Survey Under-Coverage of Top Incomes and Estimation of Inequality: What is the Role of the UK’s SPI Adjustment?

August 11, 2017
By: Richard V. Burkhauser ; Nicolas Hérault ; Stephen P. Jenkins ; Roger Wilkins
Survey under-coverage of top incomes leads to bias in survey-based estimates of overall income inequality. Using income tax record data in combination with survey data is a potential approach to address the problem; we consider here the UK’s pioneering ‘SPI adjustment’ method that implements this idea. Since 1992, the principal income distribution series (reported annually in Households Below Average Income) has been based on household survey data in which the incomes of a small number of ‘very rich’ individuals are adjusted using information from ‘very rich’ individuals in personal income tax return data. We explain what the procedure involves, reveal the extent to which it addresses survey under-coverage of top incomes, and show how it affects estimates of overall income inequality. More generally, we assess whether the SPI adjustment is fit for purpose and consider whether variants of it could be employed by other countries.
JEL: C81 D31
URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:23539&r=ltv
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Gender, Age, and Competition: a Disappearing Gap?

August 11, 2017
By: Jeffrey Flory ; Uri Gneezy ; Kenneth Leonard ; John List
Research on competitiveness at the individual level has emphasized sex as a physiological determinant, focusing on the gap in preference for competitive environments between young men and women. This study presents evidence that women’s preferences over competition change with age such that the gender gap, while large for young adults, disappears in older populations due to the fact that older women are much more competitive. Our finding that tastes for competition appear just as strong among older women as they are among men suggests a simple gender-based view of competitiveness is misleading; age seems just as important as sex. These findings are consistent with one of the most commonly cited views on the deeper origins of gender differences: that they stem at least in part from human evolution.
URL: http://d.repec.org/n?u=RePEc:feb:artefa:00611&r=ltv

How Restricted is the Job Mobility of Skilled Temporary Work Visa Holders?

August 11, 2017
By: Jennifer Hunt
Using the National Survey of College Graduates, I investigate the degree to which holders of temporary work visas in the United States are mobile between employers. Holders of temporary work visas either have legal restrictions on their ability to change employers (particularly holders of intra-company transferee visas, L-1s) or may be reluctant to leave an employer who has sponsored them for permanent residence (particularly holders of specialty worker visas, H-1Bs). I find that the voluntary job changing rate is similar for temporary visa holders and natives with similar characteristics. For the minority of temporary workers who receive permanent residence, there is a considerable spike in voluntary moving upon receipt of permanent residence, suggesting mobility is reduced during the application period by about 20%. My analysis of reasons for moving suggests that applicants are prepared to pay a small but not large professional price for permanent access to the U.S. labor market.
JEL: J61
URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:23529&r=ltv

Still More On Mariel: The Role of Race

June 20, 2017
By: George J. Borjas
Card’s (1990) study of the Mariel supply shock remains an important cornerstone of both the literature that measures the labor market impact of immigration, and of the “stylized fact” that immigration might not have much impact on the wage of workers in a receiving country. My recent reappraisal of the Mariel evidence (Borjas, 2017) revealed that the wage of low-skill workers in Miami declined substantially in the years after Mariel, and has already encouraged a number of re-reexaminations. Most recently, Clemens and Hunt (2017) argue that a data quirk in the CPS implies that wage trends in the sample of non-Hispanic prime-age men examined in my paper does not correctly represent what happened to wages in post-Mariel Miami. Specifically, there was a substantial increase in the black share of Miami’s low-skill workforce in the relevant period (particularly between the 1979 and 1980 survey years of the March CPS). Because African-American men earn less than white men, this increase in the black share would spuriously produce a drop in the average low-skill wage in Miami. This paper examines the robustness of the evidence presented in my original paper to statistical adjustments that control for the increasing number of black men in Miami’s low-skill workforce. The evidence consistently indicates that the race-adjusted low-skill wage in Miami fell significantly relative to the wage in other labor markets shortly after 1980 before fully recovering by 1990.
JEL: J0 J61
URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:23504&r=ltv

Non-Work at Work, Unemployment and Labor Productivity

June 20, 2017
By: Burda, Michael C ; Genadek, Katie R. ; Hamermesh, Daniel S.
We use the American Time Use Survey (ATUS) 2003-2012 to estimate time spent in non-work on the job. Non-work is substantial and varies positively with local unemployment. Time spent in non-work conditional on any positive amount rises, while the fraction of workers reporting positive values declines with unemployment. Both effects are economically important, and are consistent with a model in which heterogeneous workers are paid efficiency wages. That model correctly predicts the relationship between the incidence of non-work and unemployment benefits in state data linked to the ATUS, and is consistent with estimated occupational differences in non-work incidence and intensity, as well as the cyclical behavior of aggregate labor productivity.
Keywords: efficiency wages; labor productivity; non-work; time use
JEL: E24 J22
URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:12087&r=ltv

Body-Weight and Women’s Hours of Work: More Evidence That Marriage Markets Matter

June 20, 2017
By: Grossbard, Shoshana (San Diego State University) ; Mukhopadhyay, Sankar (University of Nevada, Reno)
Higher body-weight (BMI) can affect labor supply via its effects on outcomes in both labor markets and marriage markets. To the extent that it is associated with lower prospects of being in couple and obtaining intra-couple transfers, we expect that higher BMI will increase willingness to supply labor in labor markets, especially for women. We use US panel data from the NLSY79 and NLSY97 to examine whether body weight influences hours of work in the labor market. We use sibling BMI as an instrument for own BMI to address potential endogeneity of BMI in hours worked. We find that White women with higher BMI work more. This is true for both single and married White women. Results for other groups of women and men produce mixed results. The extended analysis suggests that what drives the relationship between BMI and hours worked is not lower market wages earned by high-BMI women, but rather lower spousal transfers to married women or lower expected intra-marriage transfers to single women.
Keywords: obesity, labor supply, marriage prospects, intra-household division of resources
JEL: J22 I12 J12
URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp10775&r=ltv

Selection on Ability and the Early Career Growth in the Gender Wage Gap

June 20, 2017
By: Fraga, Eduardo (Yale University) ; Gonzaga, Gustavo (Pontifical Catholic University of Rio de Janeiro (PUC-Rio)) ; Soares, Rodrigo R. (Columbia University)
This paper analyzes the effect of selection on ability on the evolution of the gender wage gap during the first years of professional life. We use longitudinal data with 16 years of the early career history of formal sector workers in Brazil. The panel allows us to build a measure of unobserved ability that we use to analyze the dynamics of labor market selection across genders as individuals age. We focus on the cohort born in 1974, for which we have a close to complete history of formal labor market participa-tion. For this cohort, the average ability of formally employed men improved in relation to that of women during the first years of professional life. The selection of men and women into the labor mar-ket was similar at age 21, but by age 31 high‐ability men (one standard deviation above the mean) had a probability of employment 1.6 percentage point higher than their high‐ability female counter-parts. This contributed to the increase in the conditional gender wage gap observed in the early career, as the ability distribution of employed women deteriorated in relation to that of employed men. Our estimates suggest that, for the 1974 cohort, this mechanism explains 32% of the cumulative growth in the conditional gender wage gap between ages 21 and 36.
Keywords: gender wage gap, selection, ability, lifecycle
JEL: J16 J21 J31 J71
URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp10791&r=ltv