nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2016‒08‒28
six papers chosen by
Maximo Rossi
Universidad de la República

  1. Life-Cycle Consumption Patterns at Older Ages in the US and the UK: Can Medical Expenditures Explain the Difference? By James Banks; Richard Blundell; Peter Levell; James P. Smith
  2. Aspirations and the Political Economy of Inequality By Timothy Besley
  3. Augmenting the Human Capital Earnings Equation with Measures of Where People Work By Erling Barth; James Davis; Richard B. Freeman
  4. Gender gaps of the unemployed - What drives diverging labor market outcomes? By Dauth, Christine
  5. Gender and Redistribution: Experimental Evidence By Thomas Buser; Louis Putterman; Joël van der Weele
  6. Measuring and Changing Control: Women's Empowerment and Targeted Transfers By Alex Armand; Pedro Carneiro; Ingvild Almas; Orazio Attanasio

  1. By: James Banks; Richard Blundell; Peter Levell; James P. Smith
    Abstract: In this paper we document significantly steeper declines in nondurable expenditures in the UK compared to the US, in spite of income paths being similar. We explore several possible causes, including different employment paths, housing ownership and expenses, levels and paths of health status, number of household members, and out-of -pocket medical expenditures. Among all the potential explanations considered, we find that those to do with healthcare—differences in levels and age paths in medical expenses—can fully account for the steeper declines in nondurable consumption in the UK compared to the US.
    JEL: D10 D11 D12 D14 D91
    Date: 2016–08
  2. By: Timothy Besley
    Abstract: In standard approaches to the political economy of inequality, the income distribution and the preferences of households are taken as fixed when studying how incomes are determined within and between nations. This paper makes the income distribution endogenous by supposing that aspirational parents can socialize children into having aspirational preferences which are modeled as a reference point in income space. The model looks at the endogenous determination of the level of income, income inequality and income redistribution where the proportion of aspirational individuals evolves endogenously according to payoffs along the equilibrium path. The paper discusses implications of the model for intergenerational mobility. It also shows how the income generation process is critical for the dynamics and welfare conclusions. Finally, it looks at some evidence from the World Values Survey in light of the theory.
    JEL: A13 D11 D63 I31
    Date: 2015–08
  3. 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.
    JEL: J0 J01 J24 J3 J40
    Date: 2016–08
  4. By: Dauth, Christine (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "Analyzing gender gaps of unemployed job-seekers, this study uniquely complements the broad literature focussing predominantly on gender gaps of employed workers. I consider a broad range of labor market outcomes, and disentangle the factors driving the labor market gaps of unemployed men and women. I show that unemployed women perform worse on the labor market due to earlier choices in occupations, their labor force attachment, and working time. By contrast, regional labor market disparities including differences of local employment offices, which are assigned to place unemployed job-seekers, are of minor importance. Married women and those with young children perform particularly bad compared to men. High unexplainable gender gaps for these groups suggest that family-related preferences, employer discrimination, and institutional settings matter for unemployment duration and the quality of reemployment." (Author's abstract, IAB-Doku) ((en))
    JEL: J16 J21 J64 J71
    Date: 2016–08–22
  5. By: Thomas Buser (University of Amsterdam, The Netherlands); Louis Putterman (Brown University, United States); Joël van der Weele (University of Amsterdam, The Netherlands)
    Abstract: Gender differences in voting patterns and political attitudes towards redistribution are well-documented. The experimental gender literature suggests several plausible behavioral explanations behind these differences, relating to gender differences in confidence concerning future relative income position, risk aversion, and social preferences. We use data from lab experiments on preferences for redistribution conducted in the U.S. and several European countries to disentangle these potential mechanisms. We find that when choosing to redistribute income as a disinterested observer, women choose higher tax rates than men when initial income depends on performance in a task but not when it is randomly allocated. In a veil of ignorance condition with uncertainty about the income position of the decision maker, this effect is even stronger, leading to a 10ppt gender difference in average chosen tax rates in the performance conditions. We find that this gender difference is mainly due to men being more (over)confident about their task performance and the resulting income position, with gender differences in risk aversion and social preferences playing a minor role.
    Keywords: gender; redistribution; overconfidence; risk attitudes; voting; taxation
    JEL: C91 J16 H24 D31
    Date: 2016–08–23
  6. By: Alex Armand (Navarra Center for International Development); Pedro Carneiro; Ingvild Almas; Orazio Attanasio
    Abstract: This paper studies how targeted cash transfers to women affect their empowerment. We use a novel identification strategy to measure women's willingness to pay to receive cash transfers instead of their partner receiving it. We apply this among women living in poor households in urban Macedonia. We match experimental data with a unique policy intervention (CCT) in Macedonia offering poor households cash transfers conditional on having their children attending secondary school. The program randomized whether the transfer was offered to household heads or mothers at municipality level, providing us with an exogenous source of variation in (offered) transfers. We show that women who were offered the transfer reveal a lower willingness to pay, and we show that this is in line with theoretical predictions.
    Keywords: Targeted cash transfers; CCT
    JEL: D13 J16 O12
    Date: 2015–11

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