nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2021‒05‒17
thirteen papers chosen by
Maximo Rossi
Universidad de la República

  1. Worker Flows and Wage Dynamics: Estimating Wage Growth Without Composition Effects By Carrasco, Raquel; García-Pérez, J. Ignacio; Jimeno, Juan F
  2. Labor contracts, gift-exchange and reference wages: Your gift need not be mine By Hernán Bejarano; Brice Corgnet; Joaquín Gómez-Miñambres
  3. Hate Is Too Great a Burden to Bear: Hate Crimes and the Mental Health of Refugees By Daniel Graeber; Felicitas Schikora
  4. The Great COVID-19 Vaccine Rollout: Behavioral and Policy Responses By Auld, C.; Toxvaerd, F.M.O.
  5. COVID-19 restrictions in the US: wage vulnerability by education, race and gender By Borja Gambau; Juan C. Palomino; Juan G. Rodríguez; Raquel Sebastian
  6. Education and economic growth By Anna Valero
  7. Understanding how socioeconomic inequalities drive inequalities in SARS-CoV-2 infections By Rachid Laajaj; Duncan Webb; Danilo Aristizabal; Eduardo Behrentz; Raquel Bernal; Giancarlo Buitrago; Zulma Cucunubá; Fernando de la Hoz
  8. Altruism born of suffering? The impact of an adverse health shock on pro-social behaviour By Black, Nicole; De Gruyter, Elaine; Petrie, Dennis; Smith, Sarah
  9. Twenty-year economic impacts of deworming. By Hamory, Joan; Miguel, Edward; Walker, Michael; Kremer, Michael; Baird, Sarah
  10. Widows’ Time, Time Stress and Happiness: Adjusting to Loss By Daniel S. Hamermesh; Michał Myck; Monika Oczkowska
  11. School Closures During the 1918 Flu Pandemic By Ager, Philipp; Eriksson, Katherine; Karger, Ezra; Nencka, Peter; Thomasson, Melissa A.
  12. Immigration, crime, and crime (Mis)perceptions By Nicolás Ajzenman; Patricio Domínguez; Raimundo Undurraga
  13. Labor Market Assimilation of South-South Forced Migrants: Evidence from a Small Open Latin American Economy By Javier Torres; Francisco Galarza

  1. By: Carrasco, Raquel; García-Pérez, J. Ignacio; Jimeno, Juan F
    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: Composition Effects; Employment dynamics; wage dynamics
    JEL: J30 J31
    Date: 2020–12
  2. By: Hernán Bejarano (Centro de Investigación y Docencia en Economía de México/Chapman University); Brice Corgnet (EM Lyon Business School); Joaquín Gómez-Miñambres (Lafayette College)
    Abstract: We extend Akerlof’s (1982) gift-exchange model to the case in which reference wages respond to changes in the work environment such as those related to unemployment benefits or workers’ productivity levels. Our model shows that these changes spur disagreements between workers and employers regarding the value of the reference wage. These disagreements tend to weaken the gift- exchange relationship thus reducing production levels and wages. We find support for these predictions in a controlled, yet realistic, workplace environment. Our work also sheds light on several stylized facts regarding employment relationships such as the increased intensity of labor conflicts when economic conditions are unstable.
    Keywords: Gift-exchange incentives self-serving biases reference-dependent utility laboratory experiments labor conflicts
    JEL: C92 D23 M54
    Date: 2021–04
  3. By: Daniel Graeber; Felicitas Schikora
    Abstract: Against a background of increasing violence against non-natives, we estimate the effect of hate crime on refugees’ mental health in Germany. For this purpose, we combine two datasets: administrative records on xenophobic crime against refugee shelters by the Federal Criminal Office and the IAB-BAMF-SOEP Survey of Refugees. We apply a regression discontinuity design in time to estimate the effect of interest. Our results indicate that hate crime has a substantial negative effect on several mental health indicators, including the Mental Component Summary score and the Patient Health Questionnaire-4 score. The effects are stronger for refugees with closer geographic proximity to the focal hate crime and refugees with low country-specific human capital. While the estimated effect is only transitory, we argue that negative mental health shocks during the critical period after arrival have important long-term consequences.
    Keywords: Mental health, hate crime, migration, refugees, human capital
    JEL: I10 J15 J24 F22 O15
    Date: 2021
  4. By: Auld, C.; Toxvaerd, F.M.O.
    Abstract: Using daily data on vaccinations, disease spread, and measures of social interaction from Google Mobility reports aggregated at the country level for 112 countries, we present estimates of behavioral responses to the global rollout of COVID-19 vaccines. We first estimate correlates of the timing and intensity of the vaccination rollout, finding that countries which vaccinated more of their population earlier strongly tended to be richer, whereas measures of the state of pandemic or its death toll up to the time of the initial vaccine rollout had little predictive ability after controlling for income. Estimates of models of social distancing and disease spread suggest that countries which vaccinated more quickly also experienced decreases in some measures of social distancing, yet also lower incidence of disease, and in these countries policy makers relaxed social distancing measures relative to countries which rolled out vaccinations more slowly
    Keywords: Economic epidemiology, econometrics, COVID-19, vaccination
    JEL: I12 C50
    Date: 2021–04–26
  5. By: Borja Gambau (Universidad Complutense de Madrid (Spain).); Juan C. Palomino (University of Oxford (UK), INET and Department of Social Policy and Intervention.); Juan G. Rodríguez (Universidad Complutense de Madrid (Spain), ICAE, EQUALITAS and CEDESOG.); Raquel Sebastian (Universidad Complutense de Madrid (Spain), ICAE and EQUALITAS.)
