nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2021‒04‒19
seven papers chosen by
Maximo Rossi
Universidad de la República

  1. The Fall in Income Inequality during COVID-19 in Five European Countries By Andrew Clark; Conchita Ambrosio; Anthony Lepinteur
  2. Homophily, Peer Effects, and Dishonesty By Liza Charroin; Bernard Fortin; Marie Claire Villeval
  3. Women's Voice on Redistribution: From Gender Norms to Taxation By Monica Bozzano; Paola Profeta; Riccardo Puglisi; Simona Scabrosetti
  4. Income Distribution in Brazil During the 2010s: A Lost Decade in the Struggle Against Inequality and Poverty By Rogério J. Barbosa; Pedro H. G. Ferreira de Souza; Sergei S. D. Soares
  5. We, the Rich: Inequality, Identity and Cooperation in Complex Societies By Andrea F.M. Martinangeli; Peter Martinsson
  6. Intergenerational Transmission of Lockdown Consequences: Prognosis of the Longer-run Persistence of COVID-19 in Latin America By Guido Neidhöfer; Nora Lustig; Mariano Tommasi
  7. Affirmative action and application strategies: Evidence from field experiments in Columbia By Banerjee, Ritwik; Ibanez, Marcela; Riener, Gerhard; Sahoo, Soham

  1. By: 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); Conchita Ambrosio (University of Luxembourg [Luxembourg]); Anthony Lepinteur (University of Luxembourg [Luxembourg])
    Abstract: We here use panel data from the COME-HERE survey to track income inequality during COVID-19 in France, Germany, Italy, Spain and Sweden. Relative inequality in equivalent household disposable income among individuals changed in a hump-shaped way over 2020. An initial rise from January to May was more than reversed by September. Absolute inequality also fell over this period. As such, policy responses may have been of more benefit for the poorer than for the richer.
    Keywords: COVID-19,COME-HERE,Income Inequality
    Date: 2021–03
  2. By: Liza Charroin; Bernard Fortin; Marie Claire Villeval
    Abstract: If individuals tend to behave like their peers, is it because of conformity, that is, the preference of people to align behavior with the behavior of their peers; homophily, that is, the tendency of people to bond with similar others; or both? We address this question in the context of an ethical dilemma. Using a peer effect model allowing for homophily, we designed a real-effort laboratory experiment in which individuals could misreport their performance to earn more. Our results reveal a preference for conformity and for homophily in the selection of peers, but only among participants who were cheating in isolation. The size of peer effects is similar when identical peers were randomly assigned and when they were selected by individuals. We thus jointly reject the presence of a self-selection bias in the peer effect estimates and of a link strength effect.
    Keywords: , Peer Effects,Homophily,Dishonesty,Self-Selection Bias,Experiment
    JEL: C92 D83 D85 D91
    Date: 2021–04–01
  3. By: Monica Bozzano; Paola Profeta; Riccardo Puglisi; Simona Scabrosetti
    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
  4. By: Rogério J. Barbosa; Pedro H. G. Ferreira de Souza; Sergei S. D. Soares
    Abstract: In this paper we analyze Pesquisa Nacional por Amostra de Domicílios Contínua (PNAD Contínua) Microdata from 2012 to 2018 to document how the mid-decade economic recession reversed the trend of pro-poor growth that dated back to the early 2000s. Since the recession, there was a rise in inequality and poverty levels and aggregate welfare decreased. While average incomes surged from 2017 to 2018, they were still below their peak in 2014. More than 80% of all income growth between 2015 and 2018 accrued to the top 5%. Most distributional statistics suggest Brazil in 2018 was either back at the same levels or even worse-off than in 2012. This paper also relies on decomposition techniques to investigate the immediate causes behind this reversal of fortune. We find that the effects of the recession on the labor market explain a lot of the recent changes, but public transfers also played a role in distributional dynamics – either by action or inaction. Social assistance transfers and unemployment compensation failed to address rising inequality and poverty in any significant way. At the same time, Social Security contributed to surprisingly large increases in inequality due to the rise in pensions to the well-off. Finally, we show that in the past few years poverty rates were much more sensitive to changes in inequality than in average incomes. Indeed, if there were no increase inequality Brazil would have made further progress in reducing poverty even amid the recession.
    Keywords: Inequality, Poverty, Welfare, Income, Income Transfers
    JEL: I3 I32 D31 I38
    Date: 2020–12
  5. By: Andrea F.M. Martinangeli; Peter Martinsson
    Abstract: Inequality not only generates status differentials between rich and poor individuals, it also generates status differentials between groups of different composition and income level. We organise the social structure within which groups are embedded to directly manipulate the processes of categorization, identiï¬ cation and comparison to induce weaker or stronger group identities. How well individuals cooperate within each of such groups will ultimately determine the degree of cooperativeness within the whole society. We ï¬ nd that the impact of inequality on social cooperativeness is as complex as is the social structure itself: cooperation varies with the strength of the group’s identity as predicted by social identity theory. In particular, high endowment homogeneous groups cooperate most and increasingly over time. Low endowment homogeneous groups display intermediate levels of cooperation. Heterogeneous groups cooperate least, a result driven by lack of cooperation on behalf of the rich. When comparing with an analogous fully homogeneous society, we show that the resulting net impact of inequality on social cooperation is not obvious.
    Keywords: experiment, inequality, multiple groups, public goods, social identity
    JEL: C91 H41
    Date: 2019–11
  6. By: Guido Neidhöfer; Nora Lustig; Mariano Tommasi
    Abstract: The shock on human capital caused by COVID-19 is likely to have long lasting consequences, especially for children of low-educated families. Applying a counterfactual exercise we project the effects of school closures and other lockdown policies on the intergenerational persistence of education in 17 Latin American countries. First, we retrieve detailed information on school lockdowns and on the policies enacted to support education from home in each country. Then, we use this information to estimate the potential impact of the pandemic on schooling, high school completion, and intergenerational associations. In addition, we account for educational disruptions related to household income shocks. Our findings show that, despite that mitigation policies were able to partly reduce instructional losses in some countries, the educational attainment of the most vulnerable could be seriously affected. In particular, the likelihood of children from low educated families to attain a secondary schooling degree could fall substantially.
    Keywords: COVID-19, lockdowns, human capital, school closures, intergenerational persistence, education, inequality, Latin America
    JEL: I24 I38 J62
    Date: 2020–12
  7. By: Banerjee, Ritwik; Ibanez, Marcela; Riener, Gerhard; Sahoo, Soham
    Abstract: Affirmative action changes incentives at all stages of the employment process. In this paper, we study the effects of affirmative action statements in job ads on i) the effort expended on the application process and ii) the manifestation of emotions, as measured by the textual analysis of the content of the motivation letter. To this end, we use data from two field experiments conducted in Colombia. We find that in the Control condition, women spend less time in the application process relative to men. Besides, female motivation letters exhibit lower levels of emotion, as measured by valence, arousal, and dominance. However, those differences vanish in the affirmative action treatment when we announced to job-seekers that half of the positions were reserved for women. In the Affirmative Action condition, the time dedicated by women significantly increased and the motivation letters written by the female candidates showed a significant increase in the expression of positive emotions. The results indicate that affirmative action policies can have significant encouraging effects on both effort and appeal of job applications of women, thereby reducing the gender gap in these outcomes.
    Keywords: Gender,Labor economics,Field experiment
    JEL: C91 J15 M52
    Date: 2021

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