nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2016‒05‒28
five 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. Mental Health and Productivity at Work: Does What You Do Matter? By Bubonya, Melisa; Cobb-Clark, Deborah A.; Wooden, Mark
  3. Do Field Experiments on Labor and Housing Markets Overstate Discrimination? Re-examination of the Evidence By David Neumark; Judith Rich
  4. The Race Between Machine and Man: Implications of Technology for Growth, Factor Shares and Employment By Daron Acemoglu; Pascual Restrepo
  5. Keeping up with the e-Joneses: Do Online Social Networks Raise Social Comparisons? By Sabatini, Fabio; Sarracino, Francesco

  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: J1
    Date: 2016–01
  2. By: Bubonya, Melisa; Cobb-Clark, Deborah A.; Wooden, Mark
    Abstract: Much of the economic cost of mental illness stems from workers’ reduced productivity. We analyze the links between mental health and two alternative workplace productivity measures – absenteeism and presenteeism (i.e., lower productivity while attending work) – explicitly allowing these relationships to be moderated by the nature of the job itself. We find that absence rates are approximately five percent higher among workers who report being in poor mental health. Moreover, job conditions are related to both presenteeism and absenteeism even after accounting for workers’ self-reported mental health status. Job conditions are relatively more important in understanding diminished productivity at work if workers are in good rather than poor mental health. The effects of job complexity and stress on absenteeism do not depend on workers’ mental health, while job security and control moderate the effect of mental illness on absence days.
    Date: 2016–04
  3. By: David Neumark; Judith Rich
    Abstract: There have been over 60 field experiments on discrimination in labor and housing markets conducted since 2000, in 16 countries. These studies nearly always find significant levels of discrimination against minority transactors in these markets. A key challenge to these findings, though, is that even in rather ideal conditions, the estimates of discrimination can be biased if there is differential variation in the unobservable determinants of productivity of majority and minority groups, conditional on the characteristics of market participants these experiments reveal to employers or landlords (Heckman, 1998). The potential bias could go in either direction, but naturally raises the question of whether this experimental literature as a whole overstates the evidence of discrimination. To assess this question, we re-assess the evidence from the nine existing studies that have sufficient information to implement a correction for this bias (Neumark, 2012). For the housing market studies, the estimated effect of discrimination is robust to this correction. For the labor market studies, in contrast, the evidence is less robust; in about half of cases covered in these studies, the estimated effect of discrimination either falls to near zero or becomes statistically insignificant.
    JEL: J71
    Date: 2016–05
  4. By: Daron Acemoglu; Pascual Restrepo
    Abstract: The advent of automation and the simultaneous decline in the labor share and employment among advanced economies raise concerns that labor will be marginalized and made redundant by new technologies. We examine this proposition using a task-based framework in which tasks previously performed by labor can be automated and more complex versions of existing tasks, in which labor has a comparative advantage, can be created. We characterize the equilibrium in this model and establish how the available technologies and the choices of firms between producing with capital or labor determine factor prices and the allocation of factors to tasks. In a static version of our model where capital is fixed and technology is exogenous, automation reduces employment and the share of labor in national income and may even reduce wages, while the creation of more complex tasks has the opposite effects. Our full model endogenizes capital accumulation and the direction of research towards automation and the creation of new complex tasks. Under reasonable conditions, there exists a stable balanced growth path in which the two types of innovations go hand-in-hand. An increase in automation reduces the cost of producing using labor, and thus discourages further automation and encourages the faster creation of new complex tasks. The endogenous response of technology restores the labor share and employment back to their initial level. Although the economy contains powerful self correcting forces, the equilibrium generates too much automation. Finally, we extend the model to include workers of different skills. We find that inequality increases during transitions, but the self-correcting forces in our model also limit the increase in inequality over the long-run.
    JEL: J23 J24 O14 O31 O33
    Date: 2016–05
  5. By: Sabatini, Fabio; Sarracino, Francesco
    Abstract: Online social networks, such as Facebook, disclose an unprecedented volume of personal information amplifying the occasions for social comparisons, which can be a cause of frustration. We test the hypothesis that the use of social networking sites (SNS) increases social comparisons as proxied by people’s dissatisfaction with their income and we compare the effect of SNS in Western and Eastern European countries. After controlling for the possibility of reverse causality, our results suggest that SNS users have a higher probability to compare their achievements with those of others. In Western countries, this leads individuals to a lower satisfaction with their economic conditions. The opposite holds in Eastern countries, where upward comparisons seemingly strengthen the hope that an improvement in individuals’ economic conditions will occur (so called “tunnel effect”). We conclude that SNS can be a strong engine of frustration for their users depending on the institutional and economic circumstances.
    Keywords: Social Networks, Social Networking Sites, Social Comparisons, Satisfaction with Income, Relative Deprivation, Research Methods/ Statistical Methods, D83, I31, O33, Z1, Z13,
    Date: 2016–04–30

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