nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2023‒10‒30
four papers chosen by
Maximo Rossi, Universidad de la República

  1. The Effects of Adverse Childhood Experiences on Adults' Subjective Wellbeing By Blanchflower, David G.; Bryson, Alex
  2. Inequality of Opportunity in Wealth: Levels, Trends, and Drivers By Graeber, Daniel; Hilbert, Viola; König, Johannes
  3. Social Skills and the Individual Wage Growth of Less Educated Workers By Aghion, Philippe; Bergeaud, Antonin; Blundell, Richard; Griffith, Rachel
  4. "Income inequality and redistribution in Scandinavian countries". By Petar Sorić; Oscar Claveira

  1. By: Blanchflower, David G. (Dartmouth College); Bryson, Alex (University College London)
    Abstract: Using four cross-sectional data files for the United States and Europe we show that Adverse Childhood Experiences (ACE) have a significant impact on subjective wellbeing (SWB) in adulthood. Death of a parent, parental separation or divorce, financial difficulties, the prolonged absence of a parent, quarreling between parents, parental unemployment, sexual assault, experiencing long-term health problems, being bullied at school and being beaten or punched as a child all have long-term impacts on wellbeing. These experiences impact a wide range of wellbeing measures in adulthood including satisfaction with many aspects of everyday life, happiness and life satisfaction, self-assessed health, and are positively linked to measures of negative affect including the GHQ6. The evidence linking ACEs to lower SWB in adulthood is consistent across fifty different measures including sixteen positive affect and twenty-six negative affect measures relating to assessments of one's one life, and eight variables capturing how the individual feels about the area she lives in, including unemployment, drugs, violence and vandalism plus democracy in their country. Trauma in childhood is long lasting.
    Keywords: childhood, neglect, abuse, family circumstances, bullying, subjective wellbeing
    JEL: I31 I10 J12
    Date: 2023–09
  2. By: Graeber, Daniel (DIW Berlin); Hilbert, Viola (DIW Berlin); König, Johannes (DIW Berlin)
    Abstract: While inequality of opportunity (IOp) in earnings is well studied, the literature on IOp in individual net wealth is scarce to non-existent. This is problematic because both theoretical and empirical evidence show that the position in the wealth and income distribution can significantly diverge. We measure ex-ante IOp in net wealth for Germany using data from the Socio-Economic Panel (SOEP). Ex-ante IOp is defined as the contribution of circumstances to the inequality in net wealth before effort is exerted. The SOEP allows for a direct mapping from individual circumstances to individual net wealth and for a detailed decomposition of net wealth inequality into a variety of circumstances; among them childhood background, intergenerational transfers, and regional characteristics. The ratio of inequality of opportunity to total inequality is stable from 2002 to 2019. This is in sharp contrast to labor earnings, where ex-ante IOp is declining over time. Our estimates suggest that about 62% of the inequality in net wealth is due to circumstances. The most important circumstances are intergenerational transfers, parental occupation, and the region of birth. In contrast, gender and individuals' own education are the most important circumstances for earnings.
    Keywords: inequality, wealth, inequality of opportunity, decomposition
    JEL: D63 J62 D31 J24
    Date: 2023–09
  3. By: Aghion, Philippe (LSE); Bergeaud, Antonin (HEC Paris); Blundell, Richard (University College London); Griffith, Rachel (University of Manchester)
    Abstract: We use matched employee-employer data from the UK to highlight the importance of social skills, including the ability to work well in a team and communicate effectively with co-workers, as a driver for individual wage growth for workers with few formal educational qualifications. We show that lower educated workers in occupations where social skills are more important experience steeper wage growth with tenure, and also higher early exit rates, than equivalent workers in occupations where social skills are less important. Moreover, the return to tenure in occupations where social skills are important is stronger in firms with a larger share of higher educated workers. We rationalize our findings using a model of wage bargaining with complementarity between the skills and abilities of less educated workers and the firm's other assets.
    Keywords: team work, social skills, individual wage growth, firm pay premium
    JEL: J31 J24 L25
    Date: 2023–09
  4. By: Petar Sorić (Faculty of Economics and Business, University of Zagreb.); Oscar Claveira (AQR-IREA Research Group. Departament d’Econometria, Estadística i Economia Aplicada. Universitat de Barcelona. Av. Diagonal, 690. 08034 Barcelona. Spain.)
    Abstract: This paper investigates the adjustment of government redistributive policies in Scandinavian countries following changes in income inequality over the period 1980-2021. We use two complementary measures of inequality: the share of total income accruing to top percentile income holders, as well as the ratio of the share of total income accruing to top decile income holders divided by that accumulated by the bottom 50%. We find that the sign of the relationship between inequality and redistribution is mostly positive and time-varying. We also find significant evidence that redistributive measures in the form of taxes and government transfers adjust more rapidly in an upward than a downward direction, with the exception of Norway. We obtain a significant long-run relationship between both variables in Iceland and Sweden, while in Norway it just holds for the short run.
    Keywords: Income inequality, Redistributive policy, Taxes, Government transfers. JEL classification: C50, D30, E62, H50.
    Date: 2023–10

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