Tuesday, October 09, 2012

When Do People Become Adults? The Uruguayan Case


Maximo Rossi, Universidad del Uruguay - Departamento de Economía (dECON)

Natalia MelgarUniversidad de La Amazonia

http://works.bepress.com/cgi/viewcontent.cgi?article=1074&context=maximo_rossi

Abstract

This paper explores the key experiences that Uruguayans consider relevant for becoming an adult in Uruguay. In particular, we assess the linkages between adulthood and income; labor market participation and marital status, among other transitions that have been found to be associated with the attainment of adulthood. With the aim of identifying attitudinal patterns, we use the 2008 International Social Survey Program in Uruguay and estimate ordered probit models to examine the importance individuals assign to a series of hypothetical transitions. We discover that gender, age, and educational level are viewed as critical determinants in the passage to adulthood. Moreover, we find that Uruguay may have a different constellation of beliefs pertaining to adult transitions than has been found in similar studies conducted in the United States.

Suggested Citation

Maximo Rossi and Natalia Melgar. "When Do People Become Adults? The Uruguayan Case" International Journal of Population Research / Hindawi Publishing Corporation 2012.Article ID 425325 (2012): 1-6.

Monday, October 08, 2012

Polarization and the Middle Class


Maximo Rossi, Universidad del Uruguay - Departamento de Economía (dECON)

Fernando BorrazUniversidad de la Republica
Nicolas GonzalezUniversidad de Montevideo

http://works.bepress.com/maximo_rossi/63

Abstract

There is an increasing literature that discusses how to measure the middle class. Some approaches are based on an arbitrary deÖnition such as income quartiles or the poverty line. Recently, Foster and Wolfson developed a methodology which lacks of arbitrariness that enables us to compare the middle class of two di§erent income distributions. We apply this new tool jointly with a complementary method ñrelative distribution approach- to household income data in 1994-2004 and 2004-2010, to analyze the evolution of the middle class and polarization in Uruguay. During the Örst period, which is characterized by an increasing income inequality, we Önd that the middle class declined and income polarization increased. In the second one, where the Uruguayan economy experienced a recovery from the downturn su§ered in 2002, we Önd that the middle class rose and polarization decreased. However, this last result is attenuated when we do not consider the household income imputation because of the new health system implemented in 2008.

Suggested Citation

Maximo Rossi, Fernando Borraz, and Nicolas Gonzalez. 2011. "Polarization and the Middle Class" dECON_Working papers
Available at: http://works.bepress.com/maximo_rossi/63

Tuesday, May 22, 2012

NEP: New Economics Papers Unemployment, Inequality and Poverty


NEP: New Economics Papers
Unemployment, Inequality and Poverty

Edited by:Maximo Rossi
University of the Republic
Issue date:2012-05-08
Papers:11
Note: Access to full contents may be restricted.
NEP is sponsored by SUNY Oswego.
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In this issue we have:

  1. Trends in Occupational Segregation by Gender 1970-2009: Adjusting for the Impact of Changes in the Occupational Coding System
    Blau, Francine D.; Brummund, Peter; Liu, Albert Yung-Hsu
  2. The Impact of Redistributive Policies on Inequality in OECD Countries
    Doerrenberg, Philipp; Peichl, Andreas
  3. Changes in China's Wage Structure
    Ge, Suqin; Yang, Dennis Tao
  4. Study on Active Inclusion of Migrants
    Klaus F. Zimmermann; Martin Kahanec; Corrado Giulietti; Martin Guzi; Alan Barrett; Bertrand Maître
  5. Wage and Employment Determination in Volatile Times: Sweden 1913-1939
    Holmlund, Bertil
  6. Explaining the Gender Wage Gap in Turkey Using the Wage Structure Survey
    Arda Aktas; Gokce Uysal
  7. Empowering Women Through Education: Evidence from Sierra Leone
    Naci H. Mocan; Colin Cannonier
  8. Evolution of poverty in Bolivia: a multidementional approach
    Werner L. Hernani-Limarino; Paul Villarroel
  9. Comparing Real Wage Rates
    Ashenfelter, Orley
  10. Trade and Inequality: From Theory to Estimation
    Elhanan Helpman; Oleg Itskhoki; Marc-Andreas Muendler; Stephen Redding
  11. Unemployment in Bolivia
    Werner L. Hernani-Limarino; Maria Villegas; Ernesto Yanez

Contents.

