nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2020‒06‒08
eleven papers chosen by
Maximo Rossi
Universidad de la República

  1. COVID-19, Lockdowns and Well-Being: Evidence from Google Trends By Brodeur, Abel; Clark, Andrew E.; Flèche, Sarah; Powdthavee, Nattavudh
  2. Disparities and Mitigation Behavior during COVID-19 By Abigail Wozniak
  3. Employer Policies and the Immigrant-Native Earnings Gap By Dostie, Benoit; Li, Jiang; Card, David; Parent, Daniel
  4. Inequality in the Impact of the Coronavirus Shock: Evidence from Real Time Surveys By Adams-Prassl, Abi; Boneva, Teodora; Golin, Marta; Rauh, Christopher
  5. Age, Death Risk, and the Design of an Exit Strategy: A Guide for Policymakers and for Citizens Who Want to Stay Alive By Oswald, Andrew J.; Powdthavee, Nattavudh
  6. Occupational Sorting and Wage Gaps of Refugees By F Baum, Christopher; Lööf, Hans; Stephan, Andreas; F. Zimmermann, Klaus
  7. Comparing distributions of ordinal data By Jenkins, Stephen P.
  8. Asocial Capital: Civic Culture and Social Distancing during COVID-19 By Ruben Durante; Luigi Guiso; Giorgio Gulino
  9. Does Economics Make You Sexist? By Paredes, Valentina; Paserman, M. Daniele; Pino, Francisco J.
  10. When to Release the Lockdown? A Wellbeing Framework for Analysing Costs and Benefits By Layard, Richard; Clark, Andrew E.; De Neve, Jan-Emmanuel; Krekel, Christian; Fancourt, Daisy; Hey, Nancy; O'Donnell, Gus
  11. Health versus Wealth: On the Distributional Effects of Controlling a Pandemic By Andrew Glover; Jonathan Heathcote; Dirk Krueger; Jose-Victor Rios-Rull

  1. By: Brodeur, Abel (University of Ottawa); Clark, Andrew E. (Paris School of Economics); Flèche, Sarah (Aix-Marseille University); Powdthavee, Nattavudh (University of Warwick)
    Abstract: The COVID-19 pandemic has led many governments to implement lockdowns. While lockdowns may help to contain the spread of the virus, they may result in substantial damage to population well-being. We use Google Trends data to test whether the lockdowns implemented in Europe and America led to changes in well-being related topic search terms. Using differences-in-differences and a regression discontinuity design to evaluate the causal effects of lockdown, we find a substantial increase in the search intensity for boredom in Europe and the US. We also found a significant increase in searches for loneliness, worry and sadness, while searches for stress, suicide and divorce on the contrary fell. Our results suggest that people's mental health may have been severely affected by the lockdown.
    Keywords: boredom, COVID-19, loneliness, well-being
    JEL: I12 I31 J22
    Date: 2020–05
  2. By: Abigail Wozniak
    Abstract: This paper uses a unique large-scale survey administered in April 2020 to assess disparities on several dimensions of wellbeing under rising COVID-19 infections and mitigation restrictions in the US. The survey includes three modules designed to assess different dimensions of well-being in parallel: physical health, mental and social health, and economic and financial security. The survey is unique among early COVID-19 data efforts in that provides insight on diverse dimensions of wellbeing and for subnational geographies. I find dramatic declines in wellbeing from pre-COVID baseline measures across both people and places. Place-level variation is not well explained by local characteristics that either precede or coincide with the pandemic. Analysis by demographic groups also shows large and unequal declines in wellbeing in the COVID era. Hispanic, younger, and lower-earning individuals all faced disproportionately worsening economic conditions, as did those with school-aged children. I conclude that place-based relief policies are unlikely to be efficient relative to support targeted to the neediest individuals. I also find that individual COVID-19 exposure and risk show concerning relationships with employment, protective behavior, and mental health. Those with direct COVID-19 exposure through their households face significantly greater employment loss, but those with recent fever symptoms or elevated risk for COVID complications are not reducing their work hours or taking additional precautions, despite negative mental health status changes indicating concern. These findings suggest that some support policies might be directly targeted to households with confirmed infections.
