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on Unemployment, Inequality and Poverty |
| By: | Herault, Nicolas (University of Bordeaux); Jenkins, Stephen P. (London School of Economics) |
| Abstract: | Because finite sample inference for inequality indices based on asymptotic methods or the standard bootstrap does not perform well, Davidson and Flachaire (Journal of Econometrics, 2007) and Cowell and Flachaire (Journal of Econometrics, 2007) proposed inference based on semiparametric methods in which the upper tail of incomes is modelled by a Pareto distribution. Using simulations, they argue accurate inference is achievable with moderately large samples. We provide the first systematic application of these and other inferential approaches to real-world income data (high-quality UK household survey data covering 1977–2018), while also modifying them to deal with weighted data and a large portfolio of inequality indices. We find that the semiparametric asymptotic approach provides a greater number of statistically significant differences than the semiparametric bootstrap which in turn provides more than the conventional asymptotic approach and the ‘Student-t’ approach (Ibragimov et al., Econometric Reviews, 2025), especially for year-pair comparisons within the period from the late-1980s onwards. |
| Keywords: | semiparametric asymptotic approach, semiparametric bootstrap approach, asymptotic approach, Pareto distribution, income inequality, t-statistic approach |
| JEL: | C14 C46 C81 D31 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17973 |
| By: | Breitkopf, Laura (Max Planck Institute for Research on Collective Goods); Chowdhury, Shyamal (Australian National University); Kamhöfer, Daniel A. (University of Kaiserslautern-Landau (RPTU)); Schildberg-Hörisch, Hannah (Heinrich Heine University Düsseldorf); Sutter, Matthias (Max Planck Institute for Research on Collective Goods) |
| Abstract: | Identifying sensitive periods in which the returns to investments into skills are especially high is challenging, but crucial for an effective and efficient timing of parental or public investments aimed at fostering children’s skills. We can detect sensitive periods with a novel design by implementing the same investment in different school grades and examining grade-specific treatment effects. Based on a randomized controlled trial with more than 3, 200 Bangladeshi children in grades 2 to 5, we find sensitive periods in the formation of self-control and patience in grade 2 (age 7–8), while prosociality remains similarly malleable throughout grades 2 to 5 (age 7–11). |
| Keywords: | social and emotional learning program, prosociality, patience, self-control, randomized controlled trial, skill formation, sensitive periods, experiments with children, Bangladesh |
| JEL: | C93 D01 D64 J13 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17974 |
| By: | Herault, Nicolas (University of Bordeaux); Jenkins, Stephen P. (London School of Economics) |
| Abstract: | Ibragimov, Kattuman, and Skrobotov (Econometric Reviews, 2025) propose a ‘t-statistic’ approach to inference for inequality indices building on results provided by Ibragimov and Müller (Journal of Business & Economic Statistics, 2010), and they and Midões and de Crombrugghe (Journal of Economic Inequality, 2023) evaluate its performance. We highlight a feature of the t-statistic approach – ‘grouping variability’ – that has been understudied to date, showing how this complicates inference for inequality indices. |
| Keywords: | asymptotic inference, t-statistic inference approach, inequality, grouping variability |
| JEL: | C14 C46 C81 D31 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17972 |
| By: | Canova, Luciano; Paladino, Giovanna |
| Abstract: | This paper investigates the emotional impact of exogenous political shocks on individual well-being by examining how Italian citizens’ optimism and happiness responded to the unexpected outcome of the 2024 U.S. presidential election. Leveraging a unique two-wave panel dataset collected before and after the election, we implement a difference-in-differences design to estimate the causal effect of electoral surprise. Respondents who had confidently predicted a Kamala Harris victory and were subsequently surprised by Donald Trump’s re-election exhibited a significant decline in self-reported happiness, controlling for individual characteristics. We interpret this as evidence of the emotional cost of unexpected geopolitical outcomes, even when such events occur abroad. Our findings underscore the conceptual distinction between optimism (a forward-looking cognitive disposition) and happiness (an affective state), showing that optimism may amplify both the emotional gains from positive outcomes and the emotional costs of negative surprises. The analysis contributes to the literature on subjective well-being by highlighting the role of global events in shaping personal affective responses and by emphasizing the need to account for exogenous shocks in models of life satisfaction. Finally, we discuss implications for future research on the causal relationship between optimism and happiness and suggest methodological strategies for disentangling endogeneity between the two constructs. |
