nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2018‒04‒30
nine papers chosen by
Maximo Rossi
Universidad de la República

  1. Emigration, Remittances and the Subjective Well-Being of Those Staying Behind By Ivlevs, Artjoms; Nikolova, Milena; Graham, Carol Lee
  2. The Fall in German Unemployment: A Flow Analysis By Carrillo-Tudela, Carlos; Launov, Andrey; Robin, Jean-Marc
  3. The Lack of Wage Growth and the Falling NAIRU By David N.F. Bell; David G. Blanchflower
  4. Crisis at Home: Mancession-induced Change in Intrahousehold Distribution By Olivier Bargain; Laurine Martinoty
  5. Career Risk and Market Discipline in Asset Management By Ellul, Andrew; Pagano, Marco; Scognamiglio, Annalisa
  6. The Human Capital Cost of Radiation: Long-Run Evidence from Exposure Outside the Womb By Elsner, Benjamin; Wozny, Florian
  7. Social Norms, Labor Market Opportunities, and the Marriage Gap for Skilled Women By Bertrand, Marianne; Cortes, Patricia; Olivetti, Claudia; Pan, Jessica
  8. The long term evolution of inequality of opportunity By Maurizio Bussolo; Daniele Checchi; Vito Peragine
  9. Health, Employment, and Disability: Implications from the Undocumented Population By George J. Borjas; David J.G. Slusky

