nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2017‒01‒15
six papers chosen by
Maximo Rossi
Universidad de la República

  1. Intergenerational Mobility and Preferences for Redistribution By Alesina, Alberto; Stantcheva, Stefanie; Teso, Edoardo
  2. The Life-cycle Benefits of an Influential Early Childhood Program By Jorge Luis García; James J. Heckman; Duncan Ermini Leaf; María José Prados
  3. The Effects of Non-Contributory Pensions on Material and Subjective Well Being By Rosangela Bando; Sebastian Galiani; Paul Gertler
  4. "The Great Recession and Racial Inequality: Evidence from Measures of Economic Well-Being" By Thomas Masterson; Ajit Zacharias; Fernando Rios-Avila; Edward N. Wolff
  5. A Poverty Line Contingent on Reference Groups: Implications for the Extent of Poverty in some Asian Countries By Chakravarty, Satya R.; Chattopadhyay, Nachiketa; Silber, Jacques
  6. Top Wealth Shares in the UK over more than a Century By Facundo Alvaredo; Anthony B. Atkinson; Salvatore Morelli

  1. By: Alesina, Alberto; Stantcheva, Stefanie; Teso, Edoardo
    Abstract: Using newly collected cross-country survey and experimental data, we investigate how beliefs about intergenerational mobility affect preferences for redistribution in five countries: France, Italy, Sweden, U.K., and U.S.. Americans are more optimistic than Europeans about intergenerational mobility, and too optimistic relative to actual mobility. Our randomized treatment that shows respondents pessimistic information about mobility increases support for redistribution, mostly for equality of opportunity policies. A strong political polarization exists: Left-wing respondents are more pessimistic about intergenerational mobility, their preferences for redistribution are correlated with their mobility perceptions, and they respond to pessimistic information by increasing support for redistribution. None of these apply to right-wing respondents, possibly because of their extremely negative views of government.
    Keywords: Fairness; intergenerational mobility; Online Experiment; redistribution; taxation
    JEL: D31 D72 H21 H23 H24
    Date: 2017–01
  2. By: Jorge Luis García; James J. Heckman; Duncan Ermini Leaf; María José Prados
    Abstract: This paper estimates the long-term benefits from an influential early childhood program targeting disadvantaged families. The program was evaluated by random assignment and followed participants through their mid-30s. It has substantial beneficial impacts on health, children's future labor incomes, crime, education, and mothers' labor incomes, with greater monetized benefits for males. Lifetime returns are estimated by pooling multiple data sets using testable economic models. The overall rate of return is 13.7% per annum, and the benefit/cost ratio is 7.3. These estimates are robust to numerous sensitivity analyses.
    JEL: C93 I28 J13
    Date: 2016–12
  3. By: Rosangela Bando; Sebastian Galiani; Paul Gertler
    Abstract: Public expenditures on non-contributory pensions are equivalent to at least 1 percent of GDP in several countries in Latin America and is expected to increase. We explore the effect of non-contributory pensions on the well-being of the beneficiary population by studying the Pension 65 program in Peru, which uses a poverty eligibility threshold. We find that the program reduced the average score of beneficiaries on the Geriatric Depression Scale by nine percent and reduced the proportion of older adults doing paid work by four percentage points. Moreover, households with a beneficiary increased their level of consumption by 40 percent. All these effects are consistent with the findings of Galiani, Gertler and Bando (2016) in their study on a non-contributory pension scheme in Mexico. Thus, we conclude that the effects of non-contributory pensions on well-being in rural Mexico can be largely generalized to Peru.
    JEL: I0
    Date: 2016–12
  4. By: Thomas Masterson; Ajit Zacharias; Fernando Rios-Avila; Edward N. Wolff
    Abstract: The Great Recession had a tremendous impact on low-income Americans, in particular black and Latino Americans. The losses in terms of employment and earnings are matched only by the losses in terms of real wealth. In many ways, however, these losses are merely a continuation of trends that have been unfolding for more than two decades. We examine the changes in overall economic well-being and inequality as well as changes in racial economic inequality over the Great Recession, using the period from 1989 to 2007 for historical context. We find that while racial inequality increased from 1989 to 2010, during the Great Recession racial inequality in terms of the Levy Institute Measure of Economic Well-Being (LIMEW) decreased. We find that changes in base income, taxes, and income from nonhome wealth during the Great Recession produced declines in overall inequality, while only taxes reduced between-group racial inequality.
    Keywords: LIMEW; United States; Great Recession; Race; Distribution of Wealth; Distribution of Income
    JEL: D31 D63 I31 J15
    Date: 2017–01
  5. By: Chakravarty, Satya R. (Asian Development Bank Institute); Chattopadhyay, Nachiketa (Asian Development Bank Institute); Silber, Jacques (Asian Development Bank Institute)
    Abstract: This paper estimates the number of poor in various countries in Asia by applying an “amalgam poverty line”, which is a weighted average of an absolute poverty line (such as $1.25 per day or $1.45 per day) and a reference income (such as the mean or the median income). The number of poor is computed under various values of the weight applied to the absolute poverty line, namely 100%, 90%, 66%, and 50%. The paper provides estimates of the headcount ratio and poverty gap ratio under the various scenarios for 25 different countries or regions examined.
    Keywords: Poverty; poverty line; poverty measurement; poverty headcount ratio; poverty gap ratio
    JEL: D31 D63 I32 O53
    Date: 2016–12–31
  6. By: Facundo Alvaredo (Paris School of Economics, INET at the Oxford Martin School, and Conicet); Anthony B. Atkinson (Nuffield College, London School of Economics, and INET at the Oxford Martin School); Salvatore Morelli (CSEF, University of Naples and Institute for Economic Modelling at the INET Oxford)
    Abstract: Recent research highlighted controversy about the evolution of concentration of personal wealth. In this paper we provide new evidence about the long-run evolution of top wealth shares for the United Kingdom. The new series covers a long period – from 1895 to the present – and has a different point of departure from the previous literature: the distribution of estates left at death. We find that the application to the estate data of mortality multipliers to yield estimates of wealth among the living does not substantially change the degree of concentration over much of the period both, in the UK and US, allowing inferences to be made for years when this method cannot be applied. The results show that wealth concentration in the UK remained relatively constant during the first wave of globalization, but then decreased dramatically in the period from 1914 to 1979. The UK went from being more unequal in terms of wealth than the US to being less unequal. However, the decline in UK wealth concentration came to an end around 1980, and since then there is evidence of an increase in top shares, notably in the distribution of wealth excluding housing in recent years. We investigate the triangulating evidence provided by data on capital income concentration and on reported super fortunes.
    Keywords: wealth inequality, estates, mortality multipliers, United Kingdom, United States
    JEL: D3 H2 N3
    Date: 2017–01–09

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