nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2016‒04‒04
seven papers chosen by
Maximo Rossi
Universidad de la República

  1. Education Policy and Intergenerational Transfers in Equilibrium By Brant Abbott; Giovanni Gallipoli; Costas Meghir; Giovanni L. Violante
  2. Female Labor Supply, Human Capital and Welfare Reform By Richard Blundell; Monica Costa Dias; Costas Meghir; Jonathan Shaw
  3. Are Universities Becoming More Unequal? By Yan Lau; Harvey S. Rosen
  4. Aggregating Elasticities: Intensive and Extensive Margins of Female Labour Supply By Orazio Attanasio; Peter Levell; Hamish Low; Orazio Attanasio
  5. What Has Been Happening to UK Income Inequality Since the Mid-1990s? Answers from Reconciled and Combined Household Survey and Tax Return Data By Richard V. Burkhauser; Nicolas Hérault; Stephen P. Jenkins; Roger Wilkins
  6. Why did poverty decline in India ? a nonparametric decomposition exercise By Balcazar Salazar,Carlos Felipe; Desai,Sonal; Murgai,Rinku; Narayan,Ambar
  7. Online Networks, Social Interaction and Segregation: An Evolutionary Approach By Angelo Antoci; Fabio Sabatini; Francesco Sarracino

  1. By: Brant Abbott (University of British Columbia); Giovanni Gallipoli (University of British Columbia); Costas Meghir (Cowles Foundation, Yale University); Giovanni L. Violante (New York University)
    Abstract: This paper examines the equilibrium effects of alternative financial aid policies intended to promote college participation. We build an overlapping generations life-cycle, heterogeneous-agent, incomplete-markets model with education, labor supply, and consumption/saving decisions. Driven by both altruism and paternalism, parents make inter vivos transfers to their children. Both cognitive and non-cognitive skills determine the non-pecuniary cost of schooling. Labor supply during college, government grants and loans, as well as private loans, complement parental resources as means of funding college education. We find that the current financial aid system in the U.S. improves welfare, and removing it would reduce GDP by 4-5 percentage points in the long-run. Further expansions of government- sponsored loan limits or grants would have no salient aggregate effects because of substantial crowding-out: every additional dollar of government grants crowds out 30 cents of parental transfers plus an equivalent amount through a reduction in student’s labor supply. However, a small group of high-ability children from poor families, especially girls, would greatly benefit from more generous federal aid.
    Keywords: Education, Education policy, Public finance, Financial aid, Inter vivos transfers, Altruism, Overlapping generations, Credit constraints, Labor supply, Equilibrium
    JEL: E24 I22 J23 J24
    Date: 2013–02
    URL: http://d.repec.org/n?u=RePEc:cwl:cwldpp:1887r&r=ltv
  2. By: Richard Blundell (University College London); Monica Costa Dias (Institute for Fiscal Studies and CEF-UP at the University of Porto); Costas Meghir (Cowles Foundation, Yale University); Jonathan Shaw (Institute for Fiscal Studies and University College London)
    Abstract: We estimate a dynamic model of employment, human capital accumulation - including education, and savings for women in the UK, exploiting tax and benefit reforms, and use it to analyze the effects of welfare policy. We find substantial elasticities for labor supply and particularly for lone mothers. Returns to experience, which are important in determining the longer-term effects of policy, increase with education, but experience mainly accumulates when in full-time employment. Tax credits are welfare improving in the UK and increase lone-mother labor supply, but the employment effects do not extend beyond the period of eligibility. Marginal increases in tax credits improve welfare more than equally costly increases in income support or tax cuts.
    Keywords: Female labor supply, Welfare reform, Tax credits, Education choice, Dynamic discrete choice models, Life cycle models
    JEL: H2 H3 J22 J24
    Date: 2013–04
    URL: http://d.repec.org/n?u=RePEc:cwl:cwldpp:1892r2&r=ltv
  3. By: Yan Lau (Reed College); Harvey S. Rosen (Princeton University)
    Abstract: Observers have expressed concern about growing inequality in resources across universities. But are universities really becoming more unequal? We argue that the typical approach of examining endowment growth alone is not sensible. In line with the literature on household inequality, we focus instead on a comprehensive income measure. We find that although there is considerable inequality among institutions, concerns about the inexorable growth of inequality are overblown. Whether one looks at income, endowment wealth, or expenditure, inequality has been high but stable, exhibiting only negligible increases in recent years. Furthermore, there has been little mobility within the higher education sector.
    JEL: I23
    Date: 2015–07
    URL: http://d.repec.org/n?u=RePEc:pri:cepsud:245&r=ltv
  4. By: Orazio Attanasio; Peter Levell; Hamish Low; Orazio Attanasio
