Social Mobility at the Top: Why Are Elites Self-Reproducing?

December 27, 2013
 
By: Elise S. Brezis (Bar-Ilan University)
Joël Hellier
URL: http://d.repec.org/n?u=RePEc:biu:wpaper:2013-12&r=ltv
This paper proposes an explanation for the decrease in social mobility that has occurred in the last two decades in a number of advanced economies, as well as for the divergence in mobility dynamics across countries. Within an intergenerational framework, we show that a two-tier higher education system with standard and elite universities generates social stratification, high social immobility and self-reproduction of the elite. Moreover, we show that the higher the relative funding for elite universities, the higher the elite self-reproduction, and the lower social mobility. We also analyse the impacts of changes in the weight of the elite and of the middle class upon social mobility. Our findings provide theoretical bases for the inverted-U profile of social mobility experienced in several countries since World War II and to the ‘Great Gatsby Curve’ relating social mobility to inequality.
Keywords: Elite, Higher Education, Selection, Social mobility, Social stratification
JEL: I21 J62 O15 Z13

Has job polarisation squeezed the American middle class?

December 27, 2013
 
By: Michael Boehm
URL: http://d.repec.org/n?u=RePEc:cep:cepcnp:400&r=ltv
Job polarisation has had strong effects on US workers’ relative wages, according to research by Michael Boehm. His study examines whether the decline in manufacturing and clerical jobs has been responsible for the lagging wages of middle-skill workers in the United States. Comparing the occupational choices and earnings of survey respondents in the 1980s and today, he shows that labour market returns to middle-skill jobs have declined relative to high- and low-skill jobs.
Keywords: Job polarization, wage inequality, talent allocation, Roy model
JEL: J21 J23 J24 J31

What do labor market institutions do?

December 27, 2013
   
By: Holmlund, Bertil (Department of Economics)
URL: http://d.repec.org/n?u=RePEc:hhs:uunewp:2013_023&r=ltv
The past couple of decades have seen a huge increase in research on various labor market institutions. This paper offers a brief overview and discussion of research on the labor market impacts of minimum wages (MW), unemployment insurance (UI), and employment protection legislation (EPL). It is argued that research on UI is largely a success story, involving a fruitful interplay between search theory and empirical work. This research has established that UI matters for labor market behavior, in particular the duration of unemployment, although there remains substantial uncertainty about the magnitudes of the effects. The research on MW should have shaken economists’ belief in the competitive labor market model as a result of frequent failures to find noticeable employment effects despite considerable effects on wages. EPL research has established that employment protection reduces labor and job turnover but the jury is still out regarding the impact on overall employment and productivity.
Keywords: minimum wages; unemployment Insurance; employment protection
JEL: J01

Decomposing the recent inequality decline in Latin America

December 27, 2013
By: Azevedo, Joao Pedro
Inchauste, Gabriela
Sanfelice, Viviane
URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:6715&r=ltv
Over the past decade, 12 of 14 Latin American countries have experienced a reduction in inequality. Based on a series of counterfactual simulations, the observed changes in inequality are decomposed in order to identify the main determinants of inequality. In contrast to methods that focus on aggregate summary statistics, the method adopted in this paper generates counterfactual distributions, so that the analysis can account for changes related to demographics, occupation, labor earnings and transfers, pensions, and other nonlabor income sources. The results show that for the majority of countries in the sample, the most important contributor to the observed decline in inequality has been the relatively strong growth in labor earnings at the bottom of the income distribution. In particular, most of the reduction in inequality can be attributed to an increase in earnings per hour for the bottom of the income distribution. The paper also contributes to the literature on inequality in Latin America by providing the Shapley-Shorrocks value of this decomposition.
Keywords: Poverty Impact Evaluation,Inequality,Services&Transfers to Poor,Labor Policies,Emerging Markets

The ins and outs of top income mobility

December 27, 2013
By: Rolf Aaberge
Anthony B. Atkinson
Jørgen Modalsli (Statistics Norway)
URL: http://d.repec.org/n?u=RePEc:ssb:dispap:762&r=ltv
This paper is concerned with the question of whether top income earners are permanently there or only temporarily receive the highest incomes. How much mobility is there at the top of the income distribution, and how has mobility changed over time? The paper makes both a methodological and an empirical contribution to answering these questions. The first part of the paper introduces a family of top income mobility measures based on differences in average annual incomes of top income earners in short-term and long-term distributions of income. Norwegian income tax records are then employed to study top income mobility in Norway since 1967. The results reveal low levels of top income mobility, but a relatively large increase in mobility starting at the same time as the income shares of the top income receivers started to increase around 1990.
Keywords: Top income shares; Income mobility; Inequality
JEL: J31 E24 D63 N34

Happiness of economists

December 11, 2013
By: Feld, Lars P.
Necker, Sarah
Frey, Bruno S.
URL: http://d.repec.org/n?u=RePEc:zbw:aluord:137&r=ltv
This study investigates the determinants of economists’ life satisfaction. The analysis is based on a survey of professional, mostly academic economists from European countries and beyond. We find that certain features of economists’ professional situation influence their well-being. Happiness is increased by having more research time while the lack of a tenured position decreases satisfaction in particular if the contract expires in the near future or cannot be extended. Surprisingly, publication success has no effect on satisfaction. While the perceived level of external pressure also has no impact, the perceived change of pressure in recent years has. Economists may have accepted a high level of pressure when entering academia but do not seem to be willing to cope with the increase observed in recent years. —
Keywords: happiness,academic labor market,extrinsic and intrinsic motivation,publish or perish-culture
JEL: I31 A11 J28

Gender Gaps in Performance Pay: New Evidence from Spain

December 11, 2013
By: Sara de la Rica
Juan J. Dolado
Raquel Vegas
URL: http://d.repec.org/n?u=RePEc:fda:fdaddt:2013-14&r=ltv
This paper analyzes the gender gap in the performance–pay component of hourly wages received by workers in Spain using detailed information drawn from a large wage survey for 2006. Under the assumption that performance pay is determined in a more competitive fashion than the remaining wage components, there should be less room for gender discrimination. However, this is not what we find. After controlling for observable characteristics, non-random selection into performance-pay jobs and for segregation into different firms and occupations, the estimated adjusted gap in favour of male remains large (around 30 log points). Further, there is evidence of a “glass ceiling” pattern throughout the distribution of performance pay. After examining alternative hypotheses that could rationalize these findings, we conjecture that employers’ discrimination, possibly due to monopsonistic power, might be the one which is more consistent with the evidence.