    Keywords: COVID-19; coronavirus
    JEL: I1 I15 I18 J10 J15 J38
    Date: 2020–05–13
  3. By: Dostie, Benoit (HEC Montreal); Li, Jiang (Statistics Canada); Card, David (University of California, Berkeley); Parent, Daniel (HEC Montreal)
    Abstract: We use longitudinal data from the income tax system to study the impacts of firms' employment and wage-setting policies on the level and change in immigrant-native wage differences in Canada. We focus on immigrants who arrived in the early 2000s, distinguishing between those with and without a college degree from two broad groups of countries – the U.S., the U.K. and Northern Europe, and the rest of the world. Consistent with a growing literature based on the two-way fixed effects model of Abowd, Kramarz, and Margolis (1999), we find that firm-specific wage premiums explain a significant share of earnings inequality in Canada and contribute to the average earnings gap between immigrants and natives. In the decade after receiving permanent status, earnings of immigrants rise relative to those of natives. Compositional effects due to selective outmigration and changing participation play no role in this gain. About one-sixth is attributable to movements up the job ladder to employers that offer higher pay premiums for all groups, with particularly large gains for immigrants from the "rest of the world" countries.
    Keywords: wage differentials, immigrants, linked employer-employee data, firm effects
    JEL: J15 J31 J71
    Date: 2020–05
  4. By: Adams-Prassl, Abi (University of Oxford); Boneva, Teodora (University of Zurich); Golin, Marta (University of Oxford); Rauh, Christopher (University of Montreal)
    Abstract: We present real time survey evidence from the UK, US and Germany showing that the labor market impacts of COVID-19 differ considerably across countries. Employees in Germany, which has a well-established short-time work scheme, are substantially less likely to be affected by the crisis. Within countries, the impacts are highly unequal and exacerbate existing inequalities. Workers in alternative work arrangements and in occupations in which only a small share of tasks can be done from home are more likely to have reduced their hours, lost their jobs and suffered falls in earnings. Less educated workers and women are more affected by the crisis.
    Keywords: recessions, inequality, labor market, unemployment, Coronavirus, COVID-19
    JEL: J21 J22 J24 J33 J63
    Date: 2020–04
  5. By: Oswald, Andrew J. (University of Warwick); Powdthavee, Nattavudh (University of Warwick)
    Abstract: Some commentators argue for a fairly general release from COVID-19 lockdown. That has a troubling flaw. It ignores the fatality risks that will then be faced by citizens in midlife and older. This paper provides information on the strong age-pattern in the risk of death from three countries (China, Italy, the UK). If politicians want an imminent removal of the lockdown, the safest approach in our judgment would be a rolling age-release strategy combined with the current principle of social distancing. But even if that is not the policy adopted, citizens need to be shown graphs of the kind in this paper. Honest guidance ought to be given to those in midlife and beyond. Governments have to allow people to understand their personal risk after any release from lockdown.
    Keywords: coronavirus, labor market, recession, COVID-19
    JEL: I18 J13 H75
    Date: 2020–05
  6. By: F Baum, Christopher (Boston College, DIW Berlin & Centre of Excellence for Science and Innovation Studies); Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Stephan, Andreas (Jönköping University, DIW Berlin & Centre of Excellence for Science and Innovation Studies); F. Zimmermann, Klaus (UNU-MERIT, Maastricht University, CEPR and GLO)
    Abstract: Refugee workers start low and adjust slowly to the wages of comparable natives. The innovative approach in this study using unique Swedish employer employee data shows that the observed wage gap between established refugees and comparable natives is mainly caused by occupational sorting into cognitive and manual tasks. Within occupations, it can be largely explained by differences in work experience. The identification strategy relies on a control group of matched natives with the same characteristics as the refugees, using panel data for 2003–2013 to capture unobserved heterogeneity.
    Keywords: refugees; wage earnings gap; Blinder—Oaxaca decomposition; employer-employee data; coarsened exact matching; correlated random effects model
    JEL: C23 F22 J24 J60 O15
    Date: 2020–06–01
  7. By: Jenkins, Stephen P.
    Abstract: To compare distributions of ordinal data such as individuals’ responses on Likert-type scale variables summarizing subjective well-being, we should not apply the toolbox of methods developed for cardinal variables such as income. Instead we should use an analogous toolbox which takes account of the ordinal nature of the responses. This paper reviews these methods and introduces a new Stata command ineqord for undertaking distributional comparisons. As the empirical illustrations demonstrate, ineqord can be used for dominance checks as well as for estimation of indices of polarization and inequality.
