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.

Three decades of publishing research in population economics

November 23, 2016

By: Brown, Alessio J.G. (UNU‐MERIT) ; Zimmermann, Klaus F. (UNU-MERIT, and Harvard University)
The Journal of Population Economics is celebrating its thirtieth birthday. When the first issue was published, population economics was non-existent as a field. Hence, the aim has been to provide a high quality outlet to publishing excellent theoretical and applied research in all areas of population economics. The article summarises key developments in the Journal’s editorial process, thematic orientation, international reach and successes. Furthermore, we discuss the benefits of working papers in economics and investigate the impacts of the present working paper culture on journal citations. Finally, we try to identify the citation impacts in the Journal itself. The Journal of Population Economics has established itself as the leader in its field. Publishing in working papers and in the Journal seem to be complementary activities.
Keywords: Demographical economics, population economics, working papers, Kuznets prize, citation impacts
JEL: A11 A14 B20 J10

Taxation of Temporary Jobs: Good Intentions with Bad Outcomes?

November 23, 2016

By: Cahuc, Pierre (Ecole Polytechnique, Paris) ; Charlot, Olivier (University of Cergy-Pontoise) ; Malherbet, Franck (CREST (ENSAE)) ; Benghalem, Helène (CREST) ; Limon, Emeline (University of Cergy-Pontoise)
This paper analyzes the consequences of the taxation of temporary jobs recently introduced in several European countries to induce firms to create more open-ended contracts and to increase the duration of jobs. The estimation of a job search and matching model on French data shows that the taxation of temporary jobs does not reach its objectives: it reduces the mean duration of jobs and decreases job creation, employment and welfare of unemployed workers. We find that a reform introducing an open-ended contract without layout costs for separations occurring at short tenure would have opposite effects.
Keywords: temporary jobs, employment protection legislation, taxation
JEL: J63 J64 J68

What Grades and Achievement Tests Measure

November 23, 2016

By: Borghans, Lex (Maastricht University) ; Golsteyn, Bart H.H. (Maastricht University) ; Heckman, James J. (University of Chicago) ; Humphries, John Eric (University of Chicago)
Intelligence quotient (IQ), grades, and scores on achievement tests are widely used as measures of cognition, yet the correlations among them are far from perfect. This paper uses a variety of data sets to show that personality and IQ predict grades and scores on achievement tests. Personality is relatively more important in predicting grades than scores on achievement tests. IQ is relatively more important in predicting scores on achievement tests. Personality is generally more predictive than IQ of a variety of important life outcomes. Both grades and achievement tests are substantially better predictors of important life outcomes than IQ. The reason is that both capture personality traits that have independent predictive power beyond that of IQ.
Keywords: IQ, achievement tests, grades, personality traits
JEL: J24 D03

El impacto del sistema tributario y del gasto social sobre la desigualdad y la pobreza en Argentina, Bolivia, Brasil, México, Perú y Uruguay: Un panorama general

November 23, 2016

By: Nora Lustig (Stone Center for Latin American Studies, Department of Economics, Tulane University.) ; Florencia Amábile ; Marisa Bucheli ; George Gray Molina ; Sean Higgins ; Miguel Jaramillo ; Wilson Jiménez Pozo ; Veronica Paz Arauco ; Claudiney Pereira ; Carola Pessino ; Máximo Rossi ; John Scott ; Ernesto Yáñez Aguilar
¿Cuánta redistribución y reducción de pobreza puede lograrse a través del gasto social, subsidios e impuestos en América Latina? Los análisis estándar de incidencia fiscal aplicados en Argentina, Bolivia, Brasil, México, Perú y Uruguay, con base en una metodología que permite comparación entre ellos, arroja los siguientes resultados: Los impuestos directos y las transferencias monetarias reducen significativamente la desigualdad y la pobreza en Argentina, Brasil y Uruguay y en menor medida en Bolivia, México y Perú. Si bien los impuestos directos son progresivos, su impacto en la redistribución del ingreso es limitado debido a que representan una pequeña proporción del PIB. Las transferencias monetarias son altamente progresivas en términos absolutos, excepto en Bolivia, donde los programas no se focalizan. Los impuestos indirectos prácticamente anulan el efecto positivo que tienen las transferencias monetarias sobre la reducción de la pobreza en Bolivia y Brasil. Cuando se incluyen las transferencias el valor monetizado de los servicios públicos en educación y salud, valuadas a costos del gobierno, éstas reducen la desigualdad en mucho mayor medida que las transferencias monetarias, lo cual refleja en gran medida su mayor tamaño en términos relativos.
Keywords: incidencia fiscal, desigualdad, pobreza, impuestos, gasto social, América Latina
JEL: H22 I3 O1

