nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2022‒02‒14
twelve papers chosen by
Maximo Rossi
Universidad de la República

  1. 2021 Summary Data of Natural Field Experiments Published on By John List
  2. Pandemic Policy and Life Satisfaction in Europe By Andrew E. Clark; Anthony Lepinteur
  3. The health impacts of universal early childhood interventions: evidence from Sure Start By Sarah Cattan; Gabriella Conti; Christine Farquharson; Rita Ginja; Maud Pecher
  4. Income risk inequality: evidence from Spanish administrative records By Manuel Arellano; Stéphane Bonhomme; Micole De Vera; Laura Hospido; Siqi Wei
  5. Other-regarding Preferences and Redistributive Politics By Ernst Fehr; Thomas Epper; Julien Senn
  6. The Relationship between Pro-environmental Behavior, Economic Preferences, and Life Satisfaction: Empirical Evidence from Germany By Thilo K.G. Haverkamp; Heinz Welsch; Andreas Ziegler
  7. Trade and informality in the presence of labor market frictions and regulations By Rafael Dix-Carneiro; Pinelopi Koujianou Goldberg; Costas Meghir; Gabriel Ulyssea
  8. Measuring Poverty Persistence By Alessio Fusco; Philippe Van Kerm
  9. The distributional and employment impacts of nationwide Minimum Wage changes By Jonathan Cribb; Giulia Giupponi; Robert Joyce; Attila Lindner; Tom Waters; Thomas Wernham; Xiaowei Xu
  10. Earnings dynamics and firm-level shocks By Benjamin Friedrich; Lisa Laun; Costas Meghir; Luigi Pistaferri
  11. Feed the children By Laurens Cherchye; Pierre-André Chiappori; Bram De Rock; Charlotte Ringdal; Frederic Vermeulen
  12. The politicized pandemic: Ideological polarization and the behavioral response to COVID-19 By Gianluca Grimalda; Fabrice Murtin; David Pipke; Louis Putterman; Matthias Sutter

  1. By: John List
    Abstract: In 2019, I put together a summary of data from my field experiments website that pertained to natural field experiments. Several people have asked me if I have an update. In this document I update all figures and numbers to show the details for 2021. I also include the description from the 2019 paper below.
    Date: 2022
  2. By: Andrew E. Clark (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Anthony Lepinteur ( - Université du Luxembourg)
    Abstract: We use data from the COME-HERE longitudinal survey collected by the University of Luxembourg to assess the effects of the policy responses to the COVID-19 pandemic on life satisfaction in France, Germany, Italy, Spain and Sweden over the course of 2020. Policy responses are measured by the Stringency Index and the Economic Support Index from the Blavatnik School of Government. Stringency is systematically associated with lower life satisfaction, controlling for the intensity of the pandemic itself. This stringency effect is larger for women, those with weak ties to the labor market, and in richer households. The effect of the Economic Support is never statistically different from zero.
    Keywords: COVID-19,Life satisfaction,Policy stringency,Economic support
    Date: 2022
  3. By: Sarah Cattan (Institute for Fiscal Studies and Institute for Fiscal Studies); Gabriella Conti (Institute for Fiscal Studies and University College London); Christine Farquharson (Institute for Fiscal Studies and Institute for Fiscal Studies); Rita Ginja (Institute for Fiscal Studies and University of Bergen); Maud Pecher (Institute for Fiscal Studies)
    Abstract: We evaluate the short- and medium-term heath impacts of Sure Start, a large-scale and univer-sal early childhood program in England. We exploit the rollout of the program and implement a difference-in-difference approach, combining data on the exact location and opening date of Sure Start centers with administrative data on the universe of admissions to public-sector hospitals. Exposure to an additional Sure Start center per thousand age-eligible children increases hospitalization by 10% at age 1 (around 6,700 hospitalizations per year), but reduces them by 8-9% across ages 11 to 15 (around 13,150 hospitalizations per year). These findings show that early childhood programs that are less intensive than small-scale ‘model programs’ can deliver significant health benefits, even in contexts with universal healthcare. Impacts are driven by hospitalizations for preventable conditions and are concentrated in disadvantaged areas, suggesting that enriching early childhood environments might be a successful strategy to reduce inequalities in health.
    Date: 2021–08–16
  4. By: Manuel Arellano (Institute for Fiscal Studies and Centre for Monetary and Financial Studies (CEMFI)); Stéphane Bonhomme (Institute for Fiscal Studies and University of Chicago); Micole De Vera (Institute for Fiscal Studies); Laura Hospido (Institute for Fiscal Studies); Siqi Wei (Institute for Fiscal Studies)
    Abstract: In this paper we use administrative data from the social security to study income dynamics and income risk inequality in Spain between 2005 and 2018. We construct individual measures of income risk as functions of past employment history, income, and demographics. Focusing on males, we document that income risk is highly unequal in Spain: more than half of the economy has close to perfect predictability of their income, while some face considerable uncertainty. Income risk is inversely related to income and age, and income risk inequality increases markedly in the recession. These findings are robust to a variety of specifications, including using neural networks for prediction and allowing for individual unobserved heterogeneity.
