nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2020‒04‒27
ten papers chosen by
Maximo Rossi
Universidad de la República

  1. Culture and Gender Allocation of Tasks: Source Country Characteristics and the Division of Non-market Work among US Immigrants By Blau, Francine D.; Kahn, Lawrence M.; Comey, Matthew; Eng, Amanda; Meyerhofer, Pamela; Willén, Alexander
  2. Inequality in Socio-Emotional Skills: A Cross-Cohort Comparison By Attanasio, Orazio; Blundell, Richard; Conti, Gabriella; Mason, Giacomo
  3. Endogenous lifetime, intergenerational mobility and economic development By Aso, Hiroki
  4. Feeling good or feeling better? By Alberto Prati; Claudia Senik
  5. Cash Transfer Programs and Household Labor Supply By Del Boca, Daniela; Pronzato, Chiara D.; Sorrenti, Giuseppe
  6. Optimal Second-Best Taxation When Individuals Have Social Preferences By Aronsson, Thomas; Johansson-Stenman, Olof
  7. Income Taxation and Dual Job Labour Supply By Choe, Chung; Oaxaca, Ronald L.; Renna, Francesco
  8. The Labor Market Returns to Advanced Degrees By Joseph G. Altonji; Ling Zhong
  9. Childhood Circumstances and Young Adulthood Outcomes: The Role of Mothers’ Financial Problems By Clark, Andrew E.; D'Ambrosio, Conchita; Barazzetta, Marta
  10. Strategies to increase the take-up of social benefits. Evidence from a field experiment in a deeply vulnerable population By Alejandro Cid; José María Cabrera; Marianne Bernatzky; María Ramírez-Michelena; Magdalena Blanco

  1. By: Blau, Francine D. (Cornell University); Kahn, Lawrence M. (Cornell University); Comey, Matthew (Cornell University); Eng, Amanda (Cornell University); Meyerhofer, Pamela (Cornell University); Willén, Alexander (Norwegian School of Economics)
    Abstract: There is a well-known gender difference in time allocation within the household, which has important implications for gender differences in labor market outcomes. We ask how malleable this gender difference in time allocation is to culture. In particular, we ask if US immigrants allocate tasks differently depending upon the characteristics of the source countries from which they emigrated. Using data from the 2003-2017 waves of the American Time Use Survey (ATUS), we find that first-generation immigrants, both women and men, from source countries with more gender equality (as measured by the World Economic Forum's Global Gender Gap Index) allocate tasks more equally, while those from less gender equal source countries allocate tasks more traditionally. These results are robust to controls for immigration cohort, years since migration, and other own and spouse characteristics. There is also some indication of an effect of parent source country gender equality for second-generation immigrants, particularly for second-generation men with children. Our findings suggest that broader cultural factors do influence the gender division of labor in the household.
    Keywords: housework, childcare, gender, immigration, time allocation
    JEL: J13 J15 J16 J22
    Date: 2020–03
  2. By: Attanasio, Orazio (University College London); Blundell, Richard (University College London); Conti, Gabriella (University College London); Mason, Giacomo (University College London)
    Abstract: We examine changes in inequality in socio-emotional skills very early in life in two British cohorts born 30 years apart. We construct comparable scales using two validated instruments for the measurement of child behaviour and identify two dimensions of socio-emotional skills: 'internalising' and 'eternalising'. Using recent methodological advances in factor analysis, we establish comparability in the inequality of these early skills across cohorts, but not in their average level. We document for the first time that inequality in socio-emotional skills has increased across cohorts, especially for boys and at the bottom of the distribution. We also formally decompose the sources of the increase in inequality and find that compositional changes explain half of the rise in inequality in externalising skills. On the other hand, the increase in inequality in internalising skills seems entirely driven by changes in returns to background characteristics. Lastly, we document that socio-emotional skills measured at an earlier age than in most of the existing literature are significant predictors of health and health behaviours. Our results show the importance of formally testing comparability of measurements to study skills dierences across groups, and in general point to the role of inequalities in the early years for the accumulation of health and human capital across the life course.
