nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2021‒08‒16
nine papers chosen by
Maximo Rossi
Universidad de la República

  1. Measuring UK top incomes By Advani, Arun; Summers, Andy; Tarrant, Hannah
  2. The Lasting Effects of Early Childhood Education on Promoting the Skills and Social Mobility of Disadvantaged African Americans By García, Jorge Luis; Heckman, James J.; Ronda, Victor
  3. Welfare Effects of Time Reallocation: Would Ending Daylight Saving Time Affect Wellbeing? By Costa-Font, Joan; Flèche, Sarah; Pagan, Ricardo
  4. Biden, COVID and Mental Health in America By David G. Blanchflower; Alex Bryson
  5. Wage distribution within the Swedish State Railways, 1877–1951: Material and methods By Hamark, Jesper; Turner, Russell
  6. Intergenerational Educational Mobility – The Role of Non-cognitive Skills By Adamecz-Völgyi, Anna; Henderson, Morag; Shure, Nikki
  7. Poverty in Latin America By Leonardo Gasparini; María Emma Santos; Leopoldo Tornarolli
  8. Welfare resilience at the onset of the COVID-19 pandemic in a selection of European countries: impact on public finance and household incomes By Cantó, Olga; Figari, Francesco; Fiorio, Carlo V.; Kuypers, Sarah; Marchal, Sarah; Romaguera-de-la-Cruz, Marina; Tasseva, Iva V.; Verbist, Gerlinde
  9. Trust and trustworthiness after negative random shocks By Hernan Bejarano; Joris Gillet; Ismael Rodriguez-Lara

