nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2016‒10‒02
ten papers chosen by
Maximo Rossi
Universidad de la República

  1. Urban Networks: Connecting Markets, People, and Ideas By Glaeser, Edward L.; Ponzetto, Giacomo A. M.; Zou, Yimei
  2. The Wage Impact of the Marielitos: A Reappraisal By Borjas, George J.
  3. The EU gender earnings gap: Job segregation and working time as driving factors By Boll, Christina; Rossen, Anja; Wolf, André
  4. Big Data and Big Cities: The Promises and Limitations of Improved Measures for Urban Life By Glaeser, Edward L.; Kominers, Scott Duke; Luca, Michael; Naik, Nikhil
  5. Immigration and the UK: Reflections After Brexit By Marco Alfano; Christian Dustmann; Tommaso Frattini
  6. Income Inequality: A State-by-State Complex Network Analysis By Periklis Gogas; Rangan Gupta; Stephen M. Miller; Theophilos Papadimitriou; Georgios Antonios Sarantitis
  8. Gender differences and social ties effects in resource sharing By d'Exelle, Ben; Riedl, Arno
  9. The Workforce of Pioneer Plants By Hausmann, Ricardo; Neffke, Frank
  10. Do People Shape Cities, or Do Cities Shape People? THe Co-evolution of Physical, Social and Economic Change in Five Major U.S. Cities By Naik, Nikhil; Kominers, Scott Duke; Raskar, Ramesh; Glaeser, Edward L.; Hidalgo, Cesar A.

  1. By: Glaeser, Edward L. (Harvard University); Ponzetto, Giacomo A. M. (Universitat Pompeu Fabra and Barcelona GSE); Zou, Yimei (Universitat Pompeu Fabra)
    Abstract: Should China build mega-cities or a network of linked middle-sized metropolises? Can Europe's mid-sized cities compete with global agglomeration by forging stronger inter-urban links? This paper examines these questions within a model of recombinant growth and endogenous local amenities. Three primary factors determine the trade-off between networks and big cities: local returns to scale in innovation, the elasticity of housing supply, and the importance of local amenities. Even if there are global increasing returns, the returns to local scale in innovation may be decreasing, and that makes networks more appealing than mega-cities. Inelastic housing supply makes it harder to supply more space in dense confines, which perhaps explains why networks are more popular in regulated Europe than in the American Sunbelt. Larger cities can dominate networks because of amenities, as long as the benefits of scale overwhelm the downsides of density. In our framework, the skilled are more likely to prefer mega-cities than the less skilled, and the long-run benefits of either mega-cities or networks may be quite different from the short-run benefits.
    Date: 2015–12
  2. By: Borjas, George J. (Harvard University)
    Abstract: This paper brings a new perspective to the analysis of the Mariel supply shock, revisiting the question and the data armed with the accumulated insights from the vast literature on the economic impact of immigration. A crucial lesson from this literature is that any credible attempt to measure the wage impact of immigration must carefully match the skills of the immigrants with those of the pre-existing workforce. The Marielitos were disproportionately low-skill; at least 60 percent were high school dropouts. A reappraisal of the Mariel evidence, specifically examining the evolution of wages in the low-skill group most likely to be affected, quickly overturns the finding that Mariel did not affect Miami's wage structure. The absolute wage of high school dropouts in Miami dropped dramatically, as did the wage of high school dropouts relative to that of either high school graduates or college graduates. The drop in the relative wage of the least educated Miamians was substantial (10 to 30 percent), implying an elasticity of wages with respect to the number of workers between -0.5 and -1.5. In fact, comparing the magnitude of the steep post-Mariel drop in the low-skill wage in Miami with that observed in all other metropolitan areas over an equivalent time span between 1977 and 2001 reveals that the change in the Miami wage structure was a very unusual event. The analysis also documents the sensitivity of the estimated wage impact to the choice of a placebo. The measured impact is much smaller when the placebo consists of cities where pre- Mariel employment growth was weak relative to Miami.
    Date: 2015–09
  3. By: Boll, Christina; Rossen, Anja; Wolf, André
    Abstract: This paper estimates size and impact factors of the gender pay gap in Europe. It adds to the literature in three aspects. First, we update existing figures on the gender pay gaps in the EU based on the Structure of Earnings Survey 2010 (SES). Second, we enrich the literature by undertaking comprehensive country comparisons of the gap components based on an Oaxaca-Blinder decomposition. Overall, we analyze 21 EU countries plus Norway, which clearly exceeds the scope of existing microdata studies. Third, we examine the sources of the unexplained gap. We find that about one third of the gap can be traced back to the role of the explanatory factors included in our analysis. The sectoral segregation of genders is identified as the most important barrier to gender pay equality in European countries. In addition, the fact that part-time positions are more frequent among women notably contributes to the gap. We conclude that policies aiming at closing the gender pay gap should focus more on the sector level than on the aggregate economy.
