Measuring employment deprivation in the EU using a household-level index

We propose an aggregate measure of employment deprivation among households that follows a methodological framework developed to measure wellbeing. This index verifies a set of reasonable axioms that other available measures do not: increases in three relevant employment deprivation elements-incidence, intensity and inequality. Incidence captures how many households in a population are touched by a lack of employment, while employment deprivation intensity reflects how far households are, on average, from being non-deprived of employment. Finally, employment deprivation inequality increases with the concentration of unemployment among few households. Based on this index, we analyze employment deprivation across the European Union using information from Labor Force Surveys during the current “Great Recession.” Our results provide evidence on the relevance of incorporating the household dimension to identify unemployment profiles, with a variety of implications, in terms of household wellbeing. Specifically, we show that countries with similar (intermediate) unemployment rates differ in their patterns of employment deprivation once the structure of employment across households is incorporated.     

Rethinking empirical approaches to racial segregation

Within empirical approaches to racial residential segregation, there has been a tendency to draw on the work of or influenced by Robert E. Park and his ecological hypothesis to explore social and spatial relations between members of different ethnic and racial groups, thus framing research within a race relations paradigm. This has promoted an analysis which naturalizes racial differences but which also sidelines structural considerations. In turn this approach has also fed into political discourses on segregation, at times supporting more reactionary positions. This paper seeks to address this debate by considering whether emphasis on minority ethnic concentration sidelines the more pertinent issue of concentration in deprived areas, suggesting that neighbourhood deprivation as a measure can be more easily aligned with structural conditions which have influenced the settlement and historical experience of many ethnic minority communities. Specifically, I consider the extent to which a measure of neighbourhood deprivation is more important than the ethnic composition of an area for thinking about the distribution of inequalities in unemployment (as one example of socio‐economic inequality). Using multilevel logistic regression I find neighbourhood income deprivation to be more important than levels of co‐ethnic concentration for explaining ethnic differences in unemployment. The findings imply that neighbourhood deprivation is significantly more important for considering inequalities in unemployment for ethnic minorities than the ethnic composition of an area.     

The measurement of unemployment using completed durations: evidence on the gender gap in unemployment in France

This paper examines how unemployment can be measured in a normative fashion - taking into account the mean and inequality of spell lengths - and how the extent of unemployment can be estimated from cross section data of the type found in labour force surveys. The issue is not straightforward since in these surveys completed durations of unemployed individuals are not observed yet they constitute the basis for calculating the kind of index that has been proposed to measure the extent of unemployment in a way that goes beyond the unemployment rate. The index proposed by Shorrocks has robust normative foundations and has an equivalent representation in terms of average complete duration and the density of completed durations. Building upon earlier work applied in the United States for estimating the average completed duration, we present a method that enables the index to be calculated based on an estimate of the density of completed durations. The approach is illustrated in the context of comparing male-female unemployment differences in France, where historically female unemployment has been higher than that of males.     

Spell incidence, spell duration and the measurement of unemployment

The proportion of the population out of work is an unsatisfactory measure of unemployment because it is indifferent to the way in which a given amount of unemployment time is distributed across the population. This paper offers a new way of measuring unemployment which takes account of both the frequency and duration of unemployment spells. The proposed unemployment index may be interpreted as the ‘welfare equivalent’ period of unemployment, and decomposes into the product of three components: a spell incidence factor, a duration factor, and the average unemployment rate.     

Axiomatizations of the normalized Banzhaf value and the Shapley value

A cooperative game with transferable utilities– or simply a TU-game – describes a situation in which players can obtain certain payoffs by cooperation. A solution concept for these games is a function which assigns to every such a game a distribution of payoffs over the players in the game. Famous solution concepts for TU-games are the Shapley value and the Banzhaf value. Both solution concepts have been axiomatized in various ways. An important difference between these two solution concepts is the fact that the Shapley value always distributes the payoff that can be obtained by the `grand coalition' consisting of all players cooperating together while the Banzhaf value does not satisfy this property, i.e., the Banzhaf value is not efficient. In this paper we consider the normalized Banzhaf value which distributes the payoff that can be obtained by the `grand coalition' proportional to the Banzhaf values of the players. This value does not satisfy certain axioms underlying the Banzhaf value. In this paper we introduce some new axioms that characterize the normalized Banzhaf value. We also provide an axiomatization of the Shapley value using similar axioms. Received: 10 April 1996 / Accepted: 2 June 1997     

