nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2023‒02‒27
eight papers chosen by
Maximo Rossi
Universidad de la República

  1. Home alone: Widows' Well-Being and Time By Maja Adena; Daniel Hamermesh; Michal Myck; Monika Oczkowska
  2. Explaining Happiness Trends in Europe By Easterlin, Richard A.; O'Connor, Kelsey J.
  3. Does money strengthen our social ties? Longitudinal evidence of lottery winners By Costa-Font, Joan; Powdthavee, Nattavudh
  4. Geographic Mobility over the Life-Cycle By Diaz, Antonia; Jáñez, Álvaro; Wellschmied, Felix
  5. Does School Choice Leave Behind Future Criminals? By Andrew Bibler; Stephen B. Billings; Stephen L. Ross
  6. The Adventure of Running Experiments with Teenagers By Antonio Alfonso-Costillo; Pablo Brañas-Garza; Diego Jorrat; Pablo Lomas; Benjamin Prissé; Mónica Vasco
  7. Persecution and Escape By Sascha O. Becker; Volker Lindenthal; Sharun Mukand; Fabian Waldinger
  8. Taking It to the Limit: Effects of Increased Student Loan Availability on Attainment, Earnings, and Financial Well-Being By Black, Sandra E.; Denning, Jeffrey T.; Dettling, Lisa J.; Goodman, Sarena; Turner, Lesley

