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on Unemployment, Inequality and Poverty |
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Issue of 2021‒06‒14
eleven papers chosen by |
| By: | Daruich, Diego; Fernández, Raquel |
| Abstract: | The idea of universal basic income (UBI)---a set income that is given to all without any conditions---is making an important comeback but there is no real evidence regarding its long-term consequences. This paper provides a very inexpensive evaluation of such a policy by studying its dynamic consequences in a general equilibrium model with imperfect capital markets and labor market shocks, in which households make decisions about education, savings, labor supply, and with intergenerational linkages via skill formation. The steady state of the model is estimated to match US household data. We find that a UBI policy that gives all households a yearly income equivalent to the poverty line level has very different welfare implications for those alive when the policy is introduced relative to future generations. While a majority of adults (primarily older non-college workers) would vote in favor of introducing UBI, all future generations (operating behind the veil of ignorance) would prefer to live in an economy without UBI. The expense of the latter leads to lower skill formation and education, requiring even higher tax rates over time. Modeling automation as an increased probability of being hit by an ``out-of-work'' shock, the model is also used to provide insights on how the benefits of UBI change as the environment becomes riskier. The results suggest that UBI may be a useful transitional policy to help current individuals whose skills are more likely to become obsolete and are unprepared for the increased risk, while, simultaneously, education policies may be implemented to increase the likelihood that future cohorts remain productive and employed. |
| Keywords: | Human Capital; Labor Supply; taxation; universal basic income |
| JEL: | H24 H31 I38 J24 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14869&r= |
| By: | Jenkins, Stephen P. (London School of Economics); Rios-Avila, Fernando (Levy Economics Institute) |
| Abstract: | Researchers use finite mixture models to analyze linked survey and administrative data on labour earnings (or similar variables), taking account of various types of measurement error in each data source. Different combinations of error-ridden and/or error-free observations characterize latent classes. Latent class probabilities depend on the probabilities of the different types of error. We introduce a set of Stata commands to fit a general class of finite mixture models to fit to linked survey-administrative data We also provide post-estimation commands for assessment of reliability, marginal effects, data simulation, and prediction of hybrid earnings variables that combine information from both data sources. |
| Keywords: | linked survey and administrative data, measurement error, finite mixture models |
| JEL: | C81 C83 D31 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14404&r= |
| By: | Roman, Monica; Zimmermann, Klaus F.; Plopeanu, Aurelian-Petruș |
| Abstract: | While under communism, identity-providing religion was suppressed, religiosity is strong today even among the youth in post-communist countries. This provides an appropriate background to investigate how external and internal religiosity relates to addictive behaviors like smoking, drinking and drugs among the young. This study shows that not religion as such or internal religiosity, but largely observable (external) religiosity prevents them from wallowing those vices |
| Keywords: | addictive behavior,Orthodox,external and internal religiosity,youth,smoking,drinking,drugs,Romania |
| JEL: | I12 N34 Z12 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:859&r= |
| By: | Alvaredo, Facundo; Cogneau, Denis; Piketty, Thomas |
| Abstract: | In this article we assess income inequality across French and British colonial empires between 1920 and 1960. For the first time, income tax tabulations are exploited to assess the case studies of French Algeria, Tunisia, Cameroon, and Vietnam, which we compare to British colonies and dominions. As measured by top income shares, inequality was high in colonies. It fell after WWII, but stabilized at much higher levels than in mainland France or the United Kingdom in the 1950s. European settlers or expatriates comprised the bulk of top income earners, and only a minority of autochthons could compete in terms of income, particularly in Africa. Top income shares were no higher in settlement colonies, not only because those territories were wealthier but also because the average European settler was less rich than the average European expatriate. Inequality between Europeans in colonies was similar to (or even below) that of the metropoles. In settlement colonies, the post-WWII fall in income inequality can be explained by a fall in inequality between Europeans, mirroring that of the metropoles, and does not imply that the European/autochthon income gap was reduced. |
| Keywords: | Africa; Asia; Colonialism; inequality; Top incomes |
| JEL: | N3 N35 N37 O15 O53 O55 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14969&r= |
| By: | Heathcote, Jonathan; Perri, Fabrizio; Violante, Giovanni L. |
