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on Unemployment, Inequality and Poverty |
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Issue of 2024‒01‒15
eight papers chosen by |
| By: | Jessica (CEDLAS-IIE-FCE-UNLP); Matías Ciaschi (CEDLAS-IIE-FCE-UNLP & CONICET); Leonardo Gasparini (CEDLAS-IIE-FCE-UNLP & CONICET); Mariana Marchionni (CEDLAS-IIE-FCE-UNLP & CONICET); Guido Neidhöfer (ZEW Mannheim) |
| Abstract: | The shock of the COVID-19 pandemic affected the human capital formation of children and youths. As a consequence of this disruption, the pandemic is likely to imply permanent lower levels of human capital. This paper provides new evidence on the impact of COVID-19 and school closures on education in Latin America by exploiting harmonized microdata from a large set of national household surveys carried out in 2020, during the pandemic. In addition, the paper uses microsimulations to assess the potential effect of changes in human capital due to the COVID-19 crisis on future income distributions. The findings show that the pandemic is likely to have significant long-run consequences in terms of incomes and poverty if strong compensatory measures are not taken soon. |
| JEL: | O1 I31 I24 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:dls:wpaper:0324&r=ltv |
| By: | Joan Costa-Font (LSE - London School of Economics and Political Science); Sarah Fleche (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Ricardo Pagan (Universidad de Málaga [Málaga] = University of Málaga [Málaga]) |
| Abstract: | Despite the growing prevalence of insufficient sleep among individuals, we still know little about the labour market return to sleep. To address this gap, we use 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. Such effect on earnings stems from productivity improvements given that the number of working hours decreases with longer sleep duration. We also identify a key mechanism driving these effects, namely the enhanced mental well-being experienced by individuals who sleep longer hours. |
| Keywords: | Sleep, Employment, Productivity, Mental health, Sunset times |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-04331898&r=ltv |
| By: | Zvi Eckstein; Michael P. Keane; Osnat Lifshitz |
| Abstract: | In the 1960 cohort, American men and women graduated from college at the same rate, and this was true for Whites, Blacks and Hispanics. But in more recent cohorts, women graduate at much higher rates than men. To understand the emerging gender education gap, we formulate and estimate a model of individual and family decision-making where education, labor supply, marriage and fertility are all endogenous. Assuming preferences that are common across ethnic groups and fixed over cohorts, our model explains differences in all endogenous variables by gender/ethnicity for the ‘60-‘80 cohorts based on three exogenous factors: family background, labor market and marriage market constraints. Changes in parental background are a key factor driving the growing gender education gap: Women with college educated mothers get greater utility from college, and are much more likely to graduate themselves. The marriage market also contributes: Women’s chance of getting marriage offers at older ages has increased, enabling them to defer marriage. The labor market is the largest factor: Improvement in women’s labor market return to college in recent cohorts accounts for 50% of the increase in their graduation rate. But the labor market returns to college are still greater for men. Women go to college more because their overall return is greater, after factoring in marriage market returns and their greater utility from college attendance. We predict the recent large increases in women’s graduation rates will cause their children’s graduation rates to increase further. But growth in the aggregate graduation rate will slow substantially, due to significant increases in the share of Hispanics – a group with a low graduation rate – in recent birth cohorts. |
| Keywords: | Labor supply; College graduation; Marriage; Parental background; Education; Fertility; Gender wage gap; Assortative mating; Returns to college |
| JEL: | I20 J22 D10 J10 J24 |
| Date: | 2023–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmoi:97511&r=ltv |
| By: | Heckman, James J. (University of Chicago); Pinto, Rodrigo (University of California, Los Angeles) |
| Abstract: | This paper examines the econometric causal model and the interpretation of empirical evidence based on thought experiments that was developed by Ragnar Frisch and Trygve Haavelmo. We compare the econometric causal model with two currently popular causal frameworks: the Neyman-Rubin causal model and the Do-Calculus. The Neyman-Rubin causal model is based on the language of potential outcomes and was largely developed by statisticians. Instead of being based on thought experiments, it takes statistical experiments as its foundation. The Do-Calculus, developed by Judea Pearl and co-authors, relies on Directed Acyclic Graphs (DAGs) and is a popular causal framework in computer science and applied mathematics. We make the case that economists who uncritically use these frameworks often discard the substantial benefits of the econometric causal model to the detriment of more informative analyses. We illustrate the versatility and capabilities of the econometric framework using causal models developed in economics. |
