nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2017‒03‒12
five papers chosen by
Maximo Rossi
Universidad de la República

  1. Sources of the Union Wage Gap: Results from High-Dimensional Fixed Effects Regression Models By Addison, John T.; Portugal, Pedro; Vilares, Hugo
  2. Origins of happiness By Andrew Clark; Sarah Flèche; Richard Layard; Nattavudh Powdthavee; George Ward
  3. On the Measurement of Long-Run Income Inequality: Empirical Evidence from Norway, 1875-2013 By Aaberge, Rolf; Atkinson, Tony; Modalsli, Jorgen Heibo
  4. The Dynamics of Gender Earnings Differentials: Evidence from Establishment Data By Erling Barth; Sari Pekkala Kerr; Claudia Olivetti
  5. Accounting for Wealth Inequality Dynamics: Methods, Estimates and Simulations for France (1800-2014) By Garbinti, Bertrand; Goupille-Lebret, Jonathan; Piketty, Thomas

  1. By: Addison, John T.; Portugal, Pedro; Vilares, Hugo
    Abstract: We estimate the impact of union density on wages using Portuguese matched employer-employee-contract data, extending Gelbach’s (2016) omitted variable bias decomposition procedure to obtain the contribution of worker, firm, and job-title heterogeneity to the union wage premium. The principal result is the dominance of the firm fixed effect: the allocation of workers among firms with different wage policies. For their part, the unobserved skills of union workers have only a modest impact on wages. In turn, job titles reflect the average contract in the collective agreement, while the wage cushion offers firms a margin of flexibility, partially undoing increases in the bargained wage. Finally, there is little to suggest that the union wage gap is influenced by improved match quality.
    Keywords: union density,union wage gap,total compensation,bargained wages,wage cushion,wage supplements,worker/firm/job-title fixed effects,Gelbach decomposition
    JEL: J31 J33 J41 J51 J52
    Date: 2017
  2. By: Andrew Clark; Sarah Flèche; Richard Layard; Nattavudh Powdthavee; George Ward
    Abstract: Understanding the key determinants of people's life satisfaction makes it possible to suggest policies for how best to reduce misery and promote wellbeing. A forthcoming book by Richard Layard and colleagues discusses evidence on the origins of happiness in survey data from Australia, Germany, the UK and the United States.
    Keywords: happiness, wellbeing, government, mental health
    Date: 2017–03
  3. By: Aaberge, Rolf (Statistics Norway); Atkinson, Tony (Nuffield College, Oxford); Modalsli, Jorgen Heibo (Statistics Norway)
    Abstract: In seeking to understand inequality today, a great deal can be learned from history. However, there are few countries for which the long-run development of income inequality has been charted. Many countries have records of incomes, taxes and social support. This paper presents a new methodology constructing income inequality indices from such data. The methodology is applied to Norway, for which rich historical data sources exist. Taking careful account of the definition of income and population and the availability of micro data starting in 1967, an upper and lower bound for the pre-tax income Gini coefficient is produced.
    Keywords: income, inequality, distribution, Norway, long-run changes
    JEL: D31 D63 N33 N34
    Date: 2017–02
  4. By: Erling Barth (Institute for Social Research, Oslo; NBER); Sari Pekkala Kerr (Wellesley College); Claudia Olivetti (Boston College; NBER)
    Keywords: earnings, gender differentials, earnings inequality
    Date: 2017–02–28
  5. By: Garbinti, Bertrand; Goupille-Lebret, Jonathan; Piketty, Thomas
    Abstract: This paper combines different sources and methods (income tax data, inheritance registers, national accounts, wealth surveys) in order to deliver consistent, unified wealth distribution series by percentiles for France over the 1800-2014 period, with detailed breakdowns by age, gender, income and assets over the 1970-2014 sub-period. We find a large decline of the top 10% wealth share from the 1910s to the 1980s (from 80-90% of total wealth during the 19th century up until World War 1, down to 50-60% in the 1980s), mostly to the benefit of the middle 40% of the distribution (the bottom 50% wealth share is always less than 10%). Since the 1980s-90s, we observe a moderate rise of wealth concentration, with large fluctuations due to asset price movements. In effect, rising inequality in saving rates and rates of return pushes toward rising wealth concentration, in spite of the contradictory effect of housing prices. We develop a simple simulation model highlighting how the combination of unequal saving rates, rates of return and labor earnings leads to large multiplicative effects and high steady-state wealth concentration. Small changes in the key parameters appear to matter a lot for long-run inequality. We discuss the conditions under which rising concentration is likely to continue in the coming decades.
    Keywords: saving rate; steady-state; Wealth Inequality
    JEL: D31 E21 N34
    Date: 2017–02

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