  1. Date:2012-04
    By:Blau, Francine D. (Cornell University)
    Brummund, Peter (Cornell University)
    Liu, Albert Yung-Hsu (Mathematica Policy Research)
    URL:http://d.repec.org/n?u=RePEc:iza:izadps:dp6490&r=ltv
    In this paper, we develop a gender-specific crosswalk based on dual-coded Current Population Survey data to bridge the change in the Census occupational coding system that occurred in 2000 and use it to provide the first analysis of the trends in occupational segregation by sex for the 1970-2009 period based on a consistent set of occupational codes and data sources. We show that our gender-specific crosswalk more accurately captures the trends in occupational segregation that are masked using the aggregate crosswalk (based on combined male and female employment) provided by the U.S. Census Bureau. Using the 2000 occupational codes, we find that segregation by sex declined over the period but at a diminished pace over the decades, falling by 6.1 percentage points over the 1970s, 4.3 percentage points over the 1980s, 2.1 percentage points over the 1990s, and only 1.1 percentage points (on a decadal basis) over the 2000s. A primary mechanism by which occupational segregation was reduced over the 1970-2009 period was through the entry of new cohorts of women, presumably better prepared than their predecessors and/or encountering less labor market discrimination; during the 1970s and 1980s, however, there were also decreases in occupational segregation within cohorts. Reductions in segregation were correlated with education, with the largest decrease among college graduates and very little change in segregation among high school dropouts.
    Keywords:occupations, occupational segregation, gender, discrimination
    JEL:J16
  2. Date:2012-04
    By:Doerrenberg, Philipp (University of Cologne)
    Peichl, Andreas (IZA)
    URL:http://d.repec.org/n?u=RePEc:iza:izadps:dp6505&r=ltv
    Recent discussions about rising inequality in industrialized countries have triggered calls for more government intervention and redistribution. Due to obvious behavioral effects caused by redistribution, it is however not clear whether redistributional policies are indeed able to combat inequality. This paper contributes to this relevant research question by using different contextual country-level data sources to study inequality trends in OECD countries since the 1980s. We first investigate the development of inequality over time before analyzing the question of whether governments can effectively reduce inequality. Different identification strategies, using fixed effects and instrumental variables models, provide some evidence that governments are capable of reducing income inequality despite countervailing behavioral adjustments. The effect is stronger for social expenditure policies than for progressive taxation, which seems to trigger more inequality increasing indirect behavioral effects. Our results also suggest that the use of secondary inequality data should be handled with caution.
    Keywords:inequality, redistribution, social expenditure, progressive taxation
    JEL:D31
  3. Date:2012-04
    By:Ge, Suqin (Virginia Tech)
    Yang, Dennis Tao (Chinese University of Hong Kong)
    URL:http://d.repec.org/n?u=RePEc:iza:izadps:dp6492&r=ltv
    Using a national sample of Urban Household Surveys, we document several profound changes in China's wage structure during a period of rapid economic growth. Between 1992 and 2007, the average real wage increased by 202 percent, accompanied by a sharp rise in wage inequality. Decomposition analysis reveals 80 percent of this wage growth to be attributable to higher pay for basic labor, rising returns to human capital, and increases in the state-sector wage premium. Employing an aggregate production function framework, we account for the sources of wage growth and wage inequality in the face of globalization and economic transition. We find capital accumulation, skill-biased technological change, and export expansion to be the major forces behind the evolving wage structure in China.
    Keywords:wage growth, wage premium, wage inequality, capital accumulation, trade expansion, technological change, China
    JEL:J31
  4. Date:2012-02
    By:Klaus F. Zimmermann (IZA)
    Martin Kahanec (IZA)
    Corrado Giulietti (IZA)
    Martin Guzi (IZA)
    Alan Barrett (ESRI)
    Bertrand Maître (ESRI)
    URL:http://d.repec.org/n?u=RePEc:iza:izarrs:43&r=ltv
    Report prepared for the European Commission, Bonn 2012 (216 pages)
  5. Date:2012-04
    By:Holmlund, Bertil (Uppsala University)
    URL:http://d.repec.org/n?u=RePEc:iza:izadps:dp6509&r=ltv
    The paper studies wage and employment determination in the Swedish business sector from the mid-1910s to the late 1930s. This period includes the boom and bust cycle of the early 1920s as well as the Great Depression of the early 1930s. The events of the early 1920s are particularly intriguing, involving inflation running at an annual rate of 30 percent followed by a period of sharp deflation where nominal wages and prices fell by 30 percent and unemployment increased from 5 to 30 percent. We examine whether relatively standard wage and employment equations can account for the volatile economic development during the interwar years. By and large, the answer is a qualified yes. Industry wages were responsive to industry-specific firm performance, suggesting a significant role for 'insider forces' in wage determination. Unemployment had a strong downward impact on wages. There is evidence that reductions in working time added to wage pressure; yet estimates of labor demand equations suggest that cuts in working time may have slightly increased employment as firms substituted workers for hours.
    Keywords:wage determination, labor demand, interwar labor markets
    JEL:J23
  6. Date:2011-06
    By:Arda Aktas (Stony Brook University Economics Department)
    Gokce Uysal (Bahcesehir University Center for Economic and Social Research (Betam))
    URL:http://d.repec.org/n?u=RePEc:bae:wpaper:005&r=ltv
    Gender discrimination in the labor market can take on many forms, the most prominent one being the gender gap in wages. The labor market in Turkey is not an exception. Even though the gender wage gap is 3 percent on average, a closer look reveals important differences along the wage distribution. There is virtually no gender gap at the lower end and men earn 6.47 percent more than women at the median. Surprisingly, women seem to earn 4.99 percent higher wages than men at the top of the wage distribution. Using the quantile regression method, we discuss how the labor market returns differ along the wage distribution. Secondly, we use the Machado-Mata decomposition method to reveal how much of the gender gap at each quantile can be explained by gender differences in characteristics versus gender differences in returns. We find that the gender gap actually widens when we control for basic characteristics such as age, education and tenure. In other words, controlling for gender differences in labor market characteristics reveals that there is gender discrimination in Turkey, as measured by the differences in returns.
    Keywords:Gender wage gap, quantile regression, Machado-Mata decomposition
  7. Date:2012-04
    By:Naci H. Mocan
    Colin Cannonier
    URL:http://d.repec.org/n?u=RePEc:nbr:nberwo:18016&r=ltv
    We use data from Sierra Leone where a substantial education program provided increased access to education for primary-school age children but did not benefit children who were older. We exploit the variation in access to the program generated by date of birth and the variation in resources between various districts of the country. We find that the program has increased educational attainment and that an increase in education has changed women’s preferences. An increase in schooling, triggered by the program, had an impact on women’s attitudes towards matters that impact women’s health and on attitudes regarding violence against women. An increase in education has also reduced the number of desired children by women and increased their propensity to use modern contraception and to be tested for AIDS. While education makes women more intolerant of practices that conflict with their well-being, increased education has no impact on men’s attitudes towards women’s well-being.
    JEL:I12
  8. Date:2012-01
    By:Werner L. Hernani-Limarino (Fundación ARU)
    Paul Villarroel (Fundación ARU)
    URL:http://d.repec.org/n?u=RePEc:aru:wpaper:201201&r=ltv
    This document constructs a multidimentional measure of poverty for Bolivia based on the new 2008 constitution's fundamental rights, which can be measured in surveys; it also documents the changes in poverty observed in the last decade, in a multidimensional approach. Particulary, we extend the analysis made by Hernani Limarino (2010) on the evolution of poverty in monetary dimensions with a complementary analysis of five other non-monetary dimentions: access to education, short term social security (health), long term social security (pensions), housing and basic household services. The Analysis shows that non-monetary poverty has remained in high levels, and quite elusive despite the reduction in poverty according to monetary measures has decreased.
    Keywords:Bolivia, Multidimensional Poverty.
    JEL:I30
  9. Date:2012-04
    By:Ashenfelter, Orley (Princeton University)
    URL:http://d.repec.org/n?u=RePEc:iza:izadps:dp6500&r=ltv
    A real wage rate is a nominal wage rate divided by the price of a good and is a transparent measure of how much of the good an hour of work buys. It provides an important indicator of the living standards of workers, and also of the productivity of workers. In this paper I set out the conceptual basis for such measures, provide some historical examples, and then provide my own preliminary analysis of a decade long project designed to measure the wages of workers doing the same job in over 60 countries – workers at McDonald’s restaurants. The results demonstrate that the wage rates of workers using the same skills and doing the same jobs differ by as much as 10 to 1, and that these gaps declined over the period 2000-2007, but with much less progress since the Great Recession.
    Keywords:real wage rates, international comparisons, productivity
    JEL:C81
  10. Date:2012-04
    By:Elhanan Helpman
    Oleg Itskhoki
    Marc-Andreas Muendler
    Stephen Redding
    URL:http://d.repec.org/n?u=RePEc:cep:cepdps:dp1138&r=ltv
    While neoclassical theory emphasizes the impact of trade on wage inequality between occupations and sectors, more recent theories of firm heterogeneity point to the impact of trade on wage dispersion within occupations and sectors. Using linked employer-employee data for Brazil, we show that much of overall wage inequality arises within sector-occupations and for workers with similar observable characteristics; this within component is driven by wage dispersion between firms; and wage dispersion between firms is related to firm employment size and trade participation. We then extend the heterogenous-firm model of trade and inequality from Helpman, Itskhoki, and Redding (2010) and structurally estimate it with Brazilian data. We show that the estimated model fits the data well, both in terms of key moments as well as in terms of the overall distributions of wages and employment, and find that international trade is important for this fit. In the estimated model, reductions in trade costs have a sizeable effect on wage inequality.
    Keywords:Wage inequality, international trade
    JEL:F12
  11. Date:2011-12
    By:Werner L. Hernani-Limarino (Fundación ARU)
    Maria Villegas (Fundación ARU)
    Ernesto Yanez (Fundación ARU)
    URL:http://d.repec.org/n?u=RePEc:aru:wpaper:201112&r=ltv
    This paper attempts to evaluate the effectiveness of Bolivia’s labor market institutions, particularly the Plan Nacional de Empleo de Emergencia (PLANE). It is found that unemployment as conventionally defined may not be the most important problem in Bolivia’s labor market, as the non-salaried market is always an alternative. While un-employment durations and unemployment scarring consequences are relatively low, labor market regulations and labor market programs do not help to increase the size of the formal market, apparently as a result of Bolivia’s rigid labor markets and labor policies based mainly on temporary employment programs. Such programs, however, may have helped to smooth consumption. Given the country’s high level of infor-mality, protection policies are second best to active policies specifically designed to increase the productivity/employability of vulnerable populations.
    Keywords:Bolivia, Unemployment, Labor Policies, Impact Evaluation.
    JEL:J08

