nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2023‒04‒03
eight papers chosen by
Maximo Rossi
Universidad de la República

  1. Gender wage gap among young adults: a comparison across British cohorts By Francesca Foliano; Alex Bryson; Heather Joshi; Bozena Wielgoszewska; David Wilkinson
  2. A Trajectories-Based Approach to Measuring Intergenerational Mobility By Yoosoon Chang; Steven Durlauf; Seunghee Lee; Joon Park
  3. The impact of COVID-19 on education in Latin America: long-run implications on poverty and inequality By Jessica Bracco; Leonardo Gasparini; Mariana Marchionni; Guido Neidhöfer
  4. Lucky Women in Unlucky Cohorts: Gender Differences in the Effects of Initial Labor Market Conditions in Latin America By María Inés Berniell; Leonardo Gasparini; Mariana Marchionni; Mariana Viollaz
  5. The distributional effect of a migratory exodus in a developing country: the role of downgrading and regularization By Carlo Lombardo; Julián Martinez-Correa; Leonardo Peñaloza-Pacheco; Leonardo Gasparini
  6. Health System Trust and Compliance with COVID-19 Restrictions By Costa-Font, Joan; Vilaplana-Prieto, Cristina
  7. Income and the (eventual) rise of democracy By Dario Debowicz; Alex Dickson; Ian A. MacKenzie; Petros G. Sekeris
  8. Changing local customs: Long-run impacts of the earliest campaigns against female genital cutting By Congdon Fors, Heather; Isaksson, Ann-Sofie; Annika, Lindskog

