nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2016‒02‒23
seven papers chosen by
Maximo Rossi
Universidad de la República

  1. Top Incomes and Human Well-Being Around the World By Richard V. Burkhauser; Jan-Emmanuel De Neve; Nattavudh Powdthavee
  2. The contribution of the minimum wage to US wage inequality over three decades: a reassessment By David H. Autor; Alan Manning; Christopher L. Smith
  3. Earnings Premiums and Penalties for Self-Employment and Informal Employees around the World By Gindling, T. H.; Mossaad, Nadwa; Newhouse, David
  4. Online networks and subjective well-being By Fabio Sabatini; Francesco Sarracino
  5. A comparison of intergenerational mobility curves in Germany, Norway, Sweden and the U.S. By Bratberg, Espen; Davis, Jonathan; Mazumder, Bhashkar; Nybom, Martin; Schnitzlein, Daniel; Vaage, Kjell
  6. Are Men Given Priority for Top Jobs? Investigating the Glass Ceiling in the Italian Academia By Maria De Paola; Michela Ponzo; Vincenzo Scoppa
  7. Reservation Wages and the Wage Flexibility Puzzle By Felix Koenig; Alan Manning; Barbara Petrongolo

  1. 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: 2016–01
  2. By: David H. Autor; Alan Manning; Christopher L. Smith
    Abstract: We reassess the effect of minimum wages on US earnings inequality using additional decades of data and an IV strategy that addresses potential biases in prior work. We find that the minimum wage reduces inequality in the lower tail of the wage distribution, though by substantially less than previous estimates, suggesting that rising lower-tail inequality after 1980 primarily reflects underlying wage structure changes rather than an unmasking of latent inequality. These wage effects extend to percentiles where the minimum is nominally non‐binding, implying spillovers. We are unable to reject that these spillovers are due to reporting artifacts, however.
    JEL: N0
    Date: 2015
  3. By: Gindling, T. H. (University of Maryland, Baltimore County); Mossaad, Nadwa (University of Maryland, Baltimore County); Newhouse, David (World Bank)
    Abstract: This paper examines the earnings premiums associated with different types of employment in 73 countries. Workers are divided into four categories: Non-professional own-account workers, employers and own-account professionals, informal wage employees, and formal wage employees. Approximately half of the workers in low income countries are nonprofessional own-account workers and the majority of the rest are informal employees. Fewer than 10% are formal employees, and only 2% of workers in low income countries are employers or own-account professionals. As per capita GDP increases, there are large net shifts from non-professional own account work into formal wage employment. Across all regions and income levels, non-professional own-account workers and informal wage employees face an earnings penalty compared to formal wage employees. But in low income countries, this earnings penalty is small, and non-professional own-account workers earn a positive premium relative to all wage employees. Earnings penalties for non-professional own account workers tend to increase with GDP and are largest for female workers in high income countries. Men earn greater premiums than women for being employers or own-account professionals. These results are consistent with compensating wage differentials and firm quasi-rents playing important roles in explaining cross-country variation in earnings penalties, and raise questions about the extent to which the unskilled self-employed are rationed out of formal wage work in low-income countries.
    Keywords: self-employment, informal sector, earnings differentials, development
    JEL: J31
    Date: 2016–02
  4. By: Fabio Sabatini (University of Rome - La Sapienza); Francesco Sarracino
    Abstract: Does Facebook make people lonely and unhappy? Empirical studies have produced conflicting results about the effect of social network- ing sites (SNS) use on individual welfare. We use a representative sample of the Italian population to investigate how actual and virtual networks of social relationships influence subjective well-being (SWB). We find a significantly negative correlation between online networking and self-reported happiness. We address endogeneity in online net- working by exploiting technological characteristics of the pre-existing voice telecommunication infrastructures that exogenously determined the availability of broadband for high-speed Internet. We try to further disentangle the direct effect of SNS use on well-being from the indirect effect possibly caused by the impact of SNS's on trust and sociability in a SEM analysis. We find that online networking plays a positive role in SWB through its impact on physical interactions. On the other hand, SNS use is associated with lower social trust, which is in turn positively correlated with SWB. The overall effect of network- ing on individual welfare is significantly negative.
