nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2017‒10‒29
eight papers chosen by
Maximo Rossi
Universidad de la República

  1. Can Subsidising Job-Related Training Reduce Inequality? By Konstantinos Angelopoulos; Andrea Benecchi; Jim Malley
  2. Subjective Well-Being and Partnership Dynamics: Are Same-Sex Relationships Different? By Chen, Shuai; van Ours, Jan C.
  3. Fairness and the unselfish demand for redistribution by taxpayers and welfare recipients By Sabatini, Fabio; Ventura, Marco; Yamamura, Eiji; Zamparelli, Luca
  4. How Do Latin American Migrants in the U.S. Stand on Schooling Premium? What Does It Reveal about Education Quality in Their Home Countries? By Alonso-Soto, Daniel; Nopo, Hugo R.
  5. Was Brexit Caused by the Unhappy and the Old? By Liberini, Federica; Oswald, Andrew J.; Proto, Eugenio; Redoano, Michela
  6. The Productivity Slowdown and the Declining Labor Share: A Neoclassical Exploration By Gene M. Grossman; Elhanan Helpman; Ezra Oberfield; Thomas Sampson
  7. Uber vs. Taxi: A Driver’s Eye View By Joshua D. Angrist; Sydnee Caldwell; Jonathan V. Hall
  8. Racial/Ethnic Differences in Non-Work at Work By Burda, Michael

