nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2023‒06‒19
nine papers chosen by
Maximo Rossi
Universidad de la República

  1. After You. Cognition and Health-Distribution Preferences By Brun, Martín; D'Ambrosio, Conchita; Ferrer-i-Carbonell, Ada; Ramos, Xavier
  2. Where Do STEM Graduates Stem From? The Intergenerational Transmission of Comparative Skill Advantages By Hanushek, Eric A.; Jacobs, Babs; Schwerdt, Guido; Van der Velden, Rolf; Vermeulen, Stan; Wiederhold, Simon
  3. The Economic Approach to Personality, Character and Virtue By Heckman, James J.; Galaty, Bridget; Tian, Haihan
  4. Time-Use and Subjective Well-Being: Is Diversity Really the Spice of Life? By Friedman-Sokuler, Naomi; Senik, Claudia
  5. The Re-Emerging Suicide Crisis in the U.S.: Patterns, Causes and Solutions By Dave E. Marcotte; Benjamin Hansen
  6. Unpacking Neighborhood Effects: Experimental Evidence from a Large-Scale Housing Program in Brazil By Belchior, Carlos Alberto; Gonzaga, Gustavo; Ulyssea, Gabriel
  7. The Health Wedge and Labor Market Inequality By Amy Finkelstein; Casey McQuillan; Owen Zidar; Eric Zwick
  8. Weight, Attractiveness, and Gender When Hiring: A Field Experiment in Spain By Goulão, Catarina; Lacomba, Juan A.; Lagos, Francisco; Rooth, Dan-Olof
  9. Judging Nudging: Understanding the Welfare Effects of Nudges Versus Taxes By John A. List; Matthias Rodemeier; Sutanuka Roy; Gregory K. Sun