    Keywords: social participation; online networks; Facebook; social trust; social capital; subjective well-being; hate speech; broadband; digital divide
    JEL: C36 D85 O33 Z13
    Date: 2014–06
  5. By: Bratberg, Espen (Department of Economics, University of Bergen); Davis, Jonathan (Harris School of Public Policy Studies, University of Chicago); Mazumder, Bhashkar (Federal Reserve Bank of Chicago and University of Bergen); Nybom, Martin (SOFI, Stockholm University); Schnitzlein, Daniel (Leibniz University Hannover and DIW Berlin); Vaage, Kjell (Department of Economics, University of Bergen)
    Abstract: We use two non-parametric measures to characterize intergenerational mobility (IGM) throughout the income distribution: Rank Mobility and Income Share Mobility. We examine differences in these IGM curves between Germany, Norway, Sweden and the United States using comparable samples. Although we find that these curves are approximately linear through most of the income distribution, non-linearities are important in describing cross-country differences. The linear representations of these curves lead to different conclusions regarding cross-country differences depending on the measure. Using ranks, we find that the U.S. is substantially less intergenerationally mobile than the three European countries which have fairly similar degrees of rank mobility. Despite the substantial heterogeneity in intergenerational rank mobility within the U.S., we show that the most mobile region of the U.S. is still less mobile than the least mobile regions of Norway and Sweden. When we use a linear estimator of Income Share Mobility we find that the four countries have very similar rates of IGM. However, there are some notable cross-country differences at the bottom and the top of the income distribution for both types of mobility. For example, the U.S. tends to experience lower upward mobility at the very bottom of the income distribution according to both measures. We conclude that researchers should be careful in drawing conclusions regarding cross-country differences in intergenerational mobility given that the results may be sensitive to the concept being used and to non-linearities.
    Keywords: rank mobility; income share mobility; cross-country differences
    JEL: I30 J62
    Date: 2015–04–15
  6. By: Maria De Paola (Università della Calabria and IZA); Michela Ponzo (Università di Napoli and CSEF); Vincenzo Scoppa (Università della Calabria and IZA)
    Abstract: We aim to investigate if men receive preferential treatment in promotions using the Italian system for the access to associate and full professor positions that is organized in two stages: first, candidates participate in a national wide competition to obtain the National Scientific Qualification (NSQ), then successful candidates compete to obtain a position in University Departments opening a vacancy. We investigate the probability of success in the two stages in relation to the candidate’s gender, controlling for several measures of productivity and a number of individual, field and university characteristics. Whereas no gender differences emerge in the probability of obtaining the NSQ, females have a lower probability of promotion at the Department level. Gender gaps tend to be larger when the number of available positions shrink, consistent with a sort of social norm establishing that men are given priority over women when the number of positions is limited.
    Keywords: Gender Discrimination; Glass Ceiling; Academic Promotions; Natural Experiment.
    JEL: J71 M51 J45 J16 D72 D78
    Date: 2016–02–10
  7. By: Felix Koenig; Alan Manning; Barbara Petrongolo
    Abstract: Wages are only mildly cyclical, implying that shocks to labour demand have a larger short-run impact on unemployment rather than wages, at odds with the quantitative predictions of the canonical search model - even if wages are only occasionally renegotiated. We argue that one source of the wage flexibility puzzles is plausibly the model for the determination of reservation wages, and consider an alternative reservation wage model based on reference dependence in job search. This extension generates less cyclical reservation wages than the canonical model, as long as reference points are less cyclical than forward-looking components of reservation wages such as the arrival rate of job offers. We provide evidence that reservation wages significantly respond to backward-looking reference points, as proxied by rents earned in previous jobs. In a model calibration we show that backward-looking reference dependence markedly reduces the predicted cyclicality of both wages and reservation wages and can reconcile theoretical predictions of the canonical model with the observed cyclicality of wages and reservation wages
    Keywords: job search, reservation wages, wage cyclicality, reference dependence
    JEL: J63 J64 E24
    Date: 2016–02

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