nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2020‒10‒26
six papers chosen by
Maximo Rossi
Universidad de la República

  1. Latin American Brotherhood? Immigration and Preferences for Redistribution By Julian Martinez-Correa; Leonardo Peñaloza Pacheco; Leonardo Gasparini
  2. Trends in US Income and Wealth Inequality: Revising After the Revisionists By Emmanuel Saez; Gabriel Zucman
  3. On Measuring Segregation in a Multigroup Context: Standardized Versus Unstandardized Indices By Coral Del Río; Olga Alonso-Villar
  4. Management Practices and Establishment Performance under Non-Union Workplace Representation By John T. Addison; Paulino Teixeira; Lutz Bellmann
  5. Side Effects of Labor Market Policies By Marco Caliendo; Robert Mahlstedt; Gerard J. van den Berg; Johan Vikström
  6. Public work and private violence By Kjelsrud, Anders; Sjurgard, Kristin Vikan

  1. By: Julian Martinez-Correa (CEDLAS-IIE-FCE-UNLP); Leonardo Peñaloza Pacheco (CEDLAS-IIE-FCE-UNLP); Leonardo Gasparini (CEDLAS-IIE-FCE-UNLP)
    Abstract: The effect of immigration on preferences for redistribution has been recently studied in the context of developed countries receiving migrants from poorer countries with very different cultural backgrounds. In this paper we explore this issue in the context of migration across similar Latin American countries. To this aim, we exploit data at the provincial level from a large attitudinal survey (LAPOP) and match it to immigration data from different sources. We follow three approaches: first, we implement an instrumental variables approach in a cross-section of censuses; second we estimate fixed effects models with data from a large sample of harmonized national household surveys, and third we exploit the massive inflow of Venezuelan refugees into the border country of Colombia with an instrumental variables methodology. Our results suggest a significant, negative and non-monotonic relationship between the share of immigrants at the provincial level and the support for redistribution policies. This anti-redistribution effect is larger among those individuals with higher income.
    JEL: O15 N36
    Date: 2020–10
  2. By: Emmanuel Saez; Gabriel Zucman
    Abstract: Recent studies argue that US inequality has increased less than previously thought, in particular due to a more modest rise of wealth and capital income at the top (Smith et al., 2019; Smith, Zidar and Zwick, 2020; Auten and Splinter, 2019). We examine the claims made in these papers point by point, separating genuine improvements from arguments that do not appear to us well grounded empirically or conceptually. Taking stock of this body of work, and factoring in other improvements, we provide a comprehensive update of our estimates of US income and wealth inequality. Although some of the points raised by the revisionists are valuable, the core quantitative findings of this literature do not appear to be supported by the data. The low capital share of private business income estimated in Smith et al. (2019) is not consistent with the large capital stock of these businesses. In Smith, Zidar and Zwick (2020), the interest rate assigned to the wealthy is higher than in the datasets where both income and wealth can be observed, leading to downward biased top wealth shares; capitalizing equities using almost only dividends dramatically underestimates the wealth of billionaires relative to the Forbes 400. In Auten and Splinter (2019), business profits earned by the top 1% but not taxable (due in particular to generous depreciation rules) are classified as tax evasion; tax evasion is then allocated to the bottom 99% based on an erroneous reading of random audit data. Our revised series show a rise of inequality similar to Saez and Zucman (2016) and Piketty, Saez, and Zucman (2018) while allowing for a more granular depiction of the composition of wealth and income at the top.
    JEL: D31 E25 H26
    Date: 2020–10
  3. By: Coral Del Río (Universidade de Vigo); Olga Alonso-Villar (Universidade de Vigo)
    Abstract: There has been little discussion about the consequences of using standardized, rather than unstandardized, segregation measures when comparing societies with different demographic compositions. This paper explores standardization in a multigroup setting through an analytical framework that offers a clear distinction between the measurement of overall and local segregation, embeds existing indices within this framework, and addresses gaps in previous research. The local approach developed here allows us to focus on the principle of transfers used in the measurement of overall segregation from a new angle and brings analytical support to the interpretation of the components of standardized overall measures as the segregation levels of the groups involved. This approach also helps clarify the debate around the measurement of school segregation since the distinction between local and overall measures, together with standardization, is key to understanding the relationship between the different proposals. This research also gives formal support to empirical strategies that compare the distribution of a minority group with that of the remaining population since they can be viewed as standardized local segregation measures satisfying basic properties.
