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on Unemployment, Inequality and Poverty |
| By: | Guglielmo Briscese; John A. List |
| Abstract: | Field experiments provide the clearest window into the true impact of many policies, allowing us to understand what works, what does not, and why. Yet, their widespread use has not been accompanied by a deep understanding of the political economy of their adoption in policy circles. This study begins with a large-scale natural field experiment that demonstrates the ineffectiveness of a widely implemented intervention. We leverage this result to understand how policymakers and a representative sample of the U.S. population update their beliefs of not only the policy itself, but the use of science and the trust they have in government. Policymakers, initially overly optimistic about the program’s effectiveness, adjust their views based on evidence but show reduced demand for experimentation, suggesting experiment aversion when results defy expectations. Among the U.S. public, support for policy experiments is high and remains robust despite receiving disappointing results, though trust in the implementing institutions declines, particularly in terms of perceptions of competence and integrity. Providing additional information on the value of learning from unexpected findings partially mitigates this trust loss. These insights, from both the demand and supply side, reveal the complexities of managing policymakers’ expectations and underscore the potential returns to educating the public on the value of open-mindedness in policy experimentation. |
| JEL: | C9 C93 H4 H41 O12 O36 P1 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33239 |
| By: | Joan Costa-Font; Frank Cowell; Joan Costa-i-Font |
| 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: | H10 I18 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11468 |
| By: | Aghion, Philippe (INSEAD); Bergeaud, Antonin (HEC Paris); Blundell, Richard W. (UCL); Griffith, Rachel (The University of Manchester) |
| Abstract: | This study employs matched employee-employer data from the UK to highlight the importance of social skills, in particular workers’ ability to work well in a team and communicate effectively with co-workers, as a driver of wage growth for workers with lower formal education. Our findings indicate that in tasks emphasizing social skills, such workers not only enjoy greater wage progression with tenure but also accrue higher returns in environments with a higher concentration of more educated colleagues. Additionally, workers’ exit occur sooner from jobs where social skills are more important. We rationalize these dynamics through a model that assesses social skills based on their complementarity with a firm’s assets and where a worker’s social skills, initially opaque to both the employee and employer, become increasingly apparent over time. |
| Keywords: | Team Work; Social Skills; Tenure-Wage Profiles; Individual Wage Growth; Firm Pay Premium |
| JEL: | J24 J31 L25 |
| Date: | 2024–03–29 |
| URL: | https://d.repec.org/n?u=RePEc:ebg:heccah:1513 |
| By: | David G. Blanchflower; Alex Bryson |
| Abstract: | Growing evidence from around the world suggests the mental health of children and young adults is declining. We examine trends in mental health in Africa where there has been little prior work. We examine data from a number of surveys including Afrobarometers, the Gallup World Poll, the World Values Surveys, UNICEF’s Multiple Cluster Indicator Surveys and Global Minds. We find little support for the proposition that the age structure of wellbeing in Africa has changed over the last decade, although the Global Minds surveys, conducted over the internet, do find mental health improves with age. One potential reason for this is the limited amount of internet access in Africa, especially for women. In countries like Burkina Faso and Guinea the majority of the population say they have never accessed the internet. In a new survey in rural Tanzania, where there is little or no internet access, mental health improves with age. The absence of the internet might help explain why the mental health of young Africans have been declining less than elsewhere other than for the internet savvy. However, there are dangers on the horizon as the sales of smartphones explode in Africa. |
| JEL: | I31 J13 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33280 |
| By: | Morabito, Leo (University of Milan); Scoppa, Vincenzo (University of Calabria) |
| Abstract: | Subjective evaluations in many contexts might be affected by decision-makers' social preferences. To explore this phenomenon, we use data from soccer referees' decisions. According to soccer rules, referees are expected to evaluate each episode independently, without taking into account previous decisions. However, if referees are averse to creating inequities between teams, they might seek to balance their decisions and, for example, after awarding a penalty to the home team, they may raise the evidence threshold for awarding a second penalty to the same team, while lowering it for awarding a penalty to the away team. First, we offer a simple theoretical model to explain these insights. Then, using detailed minute-by-minute commentary data from approximately 21, 400 matches in major European leagues, we show a strong preference by referees to treat teams fairly: they reduce the probability of awarding a penalty (or a red or yellow card) to a team if it has already been awarded to that team, while increasing the probability if it has been awarded to the opposing team. In the final part, focusing on injury time, we show that referees tend to lengthen injury time both when the home team is behind and when the away team is behind, suggesting that referees may have a preference for treating both teams fairly. |
