nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2024‒05‒20
six papers chosen by

  1. The Declining Mental Health Of The Young And The Global Disappearance Of The Hump Shape In Age In Unhappiness By David G. Blanchflower; Alex Bryson; Xiaowei Xu
  2. Interpreting Cohort Profiles of Lifecycle Earnings Volatility By Richard Blundell; Christopher R. Bollinger; Charles Hokayem; James P. Ziliak
  3. Where Do Families Headed by Same-Sex Couples Fall Within the U.S. Income Distribution? By Olga Alonso-Villar; Coral del Río
  4. Does How You Get Paid at Work Affect Your Time off Work? The Relationship between Performance-Related Employment Contracts and Leisure Activities By Andelic, Nicole; Allan, Julia; Bender, Keith A.; Powell, Daniel; Theodossiou, Ioannis
  5. Mafias and Firms By Arellano-Bover, Jaime; De Simoni, Marco; Guiso, Luigi; Macchiavello, Rocco; Marchetti, Domenico J.; Prem, Mounu
  6. Human Capital Spillovers and Health: Does Living Around College Graduates Lengthen Life? By Jacob H. Bor; David M. Cutler; Edward L. Glaeser; Ljubica Ristovska

  1. By: David G. Blanchflower; Alex Bryson; Xiaowei Xu
    Abstract: Across many studies subjective well-being follows a U-shape in age, declining until people reach middle-age, only to rebound subsequently. Ill-being follows a mirror-imaged hump-shape. But this empirical regularity has been replaced by a monotonic decrease in illbeing by age. The reason for the change is the deterioration in young people’s mental health both absolutely and relative to older people. We reconsider evidence for this fundamental change in the link between illbeing and age with micro data for the United States and the United Kingdom. Beginning around 2011 there is a monotonic and declining cross-sectional association between well-being and age. In the UK the recent COVID pandemic exacerbated the trends by impacting most heavily on the wellbeing of the young, but this was not the case in the United States. We replicate the decrease in illbeing by age across 34 countries, including the United States and the United Kingdom, using five ill-being metrics for the period 2020-2024 and confirm the findings.
    JEL: I31 I38
    Date: 2024–04
  2. By: Richard Blundell; Christopher R. Bollinger; Charles Hokayem; James P. Ziliak
    Abstract: We present new estimates of earnings volatility over time and the lifecycle for men and women by race and human capital. Using a long panel of restricted-access administrative Social Security earnings linked to the Current Population Survey, we estimate volatility with both transparent summary measures, as well as decompositions into permanent and transitory components. From the late 1970s to the mid 1990s there is a strong negative trend in earnings volatility for both men and women. We show this is driven by a reduction in transitory variance. Starting in the mid 1990s there is relative stability in trends of male earnings volatility because of an increase in the variance of permanent shocks, especially among workers without a college education, and a more attenuated trend decline among women. Cohort analyses indicate a strong U-shape pattern of volatility over the working life, which comes from large permanent shocks early and later in the lifecycle. However, this U-shape shifted downward and leftward in more recent cohorts, the latter from the fanning out of lifecycle transitory volatility in younger cohorts. These patterns are more pronounced among White men and women compared to Black workers.
    Date: 2024–04
  3. By: Olga Alonso-Villar; Coral del Río
    Abstract: By building an entire counterfactual income distribution in which married/cohabiting male and female same-sex couple families and married/cohabiting different-sex couple families have the same composition in terms of education, race, age, presence of children, and geographical variables, we determine the differential effect of these factors to explain the position of each family type within the income distribution. We also explore the income sources from which intergroup income differences arise. This approach enables us to integrate the position of individuals in the labor market and their wellbeing in terms of family income (once the effects of the above variables are accounted for). Our analysis suggests that the sexual orientation wage disadvantage that men in same-sex couples experience coexists with a family income advantage (in both the actual and the counterfactual economy), which arises from the higher probability of two-earner couples among male same-sex couples and their gender wage advantage. However, these two features are not enough to protect male couples in the low tail of the income distribution, who have lower conditional earnings than married different-sex couple families do. As for female same-sex couple families, their position in the counterfactual income distribution seems to be strongly limited by the gender wage gap these women experience, which is not outweighed by the sexual orientation wage advantage they have and the higher probability of two-earner couples among these families.
    Keywords: Income distribution, same-sex couples, sexual minorities, LGBTQ+
    JEL: D31 D63 J12 J15 J16
    Date: 2024–05
  4. By: Andelic, Nicole (University of Aberdeen); Allan, Julia (University of Stirling); Bender, Keith A. (University of Aberdeen); Powell, Daniel (University of Aberdeen); Theodossiou, Ioannis (University of Aberdeen)
    Abstract: Recent research highlights the association of performance-related pay (PRP) and poor health. An uninvestigated potential mechanism is a lower frequency of leisure activities, since PRP incentives longer work hours. This study investigates PRP's effect on a variety of leisure pursuits. After correcting for self-selection, UK data show that PRP workers are less likely to engage in some forms of exercise and spend less time sleeping compared to non PRP workers. In addition, they are more likely to eat out and consume alcohol. Such leisure differences between PRP and salaried workers may negatively affect the health and wellbeing of PRP workers.
    Keywords: performance-related pay, leisure, sleep, health
    JEL: J33 J22 I0
    Date: 2024–03
  5. By: Arellano-Bover, Jaime (Yale University); De Simoni, Marco (Bank of Italy); Guiso, Luigi (Einaudi Institute for Economics and Finance); Macchiavello, Rocco (University of Warwick); Marchetti, Domenico J. (Bank of Italy); Prem, Mounu (Einaudi Institute for Economics and Finance)
    Abstract: Infiltration of the legal economy by criminal organizations (OCGs) is potentially significant, though how pervasive remains uncertain. Beyond the volume, the motives driving infiltration are of serious policy concern. We introduce a conceptual framework to differentiate between OCGs' motives for infiltrating legal firms and validate it using new data from the Italian Financial Intelligence Unit. About 2% of Italian firms appear to have links with OCGs, with three primary motives. Firms established by OCGs are predominantly used for criminal activities (functional motive). Medium-sized firms, often infiltrated post-creation, primarily reflect a competitive motive, wherein criminal activities benefit the firm. Lastly, large, well-established firms remain separate from criminal activities and are used for pecuniary and non-pecuniary returns, such as to establish political connections (pure motive). This so far unnoticed motive accounts for a substantial share of OCGs' infiltration.
    Keywords: organized crime, legal economy, firms, infiltration
    JEL: G3 L2 K4
    Date: 2024–03
  6. By: Jacob H. Bor; David M. Cutler; Edward L. Glaeser; Ljubica Ristovska
    Abstract: Equally educated people are healthier if they live in more educated places. Every 10 percent point increase in an area’s share of adults with a college degree is associated with a decline in all-cause mortality by 7%, controlling for individual education, demographics, and area characteristics. Area human capital is also associated with lower disease prevalence and improvements in self-reported health. The association between area education and health increased greatly between 1990 and 2010. Spatial sorting does not drive these externalities; there is little evidence that sicker people move disproportionately into less educated areas. Differences in health-related amenities, ranging from hospital quality to pollution, explain no more than 17% of the area human capital spillovers on health. Over half of the correlation between area human capital and health is a result of the correlation between area human capital and smoking and obesity. More educated areas have stricter regulations regarding smoking and more negative beliefs about smoking. These have translated over time into a population that smokes noticeably less and that is less obese, leading to increasing divergence in health outcomes by area education.
    JEL: I12 I18 I24 I26 R10
    Date: 2024–04

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