nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2016‒12‒04
five papers chosen by

  1. The Spillover Effects of Affirmative Action on Competitiveness and Unethical Behavior By Ritwik Banerjee; Nabanita Datta Gupta; Marie Claire Villeval
  2. On the interpretation of non-cognitive skills – what is being measured and why it matters By John Eric Humphries; Fabian Kosse
  3. Dynastic human capital, inequality and intergenerational mobility By Adermon, Adrian; Lindahl, Mikael; Palme, Mårten
  4. Inequality in Denmark through the Looking Glass By Orsetta Causa; Mikkel Hermansen; Nicolas Ruiz; Caroline Klein; Zuzana Smidova
  5. Born to lead? The effect of birth order on non-cognitive abilities By Black, Sandra E.; Grönqvist, Erik; Öckert, Björn

  1. By: Ritwik Banerjee; Nabanita Datta Gupta (Department of Economics and Business Economics, Aarhus University, Denmark); Marie Claire Villeval
    Abstract: We conduct an artefactual field experiment to examine various spillover effects of Affirmative Action policies in the context of castes in India. We test a) if individuals who compete in the presence of Affirmative Action policies remain competitive in the same proportion after the policy has been removed, and b) whether having been exposed to the policy generates unethical behavior and spite against subjects from the category who has benefited from the policy. We find that these policies increase substantially the confidence of the lower caste members and motivate them to choose significantly more frequently a tournament payment scheme. However, we find no spillover effect on confidence and competitiveness once Affirmative Action is withdrawn: any lower caste’s gain in competitiveness due to the policy is then entirely wiped out. Furthermore, the strong existing bias of the dominant caste against the lower caste is not significantly aggravated by Affirmative Action.
    Keywords: Affirmative Action, castes, competitiveness, unethical behavior, field experiment
    JEL: C70 C91 J16 J24 J31 M52
    Date: 2016–11–29
  2. By: John Eric Humphries (University of Chicago, Department of Economics); Fabian Kosse (University of Bonn)
    Abstract: Across academic sub-fields such as labor, education, and behavioral economics, the measurement and interpretation of non-cognitive skills varies widely. As a result, it is difficult to compare results on the importance of non-cognitive skills across literatures. Drawing from these literatures, this paper systematically relates various prototypical non-cognitive measures within one data set. Specifically, we estimate and compare several different strategies for measuring non-cognitive skills. For each, we compare their relative effectiveness at predicting educational success and decompose what is being measured into underlying personality traits and economic preferences. We demonstrate that the construction of the non-cognitive factor greatly influences what is actually measured and what conclusions are reached about the role of non-cognitive skills in life outcomes such as educational attainment. Furthermore, we demonstrate that, while sometimes difficult to interpret, factors extracted from self-reported behaviors can have predictive power similar to well established taxonomies, such as the Big Five.
    Keywords: non-cognitive skills, personality, preferences, educational success
    JEL: J24 I20 D03 D90
    Date: 2016–11
  3. By: Adermon, Adrian (IFAU - Institute for Evaluation of Labour Market and Education Policy); Lindahl, Mikael (Department of Economics, University of Gothenburg; IFAU; IZA; UCLS; CESifo); Palme, Mårten (Department of economics, Stockholm University; IZA)
    Abstract: We study the importance of the extended family – or the dynasty – for the persistence in human capital inequality across generations. We use data including the entire Swedish population, linking four generations. This data structure enables us to – in addition to parents, grandparents and great grandparents – identify parents’ siblings and cousins, as well as their spouses, and the spouses’ siblings. We introduce and estimate a new parameter, which we call the intergenerational transmission of dynastic inequality. This parameter measures the between-dynasty variation in intergenerational transmission of human capital. We use three different measures of human capital: years of schooling, family income and an index of occupational status. Our results show that traditional parent-child estimates miss about half of the persistence across generations estimated by the extended model.
    Keywords: intergenerational mobility; extended family; dynasty; human capital
    JEL: I24 J62
    Date: 2016–11–07
  4. By: Orsetta Causa; Mikkel Hermansen; Nicolas Ruiz; Caroline Klein; Zuzana Smidova
    Abstract: This paper delivers a broad assessment of income inequality in Denmark. As a necessary preamble to provide a basis for discussion, we start by contrasting Danish official inequality measures with those gathered by the OECD in an international context. We show that differences between these two sources are fully explained by differences in methodological choices. We then go beyond synthetic measures of inequality to deliver a granular assessment of income distribution and of the distributional impact of taxes and transfers; and on this basis we compare Denmark to other OECD countries. This approach is then used to quantify the distributional impact of some growth-enhancing reforms undertaken or recommended for Denmark, based on empirical evidence across OECD countries. Finally, we take a forward looking stance by discussing global forces shaping the rise in inequality, in particular skill-biased technological change and deliver a tentative scenario for Denmark in the wider OECD context. Les inégalités au Danemark : mesures, évolutions et impacts de réformes récentes Ce document de travail fournit une évaluation générale de l'inégalité de revenu au Danemark. En préambule afin de fournir une base aux discussions, ce papier commence par une comparaison entre les mesures d'inégalité officielles danoises et celles recueillies par l'OCDE dans un contexte international. Il est montré que les différences entre ces deux sources sont expliquées principalement par des différences de choix méthodologiques. Ensuite, au-delà des mesures synthétiques de l'inégalité, le document fournit une évaluation granulaire des inégalités et de l'impact redistributif des impôts et des transferts au Danemark, dans une perspective internationale. Cette approche est ensuite utilisée pour quantifier l'impact redistributif de certaines réformes pro-croissance. Enfin, les potentielles évolutions futures des inégalités au Danemark sont discutées, au regard des récentes tendances mondiales, en particulier le changement technologique et son influence sur la demande de compétences.
    Keywords: income distribution, inequality, structural policies
    JEL: D31 E61 I23 O15
    Date: 2016–11–25
  5. By: Black, Sandra E. (Department of economics, University of Texas; IZA; NEBR); Grönqvist, Erik (IFAU - Institute for Evaluation of Labour Market and Education Policy); Öckert, Björn (IFAU - Institute for Evaluation of Labour Market and Education Policy)
    Abstract: We study the effect of birth order on personality traits among men using population data on enlistment records and occupations for Sweden. We find that earlier born men are more persistent, socially outgoing, willing to assume responsibility, and able to take initiative than later-borns. In addition, we find that birth order affects occupational sorting; first-born children are more likely to be managers, while later-born children are more likely to be self-employed. We also find that earlier born children are more likely to be in occupations that require leadership ability, social ability and the Big Five personality traits. Finally, we find a significant role of sex composition within the family. Later-born boys suffer an additional penalty the larger the share of boys among the older siblings. When we investigate possible mechanisms, we find that the negative effects of birth order are driven by post-natal environmental factors. We also find evidence of lower parental human capital investments in later-born children.
    Keywords: birth order; non-cognitive abilities; managerial skills
    JEL: I00 J10
    Date: 2016–11–01

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