  1. By: Brun, Martín (Universitat Autònoma de Barcelona); D'Ambrosio, Conchita (University of Luxembourg); Ferrer-i-Carbonell, Ada (CSIC Institute of Public Goods and Policies (IPP)); Ramos, Xavier (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 always support 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
  2. By: Hanushek, Eric A. (Stanford University); Jacobs, Babs (Maastricht University); Schwerdt, Guido (University of Konstanz); Van der Velden, Rolf (ROA, Maastricht University); Vermeulen, Stan (Maastricht University); Wiederhold, Simon (IWH Halle)
    Abstract: The standard economic model of occupational choice following a basic Roy model emphasizes individual selection and comparative advantage, but the sources of comparative advantage are not well understood. We employ a unique combination of Dutch survey and registry data that links math and language skills across generations and permits analysis of the intergenerational transmission of comparative skill advantages. Exploiting within-family between-subject variation in skills, we show that comparative advantages in math of parents are significantly linked to those of their children. A causal interpretation follows from a novel IV estimation that isolates variation in parent skill advantages due to their teacher and classroom peer quality. Finally, we show the strong influence of family skill transmission on children's choices of STEM fields.
    Keywords: intergenerational mobility, parent-child skill transmission, causality, STEM
    JEL: I24 I26 J12 J24 J62
    Date: 2023–05
  3. By: Heckman, James J. (University of Chicago); Galaty, Bridget (University of Chicago); Tian, Haihan (University of Chicago)
    Abstract: This chapter presents an economic approach to character and personality traits with an application to the study of virtue. Economists interpret psychological traits, including character traits and virtue, as strategies that shape responses to situations (actions) determined by underlying endowments, preferences and resources, as well as incentives to act in situations. Philosophers of virtue consider a more limited set of goals than economists but the same tools can be applied to the economics of virtue ethics. Character traits and personality are not considered immutable in either field. They are shaped by genetics, parents, peers, and schools, as well as life experiences. We develop economic models to interpret and give empirical content to virtue ethics and suggest what virtue ethics contributes to the study of economic models.
    Keywords: traits, philosophy, ethics, economic models
    JEL: J24 J13 I24
    Date: 2023–05
  4. By: Friedman-Sokuler, Naomi (Bar-Ilan University); Senik, Claudia (Paris School of Economics)
    Abstract: Using the American and the French time-use surveys, we examine whether people have a preference for a more diversified mix of activities, in the sense that they experience greater well-being when their time schedule contains many different activities rather than is concentrated on a very small number. This could be due to decreasing marginal utility, as is assumed for goods consumption, if each episode of time is conceived as yielding a certain level of utility per se. With returns to specialization, people would then face a trade-off between efficiency and diversity in choosing how to allocate time. We examine these issues and investigate potential gender differences, considering both instantaneous feelings and life satisfaction.
    Keywords: time allocation, time-use diversity, subjective well-being, life satisfaction, momentary utility, gender
    JEL: I31 J22
    Date: 2023–04
  5. By: Dave E. Marcotte; Benjamin Hansen
    Abstract: The suicide rate in the United States has risen nearly 40 percent since 2000. This increase is puzzling because suicide rates had been falling for decades at the end of the 20th Century. In this paper, we review important facts about the changing rate of suicide. General trends miss the story of important differences across groups – suicide rates rose substantially among middle aged persons between 2005 and 2015 but have fallen since. Among young people, suicide rates began a rapid rise after 2010 that has not abated. We review empirical evidence to assess potential causes for recent changes in suicide rates. The economic hardship caused by the Great Recession played an important role in rising suicide among prime-aged Americans. We illustrate that the increase in the prevalence of depression among young people during the 2010s was so large it could explain nearly all the increase in suicide mortality among those under 25. Bullying victimization of LGBTQ youth could also account for part of the rise in suicide. The evidence that access to firearms or opioids are major drivers of recent suicide trends is less clear. We end by summarizing evidence on the most promising policies to reduce suicide mortality.
    JEL: I1 I12 I19
    Date: 2023–05
  6. By: Belchior, Carlos Alberto (University of Zurich); Gonzaga, Gustavo (Pontifical Catholic University of Rio de Janeiro (PUC-Rio)); Ulyssea, Gabriel (University College London)
    Abstract: This paper investigates the impacts of neighborhoods on the economic outcomes of adults. We exploit one of the world's largest housing lottery programs and administrative data linking lottery registration, formal employment, and access to social programs in Brazil. Receiving a house has positive impacts on housing quality and reduces household expenditures but has negative effects on beneficiaries' neighborhood characteristics. On average, the program has a negative impact on the probability of being formally employed but no effect on the quality of jobs. Poorer individuals, however, experience better formal employment outcomes and lower welfare dependency. We find no differential impacts by distance to beneficiaries' previous homes or jobs. Leveraging a double-randomization design to allocate houses, we show that there are significant differences in effects across neighborhoods and we propose a framework to estimate the relative importance of potential underlying mechanisms. Network quality, amenities and crime play a very limited role, while labor market access explains 82-93% of the observed differences in neighborhood effects.
    Keywords: neighborhood effects, housing programs, labor markets
    JEL: H75 I38 O18 R23 R38
    Date: 2023–05
  7. By: Amy Finkelstein (Massachusetts Institute of Technology); Casey McQuillan (Princeton University); Owen Zidar (Princeton University); Eric Zwick (University of Chicago, Booth School of Business)
    Abstract: Over half of the U.S. population receives health insurance through an employer, with employer premium contributions creating a flat “head tax†per worker, independent of their earnings. This paper develops and calibrates a stylized model of the labor market to explore how this uniquely American approach to financing health insurance contributes to labor market inequality. We consider a partial-equilibrium counterfactual in which employer-provided health insurance is instead financed by a statutory payroll tax on firms. We find that, under this counterfactual financing, in 2019 the college wage premium would have been 11 percent lower, non-college annual earnings would have been $1, 700 (3 percent) higher, and non-college employment would have been nearly 500, 000 higher. These calibrated labor market effects of switching from head-tax to payroll-tax financing are in the same ballpark as estimates of the impact of other leading drivers of labor market inequality, including changes in outsourcing, robot adoption, rising trade, unionization, and the real minimum wage. We also consider a separate partial-equilibrium counterfactual in which the current head-tax financing is maintained, but 2019 U.S. health care spending as a share of GDP is reduced to the Canadian share; here, we estimate that the 2019 college wage premium would have been 5 percent lower and non-college annual earnings would have been 5 percent higher. These findings suggest that health care costs and the financing of health insurance warrant greater attention in both public policy and research on U.S. labor market inequality.
    Keywords: Health insurance, inequality, taxation, health insurance tax subsidy, labor market, college premium, nonemployment
    JEL: J32 J31 I26 J22 J23 I13 H24 M52
    Date: 2023–03
  8. By: Goulão, Catarina (Toulouse School of Economics); Lacomba, Juan A. (Universidad de Granada); Lagos, Francisco (Universidad de Granada); Rooth, Dan-Olof (Stockholm University)
    Abstract: Being overweight or obese is associated with lower employment and earnings, possibly arising from employer discrimination. A few studies have used field experiments to show that obese job applicants are, in fact, discriminated against in the hiring process. However, whether overweight job applicants also face employer discrimination is still an open question. To this end, we have designed a correspondence testing experiment in which fictitious applications are sent to real job openings across twelve different occupations in the Spanish labor market. We compare the callback rate for applications with a facial photo of a normal weight person to the one for applications with a photo of the same person manipulated into looking overweight. Applications with a photo of the weight-manipulated male receive significantly fewer callbacks for a job interview compared to normal weight, and this differential treatment is especially pronounced in female-dominated occupations. For women, we find the opposite result. Weight-manipulated female applications receive slightly more callbacks, especially in female-dominated occupations. Our experimental design allows us to disentangle whether employers act on attractiveness or weight when hiring. For men, the weight manipulation effect is explained by an attractiveness premium, while for women we find evidence of an attractiveness penalty, as well as a weight penalty, in explaining the effect.
    Keywords: obesity, overweight, gender, attractiveness, hiring, correspondence testing
    JEL: J64 J71
    Date: 2023–05
  9. By: John A. List; Matthias Rodemeier; Sutanuka Roy; Gregory K. Sun
    Abstract: While behavioral non-price interventions (“nudges”) have grown from academic curiosity to a bona fide policy tool, their relative economic efficiency remains under-researched. We develop a unified framework to estimate welfare effects of both nudges and taxes. We showcase our approach by creating a database of more than 300 carefully hand-coded point estimates of non-price and price interventions in the markets for cigarettes, influenza vaccinations, and household energy. While nudges are effective in changing behavior in all three markets, they are not necessarily the most efficient policy. We find that nudges are more efficient in the market for cigarettes, while taxes are more efficient in the energy market. For influenza vaccinations, optimal subsidies likely outperform nudges. Importantly, two key factors govern the difference in results across markets: i) an elasticity-weighted standard deviation of the behavioral bias, and ii) the magnitude of the average externality. Nudges dominate taxes whenever i) exceeds ii). Combining nudges and taxes does not always provide quantitatively significant improvements to implementing one policy tool alone.
    JEL: C93 D61 D83
    Date: 2023–04

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