nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2018‒02‒12
five papers chosen by
Maximo Rossi
Universidad de la República

  1. The Impact of Health on Labor Supply Near Retirement By Richard Blundell; Jack Britton; Monica Costa Dias; Eric French
  2. Early-life correlates of later-life well-being: evidence from the Wisconsin Longitudinal Study By Clark, Andrew E.; Lee, Tom
  3. Living conditions and well-being: Evidence from African countries By Andrew E. Clark; Conchita D’Ambrosio
  4. Robot arithmetic: can new technology harm all workers or the average worker? By Caselli, Francesco; Manning, Alan
  5. The productivity slowdown and the declining labor share: a neoclassical exploration By Grossman, Gene M.; Helpman, Elhanan; Oberfield, Ezra; Sampson, Thomas

  1. By: Richard Blundell (University College London); Jack Britton (Institute for Fiscal Studies); Monica Costa Dias (Institute for Fiscal Studies); Eric French (University College London)
    Abstract: Estimates of effect of health on employment differ from study to study due to differences in methods, data, institutional background and health measure. We assess the importance of these differences, using a unified framework to interpret and contrast estimate for the US and England. We find that subjective and objective health measures, and subjective measures instrumented by objective measures produce similar estimates but only if a sufficiently large number of objective measures is used. Otherwise, objective measures produce downward biased estimates. Failure to account for initial conditions produces upward biased estimates. We find that a single subjective health index yields similar estimates to multiple measures. Overall, declines in health explain up to 15% of the decline in employment between ages 50 and 70. The effects drop with education and are larger in the US than in England. Cognition has little added explanatory power once we control for health.
    Date: 2017–09
  2. By: Clark, Andrew E.; Lee, Tom
    Abstract: We here use data from the Wisconsin Longitudinal Study (WLS) to provide one of the first analyses of the distal (early-life) and proximal (later-life) correlates of older-life subjective well-being. Unusually, we have two distinct measures of the latter: happiness and eudaimonia. Even after controlling for proximal covariates, outcomes at age 18 (IQ score, parental income and parental education) remain good predictors of well-being over 50 years later. In terms of the proximal covariates, mental health and social participation are the strongest predictors of both measures of well-being in older age. However, there are notable differences in the other correlates of happiness and eudaimonia. As such, well-being policy will depend to an extent on which measure is preferred
    Keywords: life-course; well-being; eudaimonia; health; happiness
    JEL: I31 I38
    Date: 2017–11–01
  3. By: Andrew E. Clark; Conchita D’Ambrosio
    Abstract: We here use five rounds of Afrobarometer data covering more than 100,000 individuals over the 2004-2016 period to explore the link between self-assessed measures of living conditions and objective measures of individual well-being (access to basic needs). These latter are picked up by various indices of deprivation, satisfaction and inequality. We find some evidence of comparisons to those who are better off and to those who are worse off, in terms of access to basic needs, in the evaluation of current living conditions. Overall, however, subjective well-being is mostly absolute in African countries. There is notable heterogeneity by level of development, with the effect of lack of access to basic needs being more pronounced in poorer countries. Equally, comparisons to the better-off are associated with better living conditions in poorer countries, suggesting the existing of a tunnel effect: this latter disappears with economic development.
    Date: 2017
  4. By: Caselli, Francesco; Manning, Alan
    Abstract: It is well-established that new technology can cause large changes in relative wages and inequality. But there are also claims, based largely on verbal expositions, that new technology will harm workers on average or even all workers. Using formal models (which impose logical consistency and clear links between assumptions and conclusions) we show – under plausible assumptions - that new technology will cause average wages to rise if the prices of investment goods fall relative to consumer goods (a condition supported by the data) and if the new technologies do not lead to a fall in market competition. Some groups of workers must gain but others may be harmed. However, if workers can freely choose their occupation, or redistribution among workers is possible, all workers can gain
    Keywords: technology; wages
    JEL: J31 O33
    Date: 2017–09–01
  5. By: Grossman, Gene M.; Helpman, Elhanan; Oberfield, Ezra; Sampson, Thomas
    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: E25 O40
    Date: 2017–10–01

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