Wages, Experience and Training of Women over the Lifecycle

May 14, 2019
By: Richard BlundellMonica Costa DiasDavid A. GollCostas Meghir
Abstract: We investigate the role of training in reducing the gender wage gap using the UK-BHPS which contains detailed records of training. Using policy changes over an 18 year period we identify the impact of training and work experience on wages, earnings and employment. Based on a lifecycle model and using reforms as a source of exogenous variation we evaluate the role of formal training and experience in defining the evolution of wages and employment careers, conditional on education. Training is potentially important in compensating for the effects of children, especially for women who left education after completing high school.
JEL: H2 J16 J22 J24 J3 J31
URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:25776&r=ltv
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The demand for bad policy when voters underappreciate equilibrium effects

May 14, 2019
By: Dal Bó, ErnestoDal Bó, PedroEyster, Erik
Abstract: Most of the political-economy literature blames inefficient policies on institutions or politicians’ motives to supply bad policy, but voters may themselves be partially responsible by demanding bad policy. In this paper, we posit that voters may systematically err when assessing potential changes in policy by underappreciating how new policies lead to new equilibrium behavior. This biases voters towards policy changes that create direct benefits – welfare would rise if behavior were held constant – even if those reforms ultimately reduce welfare because people adjust behavior. Conversely, voters are biased against policies that impose direct costs even if they induce larger indirect benefits. Using a lab experiment, we find that a majority of subjects vote against policies that, while inflicting direct costs, would help them to overcome social dilemmas and thereby increase welfare. Subjects also support policies that, while producing direct benefits, create social dilemmas and ultimately hurt welfare. Both mistakes arise because subjects fail to fully anticipate the equilibrium effects of new policies. More precisely, we establish that subjects systematically underappreciate the extent to which policy changes will affect the behavior of other people, and that these mistaken beliefs exert a causal effect on the demand for bad policy.
Keywords: voting; reform; political failure; endogenous policy; experiment
JEL: C9 D7
URL: http://d.repec.org/n?u=RePEc:ehl:lserod:74455&r=ltv

Economic inequality and subjective well-being across the world

May 14, 2019
By: D’Ambrosio ConchitaClark Andrew
Abstract: We here use repeated cross-section data from the Afrobarometer, Asianbarometer Latinobarometer, and Eurobarometer to analyse the variables that are correlated with both current and future evaluations of standards of living. These are related not only to an individual’s own economic resources but also to the country distribution of resources.We consider resource comparisons (the gap in resources between richer and poorer individuals) and the normative evaluation of distribution (conditional on these gaps), given by the Gini coefficient. The ‘typical’ pattern of a negative effect of gaps on the better-off but a positive effect of gaps on the worse-off is found only in Europe: gaps for the better-off in Africa and Central and Latin America have no correlation with current life evaluations and are associated with more positive expectations of the future.Equally, there is no positive estimated coefficient for gaps to the worse-off in Asia. The Gini coefficient is negatively correlated with current life evaluation only in Asia, and is insignificant everywhere else. On the contrary, future life evaluations are more positive in more unequal countries in Africa and Central and Latin America.The relationship between the distribution of resources and measures of individual well-being over time is far from universal.
Keywords: Relative deprivation,WIID,Baromters,Gini coefficient,Inequality,Living conditions
URL: http://d.repec.org/n?u=RePEc:unu:wpaper:wp2018-170&r=ltv

Female Earnings Inequality: The Changing Role of Family Characteristics on the Extensive and Intensive Margins

April 29, 2019
By: David CardDean R. Hyslop
Abstract: Although women make up nearly half the U.S. workforce, most studies of earnings inequality focus on men. This is at least in part because of the complexity of modeling both the decision to work (i.e., the extensive margin) and the level of earnings conditional on work (the intensive margin). In this paper we document a series of descriptive facts about female earnings inequality using data for three cohorts in the PSID. We show that inequality in annual earnings of women fell sharply between the late 1960s and the mid-1990s, with a particularly large decline in the extensive margin component. We then fit earnings-generating models that incorporate both intensive- and extensive-margin dynamics to data for the three cohorts. Our models suggest that over 80% of the decline in female earnings inequality can be attributed to a weakening of the link between family-based factors (including the number of children of different ages and the presence and incomes of partners) and the intensive and extensive margins of earnings determination.
JEL: J22
URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:25387&r=ltv

Perspectives on Poverty in Europe

April 29, 2019
By: Jenkins, Stephen P. (London School of Economics)
Abstract: I address four topics: how our capacities to monitor poverty in Europe have improved substantially over recent decades; how progress on EU poverty reduction has been disappointing and why this has been; conceptual and measurement issues; and the future direction of EU-level anti-poverty actions. I follow in the footsteps of a giant – my perspectives are essentially elaborations of points made by Tony Atkinson.
Keywords: poverty, material deprivation, Europe, EU-SILC
JEL: C81 D31 I32
URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp12014&r=ltv

Revealing Stereotypes: Evidence from Immigrants in Schools

April 29, 2019
By: Alesina, Alberto (Harvard University); Carlana, Michela (Harvard Kennedy School); La Ferrara, Eliana (Bocconi University); Pinotti, Paolo (Bocconi University)
Abstract: If individuals become aware of their stereotypes, do they change their behavior? We study this question in the context of teachers’ bias in grading immigrants and native children in middle schools. Teachers give lower grades to immigrant students compared to natives who have the same performance on standardized, blindly-graded tests. We then relate differences in grading to teachers’ stereotypes, elicited through an Implicit Association Test (IAT). We find that math teachers with stronger stereotypes give lower grades to immigrants compared to natives with the same performance. Literature teachers do not differentially grade immigrants based on their own stereotypes. Finally, we share teachers’ own IAT score with them, randomizing the timing of disclosure around the date on which they assign term grades. All teachers informed of their stereotypes before term grading increase grades assigned to immigrants. Revealing stereotypes may be a powerful intervention to decrease discrimination, but it may also induce a reaction from individuals who were not acting in a biased way.
Keywords: immigrants, teachers, implicit stereotypes, IAT, bias in grading
JEL: I24 J15
URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp11981&r=ltv

How Valid are Synthetic Panel Estimates of Poverty Dynamics?

April 29, 2019
By: Nicolas Herault (Melbourne Institute: Applied Economic & Social Research, The University of Melbourne); Stephen P. Jenkins (London School of Economics, Institute for Social and Economic Research, University of Essex, Institute for the Study of Labor (IZA))
Abstract: A growing literature uses repeated cross-section surveys to derive ‘synthetic panel’ data estimates of poverty dynamics statistics. It builds on the pioneering study by Dang, Lanjouw, Luoto, and McKenzie (Journal of Development Economics, 2014) providing bounds estimates and the innovative refinement proposed by Dang and Lanjouw (World Bank Policy Research Working Paper 6504, 2013) providing point estimates of the statistics of interest. We provide new evidence about the accuracy of synthetic panel estimates relative to benchmarks based on estimates derived from genuine household panel data, employing high quality data from Australia and Britain, while also examining the sensitivity of results to a number of analytical choices. Overall, we are more agnostic about the validity of the synthetic panel approach applied to these two rich countries than are earlier validity studies in their applications focusing on middle- and low- income countries.
Keywords: Overty exit, poverty entry, poverty dynamics, pseudo panel, synthetic panel, BHPS, HILDA
JEL: I32 D31 C52
URL: http://d.repec.org/n?u=RePEc:iae:iaewps:wp2018n05&r=ltv