Skill-biased technical change, educational choice, and labor market polarization: the U.S. versus Europe

This paper analyzes the effect of recent technical change on the labor market and explains the observed differences in wage inequality among advanced countries. In particular, we focus on the difference between the inequality in the U.S. and in continental Europe. Many studies have indicated a rise in wage inequality in the U.S. over the past three decades. On the other hand, there has been little change in wage inequality in continental Europe. By introducing human capital investment into the model by Acemoglu (Am Econ Rev 89:1259–1278, 1999), we show that ex ante homogeneous economies would have distinct ex post wage distribution. The strategic complementarity between human capital investment and firms’ hiring strategies yields the possibility that multiple equilibria exist, which explains the difference in wage distribution between the U.S. and Europe. In addition, we show that differences in tax or education systems can explain the difference in wage distribution between the U.S. and Europe.     

The Kuznets curve of human capital inequality: 1870–2010

This paper describes the long-term global trends in education inequality since 1870. Inequality in years of schooling is shown to have mechanically decreased along with the decline in the share of illiterate people. In search of a monetary equivalent of years of schooling, we turn to Mincer (1974) human capital ineq uality. Within countries, we find evidence of an inverted U-shape curve for human capital inequality over time, namely a Kuznets curve for human capital. At the global level, the world inequality in human capital has followed a similar trajectory, first increasing from 1870 to 1970, then decreasing.     

Distorted Lorenz curves: models and comparisons

The economic literature contains many parametric models for the Lorenz curve. A number of these models can be obtained by distorting an original Lorenz curve $L$ by a function $h$ , giving rise to a distorted Lorenz curve ${\widetilde{L}}=h\circ L$ . In this paper, we study, in a unified framework, this family of curves. First, we explore the role of these curves in the context of the axiomatic structure of Aaberge (2001) for orderings on the set of Lorenz curves. Then, we describe some particular models and investigate how changes in the parameters in the baseline Lorenz curve $L$ affect the transformed curve ${\widetilde{L}}$ . Our results are stated in terms of preservation of some stochastic orders between two Lorenz curves when both are distorted by a common function.     

Reducing poverty and inequality through tax-benefit reform and the minimum wage: the UK as a case-study

Atkinson’s book Inequality: What Can Be Done? (Harvard University Press, 2015) sets out a range of concrete proposals aimed at reducing income inequality, which cover a very broad span but include major changes to the income tax and social transfers system and the minimum wage. These are framed with specific reference to the UK but have much broader relevance in demonstrating how substantial the impact on inequality of such measures could be. This paper assesses the first-round effects of these tax, transfer and minimum wage reforms on income inequality and poverty based on a microsimulation approach using EUROMOD. The reforms involve a significantly more progressive income tax structure, a major increase in the minimum wage to the level which is estimated to represent the ‘Living Wage’, and alternative routes to reforming social transfers – either to strengthen the social insurance element or to restructure the entire system as a Participation Income (a variant of Basic/Citizen’s Income). The results show how the first-round effects of either set of tax and transfer proposals would be to substantially reduce the extent of income inequality and relative income poverty and the paper draws out how the two approaches differ in their effects. The additional impact of raising the minimum wage to the Living Wage is modest, reflecting in particular the position of beneficiaries in the household income distribution and the offsetting effects on household income of the withdrawal of means-tested cash transfers.     

The original Borda count and partial voting

In a Borda count, bc, M. de Borda suggested the last preference cast should receive 1 point, the voter’s penultimate ranking should get 2 points, and so on. Today, however, points are often awarded to (first, second,..., last) preferences cast as per (n, n?1, ..., 1) or more frequently, (n ?1, n?2,..., 0). If partial voting is allowed, and if a first preference is to be given n or n ? 1 points regardless of how many preferences the voter casts, he/she will be incentivised to rank only one option/candidate. If everyone acts in this way, the bc metamorphoses into a plurality vote... which de Borda criticized at length. If all the voters submit full ballots, the outcome—social choice or ranking—will be the same under any of the above three counting procedures. In the event of one or more persons submitting a partial vote, however, outcomes may vary considerably. This preliminary paper suggests research should consider partial voting. The author examines the consequences of the various rules so far advocated and then purports that M. de Borda, in using his formula, was perhaps more astute than the science has hitherto recognised.     

Implementation of Jefferson-d’Hondt rule in the formation of a parliamentary committee

Same parliaments, to form a committee of size $q$ , use a voting process like the following: every parliamentary member votes for one out of a fixed set of candidates, and those $q$ candidates receiving more votes are elected for the committee. Assuming total discipline of vote, this is a game form in which players are the parliamentary groups. We investigate, according to some natural hypotheses about preferences, the likely distribution of the members of this committee. The main results are: (a) when fractional votes are allowed, there is a complete agreement between the distribution among the groups of the elected candidates that are outcomes of a Nash equilibrium and the distribution that, according to the size of the groups, would compute the Jefferson-d’Hondt allocation rule, and (b) when fractional votes are not allowed, there is a near agreement for a majority of situations.     

