nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2021‒10‒25
five papers chosen by
Maximo Rossi
Universidad de la República

  1. Early Childhood Development, Human Capital and Poverty By Orazio Attanasio; Sarah Cattan; Costas Meghir
  2. The changing nature of work and inequality in Brazil (2003-19): A descriptive analysis By Sergio Firpo; Alysson Portella; Flavio Riva; Giovanna Úbida
  3. Income Comparison and Happiness within Households By Salland, Jan
  4. “Beauty Too Rich for Use”*: Billionaires’ Assets and Attractiveness By Daniel S. Hamermesh; Andrew Leigh
  5. The Economics of Walking About and Predicting US Downturns By David G. Blanchflower; Alex Bryson

  1. By: Orazio Attanasio; Sarah Cattan; Costas Meghir
    Abstract: Children's experiences during early childhood are critical for their cognitive and socio-emotional development, two key dimensions of human capital. However, children from low income backgrounds often grow up lacking stimulation and basic investments, leading to developmental deficits that are difficult, if not impossible, to reverse later in life without intervention. The existence of these deficits are a key driver of inequality and contribute to the intergenerational transmission of poverty. In this paper, we discuss the framework used in economics to model parental investments and early childhood development and use it as an organizing tool to review some of the empirical evidence on early childhood research. We then present results from various important early childhoods interventions with emphasis on developing countries. Bringing these elements together we draw conclusions on what we have learned and provide some directions for future research.
    JEL: I24 I25 I3 J24 O15
    Date: 2021–10
  2. By: Sergio Firpo; Alysson Portella; Flavio Riva; Giovanna Úbida
    Abstract: In this paper we use different sources of data on job task content to investigate the importance of occupations and the intensity of routine tasks embodied in them in explaining changes in employment and earnings in Brazil, in particular their relation with earnings and polarization, and inequality. We show some evidence of polarization in earnings but not with respect to employment, although the patterns resemble more that of pro-poor or pro-rich growth.
    Keywords: Brazil, Inequality, Polarization, Task content of jobs, Occupations, Earnings inequality
    Date: 2021
  3. By: Salland, Jan (Helmut Schmidt University, Hamburg)
    Abstract: This paper applies the German Socio-Economic Panel to analyse the effect of within household income comparison on individual life satisfaction. Our estimates indicate, a primary breadwinner wife decreases spousal individual happiness by roughly nine per cent. To state the economic significance, a €70,000 increase in external, peer reference income corresponds to a similar individual happiness decrease. The estimates suggest envy effects among couples and provide mixed evidence for gender roles to influence subjective well-being. Based on subsample estimations, our results are driven by younger birth year quartiles, lower education and total income households, East German couples and households with greater fulltime employment share. The paper adds to within household interdependence of subjective well-being and indicates negative consequences of couple income comparison for individual happiness. Wives (barely) outearning their husbands seem to signal ’competition’.
    Keywords: Life Satisfaction; Well-being; Happiness; Income Comparison; Gender Identity
    JEL: D10 I31 J16
    Date: 2021–10–05
  4. By: Daniel S. Hamermesh; Andrew Leigh
    Abstract: We examine how the net worth of billionaires relates to their looks, as rated by 16 people of different gender and ethnicity. Surprisingly, their financial assets are unrelated to their beauty; nor are they related to their educational attainment. As a group, however, billionaires are both more educated and better-looking than average for their age. Men, people who reside in Western countries, and those who inherited substantial wealth, are wealthier than other billionaires. The results do not arise from measurement error or nonrandom sample selectivity. They are consistent with econometric theory about the impact of truncating a sample to include observations only from the extreme tail of the dependent variable. The point is underscored by comparing estimates of earnings equations using all employees in the 2018 American Community Survey to those using a sample of the top 0.1 percent. The findings suggest the powerful role of luck within the extremes of the distributions of economic outcomes.
    JEL: C24 J24 J40
    Date: 2021–10
  5. By: David G. Blanchflower (Bruce V. Rauner ’78 Professor of Economics, Dartmouth College, Hanover, NH 03755-3514. Adam Smith School of Business, University of Glasgow and NBER); Alex Bryson (Professor of Quantitative Social Science, UCL Social Research Institute, University College London, 20 Bedford Way, London WC1H 0AL)
    Abstract: Economic shocks are notoriously difficult to predict but recent research suggests qualitative metrics about economic actors’ expectations are predictive of downturns. We show consumer expectations indices from both the Conference Board and the University of Michigan predict economic downturns up to 18 months in advance in the United States, both at national and at state-level. All the recessions since the 1980s have been predicted by at least 10 and sometimes many more point drops in these expectations indices. A single monthly rise of at least 0.3 percentage points in the unemployment rate also predicts recession, as does two consecutive months of employment rate declines. The economic situation in 2021 is exceptional, however, since unprecedented direct government intervention in the labor market through furlough-type arrangements has enabled employment rates to recover quickly from the huge downturn in 2020. However, downward movements in consumer expectations in the last six months suggest the economy in the United States is entering recession now (Autumn 2021) even though employment and wage growth figures suggest otherwise.
    Keywords: Great unemployment, recession, consumer expectations
    JEL: J60 J64 J68
    Date: 2021–10–01

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