nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2021‒09‒06
eleven papers chosen by

  1. The Mid-Life Dip in Well-Being: A Critique By Blanchflower, David G.; Graham, Carol L.
  2. The Role of the Workplace in Ethnic Wage Differentials By John Forth; Nikolaos Theodoropoulos; Alex Bryson
  3. The well-being age U-shape effect in Germany is not flat By Blanchflower, David G.; Piper, Alan
  4. Did COVID-19 Affect the Division of Labor within the Household? Evidence from Two Waves of the Pandemic in Italy By Daniela Del Boca; Noemi Oggero; Paola Profeta; Maria Cristina Rossi
  5. Is that Really a Kuznets Curve? Turning Points for Income Inequality in China By Martin Ravallion; Shaohua Chen
  6. Wage Inequality, Selection and the Evolution of the Gender Earnings Gap in Sweden By Ahrsjö, Ulrika; Niknami, Susan; Palme, Mårten
  7. Trends in inequality within countries using a novel dataset By Carlos Gradín; Annalena Oppel
  8. Bottom Incomes and the Measurement of Poverty: A Brief Assessment of the Literature By Lidia Ceriani; Vladimir Hlasny; Paolo Verme
  9. Inequality of Opportunity and Juvenile Crime By Alejandro Bayas; Nicolas Grau
  10. Feed the children By Laurens Cherchye; Pierre-André Chiappori; Bram De Rock; Charlotte Ringdal; Frederic Vermeulen
  11. The Elusive Explanation for the Declining Labor Share By Gene M. Grossman; Ezra Oberfield