The Influence of Gender Role Attitudes on Perceptions of Women's Work Performance and the Importance of Fair Pay

Gender role attitudes and their influence on perceptions of male and female work performance are important aspects understanding workplace gender inequality. Reskin (2000 Reskin , B. 2000 . “Proximate Causes of Employment Discrimination.” Contemporary Sociology 29 ( 2 ): 319 – 328 .[Crossref], [Web of Science ®] , [Google Scholar]) suggests researchers must look to non-conscious causes in order to understand and alleviate gender inequality in the workplace. Also critical to understanding workplace gender inequality is the differential importance placed on being paid fairly. Using a survey sample of 525 traditional undergraduate students from a public university in the middle south of the United States consisting of approximately one-third African Americans and two-thirds whites, race and sex differences are examined. The more liberal the respondent in terms of gender roles, the less they perceived performance inferiority of females. Excluding white males, those more liberal on gender roles perceived fair pay as more important. Gender differences are stronger among whites. Implications for the gender inequities at work are discussed.     

A RETROSPECTIVE INVESTIGATION OF GENDER INEQUALITY AND FEMALE HOMICIDE VICTIMIZATION

ABSTRACT

For the period 1981 to 1993 women represented 21 to 26 percent of homicide victims in the United States annually (Smith and Kuchta 1993 Smith , M. Dwayne and Ellen S. Kuchta . 1993 . “Trends in Violent Crime Against Women, 1973–89.” Social Science Quarterly 74 : 28 – 45 . [CSA]  [Google Scholar]). During this same time period sex-specific homicide rates have been among the forms of disaggregation researchers have used to test the utility of traditional correlates of homicide in predicting rates across various population subgroups and units of analysis. Based upon earlier research of the effects of gender inequality upon rates of lethal violence against women, and by applying a feminist theoretical perspective, it is hypothesized that the effect of general social structural characteristics of cities upon women's risk of homicide is mediated by levels of gender inequality. Specifically, this study examines the effects of gender, socioeconomic, legislative, political and extra-legal inequality upon female homicide victimization among 217 U.S. central cities for the period of 1989–1991. Using structural equation modeling results indicate that, among traditional social structural factors, economic deprivation, population size, divorce rate, and the sex ratio all have significant, positive effects on female homicide rates. However, in subsequent models testing the mediating effects of measures of gender inequality on the association between social structural variables and female homicide rates the divorce rate is the only social structural factor that continues to have a significant, positive effect upon homicide rates. Among the four measures of gender inequality, and in support of an ameliorative feminist argument, socioeconomic inequality has a significant, positive influence on rates of female homicide victimizaton. There is also a significant, negative effect of gender legislative inequality upon these rates. That is, the more laws or acts favorable to women, the lower their rates of homicide victimization. Implications of these findings are discussed.     

Production efficiency and constraints on profit taxation and profit distribution in economies with Ramsey taxation

In economies with Ramsey taxation, decreasing returns to scale, and private ownership, we show that second-best production efficiency is desirable when the grouping of private firms induced by the profit taxation power of the government is at least as fine as the grouping of firms induced by the institutional rules of profit distribution in the economy. The classic results of Dasgupta and Stiglitz (Rev Econ Stud 39:87–103, 1972) (of firm-specific profit taxation) and Diamond and Mirrlees (Am Econ Rev 61:8–27, 1971a; Am Econ Rev 61:261–278, 1971b) and Guesnerie (A contribution to the pure theory of taxation, 1995) (of uniform 100 % profit taxation) follow as special cases of our model. Moreover, second-best analysis shows that optimal profit taxation is a substitute for optimal intermediate input taxation. In smooth economies, proportional, lump-sum, and affine modes of profit taxation are equivalent. We rework Mirrlees (Rev Econ Stud 39:105–111, 1972) counterexample, which is posed in the context of a non-smooth economy, to show that second-best production efficiency continues to remain desirable under an affine structure of profit taxation.     

Path independent choice and the ranking of opportunity sets

The indirect utility principle provides an instrumentalist basis for ranking opportunity sets, given an underlying preference ranking on alternatives. Opportunity set A is weakly preferred to B if A includes at least one preference-maximising element from $A\cup B$ . We introduce the Plott consistency principle as a natural extension of this logic to decision-makers who choose amongst alternatives according to a path independent choice function. Such choice functions need not be rationalisable by a preference order. Plott consistency requires that A is an acceptable choice from $\left\{ A, B\right\} $ if A includes at least one element from the set of acceptable choices from $A\cup B$ . We explore necessary and sufficient conditions (imposed on a choice function defined on collections of opportunity sets) for Plott consistency.     

