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on Unemployment, Inequality and Poverty |
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Issue of 2016‒02‒12
eight papers chosen by |
| By: | Cunningham,Wendy; Parra Torrado,Mónica; Sarzosa,Miguel Alonso |
| Abstract: | Evidence from developed country data suggests that cognitive and non-cognitive skills contribute to improved labor market outcomes. This paper tests this hypothesis in a developing country by using an individual-level data set from Peru that incorporates modules to measure cognitive and non-cognitive skills. The paper estimates a structural latent model with unobserved heterogeneity to capture full ability rather than just measured skill. It also applies standard ordinary least squares techniques for comparison. The analysis confirms that cognitive and non-cognitive skills are positively correlated with a range of labor market outcomes in Peru. In particular, cognitive skills positively correlate with wages and the probability of being a wage worker, white-collar, and formal worker, with verbal fluency and numeric ability playing particularly strong roles. The results are robust to methodology. The patterns are less uniform for non-cognitive skills. For instance, perseverance of effort (grit) emerges strongly for most outcomes regardless of methodology. However, plasticity?an aggregation of openness to experience and emotional stability?is only correlated with employment, and only when using the structural latent model. The ordinary least squares method also finds that the disaggregated non-cognitive skills of kindness, cooperation, emotional stability, and openness to experience emerge significantly, mostly for the wage estimates. The different results derived from the ordinary least squares and the structural model with latent skills suggest strong measurement bias in most non-cognitive skills measurement. These findings, although only correlational because of the use of a single cross-section, suggest that recent efforts by the Peruvian government to incorporate non-cognitive skill development into the school curriculum are justified. |
| Keywords: | Education For All,Effective Schools and Teachers,Access&Equity in Basic Education,Educational Sciences,Primary Education |
| Date: | 2016–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7550&r=ltv |
| By: | Gabaix, Xavier; Lasry, Jean-Michel; Lions, Pierre-Louis; Moll, Benjamin |
| Abstract: | The past forty years have seen a rapid rise in top income inequality in the United States. While there is a large number of existing theories of the Pareto tail of the long-run income distributions, almost none of these address the fast rise in top inequality observed in the data. We show that standard theories, which build on a random growth mechanism, generate transition dynamics that are an order of magnitude too slow relative to those observed in the data. We then suggest two parsimonious deviations from the canonical model that can explain such changes: "scale dependence" that may arise from changes in skill prices, and "type dependence," i.e. the presence of some "high-growth types." These deviations are consistent with theories in which the increase in top income inequality is driven by the rise of "superstar" entrepreneurs or managers. |
| Keywords: | inequality; operator methods; Pareto distribution; speed of transition; superstars |
| JEL: | D31 E24 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11028&r=ltv |
| By: | Marion Goussé (Département d'Economique, Université Laval - Universite Laval (Quebec)); Nicolas Jacquemet (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Jean-Marc Robin (ECON - Département d'économie - Sciences Po) |
| Abstract: | We extend the search-matching model of the marriage market of Shimer and Smith (2000) to allow for labor supply, home production, match-specific shocks and endogenous divorce. We study nonparametric identification using panel data on marital status, education, family values, wages, and market and non market hours, and we develop a semiparametric estimator. We estimate how much sorting results from time use specialization or homophilic preferences. We estimate how equilibrium marriage formation affects the wage elasticities of market and non market hours. We estimate individuals’ willingness to pay for marriage and quantify the redistributive effect of intra- household resource sharing |
| Keywords: | structural estimation, collective labor supply,Search-matching, sorting, assortative matching |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-01261040&r=ltv |
| By: | Jesus Crespo Cuaresma (Department of Economics, Vienna University of Economics and Business); Jozef Kubala (University of Economics in Bratislava); Kristina Petrikova (University of Economics in Bratislava) |
| Abstract: | The standard Keynesian view predicts that equalization of the income distribution leads to an increase in aggregate consumption. We revisit the analysis carried out by the seminal empirical contributions which test such a hypothesis using modern econometric methods and the most comprehensive dataset existing on income distribution measures. Our results indicate that there is no substantive empirical evidence of an effect of income inequality on aggregate consumption. |
| Keywords: | Inequality, aggregate consumption, average propensity to consume |
| JEL: | E22 D31 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp210&r=ltv |
