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.


Wage inequality and poverty effects of lockdown and social distancing in Europe

October 22, 2020

By:Juan C. Palomino (University of Oxford (UK), INET and Department of Social Policy and Intervention); Juan G. Rodríguez (Universidad Complutense de Madrid (Spain), EQUALITAS, ICAE and CEDESOG); Raquel Sebastian (Universidad Complutense de Madrid (Spain), EQUALITAS and ICAE)
Abstract:Social distancing and lockdown measures taken to contain the spread of COVID-19 may have distributional economic costs beyond the contraction of GDP. Here we evaluate the capacity of individuals to work under a lockdown based on a Lockdown Working Ability index which considers their teleworking capacity and whether their occupation is essential or closed. Our analysis reveals substantial and uneven potential wage losses across the distribution all around Europe and we consistently find that both poverty and wage inequality rise in all European countries. Under four different scenarios (2 months of lockdown and 2 months of lockdown plus 6 months of partial functioning of closed occupations at 80%, 70% and 60% of full capacity) we estimate for 29 European countries an average increase in the headcount poverty index that goes from 4.9 to 9.4 percentage points and a mean loss rate for poor workers between 10% and 16.2%. The average increase in the Gini coefficient ranges between 3.5% to 7.3% depending on the scenario considered. Decomposing overall wage inequality in Europe, we find that lockdown and social distance measures produce a double process of divergence: both inequality within and between countries increase.
Keywords:Wage inequality; Teleworking; Social distancing; Europe; COVID.
JEL:D33 E24 J21 J31
Date:
URL:http://d.repec.org/n?u=RePEc:ucm:doicae:2003&r=ltv

The Relationship between Subjective Wellbeing and Subjective Wellbeing Inequality: Taking Ordinality and Skewness Seriously

October 22, 2020

By:Arthur Grimes (Motu Economic and Public Policy Research); Stephen P. Jenkins (London School of Economics and Political Science, and IZA);Florencia Tranquilli (Motu Economic and Public Policy Research, and Victoria University of Wellington)
Abstract:We argue that the relationship between individual satisfaction with life (SWL) and SWL inequality is more complex than described by leading earlier research such as Goff, Helliwell, and Mayraz (Economic Inquiry, 2018). Using inequality indices appropriate for ordinal data, our analysis using the World Values Survey reveals that skewness of the SWL distribution, not only inequality, matters for individual SWL outcomes; so too does whether we look upwards or downwards at the (skewed) distribution. Our results are consistent with there being negative (positive) externalities for an individual’s SWL from seeing people who are low (high) in the SWL distribution.
Keywords:subjective wellbeing, ordinal data, inequality, skewness, WVS

The Adverse Effect of the COVID-19 Labor Market Shock on Immigrant Employment

July 22, 2020
By: Borjas, George J. (Harvard University); Cassidy, Hugh (Kansas State University)
Abstract: Employment rates in the United States fell dramatically between February 2020 and April 2020 as the initial repercussions of the COVID-19 pandemic reverberated through the labor market. This paper uses data from the CPS Basic Monthly Files to document that the employment decline was particularly severe for immigrants. Historically, immigrant men were more likely to be employed than native men. The COVID-related labor market disruptions eliminated the immigrant employment advantage. By April 2020, immigrant men had lower employment rates than native men. The reversal occurred both because the rate of job loss for at-work immigrant men rose relative to that of natives, and because the rate at which out-of-work immigrants could find jobs fell relative to the native job-finding rate. A small part of the relative increase in the immigrant rate of job loss arises because immigrants were less likely to work in jobs that could be performed remotely and suffered disparate employment consequences as the lockdown permitted workers with more “remotable” skills to continue their work from home.
Keywords: immigration, labor supply, COVID-19
JEL: J21 J61
URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp13277&r=ltv

 


Non Cognitive Skills and Childcare Attendance

July 22, 2020
By: Daniela Del BocaEnrica Maria MartinoChiara Pronzato
Abstract: While several studies have explored the determinants of cognitive outcomes, this paper focuses on non-cognitive skills, for which there is less empirical evidence. Non- cognitive skills have been recognized as important determinants of cognitive skills and later life outcomes. We analyze the impact of attending formal childcare at ages 0-2 on attitudes toward schooling and on the social behavior of children at the end of their first year of primary school and at the end of high school. We find that attendance of childcare significantly improves school readiness and social behavior in elementary school but the impact disappears in high school. The e ects are more beneficial for boys and for children of mothers with lower educational attainment and of fathers in low-level occupations. In addition, we find that formal childcare attendance enhances the social behavior of children without siblings and improves attitudes toward school of children with siblings.
Keywords: non-cognitive ability, child development, childcare
Date:
URL: http://d.repec.org/n?u=RePEc:cca:wchild:79&r=ltv

The Cultural Origin of Saving Behavior

July 21, 2020
By: Costa Font, JoanGiuliano, PaolaOzcan, Berkay
Abstract: Traditional economic interpretations have not been successful in explaining differences in saving rates across countries. One hypothesis is that savings respond to cultural specific social norms. A seminal paper in economics (1) however did not find any effect of culture on savings. We revisit this evidence using a novel dataset, which allows us to study the saving behavior of up to three generations of immigrants in the United Kingdom. Against the backdrop of existing evidence, we find that cultural preferences are an important explanation for cross-country differences in saving behavior, and their relevance persists up to three generations.
Keywords: Culture; Saving
JEL: D0 Z1
Date:
URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:14413&r=ltv

What Accounts for the Rising Share of Women in the Top 1%?