    Keywords: Multigroup segregation, standardized segregation indices, local segregation curves, local segregation indices
    JEL: D63 J15 J16 J71
    Date: 2020–10
  4. By: John T. Addison; Paulino Teixeira; Lutz Bellmann
    Abstract: This paper brings together two factors deemed important correlates of firm performance: advanced management practices and works councils. The country sample comprises nations where workplace representation is via a works council. The Management Questionnaire of the 2013 European Company Survey defines our full sample of mixed establishments (with and without councils) and its sister Employee Representative Questionnaire is used to derive a much smaller matched sample of works council plants. The outcome indicators are subjective measures of financial performance and the growth in labor productivity. For the full sample, we report that better management practices are strongly related to improved establishment performance, with no suggestion that works council presence influences that association one way or another. Works council presence is, however, negatively associated with financial performance and labor productivity growth. Distinguishing between councils based on managements’ views of their type suggests that this negative association is likely attributable to unconstructive and delaying councils. Irrespective of works council type, the association between management practices and the performance indicators remains positive. Analysis of the smaller sample again confirms the favorable link between management practices and establishment performance. Circumstances in which the employee representative has a favorable view of the general work climate or expresses trust in management coincide with an improved financial situation if not higher productivity growth. Mutual distrust is negatively associated with financial performance situation but unrelated to labor productivity growth.
    Keywords: management as a technology, work councils, works council type, financial performance, labor productivity growth, trust, mutual distrust, Germanic cluster
    JEL: D22 J53 M50
    Date: 2020
  5. By: Marco Caliendo (University of Potsdam, IZA Bonn, DIW Berlin, IAB Nuremberg); Robert Mahlstedt (University of Copenhagen, IZA Bonn); Gerard J. van den Berg (University of Bristol, University of Groningen, IFAU Uppsala, IZA Bonn, ZEW, CEPR, CESifo, UCLS); Johan Vikström (IFAU Uppsala, Uppsala University, UCLS)
    Abstract: Labor market policy tools such as training and sanctions are commonly used to help bring workers back to work. By analogy to medical treatments, the individual exposure to these tools may have side effects. We study effects on health using individual-level population registers on labor market events outcomes, drug prescriptions and sickness absence, comparing outcomes before and after exposure to training and sanctions. We find that training improves cardiovascular and mental health and lowers sickness absence. The results suggest that this is not due to improved employment prospects but rather to instantaneous features of participation such as, perhaps, the adoption of a more rigorous daily routine. Unemployment benefits sanctions cause a short-run deterioration of mental health, possibly due higher stress levels, but this tapers out quickly.
    Keywords: unemployment, health, sickness, prescriptions, mental health, drugs, training, depression, cardiovascular disease, sanctions
    JEL: J68 I12 I18 H51
    Date: 2020–10
  6. By: Kjelsrud, Anders (Dept. of Economics, University of Oslo); Sjurgard, Kristin Vikan (Dept. of Economics, University of Oslo)
    Abstract: Violence against women is persisting in many parts of the world. At the same time, there is a global trend of increased female labour force participation. In this paper we study the effect on intimate partner violence of a large public work program in India that explicitly encourages female participation (MGNREGA). Based on detailed administrative data, we show that the work program leads to more violence against women. We argue that the effect could be explained by a "male backlash" mechanism, where husbands exercise violence to regain power within marriage.
    Keywords: intimate partner violence; female employment; public work
    JEL: D19 J12 J16
    Date: 2020–09–17

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