nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2023‒07‒10
four papers chosen by
Maximo Rossi
Universidad de la República

  1. Social Preferences: Fundamental Characteristics and Economic Consequences By Ernst Fehr; Gary Charness
  2. Like Mother, like Child? The Rise of Women's Intergenerational Income Persistence in Sweden and the United States By Brandén, Gunnar; Nybom, Martin; Vosters, Kelly
  3. The ‘welcomed lockdown’ hypothesis? Mental wellbeing and mobility restrictions By Costa-Font, Joan; Knapp, Martin; Vilaplana-Prieto, Cristina
  4. Does exposure to democracy decrease health inequality? By Costa-Font, Joan; Kunst, Niklas

  1. 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
  2. By: Brandén, Gunnar (Center for Epidemiology and Community Medicine); Nybom, Martin (Institute for Evaluation of Labour Market and Education Policy (IFAU)); Vosters, Kelly (University of North Carolina at Charlotte)
    Abstract: We show how intergenerational mobility has evolved over time in Sweden and the United States since 1985, focusing on prime-age labor incomes of both men and women. Income persistence involving women (daughters and/or mothers) has risen substantially over recent decades in both Sweden and the US, while the more predominantly studied father-son measures remained roughly stable. Interestingly, mother-son and mother-daughter persistence levels are very similar as they rise through the sample period, also to nearly the same levels in both countries, contrary to well-established elevated levels of persistence in the US relative to Sweden. We develop a model to quantify the relative roles of parent human capital, employment, and (residual) income, as well as assortative mating. Despite very similar trends and levels for mothers in the US and Sweden, we find substantial differences in the roles of employment and assortative mating over time, consistent with the staggered timing in women's spike in labor force attachment. Parental assortative mating is also an important factor in both countries, though negative sorting on (residual) income in the US negates the upward influence of positive human capital sorting, lending to the similar cross-country levels of mother-child persistence.
    Keywords: intergenerational mobility, gender, inequality
    JEL: J62 J12 J16 J24
    Date: 2023–05
  3. By: Costa-Font, Joan; Knapp, Martin; Vilaplana-Prieto, Cristina
    Abstract: The COVID-19 pandemic and its mobility restrictions have been an external shock, influencing mental wellbeing. However, does risk exposure to COVID-19 affect the mental wellbeing effect of lockdowns? This paper examines the 'welcomed lockdown' hypothesis, namely the extent to which there is a level of risk where mobility restrictions are not a hindrance to mental wellbeing. We exploit the differential timing of exposure the pandemic, and the different stringency of lockdown policies across European countries and we focus on the effects on two mental health conditions, namely anxiety and depression. We study whether differences in the individual symptoms of anxiety and depression are explained by the combination of pandemic mortality and stringency of lockdown. We draw on an event study approach, complemented with a Difference-in-Difference (DiD), and Regression Discontinuity Design (RDD). Our estimates suggest an average increase in depression (3.95%) and anxiety (10%) symptoms relative to the mean level on the day that lockdown took effect. However, such effects are wiped out when a country's exhibits high mortality ('pandemic category 5'). Hence, we conclude that in an environment of high mortality, lockdowns no longer give rise to a reduction in mental wellbeing consistent with the 'welcome lockdown' hypothesis.
    Keywords: anxiety; depression; Covid-19; pandemic; lockdown; coronavirus; European Regional Development Fund ECO2017- 83668-R; PID2020-114231RB-I00 and RTI2018-095256-BI00; Springer deal
    JEL: I18
    Date: 2022–08–12
  4. By: Costa-Font, Joan; Kunst, Niklas
    Abstract: Exposure to democracy can have an impact on both the political attention and visibility of the needs of marginalised populations, as well as the design of health policies that can influence the distribution of population health and thus health inequality. This paper investigates the effect of exposure to democracy, that is the number of years spent in a democracy as measured by democracy indexes, on various measures of inequality in self-reported health across European countries. We use an instrumental variable strategy to leverage for the potential endogeneity of a country's exposure to democracy, drawing on both bivariate (socioeconomic) and univariate health inequality measures. Our estimates provide strong evidence that an additional year in a democracy reduces both bivariate and univariate health inequality. We document evidence of a two-point rank reduction in inequality with an additional year under a democracy. The effect is mainly driven by a 3 per cent points reduction of ‘health poverty’.
    Keywords: health inequality; income-related health inequality; Europe; democracy; institutions; health poverty
    JEL: I18
    Date: 2023–06–14

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