nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2015‒12‒01
ten papers chosen by
Maximo Rossi
Universidad de la República

  1. Segregation and social welfare By Coral del Rio; Olga Alonso-Villar
  2. Income inequality and social well-being By Nanak Kakwani; Hyun H. Son
  3. Policy Levers to Increase Jobs and Increase Income from Work after the Great Recession By Neumark, David
  4. Status Concern and Relative Deprivation in China: Measures, Empirical Evidence, and Economic and Policy Implications By Chen, Xi
  5. Poverty decomposition by regression By Tomoki Fujii
  6. The Rise of the Middle Class, Brazil (1839-1950) By Mar’a G—mez-Le—n
  7. The Effect of Wealth on Individual and Household Labor Supply: Evidence from Swedish Lotteries By Cesarini, David; Lindqvist, Erik; Notowidigdo, Matthew J.; Östling, Robert
  8. Top Incomes and Human Well-Being Around the World By Richard V. Burkhauser; Jan-Emmanuel De Neve; Nattavudh Powdthavee
  9. Immigrants and Gender Roles: Assimilation vs. Culture By Blau, Francine D.
  10. Big Data and Big Cities: The Promises and Limitations of Improved Measures of Urban Life By Edward L. Glaeser; Scott Duke Kominers; Michael Luca; Nikhil Naik

