nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2019‒02‒25
ten papers chosen by
Maximo Rossi
Universidad de la República

  1. Wealth Gradients in Early Childhood Cognitive Development in Five Latin American Countries By Schady, Norbert; Behrman, Jere R.; Caridad Araujo, Maria; Azuero, Rodrigo; Bernal, Raquel; Bravo, David; López Bóo, Florencia; Macours, Karen; Marshall, Daniela; Paxson, Christina; Vakis, Renos
  2. A different perspective on the evolution of UK income inequality By Atkinson, Anthony B.; Jenkins, Stephen P.
  3. Perspectives on poverty in Europe By Jenkins, Stephen P.
  4. Dual Labour Markets Revisited By Bentolila, Samuel; Dolado, Juan J.; Jimeno, Juan F.
  5. Incorporating Inequality Aversion in Health-Care Priority Setting By Joan Costa-i-Font; Frank Cowell
  6. Have Econometric Analyses of Happiness Data Been Futile? A Simple Truth About Happiness Scales By Le-Yu Chen; Ekaterina Oparina; Nattavudh Powdthavee; Sorawoot Srisuma
  7. Childcare Choices and Child Development: a Cross-Country Analysis By Daniela Del Boca; Christopher Flinn; Daniela Piazzalunga; Chiara Pronzato; Giuseppe Sorrenti; Matthew Wiswall
  8. Actors in the Child Development Process By Del Boca, Daniela; Flinn, Christopher; Verriest, Ewout; Wiswall, Matthew
  9. Born in the Family: Preferences for Boys and the Gender Gap in Math By Dossi, Gaia; Figlio, David; Giuliano, Paola; Sapienza, Paola
  10. Immigration and Preferences for Redistribution in Europe By Alberto Alesina; Elie Murard; Hillel Rapoport

