nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2021‒11‒08
five papers chosen by
Maximo Rossi
Universidad de la República

  1. Redistributive effect and the progressivity of taxes and benefits: evidence for the UK, 1977–2018 By Nicolas Herault; Stephen P. Jenkins
  2. Child Development in the Early Years: Parental Investment and the Changing Dynamics of Different Domains By Orazio Attanasio; Raquel Bernal; Michele Giannola; Milagros Nores
  3. Wages, Minimum Wages, and Price Pass-Through: The Case of McDonald’s Restaurants By Orley Ashenfelter; Stepan Jurajda Jurajda
  4. AI and Jobs: Evidence from Online Vacancies By Daron Acemoglu; David Autor; Jonathon Hazell; Pascual Restrepo
  5. Apprenticeship and Youth Unemployment By Pierre Cahuc; Jérémy Hervelin

  1. By: Nicolas Herault (University of Melbourne); Stephen P. Jenkins (London School of Economics)
    Abstract: We apply the Kakwani approach to decomposing redistributive effect into average rate, progressivity, and reranking components using yearly UK data covering 1977–2018. We examine cash and in-kind benefits, and direct and indirect taxes. In addition, we highlight an empirical implementation issue – the definition of the reference (‘pre-fisc’) distribution. Drawing on an innovative counterfactual approach, our empirical analysis shows that trends in the redistributive effect of cash benefits are largely associated with cyclical changes in average benefit rates. In contrast, trends in the redistributive effects of direct and indirect taxes are mostly associated with changes in progressivity. For in-kind benefits, changes in the average benefit rate and progressivity each played the major roles at different times.
    Keywords: Kakwani decomposition, inequality, redistributive effect, progressivity, reranking, benefits, taxes
    JEL: D31 H24
    Date: 2021–10
  2. By: Orazio Attanasio (Yale, IFS, FAIR NHH and NBER); Raquel Bernal (Universidad de Los Andes); Michele Giannola (University College London, Università di Napoli Federico II and CSEF.); Milagros Nores (Rutgers University)
    Abstract: This paper uses the data on child development collected around the evaluation of a nursery program to estimate the details of the process of human development. We model development as made of three latent factors, reflecting health, cognitive and socio-emotional skills. We observe children from age 1 to age 7. We assume that, at each age, these factors interact among themselves and with a variety of other inputs to determine the level of development at following ages. The richness of the data we use allows us to: (i) let the dynamics be rich and flexible; (ii) let each factors play a role in the production of any other factor; (iii) estimate age-specific functional forms; (iv) treat parental investment as an endogenous input. We show that considering parental investment as endogenous affects the estimated level of its productivity. Furthermore, we find that the dynamics of the process can be richer than usually assumed, which determines the degree of persistence of different inputs in time. Persistence also changes with age. The way the productivity of different inputs and the persistence of the process change with age have important implications for the targeting of investment and interventions, and, therefore, the identification of windows of opportunities.
    Keywords: Child development, Human capital, Dynamic production function, Parental investment, Cognitive skills, Health, Socio-emotional skills, Development.
    JEL: I15 I25 I32 J13 J24 O15
    Date: 2021–10–07
  3. By: Orley Ashenfelter (Princeton University); Stepan Jurajda Jurajda (CERGE-EI)
    Abstract: We use price and wage data from McDonald's restaurants to provide evidence on wage increases, labor-saving technology introduction, and price pass-through by a large low-wage employer facing a flurry of minimum wage hikes from 2016-2020. We estimate an elasticity of hourly wage rates with respect to minimum wages of 0.7. In 40% of instances where minimum wages increase, McDonald’s restaurants’ wages are near the effective minimum wage level both before and after its increase; however, we also uncover a tendency among a large subset of restaurants to preserve their pay ‘premium’ above the minimum wage level. We find no association between the adoption of labor-saving touch screen ordering technology and minimum wage hikes. Our data imply that McDonald’s restaurants pass through the higher costs of minimum wage increases in the form of higher prices of the Big Mac sandwich. We find a 0.2 price elasticity with respect to wage increases, which implies an elasticity of prices with respect to minimum wages of about 0.14. Based on a listing of all US McDonald’s restaurants from 2010 to 2020, we also find no effects of minimum wages on McDonald’s restaurant entry and exit.
    JEL: J23 J30 J38
    Date: 2021–01
  4. By: Daron Acemoglu (MIT); David Autor (MIT); Jonathon Hazell (Princeton University and LSE); Pascual Restrepo (Boston University)
    Abstract: We study the impact of AI on labor markets, using establishment level data on vacancies with detailed occupational information comprising the near-universe of online vacancies in the US from 2010 onwards. We classify establishments as "AI exposed" when their workers engage in tasks that are compatible with current AI capabilities.We document rapid growth in AI related vacancies over 2010-2018 that is not limited to the Professional and Business Services and Information Technology sectors and is significantly greater in AI-exposed establishments. AI-exposed establishments are differentially eliminating vacancy postings that list a range of previously-posted skills while simultaneously posting skill requirements that were not previously listed.Establishment-level estimates suggest that AI-exposed establishments are reducing hiring in non-AI positions even as they expand AI hiring. However, we find no discernible impact of AI exposure on employment or wages at the occupation or industry level,implying that AI is currently substituting for humans in a subset of tasks but it is not yet having detectable aggregate labor market consequences.
    Keywords: artificial intelligence, displacement, labor, jobs, tasks, technology, wages
    JEL: J23 O33
    Date: 2020–12
  5. By: Pierre Cahuc (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Jérémy Hervelin (CREST - Centre de Recherche en Economie et Statistique [Bruz] - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz])
    Abstract: In France, two years after school completion and getting the same diploma, the employment rate of apprentices is about 15 percentage points higher than that of vocational students. Despite this difference, this paper shows that there is almost no difference between the probability of getting a callback from employers for unemployed youth formerly either apprentices or vocational students. This result indicates that the higher employment rate of apprentices does not rely, in the French context, on better job access of those who do not remain in their training firms. The estimation of a job search and matching model shows that the expansion of apprenticeship has very limited effects on youth unemployment if this is not accompanied by an increase in the retention of apprentices in their training firm.
    Keywords: Apprenticeship,School-to-work transitions,Field experiment
    Date: 2020–04–01

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