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on Unemployment, Inequality and Poverty |
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Issue of 2024‒07‒08
nine papers chosen by |
| By: | David G. Blanchflower; Alex Bryson; Anthony Lepinteur; Alan Piper |
| Abstract: | Prior to around 2011, there was a pronounced curvilinear relationship between age and wellbeing: poor mental health was hump-shaped with respect to age, whilst subjective well-being was U-shaped. We examine data from a European panel for France, Germany, Italy, Spain and Sweden called, Come-Here, for 2020-2023, plus data from International Social Survey Program (ISSP) surveys for 2011 and 2021 and some country-specific data. Mental ill-health now declines in a roughly monotonic fashion with age, whilst subjective well-being rises with age. We also show that young people with poorer mental health spend more time daily in front of a screen on the internet or their smartphone, and that within-person increases in poor mental health are correlated with spending more time in front of a screen. This evidence appears important because it is among the first pieces of research to use panel data on individuals to track the relationship between screen time and changes in mental health, and because the results caution against simply using the presence of the internet in the household, or low usage indicators (such as having used the internet in the last week) to capture the role played by screen time in the growth of mental ill-health. |
| JEL: | I31 I38 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32500&r= |
| By: | Marx, Ive (University of Antwerp); Haapanala, Henri (University of Antwerp); Marchal, Sarah (University of Antwerp) |
| Abstract: | There has not been much progress on the poverty front in Europe over recent decades, at least if we take it as a relative phenomenon in affluent societies. There is a lot of pessimism about the possibility of making any real progress at all. Some argue that adequate poverty relief is simply too expensive or that it would put too much of a redistributive burden on the electorally powerful, making it politically difficult, if not infeasible. Another prominent argument is that wage floors and thus out-of-work benefit levels are inexorably under pressure, making poverty relief both harder to achieve and more expensive in budgetary terms. This paper sets out these accounts and focuses on what has been happening to statutory, absolute and effective wage floors in Europe over the past decades. We ask whether progress on the poverty front through pushing up wage floors and subsequently out-of-work benefits is a realistic prospect. We see reasons for optimism. |
| Keywords: | poverty, income distribution, Europe |
| JEL: | J01 I39 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16967&r= |
| By: | Boeri, Tito; Cahuc, Pierre |
| Abstract: | The COVID-19 crisis was a stress test for unemployment insurance schemes as it involved a sudden and unexpected shutdown of a very large set of activities. This forced countries to introduce, often from scratch, income support schemes for workers under new forms of employment and for the self-employed. There was also a considerable expansion of short-time work schemes. As we move past this crisis, labor markets are likely to be characterized by substantial labor reallocation, and major innovations in labor market policy will be required to smooth consumption of workers involved in this reallocation. We survey the large body of research on schemes complementary to unemployment insurance to reduce the costs of reallocation. We focus on short-time work, partial unemployment insurance, and wage insurance and compare their properties to those of standard unemployment benefits. Next we present the main empirical results on the effects of wage insurance, partial unemployment insurance, and short-time work. In the final section we discuss directions for further research. |
| Keywords: | partial unemployment insurance; short-time work; wage insurance; Covid-19; coronavirus |
| JEL: | H50 J60 |
| Date: | 2023–09–13 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:123549&r= |
| By: | Luis Guirola (Banco de España); Laura Hospido (Banco de España, CEMFI and IZA); Andrea Weber (Central European University) |
| Abstract: | Using data for 17 countries in Europe and North America, we compare the career trajectories of mothers and fathers and of women and men without children across cohorts and at different points in their life cycle. There is wide cross-country variation in employment and earnings gaps at age 30. At age 50, however, employment gaps between mothers and non-mothers have closed in most countries. We also observe convergence in employment gaps between mothers and fathers by age 50, but these gaps do not close altogether. Motherhood gaps in earnings also close by age 50 between mothers and non-mothers, particularly among the highly educated. But there is strong persistence in earnings gaps between mothers and fathers even among highly educated parents. The main reasons for the remaining gaps at later stages in the life-cycle are part-time work among women and fatherhood premia as fathers’ earnings outperform non-fathers’ over their life-cycle. |
| Keywords: | gender gaps, employment, earnings, children |
| JEL: | J12 J13 J16 J21 J22 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:2415&r= |
| By: | Berman, Yonatan; Milanovic, Branko |
| Abstract: | Homoploutia describes the situation in which the same people are rich in the space of capital and labor income. We combine survey and administrative data to document the evolution of homoploutia in the United States since 1950. In 1950, 10 percent of top decile capital-income earners were also in the top decile of labor income. Today, this indicator is 30 percent. This makes the traditional division to capitalists and laborers less relevant today. We find that the increase in homoploutia accounts for 20 percent of the increase in interpersonal income inequality since 1986. |
