nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2018‒08‒20
three papers chosen by
Maximo Rossi
Universidad de la República

  1. The returns to schooling unveiled By Ana Rute Cardoso; Hugo Reis; Paulo Guimarães; Pedro Portugal
  2. The Well-being of the Overemployed and the Underemployed and the Rise in Depression in the UK By David N.F. Bell; David G. Blanchflower
  3. Immigration and Redistribution By Alberto Alesina; Armando Miano; Stefanie Stantcheva

  1. By: Ana Rute Cardoso; Hugo Reis; Paulo Guimarães; Pedro Portugal
    Abstract: We bring together the strands of literature on the returns to education, its spillovers, and the role of the employer shaping the wage distribution. The aim is to analyze the labor market returns to education taking into account who the worker is (worker unobserved ability), what he does (the job title), with whom (the coworkers) and, also crucially, for whom (the employer). We combine data of remarkable quality exhaustive longitudinal linked employer-employee data on Portugal with innovative empirical methods, to address the homophily or reflection problem, selection issues, and common measurement errors and confounding factors. Our methodology combines the estimation of wage regressions in the spirit of Abowd, Kramarz, and Margolis (1999), Gelbach's (2016) unambiguous conditional decomposition of the impact of various omitted covariates on an estimated coefficient, and Arcidiacono et al.'s (2012) procedure to identify the impact of peer quality. We first uncover that peer effects are quite sizeable. A one standard deviation increase in the measure of peer quality leads to a wage increase of 2.1 log points. Next, we show that education grants access to better-paying firms and job titles: one fourth of the overall return to education operates through the firm channel and a third operates through the job-title channel, while the remainder is associated exclusively with the individual worker. Finally, we unveil that an additional year of average education of coworkers yields a 0.5 log points increase in a worker's wage, after we net out a 2.0 log points return due to homophily (similarity of own and peers' characteristics), and 3.3 log points associated with worker sorting across firms and job titles.
    JEL: I20 J24 J31
    Date: 2018
    URL: http://d.repec.org/n?u=RePEc:ptu:wpaper:w201805&r=ltv
  2. By: David N.F. Bell; David G. Blanchflower
    Abstract: In this paper we build on our earlier work on underemployment using data from the UK. In particular, we explore their well-being based on hours preferences rather than on involuntary part-time work used in the prior literature. We make use of five main measures of well-being: happiness; life satisfaction; whether life is worthwhile; anxiety and depression. The underemployed have higher levels of well-being than the unemployed and disabled but lower levels than any other group of workers, full or part-time. The more that actual hours differ from preferred hours the lower is a worker's well-being. This is true for those who say they want more hours (the underemployed) and those who say they want less (the over employed). We find strong evidence of a rise in depression and anxiety (negative affect) in the years since the onset of austerity in 2010 that is not matched by declines in happiness measures (positive affect). The fear of unemployment obtained from monthly surveys from the EU has also been on the rise since 2015. We find evidence of an especially large rise in anxiety and depression among workers in general and the underemployed in particular. The underemployed don't want to be underemployed.
    JEL: I20 I31 J64
    Date: 2018–07
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:24840&r=ltv
  3. By: Alberto Alesina; Armando Miano; Stefanie Stantcheva
    Abstract: We design and conduct large-scale surveys and experiments in six countries to investigate how natives' perceptions of immigrants influence their preferences for redistribution. We find strikingly large biases in natives' perceptions of the number and characteristics of immigrants: in all countries, respondents greatly overestimate the total number of immigrants, think immigrants are culturally and religiously more distant from them, and are economically weaker – less educated, more unemployed, poorer, and more reliant on government transfers – than is the case. While all respondents have misperceptions, those with the largest ones are systematically the right-wing, the non-college educated, and the low-skilled working in immigration-intensive sectors. Support for redistribution is strongly correlated with the perceived composition of immigrants – their origin and economic contribution – rather than with the perceived share of immigrants per se. Given the very negative baseline views that respondents have of immigrants, simply making them think about immigration in a randomized manner makes them support less redistribution, including actual donations to charities. We also experimentally show respondents information about the true i) number, ii) origin, and iii) “hard work” of immigrants in their country. On its own, information on the “hard work” of immigrants generates more support for redistribution. However, if people are also prompted to think in detail about immigrants' characteristics, then none of these favorable information treatments manages to counteract their negative priors that generate lower support for redistribution.
    JEL: D71 D72 H2
    Date: 2018–06
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:24733&r=ltv

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