nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2016‒02‒17
nine papers chosen by
Maximo Rossi
Universidad de la República

  1. Top Incomes and Human Well-being Around the World By Burkhauser, Richard V.; De Neve, Jan-Emmanuel; Powdthavee, Nattavudh
  2. Not Working at Work: Loafing, Unemployment and Labor Productivity By Burda, Michael Christopher; Genadek, Katie; Hamermesh, Daniel
  3. Personality Traits and the Evaluation of Start-Up Subsidies By Caliendo, Marco; Künn, Steffen; Weißenberger, Martin
  4. Paradox Lost? By Easterlin, Richard A.
  5. Job Search, Locus of Control, and Internal Migration By Caliendo, Marco; Cobb-Clark, Deborah A.; Hennecke, Juliane; Uhlendorff, Arne
  6. Genuine Saving and Conspicuous Consumption By Aronsson, Thomas; Johansson-Stenman, Olof
  7. The Gender Wage Gap: Extent, Trends, and Explanations By Blau, Francine D.; Kahn, Lawrence M.
  8. Micro and Macro Determinants of Health: Older Immigrants in Europe By Constant, Amelie F.; García-Muñoz, Teresa; Neuman, Shoshana; Neuman, Tzahi
  9. Redistribution through Charity and Optimal Taxation when People are Concerned with Social Status By Aronsson, Thomas; Johansson-Stenman, Olof; Wendner, Ronald