| Abstract: | We document that declining hours worked are the primary driver of widening inequality in the bottom half of the male labor earnings distribution in the United States over the past 52 years. This decline in hours is heavily concentrated in recessions: hours and earnings at the bottom fall sharply in recessions and do not fully recover in subsequent expansions. Motivated by this evidence, we build a structural model to explore the possibility that recessions cause persistent increases in inequality; that is, that the cycle drives the trend. The model features skill-biased technical change, which implies a trend decline in low-skill wages relative to the value of non-market activities. With this adverse trend in the background, recessions imply a potential double-whammy for low skilled men. This group is disproportionately likely to experience unemployment, which further reduces skills and potential earnings via a scarring effect. As unemployed low skilled men give up job search, recessions generate surges in non-participation. Because non-participation is highly persistent, earnings inequality remains elevated long after the recession ends. |
| Keywords: | Earnings Losses upon Displacement; Non Participation; Recession; Skill Biased Technological Change; Zero Earnings |
| JEL: | E24 E32 J24 J64 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14870&r= |
| By: | Becker, Sascha O.; Rubin, Jared; Woessmann, Ludger |
| Abstract: | This chapter surveys the recent social science literature on religion in economic history, covering both socioeconomic causes and consequences of religion. Following the rapidly growing literature, it focuses on the three main monotheisms-Judaism, Christianity, and Islam-and on the period up to WWII. Works on Judaism address Jewish occupational specialization, human capital, emancipation, and the causes and consequences of Jewish persecution. One set of papers on Christianity studies the role of the Catholic Church in European economic history since the medieval period. Taking advantage of newly digitized data and advanced econometric techniques, the voluminous literature on the Protestant Reformation studies its socioeconomic causes as well as its consequences for human capital, secularization, political change, technology diffusion, and social outcomes. Works on missionaries show that early access to Christian missions still has political, educational, and economic consequences in present-day Africa, Asia, and Latin America. Much of the economics of Islam focuses on the role that Islam and Islamic institutions played in political-economy outcomes and in the "long divergence" between the Middle East and Western Europe. Finally, cross-country analyses seek to understand the broader determinants of religious practice and its various effects across the world. We highlight three general insights that emerge from this literature. First, the monotheistic character of the Abrahamic religions facilitated a close historical interconnection of religion with political power and conflict. Second, human capital often played a leading role in the interconnection between religion and economic history. Third, many socioeconomic factors matter in the historical development of religions. |
| Keywords: | Christianity; economic history; Education; Finance; Islam; Judaism; persecution; political economy; specialization; Trade |
| JEL: | I15 I25 J15 N00 Z12 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14894&r= |
| By: | Bargain, Olivier (University of Aix-Marseille II); Lacroix, Guy (Université Laval); Tiberti, Luca (Partnership for Economic Policy (pep)) |
| Abstract: | Welfare analyses conducted by policy practitioners around the world usually rely on equivalized or per-capita expenditures and ignore the extent of within-household inequality. Recent advances in the estimation of collective models suggest ways to retrieve the complete sharing process within families using homogeneity assumptions (typically preferences stability upon exclusive goods across individuals or household types) and the observation of exclusive goods. So far, the prediction of these models has not been validated, essentially because intrahousehold allocation is seldom observed. We provide such a validation by leveraging a unique dataset from Bangladesh, which contains information on the fully individualized expenditures of each family member. We also test the core assumption (efficiency) and homogeneity assumptions used for identification. It turns out that the collective model predicts individual resources reasonably well when using clothing, i.e., one of the rare goods commonly assignable to male, female and children in standard expenditure surveys. It also allows identifying poor individuals in non-poor households while the traditional approach understates poverty among the poorest individuals. |
| Keywords: | collective model, Engel Curves, Rothbarth Method, sharing rule |
| JEL: | D11 D12 I31 J12 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14406&r= |
| By: | Sevilla, Almudena; Smith, Sarah |
