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on Unemployment, Inequality and Poverty |
| By: | van de Kraats, Coen (Erasmus University Rotterdam); Galama, Titus (University of Southern California); Lindeboom, Maarten (Vrije Universiteit Amsterdam); Deng, Zichen (University of Amsterdam) |
| Abstract: | We provide evidence that the social norm (expectation) that adults work has a substantial detrimental causal effect on the mental well-being of unemployed men in mid-life, as substantial as, e.g., the detriment of being widowed. As their peers in age retire and the social norm weakens, the mental well-being of the unemployed improves. Using data on individuals aged 50+ from 10 European countries, we identify the social norm of work effect using exogenous variation in the earliest eligibility age for old-age public pensions across countries and birth cohorts. |
| Keywords: | mental well-being, social norm of work, retirement institution |
| JEL: | I10 I31 J60 D63 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17586 |
| By: | Hugo Reis; Pedro Carneiro; Alessandro Toppeta |
| Abstract: | Generous maternity leave, affordable daycare, extensive social safety nets, excellent universal health care, and high-quality public schools, are all notable features of Nordic countries. There is a widespread belief that such strong public investments in children contribute to a levelled playing field and promote social mobility. However, gaps in learning outcomes between children of rich and poor parents remain as high in Nordic countries as elsewhere in Europe. One explanation for this paradox is that the equalizing impacts of public investments are undone by parental investments in children of rich and poor families, which are as unequal in Nordic countries as in the rest of the European continent. |
| JEL: | J62 D63 I21 J24 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ptu:wpaper:w202407 |
| By: | Coschignano, Eliana (RWI); Jessen, Robin (RWI) |
| Abstract: | Men at the bottom quintile of the German male earnings distribution had lower average earnings in 2019 than in 2001. In contrast, female earnings have increased throughout the distribution. What explains these diverging trends and how did they translate into changes in net income? Data from the Socio-Economic Panel (SOEP) reveal that the drop in bottom male earnings is mostly due to a decrease in work hours, while hours worked of females with low earnings have increased. Changes in socio-demographic characteristics explain little of the evolution of income inequality. Households and the welfare state have cushioned much of low-earning men's income drop, while disposable incomes of women have increased by less than their earnings. Finally, earnings poverty is persistent: About half of individuals in the bottom quintile are still in the bottom quintile after five years. |
| Keywords: | income inequality, earnings inequality, working hours, decomposition |
| JEL: | D31 I38 J3 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17567 |
| By: | Thomas Aronsson (University of Umea, Sweden and University of Graz, Austria); Olof Johansson-Stenman (University of Gothenburg, Sweden) |
| Abstract: | We analyze optimal redistributive income taxation within a Mirrleesian framework that incorporates other-regarding preferences, examining both a general model and four specific cases. Two of these reflect self-centered inequality aversion, based on models by Fehr & Schmidt and Bolton & Ockenfels, respectively, while the other two reflect non-self-centered inequality aversion, where individuals prefer a low Gini coefficient and a high minimum disposable income. We find that other-regarding preferences can substantially increase the income tax rates, including top income tax rates, and enhance the overall redistribution. Furthermore, different types of other-regarding preferences have markedly different implications for optimal taxation. |
| Keywords: | Optimal Taxation, Redistribution, Social Preferences, Inequality Aversion. |
| JEL: | D62 D90 H21 H23 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:grz:wpaper:2024-22 |