nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2023‒03‒06
six papers chosen by
Maximo Rossi
Universidad de la República

  1. Through the Looking Glass: Transparency about Others' Luck and Effort Enhances Redistribution By Wiese, Juliane V.; Powdthavee, Nattavudh; Yeo, Jonathan; Riyanto, Yohanes E.
  2. Marital Sorting and Inequality: How Educational Categorization Matters By Almar, Frederik; Friedrich, Benjamin; Reynoso, Ana; Schulz, Bastian; Vejlin, Rune Majlund
  3. Labour Market Expectations and Unemployment in Europe By Blanchflower, David G.; Bryson, Alex
  4. Gender Gap, Intra Household Bargaining and Sex Selective Abortion in Albania By Keiti Kondi
  5. The effects of a project and play-based early education program on medium term developmental trajectories of young children in a low-income setting By Raquel Bernal; Michele Giannola; Milagros Nores
  6. Stories, statistics, and memory By Thomas Graeber; Christopher Roth; Florian Zimmermann

  1. By: Wiese, Juliane V. (Warwick Business School); Powdthavee, Nattavudh (Nanyang Technological University, Singapore); Yeo, Jonathan (Nanyang Technological University, Singapore); Riyanto, Yohanes E. (Nanyang Technological University, Singapore)
    Abstract: How do we persuade people to part with money they feel they have rightly earned? We conducted a dyadic experiment (N=1, 986) where luck determined which of the players' performance counted toward winning the game. Despite luck playing a large part, we found strong evidence of justified deservingness among the winners. The better they performed in the task, the less they redistributed to their nonwinning partner. However, in treatments where performance was transparent, winners significantly increased redistribution to nonwinners who performed similarly well. We find that transparency can effectively alter redistributive preferences even when people feel fully deserving of their income.
    Keywords: luck, efforts, survivalship bias, redistribution, inequality, deservingness
    JEL: C9 D9
    Date: 2023–01
  2. By: Almar, Frederik (Aarhus University); Friedrich, Benjamin (Northwestern University); Reynoso, Ana (University of Michigan); Schulz, Bastian (Aarhus University); Vejlin, Rune Majlund (Aarhus University)
    Abstract: This paper revisits the link between education-based marriage market sorting and income inequality. Leveraging Danish administrative data, we develop a novel categorization of marriage market types based on the starting wages and wage growth trajectories associated with educational programs: ambition types. We find a substantial increase in sorting by educational ambition over time, which explains more than 40% of increasing inequality since 1980. In contrast, sorting trends are flat with the commonly used level of education. Hence, the mapping between education and marriage-market types matters crucially for conclusions about the role of marital sorting in rising income inequality.
    Keywords: marital sorting, inequality, education
    JEL: D13 D31 I24
    Date: 2023–01
  3. By: Blanchflower, David G. (Dartmouth College); Bryson, Alex (University College London)
    Abstract: Unemployment is notoriously difficult to predict. In previous studies, once country and year fixed effects are added to panel estimates, few variables predict changes in unemployment rates. Using panel data for 29 European countries collected by the European Commission over 444 months between January 1985 and October 2022 in an unbalanced country*month panel of just over 10000 observations, we predict changes in the unemployment rate 12 months ahead. We do so using individuals' fears of unemployment which predict subsequent changes in unemployment 12 months later in the presence of country fixed effects and lagged unemployment. We also use industrial firm's expectations of future employment, which are also predictive of what happens to unemployment three months later. Using our preferred model specification, we present out-of-sample predictions based on replications from 1, 000 random samples. These track actual movements in unemployment rates closely over a period in which there were two major recessions and unemployment shifted by a factor of two.
    Keywords: unemployment, fear, business sentiment, expectations, forecasting recession, COVID-19, supply shocks
    JEL: J60 J64 J68
    Date: 2023–01
  4. By: Keiti Kondi (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: Among European countries, Albania has by far the highest sex ratio at birth with 1.12 boys per girl, compared to the European average of 1.058. Considering this disbalance, this study analyzes the relative importance of three underlying mechanisms: sex bias in parents’ preferences for children, the gender gap in intra-household bargaining, and cultural norms. We develop a parsimonious model which incorporates different utilities for boys and girls, the bargaining between family members, and the decision about abortion dependent on its cost and including social stigma. We calibrate the model using data from the Demographic and Health Survey dataset on Albania for the year 2008 by measuring the preference for children of both sexes by the time invested in the child, education, violence, and women empowerment by how independent are women in taking their own decisions. We find that if we increase gender empowerment and equalize preference in children, the sex ratio decreases by 0.04 but it remains above its biological value. This residual could be interpreted as cultural norms affecting the decision-making and not allowing the above indicators in bringing sex ratios down to their biological values. To conclude we discuss different policies that can help in the decline of the sex ratio disparity while accounting for norms.
    Keywords: sex selective abortion, gender equality, investment in children, fertility, household bargaining power
    JEL: O1
    Date: 2023–01–13
  5. By: Raquel Bernal (Universidad de Los Andes); Michele Giannola (University of Naples Federico II, CSEF, and the Institute for Fiscal Studies.); Milagros Nores (National Institute for Early Education Research, Graduate School of Education, Rutgers, The State University of New Jersey)
    Abstract: Extensive research has shown comprehensive early interventions can improve the developmental outcomes of disadvantaged children. However, the evidence on the effectiveness of high-quality center-based programs for young children in developing countries is still scarce, where programs are typically of low quality and only short-term impacts have been assessed. This paper reports short and medium-run effects from a high-quality early education intervention characterized by key elements of process quality such as project and play-based learning and rich adult-child interactions, on children younger than four years of age in two communities in northern Colombia. We find strong positive effects on cognitive development and health, and no significant impacts on socioemotional development.
    Keywords: early childhood development, early education, poverty, impact evaluation
    JEL: J13 I10 I20 H43
    Date: 2023–02–03
  6. By: Thomas Graeber (University of Harvard); Christopher Roth (University of Cologne); Florian Zimmermann (University of Bonn)
    Abstract: Widespread misperceptions shape attitudes on key societal topics, such as climate change and the recent pandemic. These belief distortions are puzzling in contexts where accurate statistical information is broadly available and attended to. This column argues that the nature of human memory may be key for understanding the persistence of misperceptions in practice. It documents that anecdotal information in the form of stories comes to mind more easily than statistical information, generating the potential for systematic belief biases.
    Date: 2023

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