| Abstract: | The status of women in economics in the US has come increasingly under the spotlight. We exploit high quality administrative data to paint the first comprehensive picture of the status of women in UK academic economics departments in research-intensive universities. Our evidence indicates that, as in the US, women in economics are under-represented and are paid less than men. The issues facing women in economics in the UK are similar to other disciplines particularly STEM but have received less national policy attention to date. We conclude with a discussion of interventions that might improve the status of women in academia and we present new evidence that a UK academic diversity programme (Athena Swan) has narrowed the gender pay gap at a senior level. |
| Keywords: | Academia; Gender; gender wage gap; Women in Economics |
| JEL: | A14 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15034&r= |
| By: | Bossert, Walter; D'Ambrosio, Conchita; Weber, Shlomo |
| Abstract: | We present a unified approach to the design of social index numbers. Our starting point is a model that employs an exogenously given partition of the population into subgroups. A general parameterized class of group-dependent measures of deprivation is characterized, based on the differences between the income (or wealth) levels of an individual and those who are better off. We then continue to show that the general structure of our class is capable of accommodating a plethora of indices, including measures of inequality and polarization as well as distance-based measures of phenomena such as diversity and fractionalization. |
| Keywords: | diversity; fractionalization; Group-dependent deprivation; inequality; Polarization; social index numbers |
| JEL: | D31 D63 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14994&r= |
| By: | Daniela Del Boca; Noemi Oggero; Paola Profeta; Maria Cristina Rossi |
| Abstract: | The COVID-19 pandemic has had a dramatic impact on families’ lives, with parents all over the world struggling to meet the increased demands of housework, childcare and home-schooling. Much of the additional burden has been shouldered by women, particularly in countries with a traditionally uneven division of household labor. Yet the dramatic increase in remote work from home since the pandemic also has the potential to increase paternal involvement in family life and thus to redress persistent domestic gender role inequalities. This effect depends on the working arrangements of each partner, whether working remotely, working at their usual workplace or ceasing work altogether. We examine the role of working arrangements during the pandemic on the traditional division of household labor in Italy using survey data from interviews with a representative sample of working women conducted during the two waves of COVID-19 (April and November 2020). Our data show that the gender gap in household care related activities was widest during the first wave of the pandemic, and although it was less pronounced during the second wave, it was still higher than pre-COVID-19. The time spent by women on housework, childcare, and assisting their children with distance learning did not depend on their partners’ working arrangements. Conversely, men spent fewer hours helping with the housework and distance learning when their partners were at home. It is interesting, however, that although men who worked remotely or not at all did devote more time to domestic chores and child care, the increased time they spent at home did not seem to lead to a reallocation of couples’ roles in housework and child care. Finally, we find that working arrangements are linked to women’s feelings of uncertainty, with heterogeneous effects by level of education. |
| Keywords: | Covid-19, work arrangements, housework, childcare, distance learning |
| JEL: | J13 J16 J21 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9125&r= |
| By: | Victor Klockmann (Goethe University Frankfurt, Theodor-W.-Adorno-Platz 4, 60323 Frankfurt, Germany. Center for Humans & Machines, Max Planck Institute for Human Development, Lentzeallee 94, 14195 Berlin, Germany); Alicia von Schenk (Goethe University Frankfurt, Theodor-W.-Adorno-Platz 4, 60323 Frankfurt, Germany. Center for Humans & Machines, Max Planck Institute for Human Development, Lentzeallee 94, 14195 Berlin, Germany.); Marie Claire Villeval (Univ Lyon, CNRS, GATE UMR 5824, 93 Chemin des Mouilles, F-69130, Ecully, France. IZA, Bonn, Germany) |
| Abstract: | Humans shape the behavior of artificially intelligent algorithms. One mechanism is the training these systems receive through the passive observation of human behavior and the data we constantly generate. In a laboratory experiment with a sequence of dictator games, we let participants’ choices train an algorithm. Thereby, they create an externality on future decision making of an intelligent system that affects future participants. We test how information on training artificial intelligence affects the prosociality and selfishness of human behavior. We find that making individuals aware of the consequences of their training on the well-being of future generations changes behavior, but only when individuals bear the risk of being harmed themselves by future algorithmic choices. Only in that case, the externality of artificially intelligence training induces a significantly higher share of egalitarian decisions in the present. |
| Keywords: | Artificial Intelligence, Morality, Prosociality, Generations, Externalities |
| JEL: | C49 C91 D10 D62 D63 O33 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:2110&r= |