    Keywords: Gender wage gap,Oaxaca/Blinder decomposition,Europe,Structure of Earnings Survey
    JEL: J31 J16 J24
    Date: 2016
  4. By: Glaeser, Edward L. (Harvard University); Kominers, Scott Duke (Harvard University); Luca, Michael (Harvard University); Naik, Nikhil (MIT)
    Abstract: New, "big" data sources allow measurement of city characteristics and outcome variables higher frequencies and finer geographic scales than ever before. However, big data will not solve large urban social science questions on its own. Big data has the most value for the study of cities when it allows measurement of the previously opaque, or when it can be coupled with exogenous shocks to people or place. We describe a number of new urban data sources and illustrate how they can be used to improve the study and function of cities. We first show how Google Street View images can be used to predict income in New York City, suggesting that similar image data can be used to map wealth and poverty in previously unmeasured areas of the developing world. We then discuss how survey techniques can be improved to better measure willingness to pay for urban amenities. Finally, we explain how Internet data is being used to improve the quality of city services.
    Date: 2015–12
  5. By: Marco Alfano (University of Strathclyde and CReAM); Christian Dustmann (University College London and CReAM); Tommaso Frattini (University of Milan, LdA and CReAM)
    Abstract: The recent referendum in the UK on membership of the EU has sent shockwaves across the political establishment not just in the UK itself and throughout Europe, but also around the world. In the runup to the referendum, economists were (perhaps for the first time) united in pointing out that the economic case for Brexit is rather slim, that hardly any well-argued reason could be given by the Brexit camp as to why it may be a good idea to leave the EU, and that the economic consequences could be severe. That lack of economic argument in favour of Brexit, which should have been the key battleground in the run up to the referendum, led the debate to focus on one particular issue, Immigration. Like the free movement of goods, capital, and services, a fundamental pillar of the EU, and a non-negotiable requirement for any new member state, is the free movement of people. It is that particular aspect of EU membership that became the strongest single assertion of the Brexit camp. The inability to control immigration f m within the EU was made a symbol for everything else Brexit stood for (such as the idea of “sovereignty†or the pain of being subjugated to “rules made in Brussels and not the UK†), but – again – fact-based arguments against free mobility on economic or welfare grounds were hard to find. Nevertheless, free mobility within the EU became quickly the scapegoat for the economic and social woes that had distressed the country since the great recession, and perhaps even earlier, such as crime, real wage decline, inequality, unemployment, access to social services, health provision, and benefits and transfers. “Immigration†and everything people associated with it and were encouraged to believe by a relentless campaign of the majority of the tabloid press decisively contributed to the decision that the UK took on June 23, 2016. Immigration and free mobility will likely again be central in the negotiations between the UK and its European partners in developing a model for Brexit that minimises the economic costs fo both the UK and the EU.
    Date: 2016–09
  6. By: Periklis Gogas (Democritus University of Thrace); Rangan Gupta (University of Pretoria); Stephen M. Miller (University of Nevada, Las Vegas and University of Connecticut); Theophilos Papadimitriou (Democritus University of Thrace); Georgios Antonios Sarantitis (Democritus University of Thrace)
    Abstract: This study performs a long-run, inter-temporal analysis of income inequality in the U.S. spanning the period 1916-2012. We employ both descriptive analysis and the Threshold-Minimum Dominating Set methodology from Graph Theory, to examine the evolution of inequality through time. In doing so, we use two alternative measures of inequality: the Top 1% share of income and the Gini coefficient. This provides new insight on the literature of income inequality across the U.S. states. Several empirical findings emerge. First, a heterogeneous evolution of inequality exists across the four focal sub-periods. Second, the results differ between the inequality measures examined. Finally, we identify groups of similarly behaving states in terms of inequality. The U.S. authorities can use these findings to identify inequality trends and innovations and/or examples to investigate the causes of inequality within the U.S. to implement appropriate policies.
