nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2018‒07‒30
five papers chosen by
Maximo Rossi
Universidad de la República

  1. Wages and Employment: The Role of Occupational Skills By Girsberger, Esther Mirjam; Rinawi, Miriam; Krapf, Matthias
  2. Immigration and the Future of the Welfare State in Europe By Alberto Alesina; Johann Harnoss; Hillel Rapoport
  3. Measuring Unfair Inequality: Reconciling Equality of Opportunity and Freedom from Poverty By Hufe, Paul; Kanbur, Ravi; Peichl, Andreas
  4. When Short-Time Work Works By Cahuc, Pierre; Kramarz, Francis; Nevoux, Sandra
  5. Inequality, Fairness and Social Capital By Fehr, Dietmar; Rau, Hannes; Trautmann, Stefan; Xu, Yilong

  1. By: Girsberger, Esther Mirjam (University of Lausanne); Rinawi, Miriam (Swiss National Bank); Krapf, Matthias (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
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp11586&r=ltv
  2. By: Alberto Alesina (Harvard University [Cambridge], IGIER); Johann Harnoss (UP1 - Université Panthéon-Sorbonne); Hillel Rapoport (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics)
    Abstract: We analyze the effect of immigration on attitudes to redistribution in Europe. Using data for 28 European countries from the European Social Survey, we .nd that native workers lower their support for redistribution if the share of immigration in their country is high. This effect is larger for individuals who hold negative views regarding immigration but is smaller when immigrants are culturally closer to natives and come from richer origin countries. The effect also varies with native workers' and immigrants' education. In particular, more educated natives (in terms of formal education but also job-specic human capital and ocupation task skill intensity) support more redistribution if immigrants are also relatively educated. To address endogeneity concerns, we restrict identification to within country and within country-occupation variation and also instrument immigration using a gravity model. Overall, our results show that the negative .First-order effect of immigration on attitudes to redistribution is relatively small and counterbalanced among skilled natives by positive second-order effects for the quality and diversity of immigration.
    Date: 2018–01
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01707760&r=ltv
  3. By: Hufe, Paul (ZEW Mannheim); Kanbur, Ravi (Cornell University); Peichl, Andreas (Ifo Institute for Economic Research)
    Abstract: Rising income inequalities are widely debated in public and academic discourse. In this paper, we contribute to this debate by proposing a new family of measures of unfair inequality. To do so, we acknowledge that inequality is not bad per se, but that its underlying sources need to be taken into account. Thereby, this paper is the first to reconcile two prominent fairness principles, namely equality of opportunity and freedom from poverty, into a joint measure of unfair inequality. Two empirical applications provide important new insights on the development of unfair inequality both over time (in the US) and across countries (in Europe). First, unfair inequality shows different time trends and country rankings compared to total inequality. Second, average unfair inequality doubles when complementing the ideal of an equal opportunity society with poverty aversion. Furthermore, we show that an exclusive focus on top incomes may misguide fairness judgments.
    Keywords: inequality, equality of opportunity, poverty, fairness, measurement
    JEL: D31 D63 I32
    Date: 2018–06
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp11601&r=ltv
  4. By: Cahuc, Pierre; Kramarz, Francis; Nevoux, Sandra
    Abstract: Short-time work programs were revived by the Great Recession. To understand their operating mechanisms, we first provide a model showing that short-time work may save jobs in firms hit by strong negative revenue shocks, but not in less severely-hit firms, where hours worked are reduced, without saving jobs. The cost of saving jobs is low because short-time work targets those at risk of being destroyed. Using extremely detailed data on the administration of the program covering the universe of French establishments, we devise a causal identification strategy based on the geography of the program that demonstrates that short-time work saved jobs in firms faced with large drops in their revenues during the Great Recession, in particular when highly levered, but only in these firms. The measured cost per saved job is shown to be very low relative to that of other employment policies.
    Keywords: employment; Short-time work; unemployment
    JEL: E24 J22 J65
    Date: 2018–07
    URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:13041&r=ltv
  5. By: Fehr, Dietmar; Rau, Hannes; Trautmann, Stefan (Tilburg University, Center For Economic Research); Xu, Yilong (Tilburg University, Center For Economic Research)
    Abstract: We study the impact of unjust inequality on social trust and trustworthiness, and its separate effect on the economically successful and the unsuccessful, in a controlled economic experiment. We find evidence for a negative effect of unfair economic inequality on social interactions. Probing the boundaries of this effect, we document that this erosion of social capital critically depends on the context: if a well-off person is not directly responsible for the outcome of the worse-off person, then we observe no negative effects on trust and trustworthiness in the aggregate. Moreover, our data do not support the view that higher status or wealth leads to an erosion of pro-social attitudes: the successful are always more generous; groups of unsuccessful persons are least efficient and least generous in the trust game.
    Keywords: inequality; fairness; social capital
    JEL: C91 D31 D63
    Date: 2018
    URL: http://d.repec.org/n?u=RePEc:tiu:tiucen:5aa2c210-4a6c-49b0-955b-713611d02043&r=ltv

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