    Date: 2021–10–19
  5. By: Ernst Fehr; Thomas Epper (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique, IÉSEG School Of Management [Puteaux]); Julien Senn
    Abstract: Increasing inequality and associated egalitarian sentiments have again put redistribution on the political agenda. Other-regarding preferences may also affect support for redistribution, but knowledge about their distribution in the broader population and how they are associated with political support for redistributive policies is still scarce. In this paper, we take advantage of Swiss direct democracy, where people voted several times on strongly redistributive policies in national plebiscites, to study the link between other-regarding preferences and support for redistribution in a broad sample of the Swiss population. We document that inequality aversion and altruistic concerns play a quantitatively large positive role in the support for redistribution, in particular for more affluent individuals. In addition, previously identified key motives underlying opposition to redistribution-such as the belief that effort is an important driver of individual success-play no role for selfish individuals but are highly relevant for altruistic and egalitarian individuals. Finally, while inequality averse individuals display strong support for policies that primarily aim at reducing the incomes of the rich, altruistic individuals are considerably less supportive of such policies. Thus, knowledge about the fundamental properties and the distribution of individuals' other-regarding preferences provides a deeper understanding about who is likely to support specific redistributive policies.
    Keywords: Social Preferences,Altruism,Inequality Aversion,Preference Heterogeneity,Demand for Redistribution
    Date: 2022–01–02
  6. By: Thilo K.G. Haverkamp (University of Kassel); Heinz Welsch (University of Oldenburg); Andreas Ziegler (University of Kassel)
    Abstract: Based on representative data for 1614 citizens in Germany, this paper empirically examines the relationship between different types of environmental protection activities and subjective well-being (SWB) in terms of life satisfaction by specifically considering the role of economic preferences for this relationship. With respect to pro-environmental behavior, we differentiate between stated non-climate environmental and climate protection activities as well as revealed climate protection activities, which are measured in an incentivized donation experiment and thus are more meaningful than stated climate protection activities. Our empirical analysis reveals that climate protection activities are more robustly and more strongly positively correlated with life satisfaction than non-climate environmental protection activities. Furthermore, not only stated climate protection activities, but also revealed climate protection activities are significantly positively correlated with life satisfaction. These results suggest that climate protection activities lead to stronger warm glow feelings and reputation gains than non-climate environmental protection activities. Our empirical analysis additionally shows that economic preferences play an important role since especially patience and trust, but also risk-taking preferences and (less robust) altruism are significantly positively correlated with life satisfaction. In particular, economic preferences are also relevant for the relationship between pro-environmental behavior and life satisfaction. When economic preferences are included in the econometric analysis, the estimated correlations between climate protection activities and life satisfaction become weaker and the estimated correlation between non-climate environmental protection activities and life satisfaction even becomes insignificant. These results strongly suggest omitted variable biases in cross-sectional econometric analyses of the relationship between pro-environmental behavior and SWB when economic preferences are not included as control variables.
    Keywords: Subjective well-being; life satisfaction; pro-environmental behavior; incentivized donation experiment; economic preferences
    JEL: I31 Q54
    Date: 2022
  7. By: Rafael Dix-Carneiro (Institute for Fiscal Studies and Duke University); Pinelopi Koujianou Goldberg (Institute for Fiscal Studies and Yale University); Costas Meghir (Institute for Fiscal Studies and Yale University); Gabriel Ulyssea (Institute for Fiscal Studies)
    Abstract: We build an equilibrium model of a small open economy with labor market frictions and imperfectly enforced regulations. Heterogeneous firms sort into the formal or informal sector. We estimate the model using data from Brazil, and use counterfactual simulations to understand how trade affects economic outcomes in the presence of informality. We show that: (1) Trade openness unambiguously decreases informality in the tradable sector, but has ambiguous effects on aggregate informality. (2) The productivity gains from trade are understated when the informal sector is omitted. (3) Trade openness results in large welfare gains even when informality is repressed. (4) Repressing informality increases productivity, but at the expense of employment and welfare. (5) The effects of trade on wage inequality are reversed when the informal sector is incorporated in the analysis. (6) The informal sector works as an “unemployment," but not a “welfare buffer" in the event of negative economic shocks.