    Keywords: inequality; ordinal data; subjective well-being; life satisfaction; annual population survey
    JEL: C1
    Date: 2020–03–11
  8. By: Ruben Durante; Luigi Guiso; Giorgio Gulino
    Abstract: Social distancing can slow the spread of COVID-19 if citizens comply with it and internalize the cost of their mobility on others. We study how civic values mediate this process using data on mobility across Italian provinces between January and May 2020. We find robust evidence that after the virus outbreak mobility declined, but significantly more in areas with higher civic capital, both before and after a mandatory national lockdown. Simulating a SIR model calibrated on Italy, we estimate that if all provinces had the same civic capital as those in top-quartile, COVID-related deaths would have been ten times lower.
    Keywords: civic capital, Culture, Externalities, social distancing, COVID-19
    JEL: Z1 D91
    Date: 2020–05
  9. By: Paredes, Valentina (Universidad de Chile); Paserman, M. Daniele (Boston University); Pino, Francisco J. (University of Chile)
    Abstract: Recent research has highlighted unequal treatment for women in academic economics along several different dimensions: promotion, hiring, credit for co-authorship, and standards for publication in professional journals. Can the source of these differences lie in biases against women that are pervasive in the discipline, even among students in the earliest stages of their training? In this paper, we provide direct evidence on the importance of explicit and implicit biases against women among students in economics relative to other fields. We conducted a large scale survey among undergraduate students in Chilean universities, among both entering first-year students and students in years 2 and above. The survey elicits measures of implicit bias, explicit bias, and gender attitudes. We document that, on a wide battery of measures, economics students are more biased than students in other fields. There is some evidence that economics students are more biased already upon entry, before exposure to any economic classes. The gap becomes substantially more pronounced among students in years 2 and above, in particular for male students. We also find evidence of an increase in bias in a sample of students that we can follow longitudinally. Differences in political ideology and religiosity explain essentially all the gap at entry, but none of the increase in the gap with exposure. Exposure to female students and female professors attenuates some of the bias of economics students.
    Keywords: discrimination, implicit biases, sociology of economics
    JEL: J16 J71 A22 A13 A14
    Date: 2020–05
  10. By: Layard, Richard (London School of Economics); Clark, Andrew E. (Paris School of Economics); De Neve, Jan-Emmanuel (University of Oxford); Krekel, Christian (London School of Economics); Fancourt, Daisy (University College London); Hey, Nancy (What Works Centre for Wellbeing); O'Donnell, Gus (House of Lords)
    Abstract: It is politicians who have to decide when to release the lockdown, and in what way. In doing so, they have to balance many considerations (as with any decision). Often the different considerations appear incommensurable so that only the roughest of judgements can be made. For example, in the case of COVID-19, one has to compare the economic benefits of releasing the lockdown with the social and psychological benefits, and then compare the total of these with the increase in deaths that would result from an early exit. We here propose a way of doing this more systematically.
    Keywords: well-being, COVID-19, lockdown
    JEL: H12 I18 I31
    Date: 2020–04
  11. By: Andrew Glover; Jonathan Heathcote; Dirk Krueger; Jose-Victor Rios-Rull
    Abstract: To slow the spread of COVID-19, many countries are shutting down nonessential sectors of the economy. Older individuals have the most to gain from slowing virus diffusion. Younger workers in sectors that are shuttered have the most to lose. In this paper, we build a model in which economic activity and disease progression are jointly determined. Individuals differ by age (young and retired), by sector (basic and luxury), and by health status. Disease transmission occurs in the workplace, in consumption activities, at home, and in hospitals. We study the optimal economic mitigation policy of a utilitarian government that can redistribute across individuals, but where such redistribution is costly. We show that optimal redistribution and mitigation policies interact, and reflect a compromise between the strongly diverging preferred policy paths of different subgroups of the population. We find that the shutdown in place on April 12 is too extensive, but that a partial shutdown should remain in place through July. People prefer deeper and longer shutdowns if a vaccine is imminent, especially the elderly.
    Keywords: Redistribution; COVID-19; Economic policy; Pandemic; Shutdowns
    JEL: J08 J23 J63 J78
    Date: 2020–05–10

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