Money-metric utilitarianism

We discuss a method of ranking allocations in economic environments which applies when we do not know the names or preferences of individual agents. We require that two allocations can be ranked with the knowledge only of agents present, their aggregate bundles, and community indifference sets—a condition we refer to as aggregate independence. We also postulate a basic Pareto and continuity property, and a property stating that when two disjoint economies and allocations are put together, the ranking in the large economy should be consistent with the rankings in the two smaller economies (reinforcement). We show that a ranking method satisfies these axioms if and only if there is a probability measure over the strictly positive prices for which the rule ranks allocations on the basis of the random-price money-metric utilitarian rule. This is a rule which computes the money-metric utility for each agent at each price, sums these, and then takes an expectation according to the probability measure.     

Multidimensional inequality and multidimensional generalized entropy measures: An axiomatic derivation

This paper generalizes the axiomatic approach to the design of income inequality measures to the multiattribute context. While the extension of most axioms considered desirable for inequality indices is straightforward, it is not entirely clear when a situation is more unequal than another when each person is characterised by a vector of attributes of well-being. We explore two majorization criteria which are partial orders ranking distributions of attributes by their degree of inequality. The two criteria are motivated by the Pigou-Dalton Transfer Principle in the unidimensional context and its equivalent formulation. These criteria gauge inequality loosely speaking with respect to the dispersion of the multidimensional distribution of the attributes. They, however, fail to address a different dimension of multivariate inequality pertaining to an increase in the correlation of the attributes. In this connection, this paper introduces a correlation-increasing majorization criterion proposed by Boland and Proschan (1988). Finally, in conjunction with other axioms commonly invoked in the literature on inequality, the majorization criteria lead inexorably to the class of multidimensional generalized entropy measures. Received: 15 June 1995 / Accepted: 30 September 1997     

On the measurement of unemployment

This paper investigates how alternative measures of unemployment may be derived from information on unemployment duration. It begins by listing various properties that unemployment indices should satisfy, and shows how ‘duration profiles’ can usefully represent unemployment data. Theorem 1 establishes that unemployment indices are unanimous iff the duration profiles do not intersect. Two families of unemployment indices are examined in detail. Both allow unemployment to be decomposed across population subgroups. In addition, they can be expressed as the product of three components reflecting the contributions of the unemployment rate, mean unemployment duration, and differences in duration among the unemployed.     

Fertility Determinants and Economic Uncertainty: An Assessment Using European Panel Data

This study examined the determinants of fertility, using panel data for 27 European countries. We employed panel co-integration to estimate fertility as function of demographic and economic variables. We showed that low fertility in most industrialized countries in Europe is due to low infant mortality rates, high female employment, low nuptiality rate, and high opportunity cost of having children. Using two measures of economic uncertainty, which are associated with labor market decisions—a production (an output) volatility measure and the unemployment rate—we examined to what extent economic insecurities affect fertility decisions. The empirical results showed that both measures of economic uncertainty have a significant negative impact on fertility implying that labor market insecurities might be a significant factor affecting fertility decisions.     

Poverty and the business cycle: A regional panel data analysis for Spain using alternative measures of unemployment

Conventional wisdom predicts that changes in the aggregate unemployment rate may significantly affect a country’s income distribution and, consequently, have a relevant impact on the evolution of its poverty rate. However, the relationship between labour macroeconomic indicators and poverty seems to have become weaker recently. Using panel data on unemployment and poverty for Spanish regions, we estimate a system GMM model to model this relationship using alternative measures of the unemployment rate. We also test the hypothesis of asymmetric effects of the business cycle on the share of poor individuals in the population. Our results show that unemployment has a positive impact on severe poverty, while inflation has a negative effect. We also highlight the extent to which results differ when alternative intra-household unemployment distribution-sensitive measures are considered. Regarding the existence of asymmetric business cycle effects on severe poverty, our results show that despite the fact that the Great Recession has had a strong and positive effect on severe poverty, the effects of expansions and recessions on poverty are not significantly different.     