    Keywords: inequality, socio-emotional skills, cohort studies, measurement invariance
    JEL: J13 J24 I14 I24 C38
    Date: 2020–04
  3. By: Aso, Hiroki
    Abstract: This paper analyzes the effects of endogenous lifetime on the relationship between intergenerational mobility and economic development in an overlapping generations framework. We assume that an individual’s lifetime depends on health status, which improves with economic development. Increase in lifetime encourages incentives of education investment while decreasing transfer, which is the funding source for education. The dynamics of intergenerational mobility and income inequality depend crucially on lifetime. If an increase in lifetime with economic development is sufficiently small, the mobility monotonically increases while income inequality decreases. However, if lifetime increases rapidly with economic development, the mobility and income inequality exhibit cyclical, and even chaotic behavior. In fact, these various patterns of intergenerational mobility have been observed in developed countries.
    Keywords: Endogenous lifetime, Intergenerational mobility, Economic development, Income inequality
    JEL: I15 I24 J62
    Date: 2020–03–25
  4. By: Alberto Prati (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Claudia Senik (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PSE - Paris School of Economics, UP4 - Université Paris-Sorbonne)
    Abstract: Can people remember correctly their past well-being? We study three national surveys of the British, German and French population, where more than 50,000 European citizens were asked questions about their current and past life satisfaction. We uncover systematic biases in recalled subjective well-being: on average, people tend to overstate the improvement in their well-being over time and to understate their past happiness. But this aggregate figure hides a deep asymmetry: while happy people recall the evolution of their life to be better than it was, unhappy ones tend to exaggerate its worsening. It thus seems that feeling happy today implies feeling better than yesterday. These results offer an explanation of why happy people are more optimistic, perceive risks to be lower and are more open to new experiences.
    Keywords: life satisfaction,remembered utility,memory biases,intra-personal comparisons
    Date: 2020–04
  5. By: Del Boca, Daniela (University of Turin); Pronzato, Chiara D. (University of Turin); Sorrenti, Giuseppe (University of Amsterdam)
    Abstract: Employment helps reduce the risk of poverty. Through a randomized controlled trial, we evaluate the impact of a conditional cash transfer (CCT) program to low-income families with dependent children on household members' labor supply. Recipients are required to attend labor-market-oriented mentoring courses as a condition of the transfer. One year after admission to the program, fathers assigned to the CCT program are more likely to work (+14 percent) than fathers assigned to an unconditional cash transfer program or to a pure control group. No effect arises for mothers. Results seem to be explained by improved family networks and increased parental investments in activities that enhance labor market opportunities.
    Keywords: conditional cash transfers, poverty, household labor supply, mentoring courses
    JEL: I10 I20 J24 I31
    Date: 2020–03
  6. By: Aronsson, Thomas (Department of Economics, Umeå University); Johansson-Stenman, Olof (Department of Economics, School of Business, Economics and Law, University of Gothenburg)
    Abstract: Models where people derive well-being from motives other than material self-interest – including those rooted in status concerns – are surprisingly scarce in the study of optimal redistributive taxation. In fact, despite extensive evidence from experimental research, other-regarding behavior driven by prosocial preferences is more or less absent in this literature. The purpose of the present paper is to start filling this gap by analyzing the implications of prosocial preferences related to equality and efficiency for optimal income taxation. In doing so, we take a broad perspective by examining three well-known models of social preferences developed by Fehr and Schmidt (1999), Bolton and Ockenfels (2000), and Charness and Rabin (2002), respectively. Our contribution is to analyze the implications of these three social preference models for optimal redistributive income taxation based on a discrete version of the Mirrleesian (1971) framework of optimal nonlinear income taxation. We find that social preferences may have a considerable impact on the structure of marginal income taxation, and that interactions between externality correction and redistributive aspects of taxation are likely to play an important role for the optimal tax structure.
