The NEP-LTV Blog

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.

Gender and Well-being Around the World: Some Insights from the Economics of Happiness

By: Carol Graham (The Brookings Institution) and Soumya Chattopadhyay (The Brookings Institution)

URL: http://d.repec.org/n?u=RePEc:hka:wpaper:2012-010&r=ltv

A wide body of research explores gender differences in welfare outcomes, and their implications for economic development. We aim to contribute to this work by looking at differences in reported well-being (happiness) across genders around the world. We examine differences across genders within countries, comparing age, income, education, and urban versus rural cohorts, and explore how those same within country differences vary in countries of different development levels. Our findings, based also on previous research on well-being more generally, highlight some consistent patterns across genders, with women typically happier than men in the world as a whole, with the exception of the poorest sample of countries. We also find substantial differences in the standard relationships between key variables – such as marriage – and happiness when we take differences in gender rights into account. Our research also suggests that cross-gender differences in well-being are affected by the same empirical and methodological factors that drive the paradoxes underlying the income and happiness debates more generally, with norms and expectations playing an important mediating role. Women’s happiness seems to fall – at least in the short-term – when there are changes/improvements in gender rights, in keeping with our more general findings on the drops in reported well-being that are often associated with the process of acquiring agency.

Keywords: happiness, gender, agency, expectations

JEL: I3

Empowering Women Through Education: Evidence from Sierra Leone

By: Naci H. Mocan and Colin Cannonier

URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:18016&r=ltv

We use data from Sierra Leone where a substantial education program provided increased access to education for primary-school age children but did not benefit children who were older. We exploit the variation in access to the program generated by date of birth and the variation in resources between various districts of the country. We find that the program has increased educational attainment and that an increase in education has changed women’s preferences. An increase in schooling, triggered by the program, had an impact on women’s attitudes towards matters that impact women’s health and on attitudes regarding violence against women. An increase in education has also reduced the number of desired children by women and increased their propensity to use modern contraception and to be tested for AIDS. While education makes women more intolerant of practices that conflict with their well-being, increased education has no impact on men’s attitudes towards women’s well-being.
JEL: I12

Trends in Occupational Segregation by Gender 1970-2009: Adjusting for the Impact of Changes in the Occupational Coding System

By: Blau, Francine D. (Cornell University)
Brummund, Peter (Cornell University)
Liu, Albert Yung-Hsu (Mathematica Policy Research)
URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp6490&r=ltv
In this paper, we develop a gender-specific crosswalk based on dual-coded Current Population Survey data to bridge the change in the Census occupational coding system that occurred in 2000 and use it to provide the first analysis of the trends in occupational segregation by sex for the 1970-2009 period based on a consistent set of occupational codes and data sources. We show that our gender-specific crosswalk more accurately captures the trends in occupational segregation that are masked using the aggregate crosswalk (based on combined male and female employment) provided by the U.S. Census Bureau. Using the 2000 occupational codes, we find that segregation by sex declined over the period but at a diminished pace over the decades, falling by 6.1 percentage points over the 1970s, 4.3 percentage points over the 1980s, 2.1 percentage points over the 1990s, and only 1.1 percentage points (on a decadal basis) over the 2000s. A primary mechanism by which occupational segregation was reduced over the 1970-2009 period was through the entry of new cohorts of women, presumably better prepared than their predecessors and/or encountering less labor market discrimination; during the 1970s and 1980s, however, there were also decreases in occupational segregation within cohorts. Reductions in segregation were correlated with education, with the largest decrease among college graduates and very little change in segregation among high school dropouts.
Keywords: occupations, occupational segregation, gender, discrimination
JEL: J16

Inequality in OECD Countries

By: Doerrenberg, Philipp (University of Cologne)
Peichl, Andreas (IZA)

URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp6505&r=ltv

Recent discussions about rising inequality in industrialized countries have triggered calls for more government intervention and redistribution. Due to obvious behavioral effects caused by redistribution, it is however not clear whether redistributional policies are indeed able to combat inequality. This paper contributes to this relevant research question by using different contextual country-level data sources to study inequality trends in OECD countries since the 1980s. We first investigate the development of inequality over time before analyzing the question of whether governments can effectively reduce inequality. Different identification strategies, using fixed effects and instrumental variables models, provide some evidence that governments are capable of reducing income inequality despite countervailing behavioral adjustments. The effect is stronger for social expenditure policies than for progressive taxation, which seems to trigger more inequality increasing indirect behavioral effects. Our results also suggest that the use of secondary inequality data should be handled with caution.
Keywords: inequality, redistribution, social expenditure, progressive taxation
JEL: D31

