nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2018‒09‒17
nine papers chosen by
Maximo Rossi
Universidad de la República

  1. The Supply of Skill and Endogenous Technical Change: Evidence From a College Expansion Reform By Carneiro, Pedro; Liu, Kai; Salvanes, Kjell G.
  2. When Short-Time Work Works By Pierre Cahuc; Francis Kramarz; Sandra Nevoux
  3. Do Equal Employment Opportunity Statements Backfire? Evidence From a Natural Field Experiment on Job-Entry Decisions By Andreas Leibbrandt; John List
  4. Estimating the production function for human capital: results from a randomized controlled trial in Colombia By Orazio Attanasio; Sarah Cattan; Emla Fitzsimons; Costas Meghir; Marta Rubio Codina
  5. Income Distribution in Latin America. The Evolution in the Last 20 Years: A Global Approach By Leopoldo Tornarolli; Matías Ciaschi; Luciana Galeano
  6. Deciphering the Cultural Code: Cognition, Behavior, and the Interpersonal Transmission of Culture By Lu, Richard; Chatman, Jennifer A.; Goldberg, Amir; Srivastava, Sameer B.
  7. Education policy and intergenerational transfers in equilibrium By Brant Abbott; Giovanni Gallipoli; Costas Meghir; Giovanni L. Violante
  8. Adjusting to Robots: Worker-Level Evidence By Dauth, Wolfgang; Findeisen, Sebastian; Suedekum, Jens; Woessner, Nicole
  9. How do Latin American migrants in the U.S. stand on schooling premium? What does it reveal about education quality in their home countries? By Alonso-Soto, Daniel; Ñopo, Hugo