  1. By: Advani, Arun (University of Warwick, CAGE Research Centre, the Institute for Fiscal Studies (IFS), and the LSE International Inequalities Institute (LSE III)); Summers, Andy (?London School of Economics, LSE III, CAGE and IFS.); Tarrant, Hannah (LSE III)
    Abstract: We compare two approaches to measuring UK top income shares—the share of income going to particular subgroups, such as the top 1%. We set out four criteria that an ideal top share series should satisfy: (i) comparability between numerator and denominator; (ii) comparability over time; (iii) international comparability; and (iv) practical sustainability. Our preferred approach meets three of these; by contrast the approach currently used to produce UK fiscal income series meets none of them. Changing to our preferred approach matters quantitatively- the share of income going to the top 1% is 2 percentage points higher, but rising more slowly, than under the alternative.
    Keywords: income inequality, measurement, national accounts, top shares JEL Classification: D31, D63, E01, H2
    Date: 2020
  2. By: García, Jorge Luis (Clemson University); Heckman, James J. (University of Chicago); Ronda, Victor (Aarhus University)
    Abstract: This paper demonstrates multiple beneficial impacts of a program promoting inter-generational mobility for disadvantaged African-American children and their children. The program improves outcomes of the first-generation treatment group across the life cycle, which translates into better family environments for the second generation leading to positive intergenerational gains. There are long-lasting beneficial program effects on cognition through age 54, contradicting claims of fadeout that have dominated popular discussions of early childhood programs. Children of the first-generation treatment group have higher levels of education and employment, lower levels of criminal activity, and better health than children of the first-generation control group.
    Keywords: early childhood education, intergenerational mobility, racial inequality, social mobility
    JEL: J13 I28 C93 H43
    Date: 2021–07
  3. By: Costa-Font, Joan (London School of Economics); Flèche, Sarah (Aix-Marseille University); Pagan, Ricardo (University of Malaga)
    Abstract: Daylight Saving Time (DST) is currently implemented by more than seventy countries, yet we do not have a clear knowledge of how it affects individuals' welfare. Using a regression discontinuity design combined with a differences-in-differences approach, we find that the Spring DST causes a significant decline in life satisfaction. By inducing a reallocation of time, the transition into DST deteriorates sleep and increases time stress, which in turn affects physical and emotional health. After performing a simple cost-benefit analysis, we find evidence suggestive that ending DST would exert a positive effect on welfare, namely the wellbeing costs associated with DST exceed its benefits.
    Keywords: Daylight Saving Time, wellbeing, health, sleep, time stress
    JEL: I18 K2 I31
    Date: 2021–07
  4. By: David G. Blanchflower; Alex Bryson
    Abstract: Using US Census Household Pulse Survey data for the period April 2020 to June 2021 we track the evolution of the mental health of nearly 2.3 million Americans during the COVID pandemic. We find anxiety, depression and worry peaked in November 2020, coinciding with the Presidential election. The taking of prescription drugs for mental health conditions peaked two weeks later in December 2020. Mental health improved subsequently such that by April 2021 it was better than it had been a year previously. The probability of having been diagnosed with COVID did not rise significantly in the first half of 2021 but COVID infection rates were higher among the young than the old. COVID diagnoses were significantly lower in States that had voted for Biden in the Presidential Election. The probability of vaccination rose with age, was considerably higher in Biden states, and rose precipitously over the period among the young and old. Anxiety was higher among people in Biden states, whether they had been diagnosed or not, and whether they were vaccinated or not. The association between anxiety and depression and having had COVID was not significant in Biden or Trump states but being vaccinated was associated with lower anxiety and depression, with the effect being larger in Biden states. Whilst being in paid work was associated with lower anxiety, worry and depression and was associated with higher vaccination rates, it also increased the probability of having had COVID.
    JEL: I1 I3
    Date: 2021–07
  5. By: Hamark, Jesper (Department of Economic History, School of Business, Economics and Law, Göteborg University); Turner, Russell (Department of Economic History, School of Business, Economics and Law, Göteborg University)
    Abstract: For nine decades, the Swedish State Railways (SJ) produced wage records containing all its permanent employees. SJ employed more people than any private employer in Sweden, and the records contain individual-level information across hundreds of occupations: full name, yearly wage, occupational status, year and date of birth, occupational status, time of employment at SJ, etc. This paper serves as a background to a project on wage distribution within SJ, with the aim of tracking the development of, on the one hand, occupational or class-based wage inequality and, on the other, gender-based wage inequality. In this paper, we present the source material in detail, discuss its strengths and weaknesses, and describe the methods used to develop and process the wage records into data. Special attention is given to the adoption and application of HISCLASS, the historical, international social class scheme.
    Keywords: Wage distribution; HISCLASS; relative wages; white-collar wages; gender wage gap; the Swedish State Railways; Statens Järnvägar
    JEL: J24 J31 J71 N83 N84
    Date: 2021–06–01
  6. By: Adamecz-Völgyi, Anna (UCL Institute of Education); Henderson, Morag (UCL Institute of Education); Shure, Nikki (University College London)
    Abstract: While it has been shown that university attendance is strongly predicted by parental education, we know very little about why some potential 'first in family' or first-generation students make it to university and others do not. This paper looks at the role of non-cognitive skills in the university participation of this disadvantaged group in England. We find that conditional on national, high-stakes exam scores and various measures of socioeconomic background, having higher levels of non-cognitive skills, specifically locus of control, academic self-concept, work ethic, and self-esteem, in adolescence is positively related to intergenerational educational mobility to university. Our results indicate that having higher non-cognitive skills helps potential first in family university students to compensate for their relative disadvantage, and they are especially crucial for boys. The most important channel of this relationship seems to be through educational attainment at the end of compulsory schooling.
    Keywords: socioeconomic gaps, intergenerational educational mobility, higher education, non-cognitive skills
    JEL: I24 J24
    Date: 2021–07
  7. By: Leonardo Gasparini (CEDLAS-IIE-FCE-UNLP and CONICET); María Emma Santos (IIESS-Departamento de Economía-Universidad Nacional del Sur and CONICET.); Leopoldo Tornarolli (CEDLAS-IIE-FCE-UNLP)
    Abstract: This chapter discusses the measurement of monetary and multidimensional poverty in Latin America, and documents the main patterns and trends. By providing an updated assessment of the level, changes and characteristics of poverty in the region we expect to contribute to the more ambitious debate on its determinants and policy implications.
    JEL: I3 I32
    Date: 2021–08
  8. By: Cantó, Olga; Figari, Francesco; Fiorio, Carlo V.; Kuypers, Sarah; Marchal, Sarah; Romaguera-de-la-Cruz, Marina; Tasseva, Iva V.; Verbist, Gerlinde
    Abstract: This paper assesses the impact on household incomes of the COVID-19 pandemic and governments’ policy responses in April 2020 in four large and severely hit EU countries: Belgium, Italy, Spain and the UK. We provide comparative evidence on the level of relative and absolute welfare resilience at the onset of the pandemic, by creating counterfactual scenarios using the European tax-benefit model EUROMOD combined with COVID-19-related household surveys and timely labor market data. We find that income poverty increased in all countries due to the pandemic while inequality remained broadly the same. Differences in the impact of policies across countries arose from four main sources: the asymmetric dimension of the shock by country, the different protection offered by each tax-benefit system, the diverse design of discretionary measures and differences in the household level circumstances and living arrangements of individuals at risk of income loss in each country.
    Keywords: Covid-19; cross-country comparison; household incomes; income protection; tax-benefit microsimulation; coronavirus
    JEL: D31 H55 I32
    Date: 2021–07–01
  9. By: Hernan Bejarano (Center of Economics Research and Teaching, Economics Division (CIDE), Mexico.); Joris Gillet (Middlesex University, Business School.); Ismael Rodriguez-Lara (Department of Economic Theory and Economic History, University of Granada.)
    Abstract: We experimentally investigate the effect of a negative endowment shock that can cause inequality in a trust game. Our goal is to assess whether different causes of inequality have different effects on trust and trustworthiness. In our trust game, we vary whether there is inequality (in favor of the second mover) or not and whether the inequality results from a random negative shock (i.e., the outcome of a die roll) or exists from the outset. Our findings suggest that inequality causes firstmovers to send more of their endowment and second-movers to return more. However, we do not find support for the hypothesis that the cause of the inequality matters. Behavior after the occurrence of a random shock is not significantly different from the behavior in treatments where the inequality exists from the outset. Our results highlight the need to be cautious when interpreting the effects on trust and trustworthiness of negative random shocks in the field (such as natural disasters). Our results suggest that these effects are primarily driven by the inequality caused by the shock and not by any of the additional characteristics of the shock, like saliency or uncertainty.
    Keywords: Trust game, endowment heterogeneity, random shocks, inequality aversion, experimental economics.
    JEL: C91 D02 D03 D69
    Date: 2021–08–01

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