nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2017‒02‒05
seven papers chosen by
Maximo Rossi
Universidad de la República

  1. Earnings and Consumption Dynamics: A Nonlinear Panel Data Framework By Manuel Arellano; Richard Blundell; Stéphane Bonhomme
  2. Hires and Separations in Equilibrium By Edward P. Lazear; Kristin McCue
  3. Early childcare, child cognitive outcomes and inequalities in the UK By Daniela Del Boca; Daniela Piazzalunga; Chiara Pronzato
  4. Estimation and Inference for Actual and Counterfactual Growth Incidence Curves By Ferreira, Francisco H. G.; Firpo, Sergio; Galvao, Antonio F.
  5. Segregation of women into low-paying occupations in the US By Carlos Gradín
  6. Sibling Spillovers By Sandra E. Black; Sanni Breining; David N. Figlio; Jonathan Guryan; Krzysztof Karbownik; Helena Skyt Nielsen; Jeffrey Roth; Marianne Simonsen
  7. Racial/Ethnic Differences in Non-Work at Work By Hamermesh, Daniel S.; Genadek, Katie R.; Burda, Michael C.

  1. By: Manuel Arellano (CEMFI, Centro de Estudios Monetarios y Financieros); Richard Blundell (University College London); Stéphane Bonhomme (University of Chicago)
    Abstract: We develop a new quantile-based panel data framework to study the nature of income persistence and the transmission of income shocks to consumption. Log-earnings are the sum of a general Markovian persistent component and a transitory innovation. The persistence of past shocks to earnings is allowed to vary according to the size and sign of the current shock. Consumption is modeled as an age-dependent nonlinear function of assets, unobservable tastes and the two earnings components. We establish the nonparametric identification of the nonlinear earnings process and of the consumption policy rule. Exploiting the enhanced consumption and asset data in recent waves of the Panel Study of Income Dynamics, we find that the earnings process features nonlinear persistence and conditional skewness. We confirm these results using population register data from Norway. We then show that the impact of earnings shocks varies substantially across earnings histories, and that this nonlinearity drives heterogeneous consumption responses. The framework provides new empirical measures of partial insurance in which the transmission of income shocks to consumption varies systematically with assets, the level of the shock and the history of past shocks.
    Keywords: Earnings dynamics, consumption, partial insurance, panel data, quantile regression, latent variables.
    JEL: C23 D31 D91
    Date: 2016–11
  2. By: Edward P. Lazear; Kristin McCue
    Abstract: Hiring is positively correlated with separation, both across firms and over time. A theory of hiring and separation based on shifts in demand implies the opposite. One firm or industry hires and grows when another fires and contracts. But hiring for expansion and layoff for contraction comprises the minority of hiring and separation. A more accurate view is that hiring and separation reflect churn and are balanced in equilibrium, where one is the mirror image of the other. Hiring occurs primarily to fill vacant slots that open up when a firm separates a worker. Equivalently, a separation results when a worker is hired away by another firm. A model of efficient mobility yields several specific predictions in addition to the positive correlation between hires and separations. Labor market churn is most likely in firms and industries with low mean wages and high wage variance. Additionally, churn decreases during recessions with hires falling first followed by a decline in separations to match hiring. Finally, the young are predicted to bear the brunt of hiring declines. These predictions are borne out in the LEHD microdata at the economy and firm levels.
    JEL: E24 J01 M0 M00 M5
    Date: 2017–01
  3. By: Daniela Del Boca (University of Turin and Collegio Carlo Alberto); Daniela Piazzalunga (IRVAPP); Chiara Pronzato (University of Turin, CHILD and Collegio Carlo Alberto)
    Abstract: In this empirical analysis, we estimate the link between formal childcare and child cognitive outcomes, controlling for a large number of variables. We use the Millennium Cohort Survey (MCS) for the United Kingdom, which provides very detailed information about several modalities of childcare as well as several child outcomes. We also simulate how an increase in formal childcare attendance can affect inequalities across children. Our results indicate that childcare attendance has a positive impact on child cognitive outcomes, which are stronger for children from low socioeconomic background.
    Keywords: childcare, child cognitive outcomes, Millennium Cohort Survey, MCS
    JEL: J13 D10 I21
    Date: 2017–01
  4. By: Ferreira, Francisco H. G. (World Bank); Firpo, Sergio (Insper, São Paulo); Galvao, Antonio F. (University of Iowa)
