nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2023‒06‒26
seven papers chosen by
Maximo Rossi
Universidad de la República

  1. Social Preferences: Fundamental Characteristics and Economic Consequences By Fehr, Ernst; Charness, Gary
  2. 2022 Klein lecture. Parental education and invention: the Finnish enigma By Aghion, Philippe; Akcigit, Ufuk; Hyytinen, Ari; Toivanen, Otto
  3. How does exposure to COVID-19 influence health and income inequality aversion? By Asaria, Miqdad; Costa-Font, Joan; Cowell, Frank
  4. Social mobility and populist values By Perelman, Sergio; Pestieau, Pierre
  5. Understanding the growth of solitary leisure in the U.S., 1965 – 2018 By R. Gordon Rinderknecht; Daniela V. Negraia; Sophie Lohmann; Emilio Zagheni
  6. Gender and the time cost of peer review By Diane Alexander; Olga Gorelkina; Erin Hengel; Richard S.J. Tol
  7. Imperfect Signals By Georg Graetz

  1. By: Fehr, Ernst (University of Zurich); Charness, Gary (University of California, Santa Barbara)
    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.
    Keywords: social preferences, altruism, inequality aversion, image concerns, reciprocity
    JEL: D0 D2 D9 H0 J0 P0
    Date: 2023–05
  2. By: Aghion, Philippe; Akcigit, Ufuk; Hyytinen, Ari; Toivanen, Otto
    Abstract: Why is invention strongly positively correlated with parental income not only in the United States but also in Finland, which displays low income inequality and high social mobility? Using data on 1.45 M Finnish individuals and their parents, we find the following: (i) the positive association between parental income and off-spring probability of inventing is greatly reduced when controlling for parental education; (ii) instrumenting for the parents having an MSc degree using distance to nearest university reveals a large causal effect of parental education on offspring probability of inventing; and (iii) the causal effect of parental education has been markedly weakened by the introduction in the early 1970s of a comprehensive schooling reform.
    Keywords: 786587
    JEL: J1
    Date: 2023–05–16
  3. By: Asaria, Miqdad; Costa-Font, Joan; Cowell, Frank
    Abstract: We study individual aversion to health and income inequality in three European countries (the United Kingdom, Germany, and Italy), its determinants and especially, the effects of exposure to three types of COVID-19 specific shocks affecting individuals’ employment status, their income and health. Using evidence of representative samples of the population in the UK, we compare levels of health- and income-inequality aversion in the UK between the years 2016 and 2020 we find a significant increase in inequality aversion in both income and health domains. We show evidence suggesting that inequality aversion is higher in the income domain than in the health domain. Furthemore, we show that inequality aversion in both domains increases in age and education and decreasing in income and risk appetite. However, people directly exposed to major health shocks during the COVID-19 pandemic generally exhibited lower levels of aversion to both income and health inequality. Finally, we show that inequality aversion was significantly higher among those at higher risk of COVID-19 mortality who experienced major health shocks during the pandemic.
    Keywords: inequality aversion; income; health; COVID-19; attitudes to inequality; employment shocks; health shocks; difference-in-differences; coronavirus; LSE’s International Inequalities Institute which funded the 2016 survey.; Springer deal
    JEL: I18 I30 I38
    Date: 2023–05–19
  4. By: Perelman, Sergio (Université de Liège); Pestieau, Pierre (Université catholique de Louvain, LIDAM/CORE, Belgium)
    Abstract: Despite some successes in Europe, the welfare state has not been able to renew itself to meet the challenge of various social divides. The major source of these divides is undoubtedly the failure of the social elevator. One might conjecture that the welfare state has probably been too preoccupied with income inequality and poverty and not enough with social mobility. To support this hypothesis, it is important to have good measures of intergenerational mobility and of populist attitudes to compare them with indicators of redistribution. If redistribution and social mobility are indeed found to be negatively correlated, this would invalidate the famous Gatsby Curve. In this paper, we rely on the several waves of the European Social Survey (ESS) to elicit indicators of mobility and of populism and show how the lack of social mobility can explain populist attitudes across a number of European countries.
    Keywords: Populism, social mobility, education policy, Gatsby curve
    JEL: H20 H31 H50
    Date: 2023–05–01
  5. By: R. Gordon Rinderknecht (Max Planck Institute for Demographic Research, Rostock, Germany); Daniela V. Negraia (Max Planck Institute for Demographic Research, Rostock, Germany); Sophie Lohmann (Max Planck Institute for Demographic Research, Rostock, Germany); Emilio Zagheni (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: This research examined the extent to which solitary leisure in the U.S. has grown over the past 60 years. The demographic and technological developments of the past decades have profoundly altered the way people live life. An increase in social isolation is one potential such change, though its prevalence remains debated and challenging to directly quantify. To provide this direct quantification, we focused on an area of life where social isolation has the potential to be especially detrimental: leisure time. We assessed changes in leisure spent alone via nationally representative U.S. time-use data spanning six decades. Findings indicate that time spent alone during leisure has more than doubled among working-aged adults, from 57 daily minutes in 1965 to 117 in 2018. More concerningly, the probability of spending five hours or more in solo leisure a day has increased six-fold. Multivariate analyses indicate this trend is partly accounted for by population changes, most notably reductions in marriage rates and increases in living alone, but most of the growth of solo leisure remains unexplained. Leisure is an important source of social capital and network formation, and increasingly solitary leisure may undermine well-being in the moment and across the life course.
    Keywords: USA
    JEL: J1 Z0
    Date: 2023
  6. By: Diane Alexander (The Wharton School, Philadelphia, PA, USA); Olga Gorelkina (University of Liverpool, UK); Erin Hengel (London School of Economics); Richard S.J. Tol (Department of Economics, University of Sussex, BN1 9SL Falmer, United Kingdom)
    Abstract: In this paper, we investigate one factor that can directly contribute to—as well as indirectly shed light on the other causes of—the gender gap in academic publishing: length of peer review. Using detailed administrative data from an economics field journal, we find that, conditional on manuscript quality, referees spend longer reviewing female-authored papers, are slower to recommend accepting them, manuscripts by women go through more rounds of review and their authors spend longer revising them. Less disaggregated data from 32 economics and finance journals corroborate these results. We conclude by showing that all gender gaps decline—and eventually disappear—as the same referee reviews more papers. This pattern suggests novice referees initially statistically discriminate against female authors, but are less likely to do so as their information about and confidence in the peer review process improves. More generally, they also suggest that women may be particularly disadvantaged when evaluators are less familiar with the objectives and parameters of an assessment framework.
    Keywords: Gender Inequality, Statistical Discrimination, Research Productivity, Peer Review
    JEL: A11 D8 J16 J24 J7
    Date: 2023–06
  7. By: Georg Graetz
    Abstract: A pre-condition for employer learning is that signals at labor market entry do not fully reveal graduates’ productivity. I model various distinct sources of signal imperfection—such as noise and multi-dimensional types—and characterize their implications for the private return to skill acquisition. Structural estimates using NLSY data suggest an important role for noise, pushing the private return below the social return. This induces substantial under-investment and causes output losses of up to 22 percent. Value-added-based evidence from Swedish high school graduates also points to noise and under-investment. Highlighting the distinction between schooling duration and skills acquired, I conclude that individuals likely spend too much time in school, but learn too little.
    Keywords: human capital, signalling, employer learning, returns to schooling
    JEL: D82 I26 J24 J31
    Date: 2023

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