    Date: 2021–01–21
  8. By: Alessio Fusco; Philippe Van Kerm
    Abstract: This chapter reviews the literature on the measurement of poverty persistence. The review has two parts. We first cover the literature on poverty persistence indicators which develops “principled”, descriptive summary measures. We then review the econometric literature which teases out the determinants of poverty persistence. Finally, we describe the challenges and limitations the literature on poverty persistence face.
    Keywords: poverty persistence; chronic poverty; hazard models; Markovian models; state dependence; attrition
    JEL: I32
    Date: 2022–01
  9. By: Jonathan Cribb (Institute for Fiscal Studies and Institute for Fiscal Studies); Giulia Giupponi (Institute for Fiscal Studies and Bocconi University); Robert Joyce (Institute for Fiscal Studies and Institute for Fiscal Studies); Attila Lindner (Institute for Fiscal Studies and University College London); Tom Waters (Institute for Fiscal Studies and Institute for Fiscal Studies); Thomas Wernham (Institute for Fiscal Studies); Xiaowei Xu (Institute for Fiscal Studies)
    Abstract: We estimate the effect of the introduction of the UK’s National Living Wage in 2016, and increases in it up to 2019, using a new empirical method. We apply a bunching approach to a setting with no geographical variation in minimum wage rates. We effectively compare employment changes in each part of the wage distribution in low-wage areas to employment changes among similar workers living in higher-wage areas who are less exposed to increases in the national minimum wage because their nominal wages are further above it. We find substantial positive wage effects, including statistically significant spillovers up to around the 20th percentile of wages. Overall we find small negative effects on employment which are not statistically significant. We combine these estimates with a tax and benefit microsimulation model to estimate the impact on household incomes. The largest gains go to the middle of the overall working-age income distribution, though they are more concentrated within the bottom third if we consider only households with someone in paid work. The gains to poorer working households are limited by the withdrawal of means tested benefits as earnings increase. Effects of minimum wages on household incomes are very sensitive to the size of employment effects.
    Date: 2021–12–09
  10. By: Benjamin Friedrich (Institute for Fiscal Studies); Lisa Laun (Institute for Fiscal Studies); Costas Meghir (Institute for Fiscal Studies and Yale University); Luigi Pistaferri (Institute for Fiscal Studies and Stanford University)
    Abstract: We use matched employer-employee data from Sweden to study the role of the firm in affecting the stochastic properties of wages. Our model accounts for endogenous participation and mobility decisions. We find that firm-specific permanent productivity shocks transmit to individual wages, but the effect is mostly concentrated among the high-skilled workers. For low-skilled the pass-through is similar for temporary and permanent firm-level shocks and the magnitude smaller. The updates to worker-firm specific match effects over the life of a firm-worker relationship are small. Substantial growth in earnings variance over the life cycle for high-skilled workers is driven by firms. In particular, cross-sectional wage variances by age 55 are roughly one-third higher relative to a scenario with no pass-through of firm shocks onto wages.
    Date: 2021–10–07
  11. By: Laurens Cherchye (Institute for Fiscal Studies and Katholieke Universiteit Leuven); Pierre-André Chiappori (Institute for Fiscal Studies and Columbia University); Bram De Rock (Institute for Fiscal Studies and Université libre de Bruxelles); Charlotte Ringdal (Institute for Fiscal Studies); Frederic Vermeulen (Institute for Fiscal Studies and University of Leuven)
    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 ?nd 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 signi?cant heterogeneity both between individuals and intra-household decision processes.
    Date: 2021–10–05
  12. By: Gianluca Grimalda (Kiel Institute for the World Economy; Centre for Global Cooperation Research, University of Duisburg-Essen; Jaume I University); Fabrice Murtin (Organization for Economic Co-Operation and Development (OECD)); David Pipke (Kiel Institute for the World Economy); Louis Putterman (Brown University); Matthias Sutter (Max Planck Institute for Research on Collective Goods, University of Cologne, University of Innsbruck, IZA, and CESifo)
    Abstract: We investigate the relationship between political attitudes and prosociality in a survey of a representative sample of the U.S. population during the first summer of the COVID-19 pandemic. We find that an experimental measure of prosociality correlates positively with adherence to protective behaviors. Liberal political ideology predicts higher levels of protective behavior than conservative ideology, independently of the differences in prosociality across the two groups. Differences between liberals and conservatives are up to 4.4 times smaller in their behavior than in judging the government’s crisis management. This result suggests that U.S. Americans are more polarized on ideological than behavioral grounds.
    Keywords: Polarization, Ideology, Trust in politicians, COVID-19, Prosociality, Health behavior, Worries
    JEL: D01 D72 D91 I12 I18 H11 H12
    Date: 2022–01–20

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