nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2022‒11‒28
five papers chosen by
Maximo Rossi
Universidad de la República

  1. System Justification Beliefs and Life Satisfaction. The role of inequality aversion and support for redistribution. By Teresa María García Muñoz; Juliette Milgram Baleix; Omar Odeh Odeh
  2. Health Shocks and Housing Downsizing: How Persistent Is 'Ageing in Place'? By Joan Costa-i-Font; Cristina Vilaplana-Prieto
  3. Why life gets better after age 50, for some: mental well-being and the social norm of work By Coen van de Kraats; Titus Galama; Maarten Lindeboom
  4. The three eras of global inequality, 1820-2020 with the focus on the past thirty years By Milanovic, Branko
  5. The Welfare Effects of Time Reallocation: Evidence from Daylight Saving Time By Joan Costa-Font; Sarah Fleche; Ricardo Pagan

  1. By: Teresa María García Muñoz (University of Granada, Departamento de Métodos Cuantitativos.); Juliette Milgram Baleix (Universidad de Granada, Departamento de Teoría e Historia Económica); Omar Odeh Odeh (Universidad de Granada, Departamento de Teoría e Historia Económica)
    Abstract: This study tests the effect of the palliative function of system justification beliefs on life satisfaction with both aversion and support for redistribution, in serial, as mediators among Europeans. We use 30900 observations for 27 countries from the ninth wave of the European Social Survey. Consistent with predictions, individuals, who have higher system justification, are less inequality adverse, exhibit lower support for redistributive policies, and have higher life satisfaction. Serial mediation analysis reveals a significant mediating effect of inequality aversion and support for redistribution in the sequential positive nexus between system justification and life satisfaction. We also investigate whether the palliative effect of system justification holds in more (un)equal societies and whether it holds (un)equally among various social groups. The results show a non-significant difference between unequal and equal countries regarding the palliative function. Using OLS regressions, we find that individuals with low social status benefit more from the palliative function than those with high social status, especially for those in more equal countries.
    Keywords: System Justification Theory, Subjective Well-Being, Aversion for Inequality, Palliative Function.
    JEL: D63 I3
    Date: 2022–10–27
  2. By: Joan Costa-i-Font; Cristina Vilaplana-Prieto
    Abstract: Individual preferences for ‘ageing in place’ (AIP) in old age are not well understood. One way to test the strength of AIP preference is to investigate the effect of health shocks on residential mobility to smaller size or value dwellings, which we refer to as ‘housing downsizing’. This paper exploits more than a decade worth of longitudinal data to study older people’s housing decisions across a wide range of European countries. We estimate the effect of health shocks on the probability of different proxies for housing downsizing (residential mobility, differences in home value, home value to wealth ratio), considering the potential endogeneity of the health shock to examine the persistence of AIP preferences. Our findings suggest that consistently with the AIP hypothesis, every decade of life, the likelihood of downsizing decreases by two percentage points (pp). However, the experience of a health shock partially reverts such culturally embedded preference for AIP by a non-negligible magnitude on residential mobility (9pp increase after the onset of a degenerative illness, 9.3pp for other mental disorders and 6.5pp for ADL), home value to wealth ratio and the new dwelling’s size (0.6 and 1.2 fewer rooms after the onset of a degenerative illness or a mental disorder). Such estimates are larger in northern and central European countries.
    Keywords: ageing in place, housing downsizing, health shocks at old age, Europe, residential mobility, mental degenerative mental illness, mental disorder
    JEL: I18 G51 J61 R31
    Date: 2022
  3. By: Coen van de Kraats (Erasmus University Rotterdam); Titus Galama (University of Southern California); Maarten Lindeboom (Vrije Universiteit Amsterdam)
    Abstract: We provide evidence that the social norm (expectation) of work has a detrimental causal effect on the mental well-being of individuals not able to abide by it. Using SHARE data on men aged 50+ from 10 European countries, we identify the social norm of work effect in a difference-in-differences (DiD) model that compares mental well-being scores of unemployed / disabled individuals (the treatment group) with those of employed / retired individuals (the control group) at varying levels of the fraction of retirees of comparable age. The initial mental well-being gap at age 50 is large, with unemployed / disabled men experiencing lower levels of mental well-being. Beyond age 50, the mental well-being of unemployed and disabled men improves as peers of comparable age retire, and full convergence occurs generally at an age that is slightly above the normal retirement age, when everyone has retired. We estimate the social norm of work effect to be comparable to the benefit of tertiary education, the detriment of being widowed, and the benefit of having a household income of 2,000,000 Euros. We explore income-security and leisure-coordination channels as alternative interpretations of the effect to show that these cannot explain our findings.
    Keywords: mental well-being, social norm of work, retirement institutions
    JEL: I10 I31 J60 D63
    Date: 2022–11–13
  4. By: Milanovic, Branko
    Abstract: The paper reestimates global inequality between 1820 and 1980, reappraises the results up to 2013, and presents new inequality estimates for 2018. It shows that historically, global inequality has followed three eras: the first, from 1820 until 1950, characterized by rising between country income differences and increasing within-country inequalities; the second, from 1950 to the last decade of the 20th century, with very high global and between-country inequality; and the current one of decreasing inequality thanks to the rise of Asian incomes, and especially so Chinese. The present era has seen the emergence of the global “median” class, reduced population-weighted gaps between nations, and the greatest reshuffling in income positions between the West and China since the Industrial Revolution. Whether global inequality will continue on its downward trend depends now much more on changes in India and large African countries than on China. (Stone Center on Socio-Economic Inequality Working Paper)
    Date: 2022–11–09
  5. By: Joan Costa-Font (IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics, LSE - LSE Health and Social Care - LSE - London School of Economics and Political Science); Sarah Fleche (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CEP - LSE - Centre for Economic Performance - LSE - London School of Economics and Political Science); Ricardo Pagan (Universidad de Málaga [Málaga] = University of Málaga [Málaga])
    Abstract: Daylight Saving Time (DST) is currently implemented by more than seventy countries, yet we do not have a clear knowledge of how it affects individuals' welfare. Using a regression discontinuity design combined with a differences-in-differences approach, we find that the Spring DST causes a significant decline in life satisfaction. By inducing a reallocation of time, the transition into DST deteriorates sleep and increases time stress, which in turn affects physical and emotional health. After performing a simple cost-benefit analysis, we find evidence suggestive that ending DST would exert a positive effect on welfare, namely the wellbeing costs associated with DST exceed its benefits.
    Keywords: Daylight Saving Time,wellbeing,health,sleep,time stress
    Date: 2021–07

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