nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2019‒04‒08
six papers chosen by
Maximo Rossi
Universidad de la República

  1. Weekend working in 21st century Britain:Does it matter for well-being? By Andrew M. Bryce
  2. Long-term evolution of inequality of opportunity By Maurizio Bussolo; Daniele Checchi; Vito Peragine
  3. Marriage market dynamics, gender, and the age gap By Andrew Shephard
  4. Make yourselves scarce: The effect of demographic change on the relative wages and employment rates of experienced workers By Böhm, Michael J.; Siegel, Christian
  5. Robust cross-country analysis of inequality of opportunity By Francesco Andreoli; Alessio Fusco
  6. The inequality of extreme incomes By Lidia Ceriani; Paolo Verme

  1. By: Andrew M. Bryce (Department of Economics, University of Sheffield UK)
    Abstract: On any given weekend, over a fifth of the UK labour force is at work, while more than half of working adults report working at the weekend at least some of the time. This is despite the fact that weekends are conventionally set aside as rest days. The question that this paper addresses is: does this matter? This paper adds to the literature by using two large panel datasets to analyse the effects of weekend working on eight different measures of subjective well-being in the UK. Unlike most previous literature on this topic, the analysis in this paper controls for individual fixed effects such that the results should not be confounded by time invariant omitted variables that differ between individuals. I find that weekend working does not affect how satisfied people are with their lives overall but it does have a significant impact on how satisfied they are with the amount of leisure time they have, with the results suggesting that the avoidance of weekend working is equivalent to working six fewer hours per week. Moreover, people working at the weekend report significantly lower happiness yesterday than non-weekend workers. These findings imply that, while weekend working is arguably good for productivity and hence welfare, such benefits come at a cost. Notwithstanding the fact that many people may be freely supplying their labour at weekends, actions aimed at limiting weekend working or mitigating its adverse effects will improve the overall well-being of workers.
    Keywords: subjective well-being; labour market; weekend working
    JEL: I3 J2
    Date: 2019–03
  2. By: Maurizio Bussolo (World Bank, USA); Daniele Checchi (University of Milan); Vito Peragine (University of Bari)
    Abstract: The main goal of this paper is to document and analyze the long-term evolution of inequality of opportunity and thus extend the recent empirical literature, which is mainly concerned with its measurement at a specific point in time. Using repeated cross-section surveys for five European countries (France, Germany, Great Britain, Italy, and Switzerland), the evolution of inequality of opportunity is measured for a period of about two decades for the whole populations, as well as for different birth cohorts. Relative inequality of opportunity represents an important portion of total income inequality, with values ranging from 30 to 50 percent according to the standard deviation of logs (and reaching a lower share in case of mean log deviation) and, for all the countries, it shows a stable or declining time trend. When the birth cohorts are followed across time, inequality of opportunity decreases with age: the effect of circumstances seems to weaken over the life cycle. This is a quite different age profile from that of inequality of outcomes (income or consumption), which generally increases with age. A decomposition of the relative inequality of opportunity allows highlighting some key drivers of its time evolution. In all the countries, there has been a clear enhancement of equality of educational opportunity (as captured by a downward trending intergenerational education persistence) and a reduction of the returns to education. However, for some countries, notably Italy, these trends have failed to translate into decreasing inequality of opportunity in the income distribution because of the increasing role of parental networking (an additional channel through which parental background affects the incomes of offspring).
    Keywords: Inequality of Opportunity, Decomposition methods, Education mobility, Returns to Education, Family Networking, Cohort Analysis.
    JEL: D31 D63 E24 I24 J62
    Date: 2019–01
  3. By: Andrew Shephard (Department of Economics, University of Pennsylvania)
    Abstract: We present a general discrete choice framework for analyzing household formation and dissolution decisions in an equilibrium limited-commitment collective framework that allows for marriage both within and across birth cohorts. Using Panel Study of Income Dynamics and American Community Survey data, we apply our framework to empirically implement a time allocation model with labor market earnings risk, human capital accumulation, home production activities, fertility, and both within- and across-cohort marital matching. Our model replicates the bivariate marriage distribution by age, and explains some of the most salient life-cycle patterns of marriage, divorce, remarriage, and time allocation behavior. We use our estimated model to quantify the impact of the significant reduction in the gender wage gap since the 1980s on marriage outcomes.
    Keywords: Marriage, divorce, collective household models, life-cycle, search and matching, intrahousehold allocation, structural estimation
    JEL: C78 D13 D83 J12 J16 J22 J24 J31
    Date: 2019–03–15
  4. By: Böhm, Michael J. (iza university of bonn); Siegel, Christian (university of kent)
    Abstract: We argue that rising supply of experience not only reduces experienced workers’ relative wages but also their relative labor market participation. From a theoretical model we derive predictions which we quasi-experimentally investigate, using variation across U.S. local labor markets (LLMs) over the last decades and instrumenting experience supply by the LLMs’ age structures a decade earlier. We find that aging substantially reduces experienced workers’ relative wages and employment rates, and also their labor market participation rates. Our results imply that the effect of demographic change on labor markets might be more severe than previously recognized, as it reaches beyond wages.
    Keywords: demographic change, employment of experienced workers, return to experience
    JEL: J11 J21 J31
    Date: 2019–04–02
  5. By: Francesco Andreoli (University of Verona and LISER); Alessio Fusco (Luxembourg Institute of Socio-Economic Research - LISER)
    Abstract: International rankings of countries based on inequality of opportunity indices may not be robust vis-à-vis the specific metric adopted to measure opportunities. Indices often aggregate relevant information and neglect to control for normatively irrelevant distributional factors. This paper shows that gap curves can be estimated from crosssectional data and adopted to test hypotheses about robust cross-country comparisons of (in)equality of opportunity.
    Keywords: Inequality of opportunity, EU-SILC, gap curves.
    JEL: D63 J62 C14
    Date: 2019–03
  6. By: Lidia Ceriani (Georgetown University, USA); Paolo Verme (The World Bank, USA)
    Abstract: The paper derives the conditions under which income inequality measured with the Gini index is expected to increase or decrease if missing observations are added at the top or/and at the bottom of an income distribution. It shows that adding observations on the extremes of the income distribution does not necessarily result in an increase in inequality, but that meeting the conditions for obtaining a decrease in inequality is unlikely. It also shows that adding observations at the top weighs more on inequality than adding observations at the bottom. These findings are confirmed by an application to US states data. Adding observations on the extremes of an income distribution should be normally expected to increase inequality and recovering missing observations at the top should be prioritized.
    Keywords: Income inequality, income distributions, migration, top incomes; bottom incomes.
    JEL: D31 D63 E64 O15
    Date: 2019–01

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