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on Unemployment, Inequality and Poverty |
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Issue of 2024‒01‒08
ten papers chosen by |
| By: | Ernst Fehr (Department of Economics, Zurich University. Blümlisalpstrasse 10, 8006 Zurich, Switzerland); Thomas Epper (IESEG School of Management, Univ. Lille, CNRS, UMR 9221 - LEM - Lille Economie Management, F-59000 Lille, France; iRisk Center on Risk and Uncertainty); Julien Senn (Department of Economics, Zurich University. Blümlisalpstrasse 10, 8006 Zurich, Switzerland) |
| Abstract: | Parsimony is a desirable feature of economic models but almost all human behaviors are characterized by vast individual variation that appears to defy parsimony. How much parsimony do we need to give up to capture the fundamental aspects of a population’s distributional preferences and to maintain high predictive ability? Using a Bayesian nonparametric clustering method that makes the trade-off between parsimony and descriptive accuracy explicit, we show that three preference types—an inequality averse, an altruistic and a predominantly selfish type—capture the essence of behavioral heterogeneity. These types independently emerge in four different data sets and are strikingly stable over time. They predict out-of-sample behavior equally well as a model that permits all individuals to differ and substantially better than a representative agent model and a state-of-the-art machine learning algorithm. Thus, a parsimonious model with three stable types captures key characteristics of distributional preferences and has excellent predictive power. |
| Keywords: | Distributional Preferences, Altruism, Inequality Aversion, Preference Heterogeneity, Stability, Out-of-Sample Prediction, Parsimony, Bayesian Nonparametrics. |
| JEL: | D31 D63 C49 C90 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:ies:wpaper:e202310&r=ltv |
| By: | Daniel Graeber; Viola Hilbert; Johannes König |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1193&r=ltv |
| By: | Herault, Nicolas; Jenkins, Stephen P. |
| Abstract: | We decompose the redistributive effect of direct taxes into vertical, horizontal, and reranking components applying the methods of Urban and Lambert (Public Finance Review, 2008). In the first such application to the UK, and using yearly data covering 1977–2020, we find that redistributive effect increased over the period. However, there is no clear trend in horizontal inequity and this component forms a very small fraction of total redistributive effect by comparison with reranking and especially vertical components. It is also the vertical component that best tracks trends in redistributive effect. We give specific attention to the choice of the bandwidth used to define ‘close equals’ in terms of pre-tax income. We also show that implausible estimates of the horizontal inequity component arise for some years regardless of bandwidth used. |
| Keywords: | redistributive effect; redistribution; horizontal inequity; reranking; urban-Lambert decomposition; income tax |
| JEL: | D31 H24 H50 I38 |
| Date: | 2023–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:120996&r=ltv |
| By: | Costa-Font, Joan (London School of Economics); Cowell, Frank A. (London School of Economics); Shi, Xuezhu (Peking University) |
| Abstract: | We study inequality in the distribution of self-assessed health (SAH) in the United States and China, two large countries that have expanded their insurance provisions in recent decades, but that lack universal coverage and differ in other social determinants of health. Using comparable health survey data from China and the United States, we compare health inequality trends throughout the period covering the public health insurance coverage expansions in the two countries. We find that whether SAH inequality is greater in the US or in China depends on the concept of status and the inequality-sensitivity parameter used; however, the regional pattern of SAH inequality is clearly associated with health-insurance coverage expansions in the US but not significant in China. |
| Keywords: | health inequality, self-assessed health, health insurance coverage, social determinants of health |
| JEL: | D63 I18 I3 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16629&r=ltv |
| By: | Ciaschi Matías; Neidhöfer Guido; Gasparini |
| Abstract: | We estimate long-run trends in intergenerational economic mobility for a multitude of countries in Latin America going beyond parent-child correlations in educational attainment. We use several indicators of well-being, such as the socio-economic situation of individuals, job stability, housing and assets. Unlike estimates based on education, which mostly show increasing social mobility trends, we find that opportunities to achieve a certain level of economic well-being and climb up the social ladder have not changed much over time in Latin America. |
| JEL: | D63 I24 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:aep:anales:4634&r=ltv |
| By: | Costa-Font, Joan; Fleche, Sarah; Pagan, Ricardo |
| Abstract: | Despite the growing prevalence of insufficient sleep among individuals, we still know little about the labour market returns to sleep. To address this gap, we utilize longitudinal data from Germany and leverage exogenous fluctuations in sleep duration caused by variations in time and local sunset times. Our findings reveal that a one-hour increase in weekly sleep is associated with a 1.6 percentage point rise in employment and a 3.4% increase in weekly earnings. The majority of this earnings effect stems from improvements in productivity, while the number of working hours decreases with longer sleep duration. We also identify a key mechanism driving these effects: the enhanced mental well-being experienced by individuals who sleep longer hours. |
| Keywords: | sleep; employment; productivity; mental health; sunset times; Elsevier deal |