El Impacto del Sistema Tributario y el Gasto Social en la Distribución del Ingreso y la Pobreza en América Latina: Argentina, Bolivia, Brasil, Chile, Colombia, Costa Rica Ecuador, El Salvador, Guatemala, Honduras, México, Perú y Uruguay

November 23, 2016

By: Nora Lustig (Stone Center for Latin American Studies, Department of Economics, Tulane University. Commitment to Equity Institute (CEQI).)
Using standard fiscal incidence analysis, this paper estimates the impact of fiscal policy on inequality and poverty in thirteen countries in Latin America around 2010.Argentina, Brazil, Chile, Costa Rica and Uruguay are the countries which redistribute the most and El Salvador, Guatemala and Honduras redistribute the least. Contributory pensions are significantly equalizing in Argentina, Brazil and Uruguay and also in Chile, Costa Rica and Ecuador but, in the latter, their effect is small. In the rest of the countries, contributory pensions are unequalizing but their effect is also small. More unequal countries tend to redistribute more. Bolivia, Colombia, El Salvador, Guatemala, Honduras and Peru redistribute below the trend; Chile, Ecuador and Mexico are on trend; and, Argentina, Brazil, Costa Rica and Uruguay redistribute above the trend. Fiscal policy reduces poverty in nine countries. However, in Brazil, Bolivia, Guatemala and Honduras, the incidence of poverty after taxes, subsidies and transfers (excluding spending on education and health) is higher than market income poverty, even though fiscal policy is equalizing. In Brazil and Mexico, a third of the post-fiscal poor were impoverished by fiscal policy and, in Bolivia and Guatemala, two thirds were. Public spending on pre-school and primary education is always equalizing and also pro-poor (i.e., per capita spending falls with per capita income). Spending on secondary education is always equalizing but pro-poor only in some countries. Spending on tertiary education is never pro-poor; however, it is always equalizing except for Guatemala. Government spending on public health is always progressive in relative terms and equalizing. Resumen. Este artículo presenta resultados sobre el impacto de la política fiscal en la desigualdad y la pobreza en trece países de América Latina para alrededor del año 2010. Los países que más redistribuyen son Argentina, Brasil, Chile, Costa Rica y Uruguay, y los que menos, El Salvador, Guatemala y Honduras. Las pensiones contributivas tienen un efecto igualador, de magnitud significativa, en Argentina, Brasil y Uruguay. En Chile, Costa Rica y Ecuador el efecto es igualador pero pequeño. En el resto de los países, el efecto es desigualador pero también pequeño. Estos resultados son importantes porque indican que no se puede afirmar de manera general que las pensiones contributivas en América Latina son regresivas y desigualadoras. Si las pensiones contributivas se consideran un ingreso diferido, el efecto redistributivo es 4.1 puntos porcentuales mayor en la Unión Europea pero 15.4 puntos porcentuales mayor cuando las pensiones contributivas se consideran una transferencia. Los resultados para los trece países latinoamericanos muestran que los países más desiguales tienden a dedicar una proporción mayor del PIB al gasto social y que a mayor gasto social, mayor redistribución. Los países más desiguales también tienden a redistribuir más. Entre los países que redistribuyen por debajo de lo que predice la tendencia, se encuentran Bolivia, Colombia, El Salvador, Guatemala, Honduras y Perú.Chile, Ecuador y México prácticamente se encuentran sobre la línea de tendencia.Argentina, Brasil, Costa Rica y Uruguay lo hacen por encima de la tendencia. Países con un nivel de gasto social similar muestran diferentes niveles de redistribución lo cual sugiere que otros factores tales como la composición y focalización del gasto intervienen en determinar el efecto redistributivo más alla del tamaño. La política fiscal reduce la pobreza extrema en nueve países: Argentina, Chile, Colombia, Costa Rica, Ecuador, El Salvador, México, Perú y Uruguay. Sin embargo, la incidencia de la pobreza después de impuestos, subsidios y transferencias monetarias es mayor que la incidencia para el ingreso de mercado en Bolivia, Brasil, Guatemala y Honduras, aun cuando la política fiscal reduce la desigualdad. Además, aun cuando la incidencia de la pobreza y la desigualdad se reducen, con la nueva medida de Empobrecimiento Fiscal se puede observar que en Brasil y México un tercio y en Bolivia y Guatemala dos tercios de la población pobre medida con el ingreso consumible fue empobrecida: es decir, pasó de pobre a ser más pobre o de no pobre a ser pobre. El gasto en educación pre-escolar y primaria es igualador y pro-pobre en todos los países. El gasto en educación secundaria es igualador en todos los países y también pro-pobre en algunos pero no en todos. El gasto en educación terciaria nunca es pro-pobre pero es igualador a excepción de Guatemala. El gasto en salud siempre es igualador pero es pro-pobre solamente en Argentina, Brasil, Chile, Costa Rica, Ecuador y Uruguay.
Keywords: incidencia fiscal, desigualdad, pobreza, impuestos, transferencias, América Latina
JEL: D31 H22 I38