  1. By: Konstantinos Angelopoulos; Andrea Benecchi; Jim Malley
    Abstract: A well-established stylised fact is that employer provided job-related training raises productivity and wages. Using UK data, we further find that job-related training is positively related to subsidies aimed at reducing training costs for employers. We also find that there is a positive, albeit quantitatively small, relationship between wage inequality and training inequality in the UK. Motivated by the above, we explore whether policies to subsidise firms’ monetary cost of training can improve earnings for the lower skilled and reduce inequality. We achieve this by developing a dynamic general equilibrium model, featuring skilled and unskilled labour, capital-skill complementarity in production and an endogenous training allocation. Our results suggest that training subsidies for the unskilled have a significant impact on the labour income of unskilled workers. These subsides also increase earnings for skilled workers and raise aggregate income with implied lifetime multipliers exceeding unity. Finally, the positive spill over effects to skilled workers imply that training subsidies are not very effective in reducing inequality, measured as the distance between skilled and unskilled wages and incomes.
    Keywords: job-related training, wage and earning inequality, training subsidies
    JEL: E24 J24 J31
    Date: 2017
  2. By: Chen, Shuai (Tilburg University); van Ours, Jan C. (Erasmus University Rotterdam)
    Abstract: Partnered individuals are happier than singles. This can be because partnership leads to more satisfactory subjective well-being or because happier people are more likely to find a partner. We analyze Dutch panel data to investigate whether there is a causal effect of partnership on subjective well-being. Our data allow us to distinguish between marriage and cohabitation and between same-sex partnerships and opposite-sex ones. Our results support the short-term crisis model and adaptation theory. We find that marital partnership improves well-being and that these benefits are homogeneous to sexual orientation. The well-being gains of marriage are larger than those of cohabitation. Investigating partnership formation and disruption, we discover that the well-being effects are symmetric. Finally, we find that marriage improves well-being for both younger and older cohorts while cohabitation only benefits younger cohort.
    Keywords: subjective well-being, happiness, marriage, cohabitation, sexual orientation
    JEL: J12
    Date: 2017–09
  3. By: Sabatini, Fabio; Ventura, Marco; Yamamura, Eiji; Zamparelli, Luca
    Abstract: We illustrate how the desire to live in a fair society that rewards individual effort and hard work triggers an unselfish though rational demand for redistribution. This leads the well off to prefer higher taxes and the poor to reject extreme progressivity. We then provide evidence of these behaviors using a nationally representative survey from Italy. Our empirical analysis confirms that a stronger aversion to unfair distributive outcomes is associated with a higher support for redistribution by individuals with high income and to a lower demand for redistribution by those with low income.
    Keywords: fairness, income distribution, inequalities, taxation, Welfare, redistribution, free-riding, civic capital, social capital
    JEL: D63 H10 H50 H53 Z1
    Date: 2017–10–19
  4. By: Alonso-Soto, Daniel (OECD); Nopo, Hugo R. (GRADE)
    Abstract: Indicators for quality of schooling are not only relatively new in the world but also unavailable for a sizable share of the world's population. In their absence, some proxy measures have been devised. One simple but powerful idea has been to use the schooling premium for migrant workers in the U.S. (Bratsberg and Terrell, 2002). In this paper we extend this idea and compute measures for the schooling premium of immigrant workers in the U.S. over a span of five decades. Focusing on those who graduated from either secondary or tertiary education in Latin American countries, we present comparative estimates of the evolution of such premia for both schooling levels. The results show that the schooling premia in Latin America have been steadily low throughout the whole period of analysis. The results stand after controlling for selective migration in different ways. This contradicts the popular belief in policy circles that the education quality of the region has deteriorated in recent years. In contrast, schooling premium in India shows an impressive improvement in recent decades, especially at the tertiary level.
    Keywords: schooling premium, returns to education, wage differentials, immigrant workers
    JEL: J31 J61
    Date: 2017–09
  5. By: Liberini, Federica (ETH Zurich); Oswald, Andrew J. (University of Warwick); Proto, Eugenio (University of Warwick); Redoano, Michela (University of Warwick)
    Abstract: On 23 June 2016, the United Kingdom voted to leave the European Union (so-called 'Brexit'). This paper uses newly released information, from the Understanding Society data set, to examine the characteristics of individuals who were for and against Brexit. Two key findings emerge. First, unhappy feelings contributed to Brexit. However, contrary to commonly heard views, the key channel of influence was not through general dissatisfaction with life. It was through a person's narrow feelings about his or her own financial situation. Second, despite some commentators' guesses, Brexit was not caused by old people. Only the very young were substantially pro-Remain.
    Keywords: Brexit, European Union, referendum, voting
    JEL: D72
    Date: 2017–09
  6. By: Gene M. Grossman; Elhanan Helpman; Ezra Oberfield; Thomas Sampson
    Abstract: We explore the possibility that a global productivity slowdown is responsible for the widespread decline in the labor share of national income. In a neoclassical growth model with endogenous human capital accumulation a la Ben Porath (1967) and capital-skill complementarity a la Grossman et al. (2017), the steady-state labor share is positively correlated with the rates of capital-augmenting and labor-augmenting technological progress. We calibrate the key parameters describing the balanced growth path to U.S. data for the early post-war period and find that a one percentage point slowdown in the growth rate of per capita income can account for between one half and all of the observed decline in the US labor share.
    Keywords: neoclassical growth, balanced growth, technological progress, capital-skill complementarity, labor share, capital share
    JEL: O40 E25
    Date: 2017–10
  7. By: Joshua D. Angrist; Sydnee Caldwell; Jonathan V. Hall
    Abstract: Ride-hailing drivers pay a proportion of their fares to the ride-hailing platform operator, a commission-based compensation model used by many internet-mediated service providers. To Uber drivers, this commission is known as the Uber fee. By contrast, traditional taxi drivers in most US cities make a fixed payment independent of their earnings, usually a weekly or daily medallion lease, but keep every fare dollar net of expenses. We assess these compensation models from a driver’s point of view using an experiment that offered random samples of Boston Uber drivers opportunities to lease a virtual taxi medallion that eliminates the Uber fee. Some drivers were offered a negative fee. Drivers’ labor supply response to our offers reveals a large intertemporal substitution elasticity, on the order of 1.2. At the same time, our virtual lease program was under-subscribed: many drivers who would have benefitted from buying an inexpensive lease chose to opt out. We use these results to compute the average compensation required to make drivers indifferent between ride-hailing and a traditional taxi compensation contract. The results suggest that ride-hailing drivers gain considerably from the opportunity to drive without leasing.
    JEL: J18 J22 J41 J58
    Date: 2017–09
  8. By: Burda, Michael
    Abstract: Die Erhebung "American Time Use Survey" belegt kleine, statistisch signifikante Unterschiede der tatsächlichen Arbeitszeit am Arbeitsplatz nach ethnischen Minderheiten in den USA. Minderheitsbedingte Differenziale der geleisteten Arbeit werden nach Berücksichtigung von einer großen Anzahl von demografischen, beruflichen und geografischen Kontrollvariablen robust geschätzt. Die Ergebnisse deuten auf eine Überzeichnung des geschätzen Lohnnachteils von Minderheiten von etwa 10 Prozent hin.
    JEL: J15 J22 J31
    Date: 2017

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