  1. By: Francesca Foliano (University College London); Alex Bryson (University College London); Heather Joshi (University College London); Bozena Wielgoszewska (University College London); David Wilkinson (University College London)
    Abstract: We study the evolution of the gender wage gap among young adults in Britain between 1972 and 2015 using data from four British cohorts born in 1946, 1958, 1970 and 1989/90 on early life factors, human capital, family formation and job characteristics. We account for non-random selection of men and women into the labour market and compare the gender wage gap among graduates and non-graduates. The raw and covariate adjusted gender wage gaps at the mean decline over the period among non- graduates, but they rise among young graduates. The gender wage gap across the wage distribution narrows over time for lower wages. Adjusting for positive selection into employment increases the size of the gender wage gap in earlier cohorts, but selection is not apparent in the two most recent cohorts. Thus the rate of convergence in the wages of young men and women is understated when estimates do not adjust for positive selection in earlier cohorts. Differences in traditional human capital variables explain only a very small component of the gender wage gaps among young people in all four cohorts, but occupational gender segregation plays an important role in the later cohorts.
    Keywords: gender wage gap; birth cohorts; employment selection; graduates; occupational segregation.
    JEL: J16 J2 J3
    Date: 2023–03–01
  2. By: Yoosoon Chang (Indiana University, Department of Economics); Steven Durlauf (University of Chicago and National Bureau of Economic Research); Seunghee Lee (Korea Development Institute (KDI)); Joon Park (Indiana University, Department of Economics)
    Abstract: This paper develops an approach to intergenerational mobility in which the trajectories of parental incomes during childhood and adolescence are the conditioning objects for characterizing dependence across generations. We use functional regression methods to produce an intergenerational elasticity curve that measures how marginal changes in income at each age affect expected offspring permanent income. Using the PSID, estimates of this curve exhibit near monotonicity with respect to age, so that parental incomes in middle childhood and adolescence have larger marginal effects than incomes in early childhood. When interactions are allowed to occur between incomes at different ages, we find a complex pattern of substitutability between incomes at ages that are close in time versus complementarity between parental incomes for ages early childhood and adolescence. Qualitatively similar results hold for offspring education while we do not find evidence of age-specific effects for occupation. We conclude that important information about the links between parental incomes and children exists beyond the scalar characterization of parental permanent income.
    Date: 2023–03
  3. By: Jessica Bracco; Leonardo Gasparini; Mariana Marchionni; Guido Neidhöfer
    Abstract: The shock of the COVID-19 pandemic affected the process of human capital accumulation of children and youths. As a consequence of this disruption, the pandemic is likely to imply permanent lower levels of human capital. In this paper we provide new evidence on the impact of the COVID-19 and school closures on education in Latin America by exploiting harmonized microdata from a large set of national household surveys. In addition, we carry out some basic microsimulations to assess the potential effect of changes in human capital due to the COVID-19 crisis on future income distributions. We find that the pandemic is likely to have significant long-run consequences in terms of incomes and poverty if strong compensatory measures are not taken soon.
    JEL: O1 I31 I24
    Date: 2022–11
  4. By: María Inés Berniell; Leonardo Gasparini; Mariana Marchionni; Mariana Viollaz
    Abstract: This paper assesses gender differences in the effects of adverse conditions at labor-market entry in a developing region. Using harmonized microdata from national household surveys for 15 Latin American countries, we build a synthetic panel of cohorts that potentially transition from school to work and observe their labor market outcomes 10 years later. We find that men who faced higher unemployment rates at ages 18-20 suffer a negative effect on employment at ages 27-30. In contrast, women from those same unlucky cohorts have higher employment rates and earnings. Our results are consistent with women acting as secondary workers in downturns. We also find that women from unlucky cohorts control a larger share of family income and are more likely to be the head of household 10 years after labor market entry, and that adverse initial labor market conditions are correlated to more egalitarian perceptions about gender roles later in life.
    JEL: J16 J21 J22 J31
    Date: 2022–11
  5. By: Carlo Lombardo; Julián Martinez-Correa; Leonardo Peñaloza-Pacheco; Leonardo Gasparini
    Abstract: We study the distributional effect of the massive exodus of Venezuelans in Colombia and how public policy can shape its impact. Using RIF-regressions in an instrumental variables approach, we find that the exodus had a larger negative effect on the lower tail of the natives’ wage distribution, increasing inequality in the host economy. We propose downgrading as the driving mechanism: due to formal restrictions, immigrants ended up working in more routine and lower-paying jobs than natives with similar characteristics. Finally, we show that a large-scale amnesty program reduced the magnitude of downgrading, mitigating the unequalizing impact of the exodus.
    JEL: D30 F22 J61 O15
    Date: 2022–11
  6. By: Costa-Font, Joan (London School of Economics); Vilaplana-Prieto, Cristina (Universidad de Murcia)
    Abstract: We examine the extent to which exposure to higher relative COVID-19 mortality (RM), influences health system trust (HST), and whether changes in HST influence the perceived ease of compliance with pandemic restrictions during the COVID-19 pandemic. Drawing on evidence from two representative surveys covering all regions of 28 European countries before and after the first COVID-19 wave and using a difference in differences strategy together with Coarsened Exact Matching (CEM), we document that living in a region with higher RM during the first wave of the pandemic increased HS. However, the effect is driven by individuals over 45 years of age, and the opposite is true among younger cohorts. We find that a higher HST reduces the costs of complying with COVID-19 restrictions, but only so long as excess mortality does not exceed the average by more than 20%, at which point the ease of complying with COVID-19 restrictions significantly declines, offsetting the positive effect of trust in the healthcare system. Our interpretation of the estimates is that RM is interpreted as a risk signal among those over 45, and as a signal of health-care system failure among younger age individuals.
    Keywords: healthcare system trust, mortality, lockdown, Eurobarometer, difference in differences, COVID-19
    JEL: I13 Z1
    Date: 2023–02
  7. By: Dario Debowicz (School of Management, Swansea University, Bay Campus, Fabian Way, Swansea SA1 8EN, United Kingdom.); Alex Dickson (Department of Economics, University of Strathclyde, Glasgow, UK, G4 0QU.); Ian A. MacKenzie (School of Economics, University of Queensland, Brisbane, Australia); Petros G. Sekeris (TBS Business School, 1 Place A. Jourdain, 31000 Toulouse, France.)
    Abstract: We investigate the relationship between income and democracy. A theoretical framework is developed where citizens derive utility from both material goods and democratic rights. Citizens can devote their time either to creating material benefits or to political activism (that improves democratic liberties). We demonstrate a non-monotonic relationship between income and democracy. In poor countries—where the elasticity of the marginal rate of substitution between material good and democratic rights is low—exogenous increases in income (wages) lead to a reduction in the level of democratic liberties: as wages increase, citizens are increasingly willing to give up time otherwise devoted to activism to work more. In wealthy countries, the opposite is true: democratic liberties increase with income. Our country fixed-effects and GMM estimations on cross-country data over 1960- 2010 empirically validate this non-monotonic prediction, thereby corroborating our theory above-and-beyond the effect of institutions and culture.
    Keywords: Income, Democratic Values, Preferences
    JEL: C72 D72 P16 P26
    Date: 2023–03
  8. By: Congdon Fors, Heather (Department of Economics, School of Business, Economics and Law, Göteborg University); Isaksson, Ann-Sofie (Department of Economics, School of Business, Economics and Law, Göteborg University); Annika, Lindskog (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: This paper investigates the long-run impacts of Christian missionary expansion on the practice of female genital cutting (FGC) in sub-Saharan Africa. The empirical analysis draws on historical data on the locations of early European missions geographically matched with Demographic and Health Survey data on FGC practices of around 410, 000 respondents from 42 surveys performed over a 30-year period (1990-2020) in 14 African countries. The results suggest that historical Christian missions have impacted FGC practices today. The benchmark estimates imply that a person living 10 km from a historical mission is 4-6 percentage points less likely to have undergone FGC than someone living 100 km from a mission site. Similarly, having one more mission per 1000 km2 in one’s ancestral ethnic homeland decreases the probability of having undergone FGC by around 8 percentage points. The effect is robust across a large number of specifications and control variables, both modern and historic. We use ethnographic data on pre-colonial FGC to show that the location of missions was not correlated with the practice of FGC in the local population.
    Keywords: Female genital cutting; missions; norms; Africa
    JEL: D71 D91 I15 O55
    Date: 2023–03

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