  1. By: Coral del Rio (Universidade de Vigo and EQUALITAS, Spain); Olga Alonso-Villar (Universidade de Vigo and EQUALITAS, Spain)
    Abstract: This paper aims at quantifying the welfare loss that a society can experience due to the segregation of the demographic groups that comprise it. In aggregating the well-being losses (gains) of the groups derived for being concentrated in low-status (high-status) organizational units, this paper embraces the distributive approach adopted in the literature on economic deprivation and poverty. In addition to developing several measures, this paper explores the welfare losses that the United States has experienced over the last decades due to occupational segregation by both gender and race/ethnicity. The analysis is undertaken at both a national and a regional level since occupational segregation along these lines is far from been a homogenous phenomenon across the country.
    Date: 2015–10
  2. By: Nanak Kakwani (University of New South Wales, Sydney, Australia); Hyun H. Son (Asian Development Bank, Manila, Philippines)
    Abstract: Deepening inequality has become the subject of intense debates, particularly on growth, poverty, and development. This paper shows that inequality has a bearing on well-being, which comprises a set of capabilities indicating the extent of freedom individuals have in leading their lives. It examines inequality in different dimensions of well-being across Brazilian municipalities and measures the impact of income inequality on well-being. Findings reveal that Brazil has improved outcomes related to material well-being, health, education, living conditions, and labor market activities, and has reduced disparities in these areas. The study finds that income inequality hampers growth in well-being, except for indicators closely associated with education and human capital development. Findings suggest that while the impacts of income inequality differ across various dimensions of well-being, reducing inequality will generally help improve the well-being of a society
    Date: 2015–10
  3. By: Neumark, David (University of California, Irvine)
    Abstract: The depth of the Great Recession, the slow recovery of job creation, the downward trend in labor force participation, high long-term unemployment, stagnant or declining wages for low-to-medium skill jobs owing to adverse labor demand shifts, and a greater rebound in low-wage than mid- or higher-wage jobs, raised concerns that the normal business cycle dynamics of recovery from the recession will be insufficient to offset the diminished labor market prospects of many workers. These concerns have spurred serious consideration of policies to encourage job creation and higher income from work beyond the more immediate countercyclical policies that were adopted in response to Great Recession. Among the policies generating continuing or renewed interest are hiring credits, higher (sometimes much higher) minimum wages, and a more substantial Earned Income Tax Credit (EITC) for childless individuals. This paper discusses these policy options, what we know about their likely effects and tradeoffs, and what the unanswered questions are; the focus is on U.S. evidence.
    Keywords: hiring credits, income, jobs, minimum wage
    JEL: J2 J3 J6
    Date: 2015–11
  4. By: Chen, Xi (Yale University)
    Abstract: Status concern and the feelings of relative deprivation affect individual behavior and well-being. Traditional norms and the alarming inequality in China have made relative deprivation more and more intense for the Chinese population. This paper reviews empirical literature on China that attempts to test the relative deprivation hypothesis. We review the origins and pathways of relative deprivation, compare its economic measures in the literature, and summarize their applications. Drawing from solid empirical evidence, we discuss important policy implications on redistribution, official regulations and grassroots sanctions, and relative poverty alleviation.
    Keywords: inequality, status concern, relative deprivation, well-being, China
    JEL: I14 I18 I32 B41
    Date: 2015–11
  5. By: Tomoki Fujii
    Abstract: We develop a poverty decomposition method that is based on a consumption regression model. Because this method uses an integral of the partial derivatives of a poverty measure with respect to time, the resulting poverty decomposition satisfies time-reversion consistency and sub-period additivity. Unlike the existing poverty decomposition methods, it allows us to ascribe the observed change in poverty to various covariates of interest collected at a disaggregate level. This method is applied to two datasets from Tanzania to assess, among others, the short- and long-term impacts of infrastructure and market access on poverty.
    Keywords: FGT measure, Watts measure, market access, infrastructure
    Date: 2015
  6. By: Mar’a G—mez-Le—n (Universidad Carlos III de Madrid)
    Abstract: This article investigates the rise of the middle class in Brazil between the mid-nineteenth and mid-twentieth centuries and its connection with inequality. To this purpose BrazilÕs income distribution is explored from two dimensions: inequality and polarisation. A new middle class index (MCI), based on polarisation methods, is used to assess the evolution of the middle class in terms of both income and status. Results suggest that during the nineteenth century low income levels prevented the achievement of high inequality values and the emergence of a middle class. Then in the early twentieth century Brazil experienced a process of economic growth accompanied by increasing inequality in a Kuznetsian sense in which the middle class arose. Yet, despite rapid economic growth during the following decades, the continued increase of inequality, especially between 1930 and 1950, impeded the consolidation of the middle class and the reduction of poverty.
    Keywords: Middle class, inequality, polarisation, Brazil
    JEL: D31 D63 N16 N36 O15
    Date: 2015–11
  7. By: Cesarini, David (New York University); Lindqvist, Erik (Stockholm School of Economics); Notowidigdo, Matthew J. (Northwestern University); Östling, Robert (Institute for Interntional Economic Studies (IIES))
    Abstract: We study the effect of wealth on labor supply using the randomized assignment of monetary prizes in a large sample of Swedish lottery players. We find winning a lottery prize modestly reduces labor earnings, with the reduction being immediate, persistent, and similar by age, education, and sex. A calibrated dynamic model of individual labor supply implies an average lifetime marginal propensity to earn out of unearned income of -0.11, and labor-supply elasticities in the lower range of previously reported estimates. The earnings response is stronger for winners than their spouses, which is inconsistent with unitary household labor supply models.
    Keywords: Labor supply; household labor supply; income effect; marginal propensity to earn; substitution effect; uncompensated elasticity; compensated elasticity; Frisch elasticity; household bargaining; unitary model of the household; self-employment; taxation
    JEL: H20 J12 J22 J24 J26 J62
    Date: 2015–11–23
  8. By: Richard V. Burkhauser; Jan-Emmanuel De Neve; Nattavudh Powdthavee
    Abstract: The share of income held by the top 1 percent in many countries around the world has been rising persistently over the last 30 years. But we continue to know little about how the rising top income shares affect human well-being. This study combines the latest data to examine the relationship between top income share and different dimensions of subjective well-being. We find top income shares to be significantly correlated with lower life evaluation and higher levels of negative emotional well-being, but not positive emotional well-being. The results are robust to household income, individual's socio-economic status, and macroeconomic environment controls.
    Keywords: Top income, life evaluation, well-being, income inequality, World Top Income Database, Gallup World Poll
    JEL: D63 I3
    Date: 2015–11
  9. By: Blau, Francine D. (Cornell University)
    Abstract: This paper examines evidence on the role of assimilation versus source country culture in influencing immigrant women's behavior in the United States – looking both over time with immigrants' residence in the United States and across immigrant generations. It focuses particularly on labor supply but, for the second generation, also examines fertility and education. We find considerable evidence that immigrant source country gender roles influence immigrant and second generation women's behavior in the United States. This conclusion is robust to various efforts to rule out the effect of other unobservables and to distinguish the effect of culture from that of social capital. These results support a growing literature that suggests that culture matters for economic behavior. At the same time, the results suggest considerable evidence of assimilation of immigrants. Immigrant women narrow the labor supply gap with native‐born women with time in the United States, and, while our results suggest an important role for intergenerational transmission, they also indicate considerable convergence of immigrants to native levels of schooling, fertility, and labor supply across generations.
    Keywords: gender, immigration, labor supply, wages, social capital, culture, human capital
    JEL: J13 J16 J22 J24 J61
    Date: 2015–11
  10. By: Edward L. Glaeser (Harvard University); Scott Duke Kominers (Harvard Business School); Michael Luca (Harvard Business School, Negotiation, Organizations & Markets Unit); Nikhil Naik (Massachusetts Institute of Technology Media Lab)
    Abstract: New, "big" data sources allow measurement of city characteristics and outcome variables higher frequencies and finer geographic scales than ever before. However, big data will not solve large urban social science questions on its own. Big data has the most value for the study of cities when it allows measurement of the previously opaque, or when it can be coupled with exogenous shocks to people or place. We describe a number of new urban data sources and illustrate how they can be used to improve the study and function of cities. We first show how Google Street View images can be used to predict income in New York City, suggesting that similar image data can be used to map wealth and poverty in previously unmeasured areas of the developing world. We then discuss how survey techniques can be improved to better measure willingness to pay for urban amenities. Finally, we explain how Internet data is being used to improve the quality of city services.
    Date: 2015–11

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