nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2022‒06‒13
eight papers chosen by
Maximo Rossi
Universidad de la República

  1. The Full Returns to the Choice of Occupation and Education By Clark, Andrew E.; Cotofan, Maria; Layard, Richard
  2. Measuring Knowledge By James J. Heckman; Jin Zhou
  3. What lottery wins reveal about the gender gap By Sarah Fleche; Anthony Lepinteur; Nattavudh Powdthavee
  4. Mental Health: Depression, Anxiety, and Anger in the USA By Borooah, Vani
  5. Labor market search, informality and schooling investments By Matteo Bobba; Luca Flabbi; Santiago Levy
  6. Pandemic Depression: COVID-19 and the Mental Health of the Self-Employed By Marco Caliendo; Daniel Graeber; Alexander S. Kritikos; Johannes Seebauer
  7. Investing in Early Childhood Development in Preschool and at Home By Greg Duncan; Ariel Kalil; Magne Mogstad; Mari Rege
  8. Prejudice: Xenophobia, Homophobia, and Patriarchy in the World By Borooah, Vani

  1. By: Clark, Andrew E. (Paris School of Economics); Cotofan, Maria (CEP, London School of Economics); Layard, Richard (London School of Economics)
    Abstract: Information on both earnings and non-pecuniary rewards is needed to understand the occupational dispersion of wellbeing. We analyse subjective wellbeing in a large UK sample to construct a measure of "full earnings", the sum of earnings and the value of non-pecuniary rewards, in 90 different occupations. Labour-market inequality is underestimated: the dispersion of full earnings is one-third larger than the dispersion of earnings. Equally, the gender and ethnic gaps in the labour market are larger than those in earnings alone, and the full returns to education on the labour market are underestimated. These results are similar in data on US workers. In neither cross-section nor panel data do we find evidence of compensating differentials.
    Keywords: occupation, wages, non-pecuniary benefits, inequality
    JEL: I31 J31
    Date: 2022–05
  2. By: James J. Heckman; Jin Zhou
    Abstract: Empirical studies in the economics of education, the measurement of skill gaps across demographic groups, and the impacts of interventions on skill formation rely on psychometrically validated test scores that record the proportion of items correctly answered. Test scores are sometimes taken as measures of an invariant scale of human capital that can be compared over time and people. We show that for a prototypical test, invariance is violated. We use an unusually rich data set from an early childhood intervention program that measures knowledge of narrowly defined skills on essentially equivalent subsets of tasks. We examine if conventional, broadly-defined measures of skill are the same across people who are comparable on detailed knowledge measures. We reject the hypothesis of aggregate scale invariance and call into question the uncritical use of test scores in research on education and on skill formation. We compare different measures of skill and ability and reject the hypothesis of valid aggregate measures of skill.
    JEL: C81 I21 J71
    Date: 2022–04
  3. By: Sarah Fleche; Anthony Lepinteur; Nattavudh Powdthavee
    Abstract: The UK has seen a rapid increase in self-employed workers over the last two decades, but only one-third are women. Sarah Flèche and colleagues analyse data on lottery winners to show that improving women's access to capital could help reduce the gender gap in entrepreneurial activity.
    Keywords: gender inequality, self-employment, lottery wins, bhps
    Date: 2022–02–22
  4. By: Borooah, Vani
    Abstract: Using data from the Collaborative Psychiatric Epidemiology Surveys (CPES) for the United States for the period 2001 to 2003, this chapter addresses the question of inter-gender differences in depression, anxiety, and anger rates: how much of the observed difference in rates between men and women may be explained by differences between them in their exposure, and how much may be explained by differences between them in their response, to depression-inducing factors? The chapter makes two contributions: first, it uses an “interaction model” which allows men and women to respond differently to each of several condition-inducing factors, which is key in determining whether there is a significant difference between male and female responses. The overall conclusion is that, with a handful of exceptions, there are significant inter-gender differences in responses to all the variable categories. The second contribution of this chapter is to aggregate the different responses for the different variable categories into an overall response. This was achieved by applying the Oaxaca-Blinder decomposition methodology to quantifying the contribution of differences in exposure, and differences in response, to inter-gender differences in depression, anxiety, and anger rates. The overall conclusion from this exercise is that the most important reason for women and men experiencing different rates of depression, anxiety, and anger is not levels of exposure, but rather that women respond differently from men to factors which induce these conditions.
    Keywords: Depression; Anger; United States of America
    JEL: I31 I38
    Date: 2021
  5. By: Matteo Bobba (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics); Luca Flabbi (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics); Santiago Levy (UNC - University of North Carolina [Chapel Hill] - UNC - University of North Carolina System)