| Keywords: | subjective evaluations, social preferences, inequity aversion, compensatory behavior, social pressure, soccer, behavioral economics |
| JEL: | D91 L83 Z20 D63 Z28 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17512 |
| By: | Rosino María Victoria; Cucher María Solana; Ruiz María Florencia; Tommasi Mariano |
| Abstract: | Family structure and characteristics are considered an important factor in the reproduction of social inequalities. It has been documented that family structure and its stability correlate with various measures of well-being for children and adults (specially women) involved. In this paper we use a retrospective survey for the City of Buenos Aires involving three different cohorts of women, to explore their conjugal and fertility trajectories. We describe those trajectories with a vector of variables that expand the notion of “fragile families” and use cluster analysis to characterize these trajectories. We find that our indicator of fragility correlates well with variables capturing social vulnerability both in the families of origin as well as in the women's own trajectories. Other findings include an increase in "modern" lifestyles across cohorts, as captured by our indicators; a rise in educational attainment, with non-university tertiary education increasing before university education, indicating a transitional effect; and a higher likelihood of adopting "modern" lifestyles among women whose mothers were the main breadwinners. |
| JEL: | I3 J1 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:aep:anales:4759 |
| By: | Ferreira, Francisco H. G.; Brunori, Paolo |
| Abstract: | This is a chapter about inequality of opportunity and a closely related concept: inherited inequality. It does five things. First, it reviews the dominant economic model of inequality of opportunity, including its two main uses: the proposal of social objective functions and the measurement of inequality of opportunity. Second, it dispenses with two epistemically and normatively demanding assumptions that underlie the model and defines the closely related concept of inherited inequality. Although in practical terms the two are very similar, the latter rests on simpler, less demanding – and thus more solid – normative foundations. Third, it reviews recent advances in the measurement of inequality of opportunity and inherited inequality, focusing on data-driven solutions to model specification challenges. These methods are illustrated using UK data from 2009 to 2019. Fourth, the chapter proposes amending the standard static social objective functions proposed thirty years ago, towards a dynamic version that is better suited to addressing the implications – and conditioning the nature – of economic growth. Finally, the chapter discusses the differences between inequality of opportunity and meritocracy, and their possible roles in a fair society and growing economy. |
| Keywords: | inequality of opportunity; economic growth; inherited inequality; meritocracy |
| JEL: | D63 O40 |
| Date: | 2024–12–02 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126263 |
| By: | Machin, Stephen (London School of Economics); Sandi, Matteo (London School of Economics) |
| Abstract: | Research studying connections between crime and education is a prominent aspect of the big increase of publication and research interest in the economics of crime field. This work demonstrates a crime reducing impact of education, which can be interpreted as causal through leveraging research designs (e.g., based on education policy changes) that ensure the direction of causality flows from education to crime. A significant body of research also explores in detail, and in various directions, the means by which education has a crime reducing impact. This includes evidence on incapacitation versus productivity raising aspects of education, and on the quality of schooling at different stages of education, ranging from early age interventions, through primary and secondary schooling and policy changes that alter school dropout age. From this evidence base, there are education policies that have been effective crime prevention tools in many settings around the world. |
| Keywords: | education, crime |
| JEL: | K42 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17483 |
| By: | Hall, Tessa; Manning, Alan; Rose, Rebecca |
| Abstract: | It is well-known that ethnic minority and migrant workers have lower average pay than the White UK-born workforce. However, we know much less about how these gaps vary over the life-cycle because of data limitations. We use new data that combine a 1999–2018 panel from the Annual Survey of Hours and Earnings (ASHE) with individual characteristics from the 2011 Census in England and Wales. We investigate pay gaps on labour market entry and differences in pay growth. We find that differences in entry pay gaps are more important than differences in pay growth. The entry pay gaps are large, though vary across groups. The pay penalties on labour market entry can, to a considerable degree, be explained by over-representation in lower-paying firms and, within firms, in lower-paying occupations. For most groups, the pay gaps at entry seem to be largely preserved over the life-cycle, neither narrowing nor widening. For migrants, we find that the extra pay penalty is concentrated almost exclusively in those who arrived in the UK at later ages. |
| Keywords: | wage gpas; ethnicity; migration; wage growth; ASHE-Census; wage gaps |
| JEL: | J31 J15 J61 J71 |
| Date: | 2024–11–11 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:124515 |