nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2023‒06‒12
seven papers chosen by
Maximo Rossi
Universidad de la República

  1. The Gender Well-being Gap By David G. Blanchflower; Alex Bryson
  2. After you. Cognition and health-distribution preferences By Martin Brun; Conchita D'Ambrosio; Ada Ferrer-i-Carbonell; Xavier Ramos
  3. Intergenerational Altruism and Transfers of Time and Money: A Life Cycle Perspective By Uta Bolt; Eric French; Jamie Hentall MacCuish; Cormac O'Dea
  4. Does Artificial Intelligence Help or Hurt Gender Diversity? Evidence from Two Field Experiments on Recruitment in Tech By Mallory Avery; Andreas Leibbrandt; Joseph Vecci
  5. Labour Market Reallocation Effects of COVID-19 Policies in Spain: A Tale of Two Recessions By Diaz, Antonia; Dolado, Juan J.; Jáñez, Álvaro; Wellschmied, Felix
  6. Social preferences: fundamental characteristics and economic consequences By Ernst Fehr; Gary Charness
  7. The Lifecycle of Affirmative Action Policies and Its Effect on Effort and Sabotage Behavior By Subhasish M. Chowdhury; Anastasia Danilov; Martin G. Kocher

  1. By: David G. Blanchflower; Alex Bryson
    Abstract: Given recent controversies about the existence of a gender wellbeing gap we revisit the issue estimating gender differences across 55 subjective well-being metrics – 37 positive affect and 18 negative affect – contained in 8 cross-country surveys from 167 countries across the world, two US surveys covering multiple years and a survey for Canada. We find women score more highly than men on all negative affect measures and lower than men on all but three positive affect metrics, confirming a gender wellbeing gap. The gap is apparent across countries and time and is robust to the inclusion of exogenous covariates (age, age squared, time and location fixed effects). It is also robust to conditioning on a wider set of potentially endogenous variables. However, when one examines the three ‘global’ wellbeing metrics - happiness, life satisfaction and Cantril’s Ladder - women are either similar to or ‘happier’ than men. This finding is insensitive to which controls are included and varies little over time. The difference does not seem to arise from measurement or seasonality as the variables are taken from the same surveys and frequently measured in the same way. The concern here though is that this is inconsistent with objective data where men have lower life expectancy and are more likely to die from suicide, drug overdoses and other diseases. This is the true paradox – morbidity doesn’t match mortality by gender. Women say they are less cheerful and calm, more depressed, and lonely, but happier and more satisfied with their lives, than men.
    JEL: I30
    Date: 2023–05
  2. By: Martin Brun (Universitat Autònoma de Barcelona); Conchita D'Ambrosio (University of Luxembourg); Ada Ferrer-i-Carbonell (Institut d’Anà lisi Econòmica); Xavier Ramos (Universitat Autònoma de Barcelona)
    Abstract: We analyse individuals’ preferences vaccine-distribution schemes in the World, the EU, and their country of residence that emphasise circumstances rather than outcomes or effort. We link preferences to previously-measured cognition, and find that high-cognition individuals are 35% more likely to alwayssupport such schemes. These preferences are not driven by scheme convenience nor vaccine hesitancy, but appear to be caused by prosociality. We argue that this latter is linked to the perception of less equality of opportunity in society: despite having similar ideals about the role that effort and luck should play in life, high-cognition individuals perceive outcomes to be more determined by luck.
    Keywords: Social preferences, Redistribution, COVID-19, Vaccines, Cognition, COME-HERE survey
    JEL: I14 D91 D71
    Date: 2023–05
  3. By: Uta Bolt; Eric French; Jamie Hentall MacCuish; Cormac O'Dea
    Abstract: Parental investments significantly impact children’s outcomes. Exploiting panel data covering individuals from birth to retirement, we estimate child skill production functions and embed them into an estimated dynastic model in which altruistic mothers and fathers make investments in their children. We find that time investments, educational investments, and assortative matching have a greater impact on generating inequality and intergenerational persistence than cash transfers. While education subsidies can reduce inequality, due to an estimated dynamic complementarity between time investments and education, it is crucial to announce them in advance to allow parents to adjust their investments when their children are young.
    Keywords: Lifecycle; Intergenerational transfers; Parental investments
    JEL: J00 I0
    Date: 2023–04–10
  4. By: Mallory Avery (Department of Economics, Monash Business School, Monash University); Andreas Leibbrandt (Department of Economics, Monash Business School, Monash University); Joseph Vecci (Gothenburg University, Vasagatan, Gothenburg, Sweden)
