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on Unemployment, Inequality and Poverty |
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Issue of 2019‒03‒25
ten papers chosen by |
| By: | Sergio Pinto (University of Maryland); Carol Graham (The Brookings Institution) |
| Abstract: | The global economy is full of paradoxes. Despite progress in technology, reducing poverty, and increasing life expectancy, the poorest states lag behind, and there is increasing inequality and anomie in the wealthiest ones. A key driver of such unhappiness in advanced countries is the decline in the status and wages of low-skilled labor. A related feature is the increase in prime-aged males (and to a lesser extent women) simply dropping out of the labor force, particularly in the U.S. This same group is over-represented in the “deaths of despair.” There is frustration among this same cohort in Europe and it is reflected in voting trends in both contexts. Prime-aged males out of the labor force in the U.S. are the least hopeful and most stressed and angry compared to the same group in other regions, including the Middle East. Our aim is to better understand this cohort as part of a broader need to rethink our growth models and to explore policies that encourage the participation of able workers in the new global economy and can provide incentives for community involvement and other forms of engagement for those who can no longer work. |
| Keywords: | well-being, happiness, Inequality, gender, unemployment |
| JEL: | I31 D63 E24 J68 J16 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2019-016&r=all |
| By: | Pierre Cahuc (École polytechnique (X)); Francis Kramarz (Sciences Po); Sandra Nevoux (Banque de France) |
| Abstract: | Short-time work programs were revived by the Great Recession. To understand their operating mechanisms, we first provide a model showing that short-time work may save jobs in firms hit by strong negative revenue shocks, but not in less severely-hit firms, where hours worked are reduced, without saving jobs. The cost of saving jobs is low because short-time work targets those at risk of being destroyed. Using extremely detailed data on the administration of the program covering the universe of French establishments, we devise a causal identification strategy based on the geography of the program that demonstrates that short-time work saved jobs in firms faced with large drops in their revenues during the Great Recession, in particular when highly levered, but only in these firms. The measured cost per saved job is shown to be very low relative to that of other employment policies. |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/6596a4s9af8lt872jnqvm5jg73&r=all |
| By: | Pierre Cahuc (Département d'économie); Sandra Nevoux (Banque de France) |
| Abstract: | This paper shows that the reforms which expanded short-time work in France after the great 2008-2009 recession were largely to the benefit of large firms which are recurrent short-time work users. We argue that this expansion of short-time work is an inefficient way to provide insurance to workers, as it entails cross-subsidies which reduce aggregate production. An efficient policy should provide unemployment insurance benefits funded by experience rated employers’ contributions instead of short-time work benefits. We find that short-time work entails significant production losses compared to an unemployment insurance scheme with experience rating. |
| Keywords: | Short-time work; Unemployment insurance; Experience rating |
| JEL: | J63 J65 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpecon:info:hdl:2441/68ufmnnh3j9vmblf03huqt18qe&r=all |
| By: | Haoran He; David Neumark; Qian Weng |
| Abstract: | We explore compensating differentials for job flexibility, using a field experiment conducted on a Chinese job board. Our job ads differ randomly regarding when one works (time flexibility) and where one works (place flexibility). We find strong evidence that workers value job flexibility - especially regarding place of work. Application rates are higher to flexible jobs, conditional on the salary offered. Additional survey evidence indicates that workers are willing to take lower pay for more flexible jobs. Non-experimental job board data do not indicate that workers value job flexibility, reinforcing the difficulty of estimating compensating differentials from observational data. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:feb:natura:00667&r=all |
| By: | Esther Mirjam Girsberger (Economics Discipline Group, University of Technology Sydney); Matthias Krapf (University of Basel, Switzerland); Miriam Rinawi (Swiss National Bank, Switzerland) |
| Abstract: | We study how skills acquired in vocational education and training (VET) affect wages and employment dynamics in Switzerland. We present and estimate a search and matching model for workers with a VET degree who differ in their interpersonal, cognitive and manual skills. Assuming a match productivity which exhibits worker-job complementarity, we estimate how workers’ skills map into job offers, wages and unemployment. Firms value cognitive skills on average almost twice as much as interpersonal and manual skills. Moreover, they prize complementarity in cognitive and interpersonal skills. We estimate average returns to VET skills in hourly wages of 9%. Furthermore, VET improves labour market opportunities through higher job arrival rate and lower job destruction. Workers thus have large benefits from getting a VET degree. |