The Effect of Unemployment Duration on National Suicide Rates: A Time Series Analysis, 1948–1982

Abstract

Periods of increasing unemployment are associated with increases in suicide rates. Unemployment increases suicide among laid off persons, new entrants, reentrants to the labor market, and groups indirectly affected—the underemployed, those fearing unemployment, the families of the unemployed, and even those suffering from falling real wages, a condition endemic in major recessions. The present investigation deals with a neglected unemployment measure: the duration of unemployment, a condition known to be critical to the generation of extreme behavior such as suicide. Controls are introduced from alternative perspectives on the problem including the incidence of divorce. The data analyzed refer to yearly measures of the variables over a 31 year period. The results of a Cochrane-Orcutt iterative regression analysis indicate that the greater the duration of unemployment the greater the suicide rate. Using ex post forecasting techniques it is estimated that increases in unemployment during the Reagan administration have been associated with at least 929 additional deaths from suicide. The duration of unemployment increases suicide rates for both males and females. The model explains between 59 and 88 percent of the variance in suicide.     

Measuring ethnic polarization

An ethnic polarization index is a measure of the extent to which individuals in a population are distributed across different ethnic groups. The objective of this article is to develop some characterizations of the Reynal-Querol (RQ) index of ethnic polarization using alternative sets of independent axioms. A generalized form of RQ is also characterized. Some implications of the axioms are investigated as well.     

Replication: Emotional well-being and unemployment – Evidence from the American time-use survey

We use data from the well-being module of the American Time-Use Survey (ATUS) 2010–2013 to reexamine the relationship between unemployment and emotional well-being. We replicate two previous studies (Krueger & Mueller, 2012; Dolan, Kudrna, & Stone, 2017) which have produced differing findings on this relationship, and analyze what factors cause the differences in their outcomes. We find that the results critically depend on the definition of employment statuses and the choice of well-being measure. The unemployed appear sadder and more in pain than the employed, but no other emotion queried in the ATUS has worse values for the unemployed than for the employed. Aggregate emotional well-being measures suggest that unemployment is not negatively related to emotional well-being. Applying a wider instead of narrow definition of unemployment tends to result in better emotional well-being scores for the unemployed, mainly because job leavers and new or re-entrants into the labor market report better emotions than the group of people who are unemployed due to an involuntary job loss.     

Measuring the effect of matching problems on unemployment

This article shows how matching problems reduce employment figures – and hence also raise those for unemployment – by creating a gap between labour demand and employment. It also shows how this gap can be measured by unfilled jobs (unmet demand) as distinct from job vacancies (recruitment processes) and reports results from the Swedish vacancy survey which measures both. In fact, while a shift of the matching function indicating longer recruitment times suggests increasing matching problems, this can only be verified by measuring unfilled jobs, which also quantifies the effect on unemployment.     

Parental unemployment and children's educational attainment: How big is the role of aspirations?

Children exposed to parental unemployment have been found to lag behind in school, but research has struggled to pin down the underlying explanation. One hypothesis is that parental unemployment may dampen children's aspirations to do well and go far in school. Yet, few studies on parental unemployment have relied on actual measures of children's aspirations or devised a formal analysis of this mechanism. Using the UK Household Longitudinal Study (Waves 1–12, N = 1067), I investigate the role of educational aspirations in children's General Certificate of Secondary Education (GCSE) attainment. I compare adolescents exposed to parental unemployment before or only after the typical age at which GCSE exams are taken. In adjusted models, children exposed to parental unemployment before their GCSEs are around 6 percentage points less likely to attain any GCSE qualification by age 17. On average, children have high educational aspirations, although intentions to enrol in college or university are relatively lower among children exposed to an early spell of parental unemployment. Nevertheless, a hypothetical intervention setting these aspirations to the same level for all children only accounts for a modest portion of the educational penalty tied to an early spell of parental unemployment. Several sensitivity and robustness tests support this conclusion. This note seeks to stimulate more research on the mechanisms underpinning the intergenerational effects of unemployment. Findings cast doubts on the idea that children's aspirations, the target of broader policy discourse and interventions, are a crucial part of the equation.     

