nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2017‒03‒26
five papers chosen by
Maximo Rossi
Universidad de la República

  1. Distributive Implications of Fertility Changes in Latin America By Nicolas Badaracco; Leonardo Gasparini; Mariana Marchionni
  2. Coping with Change: International Differences in the Returns to Skills By Hanushek, Eric A.; Schwerdt, Guido; Wiederhold, Simon; Woessmann, Ludger
  3. Anatomy of Income Inequality in the United States: 1979{2013 By Aboozar Hadavand
  4. Perceptions of Distributive Justice in Latin America During a Period of Falling Inequality By Germán Reyes; Leonardo Gasparini
  5. Full Information Estimation of Household Income Risk and Consumption Insurance By Arpita Chatterjee; James Morley; Aarti Singh

  1. By: Nicolas Badaracco (CEDLAS - UNLP); Leonardo Gasparini (CEDLAS - UNLP); Mariana Marchionni (CEDLAS - UNLP)
    Abstract: Fertility rates significantly fell over the last decades in Latin America. In order to assess the extent to which these changes contributed to the observed reduction in income poverty and inequality we apply microeconometric decompositions to microdata from national household surveys from seven Latin American countries. We find that changes in fertility rates were associated to a non-negligible reduction in inequality and poverty in the region. The main channel was straightforward: lower fertility implied smaller families and hence larger per capita incomes. Lower fertility also fostered labor force participation, especially among women, which contributed to the reduction of poverty and inequality in most countries, although the size of this effect was smaller.
    JEL: J2 J1
    Date: 2017–01
  2. By: Hanushek, Eric A. (Hoover Institution, Stanford University, CESifo, and NBER); Schwerdt, Guido (University of Konstanz, CESifo, and IZA); Wiederhold, Simon (Catholic University Eichstaett-Ingolstadt, ifo Institute, and CESifo); Woessmann, Ludger (University of Munich, ifo Institute, CESifo, and IZA)
    Abstract: International data from the PIAAC survey allow estimation of comparable labor-market returns to skills for 32 countries. Returns to skills are larger in faster growing economies, consistent with the hypothesis that skills are particularly important for adaptation to economic change.
    Keywords: returns to skills; economic growth; cognitive skills; international comparisons; disequilibria; knowledge capital JEL Classification: I2; J3; O15
    Date: 2017
  3. By: Aboozar Hadavand
    Abstract: This paper provides a novel analysis of the trend in income inequality in the United States between 1979{2013. There are two ways in which this paper contributes to the literature. First, I analyze how much of the existing inequality in the U.S. is due to the demographic changes that happened over this period. Using microdata from Luxembourg Income Study and after decomposing inequality into within- and between-age group components, I find that the within-group share of overall inequality in the U.S. is high and steady compared to other developed countries. I also find that about 17 percent of the rise in inequality in this period is due to the between-group component (life-cycle effects). Second, I provide a regression analysis to explain cross-group variations in inequality during the period. I estimate that most of the rise in inequality has happened among middle-aged men while inequality among women, especially among married women has, in fact, decreased. This more granular analysis of inequality can help us investigate the causes of inequality, which would be impossible if we only look at a single inequality statistic.
    Keywords: Inequality Decomposition, Within-Group Inequality, Income Distribution
    JEL: D31 J11 D63
    Date: 2017–03
  4. By: Germán Reyes (The World Bank and CEDLAS); Leonardo Gasparini (CEDLAS-FCE and CONICET.)
    Abstract: In this paper we explore perceptions of distributive justice in Latin America during the 2000s and its relationship with income inequality. In line with the fall in income inequality in the region, we document a widespread, although modest, decrease in the share of the population that believes income distribution is unfair. The fall in the perception of unfairness holds across very heterogeneous groups of the population. Moreover, perceptions evolved in the same direction as income inequality for 17 out of the 18 countries for which microdata is available. Our analysis reveals unfairness perceptions are more correlated with relative measures of income inequality than absolute ones and that individual characteristics are correlated with distributive perceptions. On average, individuals that are older, more educated, unemployed, and left-wing tend to perceive income distribution as more unfair. We show that the decrease in unfairness perceptions during the last decade was due to changes in inequality, rather than to composition effects. Finally, we show that individuals that perceive income distribution as very unfair are more prone to mobilize and protest.
    JEL: D31 D63 D83
    Date: 2017–04
  5. By: Arpita Chatterjee (UNSW Business School, UNSW); James Morley (UNSW Business School, UNSW); Aarti Singh (University of Sydney)
    Abstract: We develop a panel unobserved components model of household income and consumption that can be estimated using full information methods. Maximum likelihood estimates for a simple version of this model suggests similar income risk, but higher consumption insurance relative to the partial information moments-based estimates in Blundell, Pistaferri, and Preston (2008) for the same panel dataset. Bayesian model comparison supports this simple version of the model that only allows a spillover from permanent income to permanent consumption, but assumes no cointegration and no persistence in transitory components. However, consumption insurance and income risk estimates are highly robust across different specifications.
    Keywords: panel unobserved components; Bayesian model comparison; permanent income; household consumption behavior
    JEL: E32 E22 C32
    Date: 2017–03

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