Losing Heart? The Effect of Job Displacement on Health

February 27, 2013
By: Black, Sandra E. (University of Texas at Austin)
Devereux, Paul J. (University College Dublin)
Salvanes, Kjell G. (Norwegian School of Economics (NHH))
URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp7117&r=ltv
Job reallocation is considered to be a key characteristic of well-functioning labor markets, as more productive firms grow and less productive ones contract or close. However, despite its potential benefits for the economy, there are significant costs that are borne by displaced workers. We study how job displacement in Norway affects cardiovascular health using a sample of men and women who are predominantly aged in their early forties. To do so we merge survey data on health and health behaviors with register data on person and firm characteristics. We track the health of displaced and non-displaced workers from 5 years before to 7 years after displacement. We find that job displacement has a negative effect on the health of both men and women. Importantly, much of this effect is driven by an increase in smoking behavior. These results are robust to a variety of specification checks.
Keywords: job loss, health, health behavior
JEL: I18

The New Stylized Facts about Income and Subjective Well-Being

February 27, 2013
By: Sacks, Daniel W. (Wharton School, University of Pennsylvania)
Stevenson, Betsey (University of Michigan)
Wolfers, Justin (University of Michigan)
URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp7105&r=ltv
In recent decades economists have turned their attention to data that asks people how happy or satisfied they are with their lives. Much of the early research concluded that the role of income in determining well-being was limited, and that only income relative to others was related to well-being. In this paper, we review the evidence to assess the importance of absolute and relative income in determining well-being. Our research suggests that absolute income plays a major role in determining well-being and that national comparisons offer little evidence to support theories of relative income. We find that well-being rises with income, whether we compare people in a single country and year, whether we look across countries, or whether we look at economic growth for a given country. Through these comparisons we show that richer people report higher well-being than poorer people; that people in richer countries, on average, experience greater well-being than people in poorer countries; and that economic growth and growth in well-being are clearly related. Moreover, the data show no evidence for a satiation point above which income and well-being are no longer related.
Keywords: adaptation, Easterlin Paradox, quality of life, life satisfaction, subjective well-being, economic growth

Inequality of Opportunity, Income Inequality and Economic Mobility: Some International Comparisons

February 27, 2013
By: Brunori, Paolo (University of Bari)
Ferreira, Francisco H.G. (World Bank)
Peragine, Vito (University of Bari)
URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp7155&r=ltv
Despite a recent surge in the number of studies attempting to measure inequality of opportunity in various countries, methodological differences have so far prevented meaningful international comparisons. This paper presents a comparison of ex-ante measures of inequality of economic opportunity (IEO) across 41 countries, and of the Human Opportunity Index (HOI) for 39 countries. It also examines international correlations between these indices and output per capita, income inequality, and intergenerational mobility. The analysis finds evidence of a “Kuznets curve” for inequality of opportunity, and finds that the IEO index is positively correlated with overall income inequality, and negatively with measures of intergenerational mobility, both in incomes and in years of schooling. The HOI is highly correlated with the Human Development Index, and its internal measure of inequality of opportunity yields very different country rankings from the IEO measure.
Keywords: equality of opportunity, income inequality, social mobility, mobility
JEL: D71

Social Spending and Income Redistribution in Argentina During the 2000s: the Rising Role of Noncontributory Pensions

February 27, 2013
By: Nora Lustig (Department of Economics, Tulane University)
Carola Pessino (School of Government and Executive Director, Centro de Investigaciones y Evaluación en Economía Social para el Alivio de la Pobreza, Universidad Torcuato Di Tella, Buenos Aires, Argentina)
URL: http://d.repec.org/n?u=RePEc:tul:wpaper:1221&r=ltv
Between 2003 and 2009, Argentina’s social spending as a share of GDP increased by 7.6 percentage points. Marginal benefit incidence analysis for 2003, 2006, and 2009 suggests that the contribution of cash transfers to the reduction of disposable income inequality and poverty rose markedly between 2006 and 2009 primarily due to the launching of a noncontributory pension program – the pension moratorium – in 2004. Noncontributory pensions as a share of GDP rose by 2.2 percentage points between 2003 and 2009 and entailed a redistribution of income to the poor, and from the formal sector pensioners with above minimum pensions to the beneficiaries of the pension moratorium. The redistributive impact of the expansion of public spending on education and health was also sizable and equalizing, but to a lesser degree. An assessment of fiscal funding sources puts the sustainability of the redistributive policies into question, unless nonsocial spending is significantly cut.
Keywords: social spending, benefit incidence, inequality, poverty, Argentina
JEL: D31