Income Comparisons and Non-Cognitive Skills

By: Santi Budria
Ada Ferrer-i-Carbonell

URL: http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp441&r=ltv

People gain utility from occupying a higher ranked position in the income distribution of the reference group. This paper investigates whether these gains depend on an individual’s set of non-cognitive skills. Using the 2000-2008 waves of the German Socioeconomic Panel dataset (SOEP), a subjective question on Life Satisfaction, and three different sets of non-cognitive skills indicators, we find significant and robust differences across skills groups. People who are more neurotic, extravert and have low external locus of control and low negative reciprocity are more sensitive to their individual position in the economic ladder. By contrast, the Life Satisfaction reaction to changes in economic status is significantly lower among individuals who score high (low) in negative (positive) reciprocity, and are at the bottom of the distribution of neuroticism, extraversion. The heterogeneity on the importance of income comparisons needs to be taken into account when, for example, introducing them into economic models, predicting individuals’ behaviour, or making welfare judgments.
Keywords: Life satisfaction, income comparisons, personality traits
JEL: D62

Measuring Segregation: Basic Concepts and Extensions to Other Domains

By: SILBER Jacques

URL: http://d.repec.org/n?u=RePEc:irs:cepswp:2012-20&r=ltv

This paper presents the main concepts used in measuring segregation. First it shows that the cardinal as well as the ordinal approach to the measurement of occupational segregation, when only two groups are considered (generally men and women), borrowed many ideas from the income inequality measurement literature. Second, it shows that more recent advances in segregation measurement, that were the consequence of an extension of segregation measures to the case of multi-group segregation and more recently to the analysis of ordinal segregation, could be the basis for additional approaches to the measurement of economic inequality, in particular inequality in life chances, health and happiness, and eventually also to the study of polarization. Finally because the measurement of spatial segregation is a field in itself, this paper only marginally mentions concepts that have been introduced in this no less fascinating domain.
Keywords: health inequality; inequality in hapiness; inequality in life chances; multidimensional segregation; occupational segregation; ordinal segregation; polarization; residential segregation
JEL: D31

The Evolution of Income, Consumption, and Leisure Inequality in The US, 1980-2010

By: Orazio Attanasio, Erik Hurst and Luigi Pistaferri

http://d.repec.org/n?u=RePEc:nbr:nberwo:17982&r=ltv

Recent research has documented that income inequality in the United States has increased dramatically over the prior three decades. There has been less of a consensus, however, on whether the increase in income inequality was matched by an equally large increase in consumption inequality. Most researchers have studied this question using data from the Consumer Expenditure Survey (CE) and some studies have suggested that the increase in consumption inequality has been modest. Unfortunately ,there is now mounting evidence that the CE is plagued by serious non-classical measurement error, which hinders the extent to which definitive conclusions can be made about the extent to which consumption inequality has evolved over the last three decades. In this paper, we use a variety of different techniques to overcome the measurement error problems with the CE. First, we use data from the diary component of the CE, focusing on categories where measurement error has been found to be less of an issue. Second, we explore inequality measures within the CE using the value of vehicles owned, a consumption component that is considered to be measured well. Third, we try to account directly for the non-classical measurement error of the CE by comparing the spending on luxuries (entertainment) relative to necessities (food). This is similar to the recent approach taken by Browning and Crossley (2009) and Aguiar and Bils (2011). Finally, we use expenditure data from the Panel Study of Income Dynamics to explore the dynamics of alternative measures of consumption inequality. All of our different methods yield similar results. We find that consumption inequality within the U.S. between 1980 and 2010 has increased by nearly the same amount as income inequality.
JEL: D12

Women’s Empowerment and Economic Development

By: Duflo, Esther

URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:8734&r=ltv

Women’s empowerment and economic development are closely related: in one direction, development alone can play a major role in driving down inequality between men and women; in the other direction, empowering women may benefit development. Does this imply that pushing just one of these two levers would set a virtuous circle in motion? This paper reviews the literature on both sides of the empowerment-development nexus, and argues that the inter-relationships are probably too weak to be self-sustaining, and that continuous policy commitment to equality for its own sake may be needed to bring about equality between men and women.
Keywords: gender equality; women’s empowerment
JEL: D1

The Rise and Fall of Income Inequality in Mexico, 1989-2010

By: Campos, Raymundo
Lustig, Nora

URL: http://d.repec.org/n?u=RePEc:unu:wpaper:wp2012-10&r=ltv

Inequality in Mexico rose between 1989 and 1994 and declined between 1994 and 2010. We examine the role of market forces (demand and supply of labour by skill), institutional factors (minimum wages and unionization rate), and public policy (cash transfers) in explaining changes in inequality. We apply the â..re-centred influence functionâ.. method to decompose changes in hourly wages into characteristics and returns. The main driver is changes in returns. Returns rose (1989-94) due to institutional factors and labour demand. Returns declined (1994-2006) due to changes in supply and, to a lesser extent, in demand; institutional factors were not relevant. Government transfers contributed to the decline in inequality, especially after 2000.
Keywords: inequality, wages, disposable income, labour markets, Mexico

Big ideas: wellbeing and public policy

By:Richard Layard

URL:http://d.repec.org/n?u=RePEc:cep:cepcnp:355&r=ltv

Richard Layard outlines the development of CEP research on what makes people happy and how society might best be organised to promote happiness.
Keywords:Wellbeing, happiness, public policy