nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2019‒07‒15
nine papers chosen by
Maximo Rossi
Universidad de la República

  1. Labor Market Search, Informality, and On-The-Job Human Capital Accumulation By Matteo Bobba; Luca Flabbi; Santiago Levy; Mauricio Tejada
  2. Incorporating inequality aversion in health-care priority setting By Costa-I-Font, Joan; Cowell, Frank
  3. Gender Identity and Relative Income within Households-Evidence from Sweden By Hederos, Karin; Stenberg, Anders
  4. A Summary of Artefactual Field Experiments On The Who's, What's, Where's, and When's By John List
  5. Wages and Hours Laws: What Do We Know? What Can Be Done? By Brown, Charlie; Hamermesh, Daniel S.
  6. Food Stamps and America’s Poorest By Dean Jolliffe; Juan Margitic; Martin Ravallion
  7. Are Estimates of Early Education Programs Too Pessimistic? Evidence from a Large-Scale Field Experiment that Causally Measures Neighbor Effects By List, John A.; Momeni, Fatemeh; Zenou, Yves
  8. Is There a Business Cycle Effect on the Incidence of Dual Job Holding? By Choe, Chung; Oaxaca, Ronald L.; Renna, Francesco
  9. The Marginal Labor Supply Disincentives of Welfare Reforms By Robert A. Moffitt

  1. By: Matteo Bobba (Toulouse School of Economics, University of Toulouse Capitole); Luca Flabbi (Department of Economics, University of North Carolina); Santiago Levy (Vice-Presidency for Sectors and Knowledge, Inter-American Development Bank); Mauricio Tejada (Department of Economics (ILADES), Universidad Alberto Hurtado)
    Abstract: We develop a search and matching model where firms and workers produce output that depends both on match-specific productivity and on worker-specific human capital. The human capital is accumulated while working but depreciates while searching for a job. Jobs can be formal or informal and firms post the formality status. The equilibrium is characterized by an endogenous steady state distribution of human capital and by an endogenous formality rate. The model is estimated on longitudinal labor market data for Mexico. Human capital accumulation on-the-job is responsible for more than half of the overall value of production and upgrades more quickly while working formally than informally. Policy experiments reveal that the dynamics of human capital accumulation magnifies the negative impact on productivity of the labor market institutions that give raise to informality
    Keywords: Labor market frictions, Search and matching, Nash bargaining, Informality, On-the-Job human capital accumulation
    Date: 2019–01
  2. By: Costa-I-Font, Joan; Cowell, Frank
    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 literature.
    Keywords: attitudes to inequality; inequality aversion; health; income; survey data; priority setting
    JEL: I19
    Date: 2019–06–01
  3. By: Hederos, Karin (Swedish Institute for Social Research, Stockholm University); Stenberg, Anders (Swedish Institute for Social Research, Stockholm University)
    Abstract: Bertrand et al. (2015) show that in the U.S.,the distribution of the wife’s share of household income drops sharply at the point where the wife starts to earn more than her husband. They attribute the drop to a gender identity norm prescribing that a wife’s income should not exceed her husband’s income. We document a similar sharp drop in Swedish administrative register data. However, we also show that there is a large spike in the distribution of the wife’s share of household income at the point where spouses earn exactly the same. The wives in the equal-earning couples do not have higher earnings potential than their husbands, suggesting that the spike is not generated by couples seeking to avoid that the wife earns more than her husband. Excluding the equal-earning couples, the drop is small and mostly statistically insignificant. We conclude that, if anything, we find only weak evidence that Swedish couples comply with a norm against wives earning more than their husbands.
    Keywords: Gender roles; gender norms; marriage market; gender gap; gender identity
    JEL: D10 J12 J16
    Date: 2019–06–28
  4. By: John List
    Abstract: A summary of artefactual field experiments on
    Date: 2019
  5. By: Brown, Charlie (University of Michigan); Hamermesh, Daniel S. (Barnard College)
    Abstract: We summarize recent research on the wage and employment effects of minimum wage laws in the U.S. and infer from non-U.S. studies of hours laws the likely effects of unchanging U.S. hours laws. Minimum wages in the U.S. have increasingly become a province of state governments, with the effective minimum wage now closely related to a state's wage near the lower end of its wage distribution. Original estimates demonstrate how the 45-year failure to increase the exempt earnings level for salaried workers under U.S. hours laws has raised hours of lower-earning salaried workers and reduced their weekly earnings. The overall conclusion from the literature and the original work is that wages and hours laws in the U.S. have produced impacts in the directions predicted by economic theory, but that these effects have been quite small.
    Keywords: minimum wages, overtime, employment, hours, labor regulation
    JEL: J23 J18
    Date: 2019–06
  6. By: Dean Jolliffe; Juan Margitic; Martin Ravallion
    Abstract: The paper provides the first assessment of: (i) America’s progress in lifting the lower bound—the floor—of the distribution of real income; (ii) whether the country’s largest antipoverty program, SNAP (“food stamps”), helped do so. An operational method of estimating the floor is implemented on micro survey data spanning 30 years, with various robustness and significance tests. SNAP partially compensated the poorest, and helped stabilize the floor. Nonetheless, the floor has been sinking over the last 30 years. The efficiency of SNAP in lifting the floor has declined over time. Full coverage of the poorest would lift the floor appreciable.
    JEL: I32 I38
    Date: 2019–06
  7. By: List, John A. (Department of Economics); Momeni, Fatemeh (Department of Economics); Zenou, Yves (Monach University)
    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; Neighborhood; Field experiment; Spillover effects; Non-cognitive skills
    JEL: C93 I21 R10
    Date: 2019–07–02
  8. By: Choe, Chung (Hanyang University); Oaxaca, Ronald L. (University of Arizona); Renna, Francesco (University of Akron)
    Abstract: This paper examines the extent to which the incidence of dual job holding is cyclically sensitive in the context of hours constraints on labor supply. Linear probability models of the incidence of dual job holding are estimated separately for each hours constraint regime. Selection effects are accounted for in a correlated random effects setting in which selection into overemployment, unconstrained hours, and underemployment is separately estimated each year from an ordered probit model. As measured by the local unemployment rate, transitory business cycle movements have no effect on the incidence of dual job holding. However, a sustained change in the local unemployment rate reduces the incidence of dual job holding among workers who are not hours constrained on their main jobs.
    Keywords: dual job, labor supply, hours constraint, business cycle
    JEL: J01 J22 J49
    Date: 2019–06
  9. By: Robert A. Moffitt
    Abstract: Existing research on the static effects of the manipulation of welfare program benefit parameters on labor supply has allowed only restrictive forms of heterogeneity in preferences. Yet preference heterogeneity implies that the marginal effects of welfare reforms on labor supply may differ in different time periods with different populations and which sweep out different portions of the marginal distribution of preferences. A new examination of the heavily studied AFDC program examines changes in its tax rates in 1967, 1981, and 1996 and estimates the marginal effects on labor supply of a change in participation in each of those reform years. The estimates are based on a theory-consistent reduced form model which allows for a nonparametric specification of how changes in welfare program participation affect labor supply on the margin. Estimates of the model using a form of local instrumental variables show that the marginal treatment effects are quadratic, rising and then falling as participation rates rise. Applying the estimates to the three historical reform periods shows that marginal responses differed in each period because of differences in the composition of who was on the program and who was not.
    JEL: C21 I3 J2
    Date: 2019–06

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