nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2022‒10‒03
seven papers chosen by

  1. Intergenerational Mobility of Economic Well-being in Latin America By Guido Neidhöfer; Matías Ciaschi; Leonardo Gasparini
  2. Is Inequality in Subjective Well-Being Meritocratic? Danish Evidence from Linked Survey and Administrative Data By Claus Thustrup Kreiner; Isabel Skak Olufsen
  3. How Worker Productivity and Wages Grow with Tenure and Experience: The Firm Perspective By Andrew Caplin; Minjoon Lee; Søren Leth-Petersen; Johan Sæverud; Matthew D. Shapiro
  4. The Age-Wage-Productivity Puzzle: A Contribution from Professional Football By Rachel Scarfe; Carl Singleton; Adesola Sunmoni; Paul Telemo
  5. Stress, Ethnicity, and Prosocial Behavior By Johannes Haushofer; Sara Lowes; Abednego Musau; David M. Ndetei; Nathan Nunn; Moritz Poll; Nancy Qian
  6. The Effect of Health Insurance on Child Nutritional Outcomes. Evidence from a Regression Discontinuity Design in Peru By Bernal, Noelia; Costa-Font, Joan; Ritter, Patricia
  7. Trust and Saving in Financial Institutions by the Poor By Sebastian Galiani; Peter Gertler; Camila Navajas Ahumada

