nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2022‒09‒12
eight papers chosen by
Maximo Rossi
Universidad de la República

  1. Early Childcare Duration and Students' Later Outcomes in Europe By Daniela Del Boca; Chiara Monfardini; Sarah Grace See
  2. The Race Between Education, Technology, and Institutions By Jonathan Vogel
  3. The Causal Effects of Youth Cigarette Addiction and Education By Rong Hai; James J. Heckman
  4. The Wage Curve After the Great Recession By David G. Blanchflower; Alex Bryson; Jackson Spurling
  5. What Motivates Leaders to Invest in Nation-Building? By Giuliano, Paola; Reich, Bryony; Riboni, Alessandro
  6. The analysis of inequality in the Bretton Woods institutions By Ferreira, Francisco H. G.
  7. Sexual objectification of women in media and the gender wage gap: Does exposure to objectifying pictures lower the reservation wage? By Carlsson, Fredrik; Kataria, Mitesh; Lampi, Elina
  8. When the Kids Grow Up: Women's Employment and Earnings across the Family Cycle By Claudia Goldin; Sari Pekkala Kerr; Claudia Olivetti

  1. By: Daniela Del Boca; Chiara Monfardini; Sarah Grace See
    Abstract: The importance of investment in early childhood education (ECE) has been widely documented in the literature. Among the benefits, particularly for children from disadvantaged backgrounds, is its potential to mitigate educational inequality. However, some evidence also suggests that the positive effects of ECE on later outcomes tend to dissipate over time, leaving children who attended such programmes no better off academically than those who did not. This paper studies the relationship between students’ years spent in ECE and the results of their educational assessment outcomes at age 15.Using PISA survey data for fourteen European countries from 2015 and 2018, we conduct a cross-country comparison of student performance in reading, mathematics, and science, correlating the results to early childcare and pre-primary school attendance. Our findings show that participation in early childcare is associated with better assessments at age 15, but that the benefit is nonlinear and peaks at 3-4 years of childcare attendance. Examination of gender heterogeneity patterns reveals differences in girls’ and boys’ performance on the assessments; however, there are no gender differences in the relationship between childcare participation and test outcomes. We also explore differences related to the type of educational system attended and find distinct results for the unitary and separate settings.
    Keywords: early childhood education, pre-primary, early investments, human capital, assessments, gender, institution, unitary, separate, PISA
    JEL: I20 J13 J16
    Date: 2022
  2. By: Jonathan Vogel
    Abstract: I generalize the canonical model--in which relative supply and demand for worker skills shape the skill premium--incorporating monopsony power, minimum wages, and unemployment. I estimate the extended canonical model using national data and, separately, state-level data. I show that incorporating the minimum wage improves the out-of-sample fit of the traditional canonical model. I document that minimum wages--together with supply and demand--play a central role in shaping the evolution of the U.S. college premium and the differential evolution of state-level college premia. Lending credibility to these conclusions, the state and national estimates are not only qualitatively, but also quantitatively consistent.
    JEL: E24 J0 J23 J31 J42
    Date: 2022–07
  3. By: Rong Hai; James J. Heckman
    Abstract: We develop and estimate a life-cycle model in a rational addiction framework where youth choose to smoke, attend school, work part-time, and consume while facing borrowing constraints. The model features multiple channels for studying the reciprocal causal effects of addiction and education. Variations in endowments and cigarette prices are sources of identification. We show that education causally reduces smoking. A counterfactual experiment finds that in absence of cigarettes, college attendance rises by three percentage points in the population. A practical alternative of 40% additional excise tax achieves similar results. Impacts vary substantially across persons of different cognitive and non-cognitive abilities.
    JEL: H23 I12 I18 I24 I28
    Date: 2022–07
  4. By: David G. Blanchflower; Alex Bryson; Jackson Spurling
    Abstract: Most economists maintain that the labor market in the United States is ‘tight’ because unemployment rates are low. They infer from this that there is potential for wage-push inflation. However, real wages are falling rapidly at present and, prior to that, real wages had been stagnant for some time. We show that unemployment is not key to understanding wage formation in the USA and hasn’t been since the Great Recession. Instead, we show rates of under-employment (the percentage of workers with part-time hours who would prefer more hours) and the rate of non-employment which includes both the unemployed and those out of the labor force who are not working significantly reduce wage pressures in the United States. This finding holds in panel data with state and year fixed effects and is supportive of a wage curve which fits the data much better than a Phillips Curve. We find no role for vacancies; the V:U ratio is negatively not positively associated with wage growth since 2020. The implication is that the reserve army of labor which acts as a brake on wage growth extends beyond the unemployed and operates from within and outside the firm.
