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on Unemployment, Inequality and Poverty |
| By: | Eliana Coschignano; Robin Jessen |
| 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: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1217 |
| By: | Mogstad, Magne (Dept. of Economics, University of Chicago); Salvanes, Kjell G. (Dept. of Economics, Norwegian School of Economics and Business Administration); Torsvik, Gaute (Dept. of Economics, University of Oslo) |
| Abstract: | Policymakers, public commentators, and researchers often cite the Nordic countries as examples of a social and economic model that successfully combines low income inequality with prosperity and growth. This article aims to critically assess this claim by integrating theoretical perspectives and empirical evidence to illustrate how the Nordic model functions and why these countries experience low inequality. Our analysis suggests that income equality in the Nordics is primarily driven by a significant compression of hourly wages, reducing the returns to labor market skills and education. This appears to be achieved through a wage bargaining system characterized by strong coordination both within and across industries. This finding contrasts with other commonly cited explanations for Nordic income equality, such as redistribution through the taxtransfer system, public spending on goods that complement employment, and public policies aimed at equalizing skills and human capital distribution. We consider the potential lessons for other economies that seek to reduce income equality. We conclude by discussing several underexplored or unresolved questions and issues. |
| Keywords: | Policymakers; Low income inequality; Nordic countries; Public policies; Human capital distribution |
| JEL: | H24 H26 H41 |
| Date: | 2025–02–06 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:nhheco:2025_003 |
| By: | Disney, Richard (London School of Economics); Gathergood, John (University of Nottingham); Machin, Stephen (London School of Economics); Sandi, Matteo (London School of Economics) |
| Abstract: | "Right to Buy" (RTB) was a large-scale UK housing policy whereby incumbent tenants in public housing could buy their properties at heavily subsidised prices. The policy increased the national homeownership rate by over 10 percentage points between 1980 and the late 1990s. A key feature of RTB is that housing tenure changes did not involve residential mobility, as the policy bestowed homeownership on households in disadvantaged neighbourhoods in the public housing where they were already resident. This paper shows that exposure to RTB at birth significantly improved pupil performance in high-stakes exams and the likelihood to obtain a degree, while also improving labour earnings in young adulthood. The key drivers of these human capital gains are the wealth gains arising from the subsidy and the crime reduction generated by RTB. This is evidence of a novel means by which homeownership, and the resulting societal change and neighbourhood gentrification that accompanies it, contribute to increase human capital accumulation and improve educational and work outcomes for individuals in disadvantaged, low-income childhood settings. |
| Keywords: | human capital, homeownership, public housing |
| JEL: | I21 I28 K14 R31 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17633 |
| By: | Joanne S. McLaughlin; David Neumark |
| Abstract: | We present new and rich evidence on intersectional discrimination in labor markets, focusing on wages in the traditional residual wage differential approach to discrimination. We interpret “intersectional discrimination” in the framework of interactions, in which discrimination along two intersecting dimensions leads to discrimination that exceeds the sum of its parts. We make three contributions. First, we resolve puzzling contradictory findings on intersectional discrimination in existing research – with studies using similar data and methods reaching diametrically opposite conclusions. Second, we extend the analysis of potential intersectional discrimination to more dimensions than have typically been considered in past research. Third, we explore issues of bias in the wage equations we estimate from selection on employment. Our overall conclusion from these different types of evidence is that there is little or no evidence consistent with intersectional discrimination in wage differentials among the large set of groups (and combinations of groups) we study, and indeed most evidence points in the opposite direction. |
| JEL: | J7 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33388 |
| By: | Pierre Azoulay; Shumin Qiu; Claudia Steinwender |
| Abstract: | We investigate the phenomenon of home bias in scientific citations, where researchers disproportionately cite work from their own country. We develop a benchmark for expected citations based on the relative size of countries, defining home bias as deviations from this norm. Our findings reveal that China exhibits the largest home bias across all major countries and in nearly all scientific fields studied. This stands in contrast to the pattern of home bias for China's trade in goods and services, where China does not stand out from most industrialized countries. After adjusting citation counts for home bias, we demonstrate that China's apparent rise in citation rankings is overstated. Our adjusted ranking places China fourth globally, behind the US, the UK, and Germany, tempering the perception of China's scientific dominance. |
| Keywords: | home bias, China, citations, economics of science, basic research, international spillovers |
| Date: | 2025–01–30 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2072 |