nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2019‒06‒17
five papers chosen by
Maximo Rossi
Universidad de la República

  1. Education Quality and Teaching Practices By Marina Bassi; Costas Meghir; Ana Reynoso
  2. Unemployment insurance and wage formation By von Buxhoeveden, Mathias
  3. Determinants of work-related training: An investigation of observed and unobserved firm-, job- and worker-heterogeneity By Steffes, Susanne; Warnke, Arne Jonas
  4. Socioeconomic Correlates of Political Polarization: Evidence from English Counties By Daryna Grechyna
  5. Discrimination in Hiring Based on Potential and Realized Fertility: Evidence from a Large-Scale Field Experiment By Sascha O. Becker; Ana Fernandes; Doris Weichselbaumer

  1. By: Marina Bassi (World Bank); Costas Meghir (Cowles Foundation, Yale University, NBER, IZA, CEPR, and Institute for Fiscal Studies); Ana Reynoso (Department of Economics, University of Michigan)
    Abstract: Improving school quality with limited resources is a key issue of policy. It has been suggested that instructing teachers to follow specific practices together with tight monitoring of their activities may help improve outcomes in under-performing schools that usually serve poor populations. This paper uses an RCT to estimate the e?ectiveness of guided instruction methods as implemented in under-performing schools in Chile. The intervention improved performance substantially and by equal amounts for boys and girls. However, the effect is mainly accounted for by children from relatively higher income backgrounds and not for the most deprived. Based on the CLASS instrument we document that quality of teacher-student interactions is positively correlated with the performance of low income students; however, the intervention did not affect these interactions. Guided instruction can improve outcomes, but it is a challenge to reach the most deprived children.
    Date: 2019–06
  2. By: von Buxhoeveden, Mathias (IFAU - Institute for Evaluation of Labour Market and Education Policy)
    Abstract: Wage setting models typically posit a tight relationship between the generosity of unemployment insurance (UI) and equilibrium wages. This paper estimates the effect of UI on workers’ wages. I build on a unique feature of the unemployment policy in Sweden, where workers can opt to buy supplement UI coverage above a minimum mandated level. In January 2007, the government sharply increased the price of UI, and the share of workers with supplement coverage fell from 90% to 80%. I exploit variation in the price of UI across industries to measure the effect of industry level UI-coverage on wages. My estimates suggest that a 10 percentage point reduction in the share of workers covered by supplement UI reduce wages by 5%. Since I rely on variation in UI-coverage at the industry level, these estimates contain wage adjustments from collective and individual level bargaining. Finally, I use the estimated UI-wage effect to derive bounds on worker bargaining power in a simple DMP model and find that it can be at most 0.12. This evidence support wage setting mechanisms that tie wages to the generosity of UI.
    Keywords: unemployment; insurance; youth; labor; market; wage; formation
    JEL: J31 J65
    Date: 2019–06–05
  3. By: Steffes, Susanne; Warnke, Arne Jonas
    Abstract: One of the most important policy goals in industrialized countries is to increase the skill level of the labor force by life-long-learning strategies. In this paper our aim is to explain to what extent the variation in training investments is determined either by (observed and unobserved) heterogeneity of firms or of workers, hence we put a new perspective on the determinants of training. Rather than analyzing single determinants or groups of variables, we decompose the variation into a worker-specific and a firm-specific part and show how much of the unexplained variation is independent of both. Our results show that both firm-, job- and worker-level heterogeneity explains training participation and that firm heterogeneity is far less important compared to the others. Also interesting, is the finding that a large part of the overall variance is not driven by firm- or worker heterogeneity, hence training participation seems to be to some extent an unexplained event which happens by chance.
    Keywords: Human Capital,Training,Linked-Employer-Employee Data (LEE),Decomposition,Unobserved Heterogeneity
    JEL: I24 J24 M53
    Date: 2019
  4. By: Daryna Grechyna (Department of Economic Theory and Economic History, University of Granada.)
    Abstract: This paper estimates political polarization in English counties during 1991–2007, based on the aggregated individual data from the British Household Panel Survey and using three variants of the political polarization measure. It analyzes the socioeconomic determinants of political polarization, using the indicators computed from the same survey. The results suggest that the statistical properties of three different polarization measures are similar, though there is some variation in the levels of polarization related to different policy statements. Greater income inequality, greater average age of county residents, greater share of employed full time, and lower share of natives are associated with greater political polarization in English counties. These findings shed some light on the microeconomic foundations of political polarization.
    Keywords: political polarization; income inequality; social inequality; survey data.
    JEL: D31 D63 D72 O15
    Date: 2019–06–11
  5. 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 large-scale 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-à-vis 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

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