nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2017‒10‒22
six papers chosen by

  1. Sibling Spillovers By Sandra E. Black; Sanni Breining; David N. Figlio; Jonathan Guryan; Krzysztof Karbownik; Helena Skyt Nielsen; Jeffrey Roth; Marianne Simonsen
  2. Are There Too Many Farms in the World? Labor-Market Transaction Costs, Machine Capacities and Optimal Farm Size By Andrew D. Foster; Mark R. Rosenzweig
  3. Subjective and physiological measures of well-being: an exploratory analysis using birth-cohort data By Andrén, Daniela; Clark, Andrew E; D´Ambrosio, Conchita; Karlsson, Sune; Pettersson, Nicklas
  4. The Non-Market Benefits of Education and Ability By James J. Heckman; John Eric Humphries; Gregory Veramendi
  5. The ‘Healthy Worker Effect’: Do Healthy People Climb the Occupational Ladder? By Costa Font, Joan; Ljunge, Martin
  6. Are the Spanish Long-Term Unemployed Unemployable? By Samuel Bentolila; J. Ignacio García-Pérez; Marcel Jansen

  1. 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.
    Keywords: sibling spillovers, child care, sibling fixed effects
    JEL: I00 J13
    Date: 2017
  2. By: Andrew D. Foster; Mark R. Rosenzweig
    Abstract: This paper seeks to explain the U-shaped relationship between farm productivity and farm scale - the initial fall in productivity as farm size increases from its lowest levels and the continuous upward trajectory as scale increases after a threshold - observed across the world and in low-income countries. We show that the existence of labor-market transaction costs can explain why the smallest farms are most efficient, slightly larger farms least efficient and larger farms as efficient as the smallest farms. We show that to explain the rising upper tail of the U characteristic of high-income countries requires there be economies of scale in the ability of machines to accomplish tasks at lower costs at greater operational scales. Using data from the India ICRISAT VLS panel survey we find evidence consistent with these conditions, suggesting that there are too many farms, at scales insufficient to exploit locally-available equipment-capacity scale-economies.
    JEL: O13
    Date: 2017–10
  3. By: Andrén, Daniela (Örebro University School of Business); Clark, Andrew E (Paris School of Economics (PSE)); D´Ambrosio, Conchita (University of Luxembourg); Karlsson, Sune (Örebro University School of Business); Pettersson, Nicklas (Örebro University School of Business)
    Abstract: We use a rich longitudinal data set following a cohort of Swedish women from age 10 to 49 to analyse the effects of birth and early-life conditions on adulthood outcomes. These latter include both well-being and the stress hormone cortisol. Employment and marital status are important adult determinants of well-being. Log family income and absence from school also predict adult well-being, although their importance falls when controlling for adult and birth characteristics. Among the birth characteristics, we find that high birth weight (>4.3kg) affects adult well-being. We predict the level of adult cortisol only poorly, and suggest that the relationship between life satisfaction and cortisol is non-monotonic: both high and low cortisol are negatively correlated with life satisfaction. The results from an OLS life satisfaction regression and a multinomial logit of high or low cortisol (as compared to medium) are more similar to each other.
    Keywords: life satisfaction; cortisol; birth-cohort data; adult; child and birth outcomes; multivariate imputation by chained equations
    JEL: A12 D60 I31
    Date: 2017–10–12
  4. By: James J. Heckman; John Eric Humphries; Gregory Veramendi
    Abstract: This paper analyzes the non-market benefits of education and ability. Using a dynamic model of educational choice we estimate returns to education that account for selection bias and sorting on gains. We investigate a range of non-market outcomes including incarceration, mental health, voter participation, trust, and participation in welfare. We find distinct patterns of returns that depend on the levels of schooling and ability. Unlike the monetary benefits of education, the benefits to education for many non-market outcomes are greater for low-ability persons. College graduation decreases welfare use, lowers depression, and raises self-esteem more for less-able individuals.
    JEL: D01 I14 I24 I28
    Date: 2017–10
  5. By: Costa Font, Joan (London School of Economics); Ljunge, Martin (Research Institute of Industrial Economics (IFN))
    Abstract: The association between occupational status and health has been taken to reveal the presence of health inequalities shaped by occupational status. However, that interpretation assumes no influence of health status in explaining occupational standing. This paper documents evidence of non-negligible returns to occupation status on health (which we refer to as the ‘healthy worker effect’). We use a unique empirical strategy that addressed reverse causality, namely an instrumental variable strategy using the variation in average health in the migrant’s country of origin, a health measure plausibly not determined by the migrant’s occupational status. Our findings suggest that health status exerts significant effects on occupational status in several dimensions; having a supervising role, worker autonomy, and worker influence. The effect size of health is larger than that of an upper secondary education.
    Keywords: Occupational status; Self-reported health; Immigrants; Work autonomy; Supervising role
    JEL: I18 J50
    Date: 2017–10–06
  6. By: Samuel Bentolila; J. Ignacio García-Pérez; Marcel Jansen
    Abstract: Long-term unemployment reached unprecedented levels in Spain in the wake of the Great Recession and it still affects around 57% of the unemployed. We document the sources that contributed to the rise in long-term unemployment and analyze its persistence using state-of-the-art duration models. We find pervasive evidence of negative duration dependence, while personal characteristics such as mature age, lack of experience, and entitlement to unemployment benefits are key to understand the cross-sectional differences in the incidence of long-term unemployment. The negative impact of low levels of skill and education is muted by the large share of temporary contracts, but once we restrict attention to employment spells lasting at least one month these factors also contribute to a higher risk of long-term unemployment. Surprisingly, workers from the construction sector do not fare worse than similar workers from other sectors. Finally, self-reported reservation wages are found to respond strongly to the cycle, but much less to individual unemployment duration. In view of these findings, we argue that active labour market policies should play a more prominent role in the fight against long-term unemployment while early activation should be used to curb inflows.
    Keywords: long-term unemployment, great recession, duration models, survival probability, Spain
    JEL: J63 J64 J65 C41
    Date: 2017

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