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

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

Lockdowns, Loneliness and Life Satisfaction

June 4, 2020
By: Hamermesh, Daniel S. (Barnard College)
Abstract: Using the 2012-13 American Time Use Survey, I find that both who people spend time with and how they spend it affect their happiness, adjusted for numerous demographic and economic variables. Satisfaction among married individuals increases most with additional time spent with spouse. Among singles, satisfaction decreases most as more time is spent alone. Assuming that lockdowns constrain married people to spend time solely with their spouses, simulations show that their happiness may have been increased compared to before the lockdowns; but sufficiently large losses of work time and income reverse this inference. Simulations demonstrate clearly that, assuming lockdowns impose solitude on singles, their happiness was reduced, reductions that are made more severe by income and work losses.
Keywords: Coronavirus, time use, happiness, isolation, well-being, COVID-19
JEL: I12 J22 I31


Market income inequality, left-wing political parties, and redistribution in Latin America

June 4, 2020
Abstract: The paper uses household-level data from more than 200 household income surveys from 20 Latin American and Caribbean countries to explore the (revised) median voter hypothesis and the political determinants of the recent decrease of Latin American inequality. We find that more unequal market-income countries, and greater market-income inequality within a given country, are associated with greater pro-poor redistribution, although such redistribution is rather weak in Latin America compared to the economically advanced countries. We also find that more pro-left political orientation of national legislatures has been associated with greater redistribution. We thus argue that there are political roots to the recent decrease of inequality in Latin America.
Keywords: Amérique latine

Cash Transfer Programs and Household Labor Supply

June 2, 2020
By: Daniela Del BocaChiara PronzatoGiuseppe Sorrenti
Abstract: Employment contributes to reduce the risk of poverty. Through a randomized controlled trial, we evaluate the impact of a conditional cash transfer program (CCT) to low-income families with dependent children on household members’ labor supply. The attendance of labor-market-oriented mentoring courses constitutes the condition to obtain the transfer. One year after admission to the program, fathers assigned to the CCT program are more likely to work (+14 percent) than fathers assigned to an unconditional cash transfer program or to a pure control group. No effect arises for mothers. Increased paternal investments in activities enhancing labor market opportunities and improved family networks seem to explain the results.
Keywords: conditional cash transfers, poverty, household labor supply, mentoring courses
JEL: I10 I20 J24 I31
Date: 2020

When to release the lockdown: a wellbeing framework for analysing costs and benefits

June 2, 2020
By: Layard, RichardClark, Andrew E.De Neve, Jan-EmmanuelKrekel, ChristianFancourt, DaisyHey, NancyO’Donnell, Gus
Abstract: In choosing when to end the lockdown, policy-makers have to balance the impact of the decision upon incomes, unemployment, mental health, public confidence and many other factors, as well as (of course) upon the number of deaths from COVID-19. To facilitate the decision it is helpful to forecast each factor using a single metric. We use as our metric the number of Wellbeing-Years resulting from each date of ending the lockdown. This new metric makes it possible to compare the impact of each factor in a way that is relevant to all public policy decisions.
Keywords: Covid-19; coronavirus; Wellbeing Economics; Cost-Benefit Analysis; Health Policy
JEL: D60 D61 I31
Date: 2020–04

Inequality in the Impact of the Coronavirus Shock: Evidence from Real Time Surveys

June 2, 2020
By: Abi Adams-PrasslTeodora BonevaMarta GolinChristopher Rauh
Abstract: We present real time survey evidence from the UK, US and Germany showing that the labor market impacts of COVID-19 differ considerably across countries. Employees in Germany, which has a well-established short-time work scheme, are substantially less likely to be affected by the crisis. Within countries, the impacts are highly unequal and exacerbate existing inequalities. Workers in alternative work arrangements and in occupations in which only a small share of tasks can be done from home are more likely to have reduced their hours, lost their jobs and suffered falls in earnings. Less educated workers and women are more affected by the crisis.
Keywords: recessions, inequality, labor market, unemployment, coronavirus
JEL: J21 J22 J24 J33 J63