    JEL: E24 J20 J30 J60
    Date: 2022–08
  5. By: Giuliano, Paola (University of California, Los Angeles); Reich, Bryony (Kellogg); Riboni, Alessandro (Ecole Polytechnique, Paris)
    Abstract: Why do some leaders invest in significant nation-building policies and others do not? Why does nation-building occur at certain junctures in time and not others? In our research, we investigate what motivates leaders to nation build. We argue that threats to their regime motivate rulers to invest in significant nation-building and that the type of threats that provoke nation-building have largely materialized since the 19th century.
    Keywords: nation-building, education, war
    JEL: N0 P16
    Date: 2022–07
  6. By: Ferreira, Francisco H. G.
    Abstract: This paper assesses the evolution of thinking, analysis, and discourse about inequality in the World Bank and the International Monetary Fund since their inception in 1944, on the basis of bibliometric analysis, a reading of the literature, and personal experience. Whereas the Fund was largely unconcerned with economic inequality until the 2000s but has shown a rapidly growing interest since then, the Bank’s approach has been characterized by ebbs and flows, with five different phases being apparent. The degree of interest in inequality in the two institutions appears to be largely determined by the prevailing intellectual profile of the topic in academic research, particularly in economics, and by ideological shifts in major shareholder countries, propagated downward internally by senior management. Data availability, albeit partly endogenous, also plays a role. Looking ahead, Bank and Fund researchers continue to have an important role to play, despite a much more crowded field in inequality research. I suggest that this role involves holding firm to an emphasis on inequality “at the bottom” and highlight four themes that may deserve special attention.
    Keywords: inequality; World Bank; IMF; Bretton Woods institutions
    JEL: B29 D30 O19
    Date: 2022–08
  7. By: Carlsson, Fredrik (Department of Economics, School of Business, Economics and Law, Göteborg University); Kataria, Mitesh (Department of Economics, School of Business, Economics and Law, Göteborg University); Lampi, Elina (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Using an online experiment, we investigate the influence of sexual objectification in media on economic decision making. In the experiment, subjects are asked to evaluate advertisements in women’s magazines. In the treatment groups, the ads portray women in sexually objectifying poses, while the poses are neutral in the control group. The main research hypothesis is that sexual objectification tends to make women self-objectify, i.e., they internalize the view of the objectifying images, and as a result, they lower their reservation wage. We find that women in the treatment groups do self-objectify: Women who were exposed to the objectifying images described themselves with words related to body shape or size significantly more often than women in the control group. Adding a warning text about the fact that photoshopped images can create unrealistic body ideals did not mitigate the self-objectification. However, we do not find any effect of the sexual objectification on women’s reservation wages. If we take the results at face value, they do suggest that the objectification of women in media, while having important psychological and emotional effects, does not seem to affect women’s economic behavior, at least not directly.
    Keywords: online experiment; sexual objectification; media; economic decision making
    JEL: C91 J16
    Date: 2022–08
  8. By: Claudia Goldin; Sari Pekkala Kerr; Claudia Olivetti
    Abstract: Women earn less than men, and that is especially true of mothers relative to fathers. Much of the widening occurs after family formation when mothers reduce their hours of work. But what happens when the kids grow up? To answer that question, we estimate three earning gaps: the “motherhood penalty,” the “price of being female,” and the “fatherhood premium.” When added together these three produce the “parental gender gap,” defined as the difference in income between mothers and fathers. We estimate earnings gaps for two education groups (college graduates and high school graduates who did not complete college) using longitudinal data from the NLSY79 that tracks respondents from their twenties to their fifties. As the children grow up and as women work more hours, the motherhood penalty is greatly reduced, especially for the less-educated group. But fathers manage to expand their relative gains, particularly among college graduates. The parental gender gap in earnings remains substantial for both education groups.
    JEL: J01 J16 J31
    Date: 2022–08

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