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on Unemployment, Inequality and Poverty |
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Issue of 2018‒03‒19
six papers chosen by |
| By: | Chowdhury, Shyamal (University of Sydney, and IZA Bonn); Sutter, Matthias (Max Planck Institute for Research on Collective Goods Bonn, and University of Cologne); Zimmermann, Klaus F. (UNU-MERIT) |
| Abstract: | Economic preferences - like time, risk and social preferences - have been shown to be very influential for real-life outcomes, such as educational achievements, labour market outcomes, or health status. We contribute to the recent literature that has examined how and when economic preferences are formed, putting particular emphasis on the role of intergenerational transmission of economic preferences within families. Our paper is the first to run incentivized experiments with fathers and mothers and their children by drawing on a unique dataset of 1,999 members of Bangladeshi families, including 911 children, aged 6-17 years, and 544 pairs of mothers and fathers. We find a large degree of intergenerational persistence as the economic preferences of mothers and fathers are significantly positively related to their children's economic preferences. Importantly, we find that socio-economic status of a family has no explanatory power as soon as we control for parents' economic preferences. A series of robustness checks deals with the role of older siblings, the similarity of parental preferences, and the average preferences within a child's village. |
| Keywords: | Intergenerational transmission of preferences, time preferences, risk preferences, social preferences, children, parents, Bangladesh, socio-economic status, experiment |
| JEL: | C90 D90 D81 D64 J13 J24 J62 |
| Date: | 2018–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2018008&r=ltv |
| By: | Hamish Low; Costas Meghir; Luigi Pistaferri; Alessandra Voena |
| 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. |
| JEL: | H2 H31 H53 J08 J12 J18 J22 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24356&r=ltv |
| By: | Julie Moschion (Melbourne Institute: Applied Economic & Social Research, The University of Melbourne); Nattavudh Powdthavee (Warwick Business School; and Centre for Economic Performance, London School of Economics) |
| Abstract: | This paper provides an empirical test of the rational addiction model, used in economics to model individuals’ consumption of addictive substances, versus the utility misprediction model, used in psychology to explain the discrepancy between people’s decision and their subsequent experiences. By exploiting a unique data set of disadvantaged Australians, we provide longitudinal evidence that a drop in life satisfaction tends to precede the use of illegal/street drugs. We also find that the abuse of alcohol, the daily use of cannabis and the weekly use of illegal/street drugs in the past 6 months relate to lower current levels of life satisfaction. This provides empirical support for the utility misprediction model. Further, we find that the decrease in life satisfaction following the consumption of illegal/street drugs persists 6 months to a year after use. In contrast, the consumption of cigarettes is unrelated to life satisfaction in the close past or the near future. Our results, though only illustrative, suggest that measures of individual’s subjective wellbeing should be examined together with data on revealed preferences when testing models of rational decision-making. |
| Keywords: | Life satisfaction, rational addiction, drugs, homeless, Australia, happiness |
| JEL: | D03 I12 I18 I30 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:iae:iaewps:wp2017n32&r=ltv |
| By: | Alberto Alesina (Harvard University [Cambridge], IGIER); Johann Harnoss (UP1 - Université Panthéon-Sorbonne); Hillel Rapoport (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics) |
| Abstract: | We analyze the effect of immigration on attitudes to redistribution in Europe. Using data for 28 European countries from the European Social Survey, we .nd that native workers lower their support for redistribution if the share of immigration in their country is high. This effect is larger for individuals who hold negative views regarding immigration but is smaller when immigrants are culturally closer to natives and come from richer origin countries. The effect also varies with native workers’ and immigrants’ education. In particular, more educated natives (in terms of formal education but also job-specic human capital and ocupation task skill intensity) support more redistribution if immigrants are also relatively educated. To address endogeneity concerns, we restrict identification to within country and within country-occupation variation and also instrument immigration using a gravity model. Overall, our results show that the negative .First-order effect of immigration on attitudes to redistribution is relatively small and counterbalanced among skilled natives by positive second-order effects for the quality and diversity of immigration. |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-01707760&r=ltv |
| By: | Michaela Slotwinski; Alois Stutzer; Roman Uhlig (University of Basel) |
| Abstract: | In the face of recent refugee migration, early integration of asylum seekers into the labormarket has been proposed as an important mechanism for easing their economic and social lotin the short as well as in the long term. However, little is known about the policies that fosteror hamper their participation in the labor market, in particular during the important initialperiod of their stay in the host country. In order to evaluate whether inclusive labor marketpolicies increase the labor market participation of asylum seekers, we exploit the variation inasylum policies in Swiss cantons to which asylum seekers are randomly allocated. During ourstudy period from 2011 to 2014, the employment rate among asylum seekers varied between 0% and 30.2% across cantons. Our results indicate that labor market access regulations areresponsible for a substantial proportion of these di erences, in which an inclusive regimeincreases participation by 11 percentage points. The marginal e ects are larger for asylumseekers who speak a language that is linguistically close to the one in their host canton. |
| Keywords: | Asylum policy, asylum seekers, economic integration, employment ban, labor market access regulation |
| JEL: | F22 J61 J15 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:2018/08&r=ltv |
| By: | Benito Arruñada; Matthias Krapf |
| Abstract: | We review a recent literature on cultural differences across euro member states.We point out that this literature fails to address cultural differences between Protestants and Catholics, which are likely a major underlying reason for cross-country differences. We argue that confessional culture explains why Catholic countries tend to have weaker institutions but are more open to economic and political integration. EU policies after the economic crisis looked clumsy and failed to address all concerns, but were viable, caused only a manageable amount of serious backlash and tied in well with Europe’s cultural diversity, also providing scope for learning and adaption. |
| Keywords: | European Union, religion, values, culture. |
| JEL: | Z12 F15 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1601&r=ltv |