| JEL: | I18 J12 J13 |
| Date: | 2024–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:120758&r=ltv |
| By: | James J. Heckman (The University of Chicago); Rodrigo Pinto (University of California, Los Angeles); Azeem Shaikh (The University of Chicago) |
| Abstract: | This paper considers the problem of making inferences about the effects of a program on multiple outcomes when the assignment of treatment status is imperfectly randomized. By imperfect randomization we mean that treatment status is reassigned after an initial randomization on the basis of characteristics that may be observed or unobserved by the analyst. We develop a partial identification approach to this problem that makes use of information limiting the extent to which randomization is imperfect to show that it is still possible to make nontrivial inferences about the effects of the program in such settings. We consider a family of null hypotheses in which each null hypothesis specifies that the program has no effect on one of many outcomes of interest. Under weak assumptions, we construct a procedure for testing this family of null hypotheses in a way that controls the familywise error rate – the probability of even one false rejection – in finite samples. We develop our methodology in the context of a reanalysis of the HighScope Perry Preschool program. We find statistically significant effects of the program on a number of different outcomes of interest, including outcomes related to criminal activity for males and females, even after accounting for imperfections in the randomization and the multiplicity of null hypotheses. |
| Keywords: | exact inference, experiment, familywise error rate, multiple testing, multiple outcomes, permutation testing, program evaluation |
| JEL: | C31 I21 J13 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2023-031&r=ltv |
| By: | Bonsang, Eric (Université Paris-Dauphine); Costa-Font, Joan (London School of Economics) |
| Abstract: | We revisit the universality of the "caregiving daughter effect", which holds that daughters tend to provide more care to their older parents than sons. Based on rich European data, we document evidence of such an effect in countries with large gender disparities in employment rates, where having daughters also depresses the demand for formal care. In contrast, we find evidence consistent with the "demise of the caregiving daughter" when exposed to narrower gender gaps, where there is no more daughters' effect on formal care. These results point to a reconsideration of caregiving system design amidst the rise of female employment. |
| Keywords: | informal care, formal care, daughters, caregiving daughter effect, gender employment gap, Europe, care substitution, social norms |
| JEL: | I18 J14 J3 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16615&r=ltv |
| By: | Baum, Christopher F. (Boston College, DIW Berlin and CESIS); Lööf, Hans (Royal Institute of Technology and CESIS); Stephan, Andreas (Linnaeus University and DIW Berlin); Zimmermann, Klaus F. (UNU-MERIT, Maastricht University, CEPR and GLO) |
| Abstract: | This paper examines the wage earnings of fully-employed refugee immigrants in Sweden. Using administrative employer-employee data from 1990 and onwards, about 100, 000 refugee immigrants who arrived between 1980 and 1996 and were granted asylum are compared to a matched sample of native-born workers. Employing recentered influence function (RIF) quantile regressions for the period 2011–2015 to wage earnings, the occupational task-based Oaxaca–Blinder decomposition approach shows that refugees perform better than natives at the median wage, controlling for individual and firm characteristics. This overperformance is due to female refugee immigrants, who have higher wages than comparable native-born female peers up to the 8th decile of the wage distribution. Refugee immigrant females perform better than native females across all occupational tasks studied, including non-routine cognitive tasks. A remarkable similarity exists in the relative wage distributions among various refugee groups, suggesting that cultural differences and the length of time spent in the host country do not significantly affect their labor market performance. |
| Keywords: | refugees; wage earnings gap; occupational sorting; employer-employee data; correlated random effects model; Blinder–Oaxaca decomposition |
| JEL: | C23 F22 J24 J60 O15 |
| Date: | 2023–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0496&r=ltv |
| By: | Belot, Michèle (Cornell University); Kurmangaliyeva, Madina (Université Libre de Bruxelles); Reuter, Johanna (Johannes Kepler University Linz) |
| Abstract: | Diversity in employee representation is often advocated for its potential to promote the diversity of ideas, and thereby innovation. In this study, we shed light on the phenomenon of 'idea homophily', which is a tendency to be more interested in ideas closer to one's own. We first document recent trends in the Economics Academic junior hiring showing that women specializing in traditionally male-dominated fields are faring significantly better than their counterparts in female-dominated fields and even outperform their male peers. We then examine the demand for ideas in a college educated population with an Online experiment involving 500 participants. We find substantial gender differences in which ideas people are choosing to engage with. Also, when decision-makers are predominantly male, incentives encouraging engagement with female ideas increase substantially their demand, but disproportionately in male-dominated fields. In contrast, incentives encouraging ideas in female-fields in general increase exposure to female ideas but do not lead to an over-representation of either gender conditional on field. |
| Keywords: | gender diversity, innovation, homophily, hiring, academia |
| JEL: | J16 O30 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16631&r=ltv |