| Keywords: | causal inference, causality, structural equation models, Directed Acyclic Graphs, simultaneous causality |
| JEL: | C10 C18 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16646&r=ltv |
| By: | Skawiński, Marek (Ministry of Finance); Chrostek, Paweł (Ministry of Finance; Institute of Economics); Bukowski , Paweł (University College London; London School of Economics; Institute of Economics); Novokmet , Filip (University of Bonn; World Inequality Lab) |
| Abstract: | This paper combines micro-level tax data, household surveys and national accounts data to provide consistent series of income distribution in Poland over the 2000-2018 period. We find that inequalities in Poland are one of the largest in Europe. In 2018, the share of income accrued to the top 10% is 37.4%, to the middle 40% is 41.1%, and to the bottom 50% is 21.5%. The top 1% earns 13.4% of the total income. The increase in income inequality during this period was largely driven by high business incomes in top income shares. The extent of redistribution in Poland is modest. The tax system is regressive at the top of the income distribution due to lower taxation of business income and the low burden of social contributions. Finally, we show that top income groups are dominated by business owners, males, and big city dwellers, and these groups have been the largest beneficiaries of Poland’s strong growth since 2000. Gender inequality has been high and stable in Poland, with a steeply decreasing female share with income rank (e.g. the share of females in top 0.1% group was 18% in 2018). |
| Keywords: | income inequality; income distribution |
| JEL: | D31 |
| Date: | 2023–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:ris:mfplwp:0040&r=ltv |
| By: | Johannes Haushofer; Daniel Salicath |
| Abstract: | In recent years, the psychological causes and consequences of poverty have received renewed attention from scientists and policymakers. In this review, we summarize new developments in this literature. First, we discuss advances in our understanding of the relationship between income and psychological well-being. There is a robust positive relationship between the two, both within and across countries, and in correlational and causal analyses. Second, we summarize recent work on the impact of “scarcity” and stress on economic preferences and decision-making. Our view of this literature is that the evidence is relatively weak. Third, we summarize evidence on the impact of psychological interventions on economic outcomes. Light-touch psychological interventions, such as videos that aim to raise aspirations, have shown some promise in encouraging investment and improving economic well-being. Similarly, psychotherapy and pharmacological mental health treatments have positive effects on economic outcomes. Relative to the effects of cash transfers, these impacts are small in absolute terms and large in per-dollar terms. We conclude by discussing whether a psychological poverty trap is plausible. |
| JEL: | D91 O12 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31977&r=ltv |
| By: | Støstad, Morten Nyborg (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | This paper establishes a causal link from fairness beliefs to perceived economic inequality. I conduct an experiment where participants are asked to estimate various income inequality measures of hypothetical societies. While the true income distributions of the societies remain identical and simple, the description of the societies varies to indicate “fair” and “unfair” inequality across respondents. Describing the society as “unfair” increases the incentivized estimated top 10% income share as much as the actual difference between Denmark and the United States. Other inequality metrics are similarly affected. The findings imply that ideological beliefs fundamentally alter how people perceive economic inequality. |
| Keywords: | Fairness; Economic inequality; Income inequality |
| JEL: | H23 J18 |
| Date: | 2023–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2023_022&r=ltv |
| By: | Gary Charness; James Cox; Catherine Eckel; Charles Holt; Brian Jabarian |
| Abstract: | Physical lab experiments have played an instrumental role in sculpting the history of experimental economics, facilitating controlled information conditions, efficient monetary inducements, and exclusive advantages via immediate human interaction and engaging experiences. These unique benefits render in-person lab experiments essential for the future of experimental economics, complementing the growth of online experiments and the emerging AI revolution. We characterize the environments in which it seems particularly important to conduct lab-in-the-lab experiments. Overall, the lab benefits culminate in a comprehensive research procedure that produces precise and enlightening outcomes, ultimately enriching the domain of experimental economics, and potentially extending benefits to the broader realm of social science. |
| Keywords: | lab experiments, AI |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10796&r=ltv |