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on Unemployment, Inequality and Poverty |
| By: | Costa-Font, Joan (London School of Economics); Cowell, Frank A. (London School of Economics) |
| Abstract: | This paper examines a behavioural explanation for the Brexit referendum result, the role of an individual's inequality aversion (IA). We study whether the referendum result was an "unconsidered Leave" partially driven by people's low aversion to inequality. We use a representative sample of the UK population fielded in 2017, and analyse the extent to which lottery-based individual IA estimates predict their Brexit vote. We consider alternative potential drivers of IA in both income and health domains; these include risk aversion, locus of control, alongside socio-economic and demographic characteristics. A greater aversion to income inequality predicts a lower probability of voting for Leave, even when controlling for risk aversion and other drivers of the Brexit vote. This effect is only true among men, for whom an increase in income IA by one standard deviation decreases their likelihood of voting for leaving the EU by 5% on average. Had there been a greater IA, the overall referendum result might have been different. However, the effect of health inequality aversion is not significantly different from zero. |
| Keywords: | Brexit, inequality aversion, income inequality aversion, health inequality aversion, imaginary grandchild, risk aversion, locus of control |
| JEL: | H1 I18 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17439 |
| By: | Gordon Anderson (Institute for Fiscal Studies); Sanghamitra Bandyopadhyay (Queen Mary University London); Ignasi Merediz Solà (Institute for Fiscal Studies) |
| Date: | 2023–12–21 |
| URL: | https://d.repec.org/n?u=RePEc:ifs:ifsewp:23/42 |
| By: | Joseph Altonji; Daniel Giraldo Páez; Disa M. Hynsjö; Ivan Vidangos |
| Abstract: | For birth cohorts 1935–44, 1945–62, and 1964–74, we estimate the contribution of education; permanent heterogeneity in wage rates, employment, and hours; labor market shocks; spouse characteristics and shocks; nonlabor income shocks; and marital histories to the age profiles of the variance of family income per adult equivalent. The decompositions are based upon PSID data and Altonji, Giraldo-Páez, Hynsjö, and Vidangos’ (2024) statistical model of earnings, marriage, marital sorting, fertility, and nonlabor income. We find that education and employment heterogeneity are key sources of the rise in the variance with age and across birth cohorts. Hours shocks have grown in importance for women, and employment shocks have grown in importance, especially for men after age 30. The variance contribution of wage heterogeneity is substantial at all ages and has risen across cohorts for women. Own characteristics and shocks matter more for men than women, while spouse characteristics and shocks matter more for women. Gender differences have declined across cohorts. |
| JEL: | D10 D31 J16 J31 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33122 |
| By: | Grönqvist, Hans (Research Institute of Industrial Economics (IFN)); Niknami, Susan (Stockholm University); Palme, Mårten (Department of Economics, Stockholm University); Priks, Mikael (Department of Economics, Stockholm University) |
| Abstract: | We estimate the causal effects of parental incarceration on children’s short- and long-run outcomes using administrative data from Sweden. Our empirical strategy exploits exogenous variation in parental incarceration from the random assignment of criminal defendants to judges with different incarceration tendencies. We find that the incarceration of a parent in childhood leads to a significant increase in teen criminal convictions, a decrease in high school graduation, and worse labor market outcomes in adulthood. The effects are concentrated among children from disadvantaged families, in particular families where the remaining non-convicted parent is disadvantaged. These results suggest that the incarceration of parents with young children may significantly increase the intergenerational persistence of poverty and criminal behavior in affluent countries with extensive social safety nets and progressive criminal justice systems. |
| Keywords: | Crime; Parental incarceration; Childrens outcomes; School graduation; Labor market |
| JEL: | K42 |
| Date: | 2024–11–15 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:iuiwop:1509 |