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on Unemployment, Inequality and Poverty |
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Issue of 2020‒03‒02
six papers chosen by |
| By: | James Berry (University of Delaware - Economics); Rebecca Dizon-Ross (University of Chicago); Maulik Jagnani (Yale University - Economic Growth Center) |
| Abstract: | We conduct a lab-in-the-field experiment to identify parents' preferences for investing in their children. The experiment exogenously varied the short-run returns to educational investments to identify how much parents care about maximizing total household earnings, minimizing cross- sibling inequality in "outcomes" (child-level earnings), and minimizing cross-sibling inequality in "inputs" (child-level investments). We show that while parents place some weight on maximizing earnings, they also display a strong preference for equality in inputs, forgoing roughly 40% of their potential earnings or 90% of a dayÕs wage to equalize inputs. We find no evidence that parents care about equalizing outcomes. |
| JEL: | I20 J13 |
| Date: | 2020 |
| URL: | https://d.repec.org/n?u=RePEc:bfi:wpaper:2020-06&r=all |
| By: | Raj Chetty; John N. Friedman; Emmanuel Saez; Nicholas Turner; Danny Yagan |
| Abstract: | We analyze how changes in the allocation of students to colleges would affect segregation by parental income across colleges and intergenerational mobility in the United States. We do so by linking data from tax records on parents' incomes and students' earnings outcomes for each college to data on students' SAT and ACT scores. We find that equalizing application, admission, and matriculation rates across parental income groups conditional on test scores would reduce segregation substantially, primarily by increasing the representation of middle-class students at more selective colleges. However, it would have little impact on the fraction of low-income students at elite private colleges because there are relatively few students from low-income families with sufficiently high SAT/ACT scores. Differences in parental income distributions across colleges could be eliminated by giving low and middle-income students a sliding-scale preference in the application and admissions process similar to that implicitly given to legacy students at elite private colleges. Assuming that 80% of observational differences in students' earnings conditional on test scores, race, and parental income are due to colleges' causal effects — a strong assumption, but one consistent with prior work — such changes could reduce intergenerational income persistence among college students by about 25%. We conclude that changing how students are allocated to colleges could substantially reduce segregation and increase intergenerational mobility, even without changing colleges' educational programs. |
| JEL: | J0 |
| Date: | 2020–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:26748&r=all |
| By: | Gordon John Anderson |
| Abstract: | Growing economic inequalities between a confederations’ constituencies can be a catalyst for the deterioration of its cohesiveness. The underlying idea is that inequalities that are more equally shared amongst a collection of subgroups, the more easily are they borne by the collection as a society. In focussing on empirical and theoretical bases for average income processes trending towards multiple or singular poles of attraction, the growth and convergence literature has long concerned itself with such issues. However, focussing on averages can be problematic since it can mask important distributional differences that can only be revealed when distributions are compared in their entirety. Here tools for examining distributional differences, exceptionalities and similarities which surmount these problems are employed in an interprovincial / gender based study of the progress of Canadian personal incomes and proxies for its latent experience and embodied human capital drivers namely age and experience. While the joint distributions of the drivers appear to be diverging, income distributions appear to be converging. However, closer inspection reveals that, when viewed separately, female and male income distributions are each diverging across the provinces, but the divergence is masked by the overall convergence of male and female distributions. |
| Keywords: | Distributional Differences, Inequality Indices,Multilateral Comparisons |
| JEL: | O47 I31 |
| Date: | 2020–02–20 |
| URL: | https://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-656&r=all |
| By: | Fallucchi, Francesco (LISER); Nosenzo, Daniele (University of Nottingham); Reuben, Ernesto (New York University, Abu Dhabi) |
| Abstract: | We validate experimentally a new survey item to measure the preference for competition. The item, which measures participants' agreement with the statement "Competition brings the best out of me", predicts individuals' willingness to compete in the laboratory after controlling for their ability, beliefs, and risk attitude (Niederle and Vesterlund, 2007). We further validate the explanatory power of our survey item outside of the laboratory, by comparing responses across two samples with predicted differences in their preference for competition: professional athletes and non-athletes. As predicted, we find that athletes score higher on the item than non-athletes. |
| Keywords: | competition, survey question, experiment validation |
| JEL: | C91 D90 D91 |
| Date: | 2019–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp12867&r=all |
| By: | Gordon Anderson; Oliver Linton; Grazia Pittau; Yoon Jae Whang; Roberto Zelli |
| Abstract: | The recent rise of economic nationalism together with the economic demise or potential departure of some of its constituent nations, has raised concerns regarding the coherence of the European Union. Formed to promote commonality of wellbeing among its constituents, there is interest in seeing whether its nation income distributions are converging. The usual practice of comparing per capita incomes has met with some criticism in the treatment e ects and convergence literatures (Carniero et. al. 2003, Durlauf and Quah 2002) since such moment comparisons can mask important distributional differences relevant for analysis. Here, in response to these concerns, some indices and tests for quantifying the commonality or di erentness in collections of distributions are proposed and implemented in the context of a sigma convergence study of 21st century Eurozone household income distributions. The results indicate that, when the Eurozone is considered as an entity with no nation boundaries, in a latent four class mixture distribution model, both weighted and unweighted versions of the statistics record convergence as the theory predicts for such a confederation. However when constituent nations are considered as separate entities within a confederation, unweighted versions of the tests record convergence, whereas weighted versions reveal divergence with increasing segmentation among the more populous nations in the Eurozone outweighing the convergent patterns exhibited by the smaller populated countries recently admitted to the Eurozone. |
| Keywords: | Distributional Differences, Inequality Indices,Multilateral Comparisons |
| JEL: | O47 I31 |
| Date: | 2020–02–20 |
| URL: | https://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-657&r=all |
| By: | Christopher Flinn (New York University); Petra Todd (University of Pennsylvania); Weilong Zhang (University of Cambridge) |
| Abstract: | This paper introduces the Big Five personality traits along with other covariates in a job search, matching and bargaining model and investigates how education and personality traits affect job search behavior and labor market outcomes. It develops and estimates a partial equilibrium search model in which personality traits can influence worker productivity, job offer arrival rates, job dissolution rates and the division of surplus from an employer-employee match. The estimation is based on the IZA Evaluation Dataset, a panel dataset on newly-unemployed individuals in Germany between 2007 and 2008. Model specification tests provide support for a model that allows job search parameters to be heterogeneous across individuals, varying with levels of education, birth cohort, personality traits and gender. We use the estimated model to decompose the sources of the gender wage gap. The results show that the gap arises largely because women's personality traits are valued differently than men's. Of the Big Five traits, conscientiousness and agreeableness emerge as the most important in explaining the gender wage gap. |
| Keywords: | Big Five personality traits, personality traits, birth cohort |
| JEL: | J64 J00 E24 J31 |
| Date: | 2020–02 |
| URL: | https://d.repec.org/n?u=RePEc:hka:wpaper:2020-010&r=all |