  1. By: Schady, Norbert (Inter-American Development Bank); Behrman, Jere R. (University of Pennsylvania); Caridad Araujo, Maria (Inter-American Development Bank); Azuero, Rodrigo (Inter-American Development Bank); Bernal, Raquel (Universidad de los Andes); Bravo, David; López Bóo, Florencia (Inter-American Development Bank); Macours, Karen (Paris School of Economics); Marshall, Daniela (University of Pennsylvania); Paxson, Christina (Princeton University); Vakis, Renos (World Bank)
    Abstract: Research from the United States shows that gaps in early cognitive and non-cognitive ability appear early in the life cycle. Little is known about this important question for developing countries. This paper provides new evidence of sharp differences in cognitive development by socioeconomic status in early childhood for five Latin American countries. To help with comparability, we use the same measure of receptive language ability for all five countries. We find important differences in development in early childhood across countries, and steep socioeconomic gradients within every country. For the three countries where we can follow children over time, there are few substantive changes in scores once children enter school. Our results are robust to different ways of defining socioeconomic status, to different ways of standardizing outcomes, and to selective non-response on our measure of cognitive development.
    Keywords: cognitive development, poverty, gradients
    JEL: I24 I25
    Date: 2019–01
  2. By: Atkinson, Anthony B.; Jenkins, Stephen P.
    Abstract: This paper scrutinizes the conventional wisdom about trends in UK income inequality and also places contemporary inequality in a much longer historical perspective. We combine household survey and income tax data to provide better coverage of all income ranges from the bottom to the very top. We make a case for studying distributions of income between tax units (i.e. not assuming the full income sharing that goes with the use of the household as the unit of analysis) for reasons of principle as well as data harmonization. We present evidence that income inequality in the UK is as least as high today as it was just before the start of World War 2
    Keywords: inequality; tax unit; household; Gini coefficient; income tax data; household survey data; HBA1; SPI
    JEL: C46 C81 D31
    Date: 2019–01–01
  3. By: Jenkins, Stephen P.
    Abstract: I address four topics: how our capacities to monitor poverty in Europe have improved substantially over recent decades; how progress on EU poverty reduction has been disappointing and why this has been; conceptual and measurement issues; and the future direction of EU-level anti-poverty actions. I follow in the footsteps of a giant – my perspectives are essentially elaborations of points made by Tony Atkinson
    Keywords: Poverty; material deprivation; Europe; EU-SILC
    JEL: C81 D31 I32
    Date: 2018–12–01
  4. By: Bentolila, Samuel (CEMFI, Madrid); Dolado, Juan J. (European University Institute); Jimeno, Juan F. (Bank of Spain)
    Abstract: This paper provides an overview of recent research on dual labour markets. Theoretical and empirical contributions on the labour-market effects of dual employment protection legislation are revisited, as well as factors behind its resilience and policies geared towards correcting its negative economic and social consequences. The topics covered include the stepping-stone or dead-end nature of temporary contracts, their effects on employment, unemployment, churn, training, productivity growth, wages, and labour market inflows and outflows. The paper reviews both theoretical advances and relevant policy discussions on a very relevant topic in many European countries, in particular in several that had a very poor employment performance during the recent global economic and financial crisis.
    Keywords: dual labour markets, employment protection, temporary contracts, job creation, job destruction, churn
    JEL: J41
    Date: 2019–01
  5. By: Joan Costa-i-Font; Frank Cowell
    Abstract: Although measures of sensitivity to inequality are important in judging the welfare effects of health-care programmes, it is far from straightforward how to elicit them and apply them in health-care decision making. This paper provides an overview of the literature on the measurement of inequality aversion, examines some of the features specific of the health domain that depart from the income domain, and discusses its implementation in health system priority-setting decisions. We find evidence that individuals exhibit a preference for more equitable health distribution, but inequality aversion estimates from the literature are unclear. Unlike the income-inequality literature, standard approaches in the health-economics do not follow a ‘veil-of-ignorance’ approach and elicit mostly bivariate (income-related health) inequality aversion estimates. We suggest some ideas to reduce the disconnect between the income-inequality and health-economics literatures.
    Keywords: attitudes to inequality, inequality aversion, health, income, survey data, priority setting
    JEL: I19
    Date: 2019
  6. By: Le-Yu Chen; Ekaterina Oparina; Nattavudh Powdthavee; Sorawoot Srisuma
    Abstract: Econometric analyses in the happiness literature typically use subjective well-being (SWB) data to compare the mean of observed or latent happiness across samples. Recent critiques show that comparing the mean of ordinal data is only valid under strong assumptions that are usually rejected by SWB data. This leads to an open question whether much of the empirical studies in the economics of happiness literature have been futile. In order to salvage some of the prior results and avoid future issues, we suggest regression analysis of SWB (and other ordinal data) should focus on the median rather than the mean. Median comparisons using parametric models such as the ordered probit and logit can be readily carried out using familiar statistical softwares like STATA. We also show a previously assumed impractical task of estimating a semiparametric median ordered-response model is also possible by using a novel constrained mixed integer optimization technique. We use GSS data to show the famous Easterlin Paradox from the happiness literature holds for the US independent of any parametric assumption.
    Date: 2019–02
  7. By: Daniela Del Boca; Christopher Flinn; Daniela Piazzalunga; Chiara Pronzato; Giuseppe Sorrenti; Matthew Wiswall
    Keywords: Time Allocation, Child Development, Household Labor Supply
    JEL: J13 D1
    Date: 2018
  8. By: Del Boca, Daniela (University of Turin); Flinn, Christopher (New York University); Verriest, Ewout (New York University); Wiswall, Matthew (Arizona State University)
    Abstract: We construct and estimate a model of child development in which both the parents and children make investments in the child's skill development. In each period of the development process, partially altruistic parents act as the Stackelberg leader and the child the follower when setting her own study time. We then extend this non-cooperative form of interaction by allowing parents to offer incentives to the child to increase her study time, at some monitoring cost. We show that this incentive scheme, a kind of internal conditional cash transfer, produces efficient outcomes and, in general, increases the child's cognitive ability. In addition to heterogeneity in resources (wage offers and non-labor income), the model allows for heterogeneity in preferences both for parents and children, and in monitoring costs. Like their parents, children are forward looking, but we allow children and parents to have different preferences and for children to have age-varying discount rates, becoming more "patient" as they age. Using detailed time diary information on the allocation of parent and child time linked to measures of child cognitive ability, we estimate several versions of the model. Using model estimates, we explore the impact of various government income transfer policies on child development. As in Del Boca et al. (2016), we find that the most effective set of policies are (external) conditional cash transfers, in which the household receives an income transfer given that the child's cognitive ability exceeds a prespecified threshold. We find that the possibility of households using internal cash transfers greatly increases the cost effectiveness of external cash transfer policies.
    Keywords: time allocation, child development, household labor supply
    JEL: J13 D1
    Date: 2019–01
  9. By: Dossi, Gaia; Figlio, David; Giuliano, Paola; Sapienza, Paola
    Abstract: We study the correlation between parental gender attitudes and the performance in mathematics of girls using two different approaches and data. First, we identify families with a preference for boys by using fertility stopping rules in a population of households whose children attend public schools in Florida. Girls growing up in a boy-biased family score 3 percentage points lower on math tests when compared to girls raised in other families. Second, we find similar strong effects when we study the correlations between girls' performance in mathematics and maternal gender role attitudes, using evidence from the National Longitudinal Survey of Youth. We conclude that socialization at home can explain a non-trivial part of the observed gender disparities in mathematics performance and document that maternal gender attitudes correlate with those of their children, supporting the hypothesis that preferences transmitted through the family impact children behavior.
    Keywords: cultural transmission; gender differences; Math Performance
    JEL: A13 I20 J16 Z1
    Date: 2019–02
  10. By: Alberto Alesina; Elie Murard; Hillel Rapoport
    Abstract: We examine the relationship between immigration and attitudes toward redistribution using a newly assembled data set of immigrant stocks for 140 regions of 16 Western European countries. Exploiting within-country variations in the share of immigrants at the regional level, we find that native respondents display lower support for redistribution when the share of immigrants in their residence region is higher. This negative association is driven by regions of countries with relatively large Welfare States and by respondents at the center or at the right of the political spectrum. The effects are also stronger when immigrants originate from Middle-Eastern countries, are less skilled than natives, and experience more residential segregation. These results are unlikely to be driven by immigrants' endogenous location choices.
    JEL: D6 O15 P16
    Date: 2019–02

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