nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2022‒03‒07
seven 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 Herault, Nicolas; Jenkins, Stephen P.
  2. Other-Regarding Preferences and Redistributive Politics By Fehr, Ernst; Epper, Thomas; Senn, Julien
  3. The Marginal Labor Supply Disincentives of Welfare: Evidence from Administrative Barriers to Participation By Robert A. Moffitt; Matthew V. Zahn
  4. The Variability and Volatility of Sleep: An ARCHetypal Behavior By Daniel S. Hamermesh; Gerard A. Pfann
  5. The COVID-19 Pandemic in Latin American and Caribbean Countries: The Labor Supply Impact by Gender By Viollaz, Mariana; Salazar-Saenz, Mauricio; Flabbi, Luca; Bustelo, Monserrat; Bosch, Mariano
  6. Time use and happiness: Evidence across three decades By Han, Jeehoon; Kaiser, Caspar
  7. Urban Mobility and the Experienced Isolation of Students and Adults By Cody Cook; Lindsey Currier; Edward L. Glaeser

  1. By: Herault, Nicolas; Jenkins, Stephen P.
    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. (Stone Center on Socio-Economic Inequality Working Paper)
    Date: 2021–11–02
  2. By: Fehr, Ernst (University of Zurich); Epper, Thomas (University of Lille); Senn, Julien (University of Zurich)
    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 also provides a deeper understanding about who is likely to support specific redistributive policies.
    Keywords: social preferences, altruism, inequality aversion, preference heterogeneity, demand for redistribution
    JEL: D31 D72 H23 H24
    Date: 2022–02
  3. By: Robert A. Moffitt; Matthew V. Zahn
    Abstract: Existing research on the static effects of the manipulation of welfare program benefit parameters on labor supply has allowed only restrictive forms of heterogeneity in preferences. Yet preference heterogeneity implies that the marginal effects on labor supply of welfare expansions and contractions may differ in different time periods with different populations and which sweep out different portions of the distribution of preferences. A new examination of the heavily studied AFDC program uses variation in state-level administrative barriers to entering the program in the late 1980s and early 1990s to estimate the marginal labor supply effects of changes in program participation induced by that variation. The estimates are obtained from a theory-consistent reduced form model which allows for a nonparametric specification of how changes in welfare program participation affect labor supply on the margin. Estimates using a form of local instrumental variables show that the marginal treatment effects are quadratic, rising and then falling as participation rates rise (i.e., becoming more negative then less negative on hours of work). The average work disincentive is not large but that masks some margins where effects are close to zero and some which are sizable. Traditional IV which estimates a weighted average of marginal effects gives a misleading picture of marginal responses. A counterfactual exercise which applies the estimates to three historical reform periods in 1967, 1981, and 1996 when the program tax rate was significantly altered shows that marginal labor supply responses differed in each period because of differences in the level of participation in the period and the composition of who was on the program.
    Date: 2022–02
  4. By: Daniel S. Hamermesh; Gerard A. Pfann
    Abstract: Using Dutch time-diary data from 1975-2005 covering over 10,000 respondents for 7 consecutive days each, we show that individuals’ sleep time exhibits both variability and volatility characterized by stationary autoregressive conditional heteroscedasticity: The absolute values of deviations from a person’s average sleep on one day are positively correlated with those on the next day. Sleep is more variable on weekends and among people with less education, who are younger and who do not have young children at home. Volatility is greater among parents with young children, slightly greater among men than women, but independent of other demographics. A theory of economic incentives to minimize the dispersion of sleep predicts that higher-wage workers will exhibit less dispersion, a result demonstrated using extraneous estimates of earnings equations to impute wage rates. Volatility in sleep spills over onto volatility in other personal activities, with no reverse causation onto sleep. The results illustrate a novel dimension of economic inequality and could be applied to a wide variety of human behavior and biological processes.
    JEL: C22 I14 J22
    Date: 2022–01
  5. By: Viollaz, Mariana (CEDLAS-UNLP); Salazar-Saenz, Mauricio (Pontifical Catholic University of Rio de Janeiro (PUC-Rio)); Flabbi, Luca (University of North Carolina, Chapel Hill); Bustelo, Monserrat (Inter-American Development Bank); Bosch, Mariano (Inter-American Development Bank)
    Abstract: We study the labor supply impact of the COVID-19 pandemic by gender in four Latin American and Caribbean (LAC) countries: Brazil, Chile, Dominican Republic, and Mexico. To identify the impact, we compare labor market stocks and labor market flows over four quarters for a set of balanced panel samples of comparable workers before and after the pandemic. We find that the pandemic has negatively affected the labor market status of both men and women, but that the effect is significantly stronger for women, magnifying the already large gender gaps that characterize LAC countries. The main channel through which this stronger impact is taking place is the increase in child care work affecting women with school-age children.
    Keywords: labor supply, labor market transitions, COVID-19, gender differentials, Latin American and Caribbean countries
    JEL: J6 J16 J46 O10 O17
    Date: 2022–02
  6. By: Han, Jeehoon; Kaiser, Caspar (University of Oxford)
    Abstract: We use large-scale diary data from a representative sample of Americans to proxy welfare at the level of individual activities. We make three contributions. First, we examine the association between individual activities and happiness, and show how this association has changed over time. Compared to 1985, domestic work and social care produce more happiness today. Watching TV produces less happiness today than it used to. Second, we combine activity-level data on happiness and time allocation to construct a measure of ‘time-weighted happiness’. We then analyse historical trends in this measure across population groups, particularly gender. We observe that, over the last 35 years, women’s time-weighted happiness has improved significantly relative to men’s. This trend is largely driven by gendered shifts in time allocation, rather than heterogenous trends in the enjoyability of individual activities. Our result is in stark contrast to previous work which showed a decline in women’s relative wellbeing. To explain this, our third contribution is to compare the determinants of life satisfaction – a global measure on which most previous work is built – with our measure of time-weighted happiness. Time-weighted happiness and life satisfaction turn out to only be weakly correlated. Moreover, although we obtain strong associations of income and employment status with life satisfaction, no such associations can be observed for time-weighted happiness. These findings highlight the importance of distinguishing between happiness as experienced in time and more global wellbeing measures. Finally, we verify the robustness our results by replicating them in data from the United Kingdom and show that our results are robust to alternative assumptions about how people use happiness scales.
    Date: 2021–10–03
  7. By: Cody Cook; Lindsey Currier; Edward L. Glaeser
    Abstract: Do urban children live more segregated lives than urban adults? Using cellphone location data and following the ‘experienced isolation’ methodology of Athey et al. (2021), we compare the isolation of students over the age of 16—who we identify based on their time spent at a high school—and adults. We find that students in cities experience significantly less integration in their day-to-day lives than adults. The average student experiences 27% more isolation outside of the home than the average adult. Even when comparing students and adults living in the same neighborhood, exposure to devices associated with a different race is 20% lower for students. Looking at more broad measures of urban mobility, we find that students spend more time at home, more time closer to home when they do leave the house, and less time at school than adults spend at work. Finally, we find correlational evidence that neighborhoods with more geographic mobility today also had more intergenerational income mobility in the past. We hope future work will more rigorously test the hypothesis that different geographic mobility patterns for children and adults can explain why urban density appears to boost adult wages but reduce intergenerational income mobility.
    JEL: C55 I30 J13 R30
    Date: 2022–01

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