This nepltv issue is ©2012 by Maximo Rossi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, it must include this copyright notice. It may not be sold, or placed in something else for sale.
General information on the NEP project can be found at http://nep.repec.org/. For comments please write to the director of NEPMarco Novarese at < director @ nep point repec point org >.

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Monday, May 07, 2012

NEP: New Economics Papers Unemployment, Inequality and Poverty Issue date: 2012-05-02


Edited by: Maximo Rossi

Universidad de la Republica

Papers: 11

To subscribe/unsubscribe follow this link http://lists.repec.org/mailman/options/nep-ltv

In this issue we have:

Lifetime Labor Income and the Erosion of Seniority-Based Wages in Japan: Evidence Based on Administrative Data Records
Hori, Masahiro; Iwamoto, Koichiro

Multidimensional Poverty Measurement in Europe: An Application of the Adjusted Headcount Approach
Christopher T. Whelan; Brian Nolan; Bertrand Maître

Income Comparisons and Non-Cognitive Skills
Santi Budria; Ada Ferrer-i-Carbonell

Why women are progressive in education?: Gender disparities in human capital, labor markets, and family arrangement in the Philippines
Yamauchi, Futoshi; Tiongco, Marites

Wage and Employment Determination in Volatile Times: Sweden 1913–1939
Holmlund, Bertil

Product and Labor Market Imperfections and Scale Economies: Micro-evidence on France, Japan and the Netherlands
Sabien DOBBELAERE; KIYOTA Kozo; Jacques MAIRESSE

Alternative theories for explaining the spatial wage inequality: a multilevel competition among human capital, NEG and amenities
Dusan Paredes

How pro-poor and progressive is social spending in Zambia ?
Cuesta, Jose; Kabaso, Pamela; Suarez-Becerra, Pablo

Income Inequality in the European Union
Kaja Bonesmo Fredriksen

The Impact of Redistributive Policies on Inequality in OECD Countries
Philipp Doerrenberg; Andreas Peichl

Equality of opportunities and fiscal incidence in Cote d'Ivoire
Abras, Ana; Cuesta, Jose; Hoyos, Alejandro; Narayan, Ambar

Contents.

