nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2019‒11‒18
seven papers chosen by
Maximo Rossi
Universidad de la República

  1. Is There Still Son Preference in the United States? By Francine D. Blau; Lawrence M. Kahn; Peter Brummund; Jason Cook; Miriam Larson-Koester
  2. Generosity and Wealth : Experimental Evidence from Bogota Stratification By Blanco, M.; Dalton, Patricio
  3. Bread and Social Justice: Measurement of Social Welfare and Inequalities Using Anthropometrics By Mohammad Abu-Zaineh; Ramses H. Abul Naga
  4. Is There a Link Between Air Pollution and Impaired Memory? Evidence on 34,000 English Citizens By Oswald, Andrew J.; Powdthavee, Nattavudh
  5. A Theory of Cultural Revivals By Murat Iyigun; Jared Rubin; Avner Seror
  6. Short-Time Work and Unemployment in and after the Great Recession By Michael Siegenthaler; Daniel Kopp
  7. Labor Contracts, Gift-Exchange and Reference Wages: Your Gift Need Not Be Mine! By Hernán Bejarano; Brice Corgnet; Joaquín Gómez-Miñambres

  1. By: Francine D. Blau; Lawrence M. Kahn; Peter Brummund; Jason Cook; Miriam Larson-Koester
    Abstract: In this paper, we use 2008-2013 American Community Survey data to update and further probe evidence on son preference in the United States. In light of the substantial increase in immigration, we examine this question separately for natives and immigrants. Dahl and Moretti (2008) found earlier evidence consistent with son preference in that having a female first child raised fertility and increased the probability that the family was living without a father. We find that for our more recent period, having a female first child still raises the likelihood of living without a father, but is instead associated with lower fertility, particularly for natives. Thus, by the 2008-2013 period, any apparent son preference in fertility decisions appears to have been outweighed by factors such as cost concerns in raising girls or increased female bargaining power. In contrast, some evidence for son preference in fertility persists among immigrants. Immigrant families that have a female first child have significantly higher fertility and are more likely to be living without a father (though not significantly so). Further, gender inequity in source countries is associated with son preference in fertility among immigrants. For both first and second generation immigrants, the impact of a female first-born on fertility is more pronounced for immigrants from source countries with less gender equity. Finally, we find no evidence of sex selection for the general population of natives and immigrants, suggesting that it does not provide an alternative mechanism to account for the disappearance of a positive fertility effect for natives.
    Keywords: Gender, son preference, family structure, fertility, sex selection, immigrants
    JEL: J11 J12 J13 J15 J16
    Date: 2019
  2. By: Blanco, M.; Dalton, Patricio (Tilburg University, Center For Economic Research)
    Abstract: This paper combines laboratory experiments with a unique feature of the city of Bogota to uncover the relationship between generosity and wealth. Bogota is divided by law into six socio-economic strata which are close proxies of household wealth and income. We recruit subjects from different strata and run a series of double-blind dictator games where the recipient is the NGO Techo-Colombia, which builds transitional housing for homeless families. We identify the stratum of each subject anonymously and blindly, and match their donations with their stratum. In a first experiment we provide a fixed endowment to all participants and nd that donations are significantly increasing with wealth. However, in a second experiment, we show that this is not because the rich are intrinsically more generous, but because the experimental endowment has lower real value for them. With endowments that are equivalent to their daily expenditures, the rich, the middle-class and the poor give a similar proportion of their stratum-equivalent endowment. Moreover, we find that the motivation to donate is similar across strata, where the generosity act is explained mainly by warm-glow rather than pure altruism.
    Keywords: charitable giving; social stratification; inequality; social preferences; dictator game
    JEL: C91 D31 D64
    Date: 2019
  3. By: Mohammad Abu-Zaineh (Aix-Marseille Univ, CNRS, EHESS, Ecole Centrale, AMSE & IDEP, Marseille, France); Ramses H. Abul Naga (Business School and Health Economics Research Unit, University of Aberdeen, Scotland.)
    Abstract: We address the question of the measurement of pure health inequalities and achievement in the context of welfare decreasing variables. We adopt a general framework whereby the health variable is reported on an interval, from an optimum level to a critical survival threshold. There are two problems that require some departures from the usual framework used to measure inequality and social welfare. Firstly, we show that for welfare decreasing variables, the equally distributed equivalent value is decreasing in progressive transfers (instead of being increasing). Accordingly, appropriate achievement and inequality indices for welfare decreasing variables are introduced. Secondly, because the Lorenz curve and the associated inequality indices are not robust to alternative values of the survival threshold, we argue that the family of translation invariant social welfare functions and related absolute Lorenz curve allow us to undertake inequality comparisons between distributions that are robust to the chosen level of the survival threshold. An illustrative application of the methodology is provided.
    Keywords: health achievement and inequality; welfare decreasing variables; survival thresholds; relative and absolute Lorenz curves.
