nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2021‒01‒18
six papers chosen by

  1. Homoploutia: Top Labor and Capital Incomes in the United States, 1950—2020 By Berman, Yonatan; Milanovic, Branko; , Stone Center
  2. Worker Flows and Wage Dynamics: Estimating Wage Growth without Composition Effects By Carrasco, Raquel; García-Pérez, J. Ignacio; Jimeno, Juan F.
  3. Poverty in the COVID-19 Era: Real Time Data Analysis on Five European Countries By Giorgia Menta
  4. Environmental Engagement, Religion and Spirituality in the Context of Secularization By Briguglio, Marie; García-Muñoz, Teresa; Neuman, Shoshana
  5. The Impacts of a Multifaceted Pre-natal Intervention on Human Capital Accumulation in Early Life By Carneiro, Pedro; Kraftman, Lucy; Mason, Giacomo; Moore, Lucie; Rasul, Imran; Scott, Molly
  6. Capital Gains and UK Inequality By Arun Advani; Andy Summers

  1. By: Berman, Yonatan; Milanovic, Branko; , Stone Center (The Graduate Center/CUNY)
    Abstract: Homoploutia describes the situation in which the same people (homo) are wealthy (ploutia) in the space of capital and labor income in some country. It can be quantified by the share of capital-income rich who are also labor-income rich. In this paper we combine several datasets covering different time periods to document the evolution of homoploutia in the United States from 1950 to 2020. We find that homoploutia was low after World War II, has increased by the early 1960s, and then decreased until the mid-1980s. Since 1985 it has been sharply increasing: In 1985, about 17% of adults in the top decile of capital-income earners were also in the top decile of labor-income earners. In 2018 this indicator was about 30%. This makes the traditional division to capitalists and laborers less relevant today. It makes periods characterized by high interpersonal inequality, high capital-income ratio and high capital share of income in the past fundamentally different from the current situation. High homoploutia has far-reaching implications for social mobility and equality of opportunity. We also study how homoploutia is related to total income inequality. We find that rising homoploutia accounts for about 20% of the increase in total income inequality in the United States since 1986. (Stone Center Working Paper Series)
    Date: 2020–12–31
  2. By: Carrasco, Raquel (Universidad Carlos III de Madrid); García-Pérez, J. Ignacio (Universidad Pablo de Olavide); Jimeno, Juan F. (Bank of Spain)
    Abstract: Wage dynamics is closely intertwined with job flows. However, composition effects associated to the different sizes and characteristics of workers entering/ exiting into/from employment that may blur the "true" underlying wage growth, are not typically accounted for. In this paper, we take these composition effects into consideration and compute wage growth in Spain during the 2006-2018 period after netting out the consequences of employment dynamics. Our results show that the "true" underlying wage growth in the Spanish economy during recessions (expansions) was, on average, significantly lower (higher) that the observed with raw data. This may help to explain some macro puzzles, such as the "vanishing" Phillips curve.
    Keywords: wage growth, composition effects, selection bias
    JEL: J30 J31 J21
    Date: 2020–12
  3. By: Giorgia Menta (University of Luxembourg)
    Abstract: Using real-time data from the University of Luxembourg’s COME-HERE nationally representative panel survey, covering more than 8,000 individuals across France, Germany,Italy, Spain, and Sweden, I investigate how income distributions and poverty rates havechanged from January to September 2020. I find that poverty rates increased on average in allcountries from January to May and partially recovered in September. The increase in povertyis heterogeneous across countries, with Italy being the most affected and France the least;within countries, COVID-19 contributed to exacerbating poverty differences across regions inItaly and Spain. With a set of poverty measures from the Foster-Greer-Thorbecke family, I thenexplore the role of individual characteristics in shaping different poverty profiles acrosscountries. Results suggest that poverty increased disproportionately more for youngindividuals, women, and respondents who had a job in January 2020 – with different intensityacross countries.
    Keywords: COVID-19, Poverty, TIP, Europe, Headcount ratio
    JEL: I14 I18 I32
    Date: 2021–01
  4. By: Briguglio, Marie (University of Malta); García-Muñoz, Teresa (Universidad de Granada); Neuman, Shoshana (Bar-Ilan University)
    Abstract: Over the past half century, a literature has developed across a range of disciplines exploring the relationship between religion and environmental engagement, including pro-environmental attitudes and behaviours.Empirical results are diverse and the relationship seems to vary in size and direction, depending on definitions and the method of investigation adopted. An increasingly important phenomenon which has received far less attention is that of spirituality, within/out the context of a religion. This paper contributes to the literature by examining the question in a predominantly Roman Catholic European Union country where church attendance is in decline. It employs a nationally representative dataset (n=1,029) which includes diverse measures of religiosity and spirituality, as well as measures of interest in environmental issues, in wildlife and natural history, and engagement in countryside activities and gardening, together with relevant socio-economic control variables. Our findings confirm that the usual socio-economic determinants are associated with this type of environmental engagement. We find that church attendance adds no further explanatory power to environmental engagement. On the other hand, participation in socio-cultural religious activities and self-assessed spirituality are positively and significantly associated of various dimensions of environmental engagement.
    Keywords: religion, spirituality, environment, catholic, secularization, quantitative
    JEL: O13 P18 Q51 Z12
    Date: 2020–12
  5. By: Carneiro, Pedro (University College London); Kraftman, Lucy (Institute for Fiscal Studies, London); Mason, Giacomo (Competition and Markets Authority); Moore, Lucie (OPM); Rasul, Imran (University College London); Scott, Molly (OPM)
    Abstract: We evaluate an intervention targeting early life nutrition and well-being for households in extreme poverty in Northern Nigeria. The intervention leads to large and sustained improvements in children's anthropometric and health outcomes, including an 8% reduction in stunting four years post-intervention. These impacts are partly driven by information-related channels. However, the certain and substantial flow of cash transfers is also key. They induce positive labor supply responses among women, and enables them to undertake productive investments in livestock. These provide protein rich diets for children, and generate higher household earnings streams long after the cash transfers expire.
    Keywords: nutrition, cash transfers
    JEL: I15 O15
    Date: 2020–12
  6. By: Arun Advani (University of Warwick [Coventry], IFS - Institut für Sozialforschung, LSE - London School of Economics and Political Science); Andy Summers (LSE - London School of Economics and Political Science)
    Abstract: Aggregate taxable capital gains in UK have tripled in past decade. Using confidential administrative data on the universe of UK taxpayers, we show that including gains changes the picture of UK inequality over the past two decades. These taxable gains are largely repackaged income, so their exclusion biases the picture of inequality. Including them changes who is at the top of the distribution, adding more business owners and older people. The share of income plus gains (both pre-and post-tax) going to the top 1% is 3pp higher than for income only, and this gap has been steadily rising.
    Keywords: inequality,capital gains,income shifting,top shares
    Date: 2020–05

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