nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2016‒06‒09
three papers chosen by
Maximo Rossi
Universidad de la República

  1. Introduction of a national minimum wage reduced depressive symptoms in low-wage workers: a quasi-natural experiment in the UK By Aaron Reeves; Martin McKee; Johan Mackenbach; Margaret Whitehead; David Stuckler
  2. Globalisation and Inequality: A Dynamic General Equilibrium Model of Unequal Exchange By Veneziani, Roberto; Yoshihara, Naoki
  3. Status Traps By Steven N. Durlauf; Andros Kourtellos; Chih Ming Tan

  1. By: Aaron Reeves; Martin McKee; Johan Mackenbach; Margaret Whitehead; David Stuckler
    Abstract: Does increasing incomes improve health? In 1999, the UK government implemented minimum wage legislation, increasing hourly wages to at least £3.60. This policy experiment created intervention and control groups that can be used to assess the effects of increasing wages on health. Longitudinal data were taken from the British Household Panel Survey. We compared the health effects of higher wages on recipients of the minimum wage with otherwise similar persons who were likely unaffected because (1) their wages were between 100 and 110% of the eligibility threshold or (2) their firms did not increase wages to meet the threshold. We assessed the probability of mental ill health using the 12-item General Health Questionnaire. We also assessed changes in smoking, blood pressure, as well as hearing ability (control condition). The intervention group, whose wages rose above the minimum wage, experienced lower probability of mental ill health compared with both control group 1 and control group 2. This improvement represents 0.37 of a standard deviation, comparable with the effect of antidepressants (0.39 of a standard deviation) on depressive symptoms. The intervention group experienced no change in blood pressure, hearing ability, or smoking. Increasing wages significantly improves mental health by reducing financial strain in low-wage workers. © 2016 The Authors. Health Economics published by John Wiley & Sons Ltd.
    Keywords: minimum wage; natural experiments; health policy; GHQ caseness
    JEL: R14 J01
    Date: 2016–04–04
    URL: http://d.repec.org/n?u=RePEc:ehl:lserod:66485&r=ltv
  2. By: Veneziani, Roberto (School of Economics and Finance, Queen Mary University of London); Yoshihara, Naoki (Department of Economics, University of Massachusetts, Amherst)
    Abstract: A dynamic general equilibrium model that generalises Roemer's [23] economy with a global capital market is analysed. An axiomatic analysis of the concept of unequal exchange (UE) between countries is developed at general dynamic equilibria. The class of UE definitions that satisfy three fundamental properties - including a correspondence between wealth, class and UE exploitation status - is completely characterised. It is shown that this class is nonempty and a definition of UE exploitation between countries is proposed, which is theoretically robust and firmly anchored to empirically observable data. The full class and UE exploitation structure of the international economy is derived in equilibrium.
    Keywords: Exploitation, classes, unequal exchange, international economy.
    JEL: D63 F02 B51
    Date: 2016
    URL: http://d.repec.org/n?u=RePEc:ums:papers:2016-07&r=ltv
  3. By: Steven N. Durlauf (Department of Economics, University of Wisconsin, USA); Andros Kourtellos (Department of Economics, University of Cyprus, Cyprus; The Rimini Centre for Economic Analysis, Italy); Chih Ming Tan (Department of Economics, University of North Dakota, USA; The Rimini Centre for Economic Analysis, Italy)
    Abstract: In this paper, we explore nonlinearities in the intergenerational mobility process using threshold regression models. We uncover evidence of threshold effects in children’s outcomes based on parental education and cognitive and non-cognitive skills as well as their interaction with offspring characteristics. We interpret these thresholds as organizing dynastic earnings processes into “status traps”. Status traps, unlike poverty traps, are not absorbing states. Rather, they reduce the impact of favorable shocks for disadvantaged children and so inhibit upward mobility in ways not captured by linear models. Our evidence of status traps is based on three complementary datasets; i.e., the PSID, the NLSY, and US administrative data at the commuting zone level, which together suggest that the threshold-like mobility behavior we observe in the data is robust for a range of outcomes and contexts.
    Date: 2016–05
    URL: http://d.repec.org/n?u=RePEc:rim:rimwps:16-13&r=ltv

This nep-ltv issue is ©2016 by Maximo Rossi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at http://nep.repec.org. For comments please write to the director of NEP, Marco Novarese at <director@nep.repec.org>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.