nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2018‒06‒18
eight papers chosen by
Maximo Rossi
Universidad de la República

  1. Whom Do Employers Want? The Role of Recent Employment and Unemployment Status and Age By Henry S. Farber; Chris M. Herbst; Dan Silverman; Till von Wachter
  2. Employer Power, Labor Saving Technical Change, and Inequality By Chau, Nancy H.; Kanbur, Ravi
  3. The Long-Term Impact of Employment Bans on the Economic Integration of Refugees By Marbach, Moritz; Hainmueller, Jens; Hangartner, Dominik
  4. Minimum Wages and the Gender Gap in Pay: New Evidence from the UK and Ireland By Bargain, Olivier; Doorley, Karina; Van Kerm, Philippe
  5. Social Security Programs and Retirement Around the World: Working Longer – Introduction and Summary By Courtney Coile; Kevin S. Milligan; David A. Wise
  6. The Strength of Gender Norms and Gender-Stereotypical Occupational Aspirations Among Adolescents By Andreas Kuhn; Stefan C. Wolter
  7. How Happy are Your Neighbours? Variation in Life Satisfaction among 1200 Canadian Neighbourhoods and Communities By John F. Helliwell; Hugh Shiplett; Christopher P. Barrington-Leigh
  8. Natural Disasters and Demand for Redistribution: Lessons from an Earthquake By Giovanni Gualtieri; Marcella Nicolini; Fabio Sabatini; Luca Zamparelli