    Keywords: Optimal Taxation; Redistribution; Social Preferences; Inequality Aversion
    JEL: D62 D90 H21 H23
    Date: 2020–04–16
  7. By: Choe, Chung (Hanyang University); Oaxaca, Ronald L. (University of Arizona); Renna, Francesco (University of Akron)
    Abstract: This paper examines the effects of increasing marginal tax rates on labour supply in a setting in which workers may hold two jobs and may be constrained in their weekly hours on their main jobs. A panel data, multi-equation labour supply model is estimated with correction for tax system endogeneity and multi-sample selection in a correlated random effects framework. Data come from the British Household Panel Survey. The effects of counterfactual increases in marginal tax rates are obtained from Gauss-Seidel simulations of labour supply embedded in a tax system with allowances, tax credits, and child benefits. Labour supply to the main job is reduced by increased marginal tax rates while labour supply to the second job is increased. On net total labour supply is reduced. These effects diminish with increased marginal tax rates. In addition there are labour force withdrawal effects as well as transitions from dual job holding to unitary job holding in response to increased marginal tax rates.
    Keywords: dual job, labour supply, taxation, simulation
    JEL: J01 J22 H24
    Date: 2020–03
  8. By: Joseph G. Altonji; Ling Zhong
    Abstract: We estimate the labor market return to an MBA, a JD, and master’s in engineering, nursing, education, psychology and social work, and thirteen other graduate degrees. To control for heterogeneity in preferences and ability, we use fixed effects for combinations of field-specific undergraduate and graduate degrees obtained by the last time we observe an individual. Basically, we compare earnings before the graduate degree to earnings after the degree. We find large differences across graduate fields in earnings effects, and more moderate differences in internal rates of return that account for program length and tuition. The returns often depend on the undergraduate major. The contribution of occupational upgrading to the earnings gain varies across degrees. Finally, simple regression-based estimates of returns to graduate fields are often highly misleading.
    JEL: I21 I26 J24 J31
    Date: 2020–04
  9. By: Clark, Andrew E.; D'Ambrosio, Conchita; Barazzetta, Marta
    Abstract: We here consider the cognitive and non-cognitive consequences on young adults of growing up with a mother who reported experiencing major financial problems. We use UK data from the Avon Longitudinal Study of Parents and Children to show that early childhood financial problems are associated with worse adolescent cognitive and non-cognitive outcomes, controlling for both income and a set of standard variables, and in value-added models controlling for children’s earlier age-5 outcomes. The estimated effect of financial problems is almost always larger in size than that of income. Around one-quarter to one-half of the effect of financial problems on the non-cognitive outcomes seems to transit through mother’s mental health.
    Keywords: Income, Financial Problems, Child Outcomes, Subjective well-being, Behaviour, Education, ALSPAC
    Date: 2019–01
  10. By: Alejandro Cid; José María Cabrera; Marianne Bernatzky; María Ramírez-Michelena; Magdalena Blanco
    Abstract: This is the first paper to identify, using a field experiment, the effects of intense one-on-one assistance by a professional social worker on the take-up of social benefits within a population of deeply disadvantaged informal workers. A municipal program exists that entails providing these disadvantaged informal workers with a formal permit to work on the streets and make contributions to the retirement pension system. We randomly assign one-on-one assistance to these informal workers, and within this treatment group, we randomly assign money to cover the cost of the documents required by the municipality. We find that a worker who receives one-on-one assistance is three times more likely to receive the municipal permit than a worker in the control group. We also find that a worker who receives both one-on-one assistance and cost coverage is four times more likely to obtain the municipal permit. Providing information alone does not have an impact. The program has no spillover effect on the take-up of other national support programs that are not targeted by the one-on-one assistance intervention. These findings identify possible strategies to remove barriers to increase the take-up of social benefits within deeply vulnerable populations
    Keywords: behavioral barriers; welfare take-up; social benefits; personal assistance; information; field experiment; labor regulation.
    JEL: C93 D04 J46 J62 I30 I38
    Date: 2019

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