Lifetime Labor Income and the Erosion of Seniority-Based Wages in Japan: Evidence Based on Administrative Data Records
Date: 2012-04
By: Hori, Masahiro
Iwamoto, Koichiro
URL: http://d.repec.org/n?u=RePEc:hit:cisdps:554&r=ltv
This paper examines the impact of the erosion in seniority-based wages on lifetime labor income in Japan. Despite the importance of this issue, studies to date have not been able to address it directly because reliable datasets long enough to cover individuals’ entire careers were not available. Taking advantage of administrative data records on individuals’ careers, which became available with the introduction of Pension Coverage Regular Notices, Takayama et al. (2012) constructed a panel dataset of career records covering a period of more than 30 years. We use the dataset to derive wage profiles throughout individuals’ careers. Moreover, using the estimated wage profiles for individuals with different sets of characteristics, we calculate the lifetime labor income (over a 35-year period) for those individuals to examine the impact of the erosion of Japan’s seniority wages on lifetime income. We confirm that the wage-age profile of lifetime employees over their working life has been gradually flattening in recent years. The flattening is particularly prominent among middle-aged and elderly white-collar workers with a college background, and it appears to have decreased their lifetime labor income by about 10 to 30 percent.
Keywords: Seniority-based wages, Lifetime labor income, Japan
JEL: C81

Multidimensional Poverty Measurement in Europe: An Application of the Adjusted Headcount Approach
Date: 2012-04-23
By: Christopher T. Whelan (School of Sociology and Geary Institute, Univeristy College Dublin)
Brian Nolan (College of Human Sciences, University College Dublin University College Dublin)
Bertrand Maître (Economic and Social Research Institute, Dublin)
URL: http://d.repec.org/n?u=RePEc:ucd:wpaper:201211&r=ltv
As awareness of the limitations of relying solely on income to measure poverty and social exclusion has become more widespread, attention has been increasingly focused on multi-dimensional approaches. To date efforts to measure multidimensional poverty and social exclusion in rich countries have been predominantly ad hoc and have relied on data that are far from ideal. Here we apply the approach recently developed by Alkire and Foster, characterized by a range of desirable axiomatic properties but mostly discussed so far in a development context, to European countries, exploiting the potential of harmonized microdata on deprivation newly available for the European Union. The analysis seeks to overcome the limitations of the union and intersection approaches that have characterized many earlier studies. Multidimensional poverty is characterized and decomposed in terms of the contribution of different deprivation dimensions, and an account of cross-national and socio-economic variation in risk levels is presented that is in line with theoretical expectations. Multilevel analysis of multi-dimensional poverty provides the basis for assessment of the role of macro and micro characteristics and their interaction in relation to levels and patterns of multidimensional poverty and social exclusion.
Keywords: poverty, social exclusion, multidimensional

Income Comparisons and Non-Cognitive Skills
Date: 2012
By: Santi Budria
Ada Ferrer-i-Carbonell
URL: http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp441&r=ltv
People gain utility from occupying a higher ranked position in the income distribution of the reference group. This paper investigates whether these gains depend on an individual's set of non-cognitive skills. Using the 2000-2008 waves of the German Socioeconomic Panel dataset (SOEP), a subjective question on Life Satisfaction, and three different sets of non-cognitive skills indicators, we find significant and robust differences across skills groups. People who are more neurotic, extravert and have low external locus of control and low negative reciprocity are more sensitive to their individual position in the economic ladder. By contrast, the Life Satisfaction reaction to changes in economic status is significantly lower among individuals who score high (low) in negative (positive) reciprocity, and are at the bottom of the distribution of neuroticism, extraversion. The heterogeneity on the importance of income comparisons needs to be taken into account when, for example, introducing them into economic models, predicting individuals' behaviour, or making welfare judgments.
Keywords: Life satisfaction, income comparisons, personality traits
JEL: D62

Why women are progressive in education?: Gender disparities in human capital, labor markets, and family arrangement in the Philippines
Date: 2012
By: Yamauchi, Futoshi
Tiongco, Marites
URL: http://d.repec.org/n?u=RePEc:fpr:ifprid:1155&r=ltv
This paper shows mutually consistent evidence to support female advantage in education and disadvantage in labor markets observed in the Philippines. We set up a model that shows multiple Nash equilibria to explain schooling and labor market behaviors for females and males. Our evidence from unique sibling data of schooling and work history and from the Philippine Labor Force Survey support that family arrangement to tighten commitment between daughters and parents keeps a high level of schooling investments in daughters. Because wage penalty to females in labor markets means that education is relatively important as a determinant of their earnings, parental investments in their daughters' education has larger impacts on the income of their daughters than on their sons. Parents expect larger income shared from better-educated adult daughters. In contrast, males stay in an equilibrium, with low levels of schooling investment and income sharing.
Keywords: Education, Family, Gender, Labor market,

Wage and Employment Determination in Volatile Times: Sweden 1913–1939
Date: 2012-04-18
By: Holmlund, Bertil (Department of Economics)
URL: http://d.repec.org/n?u=RePEc:hhs:uunewp:2012_009&r=ltv
The paper studies wage and employment determination in the Swedish business sector from the mid-1910s to the late 1930s. This period includes the boom and bust cycle of the early 1920s as well as the Great Depression of the early 1930s. The events of the early 1920s are particularly intriguing, involving inflation running at an annual rate of 30 percent followed by a period of sharp deflation where nominal wages and prices fell by 30 percent and unemployment increased from 5 to 30 percent. We examine whether relatively standard wage and employment equations can account for the volatile economic development during the interwar years. By and large, the answer is a qualified yes. Industry wages were responsive to industry-specific firm performance, suggesting a significant role for “insider forces” in wage determination. Unemployment had a strong downward impact on wages. There is evidence that reductions in working time added to wage pressure; yet estimates of labor demand equations suggest that cuts in working time may have slightly increased employment as firms substituted workers for hours.
Keywords: Wage determination; labor demand; interwar labor markets
JEL: J23

Product and Labor Market Imperfections and Scale Economies: Micro-evidence on France, Japan and the Netherlands
Date: 2012-04
By: Sabien DOBBELAERE
KIYOTA Kozo
Jacques MAIRESSE
URL: http://d.repec.org/n?u=RePEc:eti:dpaper:12020&r=ltv
Allowing for three labor market settings, this paper relies on an extension of Hall's econometric framework for simultaneously estimating price-cost mark-ups and scale economies. Using an unbalanced panel of 17,653 firms over the period 1986-2001 in France, 8,725 firms over the period 1994-2006 in Japan, and 7,828 firms over the period 1993-2008 in the Netherlands, we first classify 30 comparable manufacturing industries in six distinct regimes that differ in terms of the type of competition prevailing in product and labor markets. For each of the three predominant regimes in each country, we then investigate industry differences in the estimated product and labor market imperfections and scale economies. We not only find important regime differences across the three countries, but also observe cross-country differences in the levels of product and labor market imperfections and scale economies within a particular regime.

