect can be lower incomes at much older ages well beyond when people have retired. We explore the consequences of the 2000 reforms eliminating the RET from the Full Retirement Age to age 69 for the longer-run evolution of income, focusing in particular on the incidence of low income among older women, who are more likely to have become dependent mainly on income from their Social Security benefits. We find that the elimination of the RET increased the likelihood of having low incomes among women in their mid-70s and older – ages at which the lower benefits, in the long run, from claiming earlier outweigh possibly higher income in the period when women or their husbands increased their labor supply.
    JEL: H2 J14 J22
    Date: 2015–10
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:21601&r=ltv
  9. By: Costas Cavounidis; Kevin Lang
    Abstract: We develop a model of self-sustaining discrimination in wages, coupled with higher unemployment and shorter employment duration among blacks. While white workers are hired and retained indefinitely without monitoring, black workers are monitored and fired if a negative signal is received. The fired workers, who return to the pool of job-seekers, lower the average productivity of black job-seekers, perpetuating the cycle of lower wages and discriminatory monitoring. Under suitable parameter values the model has two steady states, one corresponding to each population group. Discrimination can persist even if the productivity of blacks exceeds that of whites.
    JEL: J71
    Date: 2015–10
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:21612&r=ltv
  10. By: David Neumark; Ian Burn; Patrick Button
    Abstract: We design and implement a large-scale field experiment – a resume correspondence study – to address a number of potential limitations of existing field experiments testing for age discrimination, which may bias their results. One limitation that may bias these studies towards finding discrimination is the practice of giving older and younger applicants similar experience in the job to which they are applying, to make them “otherwise comparable.” The second limitation arises because greater unobserved differences in human capital investment of older applicants may bias existing field experiments against finding age discrimination. We also study ages closer to retirement than in past studies, and use a richer set of job profiles for older workers to test for differences associated with transitions to less demanding jobs (“bridge jobs”) at older ages. Based on evidence from over 40,000 job applications, we find robust evidence of age discrimination in hiring against older women. But we find that there is considerably less evidence of age discrimination against men after correcting for the potential biases this study addresses.
    JEL: J14 J26 J7 K31
    Date: 2015–10
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:21669&r=ltv

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