nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2018‒06‒11
seven papers chosen by
Maximo Rossi
Universidad de la República

  1. Should We Fear the Robot Revolution? (The Correct Answer is Yes) By Andrew Berg; Edward F Buffie; Luis-Felipe Zanna
  2. People versus machines: the impact of minimum wages on automatable jobs By Lordan, Grace; Neumark, David
  3. Employer Power, Labor Saving Technical Change, and Inequality By Chau, Nancy H; Kanbur, Ravi
  4. Long-run effects of family policies: An experimental study of the Chinese one-child policy By Carlsson, Fredrik; Lampi, Elina; Martinsson, Peter; Tu, Qin; Yang, Xiaojun
  5. Everybody's a Victim? Global Terror, Well-Being and Political Attitudes By Akay, Alpaslan; Bargain, Olivier; Elsayed, Ahmed
  6. An international comparison of the contribution to job creation by high growth firms By Anyadike-Danes, Michael; Bjuggren, Carl Magnus; Dumont, Michel; Gottschalk, Sandra; Hölzl, Werner; Johansson, Dan; Maliranta, Mika; Myrann, Anja; Nielsen, Kristian; Zheng, Guanyu
  7. Investing in People: The Case for Human Capital Tax Credits By Rui Costa; Nikhil Datta; Stephen Machin; Sandra McNally