  1. By: Ivlevs, Artjoms (University of the West of England, Bristol); Nikolova, Milena (University of Groningen); Graham, Carol Lee (Brookings Institution)
    Abstract: Despite growing academic and policy interest in the subjective well-being consequences of emigration for those left behind, existing studies have focused on single origin countries or specific world regions. Our study is the first to offer a global perspective on the well-being consequences of emigration for those staying behind using several subjective well-being measures (evaluations of best possible life, positive affect, stress, and depression). Drawing upon Gallup World Poll data for 114 countries during 2009-2011, we find that both having family members abroad and receiving remittances are positively associated with evaluative well-being (evaluations of best possible life) and positive affect (measured by an index of variables related to experiencing positive feelings at a particular point in time). Our analysis provides novel results showing that remittances are particularly beneficial for evaluative well-being in less developed and more unequal contexts; in richer countries, only the out-migration of family members is positively associated with life evaluations, while remittances have no additional association. We also find that having household members abroad is linked with increased stress and depression, which are not offset by remittances. The out-migration of family members appears more traumatic in contexts where migration is less common, such as more developed countries, and specific world regions, such as Latin America and Sub-Saharan Africa, as well as among women. Relying on subjective well-being measures, which reflect both material and non-material aspects of life and are broad measures of well-being, allows us to provide additional insights and a more well-rounded picture of the possible consequences of emigration on migrant family members staying behind relative to standard outcomes employed in the literature, such as the left-behind's consumption, income or labor market responses.
    Keywords: migration, remittances, depression, stress, Cantril ladder of life, happiness, Gallup World Poll
    JEL: F22 F24 I3 J61
    Date: 2018–03
  2. By: Carrillo-Tudela, Carlos (University of Essex); Launov, Andrey (University of Kent); Robin, Jean-Marc (Sciences Po, Paris)
    Abstract: In this paper we investigate the recent fall in unemployment, and the rise in part-time work, labour market participation, inequality and welfare in Germany. Unemployment fell because the Hartz IV reform induced a large fraction of the long-term unemployed to deregister as jobseekers and appear as non-participants. Yet, labour force participation increased because many unregistered-unemployed workers ended up accepting low-paid part-time work that was offered in quantity in absence of a universal minimum wage. A large part of the rise in part-time work was also due to the tax benefits Hartz II introduced to take up a mini-job as secondary employment. This has provided an easy way to top-up labour income staggering under the pressure of wage moderation. The rise in part-time work led to an increase in inequality at the lower end of income distribution. Overall we find that Germany increased welfare as unemployment fell.
    Keywords: unemployment, part-time work, mini-jobs, non-participation, multiple job holding, income inequality, Germany, Hartz reforms
    JEL: J21 J31 J63 J64
    Date: 2018–03
  3. By: David N.F. Bell; David G. Blanchflower
    Abstract: There remains a puzzle around the world over why wage growth is so benign given the unemployment rate has returned to pre-recession levels. It is our contention that a considerable part of the explanation is the rise in underemployment which rose in the Great Recession but has not returned to pre-recession levels even though the unemployment rate has. Involuntary part-time employment rose in every advanced country and remains elevated in many in 2018. In the UK we construct the Bell/Blanchflower underemployment index based on reports of whether workers, including full-timers and those who want to be part-time, who say they want to increase or decrease their hours at the going wage rate. If they want to change their hours they report by how many. Prior to 2008 our underemployment rate was below the unemployment rate. Over the period 2001-2017 we find little change in the number of hours of workers who want fewer hours, but a big rise in the numbers wanting more hours. Underemployment reduces wage pressure. We also provide evidence that the UK Phillips Curve has flattened and conclude that the UK NAIRU has shifted down. The underemployment rate likely would need to fall below 3%, compared to its current rate of 4.9% before wage growth is likely to reach pre-recession levels. The UK is a long way from full-employment.
    JEL: E5 J01
    Date: 2018–04
  4. By: Olivier Bargain (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales); Laurine Martinoty (CES - Centre d'économie de la Sorbonne - CNRS - Centre National de la Recherche Scientifique - UP1 - Université Panthéon-Sorbonne)
    Abstract: The Great Recessions was essentially a 'mancession' in countries like Spain, the UK or the US, i.e. it hit men harder than women for they were disproportionately represented in heavily affected sectors. We investigate how the mancession, and more generally women's relative opportunities on the labor market, translate into within-household redistribution. Precisely, we estimate the spouses' resource shares in a collective model of consumption, using Spanish data over 2006-2011. We exploit the gender-oriented evolution of the economic environment to test two original distribution factors: first the regional-time variation in spouses' relative unemployment risks, then the gender-differentiated shock in the construction sector (having a construction sector husband after the outburst of the crisis). Both approaches conclude that the resource share accruing to Spanish wives increased by around 7-9 percent on average, following the improvement of their relative labor market positions. Among childless couples, we document a 5-11 percent decline in individual consumption inequality following the crisis, which is essentially due to intrahousehold redistribution.
    Keywords: mancession,intrahousehold allocation,unemployment risk
    Date: 2018
  5. By: Ellul, Andrew; Pagano, Marco; Scognamiglio, Annalisa
    Abstract: We establish that the labor market helps discipline asset managers via the impact of fund liquidations on their careers. Using hand-collected data on 1,948 professionals, we find that top managers working for funds liquidated after persistently poor relative performance suffer demotion entailing a yearly average compensation loss of $664,000. Scarring effects are absent when liquidations are preceded by normal performance or involve mid-level employees. Based on a model with moral hazard and adverse selection, we find that these results can be ascribed to reputation loss rather than bad luck. The findings suggest that performance-induced liquidations supplement compensation-based incentives.
    Keywords: asset managers; careers; Hedge Funds; market discipline; scarring effects
    JEL: G20 G23 J24 J62 J63
    Date: 2018–04
  6. By: Elsner, Benjamin (University College Dublin); Wozny, Florian (IZA)
    Abstract: This paper studies the long-term effect of radiation on cognitive skills. We use regional variation in nuclear fallout caused by the Chernobyl disaster in 1986, which led to a permanent increase in radiation levels in most of Europe. To identify a causal effect, we exploit the fact that the degree of soil contamination depended on rainfall within a critical ten-day window after the disaster. Based on unique geo-coded survey data from Germany, we show that people who lived in highly-contaminated areas in 1986 perform significantly worse in standardized cognitive tests 25 years later. This effect is driven by the older cohorts in our sample (born before 1976), whereas we find no effect for people who were first exposed during early childhood. These results are consistent with radiation accelerating cognitive decline during older ages. Moreover, they suggest that radiation has negative effects even when people are first exposed as adults, and point to significant external costs of man-made sources of radiation.
    Keywords: environment, human capital, radioactivity, cognitive skills
    JEL: J24 Q53
    Date: 2018–03
  7. By: Bertrand, Marianne (University of Chicago); Cortes, Patricia (Boston University); Olivetti, Claudia (Boston College); Pan, Jessica (National University of Singapore)
    Abstract: In most of the developed world, skilled women marry at a lower rate than unskilled women. We document heterogeneity across countries in how the marriage gap for skilled women has evolved over time. As labor market opportunities for women have improved, the marriage gap has been growing in some countries but shrinking in others. We discuss the comparative statics of a theoretical model in which the (negative) social attitudes toward working women might contribute to the lower marriage rate of skilled women, and might also induce a non-monotonic relationship between their labor market prospects and their marriage outcomes. The model delivers predictions about how the marriage gap for skilled women should react to changes in their labor market opportunities across economies with more or less conservative attitudes toward working women. We verify the key predictions of this model in a panel of 26 developed countries, as well as in a panel of US states.
    Keywords: social norms, marriage gap, labor market opportunities
    JEL: J12 J16
    Date: 2018–03
  8. By: Maurizio Bussolo; Daniele Checchi; Vito Peragine
    Abstract: This paper uses a parametric approach to measure inequality of opportunities. It builds a simple theoretical model offering predictions on the changes of inequality of opportunity. It is expected to decline with the decline in intergenerational persistence in education, in the labour market return to education and in the networking activity associated to parental background; these predictions are then taken to the data. The empirical analysis studies the evolving distribution in personal disposable incomes in five European countries (Italy, Germany, France, Great Britain and Switzerland) over a long time span. Thanks to extended samples, time trends show that the role of circumstances (parental background, gender age and place of birth) in shaping income distribution has declined over the last two decades in all countries considered. Depending on the inequality index, the inequality of opportunity (IOp) account between one third (MLD) and half (standard deviation of logs) of total inequality in personal disposable incomes. Inequality trends are then decomposed into age profiles and birth cohort changes. Inequality of opportunity exhibits an inverted U-shaped pattern over the life cycle. Moreover, the most recent age cohorts have experienced a lower IOp, thus appearing as the main beneficiaries of the overall decline in inequality. When interpreting thee observed dynamics, two parameters (intergenerational persistence in educational attainment and return of education) exhibit a declining trend, whereas the third one (networking activity of parents) is rising in most countries. The combined effect of the three movements yields a declining trend whenever the former twos dominate the latter.
    Date: 2018–01
  9. By: George J. Borjas; David J.G. Slusky
    Abstract: Disability benefit recipients in the United States have nearly doubled in the past two decades, growing substantially faster than the population. It is difficult to estimate how much of this increase is explained by changes in population health, as we often lack a valid counterfactual. We propose using undocumented immigrants as the counterfactual, as they cannot currently claim benefits. Using NHIS microdata, we estimate models of disability as a function of medical conditions for both the legal and undocumented populations. The relationship between health and disability is far stronger for those with legal status than it is for those who are undocumented. We find that almost all of the difference in disability trends between the two populations can be explained by different responses to underlying health impairments.
    JEL: I12 I18 J61
    Date: 2018–04

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