nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2016‒08‒07
ten papers chosen by
Maximo Rossi
Universidad de la República

  1. Children, Time Allocation and Consumption Insurance By Luigi Pistaferri; Itay Saporta-Eksten; Richard Blundell
  2. Family, Community and Long-Term Earnings Inequality By Bingley, Paul; Cappellari, Lorenzo; Tatsiramos, Konstantinos
  3. Turbulence and the Employment Experience of Older Workers By Lalé, Etienne
  4. Happiness and Development By Nikolova, Milena
  5. Recovery from Work and the Productivity of Working Hours By Pencavel, John
  6. Exposure to Poverty and Productivity By Dalton, Patricio; Gonzalez Jimenez, Victor; Noussair, Charles
  7. Augmenting the Human Capital Earnings Equation with Measures of Where People Work By Erling Barth; James Davis; Richard B. Freeman
  8. "Tongue Tide": The Economics of Language Offers Important Lessons for How Europe Can Best Integrate Migrants By Chiswick, Barry R.
  9. Ethnic Inequality By Alesina, Alberto Francesco; Michalopoulos, Stelios; Papaioannou, Ellias
  10. Are migrants more productive than stayers? Some evidence for a set of highly productive academic economists By Ruiz-Castillo, Javier; Carrasco, Raquel; Albarrán, Pedro