July 21, 2020
By: Richard V. BurkhauserNicolas HéraultStephen P. JenkinsRoger Wilkins
Abstract: The share of women in the top 1% of the UK’s income distribution has been growing over the last two decades (as in several other countries). Our first contribution is to account for this secular change using regressions of the probability of being in the top 1%, fitted separately for men and women, in order to contrast between the sexes the role of changes in characteristics and changes in returns to characteristics. We show that the rise of women in the top 1% is primarily accounted for by their greater increases (relative to men) in the number of years spent in full-time education. Although most top income analysis uses tax return data, we derive our findings taking advantage of the much more extensive information about personal characteristics that is available in survey data. Our use of survey data requires justification given survey under-coverage of top incomes. Providing this justification is our second contribution.
JEL: C81 D31 J16
URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:27397&r=ltv

What Accounts for the Rising Share of Women in the Top 1%?

July 1, 2020
By: Burkhauser, Richard V. (Cornell University); Herault, Nicolas (Melbourne Institute of Applied Economic and Social Research); Jenkins, Stephen P.(London School of Economics); Wilkins, Roger (Melbourne Institute of Applied Economic and Social Research)
Abstract: The share of women in the top 1% of the UK’s income distribution has been growing over the last two decades (as in several other countries). Our first contribution is to account for this secular change using regressions of the probability of being in the top 1%, fitted separately for men and women, in order to contrast between the sexes the role of changes in characteristics and changes in returns to characteristics. We show that the rise of women in the top 1% is primarily accounted for by their greater increases (relative to men) in the number of years spent in full-time education. Although most top income analysis uses tax return data, we derive our findings taking advantage of the much more extensive information about personal characteristics that is available in survey data. Our use of survey data requires justification given survey under-coverage of top incomes. Providing this justification is our second contribution.
Keywords: Top 1%, top incomes, inequality, gender differences, survey under-coverage
JEL: D31 J16 C81
Date: 2020–06
URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp13359&r=ltv

Non Cognitive Skills and Childcare Attendance

July 1, 2020
By: Daniela Del BocaEnrica Maria MartinoChiara Pronzato
Abstract: While several studies have explored the determinants of cognitive outcomes, this paper focuses on non-cognitive skills, for which there is less empirical evidence. Non- cognitive skills have been recognized as important determinants of cognitive skills and later life outcomes. We analyze the impact of attending formal childcare at ages 0-2 on attitudes toward schooling and on the social behavior of children at the end of their first year of primary school and at the end of high school. We find that attendance of childcare significantly improves school readiness and social behavior in elementary school but the impact disappears in high school. The e ects are more beneficial for boys and for children of mothers with lower educational attainment and of fathers in low-level occupations. In addition, we find that formal childcare attendance enhances the social behavior of children without siblings and improves attitudes toward school of children with siblings.
Keywords: non-cognitive ability, child development, childcare
Date: 2020
URL: http://d.repec.org/n?u=RePEc:cca:wchild:79&r=ltv

The Seeds of Ideology: Historical Immigration and Political Preferences in the United States

June 30, 2020
By: Giuliano, Paola (University of California, Los Angeles); Tabellini, Marco (Massachusetts Institute of Technology)
Abstract: We test the relationship between historical immigration to the United States and political ideology today. We hypothesize that European immigrants brought with them their preferences for the welfare state, and that this had a long-lasting effect on the political ideology of US born individuals. Our analysis proceeds in three steps. First, we document that the historical presence of European immigrants is associated with a more liberal political ideology and with stronger preferences for redistribution among US born individuals today. Next, we show that this correlation is not driven by the characteristics of the counties where immigrants settled or other specific, socioeconomic immigrants’ traits. Finally, we conjecture and provide evidence that immigrants brought with them their preferences for the welfare state from their countries of origin. Consistent with the hypothesis that immigration left its footprint on American ideology via cultural transmission from immigrants to natives, we show that our results are stronger when inter-group contact between natives and immigrants, measured with either intermarriage or residential integration, was higher. Our findings also indicate that immigrants influenced American political ideology during one of the largest episodes of redistribution in US history — the New Deal — and that such effects persisted after the initial shock.
Keywords: immigration, culture, political ideology, preferences for redistribution
JEL: D64 D72 H2 J15 N32 Z1
Date: 2020–05
URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp13268&r=ltv

Employer Policies and the Immigrant-Native Earnings Gap

June 30, 2020
By: Benoit DostieJiang LiDavid CardDaniel Parent
Abstract: We use longitudinal data from the income tax system to study the impacts of firms’ employment and wage-setting policies on the level and change in immigrant-native wage differences in Canada. We focus on immigrants who arrived in the early 2000s, distinguishing between those with and without a college degree from two broad groups of countries – the U.S., the U.K. and Northern Europe, and the rest of the world. Consistent with a growing literature based on the two-way fixed effects model of Abowd, Kramarz, and Margolis (1999), we find that firm-specific wage premiums explain a significant share of earnings inequality in Canada and contribute to the average earnings gap between immigrants and natives. In the decade after receiving permanent status, earnings of immigrants rise relative to those of natives. Compositional effects due to selective outmigration and changing participation play no role in this gain. About one-sixth is attributable to movements up the job ladder to employers that offer higher pay premiums for all groups, with particularly large gains for immigrants from the “rest of the world” countries.
Keywords: Wage Differentials,Immigrants,Linked Employer-Employee Data,Firm Effects,
Date: 2020–06–11
URL: http://d.repec.org/n?u=RePEc:cir:cirwor:2020s-34&r=ltv