  1. By: Carneiro, Pedro (University College London); Liu, Kai (University of Cambridge); Salvanes, Kjell G. (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: We examine the labor market consequences of an exogenous increase in the supply of skilled labor in several cities in Norway, resulting from the construction of new colleges in the 1970s. We find that skilled wages increased as a response, suggesting that along with an increase in the supply there was also an increase in demand for skill. We also show that college openings led to an increase in the productivity of skilled labor and investments in R&D. Our findings are consistent with models of endogenous technical change where an abundance of skilled workers may encourage firms to adopt skill-complementary technologies, leading to an upward-sloping long-run demand for skill.
    Keywords: Skilled labor; skilled wages; college expansion reform
    JEL: J23 J24
    Date: 2018–07–17
  2. By: Pierre Cahuc; Francis Kramarz; Sandra Nevoux
    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: Short-time work, unemployment, employment.
    JEL: E24 J22 J65
    Date: 2018
  3. By: Andreas Leibbrandt; John List
    Abstract: Labor force composition and the allocation of talent remain of vital import to modern economies. For their part, governments and companies around the globe have implemented equal employment opportunity (EEO) regulations to influence labor market flows. Even though such regulations are pervasive, surprisingly little is known about their impacts. We use a natural field experiment conducted across 10 U.S. cities to investigate if EEO statements in job advertisements affect the first step in the employment process, application rates. Making use of data from nearly 2,500 job seekers, we find considerable policy effects, but in an unexpected direction: the presence of an EEO statement dampens rather than encourages racial minorities willingness to apply for jobs. Importantly, the effects are particularly pronounced for educated job seekers and in cities with white majority populations. Complementary survey evidence suggests the underlying mechanism at work is "tokenism", revealing that EEO statements backfire because racial minorities avoid environments in which they are perceived as regulatory, or symbolic, hires rather than being hired on their own merits. Beyond their practical and theoretical importance, our results highlight how field experiments can significantly improve policy making. In this case, if one goal of EEO regulations is to enhance the pool of minority applicants, then it is not working.
    Date: 2018
  4. By: Orazio Attanasio (Institute for Fiscal Studies and University College London); Sarah Cattan (Institute for Fiscal Studies and Institute for Fiscal Studies); Emla Fitzsimons (Institute for Fiscal Studies and Institute of Education, University of London); Costas Meghir (Institute for Fiscal Studies and Yale University); Marta Rubio Codina (Institute for Fiscal Studies and Institute for Fiscal Studies)
    Abstract: We examine the channels through which a randomized early childhood intervention in Colombia led to signi cant gains in cognitive and socio-emotional skills among a sample of disadvantaged children aged 12 to 24 months at baseline. We estimate the determinants of parents' material and time investments in these children and evaluate the impact of the treatment on such investments. We then estimate the production functions for cognitive and socio-emotional skills. The effects of the program can be explained by increases in parental investments, emphasizing the importance of parenting interventions at an early age. An earlier version of this working paper is available here.
    Date: 2018–07–11
  5. By: Leopoldo Tornarolli (CEDLAS-FCE-UNLP); Matías Ciaschi (CEDLAS-FCE-UNLP); Luciana Galeano (CEDLAS-FCE-UNLP)
    Abstract: While Latin America has historically been considered a region of very high inequality, the performance of most Latin American countries in terms of reduction of income inequality has been remarkable good in the first decade of this century. Given that those improvements took place in a context of rising inequality in most of the world, the evolution of income inequality in the region has caught the attention of researchers and policy makers around the world. Taking advantage of a large database of comparable microdata from household surveys, this article updates the evidence on the trends of income inequality in all Latin American countries for the period 1992-2015. It also provides an analysis of how the distinctive evolution of income inequality in this century in Latin America has changed the position of the different countries of the region in both, the global distribution of income in the world and the global distribution of income in Latin America. Finally, the paper decomposes the evolution of income inequality in several countries of the region, discussing the role played by several factors on that evolution.
    JEL: D63 I31 J11 J21 J31 J82 N36
    Date: 2018–09
  6. By: Lu, Richard (?); Chatman, Jennifer A. (?); Goldberg, Amir (Stanford University); Srivastava, Sameer B. (?)
    Abstract: From the schoolyard to the boardroom, the pressures of cultural assimilation pervade all walks of social life. Why are some people more successful than others at cultural adjustment? Research on organizational culture has mostly focused on value congruence as the core dimension of cultural fit. We develop a complementary conceptualization of cognitive fit--perceptual accuracy, or the degree to which a person can decipher the group's cultural code. We demonstrate that the ability to read the cultural code, rather than identification with the code, matters for contemporaneous behavioral conformity. We further show 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 cognitive and behavioral cultural fit. We also take advantage of a reorganization that produced quasi-exogenous shifts in employees' interlocutors to identify the causal impact of peer influence. We discuss implications of these findings for research on cultural assimilation, the interplay of structure and culture, and the pairing of surveys with digital trace data.
    Date: 2018–05
  7. By: Brant Abbott (Institute for Fiscal Studies); Giovanni Gallipoli (Institute for Fiscal Studies and University of British Columbia); Costas Meghir (Institute for Fiscal Studies and Yale University); Giovanni L. Violante (Institute for Fiscal Studies)
    Abstract: This paper examines the equilibrium effects of alternative financial aid policies intended to promote college participation. We build an overlapping generations life cycle model with education, labor supply, and consumption/saving decisions. Cognitive and non-cognitive skills of children depend on the cognitive skills and education of parents, and affect education choice and labor market outcomes. Driven by both altruism and paternalism, parents make transfers to their children which can be used to fund education, supplementing grants, loans and the labor supply of the children themselves during college. The crowding out of parental transfers by government programs is sizable and thus cannot be ignored when designing policy. The current system of federal aid is valuable: removing either grants or loans would each reduce output by 2% and welfare by 3% in the long-run. An expansion of aid towards ability-tested grants would be markedly superior to either an expansion of student loans or a labor tax cut. This result is, in part, due to the complementarity between parental education and ability in the production of skills of future generations. A previous version of this working paper is available here.
    Keywords: Ability Transmission, Altruism, Credit Constraints, Education, Equilibrium, Financial Aid, Intergenerational Transfers, Paternalism
    Date: 2018–07–11
  8. By: Dauth, Wolfgang (University of Würzburg); Findeisen, Sebastian (Federal Reserve Bank of Minneapolis); Suedekum, Jens (DICE Heinrich-Heine-Universität Düsseldorf); Woessner, Nicole (DICE Heinrich-Heine-Universität Düsseldorf)
    Abstract: We estimate the effect of industrial robots on employment, wages, and the composition of jobs in German labor markets between 1994 and 2014. We find that the adoption of industrial robots had no effect on total employment in local labor markets specializing in industries with high robot usage. Robot adoption led to job losses in manufacturing that were offset by gains in the business service sector. We analyze the impact on individual workers and find that robot adoption has not increased the risk of displacement for incumbent manufacturing workers. They stay with their original employer, and many workers adjust by switching occupations at their original workplace. The loss of manufacturing jobs is solely driven by fewer new jobs for young labor market entrants. Moreover, we find that, in regions with higher exposure to automation, labor productivity increases while the labor share in total income declines.
    Keywords: Automation; Labor market institutions; Inequality
    JEL: F16 J24 O33 R11
    Date: 2018–08–21
  9. By: Alonso-Soto, Daniel; Ñopo, Hugo (Grupo de Análisis para el Desarrollo (GRADE))
    Abstract: Los indicadores de la calidad de la escolaridad no solo son relativamente nuevos en el mundo, sino que tampoco están disponibles para una proporción considerable de la población mundial. En su ausencia, se han ideado algunas medidas proxy. Una idea simple, pero poderosa, ha sido la de utilizar los premios a la escolaridad —entendidos como el ingreso adicional que los trabajadores son capaces de generar por cada año adicional de estudios— para los trabajadores migrantes en los Estados Unidos (Bratsberg y Terrell 2002). En este trabajo, los autores amplían esta idea y calculan medidas para los premios a la escolaridad de trabajadores inmigrantes en los Estados Unidos a lo largo de cinco décadas. Enfocándose en los egresados de la educación secundaria o terciaria en países de América Latina, los investigadores presentan estimaciones comparativas de la evolución de tales premios para ambos niveles de escolaridad. Los hallazgos muestran que los premios a la escolaridad en América Latina han sido constantemente bajos durante todo el periodo de análisis. Los resultados se mantienen luego de controlar la migración selectiva de distintas maneras. Esto contradice la creencia popular en los círculos de política de que la calidad de la educación de la región se ha deteriorado en los años recientes. Por el contrario, los premios a la escolaridad en la India muestran una mejora impresionante en las últimas décadas, en especial en el nivel terciario.
    Keywords: Calidad de la educación, aprendizaje, escolaridad, América Latina.
    JEL: I21
    Date: 2017

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