    Abstract: The use of Artificial Intelligence (AI) in recruitment is rapidly increasing and drastically changing how people apply to jobs and how applications are reviewed. In this paper, we use two field experiments to study how AI in recruitment impacts gender diversity in the male-dominated technology sector, both overall and separately for labor supply and demand. We find that the use of AI in recruitment changes the gender distribution of potential hires, in some cases more than doubling the fraction of top applicants that are women. This change is generated by better outcomes for women in both supply and demand. On the supply side, we observe that the use of AI reduces the gender gap in application completion rates. Complementary survey evidence suggests that this is driven by female jobseekers believing that there is less bias in recruitment when assessed by AI instead of human evaluators. On the demand side, we find that providing evaluators with applicants’ AI scores closes the gender gap in assessments that otherwise disadvantage female applicants. Finally, we show that the AI tool would have to be substantially biased against women to result in a lower level of gender diversity than found without AI.
    Keywords: Artificial Intelligence, Gender, Diversity, Field Experiment
    JEL: C93
    Date: 2023–05
  5. By: Diaz, Antonia; Dolado, Juan J. (Universidad Carlos III de Madrid); Jáñez, Álvaro (Universidad Carlos III de Madrid); Wellschmied, Felix (Universidad Carlos III de Madrid)
    Abstract: This paper studies short-time work arrangements (ERTEs) when aggregate risk is partially sector-specific. In Spain, the Great Recession and the pandemic recession (aka the Great Contagion) can both be understood as being driven partially by large sector-specific shocks. However, the latter shows much less labor reallocation because ERTEs were available to firms. We show that ERTEs stabilize unemployment rates by allowing workers to remain with their employers in highly affected sectors. However, they crowd-out labor hoarding of employers, increase the volatility of the rate of people working and, consequently, of output, and slow-down worker reallocation away from the sectors badly hit by the recession.
    Keywords: worker turnover, sector diversification, short-time work, Great Recession, COVID-19
    JEL: J11 J18 J21 J64
    Date: 2023–04
  6. By: Ernst Fehr; Gary Charness
    Abstract: We review the vast literature on social preferences by assessing what is known about their fundamental properties, their distribution in the broader population, and their consequences for important economic and political behaviors. We provide, in particular, an overview of the empirically identified characteristics of distributional preferences and how they are affected by merit, luck, and risk considerations as well as by concerns for equality of opportunity. In addition, we identify what is known about belief-dependent social preferences such as reciprocity and guilt aversion. The evidence indicates that the big majority of individuals have some sort of social preference while purely self-interested subjects are a minority. Our review also shows how the findings from laboratory experiments involving social preferences provide a deeper understanding of important field phenomena such as the consequences of wage inequality on work morale, employees’ resistance to wage cuts, individuals’ self-selection into occupations and sectors that are more or less prone to morally problematic behaviors, as well as issues of distributive politics. However, although a lot has been learned in recent decades about social preferences, there are still many important, unresolved, yet exciting, questions waiting to be tackled.
    Date: 2023–04
  7. By: Subhasish M. Chowdhury (Department of Economics, University of Sheffield, Sheffield S1 4DT, UK.); Anastasia Danilov (School of Management and Economics, Humboldt-University of Berlin, 10178 Berlin, Germany.); Martin G. Kocher (Department of Economics, University of Vienna, 1090 Vienna, Austria; Department of Economics, University of Gothenburg, Gothenburg, Sweden; and CESifo Munich.)
    Abstract: A main goal of affirmative action (AA) policies is to enable disadvantaged groups to compete with their privileged counterparts. Existing theoretical and empirical research documents that incorporating AA can result in both more egalitarian outcomes and higher exerted efforts. However, the direct behavioral effects of the introduction and removal of such policies are still under-researched. It is also unclear how specific AA policy instruments, for instance, head- start for a disadvantaged group or handicap for the privileged group, affect behavior. We examine these questions in a laboratory experiment in which individuals participate in a real- effort tournament and can sabotage each other. We find that AA does not necessarily result in higher effort. High performers that already experienced an existing AA-free tournament reduce their effort levels after the introduction of the AA policy. There is less sabotage under AA when the tournament started directly with the AA regime. The removal of AA policies, however, significantly intensifies sabotage. Finally, there are no overall systematic differences between handicap and head-start in terms of effort provision or sabotaging behavior.
    Keywords: Affirmative action; Sabotage; Experiment; Tournament; Handicap; Head-start
    JEL: C72 C91 D63 D72
    Date: 2023–05

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