Alternative theories for explaining the spatial wage inequality: a multilevel competition among human capital, NEG and amenities
Date: 2012-04
By: Dusan Paredes (IDEAR - Department of Economics, Universidad Católica del Norte - Chile)
URL: http://d.repec.org/n?u=RePEc:cat:dtecon:dt201206&r=ltv
This paper presents an empirical framework for analyzing the spatial wage inequality in a Latin American country: Chile. This country is mainly characterized by two stylized facts: the high spatial concentration around metropolitan areas and the key role of natural resources. We consider both elements with a competition between NEG versus amenity framework. Both theories are combined with human capital through a Multilevel Analysis. The results show the low performance of NEG for Chile and how the natural resources are a winner causal mechanism for the case. Additionally, the spatial wage variability is extremely small when it is compared with the wage variation at individual level.
Keywords: Spatial wage inequality, spatial concentration, natural resources, NEG, amenity framework, wage variation at individual level

How pro-poor and progressive is social spending in Zambia ?
Date: 2012-04-01
By: Cuesta, Jose
Kabaso, Pamela
Suarez-Becerra, Pablo
URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:6052&r=ltv
This paper analyzes the distributional effect of public spending in Zambia using the most recent data from the 2010 Living Conditions Monitoring Survey. The analysis focuses on both the"traditional"social sectors, such as education and public healthcare, as well as other spending areas less thoroughly studied, such as agricultural support programs. Ultimately, this benefit incidence analysis addresses the extent to which spending is pro-poor and progressive; that is, it primarily benefits the poor and does so at an increasing rate as welfare levels decrease. The results indicate that overall public education spending in Zambia is neither pro-poor nor progressive, but while this is true for the system as a whole it is not true for all of its parts. The net unitary benefits of primary and secondary education are clearly both pro-poor and progressive. However, their progressivity is ultimately outweighed by the extreme concentration of tertiary education benefits among the wealthiest members of Zambian society. Health spending is also regressive and not pro-poor. Although unitary net benefits are slightly progressive, unequal access remains the key constraint. In contrast, the benefits of agricultural-input subsidy programs follow a somewhat progressive pattern (for each beneficiary in the top quintile there are almost two beneficiaries in the poorest quintile) but clearly suffer from targeting problems. Consequently, without better-designed and more conscientiously implemented targeting mechanisms, public spending on health, education, and fertilizers will not be able to further the government's larger objectives for pro-poor and progressive development policy.
Keywords: Health Monitoring&Evaluation,Public Sector Expenditure Policy,Access to Finance,Population Policies,Health Systems Development&Reform

Income Inequality in the European Union
Date: 2012-04-16
By: Kaja Bonesmo Fredriksen
URL: http://d.repec.org/n?u=RePEc:oec:ecoaaa:952-en&r=ltv
Poor growth performance over the past decades in Europe has increased concerns for rising income dispersion and social exclusion. European authorities have recently launched the Europe 2020 strategy which aims to improve social inclusion in Europe on top of already existing European regional policies aiming to reduce regional disparities through stimulating growth in areas where incomes are relatively low. While it is most common to confine measures of inequality to national borders, the existence of such union-wide objectives and policies motivates measuring income dispersion among all Europeans in this paper. Towards the end of the 2000s the income distribution in Europe was more unequal than in the average OECD country, albeit notably less so than in the United States. It is the within-country, not the between-country dimension, which appears to be most important. Inequality in Europe has risen quite substantially since the mid 1980s. While the EU enlargement process has contributed to this, it is not the only explanation since inequality has also increased within a “core” of 8 European countries. Large income gains among the 10% top earners appear to be a main driver behind this evolution.
L'inégalité des revenus dans l'Union européenne
La faible croissance en Europe au cours des dernières décennies a augmenté les inquiétudes concernant la répartition des revenus et l’exclusion sociale. Les autorités européennes ont récemment lancé la stratégie Europe 2020 qui vise à améliorer l’insertion sociale en Europe en plaçant cet objectif au dessus des politiques régionales européennes déjà existantes afin de réduire les disparités régionales en stimulant la croissance dans les zones où les revenus sont relativement bas. Alors que l’inégalité est, le plus fréquemment, mesurée par pays, le fait de mettre en place des objectifs et des politiques à l’échelle européenne explique pourquoi ce rapport traite de l’inégalité des revenus entre tous les Européens. Vers la fin des années 2000, la distribution des revenus en Europe était plus inégalitaire que la moyenne de la zone de l’OCDE mais beaucoup moins qu’aux États-Unis. Ce sont les inégalités à l’intérieur des pays et non entre pays qui semblent le plus importantes. L’inégalité en Europe a sensiblement augmenté depuis la moitié des années 80. Même si l’élargissement a contribué à cette hausse, ce n’est pas la seule explication puisque l’inégalité a aussi augmenté au sein d’un groupe de 8 pays faisant parti de l’Union sur toute la période considérée. D’importants gains de revenus pour les 10% les mieux rémunérés apparaissent comme étant la raison principale de cette évolution.
Keywords: redistribution, European Union, convergence, income inequality, Gini coefficient, top incomes, redistribution, Union européenne, convergence, inégalité des revenus, hauts revenus, Gini
JEL: C81

