The NEP-LTV Blog

September 27, 2010

This blog is an experiment to explore the feasibility of scientific discussion on an Economics blog. NEP-LTV disseminates every week new working papers in the field of Unemployment, Inequality & Poverty. Among them, the NEP-LTV editor selects one to be discussed. Everyone is invited to comment. Try to stay civil, or your comments will be removed. And encourage others to read or join in the discussion.


The Minimum Wage from a Two-Sided Perspective

March 11, 2014
 
By: Alessio J. G. Brown
Christian Merkl
Dennis Snower
URL: http://d.repec.org/n?u=RePEc:kie:kieliw:1906&r=ltv
This paper sheds new light on the effects of the minimum wage on employment from a two-sided theoretical perspective, in which firms’ job offer and workers’ job acceptance decisions are disentangled. Minimum wages reduce job offer incentives and increase job acceptance incentives. We show that sufficiently low minimum wages may do no harm to employment, since their job-offer disincentives are countervailed by their job-acceptance incentives
Keywords: Minimum wage, labor market, employment, unemployment, job offer, job acceptance
JEL: J3 J6 J2

Biased Perceptions of Income Inequality and Redistribution

March 11, 2014
By: Engelhardt, Carina
Wagener, Andreas
URL: http://d.repec.org/n?u=RePEc:han:dpaper:dp-526&r=ltv
When based on perceived rather than o n objective income distributions, the Meltzer- Richards hypothesis and the POUM hypothesis work quite well empirically: there exists a positive link between perceived inequality or perceived upward mobility and the extent of redistribution in democratic regimes – though such a link does not exist when objective measures of inequality and social mobility are used. These observations highlight that political preferences and choices might depend more on perceptions than on factual data.
Keywords: Biased Perception, Majority Voting, Redistribution
JEL: H53 D72 D31

Economic Growth Evens-Out Happiness: Evidence from Six Surveys

March 11, 2014
 
By: Andrew E. Clark (EEP-PSE – Ecole d’Économie de Paris – Paris School of Economics – Ecole d’Économie de Paris, PSE – Paris-Jourdan Sciences Economiques – CNRS : UMR8545 – École des Hautes Études en Sciences Sociales (EHESS) – École des Ponts ParisTech (ENPC) – École normale supérieure [ENS] – Paris – Institut national de la recherche agronomique (INRA))
Sarah Flèche (EEP-PSE – Ecole d’Économie de Paris – Paris School of Economics – Ecole d’Économie de Paris, PSE – Paris-Jourdan Sciences Economiques – CNRS : UMR8545 – École des Hautes Études en Sciences Sociales (EHESS) – École des Ponts ParisTech (ENPC) – École normale supérieure [ENS] – Paris – Institut national de la recherche agronomique (INRA))
Claudia Senik (EEP-PSE – Ecole d’Économie de Paris – Paris School of Economics – Ecole d’Économie de Paris, PSE – Paris-Jourdan Sciences Economiques – CNRS : UMR8545 – École des Hautes Études en Sciences Sociales (EHESS) – École des Ponts ParisTech (ENPC) – École normale supérieure [ENS] – Paris – Institut national de la recherche agronomique (INRA), UP4 – Université Paris 4, Paris-Sorbonne – Université Paris IV – Paris Sorbonne – Ministère de l’Enseignement Supérieur et de la Recherche Scientifique)
URL: http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-00936145&r=ltv
In spite of the great U-turn that saw income inequality rise in Western countries in the 1980s, happiness inequality has dropped in countries that have experienced income growth (but not in those that did not). Modern growth has reduced the share of both the “very unhappy” and the “perfectly happy”. The extension of public amenities has certainly contributed to this greater happiness homogeneity. This new stylized fact comes as an addition to the Easterlin paradox, offering a somewhat brighter perspective for developing countries.
Keywords: Happiness ; Inequality ; Economic growth ; Development ; Easterlin paradox

Human Well-being and In-Work Benefits: A Randomized Controlled Trial

March 11, 2014
 
By: Dorsett, Richard (National Institute of Economic and Social Research (NIESR))
Oswald, Andrew J. (University of Warwick)
URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp7943&r=ltv
Many politicians believe they can intervene in the economy to improve people’s lives. But can they? In a social experiment carried out in the United Kingdom, extensive in-work support was randomly assigned among 16,000 disadvantaged people. We follow a sub-sample of 3,500 single parents for 5 ensuing years. The results reveal a remarkable, and troubling, finding. Long after eligibility had ceased, the treated individuals had substantially lower psychological well-being, worried more about money, and were increasingly prone to debt. Thus helping people apparently hurt them. We discuss a behavioral framework consistent with our findings and reflect on implications for policy.
Keywords: randomized controlled trials, government policy, in-work benefits, wage subsidies, well-being, happiness
JEL: I31 D03 D60 H11 J38

Longitudinal Evidence for a Midlife Nadir in Human Well-being: Results from Four Data Sets

March 11, 2014
 
By: Cheng, Terence Chai (Melbourne Institute of Applied Economic and Social Research)
Powdthavee, Nattavudh (London School of Economics)
Oswald, Andrew J. (University of Warwick)
URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp7942&r=ltv
There is a large amount of cross-sectional evidence for a midlife low in the life cycle of human happiness and well-being (a ‘U shape’). Yet no genuinely longitudinal inquiry has uncovered evidence for a U-shaped pattern. Thus some researchers believe the U is a statistical artefact. We re-examine this fundamental cross-disciplinary question. We suggest a new test. Drawing on four data sets, and only within-person changes in well-being, we document powerful support for a U-shape in unadjusted longitudinal data without the need for regression equations. The paper’s methodological contribution is to exploit the first-derivative properties of a well-being equation.
Keywords: life-cycle happiness, subjective well-being, longitudinal study, U shape
JEL: I31 D01 C18

The Economics of Human Development and Social Mobility

March 11, 2014
By: James J. Heckman
Stefano Mosso
URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:19925&r=ltv
This paper distills and extends recent research on the economics of human development and social mobility. It summarizes the evidence from diverse literatures on the importance of early life conditions in shaping multiple life skills and the evidence on critical and sensitive investment periods for shaping different skills. It presents economic models that rationalize the evidence and unify the treatment effect and family influence literatures. The evidence on the empirical and policy importance of credit constraints in forming skills is examined. There is little support for the claim that untargeted income transfer policies to poor families significantly boost child outcomes. Mentoring, parenting, and attachment are essential features of successful families and interventions to shape skills at all stages of childhood. The next wave of family studies will better capture the active role of the emerging autonomous child in learning and responding to the actions of parents, mentors and teachers.
JEL: I20 I24 I28 J13

Why Is There No Income Gap Between the Hui Muslim Minority and the Han Majority in Rural Ningxia, China?

March 11, 2014
   
By: Gustafsson, Björn Anders (University of Gothenburg)
Sai, Ding (Chinese Academy of Social Sciences)
URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp7970&r=ltv
Using a household sample survey for 2006 we show that the Hui population in the rural part of Ningxia autonomous region of China is disadvantaged compared to the Han majority as regards length of education and household per capita wealth. Yet there is no gap in average disposable income between the two ethnic groups and poverty rates are very similar. This paradox is due to members of Hui households earning more income outside the farm than members of Han households. Particularly young male Hui living in poor villages have a remarkably high likelihood of migrating, thereby bringing home income to their households.
Keywords: China, ethnic minorities, Hui ethnicity, income, poverty, migration
JEL: D31 J15 R23

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