| By: | Jesus Crespo Cuaresma (Department of Economics, Vienna University of Economics and Business); Stephan Klasen (University of Göttingen); Konstantin M. Wacker (University of Mainz) |
| Abstract: | Martin Ravallion ("Why Don't We See Poverty Convergence?" American Economic Review, 102(1): 504-23; 2012) presents evidence against the existence of convergence in global poverty rates despite convergence in household mean income levels and the close linkage between income growth and poverty reduction. We show that this finding is driven by a specification that demands more than simple convergence in poverty headcount rates and assumes a growth elasticity of poverty reduction, which is well-known to accelerate with low initial poverty levels. If we motivate the poverty convergence equation using an arguably superior growth semi-elasticity of poverty reduction, we find highly significant and robust evidence of convergence in absolute poverty headcount ratios and poverty gaps. Relatedly, we show that the results in Ravallion (2012) are driven by the special income growth and poverty dynamics in Central and Eastern European transition economies that started with low initial poverty rates and thus observed a high elasticity of poverty reduction. Once we control for their abnormal poverty dynamics, we again find robust evidence of global convergence in poverty, even in the original specification by Ravallion (2012). |
| Keywords: | poverty convergence, economic growth, poverty trap, transition economies |
| JEL: | I32 D31 P36 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp213&r=ltv |
| By: | Joao Alfredo Galindo da Fonseca (University of British Columbia, Vancouver School of Economics); Giovanni Gallipoli (University of British Columbia); Yaniv Yedid-Levi (University of British Columbia, Vancouver School of Economics) |
| Abstract: | We revisit the empirical relationship between wages and labor market conditions. Following work histories in the NLSY79 we document that the relationship between wages and unemployment rate differs across occupations. The results hold after controlling for unobserved match quality. This suggests that evidence about history-dependence of wages obtained from pooled samples conceals significant differences and may provide an imprecise description of earning dynamics. Similar discrepancies emerge when we group workers by education. Sensitivity of wages to unemployment appears related to whether total remuneration entails performance pay components. |
| Keywords: | wages, unemployment, occupation |
| JEL: | E30 J30 J60 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2016-001&r=ltv |
| By: | Autor, David; Dorn, David; Hanson, Gordon |
| Abstract: | Abstract China’s emergence as a great economic power has induced an epochal shift in patterns of world trade. Simultaneously, it has challenged much of the received empirical wisdom about how labor markets adjust to trade shocks. Alongside the heralded consumer benefits of expanded trade are substantial adjustment costs and distributional consequences. These impacts are most visible in the local labor markets in which the industries exposed to foreign competition are concentrated. Adjustment in local labor markets is remarkably slow, with wages and labor-force participation rates remaining depressed and unemployment rates remaining elevated for at least a full decade after the China trade shock commences. Exposed workers experience greater job churning and reduced lifetime income. At the national level, employment has fallen in U.S. industries more exposed to import competition, as expected, but offsetting employment gains in other industries have yet to materialize. Better understanding when and where trade is costly, and how and why it may be beneficial, are key items on the research agenda for trade and labor economists. |
| Keywords: | China; International Trade; Labor Markets |
| JEL: | F16 H55 J23 J31 J63 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11054&r=ltv |
| By: | Marco Caliendo; Deborah A. Cobb-Clark; Juliane Hennecke; Arne Uhlendorff |
| Abstract: | Internal migration can substantially improve labor market e ciency. Consequently, policy is often targeted towards reducing the barriers workers face in moving to new labor markets. In this paper we explicitly model internal migration as the result of a job search process and demonstrate that assumptions about the timing of job search have fundamental implications for the pattern of internal migration that results. Unlike standard search models, we assume that job seekers do not know the true job o er arrival rate, but instead form subjective beliefs { related to their locus of control { about the impact of their search e ort on the probability of receiving a job o er. Those with an internal locus of control are predicted to search more intensively (i.e. across larger geographic areas) because they expect higher returns to their search e ort. However, they are predicted to migrate more frequently only if job search occurs before migration. We then test the empirical implications of this model. We nd that individuals with an internal locus of control not only express a greater willingness to move, but also undertake internal migration more frequently. |
| Keywords: | Locus of Control, Internal Migration, Mobility, Job Search |
| JEL: | J61 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp818&r=ltv |