nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2019‒10‒28
six papers chosen by
Maximo Rossi
Universidad de la República

  1. Cognitive and Non-Cognitive Abilities of Immigrants: New Perspectives on Migrant Quality from a Selective Immigration Country By Naghsh Nejad, Maryam; Schurer, Stefanie
  2. On Measuring Segregation in a Multigroup Context: Standardized Versus Unstandardized Indices By Coral del Río; Olga Alonso-Villar
  3. Why do the poor vote for low tax rates? A (real-effort task) experiment on income redistribution. By Natalia Jiménez Jiménez; Elena Molis; Ángel Solano García
  4. You’re the One That I Want! Public Employment and Women’s Labor Market Outcomes By Gomes, Pedro Maia; Kuehn, Zoë
  5. The Wrong Kind of AI? Artificial Intelligence and the Future of Labor Demand By Acemoglu, Daron; Restrepo, Pascual
  6. Education and Health: Long-run Effects of Peers, Tracking and Years By Fischer, Martin; Gerdtham, Ulf-G; Heckley, Gawain; Karlsson, Martin; Kjellsson, Gustav; Nilsson, Therese

  1. By: Naghsh Nejad, Maryam (University of Technology, Sydney); Schurer, Stefanie (University of Sydney)
    Abstract: Economic theory suggests that selective immigration policies based on observable characteristics will affect unobservable migrant quality. Little empirical evidence exists on this hypothesis. We quantify traditionally unobservable components of migrant quality in Australia, a high-migrant share OECD country with a selective immigration policy. We proxy migrant quality with widely-accepted measures of personality and cognitive ability. Both first- and second-generation immigrants outperform natives on socially-beneficial personality traits. While first-generation migrants suffer language-ability penalties, their off-spring overcome these penalties and outperform natives in cognitive ability. Immigrants do not outperform natives in the labor market, a finding which may be explained by heterogeneous wage returns to non-cognitive ability.
    Keywords: economics of immigration, migrant quality, selection on unobservables, non-cognitive ability, cognitive ability
    JEL: F22 J61 J24 J31 J62 O15
    Date: 2019–10
  2. By: Coral del Río; Olga Alonso-Villar
    Abstract: There has been little discussion in the literature about the consequences of using standardized (versus unstandardized) segregation measures when comparing societies with different demographic compositions. To measure the segregation of a group in a multigroup setting, this paper develops standardized local segregation indices, which show a maximum value of 1 when the group is fully segregated, and links these measures with existing standardized overall segregation measures. Our research not only allows for enhancement of the local segregation approach—offering new measures and evaluating them against basic properties—but also provides a better understanding of existing standardized overall measures. To illustrate its value, this paper offers estimates of the occupational segregation of white women in the largest U.S. metropolitan areas using standardized and unstandardized segregation measures. This permits us to identify metropolitan areas that would have gone unnoticed if only one of these two approaches had been employed.
    Keywords: Multigroup segregation; Standardized segregation indices; Local segregation curves; Local segregation indices
    JEL: D63 J15 J16 J71
    Date: 2019–09
  3. By: Natalia Jiménez Jiménez (Departamento de Economía, Métodos Cuantitativos e Historia Económica, University Pablo de Olavide.); Elena Molis (Department of Economic Theory and Economic History, University of Granada.); Ángel Solano García (Department of Economic Theory and Economic History, University of Granada.)
    Abstract: The main purpose of this paper is to shed some light on the voting behavior of low-income voters over income redistribution. To this end, we test a model based on Meltzer and Richard’s (1981) framework through a lab experiment in which individuals vote over two exogenous tax rates and their pre-tax income is determined according to their performance in a real-effort task. We classify individuals into highskilled and low-skilled participants according to their performance in a tournament at the beginning of the experiment. We find that a large proportion of low-skilled workers vote for the lowest tax rate (the one that gives them the lowest payoff), especially when the alternative tax rate is very high. However, this proportion is significantly reduced in treatments in which the subjects are given extra information about how the tax operates in redistributing income. This result suggests that the lack of information about the role of taxes in income redistribution may be an important factor in explaining the counter-intuitive voting behavior of low-income voters over income redistribution. We also find that both the prospect of upward mobility and the belief in the negative effect of taxes on productivity make low-income voters support low tax rates, especially when the alternative tax rate is very high.
    Keywords: income inequality, income redistribution, voting, taxation, real-effort task.
    JEL: C92 D72 H30 J41
    Date: 2019–10–11
  4. By: Gomes, Pedro Maia (Birkbeck, University of London); Kuehn, Zoë (Universidad Autónoma de Madrid)
    Abstract: In most countries, the public sector hires disproportionally more women than men. We document gender differences in employment, transition probabilities, hours, and wages in the public and private sector using microdata for the United States, the United Kingdom, France, and Spain. We then build a search and matching model where men and women decide if to participate and if to enter private or public sector labor markets. We calibrate our model separately to the four countries. Running counterfactual experiments, we quantify whether the selection of women into the public sector is driven by: (i) lower gender wage gaps and thus relatively higher wages for women in the public sector, (ii) possibilities of better conciliation of work and family life for public sector workers, (iii) greater job security in the public compared to the private sector, or (iv) intrinsic preferences for public sector occupations. We find that, quantitatively, women's higher public sector wage premia and their preferences for working in the public sector explain most of the selection. We calculate the monetary value of public sector job security and work-life balance premia, for both men and women, and we estimate how higher public sector wages and employment affect male and female unemployment, inactivity rates, and wages differently.
    Keywords: public sector employment, female labor force participation, gender wage gap
    JEL: J21 J16 J45 H10 E60
    Date: 2019–10
  5. By: Acemoglu, Daron (MIT); Restrepo, Pascual (Boston University)
    Abstract: Artificial Intelligence is set to influence every aspect of our lives, not least the way production is organized. AI, as a technology platform, can automate tasks previously performed by labor or create new tasks and activities in which humans can be productively employed. Recent technological change has been biased towards automation, with insufficient focus on creating new tasks where labor can be productively employed. The consequences of this choice have been stagnating labor demand, declining labor share in national income, rising inequality and lower productivity growth. The current tendency is to develop AI in the direction of further automation, but this might mean missing out on the promise of the "right" kind of AI with better economic and social outcomes.
    Keywords: automation, artificial intelligence, jobs, inequality, innovation, labor demand, productivity, tasks, technology, wages
    JEL: J23 J24
    Date: 2019–10
  6. By: Fischer, Martin; Gerdtham, Ulf-G (Department of Economics); Heckley, Gawain (Department of Health Economics); Karlsson, Martin (Healf Economics); Kjellsson, Gustav (University of Gothenburg); Nilsson, Therese (Research Institute of Industrial Economics (IFN))
    Abstract: We investigate two parallel school reforms in Sweden to assess the long-run health effects of education. One reform only increased years of schooling, while the other increased years of schooling but also removed tracking leading to a more mixed socioeconomic peer group. By differencing the effects of the parallel reforms we can separate the effect of de-tracking and peers from that of more schooling. We find that the pure years of schooling reform reduced mortality and improved current health. Differencing the effects of the reforms shows significant differences in the estimated impacts, suggesting that de-tracking and subsequent peer effects resulted in worse health.
    Keywords: Health returns to education; School tracking; Peer effects
    JEL: I12 I18 I26
    Date: 2019–10–21

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