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on Unemployment, Inequality and Poverty |
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Issue of 2021‒05‒10
six papers chosen by |
| By: | Bosworth, Steven; Snower, Dennis J. |
| Abstract: | This paper models the welfare consequences of social fragmentation arising from technological advance. We start from the premise that technological progress falls primarily on market-traded commodities rather than prosocial relationships, since the latter intrinsically require the expenditure of time and thus are less amenable to productivity increases. Since prosocial relationships require individuals to identify with others in their social group whereas marketable commodities are commonly the objects of social status comparisons, a tradeoff arises between in-group affliation and inter-group status comparisons. People consequently narrow the bounds of their social groups, reducing their prosocial relationships and extending their status-seeking activities. As prosocial relationships generate positive externalities whereas status-seeking activities generate negative preference externalities, technological advance may lead to a particular type of "decoupling" of social welfare from material prosperity. Once the share of status goods in total production exceeds a crucial threshold, technological advance is shown to be welfare-reducing. |
| Keywords: | Bowling Alone; Conspicuous consumption; decoupling; growth; social fragmentation |
| JEL: | D63 D69 D71 E71 I39 O33 Z10 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15665&r= |
| By: | Figlio, David; Giuliano, Paola; Marchingiglio, Riccardo; Ozek, Umut; Sapienza, Paola |
| Abstract: | We study the effect of exposure to immigrants on the educational outcomes of US-born students, using a unique dataset combining population-level birth and school records from Florida. This research question is complicated by substantial school selection of US-born students, especially among White and comparatively affluent students, in response to the presence of immigrant students in the school. We propose a new identification strategy to partial out the unobserved non-random selection into schools, and find that the presence of immigrant students has a positive effect on the academic achievement of US-born students, especially for students from disadvantaged backgrounds. Moreover, the presence of immigrants does not affect negatively the performance of affluent US-born students, who typically show a higher academic achievement compared to immigrant students. We provide suggestive evidence on potential channels. |
| Keywords: | Educational Attainment; Immigrant students |
| JEL: | I21 I24 J15 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15933&r= |
| By: | Liza Charroin (Centre d'Economie de la Sorbonne - Université Paris 1); Bernard Fortin (Laval University (Québec), CIRPEE, CIRANO and IZA (Bonn)); Marie Claire Villeval (Université de Lyon, CNRS, GATE and IZA (Bonn)) |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:21011&r= |
| By: | Carlana, Michela; La Ferrara, Eliana |
| Abstract: | In response to the COVID-19 outbreak, the governments of most countries ordered the closure of schools, potentially exacerbating existing learning gaps. This paper evaluates the effectiveness of an intervention implemented in Italian middle schools that provides free individual tutoring online to disadvantaged students during lock-down. Tutors are university students who volunteer for 3 to 6 hours per week. They were randomly assigned to middle school students, from a list of potential beneficiaries compiled by school principals. Using original survey data collected from students, parents, teachers and tutors, we find that the program substantially increased students' academic performance (by 0.26 SD on average) and that it significantly improved their socio-emotional skills, aspirations, and psychological well-being. Effects are stronger for children from lower socioeconomic status and, in the case of psychological well-being, for immigrant children. |
| JEL: | I21 I24 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15761&r= |
| By: | Dani Rodrik; Stefanie Stantcheva |
| Abstract: | One of the biggest challenges that countries face today is the very unequal distributions of opportunities, resources, income and wealth across people. Inclusive prosperity – whereby many people from different backgrounds can benefit from economic growth, new technologies, and the fruits of globalization – remains elusive. To address these issues, societies face choices among many different policies and institutional arrangements to try to ensure a proper supply of productive jobs and activities, as well as access to education, financial means, and other endowments that prepare individuals for their participation in the economy. In this paper we offer a simple, organizing framework to think about policies for inclusive prosperity. We provide a comprehensive taxonomy of policies, distinguishing among the types of inequality they address and the stages of the economy where the intervention takes place. The taxonomy clarifies the differences among contending approaches to equity and inclusion and can help analysts assess the impacts and implications of different policies and identify potential gaps. |
| JEL: | A1 E61 H2 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28736&r= |
| By: | Dix-Carneiro, Rafael; Goldberg, Pinelopi Koujianou; Meghir, Costas; Ulyssea, Gabriel |
| Abstract: | We build an equilibrium model of a small open economy with labor market frictions and imperfectly enforced regulations. Heterogeneous firms sort into the formal or informal sector. We estimate the model using data from Brazil, and use counterfactual simulations to understand how trade affects economic outcomes in the presence of informality. We show that: (1) Trade openness unambiguously decreases informality in the tradable sector, but has ambiguous effects on aggregate informality. (2) The productivity gains from trade are understated when the informal sector is omitted. (3) Trade openness results in large welfare gains even when informality is repressed. (4) Repressing informality increases productivity, but at the expense of employment and welfare. (5) The effects of trade on wage inequality are reversed when the informal sector is incorporated in the analysis. (6) The informal sector works as an "unemployment," but not a "welfare buffer" in the event of negative economic shocks. |
| JEL: | F14 F16 J46 O17 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:-85244&r= |