nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2018‒03‒12
six papers chosen by
Maximo Rossi
Universidad de la República

  1. Marriage, Labor Supply and the Dynamics of the Social Safety Net By Hamish Low; Costas Meghir; Luigi Pistaferri; Alessandra Voena
  2. Does Insurance Expansion Alter Health Inequality and Mobility? Evidence from the Mexican Seguro Popular By Joan Costa-i-Font; Frank Cowell; Belén Saénz de Miera Juárez
  3. The Long-Lasting Effects of Family and Childhood on Adult Wellbeing: Evidence from British Cohort Data By Flèche, Sarah; Lekfuangfu, Warn N.; Clark, Andrew E.
  4. Access to Long Term Care After a Wealth Shock: Evidence from The Housing Bubble and Burst By Joan Costa-i-Font; Richard G. Frank; Katherine Swartz
  5. The Effect of a Sibling's Gender on Earnings, Education and Family Formation By Peter, Noemi; Lundborg, Petter; Mikkelsen, Sara; Webbink, Dinand
  6. Explaining cross-state earnings inequality differentials in India: An RIF decomposition approach By Carlos Gradín

  1. By: Hamish Low (University of Cambridge); Costas Meghir (Yale University); Luigi Pistaferri (Stanford University); Alessandra Voena (The University of Chicago)
    Abstract: The 1996 PRWORA reform introduced time limits on the receipt of welfare in the United States. We use variation by state and across demographic groups to provide reduced form evidence showing that such limits led to a fall in welfare claims (partly due to "banking" benefits for future use), a rise in employment, and a decline in divorce rates. We then specify and estimate a life-cycle model of marriage, labor supply and divorce under limited commitment to better understand the mechanisms behind these behavioral responses, carry out counterfactual analysis with longer run impacts and evaluate the welfare effects of the program. Based on the model, which reproduces the reduced form estimates, we show that among low educated women, instead of relying on TANF, single mothers work more, more mothers remain married, some move to relying only on food stamps and, in ex-ante welfare terms, women are worse off.
    Keywords: time limits, welfare reform, life-cycle, marriage and divorce
    JEL: D91 H53 J12 J21
    Date: 2018–03
  2. By: Joan Costa-i-Font; Frank Cowell; Belén Saénz de Miera Juárez
    Abstract: The effect of insurance expansions on the distribution of health status is still a matter we know little about. This paper draws upon new measures of pure health inequality and mobility in health which accommodates categorical data to understand how an expansion of public insurance affects both inequality and mobility in health. These measures require a measure of health status that is either “upward-looking” or “downward looking”. We find that, the distribution of health worsens in Mexico between 2002 and 2009, although the change is only consistent for the upward looking definition of status. Together with the lack of mobility in health observed, we can thus conclude that Mexico is becoming more rigid over time insofar as the distribution of health status.
    Keywords: self-reported health, health inequality, health mobility, health insurance, Mexico
    JEL: I18
    Date: 2017
  3. By: Flèche, Sarah; Lekfuangfu, Warn N.; Clark, Andrew E.
    Abstract: To what extent do childhood experiences continue to affect adult wellbeing over the life course? Previous work on this link has been carried out either at one particular adult age or for some average over adulthood. We here use two British birth-cohort datasets (the 1958 NCDS and the 1970 BCS) to map out the time profile of the effect of childhood experiences on adult outcomes, including life satisfaction. We find that the effects of many aspects of childhood do not fade away over time but are rather remarkably stable. In both birth-cohorts, child non-cognitive skills are the strongest predictors of adult life satisfaction at all ages. Of these, emotional health is the strongest. Childhood cognitive performance is more important than good conduct in explaining adult life satisfaction in the earlier NCDS cohort, whereas this ranking is inverted in the more recent BCS.
    Keywords: life satisfaction,cohort data,childhood,adult outcomes
    JEL: A12 D60 I31
    Date: 2018
  4. By: Joan Costa-i-Font; Richard G. Frank; Katherine Swartz
    Abstract: Home equity is the primary self-funding mechanism for long term services and supports (LTSS). Using data from the relevant waves of the Health and Retirement Study (1996-2010), we exploit the exogenous variation in the form of wealth shocks resulting from the value of housing assets, to examine the effect of wealth on use of home health, unpaid help and nursing home care by older adults. We find a significant increase in the use of paid home health care and unpaid informal care but no effect on nursing home care access. We conduct a placebo test on individuals who do not own property; their use of LTSS was not affected by the housing wealth changes. The findings suggest that a wealth shock exerts a positive and significant effect on the uptake of home health and some effect on unpaid care but no significant effect on nursing home care.
    Keywords: long term care, housing equity, housing bubble, informal care, home health care, nursing home care
    JEL: I18 J14
    Date: 2017
  5. By: Peter, Noemi (Faculty of Economics and Business, University of Groningen); Lundborg, Petter (Department of Economics, Lund University); Mikkelsen, Sara (Department of Economics, Lund University); Webbink, Dinand (Erasmus School of Economics, Rotterdam)
    Abstract: We examine how the gender of a sibling affects earnings, education and family formation. Identification is complicated by parental preferences: if parents prefer certain sex compositions over others, children's gender affects not only the outcomes of other children but also the existence of potential additional children. We employ two empirical strategies that both address this problem. First, we look at a sample of dizygotic (i.e. non-identical) twins. Second, we use a large sample of singletons to estimate whether first-borns are affected by the gender of their second-born sibling. We find that a same-sex sibling increases men's earnings and family formation outcomes (marriage and number of children), as compared to an opposite-sex sibling. Women with a same-sex sibling also earn more and are somewhat more likely to form a family in the singleton sample. A large part of the positive effect on men's income can be explained by competition among brothers. Women on the other hand seem to benefit from sisters because of shared labor market networks. The effects on family formation might stem from differential parental treatment for men, and from competition between sisters for women.
    Keywords: sibling gender; sex composition; twins; income; schooling; fertility
    JEL: J00 J13 J16 J24
    Date: 2018–02–26
  6. By: Carlos Gradín
    Abstract: Despite the relevance of geographical disparities in India, earnings inequality occurs mostly within states, but with a broad range of variability in its levels. We investigate the sources of such variability using RIF decompositions of the inequality gaps between most populous states and India. Our results point to substantial compositional effects associated with cross-state variability in the extent of high-skilled formal employment outside the farm and construction sectors, and along the degree of urbanization and some demographic factors. Cross-state differences in conditional earnings structures, however, turn out to be crucial, especially regarding the different degree of earnings stratification by caste in each state.
    Date: 2018

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