    JEL: D63 I14
    Date: 2019–11
  4. By: Oswald, Andrew J. (Economics and CAGE, University of Warwick); Powdthavee, Nattavudh (WBS, University of Warwick)
    Abstract: It is known that people feel less happy in areas with higher levels of nitrogen dioxide NO2 (MacKerron and Mourato, 2009). What else might air pollution do to human wellbeing? This paper uses data on a standardized word-recall test that was done in the year 2011 by 34,000 randomly sampled English citizens across 318 geographical areas. We find that human memory is worse in areas where NO2 and PM10 levels are greater. The paper provides both (i) OLS results and (ii) instrumental-variable estimates that exploit the direction of the prevailing westerly wind and levels of population density. Although caution is always advisable on causal interpretation, these results are concerning and are consistent with laboratory studies of rats and other non-human animals. Our estimates suggest that the difference in memory quality between England’s cleanest and most-polluted areas is equivalent to the loss of memory from 10 extra years of ageing
    Keywords: Memory ; NO2 ; PM10 ; air ; pollution ; particulates
    Date: 2019
  5. By: Murat Iyigun (University of Colorado, Boulder); Jared Rubin (Chapman University); Avner Seror (Aix-Marseille Univ, CNRS, EHESS, Ecole Centrale, AMSE, Marseille, France)
    Abstract: Why do some societies fail to adopt more efficient institutions? And why do such failures often coincide with cultural movements that glorify the past? We propose a model highlighting the interplay—or lack thereof—between institutional change and cultural beliefs. The main insight is that institutional change by itself will not lead to a more efficient economy unless culture evolves in tandem. This is because institutional change can be countered by changes in cultural values complementary to a more "traditional" economy. In our model, forward-looking elites, who benefit from a traditional, inefficient economy, may over-provide public goods that are complementary to the production of traditional goods. This encourages individuals to transmit cultural beliefs complementary to the provision of traditional goods. A horse race results between institutions, which evolve towards a more efficient (less traditional) economy, and cultural norms, which are pulled towards "tradition" by the elites. When culture wins the horse race, institutions respond by giving more political power to traditional elites—even if in doing so more efficient institutions are left behind. We call the interaction between these cultural and institutional dynamics a cultural revival.
    Keywords: institutions, cultural beliefs, cultural transmission, institutional change
    JEL: D02 N40 N70 O33 O38 O43 Z10
    Date: 2019–11
  6. By: Michael Siegenthaler (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Daniel Kopp (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: Can governmental policies mitigate the effects of recessions on unemployment? We study whether the Swiss short-time work (STW) program reduced unemployment in the 2009–2015 period using quarterly establishment-level panel data linking several administrative data sources. We compare changes in permanent layoffs into unemployment, hiring from unemployment, establishment survival and size between establishments that applied successfully to establishments that applied unsuccessfully for STW at cantonal employment agencies. The latter appear to be a valid control group for the former among others because of substantial idiosyncrasies in cantonal approval practices. We find strong evidence that STW increases establishment survival and prevents rather than postpones dismissals: the 7,880 establishments treated in 2009 would have dismissed approximately 20,500 workers into unemployment (0.46% of the labor force) until 2012. Most workers would have been dismissed in the quarters immediately following application and more than a third would have become long-term unemployed. We estimate that the savings in terms of unemployment benefit payments may have been large enough to compensate the spending on STW benefits for the Swiss unemployment insurance.
    Keywords: Great Recession, Labor demand, Layoffs, Labor hoarding, Short-time work, Unemployment, Work sharing
    JEL: E24 J23 J63 J65
    Date: 2019–07
  7. By: Hernán Bejarano (Centro de Investigación y Docencia Económicas (CIDE), Mexico); Brice Corgnet (Univ Lyon, CNRS, GATE UMR5824, 93 Chemin des Mouilles, F-69130, France; emlyon business school, 23 avenue guy de collongue, Ecully 69130); Joaquín Gómez-Miñambres (Lafayette College, Department of Economics, 730 High Street, Easton, PA 18042. Chapman University, Economic Science Institute. One University Drive, Orange, California 92866)
    Abstract: We extend Akerlof’s (1982) gift-exchange model to the case in which reference wages respond to changes in the work environment such as those related to unemployment benefits or workers’ productivity levels. Our model shows that these changes spur disagreements between workers and employers regarding the value of the reference wage. These disagreements tend to weaken the gift-exchange relationship thus reducing production levels and wages. We find support for these predictions in a controlled, yet realistic, workplace environment. Our work also sheds light on several stylized facts regarding employment relationships such as the increased intensity of labor conflicts when economic conditions are unstable.
    Keywords: Gift-exchange, incentives, self-serving biases, reference-dependent utility, laboratory experiments, labor conflicts
    JEL: C92 D23 M54
    Date: 2019

This nep-ltv issue is ©2019 by Maximo Rossi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.