The Impact of Redistributive Policies on Inequality in OECD Countries
Date: 2012-04-13
By: Philipp Doerrenberg (CGS, University of Cologne)
Andreas Peichl (IZA, University of Cologne, ISER and CESifo)
URL: http://d.repec.org/n?u=RePEc:cgr:cgsser:03-05&r=ltv
Recent discussions about rising inequality in industrialized countries have triggered calls for more government intervention and redistribution. Due to obvious behavioral effects caused by redistribution, it is however not clear whether redistributional policies are indeed able to combat inequality. This paper contributes to this relevant research question by using different contextual country-level data sources to study inequality trends in OECD countries since the 1980s. We first investigate the development of inequality over time before analyzing the question of whether governments can effectively reduce inequality. Different identification strategies, using fixed effects and instrumental variables models, provide some evidence that governments are capable of reducing income inequality despite countervailing behavioral adjustments. The effect is stronger for social expenditure policies than for progressive taxation, which seems to trigger more inequality increasing indirect behavioral effects. Our results also suggest that the use of secondary inequality data should be handled with caution.
Keywords: Inequality, Redistribution, Social Expenditure, Progressive Taxation
JEL: D31

Equality of opportunities and fiscal incidence in Cote d'Ivoire
Date: 2012-04-01
By: Abras, Ana
Cuesta, Jose
Hoyos, Alejandro
Narayan, Ambar
URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:6048&r=ltv
This study analyzes opportunities for children in Cote d'Ivoire, where opportunities refer to access to basic services and goods that improve the likelihood of a child maximizing his or her human potential. The principle that guides this analysis is one of equality of opportunity, which is that a child's circumstances at birth should not determine his or her access to opportunities. The analysis computes the Human Opportunity Index, which measures the extent to which access to basic services is universal and evenly distributed among children of different circumstances. Opportunities are limited in Cote d'Ivoire, despite some improvements in access to electricity and timely access to primary education. Otherwise, trends on access remain stagnant. Scale effects (variations across the board) are behind these trends, with little improvement observed from equalizing interventions. Circumstances such as region and household head characteristics affect a child's access to opportunities, while household incomes and a child's gender and ethnicity play a relatively small role in access differentials. Public spending on education opportunities is shown to be regressive and pro-rich, especially when analyzed across the distribution of circumstances rather than acroos income level.The groups of children that are particularly behind in terms of educational opportunities are those whose household heads lack primary education and reside in rural areas. Closing the enrollment gap of these children should be a priority for targeted educational interventions. However, improving opportunities may require more than a single type of intervention: opportunities with low coverage may need to be scaled up, while those with large inequalities of access may require equalizing interventions.
Keywords: Primary Education,Population Policies,Disability,Gender and Law,Rural Poverty Reduction

This nep–ltv issue is ©2012 by Maximo Rossi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, it must include this copyright notice. It may not be sold, or placed in something else for sale.

General information on the NEP project can be found at http://nep.repec.org/. For comments please write to the director of NEP, Marco Novarese at < director @ nep point repec point org >.

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Friday, March 23, 2012

NEP: New Economics Papers Unemployment, Inequality and Poverty Issue date: 2012-03-21


NEP: New Economics Papers Unemployment, Inequality and Poverty Issue date: 2012-03-21 
Edited by: Maximo Rossi

Universidad de la Republica

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In this issue we have:

The Rise and Fall of Income Inequality in Mexico, 1989â..2010
Campos, Raymundo; Lustig, Nora
Inequality Trends and their Determinants: Latin America over 1990-2011
Cornia, Giovanni Andrea

The Politics of Inequality and Redistribution in Latin Americaâ..s Post-Adjustment Era
Roberts, Kenneth M.

Grandparents' Childcare and Female Labor Force Participation
Posadas, Josefina; Vidal-Fernández, Marian

Policy Regimes, Inequality, Poverty and Growth: The Chilean Experience, 1973-2010
Contreras, Dante

Wealth and inequality in Italy
Giovanni D'Alessio

Decomposing the Composition Effect
Rothe, Christoph

The Distribution of Full Income in Greece
Koutsampelas, Christos; Tsakloglou, Panos

Did Trade Openness Affect Income Distribution in Latin America? Evidence for the years 1980â..2010
Szekely, Miguel

Gender Differences in Education
Pekkarinen, Tuomas

Is Religiosity of Immigrants a Bridge or a Buffer in the Process of Integration? A Comparative Study of Europe and the United States
García Muñoz, Teresa; Neuman, Shoshana

Hiring, Churn and the Business Cycle
Edward P. Lazear; James R. Spletzer

The Gender Wage Gap by Education in Italy
Mussida, C.; Picchio, M.

Economic Growth, Comparative Advantage, and 
Gender Differences in Schooling Outcomes: Evidence from the Birthweight Differences of Chinese Twins
Junsen Zhang; Mark Rosenzweig

Contents.

The Rise and Fall of Income Inequality in Mexico, 1989â..2010
Date: 2012
By: Campos, Raymundo
Lustig, Nora
URL: http://d.repec.org/n?u=RePEc:unu:wpaper:wp2012-10&r=ltv
Inequality in Mexico rose between 1989 and 1994 and declined between 1994 and 2010. We examine the role of market forces (demand and supply of labour by skill), institutional factors (minimum wages and unionization rate), and public policy (cash transfers) in explaining changes in inequality. We apply the â..re-centred influence functionâ.. method to decompose changes in hourly wages into characteristics and returns. The main driver is changes in returns. Returns rose (1989-94) due to institutional factors and labour demand. Returns declined (1994-2006) due to changes in supply and, to a lesser extent, in demand; institutional factors were not relevant. Government transfers contributed to the decline in inequality, especially after 2000.
Keywords: inequality, wages, disposable income, labour markets, Mexico

Inequality Trends and their Determinants: Latin America over 1990-2011
Date: 2012
By: Cornia, Giovanni Andrea
URL: http://d.repec.org/n?u=RePEc:unu:wpaper:wp2012-09&r=ltv
The paper reviews the steady and widespread decline in income inequality which has taken place in most of Latin America over 2002-10 and whichâ..â..if continued for another 2-3 yearsâ..â..would reduce the average regional income inequality to pre-liberalization levels. The paper then focuses on the factors, which may explain such inequality decline. A review of the literature and an econometric test indicate that a few complementary factors played an important role in this regard, including a drop in the skill premium following a rapid expansion of secondary education, and the adoption of a new development model by a growing number of left-of-centre governments which emphasizes fiscally-prudent but more equitable macroeconomic, tax, social expenditure and labour policies. For the region as a whole, improvements in terms of trade, migrant remittances, FDI and world growth playeda less important role than expected although their impact was perceptible in countries where such transactions were sizeable.
Keywords: income inequality, human capital inequality, policy regimes, external conditions, Latin America

