nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2020‒05‒11
six papers chosen by
Maximo Rossi
Universidad de la República

  1. Cognitive Consequences of Iodine Deficiency in Adolescence: Evidence from Salt Iodization in Denmark By Benjamin Ly Serena
  2. Monopsony in labor markets: a review By Manning, Alan
  3. Is Happiness U-shaped Everywhere? Age and Subjective Well-being in 145 Countries By Blanchflower, David G.
  4. Inter-country Distancing, Globalization and the Coronavirus Pandemic By Zimmermann, Klaus F.; Karabulut, Gokhan; Bilgin, Mehmet Huseyin; Doker, Asli Cansin
  5. Time Discounting and Wealth Inequality By Thomas Epper; Ernst Fehr; Helga Fehr-Duda; Claus Thustrup Kreiner; David Dreyer Lassen; Soeren Leth-Petersen; Gregers Nytoft Rasmussen
  6. The Kuznets curve of the Rich By Marwil J. Dávila-Fernández; Lionello F. Punzo

  1. By: Benjamin Ly Serena (CEBI, Department of Economics, University of Copenhagen)
    Abstract: Over the past three decades, many countries have introduced iodized salt policies to eradicate iodine deficiency. While it is well known that iodine deficiency in utero is detrimental to cognitive ability, little is known about the consequences of iodine deficiencies after birth. This paper examines the impact of iodine deficiency in adolescence on cognitive performance. I identify the causal effect of iodine deficiency quasi-experimentally using the introduction of iodized salt in Denmark. Denmark went from a ban on iodized salt before 1998 to a mandate after 2001, making it an ideal national experiment. Combining administrative records on high school grades over a thirty-year period with geographic variation in initial iodine deficiency, I find that salt iodization increases the Grade Point Averages of high school students by 6-9 percent of a standard deviation. This improvement is comparable to the benefits of more standard school achievement policies and at much lower costs.
    Keywords: Iodine Deficiency, Iodized Salt, Nutrition, Human Capital, Health
    JEL: I15 I18 J24
    Date: 2019–06–25
  2. By: Manning, Alan
    Abstract: There has been an increase in interest in monopsony in recent years. This paper reviews the accumulating evidence that employers have considerable monopsony power. It summarizes the application of this idea to explaining the impact of minimum wages and immigration, in anti-trust and in understanding how to model the determinants of earnings in matched-employer-employee data sets and the implications for inequality and the labor share.
    Keywords: Monospsony; Imperfect Competition
    JEL: J42
    Date: 2020–02–17
  3. By: Blanchflower, David G.
    Abstract: A large empirical literature has debated the U-shaped happiness-age curve. This paper re-examines the relationship between various measures of well-being and age in one hundred and forty-five countries, including one hundred and nine developing countries, controlling for education, marital and labor force status, among others on samples of individuals under the age of seventy. The curve is forcefully confirmed with an age minimum, or nadir, in midlife around age fifty, employing separate analyses for developing and advanced countries as well as for the continent of Africa as robustness checks. While panel data are largely unavailable for this issue, and the finding using such data largely confirms the cross-section results, the paper discusses insights on why cohort effects do not drive the findings. I find the minima has risen over time in Europe and the United States. The happiness curve seems to be everywhere.
    Keywords: Well-being,Happiness,U-shape in Age
    JEL: I31 P51 D6
    Date: 2020
  4. By: Zimmermann, Klaus F.; Karabulut, Gokhan; Bilgin, Mehmet Huseyin; Doker, Asli Cansin
    Abstract: Originating in China, the Coronavirus has reached the world at different speeds and levels of strength. This paper provides some initial understanding of some driving factors and their consequences. Since transmission requires people, the human factor behind globalization is essential. Globalization, a major force behind global wellbeing and equality, is highly associated with this factor. The analysis investigates the impact globalization has on the speed of initial transmission to a country and on the size of initial infections in the context of other driving factors. Our cross-country analysis finds that measures of globalization are positively related to the spread of the virus, both in speed and size. However, the study also finds that globalized countries are better equipped to keep fatality rates low. The conclusion is not to reduce globalization to avoid pandemics, but to better monitor the human factor at the outbreak and to mobilize collaboration forces to curtail diseases.
    Keywords: Globalization,Coronavirus,COVID-19,Pandemic,Inter-country Distancing
    JEL: C30 F69 I19
    Date: 2020
  5. By: Thomas Epper (University of St.Gallen, School of Economics and Political Science); Ernst Fehr (University of Zurich, Department of Economics); Helga Fehr-Duda (University of Zurich, Department of Banking and Finance); Claus Thustrup Kreiner (CEBI, Department of Economics, University of Copenhagen); David Dreyer Lassen (CEBI, Department of Economics, University of Copenhagen); Soeren Leth-Petersen (CEBI, Department of Economics, University of Copenhagen); Gregers Nytoft Rasmussen (CEBI, Department of Economics, University of Copenhagen)
    Abstract: This paper documents a large association between individuals� time discounting in incentivized experiments and their positions in the real-life wealth distribution derived from Danish high-quality administrative data for a large sample of middle-aged individuals. The association is stable over time, exists through the wealth distribution and remains large after controlling for education, income profile, school grades, initial wealth, parental wealth, credit constraints, demographics, risk preferences and additional behavioral parameters. Our results suggest that savings behavior is a driver of the observed association between patience and wealth inequality as predicted by standard savings theory.
    Keywords: Wealth inequality, savings behavior, time discounting, experimental methods, administrative data
    JEL: C91 D31 E21
    Date: 2019–10–07
  6. By: Marwil J. Dávila-Fernández; Lionello F. Punzo
    Abstract: A long-standing interest in the relationship between inequality and sustainable growth continues to fascinate economists among other social scientists. It must be noted, however, that most empirical efforts have been focused on the income-inequality-growth nexus, while studies on wealth inequality are much more scarce. In this article, it is our purpose to fill such a gap in the literature by assessing the correspondence between the top 1 percent wealth-share and economic growth. Making use of time-series cointegration techniques, we study the experience of France and the United States between 1950 and 2014. Our estimates suggest that the growth rate of output is an inverted-U shaped function of the wealth-share of the top 1 percent. The estimated relationship is robust to variations in control variables and estimation methods. We compute a sort of optimal wealth-share, understood as the share of wealth compatible with the maximum rate of growth, and show that France is growing close to its long-run potential while the United States is significantly below it.
    Keywords: Growth, wealth inequality, top wealth-shares, France, United States
    JEL: G01 C61 D84
    Date: 2020–04

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