    Abstract: We study the wage vulnerability to the stay-at-home orders and social distancing measures imposed to prevent COVID-19 contagion in the US by education, race, gender, and state. Under 2 months of lockdown plus 10 months of partial functioning we find that both wage inequality and poverty increase in the US for all social groups and states. For the whole country, we estimate an increase in inequality of 4.1 Gini points and of 9.7 percentage points for poverty, with uneven increases by race, gender, and education. The restrictions imposed to curb the spread of the pandemic produce a double process of divergence: both inequality within and between social groups increase, with education accounting for the largest part of the rise in inequality between groups. We also find that education level differences impact wage poverty risk more than differences by race or gender, making lower-educated groups the most vulnerable while graduates of any race and gender are similarly less exposed. When measuring mobility as the percentile rank change, most women with secondary education or higher move up, while most men without higher education suffer downward mobility. Our findings can inform public policy aiming to address the disparities in vulnerability to pandemic-related shocks across different socioeconomic groups.
    Keywords: COVID-19; inequality; poverty; mobility; United States.
    JEL: D33 I32 J31 O51
    Date: 2021–04
  6. By: Anna Valero
    Abstract: This paper summarises the literature that has linked education and economic growth. It begins with an overview of the key concepts in neoclassical and endogenous growth models, and discussion on how these have been tested in the data. Issues with respect to specification, the measurement of human capital and causality are discussed, together with studies that have sought to addresses these. A more recent and growing literature that explores the links between firm level human capital and productivity, including externalities, is then summarised. Beyond studies that link human capital to economic performance directly, there are numerous studies that have explore the relationships between human capital and the determinants of growth including investment, technology adoption and invention. Key findings from this literature are drawn out, together with a summary of the literature that has linked the activities of universities (key producers of both human capital and innovation) to their local economies. The paper concludes with discussion of policy implications stemming from this body of research, and promising areas for future research.
    Keywords: human capital, growth, innovation
    Date: 2021–04
  7. By: Rachid Laajaj; Duncan Webb; Danilo Aristizabal; Eduardo Behrentz; Raquel Bernal; Giancarlo Buitrago; Zulma Cucunubá; Fernando de la Hoz
    Abstract: Across the world, the SARS-CoV-2 (COVID-19) pandemic has disproportionately affected economically disadvantaged groups. This differential impact has numerous possible explanations, each with significantly different policy implications. We examine, for the first time in a low- or middle-income country, which mechanisms best explain the disproportionate impact of the virus on the poor. Combining an epidemiological model with rich data from Bogotá, Colombia, we show that total infections and inequalities in infections are largely driven by inequalities in the inability to work remotely and in within-home secondary attack rates. Inequalities in isolation behavior are less important but non-negligible, while access to testing and contract-tracing plays practically no role. Interventions that mitigate transmission are often more effective when targeted on socioeconomically disadvantaged groups.
    Keywords: COVID-19, inequality, infections, socioeconomic strata
    JEL: I14 I15 I18 O54
    Date: 2021–05–03
  8. By: Black, Nicole; De Gruyter, Elaine; Petrie, Dennis; Smith, Sarah
    Abstract: 'Altruism born of suffering' (ABS) predicts that, following an adverse life event such as a health shock, individuals may become motivated to act pro-socially. However, this has not yet been examined systematically. Using data from the United States Panel Study of Income Dynamics, we find that a health shock does not lead to a general increase in pro-social behaviour. Instead, ABS is akin to a specific shock that affects giving to health charities, with an increase in the probability of giving and amounts donated to health charities coming at the expense of other non-religious charities.
    JEL: D64 H41 I12
    Date: 2020–12
  9. By: Hamory, Joan; Miguel, Edward; Walker, Michael; Kremer, Michael; Baird, Sarah
    Abstract: Estimating the impact of child health investments on adult living standards entails multiple methodological challenges, including the lack of experimental variation in health status, an inability to track individuals over time, and accurately measuring living standards and productivity in low-income settings. This study exploits a randomized school health intervention that provided deworming treatment to Kenyan children, and uses longitudinal data to estimate impacts on economic outcomes up to 20 y later. The effective respondent tracking rate was 84%. Individuals who received two to three additional years of childhood deworming experienced a 14% gain in consumption expenditures and 13% increase in hourly earnings. There are also shifts in sectors of residence and employment: treatment group individuals are 9% more likely to live in urban areas, and experience a 9% increase in nonagricultural work hours. Most effects are concentrated among males and older individuals. The observed consumption and earnings benefits, together with deworming's low cost when distributed at scale, imply that a conservative estimate of its annualized social internal rate of return is 37%, a high return by any standard.
