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on Unemployment, Inequality and Poverty |
| By: | Brunori, Paolo (University of Florence); Ferreira, Francisco H. G. (London School of Economics); Salas-Rojo, Pedro (London School of Economics) |
| Abstract: | Scholars have sought to quantify the extent of inequality which is inherited from past generations in multiple ways, including a large body of work on intergenerational mobility and inequality of opportunity. This paper makes two contributions to that broad literature. First, we show that many of the most frequently used approaches to measuring mobility or inequality of opportunity fit within a general framework which involves, as a first step, a calculation of the extent to which inherited circumstances can predict current incomes. Second, we suggest a new method - within that broad framework - which is sensitive to differences across the entire distributions of groups with different inherited characteristics, rather than just in their means. This feature makes it particularly well-suited to measuring inequality of opportunity, as well as to any inequality decomposition approach that requires going beyond means in assessing between-group differences. We apply this approach to South Africa, arguably the world's most unequal country, and find that almost three-quarters of its current inequality is inherited from predetermined circumstances, with race playing the largest role but parental background also making an important contribution. |
| Keywords: | inequality, opportunity, mobility, transformation trees, South Africa |
| JEL: | D31 D63 J62 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17203 |
| By: | Blouin, Arthur (University of Toronto); Mani, Anandi (University of Oxford); Mukand, Sharun (University of Warwick); Sgroi, Daniel (University of Warwick) |
| Abstract: | Can inequality in rewards result in an erosion in broad-based support for meritocratic norms? We hypothesize that unequal rewards between the successful and the rest, drives a cognitive gap in their meritocratic beliefs, and hence their social preferences for redistribution. Two separate experiments (one in the UK and the other in the USA) show that the elite develop and maintain "meritocratic bias" in the redistributive taxes they propose, even when not applied to their own income: lower taxes on the rich and fewer transfers to the poor, including those who failed despite high effort. These social preferences at least partially reflect a selfserving meritocratic illusion that their own high income was deserved. A Wason Card task confirms that individuals maintain their illusion of being meritocratic, by not expending cognitive effort to process information that may undermine their self-image even when incentivized to do otherwise. |
| Keywords: | inequality, meritocracy, redistribution, populism, motivated reasoning, social preferences |
| JEL: | D91 C92 D63 D82 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17180 |
| By: | König, Felix; Manning, Alan; Petrongolo, Barbara |
| Abstract: | Using micro data for the UK and Germany, we provide novel evidence on the cyclical properties of reservation wages and estimate that wages and reservation wages are characterised by moderate and very similar degrees of cyclicality. Several job search models that quantitatively match the cyclicality of wages tend to overpredict the cyclicality in reservation wages. We show that this puzzle can be addressed when reservation wages display backward-looking reference dependence. Model calibrations that allow for reference dependence match the empirically observed cyclicality of wages and reservation wages for plausible value of all other model parameters. |
| Keywords: | job search; reservation wages; wage cyclicality; reference dependence |
| JEL: | E24 J63 J64 |
| Date: | 2024–06–03 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:125342 |
| By: | Matías Güizzo Altube (Inter-American Development Bank); Carlos Scartascini (Inter-American Development Bank); Mariano Tommasi (Universidad de San Andrés) |
| Abstract: | Inequality is a crucial issue in Latin America and the Caribbean, alongside very low productivity gains over the last 60 years and low levels of investment and efficiency. Most literature, especially on the political economy determinants of these problems, has considered these issues individually. This article revisits the discussion on the political economy of redistribution (or lack thereof) in the region, embedding it in a broader political economy debate. We characterize the region and its countries in terms of the size of the public sector, the extent of fiscal redistribution, and the efficiency of public action. We summarize various strands of literature that explain elements of the fiscal vector individually and provide a framework that combines elements from several strands, explaining why different countries exhibit different configurations of government size, redistribution, and efficiency. |
| Keywords: | Inequality, Redistribution, Political Economy, Growth, Poverty |
| JEL: | H20 H23 E62 P16 |
| Date: | 2023–09 |
| URL: | https://d.repec.org/n?u=RePEc:sad:wpaper:169 |
| By: | Chung, Andy (University of Reading); Hamermesh, Daniel S. (University of Texas at Austin); Singleton, Carl (University of Stirling); Wang, Zhengxin (Zhejiang University of Finance and Economics); Zhang, Junsen (Zhejiang University) |
| Abstract: | We investigate the relationship between physical attractiveness and the time people devote to video/computer gaming. Average American teenagers spend 2.6% of their waking hours gaming, while for adults this figure is 2.7%. Using the American Add Health Study, we show that adults who are better-looking have more close friends. Arguably, gaming is costlier for them, and they thus engage in less of it. Physically attractive teens are less likely to engage in gaming at all, whereas unattractive teens who do game spend more time each week on it than other gamers. Attractive adults are also less likely than others to spend any time gaming; and if they do, they spend less time on it than less attractive adults. Using the longitudinal nature of the Add Health Study, we find supportive evidence that these relationships are causal for adults: good looks decrease gaming time, not vice-versa. |
| Keywords: | physical attractiveness, beauty, time allocation, social activity, teenage behavior |
| JEL: | J22 L82 L86 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17191 |