| Keywords: | exogenous emotional shocks, optimism, subjective wellbeing |
| JEL: | C21 D91 I31 |
| Date: | 2025–06–25 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:125123 |
| By: | Feuillade, Mylène (Paris School of Economics); Goux, Dominique (CREST-INSEE); Maurin, Eric (Paris School of Economics) |
| Abstract: | This article explores how an employee’s choice to work from home (WFH) influences his or her spouse’s outcomes. Drawing on the specific features of the French institutions, we show that a spouse’s switch to WFH leads to a sharp increase in the probability that his or her partner will also switch to WFH, as well as in the number of hours worked by the partner. These cross-effects are particularly strong on the better-paid partner within the couple (whether the man or the woman) who appears to condition his or her decision to work from home on that of his or her (less-paid) partner. The effects of WFH on the volume of hours worked are greatly underestimated when spillovers within couples are neglected. On the other hand, we detect no significant effect on partners’ commuting distance, nor on the type of urban unit they choose to live in. |
| Keywords: | hours worked, social interactions, work from home |
| JEL: | J22 J16 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17997 |
| By: | Francesco Agostinelli (University of Pennsylvania); Matthias Doepke (Northwestern University, London School of Economics); Giuseppe Sorrenti (University of Lausanne); Fabrizio Zilibotti (Yale University) |
| Abstract: | This chapter argues that parenting choices are a central force in the joint evolution of culture and economic outcomes. We present a framework in which parents-motivated by both their childrenÕs future success and their own normative beliefs-choose parenting styles and transmit cultural traits responding to economic incentives. Values such as work ethic, patience, and religiosity are more likely to be instilled when their anticipated returns, economic or otherwise, are high. The interaction between parenting and economic conditions gives rise to endogenous cultural and economic stratification. We extend the model to include residential sorting and social interactions, showing how neighborhood choice reinforces disparities in trust and human capital. Empirical evidence from the World Values Survey supports the modelÕs key predictions. We conclude by highlighting open questions at the intersection of parenting, culture, and inequality. |
| Date: | 2025–06–19 |
| URL: | https://d.repec.org/n?u=RePEc:cwl:cwldpp:2449 |
| By: | Lemos, Sara (University of Leicester) |
| Abstract: | No empirical evidence has ever been reported that the large inflow of accession immigrants – following the 2004 expansion of the European Union – led to a fall in wages or employment, or a rise in unemployment in the UK between 2004 and 2006. This immigration shock was unexpectedly larger and faster – as well as more concentrated into areas and occupations – than anticipated, seemingly more akin to an exogenous supply shock than most immigration shocks. Exploiting rich but underused individual level data from the Lifetime Labour Market Database (LLMDB) we estimate the effect of this immigration shock on wages, employment and unemployment of natives and previously existing immigrants in the UK. We confirm once again the finding of little evidence that the inflow of accession immigrants led to a fall in wages, a fall in employment, or a rise in unemployment of natives in the UK between 2004 and 2006. However, we uncover, for the first time, novel evidence of adverse employment and unemployment effects for low paid existing immigrants as a result of the accession immigration inflow. This is more severe for low paid immigrants and young low paid immigrants as well as for long term unemployed immigrants. |
| Keywords: | wages, employment, immigration, Central and Eastern Europe, UK |
| JEL: | J22 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18000 |
| By: | Sua Kang; Wookun Kim; Kanghyock Koh |
| Abstract: | We study the impacts of childbirth on maternal mental health, the role of pro-natalist cash transfers, and the fertility consequences of maternal mental health. Using claims-level data from South Korea's universal healthcare system, we find that mental health diagnoses rise by 34.8% (198.7%) after the first (second) birth. We find little evidence that cash transfers mitigate these effects. As potential mechanisms, we examine liquidity constraints, labor market changes, time use, and social stigma. Lastly, we document that poor mental health after childbirth is negatively associated with the likelihood of having another child. |
| Keywords: | mental health, pro-natalist cash transfers, fertility |
| JEL: | J13 I10 H75 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11986 |