Early Childcare, Child Cognitive Outcomes and Inequalities in the UK

November 14, 2016

By: Del Boca, Daniela (University of Turin) ; Piazzalunga, Daniela (IRVAPP) ; Pronzato, Chiara D. (University of Turin)
The objective of this research is to explore the impact of early childcare on child cognitive outcomes. We utilize the Millennium Cohort Survey (MCS) for the United Kingdom, which provides very detailed information about several modalities of childcare as well as several child outcomes. In our empirical analysis, we estimate the association between formal childcare and child cognitive outcomes, allowing the effect of formal childcare to be different for children from different family backgrounds, controlling for a large number of variables (regarding the child, the mother, the father, the household). In a second step, we simulate how an increase in formal childcare attendance can affect inequalities across children. Our results show that childcare attendance has a positive impact on child cognitive outcomes, which are stronger for children from low socio–economic background.
Keywords: child care, child outcomes, inequalities
JEL: J13 H75


Earnings and Consumption Dynamics: A Nonlinear Panel Data Framework

November 14, 2016


By: Manuel Arellano (Centro de Estudios Monetarios y Financieros) ; Richard Blundell (University College London) ; Stéphane Bonhomme (University of Chicago)
We develop a new quantile-based panel data framework to study the nature of income persistence and the transmission of income shocks to consumption. Log-earnings are the sum of a general Markovian persistent component and a transitory innovation. The persistence of past shocks to earnings is allowed to vary according to the size and sign of the current shock. Consumption is modeled as an age-dependent nonlinear function of assets, unobservable tastes and the two earnings components. We establish the nonparametric identification of the nonlinear earnings process and of the consumption policy rule. Exploiting the enhanced consumption and asset data in recent waves of the Panel Study of Income Dynamics, we find that the earnings process features nonlinear persistence and conditional skewness. We confirm these results using population register data from Norway. We then show that the impact of earnings shocks varies substantially across earnings histories, and that this nonlinearity drives heterogeous consumption responses. The framework provides new empirical measures of partial insurance in which the transmission of income shocks to consumption varies systematically with assets, the level of the shock and the history of past shocks.
Keywords: earnings dynamics, Consumption, partial insurance, panel data, quantile regression, latent variables
JEL: C23 D31 D91