nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2021‒02‒08
three papers chosen by
Maximo Rossi
Universidad de la República

  1. Longer-Run Effects of Antipoverty Policies on Disadvantaged Neighborhoods By David Neumark; Brian Asquith; Brittany Bass
  2. Where Does Wealth Come From? By Sandra E. Black; Paul J. Devereux; Fanny Landaud; Kjell G. Salvanes
  3. Why Do Sectoral Employment Programs Work? Lessons from WorkAdvance By Lawrence F. Katz; Jonathan Roth; Richard Hendra; Kelsey Schaberg

  1. By: David Neumark (University of California-Irvine); Brian Asquith (W.E. Upjohn Institute for Employment Research); Brittany Bass (University of California-Irvine)
    Abstract: We estimate the longer-run effects of minimum wages, the Earned Income Tax Credit, and welfare on key economic indicators of economic self-sufficiency in disadvantaged neighborhoods. We find that the longer-run effects of the EITC are to increase employment and to reduce poverty and public assistance. We also find some evidence that higher welfare benefits had longer-run adverse effects, and quite robust evidence that tighter welfare time limits reduce poverty and public assistance in the longer run. The evidence on the long-run effects of the minimum wage on poverty and public assistance is not robust, with some evidence pointing to reductions and some to increases.
    Keywords: Neighborhood poverty, minimum wages, EITC, welfare, employment
    JEL: I32 I38 J08 J21 J31
    Date: 2019–03
  2. By: Sandra E. Black; Paul J. Devereux; Fanny Landaud; Kjell G. Salvanes
    Abstract: Much attention has been given to rising wealth inequality in recent decades. However, understanding inequality requires an understanding of how wealth relates to the potential wealth an individual could accumulate and where this wealth comes from. Using administrative data from Norway, we create measures of potential wealth that abstract from differential consumption and spending behavior. We then examine how these measures relate to observed net wealth of individuals at a point in time and the role played by different sources of wealth in the distribution of potential wealth. We find that net wealth is a reasonable proxy for potential wealth, particularly in the tails of the distribution. Importantly, people in different parts of the potential wealth (or actual net wealth) distribution get their wealth from very different sources. Labor income is the most important determinant of wealth, except among the top 1%, where capital income and capital gains on financial assets become important. Inheritances and gifts are not an important determinant of wealth, even at the top of the wealth distribution. Finally, although inheritances are not important, parental wealth does influence child’s wealth; children of wealthy parents accumulate wealth from very different sources than children of less wealthy parents.
    JEL: G51 J01 J1
    Date: 2020–12
  3. By: Lawrence F. Katz; Jonathan Roth; Richard Hendra; Kelsey Schaberg
    Abstract: This paper examines the evidence from randomized evaluations of sector-focused training programs that target low-wage workers and combine upfront screening, occupational and soft skills training, and wraparound services. The programs generate substantial and persistent earnings gains (11 to 40 percent) following training completion. Theoretical mechanisms for program impacts are explored for the WorkAdvance demonstration. Earnings gains are generated by getting participants into higher-wage jobs in higher-earning industries and occupations not just by raising employment. Training in transferable and certifiable skills (likely under-provided from poaching concerns) and reductions of employment barriers to high-wage sectors for non-traditional workers appear to play key roles.
    JEL: J24 J38
    Date: 2020–12

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