    Abstract: Different episodes of economic growth display widely varying distributional characteristics, both across countries and over time. Growth is sometimes accompanied by rising and sometimes by falling inequality. Applied economists have come to rely on the Growth Incidence Curve, which gives the quantile-specific rate of income growth over a certain period, to describe and analyze the incidence of economic growth. This paper discusses the identification conditions, and develops estimation and inference procedures for both actual and counterfactual growth incidence curves, based on general functions of the quantile potential outcome process over the space of quantiles. The paper establishes the limiting null distribution of the test statistics of interest for those general functions, and proposes resampling methods to implement inference in practice. The proposed methods are illustrated by a comparison of the growth processes in the United States and Brazil during 1995-2007. Although growth in the average real wage was disappointing in both countries, the distribution of that growth was markedly different. In the United States, wage growth was mediocre for the bottom 80 percent of the sample, but much more rapid for the top 20 percent. In Brazil, conversely, wage growth was rapid below the median, and negative at the top. As a result, inequality rose in the United States and fell markedly in Brazil.
    Keywords: growth incidence curves, potential outcomes, inference, quantile process
    JEL: C14 C21 D31 I32
    Date: 2017–01
  5. By: Carlos Gradín (Universidade de Vigo and EQUALITAS, Spain)
    Abstract: We present an approach to measure the stratification of occupations by sex. For that, we extend the conventional framework for measuring gender segregation to take into account the quality of jobs (e.g. average earnings) predominantly held by each sex. We complement segregation curves and measures derived from them, with their associated concentration curves and indices, to determine whether women are segregated into low-paying jobs. We investigate with this approach the long-term trends of gender segregation and stratification of occupations by sex in the US using census data. Our results show that de-stratification of occupations by sex was more intense than their desegregation, and lasted longer, even after segregation had stagnated. Neither segregation nor stratification levels can be explained by the different characteristics of male and female workforces, although the profound changes in the composition of workers over time (e.g. education, marital status) did help to substantially explain their trends. Changes in the earnings structure favoring occupations held by women since 1980 additionally contributed to reduce stratification over time. Finally, changes in the conditional occupational distribution by sex only reduced segregation and stratification before 1990.
    Keywords: occupational segregation, stratification, low-paying occupations, gender.
    JEL: J16 J42 J71 J82
    Date: 2017–01
  6. By: Sandra E. Black; Sanni Breining; David N. Figlio; Jonathan Guryan; Krzysztof Karbownik; Helena Skyt Nielsen; Jeffrey Roth; Marianne Simonsen
    Abstract: It is notoriously difficult to identify peer effects within the family, because of the common shocks and reflection problems. We make use of a novel identification strategy and unique data in order to gain some purchase on this problem. We employ data from the universe of children born in Florida between 1994 and 2002 and in Denmark between 1990 and 2001, which we match to school and medical records. To address the identification problem, we examine the effects of having a sibling with a disability. Utilizing three-plus-child families, we employ a differences-in-differences research design which makes use of the fact that birth order influences the amount of time which a child spends in early childhood with their siblings, disabled or not. We observe consistent evidence in both locations that the second child in a family is differentially affected when the third child is disabled. We also provide evidence which suggests that the sibling spillovers are working at least in part through the relative exposure to parental time and financial resources.
    JEL: I0 J13
    Date: 2017–01
  7. By: Hamermesh, Daniel S. (Royal Holloway, University of London); Genadek, Katie R. (University of Minnesota); Burda, Michael C. (Humboldt University Berlin)
    Abstract: Evidence from the American Time Use Survey 2003-12 suggests the existence of small but statistically significant racial/ethnic differences in time spent not working at the workplace. Minorities, especially men, spend a greater fraction of their workdays not working than do white non-Hispanics. These differences are robust to the inclusion of large numbers of demographic, industry, occupation, time and geographic controls. They do not vary by union status, public-private sector attachment, pay method or age; nor do they arise from the effects of equal-employment enforcement or geographic differences in racial/ethnic representation. The findings imply that measures of the adjusted wage disadvantages of minority employees are overstated by about 10 percent.
    Keywords: time use, wage discrimination, wage differentials
    JEL: J22 J15 J31
    Date: 2017–01

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