    Keywords: Kenya, child health, deworming, long-run impacts
    Date: 2021–04–01
  10. By: Daniel S. Hamermesh; Michał Myck; Monika Oczkowska
    Abstract: By age 77 a plurality of women in wealthy Western societies are widows. Comparing older (aged 70+) married women to widows in the American Time Use Survey 2003-18 and linking the data to the Current Population Survey allow inferring the short- and longer-term effects of an arguably exogenous shock—husband’s death—and measuring the paths of adjustment of time use to it. Widows differ from otherwise similar married women, especially from married women with working husbands, by cutting back on home production, mainly food preparation and housework, mostly by engaging in less of it each day, not doing it less frequently. French, Italian, German, and Dutch widows behave similarly. Widows are alone for 2/3 of the time they had spent with their spouses, with a small increase in time with friends and relatives shortly after becoming widowed. Evidence from the European countries shows that widows feel less time stress than married women but are also less satisfied with their lives. Following older women in 18 European countries before and after a partner’s death shows that widowhood reduces their feelings of time pressure. U.S. longitudinal data demonstrate that it increases feelings of depression. Most of the adjustment of time use in response to widowhood occurs within one year of the husband’s death; but feelings of reduced time pressure and of depression persist much longer.
    JEL: I31 J14 J22
    Date: 2021–05
  11. By: Ager, Philipp; Eriksson, Katherine; Karger, Ezra; Nencka, Peter; Thomasson, Melissa A.
    Abstract: The COVID-19 pandemic has reignited interest in responses to the 1918-19 influenza pandemic, the last comparable U.S. public health emergency. During both pandemics, many state and local governments made the controversial decision to close schools. We study the short- and long-run effects of 1918-19 pandemic-related school closures on children. We find precise null effects of school closures in 1918 on school attendance in 1919-20 using newly collected data on the exact timing of school closures for 168 cities in 1918-19. Linking affected children to their adult outcomes in the 1940 census, we also find precise null effects of school closures on adult educational attainment, wage income, non-wage income, and hours worked in 1940. Our results are not inconsistent with an emerging literature that finds negative short-run effects of COVID-19-related school closures on learning. The situation in 1918 was starkly different from today: (1) schools closed in 1918 for many fewer days on average, (2) the 1918 virus was much deadlier to young adults and children, boosting absenteeism even in schools that stayed open, and (3) the lack of effective remote learning platforms in 1918 may have reduced the scope for school closures to increase socioeconomic inequality.
    Keywords: 1918-19 Influenza Pandemic; Educational Attainment; School Closures
    JEL: I18 I26 N32
    Date: 2020–12
  12. By: Nicolás Ajzenman (Sao Paulo School of Economics - FGV); Patricio Domínguez (Inter-American Development Bank); Raimundo Undurraga (University of Chile)
    Abstract: This paper studies the effects of immigration on crime and crime perceptions in Chile, where the foreign-born population more than doubled in the last decade. By using individual-level victimization data, we document null effects of immigration on crime but positive and significant effects on crime-related concerns, which in turn triggered preventive behavioral responses, such as investing in home-security. Our results are robust across a two-way fixed effects model and an IV strategy based on a shift-share instrument that exploits immigration inflows towards destination countries other than Chile. On mechanisms, we examine data on crime-related news on TV and in newspapers, and find a disproportionate coverage of immigrant-perpetrated homicides as well as a larger effect of immigration on crime perceptions in municipalities with a stronger media presence. These effects might explain the widening gap between actual crime trends and public perceptions of crime.
    Keywords: crime immigration crime perception media crime beliefs
    JEL: O15 F22 K1
    Date: 2021–04
  13. By: Javier Torres (Universidad del Pacífico); Francisco Galarza (Universidad del Pacífico)
    Abstract: We study the negative wage premium Venezuelan immigrants face in the Peruvian labor market in 2018, by merging two national household surveys. Consistent with an imperfect transfer of skills, we find that Venezuelans face, on average, a 40% discount on their hourly wage compared to Peruvians. Interestingly, there is heterogeneity in wage premiums across education levels and broad groups of fields of study. The higher the education level, the larger the negative wage premium. Venezuelans with low levels of education could earn a higher hourly wage than Peruvian. Further, Immigrants with careers related to Economics, Administration and Commerce face the least wage discount. Finally, we find that foreign work experience has negligible value in the host country.
    Keywords: Immigration, Economic Assimilation, Wage Gap.
    JEL: J15 J24 J31 J70
    Date: 2021–04

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