| Keywords: | Occupational training; labour market search; multidimensional skills. |
| JEL: | E23 J23 J24 J64 |
| Date: | 2019–01–29 |
| URL: | http://d.repec.org/n?u=RePEc:uts:ecowps:55&r=all |
| By: | Pierre Cahuc (Département d'économie); Stéphane Carcillo (Département d'économie); Thomas Le Barbanchon (Centre de Recherche en Économie et Statistique (GENES)) |
| Abstract: | This paper analyzes the effectiveness of hiring credits. Using comprehensive administrative data, we show that the French hiring credit, implemented during the Great Recession, had significant positive employment effects and no effects on wages. Relying on the quasi-experimental variation in labor cost triggered by the hiring credit, we estimate a structural search and matching model. Simulations of counterfactual policies show that the effectiveness of the hiring credit relied to a large extent on three features: it was nonanticipated, temporary and targeted at jobs with rigid wages. We estimate that the cost per job created by permanent hiring credits, either countercyclical or time-invariant, in an environment with flexible wages would have been much higher. |
| Keywords: | Hiring credit; Labor demand; Search and matching model |
| JEL: | C93 J6 C31 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/2rcfhie1t29t8ri11cvv60qku0&r=all |
| By: | Eric A. Hanushek; Paul E. Peterson; Laura M. Talpey; Ludger Woessmann |
| Abstract: | Concerns about the breadth of the U.S. income distribution and limited intergenerational mobility have led to a focus on educational achievement gaps by socio-economic status (SES). Using intertemporally linked assessments from NAEP, TIMSS, and PISA, we trace the achievement of U.S. student cohorts born between 1954 and 2001. Achievement gaps between the top and bottom deciles and the top and bottom quartiles of the SES distribution have been large and remarkably constant for a near half century. These unwavering gaps have not been offset by overall improvements in achievement levels, which have risen at age 14 but remained unchanged at age 17 for the most recent quarter century. The long-term failure of major educational policies to alter SES gaps suggests a need to reconsider standard approaches to mitigating disparities. |
| JEL: | H4 I2 J24 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25648&r=all |
| By: | Abrahamsen, Signe A. (University of Bergen, Department of Economics); Grøtting, Maja Weemes (Norwegian Social Research, Oslo Metropolitan University) |
| Abstract: | Health-care expenditures and the demand for caregiving are increasing concerns for policy makers. Although informal care to a certain extent may substitute for costly formal care, providing informal care may come at a cost to caregivers in terms of their own health. However, evidence of causal effects of care responsibilities on health is limited, especially for long-term outcomes. In this paper, we estimate long-term effects of a formal care expansion for the elderly on the health of their middle-aged daughters. We exploit a reform in the federal funding of formal care for Norwegian municipalities that caused a greater expansion of home care provision in municipalities that initially had lower coverage rates. We find that expanding formal care reduced sickness absence in the short run, primarily due to reduced absences related to musculoskeletal and psychological disorders. In general, we find no effects on long-term health outcomes. |
| Keywords: | Formal and informal eldercare; sickness absence; health |
| JEL: | I10 J14 J22 J38 |
| Date: | 2019–01–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bergec:2019_002&r=all |
| By: | Edward J. Green |
| Abstract: | The broad concept of an individual's welfare is actually a cluster of related specific concepts that bear a "family resemblance" to one another. One might care about how a policy will affect people both in terms of their subjective preferences and also in terms of some notion of their objective interests. This paper provides a framework for evaluation of policies in terms of welfare criteria that combine these two considerations. Sufficient conditions are provided for such a criterion to imply the same ranking of social states as does Pareto's unanimity criterion. Sufficiency is proved via study of a community of agents with interdependent ordinal preferences. |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1903.07769&r=all |
| By: | Giovanna d’Adda; Martin Dufwenberg; Francesco Passarelli; Guido Tabellini |
| Abstract: | We consider an expanded notion of social norms that render them belief-dependent and partial, formulate a series of related testable predictions, and design an experiment based on a variant of the dictator game that tests for empirical relevance. Main results: Normative beliefs influence generosity, as predicted. Degree of partiality leads to more dispersion in giving behavior, as predicted. Keywords: Social norms, partial norms, normative expectations, consensus, experiment. JEL codes: C91, D91 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:igi:igierp:643&r=all |