The Politics of Inequality and Redistribution in Latin Americaâ..s Post-Adjustment Era
Date: 2012
By: Roberts, Kenneth M.
URL: http://d.repec.org/n?u=RePEc:unu:wpaper:wp2012-08&r=ltv
Declining social and economic inequalities since the late 1990s coincided with several basic shifts in Latin Americaâ..s political landscape, including an electoral turn to the left and a revival of social mobilization from below. These shifts helped to â..repoliticizeâ.. inequality and return redistributive policies to a central place on the political agenda in the aftermath to the structural adjustment policies of the 1980s and 1990s.Equity gains, however, have occurred under conservative governments as well as leftist ones, and they are associated with a diverse set of public policy initiatives. The new politics of inequality, therefore, differ significantly from those of Latin Americaâ..s ISI era, as well as those that prevailed during the period of economic liberalization.
Keywords: inequality, redistribution, structural adjustment, political parties, populism, social policy

Grandparents' Childcare and Female Labor Force Participation
Date: 2012-02
By: Posadas, Josefina (World Bank)
Vidal-Fernández, Marian (University of New South Wales)
URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp6398&r=ltv
In the U.S., grandparents look after one in five preschool children of employed women. Does this source of informal childcare increase female labor force participation and if so, up to what extent? The main challenge to answer this question is that a positive relationship between grandparents’ childcare and female labor force participation might not be causal. We use the maternal grandmother’s death as an instrument of grandparents’ childcare to measure the effect of grandparents’ childcare on maternal labor force participation (MLFP). We compare OLS and IV estimates and find that grandparents’ childcare increases MLFP by 15 percentage points on average. We argue that most of the effect is driven by families from socio-economically disadvantaged backgrounds.
Keywords: maternal labor force participation, grandparents, childcare, NLSY
JEL: J2

Policy Regimes, Inequality, Poverty and Growth: The Chilean Experience, 1973-2010
Date: 2012
By: Contreras, Dante
URL: http://d.repec.org/n?u=RePEc:unu:wpaper:wp2012-04&r=ltv
Since the 1970s, Chile has exhibited a highly skewed income distribution accompanied with strong fluctuations over time. Although income distribution worsened notably in the 1970s-80s, a significant improvement was recorded in the first half of the 1990s, resulting from better economic and social policies in the return to democracy. Nonetheless, Chile still faces significant challenges to improve development. There must be an active macroeconomic policy focused on the real economy. Chile also needs profound microeconomic reforms, including (i) capital markets, developing long-term financing channels for small businesses; (ii) radical progress in quality of education and labour training; and (iii) vigorous public support for innovation.
Keywords: income distribution, 
macroeconomic policy, microeconomic policies

Wealth and inequality in Italy
Date: 2012-02
By: Giovanni D'Alessio (Banca d'Italia)
URL: http://d.repec.org/n?u=RePEc:bdi:opques:qef_115_12&r=ltv
The paper describes first the evolution in total household wealth in Italy over the period 1965-2010 before addressing the analysis of wealth inequality. On the basis of reconstructed data, we show that household wealth inequality declined until the beginning of the 1990s. It then grew significantly during that decade, remaining at approximately the same level afterwards. By international standards, Italy does not have a high level of wealth inequality (contrary to the evidence available for income). Wealth distribution has changed significantly over time, favouring elderly rather than young households. The origins of wealth (savings, gifts, inheritance, capital gains) are also examined and the statistical evidence is discussed together with the opinions on inequality collected by means of statistical surveys.
Keywords: wealth, inequality
JEL: D31

Decomposing the Composition Effect
Date: 2012-02
By: Rothe, Christoph (Toulouse School of Economics)
URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp6397&r=ltv
This paper proposes a decomposition of the composition effect, i.e. the part of the observed between-group difference in the distribution of some economic outcome that can be explained by differences in the distribution of covariates. Our decomposition contains three types of components: (i) the "direct contributions" of each covariate due to between-group differences in the respective marginal distributions, (ii) several “two way” and "higher order" interaction effects due to the interplay between two or more covariates' marginal distributions, and (iii) a "dependence effect" accounting for between-group differences in dependence patterns among the covariates. Our methods can be used to decompose differences in arbitrary distributional features, like quantiles or inequality measures, and allows for general nonlinear relationships between the outcome and the covariates. It can easily be implemented in practice using standard econometric techniques. An application to wage data from the US illustrates the empirical relevance of the decomposition’s components.
Keywords: counterfactual distribution, decomposition methods
JEL: C13

The Distribution of Full Income in Greece
Date: 2012-02
By: Koutsampelas, Christos (University of Cyprus)
Tsakloglou, Panos (Athens University of Economics and Business)
URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp6396&r=ltv
Non-cash incomes from either private or public sources can have substantial effects on the distribution of economic welfare. However, standard approaches to inequality measurement either neglect them or take into account only selected non-monetary items. Using data for Greece in the mid 2000s we show that it is possible to incorporate a comprehensive list of non-monetary components into the analysis of income inequality. The results indicate that inequality declines sharply when we move from the distribution of disposable monetary income to the distribution of full income, that includes both cash and non-cash incomes. Both private and public non-cash incomes are far more equally distributed than monetary income, but the inequality-reducing effect of publicly provided in-kind services is stronger. The structure of inequality changes when non-cash incomes are included in the concept of resources, but the effects are not dramatic. Non-cash incomes appear to accrue more heavily to younger and older individuals, thus reducing differences across age groups.
Keywords: income distribution, imputed rent, in-kind public transfers
JEL: D31