  1. By: Henry S. Farber; Chris M. Herbst; Dan Silverman; Till von Wachter
    Abstract: We use a resume audit study to better understand the role of employment and unemployment histories in affecting callbacks to job applications. We focus on how the effect of career history varies by age, partly in an attempt to reconcile disparate findings in prior studies. While we cannot reconcile earlier findings on the effect of unemployment duration, the findings solidify an emerging consensus on the role of age and employment on callback. First, among applicants across a broad age range, we find that applicants with 52 weeks of unemployment have a lower callback rate than do applicants with shorter unemployment spells. However, regardless of an applicant's age, there is no relationship between spell length and callback among applicants with shorter spells. Second, we find a hump-shaped relationship between age and callback, with both younger and older applicants having a lower probability of callback relative to prime-aged applicants. Finally, we find that those applicants who are employed at the time of application have a lower callback rate than do unemployed applicants, regardless of whether the interim job is of lower or comparable quality relative to the applied-for job. This may reflect a perception among employers that it is harder or more expensive to attract an applicant who is currently employed.
    JEL: J60 J62 J64
    Date: 2018–05
  2. By: Chau, Nancy H. (Cornell University); Kanbur, Ravi (Cornell University)
    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.
    Keywords: employer power, labor saving technical change, wage inequality, search model, equilibrium wage distribution
    JEL: J31 J42 D31 O34
    Date: 2018–05
  3. By: Marbach, Moritz (Stanford University and ETH Zurich); Hainmueller, Jens (Stanford University); Hangartner, Dominik (Stanford University and ETH Zurich)
    Abstract: Many European countries impose employment bans that prevent asylum seekers from entering the local labor market for a certain waiting period upon arrival. We provide evidence on the long-term effects of such employment bans on the subsequent economic integration of refugees. We leverage a natural experiment in Germany, where a court ruling prompted the reduction in the length of the employment ban. We find that even five years after the waiting period was reduced, employment rates were about 20 percentage points lower for refugees who, upon arrival, had to wait an additional seven months before they were allowed to enter the labor market. It took up to ten years for this employment gap to disappear. Our findings suggest that longer employment bans considerably slowed down the economic integration of refugees and reduced their motivation to integrate early on after arrival. A marginal cost-benefit analysis suggests that this employment ban cost German taxpayers about 40 million Euro per year on average in terms of welfare expenditures and forgone tax revenues from unemployed refugees.
    Date: 2017–11
  4. By: Bargain, Olivier (University of Bordeaux); Doorley, Karina (Economic and Social Research Institute, Dublin); Van Kerm, Philippe (LISER (CEPS/INSTEAD))
    Abstract: Women are disproportionately in low paid work compared to men so, in the absence of rationing effects on their employment, they should benefit the most from minimum wage policies. This study examines the change in the gender wage gap around the introduction of minimum wages in Ireland and the United Kingdom. Using survey data for the two countries, we develop a decomposition of the change in the gender differences in wage distributions around the date of introduction of minimum wages. We separate out 'price' effects attributed to minimum wages from 'employment composition' effects. A significant reduction of the gender gap at low wages is observed after the introduction of the minimum wage in Ireland while there is hardly any change in the UK. Counterfactual simulations show that the difference between countries may be attributed to gender differences in non-compliance with the minimum wage legislation in the UK.
    Keywords: gender wage gap, minimum wage, distribution regression
    JEL: C14 I2 J16
    Date: 2018–04
  5. By: Courtney Coile; Kevin S. Milligan; David A. Wise
    Abstract: This is the introduction and summary to the eighth phase of an ongoing project on Social Security Programs and Retirement Around the World. This project, which compares the experiences of a dozen developed countries, was launched in the mid 1990s following decades of decline in the labor force participation rate of older men. The first several phases of the project document that social security program provisions can create powerful incentives for retirement that are strongly correlated with the labor force behavior of older workers. Subsequent phases of the project have explored disability program provisions and their effects on retirement as well as potential obstacles to promoting work at older ages, including whether there is a link between older employment and youth unemployment and whether older individuals are healthy enough to work longer. In the two decades since the project began, the dramatic decline in men’s labor force participation has ended and been replaced by sharply rising participation rates. Older women’s participation has been rising as well. In this eighth phase of the project, we explore this phenomenon of working longer. We document trends in participation and employment and also consider factors that may help to explain these changes in behavior. We conclude that social security reforms as well as other factors such as the movement of women into the labor force have likely played an important role.
    JEL: J14 J26
    Date: 2018–05
  6. By: Andreas Kuhn (Swiss Federal Institute for Vocational Education and Training); Stefan C. Wolter (University of Bern, Swiss Coordination Centre for Research in Education, CESifo & IZA)
    Abstract: We test the hypothesis that adolescents' occupational aspirations are more gender-stereo-typical if they live in regions where the norm towards gender equality is weaker. For our empirical analysis, we combine rich survey data describing a sample of 1,434 Swiss adolescents in 8th grade with communal voting results dealing with gender equality and policy. We use the voting results to measure spatial variation in the local norm towards (more) gender equality. We find that adolescents living in localities with a stronger norm towards gender equality are significantly and substantively less likely to aspire for a gender-stereotypical occupation. This correlation may reflect different underlying mechanisms, however, and a more detailed analysis in fact reveals that the association between gender norms and occupational aspirations mainly reflects the intergenerational transmission of occupations from parents to their children.
    Keywords: occupational choice, occupational segregation, gender gap, gender norms, preferences, socialization, intergenerational transmission
    JEL: J16 J24
    Date: 2018–06
  7. By: John F. Helliwell; Hugh Shiplett; Christopher P. Barrington-Leigh
    Abstract: This paper presents a new public-use dataset for community-level life satisfaction in Canada, based on more than 400,000 observations from the Canadian Community Health Surveys and the General Social Surveys. The country is divided into 1215 similarly sampled geographic regions, using natural, built, and administrative boundaries. A cross-validation exercise suggests that our choice of minimum sampling thresholds approximately maximizes the predictive power of our estimates. Our procedure reveals robust differences in life satisfaction between and across urban and rural communities. We then match the life satisfaction data with a range of key census variables to explore ways in which lives differ in the most and least happy communities. The data presented here are useful on their own to study community-level variation, and can also be used to provide contextual variables for multi-level modelling with individual life satisfaction data set in a community context.
    JEL: C81 I31 R12
    Date: 2018–05
  8. By: Giovanni Gualtieri (National Research Council, Institute of Biometeorology); Marcella Nicolini (University of Pavia, Department of Economics); Fabio Sabatini (Sapienza University of Rome, Department of Economics and Law); Luca Zamparelli (Sapienza University of Rome, Department of Economics and Law)
    Abstract: The literature shows that when a society believes that wealth is determined by random “luck” rather than by merit, it demands more redistribution. Adverse shocks, like earthquakes, strengthen the belief that random “bad luck” can frustrate the outcomes achieved with merit. We theoretically illustrate that individuals react to such shocks by raising support for redistribution. We then present evidence of this behavior by exploiting a natural experiment provided by one of the strongest seismic events that occurred in Italy in the last three decades, the L’Aquila earthquake in 2009. We assemble a novel dataset by matching information on the ground acceleration registered throughout the National Strong Motion Network during the earthquake with survey data about individual opinions on redistribution collected a few months later. The empirical analysis illustrates that the intensity of the shakes is associated with subsequent stronger beliefs that, for a society to be fair, income inequalities should be levelled by redistribution.
    Keywords: Fairness, Redistribution, Inequality, Natural Disasters, Earthquakes
    JEL: H10 H53 D63 D69 Z1
    Date: 2018–05

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 For comments please write to the director of NEP, Marco Novarese at <>. 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.