nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2016‒05‒14
five papers chosen by
Maximo Rossi
Universidad de la República

  1. "De gustibus errari (pot)est": utility misprediction, preferences for well-being and life By Becchetti, Leonardo; Conzo, Pierluigi
  2. Why are there so few Women in Executive Positions? An Analysis of Gender Differences in the Life-Cycle of Executive Employment By Anders Frederiksen; Timothy Halliday
  3. Allocating Effort and Talent in Professional Labor Markets By Barlevy, Gadi; Neal, Derek
  4. Locus of Control and Its Intergenerational Implications for Early Childhood Skill Formation By Warn N. Lekfuangfu; Nattavudh Powdthavee; Nele Warrinnier; Francesca Cornaglia
  5. Mortality Inequality: The Good News from a County-Level Approach By Currie, Janet; Schwandt, Hannes

  1. By: Becchetti, Leonardo (Associazione Italiana per la Cultura della Cooperazione e del Non Profit); Conzo, Pierluigi (Associazione Italiana per la Cultura della Cooperazione e del Non Profit)
    Abstract: The life satisfaction literature generally focuses on how life events affect subjective well-being. Through a contingent valuation survey we test whether well-being preferences have significant impact on life satisfaction. A sample of respondents is asked to simulate a policymaker decision consisting in allocating scarce financial resources among 11 well-being domains. Consistently with the utility misprediction hypothesis, we find that the willingness to invest more in the economic well-being domain is negatively correlated with life satisfaction. Our findings are shown to be robust when we account for unobservables related to economic fragility and non-random sample selection. Reverse causality and omitted variable bias are controlled for with instrumental variables and a sensitivity analysis on departures from exogeneity assumptions. Subsample estimates document that the less educated are more affected by the problem.
    Keywords: life satisfaction; well-being preferences; utility misprediction; subjective well-being
    JEL: A13 D64 H50 I31
    Date: 2014–07–16
  2. By: Anders Frederiksen (Aarhus University, IZA); Timothy Halliday (University of Hawaii at Manoa, University of Hawaii Economic Research Organization, IZA)
    Abstract: “Glass ceilings†and “sticky floors†are typical explanations for the low representation of women in top executive positions, but a focus on gender differences in promotions provides only a partial explanation. We consider the life-cycle of executive employment, which allows for a full characterization of the gender composition of executive management. We establish that there are few women in executive management because they have lower levels of human capital, are underrepresented in lower-level jobs, and are less likely to be perceived as high-productivity employees. We do not find that women have uniformly unfavorable promotion and demotion probabilities.
    Date: 2015–01
  3. By: Barlevy, Gadi (Federal Reserve Bank of Chicago); Neal, Derek (University of Chicago)
    Abstract: In many professional service firms, new associates work long hours while competing in up-or-out promotion contests. Our model explores why these firms require young professionals to take on heavy work loads while simultaneously facing significant risks of dismissal. We argue that the productivity of skilled partners in professional service firms (e.g. law, consulting, investment banking and public accounting) is quite large relative to the productivity of their peers who are competent and experienced but not well-suited to the partner role. Therefore, these firms adopt personnel policies that facilitate the identification of new partners. In our model, both heavy work loads and up-or-out rules serve this purpose. Firms are able to identify more professionals who can function effectively as partners when they require new associates to perform more tasks. Further, when firms replace experienced associates with new less productive workers, they gain the opportunity to identify talented professionals who will have long careers as partners. Both of these personnel practices are costly. However, when the gains from increasing the number of talented partners exceed these costs, firms employ both practices in tandem. We present evidence on life-cycle patterns of hours and earnings among lawyers that support our claim that both heavy work loads and up-or-out rules are screening mechanisms.
    Keywords: up-or-out; labor market; long hours; professional workers; screening
    JEL: J22 J44 M51
    Date: 2016–03–04
  4. By: Warn N. Lekfuangfu (Chulalongkorn University and CEP, London School of Economics); Nattavudh Powdthavee (CEP, London School of Economics); Nele Warrinnier (CEP, London School of Economics and University of Leuven); Francesca Cornaglia (Queen Mary University of London and CEP, London School of Economics)
    Abstract: This paper builds upon Cunha's (2015) subjective rationality model in which parents have a subjective belief about the impact of their investment on the early skill formation of their children. We propose that this subjective belief is determined in part by locus of control (LOC), i.e., the extent to which individuals believe that their actions can influence future outcomes. Consistent with the theory, we show that maternal LOC measured at the 12th week of gestation strongly predicts maternal attitudes towards parenting style, maternal time investments, as well as early and late cognitive outcomes. We also utilize the variation in inputs and outputs by maternal LOC to help improve the specification typically used in the estimation of skill production function parameters.
    Keywords: Locus of control, Parental investment, Human capital accumulation, Early skill formation, ALSPAC
    JEL: J01 I31
    Date: 2016–04
  5. By: Currie, Janet (Princeton University); Schwandt, Hannes (University of Zurich)
    Abstract: Analysts who have concluded that inequality in life expectancy is increasing have generally focused on life expectancy at age 40 to 50. However, we show that among infants, children, and young adults, mortality has been falling more quickly in poorer areas with the result that inequality in mortality has fallen substantially over time. This is an important result given the growing literature showing that good health in childhood predicts better health in adulthood and suggests that today's children are likely to face considerably less inequality in mortality as they age than current adults. We also show that there have been stunning declines in mortality rates for African-Americans between 1990 and 2010, especially for black men. The fact that inequality in mortality has been moving in opposite directions for the young and the old, as well as for some segments of the African-American and non-African-American populations argues against a single driver of trends in mortality inequality, such as rising income inequality. Rather, there are likely to be multiple specific causes affecting different segments of the population. We show that the differential timing of smoking reductions among the rich and the poor can explain a significant fraction of the current increase in mortality inequality in older cohorts.
    Keywords: mortality, inequality, racial differences, smoking
    JEL: I14 I32 J11 J13
    Date: 2016–04

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