nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2019‒05‒20
ten papers chosen by
Maximo Rossi
Universidad de la República

  1. Crisis at Home: Mancession-induced Change in Intrahousehold Distribution By Olivier Bargain; Laurine Martinoty
  2. Happier Than Them, but More of Them Are Happy:Aggregating Subjective Well-Being By Cristina Sechel
  3. Social Mobility Trends in Canada: Going up the Great Gatsby Curve By Marie Connolly; Catherine Haeck; David Lapierre
  4. Comparing global inequality of income and wealth By Shorrocks Anthony; Davies James
  5. Wage growth and inequality in urban China: 1988–2013 By Gustafsson Björn; Wan Haiyuan
  6. What might explain today’s conflicting narratives on global inequality? By Ravallion Martin
  7. Discrimination in Hiring Based on Potential and Realized Fertility: Evidence from a Large-Scale Field Experiment By Sascha O. Becker; Ana Fernandes; Doris Weichselbaumer
  8. Are Estimates of Early Education Programs Too Pessimistic? Evidence from a Large-Scale Field Experiment that Causally Measures Neighbor Effects By List, John; Momeni, Fatemeh; Zenou, Yves
  9. Do Income Contingent Student Loan Programs Distort Earnings? Evidence from the UK By Jack W. Britton; Jonathan Gruber
  10. Occupational gender segregation in post-apartheid South Africa By Gradín Carlos