  1. By: Luigi Pistaferri (Stanford University); Itay Saporta-Eksten (Tel Aviv University); Richard Blundell (University College London)
    Abstract: We consider the life-cycle problem of a household that in each period decides how much to consume and how to allocate spouses' time to work, leisure, and childcare. In an environment with uncertainty, the allocation of goods and time over the life cycle plays the further role of providing insurance against shocks. We use longitudinal data on consumption, and husband and wife separate information on hourly wages, hours of work, and time spent with children to estimate structural parameters measuring the sensitivity of consumption and time allocation choices to transitory and permanent wage shocks. These structural parameters provide a full picture regarding the ability of household to smooth marginal utility in response to shocks. In addition, information on hours of work and hours spent on childcare allows to decompose overall Frisch response into two components, one reflecting the degree of complementarity between husband's and wife's leisure ("companionship" or "love") and another reflecting the degree of substitutability of their childcare time in the production of childcare services.
    Date: 2016
  2. By: Bingley, Paul (Danish National Centre for Social Research (SFI)); Cappellari, Lorenzo (Università Cattolica del Sacro Cuore); Tatsiramos, Konstantinos (University of Nottingham)
    Abstract: This paper studies the influence of family, schools and neighborhoods on life-cycle earnings inequality. We develop an earnings dynamics model linking brothers, schoolmates and teenage parish neighbors using population register data for Denmark. We exploit differences in the timing of family mobility and the partial overlap of schools and neighborhoods to separately identify sorting from community and family effects. We find that family is far more important than community in influencing earnings inequality over the life cycle. Neighborhoods and schools influence earnings only early in the working life and this influence falls rapidly and becomes negligible after age 30.
    Keywords: sibling correlations, neighborhoods, schools, life-cycle earnings, inequality
    JEL: D31 J62
    Date: 2016–07
  3. By: Lalé, Etienne (University of Bristol)
    Abstract: This paper provides a unified account of the trends in unemployment and labor force participation pertaining to the employment experience of older male workers during the past half-century. We build an equilibrium life-cycle model with labor-market frictions and an operative labor supply margin, wherein economic turbulence à la Ljungqvist and Sargent (1998) interact with institutions in ways that deteriorate employment. The model explains simultaneously: (i) the fall in labor force participation in the United States, (ii) the similar but more pronounced decline in Europe alongside rising unemployment rates and (iii) differences across European countries in the role played respectively by unemployment and labor force participation. The model also shows that policies that fostered early retirement may have exacerbated the deterioration of European labor markets: raising early retirement incentives to reduce unemployment among older workers tends to increase unemployment at younger ages, especially in turbulent economic times and under stringent employment protection legislation.
    Keywords: job search, job loss, turbulence, European unemployment, labor force participation
    JEL: E24 J21 J64
    Date: 2016–07
  4. By: Nikolova, Milena (IZA)
    Abstract: Subjective well-being (SWB) indicators, such as positive and negative emotions, life evaluations, and assessments of having purpose and meaning and life are increasingly used alongside income, employment, and consumption measures to provide a more comprehensive view of human progress. SWB measures have several advantages but also challenges which development scholars and practitioners need to carefully consider before introducing such metrics in the policy arena. This article provides an overview of the SWB approach and offers insights into whether and how SWB measures can inform development theory and practice.
    Keywords: development policy, subjective well-being, happiness, measurement
    JEL: I31 O10
    Date: 2016–07
  5. By: Pencavel, John (Stanford University)
    Abstract: Observations on munition workers are organized to examine the relationship between their output each week, their working hours and days each week, and their working hours and days in adjacent weeks. The hypothesis is that workers need to recover from work and a long working week results in greater fatigue and stress and yet provides insufficient time for recuperation before the next week's work opens. Workers require time off the job to restore their physical, mental, and emotional capacities and, if a long working week provides inadequate time to repair, their subsequent work performance suffers.
    Keywords: working hours, output, productivity, recovery
    JEL: J24 J22 N34
    Date: 2016–07
  6. By: Dalton, Patricio (Tilburg University, Center For Economic Research); Gonzalez Jimenez, Victor (Tilburg University, Center For Economic Research); Noussair, Charles (Tilburg University, Center For Economic Research)
    Abstract: We study whether poverty can induce affective states that decrease productivity. In a controlled laboratory setting, we find that subjects randomly assigned to a treatment, in which they view a video featuring individuals that live in extreme poverty, exhibit lower subsequent productivity compared to subjects assigned to a control treatment. Questionnaire responses, as well as facial recognition software, provide quantitative measures of the affective state evoked by the two treatments. Subjects exposed to images of poverty experience a more negative affective state than those in the control treatment. Further analyses show that individuals in a more positive emotional state exhibit less of a treatment effect. Also, those who exhibit greater attentiveness upon viewing the poverty video are less productive. The results are consistent with the notion that exposure to poverty can induce a psychological state in individuals that adversely affects productivity.
    Keywords: poverty; productivity; mood; emotions; limited attention; experiments
    JEL: D03 J24 C91
    Date: 2016
  7. By: Erling Barth; James Davis; Richard B. Freeman
    Abstract: We augment standard ln earnings equations with variables reflecting unmeasured attributes of workers and measured and unmeasured attributes of their employer. Using panel employee-establishment data for US manufacturing we find that the observable employer characteristics that most impact earnings are: number of workers, education of co-workers, capital equipment per worker, industry in which the establishment produces, and R&D intensity of the firm. Employer fixed effects also contribute to the variance of ln earnings, though substantially less than individual fixed effects. In addition to accounting for some of the variance in earnings, the observed and unobserved measures of employers mediate the estimated effects of individual characteristics on earnings and increasing earnings inequality through the sorting of workers among establishments.
    Date: 2016–01
  8. By: Chiswick, Barry R. (George Washington University)
    Abstract: This policy analysis discusses issues regarding the migration to Europe of large numbers of immigrants and refugees who, on arrival, do not know their host country's language. It reviews problems of economic integration into the labor market, the consequences of the formation of immigrant enclaves divorced from the host country labor market, and considers public policies to facilitate their linguistic and economic integration.
    Keywords: immigrants, refugees, language, enclaves, Europe, discrimination
    JEL: F22 J15 J24 J31 J61
    Date: 2016–07
  9. By: Alesina, Alberto Francesco; Michalopoulos, Stelios; Papaioannou, Ellias
    Abstract: This study explores the consequences and origins of between-ethnicity economic inequality across countries. First, combining satellite images of nighttime luminosity with the historical homelands of ethnolinguistic groups we construct measures of ethnic inequality for a large sample of countries. We also compile proxies of overall spatial inequality and regional inequality across administrative units. Second, we uncover a strong negative association between ethnic inequality and contemporary comparative development; the correlation is also present when we condition on regional inequality, which is itself related to under-development. Third, we investigate the roots of ethnic inequality and establish that differences in geographic endowments across ethnic homelands explain a sizable fraction of the observed variation in economic disparities across groups. Fourth, we show that ethnic-specific inequality in geographic endowments is also linked to under-development.
    Date: 2016
  10. By: Ruiz-Castillo, Javier; Carrasco, Raquel; Albarrán, Pedro
    Abstract: This paper compares the average productivity of migrants (who work in a country different from their country of origin) and stayers (whose entire academic career takes place in their country of origin) in a set of 2,530 highly productive economists that work in 2007 in a selection of the top 81 Economics departments worldwide. The main findings are the following two. Firstly, productivity comparisons between migrants and stayers depend on the cohort and the type of department where individuals work in 2007. For example, in the top U.S. departments, foreigners are more productive than stayers only among older individuals; in the bottom U.S. departments, foreigners are more productive than stayers for both cohorts, while in the other countries with at least one department in the sample the productivity of foreigners and stayers is indistinguishable for both cohorts. Secondly, when we restrict our attention to an elite consisting of economists with above average productivity, all productivity differences between migrants and stayers in the U.S. vanish. These results are very robust. However, our ability to interpret these correlations is severely limited by the absence of information on the decision to migrate.
    Date: 2016–07–01

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