nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2021‒03‒29
ten papers chosen by
Maximo Rossi
Universidad de la República

  1. Marriage Dynamics, Earnings Dynamics, and Lifetime Family Income By Joseph G. Altonji; Disa M. Hynsjo; Ivan Vidangos
  2. Homoploutia: Top Labor and Capital Incomes in the United States, 1950-2020 By Yonatan Berman; Branko Milanovic
  3. Reconciling the Conflicting Narratives on Poverty in China By Martin Ravallion; Shaohua Chen
  4. On Immigration and Native Entrepreneurship By Harriet Duleep; David A. Jaeger; Peter McHenry
  5. Maternal depression and child human capital: A genetic instrumental-variable approach By Giorgia Menta; Anthony Lepinteur; Andrew Clark; Simone Ghislandi; Conchita Ambrosio
  6. The allocation of after-school time and child soxio-emotional skills By Elena Claudia Meroni; Daniela Piazzalunga; Chiara Pronzato
  7. What Do Happiness Data Mean? Theory and Survey Evidence By Daniel J. Benjamin; Jakina Debnam Guzman; Marc Fleurbaey; Ori Heffetz; Miles S. Kimball
  8. The Wife's Protector: A Quantitative Theory Linking Contraceptive Technology with the Decline in Marriage By Jeremy Greenwood; Nezih Guner; Karen A. Kopecky
  9. Women’s Voice on Redistribution: from Gender Norms to Taxation By Monica Bozzano; Paola Profeta; Riccardo Puglisi; Simona Scabrosetti
  10. Gender Equality and Inclusive Growth By Raquel Fernández; Asel Isakova; Francesco Luna; Barbara Rambousek