    Abstract: There is a renewed interest in the size of labour supply elasticities and the discrepancy between micro and macro estimates. Recent contributions have stressed the distinction between changes in labour supply at the extensive and the intensive margin. In this paper, we stress the importance of individual heterogeneity and aggregation problems. At the intensive margins, simple specifications that seem to fit the data give rise to non linear expressions that do not aggregate in a simple fashion. At the extensive margin, aggregate changes in participation are likely to depend on the cross sectional distribution of state variables when a shock hits and, therefore, are likely to be history dependent. We tackle these aggregation issues directly by specifying a life cycle model to explain female labour supply in the US and estimate its various components. We estimate the parameters of different component of the model. Our results indicate that (i) at the intensive margin, Marshallian and Hicksian elasticities are very heterogeneous and, on average, relatively large; (ii) Frisch elasticities are, as implied by the theory, even larger; (iii) aggregate labour supply elasticities seem to vary over the business cycle, being larger during recessions.
    Keywords: labour supply elasticities, heterogeneity, aggregation, non-separability
    JEL: J22 D91
    Date: 2015–06–23
    URL: http://d.repec.org/n?u=RePEc:cam:camdae:1558&r=ltv
  5. By: Richard V. Burkhauser (Department of Policy Analysis and Management, Cornell University); Nicolas Hérault (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne); Stephen P. Jenkins (Department ofSocial Policy, London School of Economics); Roger Wilkins (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)
    Abstract: Estimates of UK income inequality trends differ substantially according to whether estimates are based on household survey data (used for official statistics) or tax return data (used in the top incomes literature). We reconcile differences in variable definitions and combine survey and tax return data in order to take advantage of the much better coverage of top incomes in the latter, and provide improved estimates of UK inequality trends since the mid-1990s. We show there was a marked increase in income inequality in the early 2000s that survey-based estimates do not reveal, and our conclusions are robust to changes in the definitions of income, income-sharing unit, and summary inequality measure. In addition, our reconciled and combined data provide more comparable estimates of UK-US inequality trends than the top incomes literature to date. Classification-D31, C81
    Keywords: Inequality, income inequality, top income shares, HBAI, SPI, top incomes, tax return data, survey data
    Date: 2016–02
    URL: http://d.repec.org/n?u=RePEc:iae:iaewps:wp2016n5&r=ltv
  6. By: Balcazar Salazar,Carlos Felipe; Desai,Sonal; Murgai,Rinku; Narayan,Ambar
    Abstract: This paper uses panel data to analyze factors that contributed to the rapid decline in poverty in India between 2005 and 2012. The analysis employs a nonparametric decomposition method that measures the relative contributions of different components of household livelihoods to observed changes in poverty. The results show that poverty decline is associated with a significant increase in labor earnings, explained in turn by a steep rise in wages for unskilled labor, and diversification from farm to nonfarm sources of income in rural areas. Transfers, in the form of remittances and social programs, have contributed but are not the primary drivers of poverty decline over this period. The pattern of changes is consistent with processes associated with structural transformation, which add up to a highly pro-poor pattern of income growth over the initial distribution of income and consumption. However, certain social groups (Adivasis and Dalits) are found to be more likely to stay in or fall into poverty and less likely to move out of poverty. And even as poverty has reduced dramatically, the share of vulnerable population has not.
    Keywords: Services&Transfers to Poor,Inequality,Pro-Poor Growth,Rural Poverty Reduction
    Date: 2016–03–15
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:7602&r=ltv
  7. By: Angelo Antoci; Fabio Sabatini; Francesco Sarracino
    Abstract: We have developed an evolutionary game model, where agents can choose between two forms of social participation: interaction via online social networks and interaction by exclusive means of face-to-face encounters. We illustrate the societal dynamics that the model predicts, in light of the empirical evidence provided by previous literature. We then assess their welfare implications. We show that dynamics, starting from a world in which online social interaction is less gratifying than offline encounters, will lead to the extinction of the sub-population of online networks users, thereby making Facebook and alike disappear in the long run. Furthermore, we show that the higher the propensity for discrimination between the two sub-populations of socially active individuals, the greater the probability that individuals will ultimately segregate themselves, making society fall into a social poverty trap.
    Date: 2016–03
    URL: http://d.repec.org/n?u=RePEc:arx:papers:1603.05828&r=ltv

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