nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2017‒01‒01
five papers chosen by
Maximo Rossi
Universidad de la República

  1. Misperceptions of income distributions: Cross-country evidence from a randomized survey experiment By Bublitz, Elisabeth
  2. Analytic Foundations: Measuring the Redistributive Impact of Taxes and Transfers By Ali Enami; Nora Lustig; Rodrigo Aranda
  3. Labor Supply Elasticities: Overcoming Nonclassical Measurement Error Using More Accurate Hours Data By Garry Barrett; Daniel S. Hamermesh
  4. Entrepreneurship and Income Inequality By Halvarsson, Daniel; Korpi, Martin; Wennberg, Karl
  5. The New Lifecycle of Women’s Employment: Disappearing Humps, Sagging Middles, Expanding Tops By Claudia Goldin; Joshua Mitchell

  1. By: Bublitz, Elisabeth
    Abstract: This paper investigates whether the individual misperception of income distributions helps explain why, opposite to Meltzer and Richard (1981), higher initial inequality levels do not correlate positively with redistribution. I conduct a representative survey experiment in Brazil, France, Germany, Russia, Spain, and the United States, providing a personalized information treatment on the income distribution to a randomly chosen subsample. Most respondents misperceive their own position in the income distribution. These biases differ by country and the true income position. Misperceptions of the median income relate negatively to misperceived income positions, showing evidence for biased reference points. Correcting misperceptions slightly shifts the demand towards less redistribution in Germany and Russia which appears to be driven by respondents with a negative position bias. Apart from Spain and the US, treatment reactions lead to a convergence of the demand for redistribution across countries. The treatment also alters trust levels in government and beliefs about the importance of luck but not equally across bias types.
    Keywords: income distribution,biased perceptions,inequality,survey experiment
    JEL: D31 D63 H20
    Date: 2016
  2. By: Ali Enami (Tulane University and CEQ Institute.); Nora Lustig (Stone Center for Latin American Studies, Department of Economics, Tulane University.); Rodrigo Aranda (Tulane University and CEQ Institute.)
    Abstract: This paper provides a theoretical foundation for analyzing the redistributive effect of taxes and transfers for the case in which the ranking of individuals by pre-fiscal income remains unchanged. We show that in a world with more than a single fiscal instrument, the simple rule that progressive taxes or transfers are always equalizing not necessarily holds, and offer alternative rules that survive a theoretical scrutiny. In particular, we show that the sign of the marginal contribution unambiguously predicts whether a tax or a transfer is equalizing or not.
    Date: 2016–11
  3. By: Garry Barrett; Daniel S. Hamermesh
    Abstract: We measure the impact of measurement error in labor-supply elasticities estimated over recalled usual work hours, as is ubiquitous in the literature. Employing hours of work in diaries collected by the American Time Use Survey, 2003-12, along with the same respondents’ recalled usual hours, we show that the latter yield elasticities that are positively biased. We argue that this bias arises from the salience on recalled hours of differences in wage rates.
    JEL: C31 J22
    Date: 2016–12
  4. By: Halvarsson, Daniel (The Ratio Institute); Korpi, Martin (The Ratio Institute); Wennberg, Karl (The Ratio Institute and the Department of Management and Engineering (IEI) and Institute of Analytical Sociology (IAS) Norrköping)
    Abstract: Entrepreneurship research highlights individual entrepreneurship as a simultaneous source of enhanced income mobility for some but a potential source of poverty for others. Research on inequality has furthered new types of models to decompose and problematize various sources of income inequality in modern economies, but attention to entrepreneurship as an increasingly prevalent occupational choice in these models remains scant. This paper seeks to bridge these two literatures by applying regression-based income decomposition among entrepreneurs and paid workers, distinguishing between self-employed (SE) and incorporated self-employed (ISE) individuals in Sweden. We find that the proportion of self-employed in the workforce significantly increases income dispersion by way of widening the bottom end of the distribution, whereas the proportion of incorporated self-employed contributes only marginally to income dispersion at the top end of the distribution.
    Keywords: entrepreneurship; income decomposition
    JEL: J24 J31 L26 O15
    Date: 2016–12–15
  5. By: Claudia Goldin; Joshua Mitchell
    Abstract: A new lifecycle of women’s employment emerged with cohorts born in the 1950s. For prior cohorts, lifecycle employment had a hump shape; it increased from the twenties to the forties, hit a peak and then declined starting in the fifties. The new lifecycle of employment is initially high and flat, there is a dip in the middle and a phasing out that is more prolonged than for previous cohorts. The hump is gone, the middle is a bit sagging and the top has greatly expanded. We explore the increase in cumulative work experience for women from the 1930s to the 1970s birth cohorts using the SIPP and the HRS. We investigate the changing labor force impact of a birth event across cohorts and by education and also the impact of taking leave or quitting. We find greatly increased labor force experience across cohorts, far less time out after a birth and greater labor force recovery for those who take paid or unpaid leave. Increased employment of women in their older ages is related to more continuous work experience across the lifecycle.
    JEL: J16 J21
    Date: 2016–12

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