On ranking opportunity distributions

Our results show the intimate relationship between a large group of apparently different rankings of opportunity distributions. First, we provide a set of core basic axioms that are intuitively plausible under any concern for equality or efficiency aspects. Second, we introduce two very opposed views of the problem by incorporating different perspectives of the notion of advantage (better opportunity set) and we provide some axioms that might be defended under such extreme positions. For any of these two different perspectives, we characterize the families of rankings which satisfy the core axioms and the group of axioms corresponding to that view. These characterizations will prove insightful to better understand most of the criteria already introduced in the literature, which are part of the families we study.     

UNEMPLOYMENT AND OTHER MEASURES OF LABOR MARKET INEFFICIENCY: A COMPARISON OF U.K. AND U.S. LABOR MARKETS 1931–96

Although unemployment is often used as a measure of labor market inefficiency, economic theory indicates that market inefficiency is determined by both the gap between and the elasticities of supply and demand. Using time series data for the United States and United Kingdom, this article investigates how good the unemployment rate is as a measure of labor market inefficiency by calculating the deadweight loss associated with unemployment rates over time. Results show that the loss arising from unemployment is low across time and countries and that the unemployment rate is often a weak proxy for comparing labor market inefficiency. (JEL J6 )     

Explaining differences in the political meaning of unemployment across time and space

This article is a first attempt at theorizing the differences in the political meaning of unemployment and how governments create these differences. It first reviews existing explanations about why unemployment is an especially pressing political threat to those in power. In lieu of a an existing literature on the sources of variation in this threat, the next section puts forward four alternative explanations based on related arguments about politics and the economy. These are the approaches of power resources, protest mobilization, deprivation, and ideology. Guided by the promises and pitfalls of these respective theories, the subsequent section argues for an alternative institutional-constructivist approach. Starting with the historical observation that the category of unemployment was invented alongside particular social institutions and employment practices, this approach seeks to explain how variation in these institutionalized practices is responsible for differences in the political salience of unemployment. The section that follows discusses how government policies can reconstruct the meaning of unemployment by reconfiguring the available set of institutional choices in the labor market and by designating what kinds of choices constitute involuntary joblessness. It is argued that “unemployment” is defined against institutionalized norms of what kinds of work constitute “employment.” Changes in the boundaries of the concept of unemployment come about through changes in the ways that governments hold certain kinds of work as exemplary while granting other forms of work lesser recognition. The final section considers how this reciprocal relationship between the construction of unemployment and employment both imposes political constraints for governments and creates opportunities. Governments face numerous conflicting incentives whether to expand or restrict the institutionalized definition of unemployment. While they must retain semblance with inherited conceptions of unemployment; they can redefine the problem of unemployment through the institutionalization of new solutions.     

Measuring the cohesiveness of preferences: an axiomatic analysis

In this paper, we axiomatically study how to measure the similarity of preferences in a group of individuals. For simplicity, we refer to this as the cohesiveness. First, we provide axioms that characterize a family of linear and additive measures whose intersection is a partial ordinal criterion similar to first order stochastic dominance. The introduction of some additional properties isolates a one-parameter subfamily. This parameter evaluates the effect on the cohesiveness if one individual changes his ranking on a single pair of objects, as a function of how many of the remaining individuals in the group rank the first object over the second and vice versa. Finally, we characterize the focal measures of this subfamily separately showing that they coincide with measures constructed using two, at first sight, totally different approaches suggested in the literature.     

Eigenvector-like measures of centrality for asymmetric relations

Eigenvectors of adjacency matrices are useful as measures of centrality or of status. However, they are misapplied to asymmetric networks in which some positions are unchosen. For these networks, an alternative measure of centrality is suggested that equals an eigenvector when eigenvectors can be used and provides meaningfully comparable results when they cannot.