nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2019‒01‒28
five papers chosen by
Maximo Rossi
Universidad de la República

  1. The Econometrics and Economics of the Employment Effects of Minimum Wages: Getting from Known Unknowns to Known Knowns By Neumark, David
  2. The Comfortable, the Rich, and the Super-rich. What Really Happened to Top British Incomes During the First Half of the Twentieth Century? By Peter Scott; James Walker
  3. Wage Insurance, Part-Time Unemployment Insurance and Short-Time Work in the XXI Century By Pierre Cahuc
  4. From Immigrants to Robots: The Changing Locus of Substitutes for Workers By George J. Borjas; Richard B. Freeman
  5. How natural field experiments have enhanced our understanding of unemployment By Omar Al-Ubaydli; John List

  1. By: Neumark, David (University of California, Irvine)
    Abstract: I discuss the econometrics and the economics of past research on the effects of minimum wages on employment in the United States. My intent is to try to identify key questions raised in the recent literature, and some from the earlier literature, which I think hold the most promise for understanding the conflicting evidence and arriving at a more definitive answer about the employment effects of minimum wages. My secondary goal is to discuss how we can narrow the range of uncertainty about the likely effects of the large minimum wage increases becoming more prevalent in the United States. I discuss some insights from both theory and past evidence that may be informative about the effects of high minimum wages, and try to emphasize what research can be done now and in the near future to provide useful evidence to policymakers on the results of the coming high minimum wage experiment, whether in the United States or in other countries.
    Keywords: minimum wage, employment
    JEL: J23 J38
    Date: 2018–11
  2. By: Peter Scott (Henley Business School, University of Reading); James Walker (Henley Business School, University of Reading)
    Abstract: We examine shifts in British income inequality and their causes between 1911 and 1949. Newly re-discovered Inland Revenue 1911 estimates and more detailed data from subsequent official income distribution enquiries are used to show that income was substantially more concentrated at the top of the income distribution in 1911 than previous estimates suggest, and that the top 1 per cent were the principal “losers” in the subsequent trend towards reduced income inequality. We find that this trend reflected a sharp decline in top “unearned” incomes - paralleling the findings of Piketty and Saez for France and the USA. This explains the paradox between the observed reduction in British income inequality and the lack of evidence for any substantial redistribution of income between salary and wage-earners.
    Keywords: Income inequality, United Kingdom
    JEL: H26 H87 E21
    Date: 2018–10
  3. By: Pierre Cahuc (Département d'économie)
    Abstract: At the start of the XXI century, characterized by the rise of new forms of employment and of skills requirements, many countries need to adapt their labor market institutions to accompany technological changes and globalization. In this context, unemployment insurance is an essential tool to foster and smooth career paths. Its core components comprise unemployment benefits paid to full-time unemployed workers, monitoring, and counseling. But it is clear that they are not sufficient to cover all risks properly. To deal with this issue, part-time unemployment insurance, short-time work and wage insurance have been tried, at different scales, in several countries over the last decades. This paper surveys the evaluations of these schemes and draws lessons from their results for future research and for labor market institutions.
    Keywords: Part-time unemployment insurance; Wage insurance; Short-time work
    JEL: H5 J6
    Date: 2018–12
  4. By: George J. Borjas; Richard B. Freeman
    Abstract: Increased use of robots has roused concern about how robots and other new technologies change the world of work. Using numbers of robots shipped to primarily manufacturing industries as a supply shock to an industry labor market, we estimate that an additional robot reduces employment and wages in an industry by roughly as much as an additional 2 to 3 workers and by 3 to 4 workers in particular groups, which far exceed estimated effects of an additional immigrant on employment and wages. While the growth of robots in the 1996-2016 period of our data was too modest to be a major determinant of wages and employment, the estimated coefficients suggest that continued exponential growth of robots could disrupt job markets in the foreseeable future and thus merit attention from labor analysts.
    JEL: J20 J61 O33
    Date: 2019–01
  5. By: Omar Al-Ubaydli; John List
    Abstract: Natural field experiments investigating key labour market phenomena such as unemployment have only been used since the early 2000s. This paper reviews the literature and draws three primary conclusions that deepen our understanding of unemployment. First, the inability to monitor workers perfectly in many occupations complicates the hiring decision in a way that contributes to unemployment. Second, the inability to determine a worker's attributes precisely at the time of hiring leads to discrimination on the basis of factors such as race, gender, age and ethnicity. This can lead to systematically high and persistent levels of unemployment for groups that face discrimination. Third, the importance of social and personal dynamics in the workplace can lead to short-term unemployment. Much of the knowledge necessary for these conclusions could only be obtained using natural field experiments due to their ability to combine randomized control with an absence of experimenter demand effects.
    Date: 2019

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