nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2018‒06‒25
seven papers chosen by
Maximo Rossi
Universidad de la República

  1. Wages and employment: The role of occupational skills By Esther Mirjam Girsberger; Miriam Rinawi; Matthias Krapf
  2. Long-run Effects of Lottery Wealth on Psychological Well-being By Lindqvist, Erik; Östling, Robert; Cecarini, David
  3. Social Protection and Economic Development: Are the Poorest Being Lifted-Up or Left-Behind? By Martin Ravallion; Dean Jolliffe; Juan Margitic
  4. Lifting the Curtain: Backstage Cognition, Frontstage Behavior, and the Interpersonal Transmission of Culture By Lu, Richard; Chatman, Jennifer A.; Goldberg, Amir; Srivastava, Sameer B.
  5. New Directions in Measuring Intergenerational Mobility By Güell, Maia; Rodríguez Mora, José Vicente; Solon, Gary
  6. The Shadow Prices of Voluntary Caregiving: Using Panel Data of Well-Being to Estimate the Cost of Informal Care By McDonald, Rebecca; Powdthavee, Nattavudh
  7. Altruism and information By Brañas-Garza, Pablo; Bucheli, Marisa; Espinosa, Maria Paz

  1. By: Esther Mirjam Girsberger (University of Lausanne); Miriam Rinawi (Swiss National Bank); Matthias Krapf (University of Basel)
    Abstract: How skills acquired in vocational education and training (VET) affect wages and employment is not clear. We develop and estimate a search and matching model for workers with a VET degree. Workers differ in interpersonal, cognitive and manual skills, while firms require and value different combinations of these skills. Assuming that match productivity exhibits worker-job complementarity, we estimate how interpersonal, cognitive and manual skills map into job offers, unemployment and wages. We find that firms value cognitive skills on average almost twice as much as interpersonal and manual skills, and they prize complementarity in cognitive and interpersonal skills. The average return to VET skills in hourly wages is 9%, similar to the returns to schooling. Furthermore, VET appears to improve labour market opportunities through higher job arrival rate and lower job destruction. Workers thus have large benefits from acquiring a VET degree.
    Keywords: Occupational training, vocational education, labor market search, sorting, multidimensional skills
    JEL: E24 J23 J24 J64
    Date: 2018–06
  2. By: Lindqvist, Erik (Department of Economics); Östling, Robert (Institute for International Economic Studies); Cecarini, David (Department of Economics)
    Abstract: We surveyed a large sample of Swedish lottery players about their psychological well-being and analyzed the data following pre-registered procedures. Relative to matched controls, large-prize winners experience sustained increases in overall life satisfaction that persist for over a decade and show no evidence of dissipating with time. The estimated treatment effects on happiness and mental health are significantly smaller, suggesting that wealth has greater long-run effects on evaluative measures of well-being than on affective ones. Follow-up analyses of domain-specific aspects of life satisfaction clearly implicate financial life satisfaction as an important mediator for the long-run increase in overall life satisfaction.
    Keywords: Psychological Well-being; Subjective Well-being; Happiness
    JEL: D69 I31
    Date: 2018–06–18
  3. By: Martin Ravallion; Dean Jolliffe; Juan Margitic
    Abstract: Standard measures of poverty may reveal nothing about whether the poorest of the poor are being lifted-up or left-behind, yet this is a widespread concern among policy makers and citizens. The paper assesses whether public spending on social protection benefits the poorest and hence lifts the floor, and what role economic development plays. Evidence is presented for the developing world and the US. Across developing countries, a higher mean income comes with a higher floor. The bulk of this income effect is direct rather than via higher spending on social protection. That spending generally lifts the floor though this is mainly due to social insurance; on average, social assistance adds only 1.5 cents per day to the floor. Turning to the US, the paper finds that the floor has been sinking over the last 30 years, associated with an inequitable growth process. Food stamp spending partially compensates the poorest, and helped stabilize the floor in the wake of the 2008 financial crisis. The poorest in the US gain more from food stamps than average spending on food stamps, though the program’s impact on the floor per $ spent has fallen over time.
    JEL: I32 I38 O15
    Date: 2018–05
  4. By: Lu, Richard (University of California, Berkeley); Chatman, Jennifer A. (University of California, Berkeley); Goldberg, Amir (Stanford University); Srivastava, Sameer B. (University of California, Berkeley)
    Abstract: From the schoolyard to the boardroom, the pressures of cultural assimilation pervade all walks of social life. Yet people vary in the capacity to fit in culturally, and their fit can wax and wane over time. We examine how individual cognition and social influence produce variation and change in cultural fit. We do so by lifting the curtain between the backstage (cognition) and frontstage (behavior) of cultural fit. We theorize that the backstage comprises two analytically distinct dimensions--perceptual accuracy and value congruence--and that the former matters for normative compliance on the frontstage, whereas the latter does not. We further propose that a person's behavior and perceptual accuracy are both influenced by observations of others' behavior, whereas value congruence is less susceptible to peer influence. Drawing on email and survey data from a mid-sized technology firm, we use the tools of computational linguistics and machine learning to develop longitudinal measures of frontstage and backstage cultural fit. We also take advantage of a reorganization that produced quasi-exogenous shifts in employees' peer groups to identify the causal impact of social influence.
    Date: 2017–10
  5. By: Güell, Maia; Rodríguez Mora, José Vicente; Solon, Gary
    Abstract: In this paper we overview some recent literature that exemplify several of the cutting edges in research on intergenerational transmission of socioeconomic status and highlight some cross-cutting themes. We also offer a few suggestions for future research
    Date: 2018–05
  6. By: McDonald, Rebecca (University of Birmingham); Powdthavee, Nattavudh (University of Warwick)
    Abstract: This paper uses the wellbeing valuation (WV) approach to estimate and monetize the wellbeing impacts of informal care provision on caregivers. Using nationally representative longitudinal data from the U.K., we address two challenging methodological issues related to the economic valuation of informal care: (i) the endogeneity of informal care; and (ii) the sensitivity of income estimates used in valuation. We address the endogeneity issue by decomposing wellbeing losses into those associated with caring for a relative who had recently suffered a serious accident and those associated with caring for a relative who had not had an accident. We use of the Fixed Effects Filtered (FEF) estimator to enable the permanent income coefficient to be estimated free from individual fixed effects bias. This estimate is used instead of the transient income effect in the calculation of shadow prices of informal care. Our estimates suggest that permanent income would have to increase by approximately £102k per year on average to just compensate for the wellbeing losses from providing informal care.
    Keywords: informal care, well-being, compensation variations, permanent income, happiness, shadow prices
    JEL: H8 I18 I31
    Date: 2018–05
  7. By: Brañas-Garza, Pablo; Bucheli, Marisa; Espinosa, Maria Paz
    Abstract: Experimental literature has accumulated evidence on the association of personal characteristics to a higher or lower level of prosocial behavior. There is also evidence that donations are affected by the mere provision of information about the recipients, whatever its nature or content. In this paper, we present a unified experimental framework to analyze the impact of social class, political orientation and gender on the level of giving; our experimental design allows us to reveal the effect of providing information by itself, with respect to the baseline treatment of no information, and separately from the effect of the informational content. These results could be relevant to any design intended to measure the impact on altruism of different manipulations of the Dictator Game.
    Keywords: economic experiments, information, wealth, gender, ideology, inequity aversion, giving.
    JEL: C91 D64 I30
    Date: 2018–05–30

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