nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2020‒08‒17
nine papers chosen by
Maximo Rossi
Universidad de la República

  1. Ten facts about income inequality in advanced economies By Lucas Chancel
  2. The Incentive Effects of Cash Transfers to the Poor By Anna Aizer; Shari Eli; Adriana Lleras-Muney
  3. Incentives, Globalization, and Redistribution By Haufler, Andreas; Perroni, Carlo
  4. Discrimination, narratives and family history: An experiment with Jordanian host and Syrian refugee children By Barron, Kai; Harmgart, Heike; Huck, Steffen; Schneider, Sebastian; Sutter, Matthias
  5. Commuting time and the gender gap in labor market participation By Lídia Farré; Jordi Jofre-Monseny; Juan Torrecillas
  6. Income Poverty has been Halved in the Developing World, even when Accounting for Relative Poverty By Benoit Decerf; Mery Ferrando
  7. The innovation premium to soft skills in low-skilled occuptions By Aghion, Philippe; Bergeaud, Antonin; Blundell, Richard; Griffith, Rachel
  8. Compensating for Academic Loss: Online Learning and Student Performance during the COVID-19 Pandemic By Andrew E. Clark; Huifu Nong; Hongjia Zhu; Rong Zhu
  9. Top Incomes, Income and Wealth Inequality in the Netherlands: The first 100 Years 1914-2014 -what's next? By Wiemer Salverda