  1. By: Burkhauser, Richard V. (Cornell University); De Neve, Jan-Emmanuel (University of Oxford); Powdthavee, Nattavudh (London School of Economics)
    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: 2016–01
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp9677&r=ltv
  2. By: Burda, Michael Christopher; Genadek, Katie; Hamermesh, Daniel
    Abstract: Using the American Time Use Survey (ATUS) 2003-12, we estimate time spent by workers in non-work while on the job. Non-work time is substantial and co-varies positively with the local unemployment rate. While the fraction of workers who spend some time in non-work varies pro-cyclically, the average time spent by workers in non-work conditional on any positive non-work varies countercyclically. These results are consistent with a model in which heterogeneous workers are paid efficiency wages to refrain from loafing on the job. That model also predicts relationships of the incidence and conditional amounts of non-work with wage rates and unemployment benefits that are observed in links of the ATUS to data characterizing states unemployment insurance schemes.
    JEL: J22 E24 J30
    Date: 2015
    URL: http://d.repec.org/n?u=RePEc:zbw:vfsc15:112905&r=ltv
  3. By: Caliendo, Marco (University of Potsdam); Künn, Steffen (Maastricht University); Weißenberger, Martin (University of Potsdam)
    Abstract: Many countries support business start-ups to spur economic growth and reduce unemployment with different programmes. Evaluation studies of such programmes commonly rely on the conditional independence assumption (CIA), allowing a causal interpretation of the results only if all relevant variables affecting participation and success are accounted for. While the entrepreneurship literature has emphasised the important role of personality traits as predictors for start-up decisions and business success, these variables were neglected in evaluation studies so far due to data limitations. In this paper, we evaluate a new start-up subsidy for unemployed individuals in Germany using propensity score matching under the CIA. Having access to rich administrative-survey data allows us to incorporate usually unobserved personality measures in the evaluation and investigate their impact on the estimated effects. We find strong positive effects on labour market reintegration and earned income for the new programme. Most importantly, results including and excluding individuals' personalities do not differ significantly, implying that concerns about potential overestimation of programme effects in absence of personality measures might be less justified if the set of other control variables is rich enough.
    Keywords: start-up subsidies, evaluation, self-employment, personality, treatment effects
    JEL: C14 L26 H43 J68
    Date: 2016–01
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp9628&r=ltv
  4. By: Easterlin, Richard A. (University of Southern California)
    Abstract: Or Paradox Regained? The answer is Paradox Regained. New data confirm that for countries worldwide long-term trends in happiness and real GDP per capita are not significantly positively related. The principal reason that Paradox critics reach a different conclusion, aside from problems of data comparability, is that they do not focus on identifying long-term trends in happiness. For some countries their estimated growth rates of happiness and GDP are not trend rates, but those observed in cyclical expansion or contraction. Mixing these short-term with long-term growth rates shifts a happiness-GDP regression from a horizontal to positive slope.
    Keywords: Easterlin Paradox, economic growth, income, happiness, life satisfaction, subjective well-being, transition countries, less developed nations, developed countries, long-term, short-term, trends, fluctuations
    JEL: I31 D60 O10 O5
    Date: 2016–01
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp9676&r=ltv
  5. By: Caliendo, Marco (University of Potsdam); Cobb-Clark, Deborah A. (University of Sydney); Hennecke, Juliane (Free University of Berlin); Uhlendorff, Arne (CREST)
    Abstract: Internal migration can substantially improve labor market efficiency. 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 offer arrival rate, but instead form subjective beliefs - related to their locus of control - about the impact of their search effort on the probability of receiving a job offer. 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 effort. 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 find 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: 2015–12
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp9600&r=ltv
  6. By: Aronsson, Thomas (Department of Economics, Umeå School of Business and Economics, Umeå University,); Johansson-Stenman, Olof (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Much evidence suggests that people are concerned with their relative consumption, i.e., their own consumption relative to that of others. Yet, conspicuous consumption and the corresponding social costs have so far been ignored in savings-based indicators of sustainable development. The present paper examines the implications of relative consumption concerns for measures of sustainable development by deriving analogues to genuine saving when people are concerned with their relative consumption. Unless the positional externalities have been fully internalized, an indicator of such externalities must be added to genuine saving to arrive at the proper measure of intertemporal welfare change. A numerical example based on U.S. and Swedish data suggests that conventional measures of genuine saving (which do not reflect conspicuous consumption) are likely to largely overestimate this welfare change. We also show how relative consumption concerns affect the way public investment ought to be reflected in genuine saving.
    Keywords: Welfare change; investment; saving; relative consumption
    JEL: D03 D60 D62 E21 H21 I31 Q56
    Date: 2016–01
    URL: http://d.repec.org/n?u=RePEc:hhs:gunwpe:0641&r=ltv
  7. By: Blau, Francine D. (Cornell University); Kahn, Lawrence M. (Cornell University)
    Abstract: Using PSID microdata over the 1980-2010, we provide new empirical evidence on the extent of and trends in the gender wage gap, which declined considerably over this period. By 2010, conventional human capital variables taken together explained little of the gender wage gap, while gender differences in occupation and industry continued to be important. Moreover, the gender pay gap declined much more slowly at the top of the wage distribution that at the middle or the bottom and by 2010 was noticeably higher at the top. We then survey the literature to identify what has been learned about the explanations for the gap. We conclude that many of the traditional explanations continue to have salience. Although human capital factors are now relatively unimportant in the aggregate, women's work force interruptions and shorter hours remain significant in high skilled occupations, possibly due to compensating differentials. Gender differences in occupations and industries, as well as differences in gender roles and the gender division of labor remain important, and research based on experimental evidence strongly suggests that discrimination cannot be discounted. Psychological attributes or noncognitive skills comprise one of the newer explanations for gender differences in outcomes. Our effort to assess the quantitative evidence on the importance of these factors suggests that they account for a small to moderate portion of the gender pay gap, considerably smaller than say occupation and industry effects, though they appear to modestly contribute to these differences.
    Keywords: gender, gender pay gap, wage differentials, discrimination, human capital investment, occupations, occupational segregation
    JEL: J16 J24 J31 J71
    Date: 2016–01
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp9656&r=ltv
  8. By: Constant, Amelie F. (Temple University); García-Muñoz, Teresa (Universidad de Granada); Neuman, Shoshana (Bar-Ilan University); Neuman, Tzahi (Hebrew University, Jerusalem)
    Abstract: We study the health determinants of immigrant men and women over the age of fifty, in Europe, and compare them to natives. We utilize the unique Survey of Health Aging and Retirement (SHARE) and augmented it with macroeconomic information on the 22 home countries and 16 host countries. Using Multilevel Analysis we can best capture the within and between countries variation and produce reliable results. We find that during the first decade after arrival, immigrants report higher levels of subjective health compared to natives and to previous cohorts of immigrants. As time since migration passes by, reported subjective health decreases; immigrants' health becomes the same as that of comparable natives or it even decreases. The level of economic development of both the origin and the host country positively affect the individual's health, but the effect of the host country is much more pronounced. It appears that positive and negative deviations (of the host from the origin country) have different impacts on individual health: an increase in a positive deviation (the country of origin is more developed compared to the host country – a 'loss' for the immigrating individual) leads to a decrease in the immigrant's subjective health, while an increase in the absolute negative deviation (a 'gain' for the immigrating person) leads to an increase in the immigrant's subjective health. These differential effects can be explained as some variant of the Loss-Aversion Theory.
    Keywords: self-assessed health status, immigration, Europe, country of origin, older population, multilevel regression
    JEL: C22 J11 J12 J14 O12 O15 O52
    Date: 2014–12
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp8754&r=ltv
  9. By: Aronsson, Thomas (Department of Economics, Umeå School of Business and Economics, Umeå University,); Johansson-Stenman, Olof (Department of Economics, School of Business, Economics and Law, Göteborg University); Wendner, Ronald (Department of Economics, University of Graz, Austria)
    Abstract: This paper deals with tax policy responses to charitable giving based on a model of optimal redistributive income taxation. The major contribution is the simultaneous treatment of (i) warm-glow and stigma effects of charitable donations; (ii) that the warm glow of giving and stigma of receiving charity may to some extent depend on relative comparisons; and (iii) that people are also concerned with their relative consumption more generally. Whether charity should be taxed or supported turns out to largely depend on the relative strengths of the warm glow of giving and the stigma of receiving charity, respectively, and on the positional externalities caused by charitable donations. In addition, imposing stigma on the mimicker (via a relaxation of the self-selection constraint) strengthens the case for subsidizing charity. We also consider a case where the government is unable to target the charitable giving through a direct tax instrument, and examine how the optimal marginal income tax structure is adjusted in response to charitable giving.
    Keywords: Conspicuous consumption; conspicuous charitable giving; optimal income taxation; warm glow; stigma
    JEL: D03 D62 H21 H23
    Date: 2016–01–12
    URL: http://d.repec.org/n?u=RePEc:hhs:gunwpe:0642&r=ltv

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