    Abstract: We develop a search and matching model where matches (jobs) can be formal or informal. Workers choose their level of schooling and search for an employee job either as unemployed or as self-employed. Firms post vacancies in each schooling market, decide the formality status of the job, and bargain with workers over wages. The resulting equilibrium size of the informal sector is an endogenous function of labor market and institutional characteristics. We estimate the model parameters using labor force survey data from Mexico and the exogenous variation induced by the roll-out of a non-contributory social program. Counterfactual experiments based on the estimated model show that eliminating informal jobs increases schooling investments but at the cost of decreasing welfare for both workers and firms.
    Keywords: Labor market frictions,Search and matching,Nash bargaining,Informality,Returns to schooling
    Date: 2022–02
  6. By: Marco Caliendo (University of Potsdam, IZA Bonn, DIW Berlin, IAB Nuremberg); Daniel Graeber (DIW Berlin, University of Potsdam); Alexander S. Kritikos (DIW Berlin, University of Potsdam, IAB Nuremberg, IZA Bonn); Johannes Seebauer (DIW Berlin, Freie Universität Berlin)
    Abstract: We investigate the effect of the COVID-19 pandemic on self-employed people’s mental health. Using representative longitudinal survey data from Germany, we reveal differential effects by gender: whereas self-employed women experienced a substantial deterioration in their mental health, self-employed men displayed no significant changes up to early 2021. Financial losses are important in explaining these differences. In addition, we find larger mental health responses among self-employed women who were directly affected by government-imposed restrictions and bore an increased childcare burden due to school and daycare closures. We also find that self-employed individuals who are more resilient coped better with the crisis.
    Keywords: self-employment, COVID-19, mental health, gender, representative longitudinal survey data, PHQ-4 score, resilience
    JEL: L26 D31 I14 I18 J16
    Date: 2022–05
  7. By: Greg Duncan; Ariel Kalil; Magne Mogstad; Mari Rege
    Abstract: The foundations for successful child development are established in early childhood. Two main policy approaches for strengthening these foundations have been subsidized preschool programs and programs targeting the home environment. Our chapter reviews a large body of empirical work investigating whether these programs make a difference for children’s development, and if so, how and under what conditions do they help, how cost-effective are they, and which programs are scalable. We start by reviewing studies that estimate how much of the variation in child outcomes can be explained by genetics versus environmental factors. These studies demonstrate that variation in environmental factors plays a key role in explaining individual life outcomes. This suggests that early childhood programs might play a significant role in helping children realize their potential in life. Nevertheless, our review of early childhood programs demonstrates that the evidence is mixed – some programs are successful in fostering lasting skill development, but many are not. We conclude that existing research on early childhood education falls short of sufficiently answering fundamental questions about what works for whom and why. A tighter link between theory, econometric methods and data is essential to compare and reconcile the mixed and sometimes conflicting empirical results across studies, and to understand when and why the impacts of home environment and pre-school interventions fade out.
    JEL: J13
    Date: 2022–04
  8. By: Borooah, Vani
    Abstract: The raison d’être of this paper is to develop measures for xenophobia, homophobia, and patriarchy and, in so doing, to provide systematic information about the degree of prejudice against certain groups (foreigners, homosexuals, women) — in particular, whether prejudice differs by the world’s regions and religions, and between the groups that are the target of prejudice. Furthermore, the chapter enquires about the characteristics of persons — apart from their religion and region — that make for prejudice, or a lack of it. In developing the analysis, this chapter makes several conceptual contributions. It advances the concept of a “xenophobia score” which is used to measure the amount of xenophobia in different regions of the world. It links homophobia to attitudes towards homosexuality. Lastly, it examines dissonance between men and women in their views about gender equality and, in so doing, measures the amount of “gender tension” among adherents of different religions and denizens of different regions. Underpinning this analysis is a multivariate analysis of xenophobia, homophobia, and patriarchy. This allows one to answer questions that are of considerable societal importance: are women more liberal than men in their attitude towards foreigners and homosexuals? Do women seek greater equality than men are prepared to concede?
    Keywords: Prejudice, homophobia, xenophobia, misogyny
    JEL: I3 I31 J71
    Date: 2021

This nep-ltv issue is ©2022 by Maximo Rossi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.