| Keywords: | political economy; homoploutia; income inequality |
| JEL: | D31 J01 P16 |
| Date: | 2023–10–03 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:123639&r= |
| By: | Jorge Luis Garcia (Clemson University); James J. Heckman (The University of Chicago) |
| Abstract: | A recent comment published in Science argues that the evidence on the long-term effects of early childhood education is unsettled. We qualify this comment and contrast it with comprehensive studies based on established principles of scientific practice. Burchinal et al. (2024) base their assessment on flawed experimental evaluations. They mischaracterize the state of knowledge by selectively evaluating evidence and ignoring rigorous, long-term studies based on the Perry Preschool and Carolina Abecedarian Projects. High-quality early childhood education programs achieve consistent long-term benefits when proper controls and standardizations are applied. An essential mechanism for their success is fostering parental investment and effective parenting. We underscore the necessity of mechanism-focused research to guide early childhood education policies. Well-conducted studies demonstrate the long-term effectiveness of high-quality early education programs, including Head Start. |
| Keywords: | early childhood education, Perry Preschool Project, Abecedarian Project, evaluation of social programs |
| JEL: | I00 J24 J13 D04 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:hka:wpaper:2024-012&r= |
| By: | Frijters, Paul; Krekel, Christian; Ulker, Aydogan |
| Abstract: | Is wellbeing, measured by life satisfaction, higher if the same number of negative events is spread out rather than bunched in time? Is it better if positive events are spread out or bunched? We answer these questions empirically, exploiting biannual data on six positive and twelve negative life events in the Household, Income and Labour Dynamics in Australia panel. Accounting for selection, anticipation, and adaptation, we find a tipping point when it comes to negative events: once people experience about two negative events, their wellbeing depreciates disproportionally as more and more events occur in a given period of time. For positive events, effects are weakly decreasing in size. So for a person's wellbeing it is better if both the good and the bad is spread out rather than bunched in time. This corresponds better with the classic economic presumption of diminishing marginal effects rather than Machiavelli's prescript of inflicting all injuries at once, further motivating the use of life satisfaction as a suitable proxy for utility. Yet, differences are small, with complete smoothing of all negative events over all people and periods calculated to yield no more than a 12% reduction in the total negative wellbeing impact of negative events. |
| Keywords: | hedonic adaptation; life events; life satisfaction; non-Linearities; welfare analysis; wellbeing |
| JEL: | I31 D10 |
| Date: | 2023–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:117439&r= |
| By: | Costa-Font, Joan; Jimenez-Martin, Sergi; Vilaplana-Prieto, Cristina |
| Abstract: | We study whether caregiving and intergenerational transfer decisions are sensitive to changes in economic incentives following the inception of a new unconditional and universal system of allowances and supports, after the introduction of the 2006 Promotion of Personal Autonomy and Care for Dependent Persons Act (SAAD in Spanish), and the ensuing effects of its austerity cuts after 2012. We find that whilst the introduction of a caregiving allowance (of a maximum value of €530 in 2011) increased the supply of informal caregiving by 20-22 percentual points (pp), the inception of a companion system of publicly subsidised homecare supports did not modify the supply of care. Consistent with an exchange motive for intergenerational transfers, we estimate an average 17 pp (8.2-8.7pp) increase (decrease) in downstream (upstream) transfers among those receiving caregiving allowances. Our estimates resulting from the reduction in the allowances and supports after the austerity cuts in 2012 are consistent with our main estimates, and suggest stronguer effects among lower-income families. |
| Keywords: | caregiving; intergenerational transfers; unconditional transfer; long-term care; family transfers; exchange motivation; allowances; Spain; Exchange motives |
| JEL: | G22 I18 D14 |
| Date: | 2022–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:115185&r= |
| By: | Pedro Carneiro (Department of Economics, University College London); Kjell Salvanes (Department of Economics, Norwegian School of Economics); Emma Tominey (Department of Economics, University of York) |
| Abstract: | Faced with income shocks, households may be unable to smooth their consumption, because of limited insurance possibilities. Likewise, it may also be difficult to smooth investments in children. This could have large consequences for their human capital if there are sensitive periods of learning, or if investments are not perfect substitutes over time. In this paper we estimate the impact of transitory and permanent shocks to household income in different periods of childhood on the human capital of their children, using administrative records from Norway. Across outcomes, the impacts of transitory and permanent shocks are largely similar regardless of the age at which they occur, with a few exceptions (small in magnitude). The impact of transitory shocks is larger for college enrolment and obesity if these shocks occur at earlier ages. The impacts of permanent shocks on high school graduation are larger the later in childhood they occur. |
| Keywords: | child human capital; insurance; income dynamics |
| JEL: | D12 J13 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:ucl:cepeow:24-04&r= |