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.

Still More On Mariel: The Role of Race

June 20, 2017
By: George J. Borjas
Card’s (1990) study of the Mariel supply shock remains an important cornerstone of both the literature that measures the labor market impact of immigration, and of the “stylized fact” that immigration might not have much impact on the wage of workers in a receiving country. My recent reappraisal of the Mariel evidence (Borjas, 2017) revealed that the wage of low-skill workers in Miami declined substantially in the years after Mariel, and has already encouraged a number of re-reexaminations. Most recently, Clemens and Hunt (2017) argue that a data quirk in the CPS implies that wage trends in the sample of non-Hispanic prime-age men examined in my paper does not correctly represent what happened to wages in post-Mariel Miami. Specifically, there was a substantial increase in the black share of Miami’s low-skill workforce in the relevant period (particularly between the 1979 and 1980 survey years of the March CPS). Because African-American men earn less than white men, this increase in the black share would spuriously produce a drop in the average low-skill wage in Miami. This paper examines the robustness of the evidence presented in my original paper to statistical adjustments that control for the increasing number of black men in Miami’s low-skill workforce. The evidence consistently indicates that the race-adjusted low-skill wage in Miami fell significantly relative to the wage in other labor markets shortly after 1980 before fully recovering by 1990.
JEL: J0 J61

Non-Work at Work, Unemployment and Labor Productivity

June 20, 2017
By: Burda, Michael C ; Genadek, Katie R. ; Hamermesh, Daniel S.
We use the American Time Use Survey (ATUS) 2003-2012 to estimate time spent in non-work on the job. Non-work is substantial and varies positively with local unemployment. Time spent in non-work conditional on any positive amount rises, while the fraction of workers reporting positive values declines with unemployment. Both effects are economically important, and are consistent with a model in which heterogeneous workers are paid efficiency wages. That model correctly predicts the relationship between the incidence of non-work and unemployment benefits in state data linked to the ATUS, and is consistent with estimated occupational differences in non-work incidence and intensity, as well as the cyclical behavior of aggregate labor productivity.
Keywords: efficiency wages; labor productivity; non-work; time use
JEL: E24 J22

Body-Weight and Women’s Hours of Work: More Evidence That Marriage Markets Matter

June 20, 2017
By: Grossbard, Shoshana (San Diego State University) ; Mukhopadhyay, Sankar (University of Nevada, Reno)
Higher body-weight (BMI) can affect labor supply via its effects on outcomes in both labor markets and marriage markets. To the extent that it is associated with lower prospects of being in couple and obtaining intra-couple transfers, we expect that higher BMI will increase willingness to supply labor in labor markets, especially for women. We use US panel data from the NLSY79 and NLSY97 to examine whether body weight influences hours of work in the labor market. We use sibling BMI as an instrument for own BMI to address potential endogeneity of BMI in hours worked. We find that White women with higher BMI work more. This is true for both single and married White women. Results for other groups of women and men produce mixed results. The extended analysis suggests that what drives the relationship between BMI and hours worked is not lower market wages earned by high-BMI women, but rather lower spousal transfers to married women or lower expected intra-marriage transfers to single women.
Keywords: obesity, labor supply, marriage prospects, intra-household division of resources
JEL: J22 I12 J12

Selection on Ability and the Early Career Growth in the Gender Wage Gap

June 20, 2017
By: Fraga, Eduardo (Yale University) ; Gonzaga, Gustavo (Pontifical Catholic University of Rio de Janeiro (PUC-Rio)) ; Soares, Rodrigo R. (Columbia University)
This paper analyzes the effect of selection on ability on the evolution of the gender wage gap during the first years of professional life. We use longitudinal data with 16 years of the early career history of formal sector workers in Brazil. The panel allows us to build a measure of unobserved ability that we use to analyze the dynamics of labor market selection across genders as individuals age. We focus on the cohort born in 1974, for which we have a close to complete history of formal labor market participa-tion. For this cohort, the average ability of formally employed men improved in relation to that of women during the first years of professional life. The selection of men and women into the labor mar-ket was similar at age 21, but by age 31 high‐ability men (one standard deviation above the mean) had a probability of employment 1.6 percentage point higher than their high‐ability female counter-parts. This contributed to the increase in the conditional gender wage gap observed in the early career, as the ability distribution of employed women deteriorated in relation to that of employed men. Our estimates suggest that, for the 1974 cohort, this mechanism explains 32% of the cumulative growth in the conditional gender wage gap between ages 21 and 36.
Keywords: gender wage gap, selection, ability, lifecycle
JEL: J16 J21 J31 J71

Living Up to Expectations: How Job Training Made Women Better Off and Men Worse Off

June 2, 2017

By: Paloma Acevedo ; Guillermo Cruces ; Paul Gertler ; Sebastian Martinez
We study the interaction between job and soft skills training on expectations and labor market outcomes in the context of a youth training program in the Dominican Republic. Program applicants were randomly assigned to one of 3 modalities: a full treatment consisting of hard and soft skills training plus an internship, a partial treatment consisting of soft skills training plus an internship, or a control group. We find strong and lasting effects of the program on personal skills acquisition and expectations, but these results are markedly different for young men and young women. Shortly after completing the program, both male and female participants report increased expectations for improved employment and livelihoods. This result is reversed for male participants in the long run, a result that can be attributed to the program’s negative short-run effects on labor market outcomes for males. While these effects seem to dissipate in the long run, employed men are substantially more likely to be searching for another job. On the other hand, women experience improved labor market outcomes in the short run and exhibit substantially higher levels of personal skills in the long run. These results translate into women being more optimistic, having higher self-esteem and lower fertility in the long run. Our results suggest that job-training programs of this type can be transformative – for women, life skills mattered and made a difference, but they can also have a downside if, like in this case for men, training creates expectations that are not met.
JEL: J08 J24 J31 J68


Structural inequality: The case of Sweden

June 2, 2017

By: Olof Robling ; Jon Kristian Pareliussen (OECD)
Structural trends not directly related to labour market functioning and redistribution have made a sizeable contribution to inequality and poverty in Sweden, but occupy only limited space in the income inequality debate. To fill this gap, we put a quarter of a century of rising inequality in Sweden in a new perspective by quantifying the effect of changing household composition, age structure, industry structure, educational attainment and immigration on inequality. The influence of structural changes on inequality is derived from micro-data from Statistics Sweden. We re-weigh subgroups of the population with certain characteristics by their population shares in 1987 to construct counterfactual income distributions for 2013 and derive inequality measures that we compare to their actual 2013 values. We find that almost half of the inequality increase between 1987 and 2013 can be mechanically ascribed to these factors.
Keywords: demographics, immigration, Income distribution, poverty, structural trends
JEL: D31 I24 I32 J11 J12 J14 J15 L16


Is Global Equality the Enemy of National Equality?

June 2, 2017


By: Rodrik, Dani (University of Chicago)
The bulk of global inequality is accounted for by income differences across countries rather than within countries. Expanding trade with China has aggravated inequality in some advanced economies, while ameliorating global inequality. But the “China shock” is receding and other low-income countries are unlikely to replicate China’s export-oriented industrialization experience. Relaxing restrictions on cross-border labor mobility might have an even stronger positive effect on global inequality. However it also raises a similar tension. While there would likely be adverse effects on low-skill workers in the advanced economies, international labor mobility has some advantages compared to further liberalizing international trade in goods. I argue that none of the contending perspectives–national-egalitarian, cosmopolitan, utilitarian–rovides on its own an adequate frame for evaluating the consequences.