  1. By: Guido Neidhöfer (ZEW Mannheim & CEDLAS-IIE-FCE-UNLP); Matías Ciaschi (CEDLAS-IIE-FCE-UNLP & CONICET); Leonardo Gasparini (CEDLAS-IIE-FCE-UNLP & CONICET)
    Abstract: We estimate, for the first time, long-run trends in intergenerational economic mobility for a multitude of countries in Latin America going beyond parent-child correlations in educational attainment. We use several indicators of well-being, such as the socio-economic situation of individuals, job stability, homeownership and assets. Unlike estimates based on education, which mostly show increasing social mobility trends, we find that opportunities to achieve a certain level of economic well-being and climb up the social ladder are rather unequally distributed and have not changed much over time in Latin America.
    JEL: D63 I24 J62 O15
    Date: 2022–09
  2. By: Claus Thustrup Kreiner (University of Copenhagen, CEBI, CESifo, and CEPR); Isabel Skak Olufsen (University of Copenhagen and CEBI)
    Abstract: This paper decomposes inequality in subjective well-being into inequality due to socioeconomic background (SEB) and meritocratic inequality due to differences in individual merits such as school performance. We measure the meritocratic share of well-being, defined as the share of explained variation in life satisfaction attributable to variation in merits not related to SEB. The empirical evidence from Denmark combines survey information on well-being with administrative data on individual characteristics. We find systematic differences in wellbeing already in early adulthood, where differences in economic outcomes are not yet visible. At age 18-19, about 40 percent of the inequality in well-being is meritocratic. The role of merits rises to 65-85 percent in midlife (age 40-55), where it is also higher than the role of merits in income inequality. The positive conclusions that inequality in well-being is more meritocratic than income inequality and more meritocratic as people grow older get support by corresponding results using an equal opportunity approach.
    Keywords: Subjective well-being, inequality, intergenerational mobility
    JEL: I31 J62 D30 D63
    Date: 2022–09–05
  3. By: Andrew Caplin (New York University and NBER); Minjoon Lee (Carleton University); Søren Leth-Petersen (University of Copenhagen); Johan Sæverud (University of Copenhagen); Matthew D. Shapiro (University of Michigan and NBER)
    Abstract: How worker productivity evolves with tenure and experience is central to economics, shaping, for example, life-cycle earnings and the losses from involuntary job separation. Yet, worker-level productivity is hard to identify from observational data. This paper introduces direct measurement of worker productivity in a firm survey designed to separate the role of on-the-job tenure from total experience in determining productivity growth. Several findings emerge concerning the initial period on the job. (1) On-the-job productivity growth exceeds wage growth, consistent with wages not being allocative period-by-period. (2) Previous experience is a substitute, but a far less than perfect one, for on-the-job tenure. (3) There is substantial heterogeneity across jobs in the extent to which previous experience substitutes for tenure. The survey makes use of administrative data to construct a representative sample of firms, check for selective non-response, validate survey measures with administrative measures, and calibrate parameters not measured in the survey.
    Keywords: Productivity, Wages, Tenure, Experience, Firm survey
    JEL: E24 J24 J30
    Date: 2022–09–11
  4. By: Rachel Scarfe (School of Economics, University of Edinburgh); Carl Singleton (Department of Economics, University of Reading); Adesola Sunmoni (Department of Economics, University of Reading); Paul Telemo (School of Economics, University of Edinburgh)
    Abstract: There is an inverted u-shaped relationship between age and wages in most labour markets and occupations, but the effects of age on productivity are less clear. We use panel data on the productivity and salaries of all elite professional footballers (soccer players) in North America to estimate age-productivity and age-wage profiles, which control for unobserved player characteristics and for entry and exit from this market, finding stark differences. While the productivity of footballers tends to peak in their early to mid-20s and then falls slowly, wages continue to increase throughout most of their careers, up to age 30, after which they fall rapidly. This discrepancy has been observed in other labour markets and poses the question: why are the youngest and oldest workers seemingly underpaid relative to their productivity? We consider a number of possible mechanisms that could be responsible without finding a clear culprit.
    Keywords: Labour productivity, Wages, Aging, Major League Soccer
    JEL: J23 J24 J31 J41 Z22
    Date: 2022–09–09
  5. By: Johannes Haushofer; Sara Lowes; Abednego Musau; David M. Ndetei; Nathan Nunn; Moritz Poll; Nancy Qian
    Abstract: While observational evidence suggests that people behave more prosocially towards members of their own ethnic group, many laboratory studies fail to find this effect. One possible explanation is that coethnic preference only emerges during times of stress. To test this hypothesis, we pharmacologically increase levels of the stress hormone cortisol, after which participants complete laboratory experiments with coethnics and noncoethnics. We find mixed evidence that increased cortisol decreases prosocial behavior. Coethnic preferences do not vary with cortisol. However, in contrast to previous studies, we find strong and robust evidence of coethnic preference.
    JEL: O12 Z10
    Date: 2022–08
  6. By: Bernal, Noelia (Universidad de Piura); Costa-Font, Joan (London School of Economics); Ritter, Patricia (University of Connecticut)
    Abstract: We study the effect of health insurance expansion on nutrition-related children's health outcomes. We exploit quasi-random variation from an insurance expansion targeted at poor households in Peru. We find that access to insurance reduces childhood obesity and exerts positive and economically significant effects on some preventive health care utilization and behaviours, such as children's regular growth checks-ups and deworming treatments, the duration of breastfeeding, and a substitution of foods rich in carbohydrates for other foods rich in proteins. In contrast, we do not find any effect on other outcomes typically related to other interventions.
    Keywords: children’s health, obesity, overweight, public health insurance, health behaviors, nutrition, breast-feeding
    JEL: J13
    Date: 2022–08
  7. By: Sebastian Galiani (University of Maryland/NBER); Peter Gertler (University of California, Berkeley/NBER); Camila Navajas Ahumada (Universidad Torcuato Di Tella)
    Abstract: We randomly assigned beneficiaries of a conditional cash transfer program in Peru to attend a 3 hour training session designed to build their trust in financial institutions.We find that the intervention: (a) increased trust in banks, but had no effect on financial literacy, and (b) increased savings over a ten month period. The increase insavings represents a 1.4 percentage point increase in the savings rate out of the cash transfer deposits, and a 0.4 percentage point increase in the savings rate out of household income.
    Keywords: Trust, savings and poverty
    JEL: G20 D14 I30
    Date: 2022–09

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