  1. By: Andrew Berg; Edward F Buffie; Luis-Felipe Zanna
    Abstract: We may be on the cusp of a “second industrial revolution” based on advances in artificial intelligence and robotics. We analyze the implications for inequality and output, using a model with two assumptions: “robot” capital is distinct from traditional capital in its degree of substitutability with human labor; and only capitalists and skilled workers save. We analyze a range of variants that reflect widely different views of how automation may transform the labor market. Our main results are surprisingly robust: automation is good for growth and bad for equality; in the benchmark model real wages fall in the short run and eventually rise, but “eventually” can easily take generations.
    Date: 2018–05–21
    URL: http://d.repec.org/n?u=RePEc:imf:imfwpa:18/116&r=ltv
  2. By: Lordan, Grace; Neumark, David
    JEL: J1
    Date: 2018–01–17
    URL: http://d.repec.org/n?u=RePEc:ehl:lserod:87944&r=ltv
  3. By: Chau, Nancy H; Kanbur, Ravi
    Abstract: How does employer power mediate the impact of labor saving technical change on inequality? This question has largely been neglected in the recent literature on the wage and distributional consequences of automation, where the labor market is assumed to be competitive. In a simple task-based model, with search frictions which generate an equilibrium wage distribution even with identical firms and workers, we explore the implications of labor saving technical change for equilibrium outcomes. We show that employer power is a crucial determinant of the nuanced comparative statics of technical change. Among a range of results, we show the possibility of Kuznetsian inverse-U relationships between employer power and inequality, and labor saving technical change and inequality. We further show that when employer power is sufficiently low, labor saving technical change can both increase total output and increase wage inequality. With free entry of firms, labor saving technical change leads to both a first order dominating shift in the age distribution and an increase in the Gini coefficient of wage inequality.
    Date: 2018–05
    URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:12925&r=ltv
  4. By: Carlsson, Fredrik (Department of Economics, School of Business, Economics and Law, Göteborg University); Lampi, Elina (Department of Economics, School of Business, Economics and Law, Göteborg University); Martinsson, Peter (Department of Economics, School of Business, Economics and Law, Göteborg University); Tu, Qin (School of Economics and Resource Management, Beijing Normal University, Beijing, China); Yang, Xiaojun (School of Public Policy and Administration, Xi’an Jiaotong University, Xi’an, China)
    Abstract: We present lab-in-the-field experimental evidence of the effects of the Chinese one-child policy on individuals’ preferences and behavior as adults. The experiments were conducted in three different provinces because the policy was not strictly implemented at the same time in all provinces. We measure risk and time preferences, as well as subjects’ competitiveness, cooperation, and bargaining behavior, sampling individuals born both before and after the introduction of the policy. Overall, we do not find any sizeable or statistically significant effects of the one-child policy on preferences or behavior in any of the experiments. These results hold for heterogeneity in the timing of the implementation of the OCP in different provinces, for heterogeneity among individuals, and for various robustness checks.
    Keywords: one-child policy; lab-in-the-field experiment; China.
    JEL: C91 D03 D10 I31 P30
    Date: 2018–05
    URL: http://d.repec.org/n?u=RePEc:hhs:gunwpe:0732&r=ltv
  5. By: Akay, Alpaslan (Department of Economics, School of Business, Economics and Law, Göteborg University); Bargain, Olivier (Bordeaux University and the Institut Universitaire de France (France)); Elsayed, Ahmed (IZA (Germany))
    Abstract: Terror has become a global issue. Terror acts perpetuated by religious, nationalist or political groups around the globe can propagate distress rapidly through different channels and possibly change political attitudes. This paper suggests the first evaluation of the impact of global terror on human welfare. We combine panel datasets for Australia, Germany, Russia, Switzerland, the UK and the US. Individual well-being informationfor 750,000 individualxyear observations, recorded on precise dates, is matched with daily information on the 70,000 terror events that took place worldwide during 1994-2013. High-frequency data and quasi-random terror shocks of varying intensity provide the conditions for robust inference, while external validity is guaranteed by the use of large representative samples. We find a significantly negative effect of global terror on well-being, with a money-metric cost of around 6% - 17% of national income. Among diffusion channels, stock markets and economic anticipations play a minimal role, while traditional media filter the most salient events. The effect is greatly modulated by the physical, genetic or cultural proximity to the terror regions/victims. For a subset of countries, we also show that global terror has significantly increased the intention to vote for conservative parties. Heterogeneity analyses point to the mediating effect of risk perception: individuals who exhibit stronger emotional responses to terror possibly more exposed to potential threats - are also more likely to experience a conservative shift.
    Keywords: Global Terror; Subjective Well-Being; Media; Political Attitudes
    JEL: C99 D60 D72 D74 I31
    Date: 2018–06
    URL: http://d.repec.org/n?u=RePEc:hhs:gunwpe:0733&r=ltv
  6. By: Anyadike-Danes, Michael (Aston Business School and Enterprise Research Centre, UK); Bjuggren, Carl Magnus (Research Institute of Industrial Economics (IFN), Sweden); Dumont, Michel (Federal Planning Bureau and Ghent University, Belgium); Gottschalk, Sandra (ZEW, Germany); Hölzl, Werner (Austrian Institute of Economic Research (WIFO)); Johansson, Dan (Örebro University School of Business); Maliranta, Mika (ETLA and University of Jyväskylä, Finland); Myrann, Anja (Ragnar Frisch Centre for Economic Research, Norway); Nielsen, Kristian (Aalborg University, Denmark); Zheng, Guanyu (Productivity Commission, New Zealand)
    Abstract: This paper addresses three simple questions: how should the contribution of HGFs to job creation be measured? how much does this contribution vary across countries? to what extent does the cross-country variation depend on variation in the proportion of HGFs in the business population? The first is a methodological question which we answer using a more highly articulated version of the standard job creation and destruction accounts. The other two are empirical questions which we answer using a purpose-built dataset assembled from national firm-level sources and covering nine countries, spanning the ten three year periods from 2000/03 to 2009/12. The basic principle governing the development of the accounting framework is the choice of appropriate comparators. Firstly, when measuring contributions to job creation, we should focus on just job creating firms, otherwise we are summing over contributions from firms with positive, zero, and negative job creation numbers. Secondly, because we know growth depends in part on size, the ’natural’ comparison for HGFs is with job creation by similar-sized firms which simply did not grow as fast as HGFs. However, we also show how the measurement framework can be further extended to include, for example, a consistent measure of the contribution of small job creating firms. On the empirical side, we find that the HGF share of job creation by large job creating firms varies across countries by a factor of two, from around one third to two thirds. A relatively small proportion of this cross-country variation is accounted for by variations in the influence of HGFs on job creation. On average HGFs generated between three or four times as many jobs as large non-HGF job creating firms, but this ratio is relatively similar across countries. The bulk of the cross-country variation in HGF contribution to job creation is accounted for by the relative abundance (or rarity) of HGFs. Moreover, we also show that the measurement of abundance depends upon the choice of measurement framework: the ’winner’ of a cross-national HGF ’beauty context’ on one measure will not necessarily be the winner on another.
    Keywords: high-growth firms; firm growth; job creation
    JEL: D22 E24 L11 L25 L26 M13
    Date: 2018–05–08
    URL: http://d.repec.org/n?u=RePEc:hhs:oruesi:2018_007&r=ltv
  7. By: Rui Costa (London School of Economics); Nikhil Datta (London School of Economics); Stephen Machin (University College London); Sandra McNally (London School of Economics)
    Abstract: Estimates from the US suggest that increasing levels of human capital over the second half of the last century accounted for approximately one third of productivity growth, while some estimates of the social rate of return to R&D in the manufacturing sector have exceeded one hundred percent. Despite the contribution of both human capital and R&D to economic growth, the UK fiscal system does not treat the two equally when it comes to employer incentives to invest. Firms that invest in R&D are able to claim generous tax relief on their investments whereas there is no such across-the-board incentive to invest in the training of their workers. This is despite the fact that the rationale for government support to firm investment in human capital is similar to that for R&D and both are important for economic growth. We explain the economic rationale for government support in the form of tax credits, discuss current practice in the UK in relation to R&D, and address the evidence on effectiveness. We then discuss how the policy might be adapted to provide similar incentives for investing in human capital.
    Keywords: human capital, research and development, r&d, tax relief, United Kingdom
    JEL: H23 J24 O30
    Date: 2018–05
    URL: http://d.repec.org/n?u=RePEc:hka:wpaper:2018-030&r=ltv

This nep-ltv issue is ©2018 by Maximo Rossi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at http://nep.repec.org. For comments please write to the director of NEP, Marco Novarese at <director@nep.repec.org>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.