  1. By: Maja Adena (WZB Berlin); Daniel Hamermesh (University of Texas at Austin); Michal Myck (Centre for Economic Analysis); Monika Oczkowska (Centre for Economic Analysis)
    Abstract: Using data from the Survey of Health, Ageing and Retirement in Europe (SHARE, 2004-17) and time diaries from Poland (2013), the U.S. (2006-16), the U.K. (2014-15) and France (2009-10), we examine differences between widowed and partnered older women in well-being and its development in widowhood. Most importantly, our analysis accounts for time use, an aspect which has not been studied previously. We trace the evolution of well-being of women who become widowed by comparing them with their matched non-widowed ‘statistical twins’ and examine the role of an exceptionally broad set of potential moderators of widowhood’s impact on well-being. We confirm a dramatic decrease in mental health and life satisfaction after the loss of partner, followed by a slow partial recovery over a five-year period. An extensive set of controls recorded prior to widowhood, including detailed family ties and social networks, provides little help in explaining the deterioration in well-being. Unique data from time-diaries kept by older women in several European countries and the U.S. tell us why: the key factor behind widows’ reduced well-being is increased time spent alone.
    Keywords: widowhood; well-being; social networks; time use;
    JEL: I31 I19 J14
    Date: 2023–01–20
  2. By: Easterlin, Richard A. (University of Southern California); O'Connor, Kelsey J. (STATEC Research – National Institute of Statistics and Economic Studies)
    Abstract: In Europe differences among countries in the overall change in happiness since the early 1980s have been due chiefly to the generosity of welfare state programs— increasing happiness going with increasing generosity and declining happiness with declining generosity. This is the principal conclusion from a time series study of ten Northern, Western, and Southern European countries with the requisite data. In the present study cross-section analysis of recent data gives a misleading impression that economic growth, social capital, and / or quality of the environment are driving happiness trends, but in the long-term time-series data these variables have no relation to happiness. Significance: Over the past five decades happiness has emerged as a subject of social science research and a potential goal of public policy. But how can a country's happiness be increased? On this, there is a conflict between a number of policy alternatives – promote economic growth, increase social capital, improve the environment, expand welfare state programs. Each of these has point-of-time (cross-section) evidence supporting its claim, but there are very few long-term time-series studies. This article presents newly available time-series evidence that supports the importance of welfare state policies.
    Keywords: economic growth, happiness, life satisfaction, subjective well-being, long-term, welfare programs, social capital, trust, quality of environment, cross section, time series, Europe, Easterlin Paradox
    JEL: I31 I38 D60 O10 Q53 Z13
    Date: 2023–01
  3. By: Costa-Font, Joan; Powdthavee, Nattavudh
    Abstract: We study the effect of lottery wins on social ties and support network in the United Kingdom. On average, we find that winning more in the lottery increases the probability of meeting friends on most days, which is consistent with the complementary effect of income on social ties. The opposite is true with regards to social ties held for more instrumental reasons such as talking to neighbours. Winning more in the lottery also lessens an individual support network consistently with a substitution for instrumental social ties. However, further robustness checks reveal that the average lottery effects are driven by the few outliers of very large wins in the sample, thus suggesting that small to medium-sized wins (below £10k) may not be enough to change people’s social ties and support network in a substantial way.
    Keywords: income; lottery; socialization effect; unearned income; friendships; neighbourhood; social ties
    JEL: Z10
    Date: 2023–02–03
  4. By: Diaz, Antonia; Jáñez, Álvaro (Universidad Carlos III de Madrid); Wellschmied, Felix (Universidad Carlos III de Madrid)
    Abstract: When mobility between locations is frictional, a person's economic well-being is partially determined by her place of birth. Using a life cycle model of mobility, we find that search frictions are the main impairment to the mobility of young people in Spain, and these frictions are particularly strong in economically distressed locations. As a result, being born in a high-unemployment urban area carries with it a large welfare penalty. Less stable jobs, slower skill accumulation, lower average wages, and fewer possibilities for geographic mobility all contribute to these welfare losses. Paying transfers to people in distressed economic locations decreases these welfare losses without large adverse effects on mobility. In contrast, several policies that encourage people to move to low-unemployment urban areas increase these welfare losses and fail to meaningfully increase mobility towards these more successful locations.
    Keywords: mobility, local labor markets, search frictions, life cycle, dynamic spatial models
    JEL: E20 E24 E60 J21 J61 J63 J64 J68 R23 R31
    Date: 2023–01
  5. By: Andrew Bibler (University of Nevada, Las Vegas); Stephen B. Billings (University of Colorado); Stephen L. Ross (University of Connecticut)
    Abstract: School choice lotteries are an important tool for allocating access to high-quality and oversubscribed public schools. While prior evidence suggests that winning a school lottery decreases adult criminality, there is little evidence for how school choice lotteries impact non-lottery students who are left behind at their neighborhood school. We leverage variation in actual lottery winners conditional on expected lottery winners to link the displacement of middle school peers to adult criminal outcomes. We find that non-applicant boys are more likely to be arrested as adults when applicants from their neighborhood win the school choice lottery. These effects are concentrated among boys who are at low risk of being arrested based on observables. Finally, we confirm evidence in the literature that students who win the lottery decrease adult criminality but show that after accounting for the negative impact on the students who forego the lottery, lotteries increase overall arrests and days incarcerated for young men.
    Keywords: School Choice Lotteries, Students Left Behind, Arrest, Crime, Middle School, Neighborhood Effects, Peers
    JEL: I24 I28 K42 R23
    Date: 2023–01
  6. By: Antonio Alfonso-Costillo (Universidad Loyola); Pablo Brañas-Garza (Universidad Loyola); Diego Jorrat (Universidad Loyola); Pablo Lomas (Universidad Loyola); Benjamin Prissé (Universidad Loyola); Mónica Vasco (Universidad Loyola)
    Abstract: Economists are increasingly interested in how to conduct experiments with teenagers. This paper evaluates whether different methodological factors impact the answers of teenagers to standard experimental tasks on measuring time preferences, risk preferences, cognitive abilities and financial abilities, among others. Results show: i) the recruitment process matters depending on whether the school includes the experiment as an institutional activity or the teachers led the process particularly for their class; the dropout rate reduced significantly from the first to the third experimental wave, when the school was responsible for organizingthe experiment; ii) hypothetical payments elicits similar results than monetary payments; iii) adding visual elements to the experiment’s interface improves the quality of answers; and iv) the type of electronic device on which subjects answer the tasks does not influence results, while administrating the experiment by school teachers does affect the answers. We conclude by giving three suggestions to researchers interested in conducting experiments with teenagers: first, run the experiment as a school-programmed activity; second, it is not necessary the use of real payments which increases the cost and complicates the recruitment; and third, integratevisual components to the task
    Keywords: developmental decision-making; field experiments; economic preferences; teenagers
    JEL: C91 D81
    Date: 2023–02
  7. By: Sascha O. Becker (Monash University and University of Warwick); Volker Lindenthal (LMU Munich); Sharun Mukand (University of Warwick); Fabian Waldinger (LMU Munich)
    Abstract: We study the role of professional networks in facilitating emigration of Jewish academics dismissed from their positions by the Nazi government. We use individual-level exogenous variation in the timing of dismissals to estimate causal effects. Academics with more ties to early émigrés (emigrated 1933-1934) were more likely to emigrate. Early émigrés functioned as "bridging nodes" that facilitated emigration to their own destination. We also provide evidence of decay in social ties over time and show that professional networks transmit information that is not publicly observable. Finally, we study the relative importance of three types (family, community, professional) of social networks.
    Keywords: professional networks; high-skilled emigration; Nazi Germany; Jewish academics; universities;
    JEL: I20 I23 I28 J15 J24 N30 N34 N40 N44
    Date: 2023–01–23
  8. By: Black, Sandra E. (Columbia University); Denning, Jeffrey T. (Brigham Young University); Dettling, Lisa J. (Federal Reserve Board of Governors); Goodman, Sarena (Federal Reserve Board of Governors); Turner, Lesley (Vanderbilt University)
    Abstract: Growing reliance on student loans and repayment difficulties have raised concerns of a student debt crisis in the United States, but little is known about the effects of student borrowing on human capital and long-run financial well-being. We use variation induced by recent expansions in federal loan limits combined with administrative datasets to identify the effects of increased access to student loans on credit-constrained students' educational attainment, earnings, debt, and loan repayment. Increased student loan availability raises student debt and improves degree completion, later-life earnings, and student loan repayment while having no effect on homeownership or other types of debt.
    Keywords: credit constraints, student debt
    JEL: I20 I22 I21
    Date: 2023–01

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