Did Trade Openness Affect Income Distribution in Latin America? Evidence for the years 1980â..2010
Date: 2012
By: Szekely, Miguel
URL: http://d.repec.org/n?u=RePEc:unu:wpaper:wp2012-03&r=ltv
This paper offers a medium-term perspective for analysing the trade opennessâ..inequality relationship in Latin America. We present three contributions. The first is that we assemble a database on income distribution indicators systematically estimated from household surveys with emphasis on within-country consistency of methodology, definitions, and coverage for the years 1980-2010. This 30-year database allows observing clearly that the increases in inequality throughout the 1980s and 1990s decades have been almost totally counteracted by the improvements during the first 10 years of the twenty-first century: 75 per cent of the deterioration in income distribution was reversed in the first decade of 2000. The second is an estimation of the association between trade openness and income distribution over the 30-year period. Our central conclusion in this regard is that greater trade openness is associated with contemporaneous increases in inequality in the region. The third is that trade openness contributedâ..â..together with other factorsâ..â..to the increase in inequality during the 1980s and 1990s, but once fully implemented, it did not lead to further rises in inequality, and did not represent a permanent obstacle to improvements in income distribution triggered by other factors such as greater education levels across the population.
Keywords: inequality, education, trade

Gender Differences in Education
Date: 2012-02
By: Pekkarinen, Tuomas (Aalto University)
URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp6390&r=ltv
This paper surveys the trends in gender gaps in education, their causes and potential policy implications. I show that female educational attainment has surpassed, or is about to surpass, male educational attainment in most industrialized countries. These gaps reflect male overrepresentation among secondary school drop-outs and female overrepresentation among tertiary education students and graduates. Existing evidence suggests that this pattern is a result of a combination of increasing returns to education and lower female effort costs of education. Widening gender gap in education combined with recent wage and employment polarization will likely lead to widening inequalities and is linked to declining male labor force participation. The paper discusses evidence on educational policies that both widen and reduce gender gaps in educational outcomes.
Keywords: gender differences, test scores, education
JEL: I20

Is Religiosity of Immigrants a Bridge or a Buffer in the Process of Integration? A Comparative Study of Europe and the United States
Date: 2012-02
By: García Muñoz, Teresa (Universidad de Granada)
Neuman, Shoshana (Bar-Ilan University)
URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp6384&r=ltv
This study reviews and evaluates the intertwined relationship between immigration and religiosity, focusing on the two sides of the Atlantic – Europe and the United States. Based on the existing literature and on a statistical analysis of several data sets (the International Social Survey Program – ISSP: Module Religion, 2008; the European Social Survey – ESS, waves 2002-2010; and the General Social Survey – GSS, waves 2002-2010) the following aspects are explored: (i) the current religious landscape of Europe and of the United States and projections for the future; (ii) religiosity of immigrants (in Europe and the United States): are they more religious than the native populations (in terms of church attendance and of prayer habits)?; (iii) how does religiosity of immigrants affect integration: is it serving as a bridge that smoothens integration into the local population, or as a buffer against the harsh integration process?; and (iv) are the intersections between religiosity and integration different in Europe and in the United States, due to historical differences in the state-religion relationship, immigration policies and concepts? The main findings are the following: (a) immigrants are indeed more religious than the populations in the receiving countries. This fact, combined with higher fertility rates and also a continued inflow of immigrants, will lead to major changes in the religious landscape, both in Europe and in the United States; and (b) while in the united States religiosity of immigrants serves as a bridge between the immigrants and the local population, in Europe it has mainly the function of a buffer and of "balm to the soul".
Keywords: immigration, religion, integration, Europe, United States
JEL: J11

Hiring, Churn and the Business Cycle
Date: 2012-03
By: Edward P. Lazear
James R. Spletzer
URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:17910&r=ltv
Churn, defined as replacing departing workers with new ones as workers move to more productive uses, is an important feature of labor dynamics. The majority of hiring and separation reflects churn rather than hiring for expansion or separation for contraction. Using the JOLTS data, we show that churn decreased significantly during the most recent recession with almost four-fifths of the decline in hiring reflecting decreases in churn. Reductions in churn have costs because they reflect a reduction in labor movement to higher valued uses. We estimate the cost of reduced churn to be $208 billion. On an annual basis, this amounts to about .4% of GDP for a period of 3 1/2 years.
JEL: J21

The Gender Wage Gap by Education in Italy
Date: 2012
By: Mussida, C.
Picchio, M. (Tilburg University, Center for Economic Research)
URL: http://d.repec.org/n?u=RePEc:dgr:kubcen:2012021&r=ltv
Abstract: This paper studies the gender wage gap by educational attainment in Italy using the 1994–2001 ECHP data. We estimate wage distributions in the presence of covariates and sample selection separately for highly and low educated men and women. Then, we decompose the gender wage gap across all the wage distribution and isolate the part due to gender differences in the remunerations of the similar characteristics. We find that women are penalized especially if low educated. When we control for sample selection induced by unobservables, the penalties for low educated women become even larger, above all at the bottom of the wage distribution.
Keywords: gender wage gap;education;counterfactual distributions;decompositions;hazard function.
JEL: C21
Economic Growth, Comparative Advantage, and 

Gender Differences in Schooling Outcomes: Evidence from the Birthweight Differences of Chinese Twins
Date: 2012-02
By: Junsen Zhang (Chinese University of Hong Kong)
Mark Rosenzweig (Economic Growth Center, Yale University)
URL: http://d.repec.org/n?u=RePEc:egc:wpaper:1008&r=ltv
Data from two surveys of twins in China are used to contribute to an improved understanding of the role of economic development in affecting gender differences in the trends in, levels of, and returns to schooling observed in China and in many developing countries in recent decades. In particular, we explore the hypothesis that these phenomena reflect differences in comparative advantage with respect to skill and brawn between men and women in the context of changes in incomes, returns to skill, and/or nutritional improvements that are the result of economic development and growth.
Keywords: schooling, gender, twins, China
JEL: J24

This nep–ltv issue is ©2012 by Maximo Rossi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, it must include this copyright notice. It may not be sold, or placed in something else for sale.

General information on the NEP project can be found at http://nep.repec.org/. For comments please write to the director of NEP, Marco Novarese at < director @ nep point repec point org >.

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