  1. By: Blanchflower, David G.; Graham, Carol L.
    Abstract: A number of studies - including our own - find a mid-life dip in well-being. Yet several papers in the psychology literature claim that the evidence of a U-shape is "overblown" and if there is such a thing that any such decline is "trivial". Others have claimed that the evidence of a U-shape "is not as robust and generalizable as is often assumed," or simply "wrong." We identify 424 studies, mostly published in peer reviewed journals that find U-shapes that these researchers apparently were unaware of. We use data for Europe from the Eurobarometer Surveys (EB), 1980-2019; the Gallup World Poll (GWP), 2005-2019 and the UK's Annual Population Survey, 2016-2019 and the Census Bureau's Household Pulse Survey of August 2021, to examine U-shapes in age in well-being. We find remarkably strong and consistent evidence across countries of statistically significant and non-trivial U-shapes in age with and without socio-economic controls. We show that studies cited by psychologists claiming there are no U-shapes are in error; we reexamine their data and find differently. The effects of the mid-life dip we find are comparable to major life events such as losing a spouse or becoming unemployed. This decline is comparable to half of the unprecedented fall in well-being observed in the UK in 2020 and 2021, during the Covid19 pandemic and lockdown, which is hardly "inconsequential" as claimed.
    Date: 2021
  2. By: John Forth (Bayes Business School, City, University of London, UK); Nikolaos Theodoropoulos (University of Cyprus); Alex Bryson (University College London, UK)
    Abstract: Using matched employer-employee data for Britain, we examine ethnic wage differentials among full-time employees. We find substantial ethnic segregation across workplaces: around three-fifths of workplaces in Britain employ no ethnic minority workers. However, this workplace segregation does not contribute to the aggregate wage gap between ethnic minorities and white employees. Instead, most of the ethnic wage gap exists between observationally equivalent co-workers. Lower pay satisfaction and higher levels of skill mismatch among ethnic minority workers are consistent with discrimination in wage-setting on the part of employers. The use of job evaluation schemes within the workplace is shown to be associated with a smaller ethnic wage gap.
    Keywords: ethnic wage gap; workplace segregation; skill mismatch; pay satisfaction; job evaluation
    JEL: J16 J31 M52 M54
    Date: 2021–09–01
  3. By: Blanchflower, David G.; Piper, Alan
    Abstract: Kassenboehmer and DeNew (2012) claim that there is no well-being age U-shape effect for Germany, when controlling for fixed effects and respondent experience and interviewer characteristics in the German Socio-Economic Panel, 1994-2006. We re-estimate with a longer run of years and restrict the age of respondents to those under seventy and find the well-being age U-shape effect is neither flat nor trivial.
    Keywords: age,ageing,life satisfaction,interviewer characteristics,interviewee experience,fixed effects,panel analysis,GSOEP
    JEL: I31 J14 C42
    Date: 2021
  4. By: Daniela Del Boca (University of Turin and Collegio Carlo Alberto); 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: 2021–08
  5. By: Martin Ravallion; Shaohua Chen
    Abstract: The path of income inequality in post-reform China has been widely interpreted as “China’s Kuznets curve.” We show that the Kuznets growth model of structural transformation in a dual economy, alongside population urbanization, has little explanatory power for our new series of inequality measures back to 1981. Our simulations tracking the partial “Kuznets derivative” of inequality with respect to urban population share yield virtually no Kuznets curve. More plausible explanations for the inequality turning points relate to determinants of the gap between urban and rural mean incomes, including multiple agrarian policy reforms. Our findings warn against any presumption that the Kuznets process will assure that China has passed its time of rising inequality. More generally, our findings cast doubt on past arguments that economic growth through structural transformation in poor countries is necessarily inequality increasing, or that a turning point will eventually be reached after which that growth will be inequality decreasing.
    JEL: D31 I32 O15
    Date: 2021–08
  6. By: Ahrsjö, Ulrika (Dept. of Economics, Stockholm University); Niknami, Susan (Dept. of Economics, Stockholm University); Palme, Mårten (Dept. of Economics, Stockholm University)
    Abstract: We estimate the change in the gender wage gap between 1968 and 2010 in Sweden accounting for (1) changes in the intensive margin of labour supply; (2) changes in the overall wage inequality; (3) changes in selection into the labor market using parametric and non-parametric selection corrections. Our results show that between 1968 and 1991, about half of the changes in the gender wage gap can be attributed to changes in the overall wage distribution. Conversely, changes in the wage distribution in 1991-2010 masks a larger closure of the gender wage gap. Our corrections for selection into the labor force suggest that uncorrected estimates miss about half of the around 20 percentage points decrease in the gender wage gap over the 1968-2010 period.
    Keywords: Gender pay gap; wage gap; gender inequality; selective samples
    JEL: J16 J22 J31 J51 J71
    Date: 2021–08–25
  7. By: Carlos Gradín; Annalena Oppel
    Abstract: We revisit trends in within-country income inequality using a newly integrated dataset that covers at least 70 per cent of the global population since 1980. We investigate absolute and relative inequality trends across the past four decades, combining the use of Lorenz curves with a set of inequality measures to gain insights on countries without Lorenz dominance.
    Keywords: Income inequality, Database, WIID
    Date: 2021
  8. By: Lidia Ceriani (Georgetown University, Washington DC, USA.); Vladimir Hlasny (Ewha Womans University, Seoul, South Korea.); Paolo Verme (World Bank, Washington DC, USA.)
    Abstract: The paper discusses the main issues related to negative and zero incomes that are relevant for the measurement of poverty. It shows the prevalence of non-positive incomes in high- and middle-income countries, provides an analysis of the sources and structure of these incomes, outlines the various approaches proposed by scholars and statistical agencies to treat non-positive incomes, and explains how non-positive incomes and alternative correction methods impact the measurement of standard poverty indexes. It is argued that negative and zero incomes cannot be treated equally in terms of household well-being and that standard methods used by practitioners fail to recognize this fact likely resulting in overestimations of poverty.
    Keywords: Welfare measurement; Well-being; Poverty targeting; High- and middle-income countries; Survey non-response; Negative incomes; Zero incomes; Extreme income corrections
    JEL: D31 D63 I32
    Date: 2021–08
  9. By: Alejandro Bayas; Nicolas Grau
    Abstract: To what extent should young people be normatively held responsible for committing a crime? To contribute to this debate, we study the role of inequality of opportunity in juvenile crime behavior. Drawing on Roemer’s theoretical framework and using administrative data from Chile, we empirically evaluate how much of the responsibility for the crime was determined by structural factors (i.e., circumstances) and how much was determined by decisions taken by the perpetrator (i.e., agency). Overall, we find evidence of substantial inequality of opportunity in this context. Specifically, we find that the contribution of circumstances varies between 46.44% and 32.10%, when explaining crime among males. As a benchmark analysis, we find that the role of circumstances in high school completion is less relevant than in criminal behavior, with levels between 34.80% and 18.54%. Finally, our study contradicts previous literature— suggesting that a different conception of equality of opportunity does change the conclusion regarding the relative contribution of agency versus circumstances.
    Date: 2021–09
  10. By: Laurens Cherchye; Pierre-André Chiappori; Bram De Rock; Charlotte Ringdal; Frederic Vermeulen
    Abstract: To understand the household decision-making process regarding food expenditures for children in poor households in Nairobi, we conduct an experiment with 424 married couples. In the experiment, the spouses (individually and jointly) allocated money between themselves and nutritious meals for one of their children. First, we find strong empirical support for individual rationality and cooperative behavior. Second, our results suggest that women do not have stronger preferences for children’s meals than men. Third, the spouses’ respective bargaining positions derived from consumption patterns strongly correlate with more traditional indicators. Finally, we document significant heterogeneity both between individuals and intra-household decision processes.
    Keywords: collective model, intra-household allocation, experiment, Kenya, children
    Date: 2021–08–24
  11. By: Gene M. Grossman; Ezra Oberfield
    Abstract: A vast literature seeks to measure and explain the apparent decline in the labor share in national income that has occurred in recent times in the United States and elsewhere. The culprits include technological change, increased globalization and the rise of China, the enhanced exercise of market power by large firms in concentrated product markets, the decline in unionization rates and the erosion in the bargaining power of workers in labor markets, and the changing composition of the workforce due to a slowdown in population growth and a rise in educational attainment. We review this literature, with special emphasis on the pitfalls associated with using cross-sectional data to assess this phenomenon and the reasons why the body of papers collectively explains the phenomenon many times over.
    JEL: E25
    Date: 2021–08

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