  1. By: Olivier Bargain (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales); Laurine Martinoty (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: The Great Recessions was essentially a 'mancession' in countries like Spain, the UK or the US, i.e. it hit men harder than women for they were disproportionately represented in heavily affected sectors. We investigate how the mancession, and more generally women's relative opportunities on the labor market, translate into within-household redistribution. Precisely, we estimate the spouses' resource shares in a collective model of consumption, using Spanish data over 2006-2011. We exploit the gender-oriented evolution of the economic environment to test two original distribution factors: first the regional-time variation in spouses' relative unemployment risks, then the gender-differentiated shock in the construction sector (having a construction sector husband after the outburst of the crisis). Both approaches conclude that the resource share accruing to Spanish wives increased by around 7-9 percent on average, following the improvement of their relative labor market positions. Among childless couples, we document a 5-11 percent decline in individual consumption inequality following the crisis, which is essentially due to intrahousehold redistribution.
    Keywords: mancession,intrahousehold allocation,unemployment risk
    Date: 2018
  2. By: Cristina Sechel (Department of Economics, University of Sheffield UK)
    Abstract: This paper proposes the use of headcount-based indicators for the measurement of national Subjective Well-Being (SWB). It provides a methodological contribution to the challenge of threshold selection for headcount measures using Cognitive Dissonance Theory operationalised using life satisfaction data from World/European Values Surveys. A Beta- regression approach is employed to explore the empirical relationships between national SWB and objective measures of well-being contributing to the empirical literature on social indicators. The use of this model is novel in this context. The findings reveal relationships between objective measures of development and SWB that are not apparent when average national SWB is used. For example, I find no significant link between national income and the share of satisfied individuals
    Keywords: subjective well-being; cognitive dissonance theory; beta- regression
    JEL: O1 I3 H1
    Date: 2019–04
  3. By: Marie Connolly (Department of Economics, University of Quebec in Montreal); Catherine Haeck (Department of Economics, University of Quebec in Montreal); David Lapierre (Department of Economics, University of Quebec in Montreal)
    Abstract: While cross-sectional increases in inequality are a cause for concern, the study of the intergenerational transmission of socioeconomic status is perhaps more relevant. How is social status reproduced from one generation to the next? Recent work has highlighted the relationship, if not causal then correlational, between inequality and measures of social mobility in a cross-country setting. This relationship is dubbed the Great Gatsby Curve (Corak 2013): places with higher inequality during one’s childhood are correlated with lower intergenerational income mobility between the child and his or her parents. In this paper, newly developed administrative Canadian tax data are exploited to compute measures of intergenerational income mobility at the national and provincial levels. This work provides detailed descriptive evidence on the trends in social mobility. Results show that mobility has steadily declined over time, and that there has been an increase in the inequality of the parental income distribution, as measured by the Gini coefficient. Hence Canada, and all its provinces, have been “going up†the Great Gatsby Curve. The cross sectional, cross country relationship thus also holds within a same country over time, leading credence to the more causal than correlational nature of the relationship, though causality is not formally tested here. The decrease in mobility, particularly for children born in the bottom quintile of the income distribution, should be of concern to federal and provincial policymakers alike and highlights the need for additional research in order to provide equal opportunities to all children.
    Keywords: social mobility, intergenerational transmissions, income inequality, Great Gatsby curve, Canada
    JEL: J62 D63
    Date: 2019–04
  4. By: Shorrocks Anthony; Davies James
    Abstract: This paper is the first to compare global trends in income and wealth inequality this century. It is based on large income and wealth microdata samples designed to be representative of all countries in the world.Measured by the Gini coefficient, inequality between countries accounts for about two-thirds of global income inequality, but noticeably less— around one half—of wealth inequality. Broadly similar results are found for different years and different inequality indices, bar the share of the top 1 per cent. Over time, changes in countries’ mean income and wealth, and population sizes, have reduced world inequality.Income inequality has changed little within countries, so the downward trend remains intact. However, within-country wealth inequality has risen, halting the downward shift in global wealth inequality and raising the share of the top 1 per cent after 2007.
    Keywords: World,Distributions,Global,Income inequality,Inequality,Wealth
    Date: 2018
  5. By: Gustafsson Björn; Wan Haiyuan
    Abstract: We investigate the evolution of wage levels, wage inequality, and wage determinants among urban residents in China using China Household Income Project data from 1988, 1995, 2002, 2007, and 2013.Average wage grew impressively between each pair of years. Wage inequality had long been on the increase, but between 2007 and 2013 no clear changes occurred. In 1988, age and wages were positively related throughout working life, but more recently older workers’ wages have been lower than those of middle-aged workers.The relationship between education and wages was weak in 1988 but strengthened rapidly thereafter—a process that came to a halt in 2007. During the period in which China was a planned economy the gender wage gap was small in urban China, but it widened rapidly between 1995 and 2007.We also report the existence of a premium for being employed in a foreign-owned firm or in the state sector.
    Keywords: Income inequality,Labour market,Wage function,Wage growth,Wages
    Date: 2018
  6. By: Ravallion Martin
    Abstract: How unequal is the world today? Is global income inequality falling, as many economists claim, or is it rising, as one often hears?This paper reviews the arguments and evidence. A number of concerns about the underlying data are identified, with biases going in both directions. Conceptual issues further cloud the picture. The claim that global inequality has been falling since 1990 can be defended for a subset of the admissible parameter values, but only a subset.Global inequality is found to be rising if one or more of the following conditions holds: (i) one attaches a high ethical weight to the poorest; (ii) one has a strong ethical aversion to high-end inequality; (iii) one takes a nationalistic perspective, emphasizing relative deprivation within countries; or (iv) one sees inequality as absolute rather than relative.Popular debates on this topic would benefit from greater clarity on the concepts used, and greater awareness of data limitations.
    Keywords: Measurement,Axioms,Global inequality,Growth,Household surveys
    Date: 2018
  7. By: Sascha O. Becker; Ana Fernandes; Doris Weichselbaumer
    Abstract: Due to conventional gender norms, women are more likely to be in charge of childcare than men. From an employer’s perspective, in their fertile age they are also at “risk” of pregnancy. Both factors potentially affect hiring practices of firms. We conduct a largescale correspondence test in Germany, Switzerland, and Austria, sending out approx. 9,000 job applications, varying job candidate’s personal characteristics such as marital status and age of children. We find evidence that, for part-time jobs, married women with older kids, who likely finished their childbearing cycle and have more projectable childcare chores than women with very young kids, are at a significant advantage vis-àvis other groups of women. At the same time, married, but childless applicants, who have a higher likelihood to become pregnant, are at a disadvantage compared to single, but childless applicants to part-time jobs. Such effects are not present for full-time jobs, presumably, because by applying to these in contrast to part-time jobs, women signal that they have arranged for external childcare.
    Keywords: Fertility; Discrimination; Experimental economics
    JEL: C93 J16 J71
    Date: 2019–04
  8. By: List, John; Momeni, Fatemeh; Zenou, Yves
    Abstract: We estimate the direct and spillover effects of a large-scale early childhood intervention on the educational attainment of over 2,000 disadvantaged children in the United States. We show that failing to account for spillover effects results in a severe underestimation of the impact. The intervention induced positive direct effects on test scores of children assigned to the treatment groups. We document large spillover effects on both treatment and control children who live near treated children. On average, spillover effects increase a child's non-cognitive (cognitive) scores by about 1.2 (0.6 to 0.7) standard deviations. The spillover effects are localized, decreasing with the spatial distance to treated neighbors. Our evidence suggests the spillover effect on non-cognitive scores are likely to operate through the child's social network. Alternatively, parental investment is an important channel through which cognitive spillover effects operate. We view our results as speaking to several literatures, perhaps most importantly the role of public programs and neighborhoods on human capital formation at an early age.
    Keywords: early education; field experiment; neighborhood; non-cognitive skills; spillover effects
    JEL: C93 I21 R1
    Date: 2019–05
  9. By: Jack W. Britton; Jonathan Gruber
    Abstract: Government backed income contingent student loans are an increasingly being used to fund higher education. An income contingent repayment plan acts as an incremental marginal tax on labor earnings, which could cause individuals to distort their work effort. This paper uses an administrative dataset from the UK that links student loan borrowers between 1998 and 2008, to their official tax records between 2001/02 and 2013/14. Using a combination of techniques, including bunching and difference-in-difference methodology, our findings strongly reject the hypothesis that the UK’s income-contingent repayment plan distorts labor supply.
    JEL: H2 H52 I22
    Date: 2019–05
  10. By: Gradín Carlos
    Abstract: In this paper, I show that occupations in South Africa are segregated and stratified not only by race, but also by gender. While some women (mostly black and Coloured) overwhelmingly fill low-paying jobs, others (mostly white and Indian/Asian but also Coloured) tend to fill higher-paying professional positions.I find some evidence of a long-term reduction in gender segregation and stratification, with women and men entering occupations previously dominated by the other gender, although this trend is sensitive to several data considerations. Most recent evidence, however, points at stagnation in this process. Distinct worker characteristics by gender, such as education, location, or age, cannot explain existing segregation or women’s overrepresentation in low-paying jobs, compared with men. They do, however, partially explain their overrepresentation in higher-paying positions.
    Keywords: Gender,low pay,Occupational segregation,post-apartheid,Stratification
    Date: 2018

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