    Keywords: Income inequality, graph theory, U.S. states
    JEL: D63
    Date: 2016–09
  7. By: Ophélie Mugel (IRG - Institut de Recherche en Gestion - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12)
    Abstract: Well-being has become a major social issue in light of the WHO (World Health Organization) forecasts, stating that in 2030 problems associated with emotional difficulties (such as anxiety and depression) will become the first global cause of disability. This finding raises concern to the whole society and its institutions and questions the role of marketing in understanding consumer well-being. This research aims to identify the definitions of well-being from a literature review that includes three parts. The first presents the universal and subjective dimensions of the concept; the second defines its application to the marketing field and more precisely to food consumption.
    Abstract: Le bien-être est devenu un enjeu sociétal au vu des prévisions de l'OMS (Organisation Mondiale de la Santé) qui constate qu'en 2030, les problèmes liés aux difficultés émotionnelles (comme l'anxiété et la dépression) vont devenir la première cause mondiale d'invalidité. Ce constat doit interpeler toute la société et ses institutions et pose la question du rôle du marketing et de la compréhension du bien-être du consommateur. L'objectif de cette recherche est d'identifier les définitions du bien-être à partir d'une revue de la littérature qui comprend plusieurs axes. Le premier présente les dimensions universelles et subjectives du concept ; le deuxième permet de définir son application au champ du marketing et plus particulièrement à la consommation alimentaire.
    Keywords: bien-être alimentaire,comportement du consommateur,littérature
    Date: 2015–11–27
  8. By: d'Exelle, Ben (university of east anglia); Riedl, Arno (General Economics 1 (Micro))
    Abstract: In rural areas in developing countries gender inequality tends to be severe which might have substantial welfare implications if it determines how scarce economic resources are shared between men and women. Therefore, it is important to know how gender influences resource sharing and - given the strong embeddedness of resource sharing in social networks - in what ways social ties interact with this influence. To investigate this, we combine data from resource allocation experiments and a social network survey in rural Nicaragua. We find that women share less than men, and that this difference is largest among people of the same village and of different gender. We also find that social ties exert an important influence on sharing and that women have fewer friendship ties within their village than men. Regression analysis shows important gender differences in the effect of social ties on sharing. While both men and women share more with female friends than with female non-friends, women share less with male friends than with male non-friends. We also find that with controls for friendship ties, there remains a direct gender effect on within-village sharing, with men sharing more than women. Finally, we find that our results are robust to potential gender differences in the reporting of social ties.
    Keywords: resource sharing, social ties, gender, lab-in-the-field experiment, Nicaragua
    JEL: C90 Z10
    Date: 2016
  9. By: Hausmann, Ricardo (Harvard University and Santa Fe Institute); Neffke, Frank (Harvard University)
    Abstract: Is labor mobility important in technological diffusion? We address this question by asking how plants assemble their workforce if they are industry pioneers in a location. By definition, these plants cannot hire local workers with industry experience. Using German social-security data, we find that such plants recruit workers from related industries from more distant regions and local workers from less-related industries. We also show that pioneers leverage a low-cost advantage in unskilled labor to compete with plants that are located in areas where the industry is more prevalent. Finally, whereas research on German reunification has often focused on the effects of east-west migration, we show that the opposite migration facilitated the industrial diversification of eastern Germany by giving access to experienced workers from western Germany.
    JEL: J23 J24 M13 M50 O15 O33 R11 R12
    Date: 2016–01
  10. By: Naik, Nikhil (MIT); Kominers, Scott Duke (Harvard University); Raskar, Ramesh (MIT); Glaeser, Edward L. (Harvard University); Hidalgo, Cesar A. (MIT)
    Abstract: Urban change involves transformations in the physical appearance and the social composition of neighborhoods. Yet, the relationship between the physical and social components of urban change is not well understood due to the lack of comprehensive measures of neighborhood appearance. Here, we introduce a computer vision method to quantify change in physical appearance of streetscapes and generate a dataset of physical change for five large American cities. We combine this dataset with socioeconomic indicators to explore whether demographic and economic changes precede, follow, or co-occur with changes in physical appearance. We find that the strongest predictors of improvement in a neighborhood's physical appearance are population density and share of college-educated adults. Other socioeconomic characteristics, like median income, share of vacant homes, and monthly rent, do not predict improvement in physical appearance. We also find that neighborhood appearances converge to the initial appearances of bordering areas, supporting the Burgess "invasion" theory. In addition, physical appearance is more likely to improve in neighborhoods proximal to the central business district. Finally, we find modest support for "tipping" and "filtering" theories of urban change.
    Date: 2015–10

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