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.


Growth, Trade, and Inequality

December 10, 2014

By: Gene M. Grossman
Elhanan Helpman

URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:20502&r=ltv

We introduce firm and worker heterogeneity into a model of innovation-driven endogenous growth. Individuals who differ in ability sort into either a research sector or a manufacturing sector that produces differentiated goods. Each research project generates a new variety of the differentiated product and a random technology for producing it. Technologies differ in complexity and productivity, and technological sophistication is complementary to worker ability. We study the co-determination of growth and income inequality in both the closed and open economy, as well as the spillover effects of policy and conditions in one country to outcomes in others.

JEL: D33 F12 F16 O41


Long Workweeks and Strange Hours

December 10, 2014

By: Daniel S. Hamermesh
Elena Stancanelli

URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:20449&r=ltv

American workweeks are long compared to other rich countries’. Much less well-known is that Americans are more likely to work at night and on weekends. We examine the relationship between these two phenomena using the American Time Use Survey and time-diary data from 5 other countries. Adjusting for demographic differences, Americans’ incidence of night and weekend work would drop by about 10 percent if European workweeks prevailed. Even if no Americans worked long hours, the incidence of unusual work times in the U.S. would far exceed those in continental Europe.

JEL: J08 J22


More on Recent Evidence on the Effects of Minimum Wages in the United States

December 10, 2014

By: David Neumark
J.M. Ian Salas
William Wascher

URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:20619&r=ltv

A central issue in estimating the employment effects of minimum wages is the appropriate comparison group for states (or other regions) that adopt or increase the minimum wage. In recent research, Dube et al. (2010) and Allegretto et al. (2011) argue that past U.S. research is flawed because it does not restrict comparison areas to those that are geographically proximate and fails to control for changes in low-skill labor markets that are correlated with minimum wage increases. They argue that using “local controls” establishes that higher minimum wages do not reduce employment of less-skilled workers. In Neumark et al. (2014), we present evidence that their methods fail to isolate more reliable identifying information and lead to incorrect conclusions. Moreover, for subsets of treatment groups where the identifying variation they use is supported by the data, the evidence is consistent with past findings of disemployment effects. Allegretto et al. (2013) have challenged our conclusions, continuing the debate regarding some key issues regarding choosing comparison groups for estimating minimum wage effects. We explain these issues and evaluate the evidence. In general, we find little basis for their analyses and conclusions, and argue that the best evidence still points to job loss from minimum wages for very low-skilled workers – in particular, for teens.

JEL: J23 J38 J88


The Labor Supply of Self-Employed Workers: The Choice of Working Hours in Worker Co-ops

December 10, 2014

By: Pencavel, John (Stanford University)

URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp8561&r=ltv

Workers in cooperatives are self-employed workers and, if they resemble employees in conventional workplaces, they care about the length of their working hours. In this paper, their choice of hours is characterized as a conventional labor supply decision and a familiar hours-wage relationship is derived. This is estimated using mill-year observations on the plywood co-ops in the Pacific Northwest. The results are compared with those from the work behavior of other self-employed workers and with working hours in capitalist plywood mills.

Keywords: labor supply, hours, worker co-ops

JEL: J22 J54


Boss Competence and Worker Well-being

December 10, 2014

By: Artz, Benjamin (University of Wisconsin, Oshkosh)
Goodall, Amanda H. (Cass Business School)
Oswald, Andrew J. (University of Warwick)
URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp8559&r=ltv
Nearly all workers have a supervisor or ‘boss’. Yet there is almost no published research by economists into how bosses affect the quality of employees’ lives. This study offers some of the first formal evidence. First, it is shown that a boss’s technical competence is the single strongest predictor of a worker’s well-being. Second, we examine equivalent instrumental-variable results. Third, we demonstrate longitudinally that even if a worker stays in the same job and workplace then a newly competent supervisor greatly improves the worker’s well-being. Finally, we discuss analytical possibilities, and consider necessary future research.
Keywords: bosses, expert leaders, leadership, job satisfaction, happiness
JEL: I31 J28 M54

Wealth Inequality in the United States since 1913: Evidence from Capitalized Income Tax Data

December 4, 2014

By: Emmanuel Saez
Gabriel Zucman

URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:20625&r=ltv

This paper combines income tax returns with Flow of Funds data to estimate the distribution of household wealth in the United States since 1913. We estimate wealth by capitalizing the incomes reported by individual taxpayers, accounting for assets that do not generate taxable income. We successfully test our capitalization method in three micro datasets where we can observe both income and wealth: the Survey of Consumer Finance, linked estate and income tax returns, and foundations’ tax records. Wealth concentration has followed a U-shaped evolution over the last 100 years: It was high in the beginning of the twentieth century, fell from 1929 to 1978, and has continuously increased since then. The rise of wealth inequality is almost entirely due to the rise of the top 0.1% wealth share, from 7% in 1979 to 22% in 2012–a level almost as high as in 1929. The bottom 90% wealth share first increased up to the mid-1980s and then steadily declined. The increase in wealth concentration is due to the surge of top incomes combined with an increase in saving rate inequality. Top wealth-holders are younger today than in the 1960s and earn a higher fraction of total labor income in the economy. We explain how our findings can be reconciled with Survey of Consumer Finances and estate tax data.

JEL: H2 N32


The Gender Pay Gap Across Countries: A Human Capital Approach

December 4, 2014

By: Polachek, Solomon (Binghamton University, New York)
Xiang, Jun (Rutgers University)

URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp8603&r=ltv

The gender wage gap varies across countries. For example, among OECD nations women in Australia, Belgium, Italy and Sweden earn 80% as much as males, whereas in Austria, Canada and Japan women earn about 60%. Current studies examining cross-country differences focus on the impact of labor market institutions such as minimum wage laws and nationwide collective bargaining. However, these studies neglect labor market institutions that affect women’s lifetime work behavior – a factor crucially important in gender wage gap studies that employ individual data. This paper explicitly concentrates on labor market institutions that are related to female lifetime work that affect the gender wage gap across countries. Using ISSP (International Social Survey Programme), LIS (Luxembourg Income Study) and OECD wage data for 35 countries covering 1970-2002, we show that the gender pay gap is positively associated with the fertility rate, positively associated with the husband-wife age gap at first marriage, and positively related to the top marginal tax rate, all factors which negatively affect women’s lifetime labor force participation. In addition, we show that collective bargaining, as found in previous studies, is negatively associated with the gender pay gap.

Keywords: gender, pay, human capital, international differences

JEL: J3 J7 I3 H8 F55


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