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on Unemployment, Inequality and Poverty |
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Issue of 2018‒04‒23
five papers chosen by |
| By: | Garbinti, Bertrand; Goupille-Lebret, Jonathan; Piketty, Thomas |
| Abstract: | This paper presents "Distributional National Accounts" (DINA) for France. That is, we combine national accounts, tax and survey data in a comprehensive and consistent manner to build homogenous annual series on the distribution of national income by percentiles over the 1900-2014 period, with detailed breakdown by age, gender and income categories over the 1970-2014 period. Our DINA-based estimates allow for a much richer analysis of the long-run pattern found in previous tax-based series, i.e. a long-run decline in income inequality, largely due to a sharp drop in the concentration of wealth and capital income following the 1914-1945 capital shocks. First, our new series deliver higher inequality levels than the usual tax-based series for the recent decades, because the latter miss a rising part of capital income. Growth incidence curves look dramatically different for the 1950-1983 and 1983-2014 sub-periods. We also show that it has become increasingly difficult in recent decades to access top wealth groups with labor income only. Next, gender inequality in labor income declined in recent decades, albeit fairly slowly among top labor incomes E.g. female share among top 0.1% earners was only 12% in 2012 (vs. 7% in 1994 and 5% in 1970). Finally, we find that distributional changes can have large impact on comparisons of well-being across countries. E.g. average pre-tax income among bottom 50% adults is 30% larger in France than in the U.S., in spite of the fact that aggregate per adult national income is 30% smaller in France. |
| Keywords: | income distribution; Income inequality; National Accounts |
| JEL: | D31 E01 H2 N34 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12799&r=ltv |
| By: | Song, Jae (Social Security Administration); Price, David (Princeton University); Guvenen, Fatih (Federal Reserve Bank of Minneapolis); Bloom, Nicholas (Stanford University); von Wachter, Till (University of California Los Angeles) |
| Abstract: | We use a massive, matched employer-employee database for the United States to analyze the contribution of firms to the rise in earnings inequality from 1978 to 2013. We find that one-third of the rise in the variance of (log) earnings occurred within firms, whereas two-thirds of the rise occurred between firms. However, this rising between-firm variance is not accounted for by the firms themselves: the firm-related rise in the variance can be decomposed into two roughly equally important forces—a rise in the sorting of high-wage workers to high-wage firms and a rise in the segregation of similar workers between firms. In contrast, we do not find a rise in the variance of firm-specific pay once we control for worker composition. Instead, we see a substantial rise in dispersion of person-specific pay, accounting for 68% of rising inequality, potentially due to rising returns to skill. The rise in between-firm variance, mostly due to worker sorting and segregation, accounted for a particularly large share of the total increase in inequality in smaller and medium firms (explaining 84% for firms with fewer than 10,000 employees). In contrast, in the very largest firms with 10,000+ employees, 42% of the increase in the variance of earnings took place within firms, driven by both declines in earnings for employees below the median and a substantial rise in earnings for the 10% best-paid employees. However, because of their small number, the contribution of the very top 50 or so earners at large firms to the overall increase in within-firm earnings inequality is small. |
| Keywords: | Income inequality; Pay inequality; Between-firm inequality |
| JEL: | E23 J21 J31 |
| Date: | 2018–04–09 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmwp:750&r=ltv |
| By: | Cardoso, Ana Rute (IAE Barcelona (CSIC)); Guimaraes, Paulo (Banco de Portugal); Portugal, Pedro (Banco de Portugal); Reis, Hugo (Banco de Portugal) |
| Abstract: | We bring together the strands of literature on the returns to education, its spillovers, and the role of the employer shaping the wage distribution. The aim is to analyze the labor market returns to education taking into account who the worker is (worker unobserved ability), what he does (the job title), with whom (the coworkers) and, also crucially, for whom (the employer). We combine data of remarkable quality – exhaustive longitudinal linked employer-employee data on Portugal – with innovative empirical methods, to address the homophily or reflection problem, selection issues, and common measurement errors and confounding factors. Our methodology combines the estimation of wage regressions in the spirit of Abowd, Kramarz, and Margolis (1999), Gelbach's (2016) unambiguous conditional decomposition of the impact of various omitted covariates on an estimated coefficient, and Arcidiacono et al.'s (2012) procedure to identify the impact of peer quality. We first uncover that peer effects are quite sizeable. A one standard deviation increase in the measure of peer quality leads to a wage increase of 2.1 log points. Next, we show that education grants access to better-paying firms and job titles: one fourth of the overall return to education operates through the firm channel and a third operates through the job-title channel, while the remainder is associated exclusively with the individual worker. Finally, we unveil that an additional year of average education of coworkers yields a 0.5 log points increase in a worker's wage, after we net out a 2.0 log points return due to homophily (similarity of own and peers' characteristics), and 3.3 log points associated with worker sorting across firms and job titles. |
| Keywords: | wage distribution, human capital spillovers, returns to education, peer effects, linked employer-employee data, high-dimensional fixed effects, firm, job title |
| JEL: | J31 J24 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11419&r=ltv |
| By: | Ritwik Banerjee (Indian Institute of Management Bangalore and IZA); Nabanita Datta Gupta (Department of Economics and Business Economics, Aarhus University, Denmark); Marie Claire Villeval (University of Lyon) |
| Abstract: | Is success in a task used strategically by individuals to motivate their beliefs prior to taking action in a subsequent, unrelated, task? Also, is the distortion of beliefs reinforced for individuals who have lower status in society? Conducting an artefactual field experiment in India, we show that success when competing in a task increases the performers’ self-confidence and competitiveness in the subsequent task. We also find that such spillovers affect the self-confidence of low-status individuals more than that of high-status individuals. Receiving good news under Affirmative Action, however, boosts confidence across tasks regardless of the caste status. |
| Keywords: | Motivated beliefs, spillovers, self-confidence, competitiveness, Affirmative Action, experiment |
| JEL: | C91 J15 M52 |
| Date: | 2018–04–09 |
| URL: | http://d.repec.org/n?u=RePEc:aah:aarhec:2018-02&r=ltv |
| By: | Daniela Del Boca (University of Turin and Collegio Carlo Alberto); Chiara Monfardini (University of Bologna); Sarah Grace See (University of York) |
| Abstract: | Using data from OECD’s PISA, Eurostat and World Bank’s WDI, we explore how child cognitive outcomes at the aggregate country level are related to macroeconomic conditions, specifically government education expenditures and early education experience. We find that both government expenditures in education and attendance to early child care are associated with better later school performance. We also consider different childcare characteristics such as duration and quality, which appear to have significant effects Our results may imply that policies encouraging childcare expansion should also take into account quality issues. |
| Keywords: | early childcare and education, school performance, test scores, early childhood education |
| JEL: | H52 J24 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2018-020&r=ltv |