  1. By: Lucas Chancel (PSE - Paris School of Economics, WIL - World Inequality Lab)
    Abstract: This paper presents 10 basic facts regarding inequality in advanced economies. Income and wealth inequality was very high a century ago, dropped in the 20th century, and has been rising at different speeds across countries since the 1980s. The financial crisis of 2008 does not appear to have inverted this trend. At the global level, while between-country inequality mattered more than within-country inequality in the 1980s, it is the opposite today. The rise of inequality has not been counterbalanced by an increase social mobility. The reduction of gender pay gaps has tempered the rise of inequality in recent decades, but gender inequality remains particularly high among top income and wealth groups. Racial inequalities remain large as well. Evidence suggests that trade and technology alone cannot explain large inequality variations across rich countries. Shifts in tax and wage setting policies, as well as differences in educational and health systems matter a lot.
    Keywords: inequality,advanced economies,income inequality,wealth inequality,inequality data,Distributional National Accounts,DINA,inequality measurement
    Date: 2019
  2. By: Anna Aizer; Shari Eli; Adriana Lleras-Muney
    Abstract: All redistributive and social insurance programs trade off the potential benefits of transfers with the disincentives these programs generate. We investigate this trade-off using newly collected lifetime data for 16,000 women who applied to the Mothers’ Pension Program, the first cash transfer program in the US. In the short-run cash transfers reduced geographic mobility and delayed marriage of recipients but did not affect who they married or where they moved to. In the long run transfers had no effect on work, marriage or fertility behaviors. They also did not improve the economic conditions of recipients or their longevity.
    JEL: I12 I14 I18 I32 I38 J16 N32
    Date: 2020–07
  3. By: Haufler, Andreas (University of Munich and CESifo); Perroni, Carlo (University of Warwick and CESifo)
    Abstract: We offer a new explanation for why taxes have become less progressive in many countries in parallel with an increase in income inequality. When performancebased compensation differentials are needed to incentivize effort, redistribution through progressive income taxes becomes less precisely targeted. Taxation reduces after-tax income inequality but undermines incentive contracts, lowering effort and raising pre-tax income differentials. Market integration can widen the spread of project returns and make contract choices more responsive to changes in the level of taxation, resulting in a lower optimum income tax rate even when individuals are not inter-jurisdictionally mobile.
    Keywords: Redistributive Taxation ; Performance-based Contracts ; Market Integration JEL codes: H21 ; F15 ; D63
    Date: 2020
  4. By: Barron, Kai; Harmgart, Heike; Huck, Steffen; Schneider, Sebastian; Sutter, Matthias
    Abstract: We measure the prevalence of discrimination between Jordanian host and Syrian refugee children attending school in Jordan. Using a simple sharing experiment, we find only little discrimination. Among the Jordanian children, however, we see that those who descended from Palestinian refugees do not discriminate at all, suggesting that a family history of refugee status can generate solidarity with new refugees. We also find that parents' narratives about the refugee crisis are correlated with the degree of discrimination, suggesting that discriminatory preferences are being transmitted through parental attitudes.
    Keywords: discrimination,refugees,children,experiment,integration
    JEL: C91 D90 J15 C93 J13
    Date: 2020
  5. By: Lídia Farré (Universitat de Barcelona & IAE (CSIC)); Jordi Jofre-Monseny (Universitat de Barcelona & IEB); Juan Torrecillas (Universitat de Barcelona & IEB)
    Abstract: This paper investigates the contribution of increasing travel times to the persistent gender gap in labor market participation. In doing so, we estimate the labor supply elasticity of commuting time from a sample of men and women in US cities using microdata from the Census for the last decades. To address endogeneity concerns, we adopt an instrumental variables approach that exploits the shape of cities as an exogenous source of variation for travel times. Our estimates indicate that a 10 minutes increase in commuting decreases the probability of married women to participate in the labor market by 4.6 percentage points. In contrast, the estimated effect on men is small and statistically insignificant. We also find that women with children and immigrant women originating from countries with more gendered social norms respond the most to commuting time variations. This evidence suggests that the higher burden of family responsibilities supported by women may magnify the negative effect of commuting on their labor supply. From our findings, we conclude that the increasing trend in travel times observed in the US and in many European countries during the last decades may have contributed to the persistence of gender disparities in labor market outcomes.
    Keywords: Commuting time, labor supply, gender roles, family responsibilities, city shape
    JEL: R41 J01 J16 J22
    Date: 2020
  6. By: Benoit Decerf (University of Namur); Mery Ferrando (Tilburg University)
    Abstract: The first Millennium Development Goal was to halve extreme absolute poverty over the period 1990-2015. This goal has been met by a large margin, but the simultaneous increase in within-country inequality has led to an increase in relative poverty. As absolute and relative poverty evolved in opposite directions, whether or not overall poverty – which combines both absolute and relative poverty – has been reduced typically depends on the arbitrary priority assigned to absolutely poor individuals. We develop a new method for overall income poverty evaluation thatcan potentially provide judgments that do not depend on that priority parameter. We show that, if we assume that an individual who is absolutely poor is poorer than an individual who is only relatively poor, overall poverty in the developing world has been (at least) halved over the period, regardless of the value chosen for the priority parameter. This result is robust to alternative specifications of the poverty lines and to the exclusion of China or India. Alternative approaches find much less overall poverty reduction because they violate our normative assumption.
    Keywords: Income Poverty, Relative Poverty, Absolute Poverty, Developing World.
    JEL: D63 I32
    Date: 2020–07
  7. By: Aghion, Philippe; Bergeaud, Antonin; Blundell, Richard; Griffith, Rachel
    Abstract: Matched employee-employer data from the UK are used to analyze the wage premium to working in an innovative firm. We find that firms that are more R&D intensive pay higher wages on average, and this is particularly true for workers in some low-skilled occupations. We propose a model in which a firm's innovativeness is reflected in the degree of complementarity between workers in low-skill and high-skilled occupations, and in which non-verifiable soft skills are an important determinant of the wages of workers in low-skilled occupations. The model yields additional predictions on training, tenure and outsourcing which we also find support for in data.
    Date: 2019–11
  8. By: Andrew E. Clark (PSE - Paris School of Economics, 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); Huifu Nong (SunYat-sen University); Hongjia Zhu (Jinan University [Guangzhou]); Rong Zhu (Flinders University [Adelaide, Australia])
    Abstract: The outbreak of the COVID-19 pandemic has led to widespread school shutdowns, and many schools have opted for education using online learning platforms. Using administrative data from three middle schools in China, this paper estimates the causal effects of online learning on student performance. Using the difference-in-differences approach, we show that online education improves students' academic achievement by 0.22 of a standard deviation, relative to those who stopped receiving learning support from their school during the COVID-19 lockdown. All else equal, students from a school having access to recorded online lessons delivered by external higher-quality teachers have achieved more progress in academic outcomes than those accessing lessons recorded by teachers in their own school. We find no evidence that the educational benefits of distance learning differ for rural and urban students. However, there is more progress in the academic achievement of students using a computer for online education than that of those using a smartphone. Last, low achievers benefit the most from online learning while there is no significant impact for top students. Our findings have important policy implications for educational practices when lockdown measures are implemented during a pandemic.
    Keywords: academic achievement,COVID-19 pandemic,online learning
    Date: 2020–07
  9. By: Wiemer Salverda (UvA - University of Amsterdam [Amsterdam])
    Abstract: In 2001 Tony very kindly agreed that we would work together on the top income shares for our two countries, the Netherlands and the UK. I profited enormously from his experience with top incomes and, naturally, with the UK, and, surprisingly, also with my own country. He could actually read Dutch and had much easier access to the pre-war Dutch statistics than I had. He joked about non-existent privacy concerns in the statistics of those days as that highest class of incomes counted one observation only – Tony imagined that would be Henri Deterding, chairman of Royal Dutch Shell up to 1937. I treasure the moments we sat together at Nuffield for work, at the high table, or, equally nicely, in a pub for a beer. With his guidance we successfully laid the basis for the first 85 years (1914-1999), on which I have built for a summary update of Dutch top incomes to the year 2012 (Salverda, 2013) and on which I base myself for the present paper's more extensive update to 2014. Tony has seen most of the new material (compare the Graphs section below) in July 2016 and responded, even on holiday, with some suggestions and questions. He liked chart books, well this is one. It is really very sad that we have not been able to finish this together. He liked the ‘100 years' completion of the series, and anyone who knew him would have wished him a century in good health.
    Keywords: Top Incomes,Income Inequality,Wealth Inequality,The Netherlands
    Date: 2019

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