  1. By: Joseph G. Altonji; Disa M. Hynsjo; Ivan Vidangos
    Abstract: We examine what determines the family income that men and women experience over their adult lives. To this end, we estimate a dynamic model of earnings, nonlabor income, fertility, marriage, and divorce. We use the model to address a number of important questions in labor and family economics, including the effects of education and unobserved permanent characteristics on marital status and on spouse characteristics conditional on marriage. We estimate the dynamic response of wage rates, work hours, earnings, marriage and spouse characteristics and family income to various shocks. Marital status has a much larger effect on family income for women than men, while labor market shocks to men are more important than shocks to women. Marital sorting plays a major role in the return to education and permanent wages, especially for women. We use the model to provide gender-specific estimates of the contribution of education, permanent wages, labor market shocks, spouse characteristics, and marital histories to the variance of family income at a given age and over a lifetime.
    JEL: D1 D31 J01 J10 J12 J16 J31
    Date: 2021–01
  2. By: Yonatan Berman (London Mathematical Laboratory, Stone Center on Socio-Economic Inequality, The Graduate Center - CUNY Graduate Center - CUNY - City University of New York [New York]); Branko Milanovic (The Graduate Center - CUNY Graduate Center - CUNY - City University of New York [New York], Stone Center on Socio-Economic Inequality, International Inequalities Institute)
    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.
    Keywords: income inequality,homoploutia,political economy
    Date: 2020–12
  3. By: Martin Ravallion (Department of Economics, Georgetown University); Shaohua Chen
    Abstract: The widely held view that China has greatly reduced income poverty over the last 40 years does not accord with all the evidence. The paper tries to reconcile the conflicting findings. The fact that strongly-relative measures show rising poverty is easily understood, since such measures depend solely on relative distribution, and inequality in China has been rising until recently. More surprising, and revealing, is the story told by the official lines, which were revised twice since the original 1985 line. The paper shows that the official lines are neither absolute nor strongly relative. Rather, they are weakly relative, with a positive elasticity to the mean that is less than unity. Along with rising inequality, this feature slowed the pace of measured poverty reduction when compared to absolute measures. Nonetheless, substantial progress against poverty is indicated, as we confirm using our independent, and higher, weakly-relative lines calibrated to cross-country data. Classification- I32, O15
    Keywords: China, poverty lines, relative income
    Date: 2021–03–16
  4. By: Harriet Duleep (William & Mary, IZA, and GLO); David A. Jaeger (University of St. Andrews, CReAM, IZA, and CEPR); Peter McHenry (William & Mary and GLO)
    Abstract: We present a novel theory that immigrants facilitate innovation and entrepreneurship by being willing and able to invest in new skills. Immigrants whose human capital is not immediately transferable to the host country face lower opportunity costs of investing in new skills or methods and will be more exible in their human capital investments than observationally equivalent natives. Areas with large numbers of immigrants may therefore lead to more entrepreneurship and innovation, even among natives. We provide empirical evidence from the United States that is consistent with the theory's predictions.
    Keywords: immigration, innovation, entrepreneurship, human capital
    JEL: J15 J24 J39 J61 L26
    Date: 2021–03
  5. By: Giorgia Menta (University of Luxembourg [Luxembourg]); Anthony Lepinteur (University of Luxembourg [Luxembourg]); Andrew Clark (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - 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); Simone Ghislandi (Bocconi University [Milan, Italy]); Conchita Ambrosio (University of Luxembourg [Luxembourg])
    Abstract: We here address the causal relationship between maternal depression and child human capital using UK cohort data. We exploit the conditionally-exogenous variation in mothers' genomes in an instrumental-variable approach, and describe the conditions under which mother's genetic variants can be used as valid instruments. An additional episode of maternal depression between the child's birth up to age nine reduces both their cognitive and non-cognitive skills by 20 to 45% of a SD throughout adolescence. Our results are robust to a battery of sensitivity tests addressing, among others, concerns about pleiotropy and the maternal transmission of genes to her child.
    Keywords: Mendelian Randomisation,Maternal Depression,Human Capital,Instrumental Variables,ALSPAC
    Date: 2021–02
  6. By: Elena Claudia Meroni; Daniela Piazzalunga; Chiara Pronzato
    Abstract: In this paper, we study the effect of the allocation of after-school time on children’s non cognitive development, using data from the Millennium Cohort Study (UK) and focusing on children aged 7-11 years old. We classify the time spent outside of school into seven groups of activities and evaluate their impact on five socio-emotional skills drawn from the Strength and Difficulties questionnaire, taking advantage of the panel structure of the data. We then test the robustness of our estimates against endogeneity issues. Time spent on sports, studying, reading, tidying up, and active time with parents have beneficial effects, while video-screen time and extra hours at school have harmful ones.
    Keywords: child time use, extra-curricular activities, non-cognitive development, socio emotional skills, omitted variable bias, reverse causality.
    JEL: J13 J24 I24 D10
    Date: 2021
  7. By: Daniel J. Benjamin; Jakina Debnam Guzman; Marc Fleurbaey; Ori Heffetz; Miles S. Kimball
    Abstract: What utility notion do self-reported well-being (SWB) questions measure? We clarify the assumptions that underlie existing applications regarding the (i) life domains, (ii) time horizons, and (iii) other-regarding preferences captured by SWB data. We ask survey respondents what they had in mind regarding (i)–(iii) when answering commonly used—life satisfaction, happiness, ladder—and new SWB questions. Respondents put most weight on the present and on themselves—but not enough to interpret SWB data as measuring notions of flow utility and self-centered utility. We find differences across SWB questions and across sociodemographic groups. We outline actionable suggestions for SWB researchers.
    JEL: D69 D90 I31
    Date: 2021–02
  8. By: Jeremy Greenwood (University of Pennsylvania); Nezih Guner (CEMFI, Centro de Estudios Monetarios y Financieros); Karen A. Kopecky (FRB Atlanta)
    Abstract: The 19th and 20th centuries saw a transformation in contraceptive technologies and their take up. This led to a sexual revolution, which witnessed a rise in premarital sex and out-of-wedlock births, and a decline in marriage. The impact of contraception on married and single life is analyzed here both theoretically and quantitatively. The analysis is conducted using a model where people search for partners. Upon ?nding one, they can choose between abstinence, marriage, and a premarital sexual relationship. The model is confronted with some stylized facts about premarital sex and marriage over the course of the 20th century. Some economic history is also presented.
    Keywords: Age of marriage, contraceptive technology, history, never-married population, number of partners, out-of-wedlock births, premarital sex, singles.
    Date: 2019–12
  9. By: Monica Bozzano (Università di Pavia); Paola Profeta (Università Bocconi, Axa Research Lab on Gender Equality, Dondena Centre for Research on Social Dynamics and Public Policies Università Bocconi); Riccardo Puglisi (Università di Pavia); Simona Scabrosetti (Università di Pavia, Dondena Centre for Research on Social Dynamics and Public Policies Università Bocconi)
    Abstract: Gender norms, i.e. the role of men and women in the society, are a fundamental channel through which culture may influence preferences for redistribution and public policies. We consider both cross-country and individual level evidence on this mechanism. We find that in countries that are historically more gender-equal the tax system today is more redistributive. At the individual level, we find that in more gender equal countries gender differences in redistributive preferences are significantly larger. This effect is driven by women becoming systematically more favorable to redistribution, while there are no significant changes for men. Interestingly, there is no gender-based difference in preferences for redistribution among left-leaning citizens, while this difference is significant among moderates in the expected direction: ideologically moderate women are more favorable to redistribution than moderate men, and this effect is even stronger among right-leaning individuals.
    Keywords: gender inequality, comparative public finance, tax mix, institutions, historical origins
    JEL: H10 H20 N30 Z18
    Date: 2021–03
  10. By: Raquel Fernández; Asel Isakova; Francesco Luna; Barbara Rambousek
    Abstract: This paper considers various dimensions and sources of gender inequality and presents policies and best practices to address these. With women accounting for fifty percent of the global population, inclusive growth can only be achieved if it promotes gender equality. Despite recent progress, gender gaps remain across all stages of life, including before birth, and negatively impact health, education, and economic outcomes for women. The roadmap to gender equality has to rely on legal framework reforms, policies to promote equal access, and efforts to tackle entrenched social norms. These need to be set in the context of arising new trends such as digitalization, climate change, as well as shocks such as pandemics.
    Keywords: Women;Gender inequality;Gender;Health;Education;gender gap,inequality,wage gap,wage segregation,gender discrimination,active labor market policies,gender budgeting,GGGI: Global Gender Gap Index,inclusive growth,WP,fiscal policy,parental leave,justice system,gender earnings gap,age-employment profile,commonwealth country
    Date: 2021–03–04

This nep-ltv issue is ©2021 by Maximo Rossi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.