Beyond Pensions: A Radical Systems-Based Transformation of Present-Future Choice

Aging populations worldwide, fiscal deficits, growing sovereign debt, and slowing economies have combined to create and exacerbate what is widely known as the “pension crisis”, characterized by poverty among the elderly substantially due to inadequate retirement income. We argue that the roots of the crisis go much deeper than “pensions”, and involve a long-term secular shift from saving and capital formation to consumption, in the West. Cosmetic “solutions” to the pension crisis, such as delaying the retirement age, are ineffective. The “pension crisis” label itself impedes clear thinking about developing an effective and affordable solution. The core of the problem is the fact that present-future choice tilted to “present”, in the West, for decades. Higher saving, over a longer time horizon, invested at higher average returns, is the ultimate goal, and only one that offers true long-term transformative change. We propose an original, radical, systemic solution, based on an evolutionary social transformation¹1 ‘Evolution has achieved an extraordinary record of design, yet has taken an extremely long period of time to do so’?…?‘The exponentially quickening pace of the evolution of human-created technology, which picked up the pace from the evolution of life-forms’. (Kurzweil, 1999 Kurzweil, R. 1999. The Age of Spiritual Machines: When Computers Exceed Human Intelligence. New York: Viking. [Google Scholar]) of present-future choice toward increased saving; a proposal that addresses the roots of the pension crisis, not just the symptoms.²2 This paper is based in part on a longer study, Gerstenhaber et al., 2015 Gerstenhaber, M., Maital, S. & Buchnik, T. 2015. The Carob Tree: A Radical Evolutionary Systemic Solution to the Pension Crisis. Haifa, Israel: S. Neaman Institute, Technion. [Google Scholar]; an earlier version of the pension reform proposal outlined below can be found in Passig and Gerstenhaber (2014) Passig, D. & Gerstenhaber, M. 2014. A Possible Pension-savings Paradigm for a Sustainable Future: A Developed Country Case Study (UK). Journal of Organisational Transformation & Social Change, 11(3): 207–229. doi: 10.1179/1477963314Z.00000000030[Taylor & Francis Online] , [Google Scholar] and Gerstenhaber (2009) Gerstenhaber, M. 2009. Have You Ever Seen a Retired Tiger in the Jungle? Eradicating Pensioner Poverty: A Manifesto for Democratic and Responsible Capitalism. London: Ruscombe Press. [Google Scholar]. We contend that an effective pension allocation and accumulation system is a stable force for economic growth over time — but only when these significant capital investments are made directly in the real economy and take account of appropriate technological innovation. At the moment the bulk of global investment capital in the West is directed to short-term speculative activity in various financial markets, opportunistically taking advantage of historically low borrowing rates. We provide a macroeconomic simulation of our proposal, should it be adopted, comparing no-change and radical-change scenarios for the Israel economy, and urge scholars to carry out similar projections and analyses for individual OECD countries. We next show how an increase in national saving and capital formation can contribute to “rebalancing” the global economy, between low-saving Western nations and high-saving Asian ones. Finally, we outline our “four pillar” radical proposal, which leverages persistent long-run saving and investment, and illustrate its impact with some macroeconomic projections for Israel, comparing two scenarios, one with low national saving, the second with increased national saving. An achievable increase in the national saving rate, implemented through the tax system and accompanied by intelligent capital formation, can have enormous impact, it is shown, not only on elderly poverty but on society as a whole. In our plan, lower consumption demand through higher savings, is offset by higher capital formation, which has a larger employment and GDP multiplier.     

Occupational Human Capital and Wages: The Role of Skills Transferability Across Occupations

This paper examines the effect of accumulated human capital, and particularly occupational human capital, on the workers’ wages. Unlike previous studies that apply occupational tenure as a proxy for occupational human capital, this paper applies the concept of Shaw’s (1984) occupational human capital to capture the transferability of occupational skills and estimates a new measure of occupational human capital, so-called occupational investment. Using the National Longitudinal Survey of Youth (NLSY) from 1979 to 2000, the key findings of this paper suggest that occupational skills from the previous jobs can also affect the workers’ wages at the current job and that occupational investment is one of the important sources of wages supporting the Shaw’s original work on wage determination. Specifically, 5 years of (3-digit) occupational investment relative to current occupational tenure could lead to a wage increase of 7.7 to 18.4 %. I also find that the general labor market experience accounts for a large share of workers’ wages.     

Subgroup independence conditions on preferences

The concept of n-scale independence is introduced for a preference relation defined on ${\mathbb{R}^{n}=\mathbb{R}^{n_{1}}\times \cdots \times \mathbb{R}^{n_{p}}}$ . In addition to zero-independence and upper semicontinuity at zero, n-scale independence allows us to characterizate linear oligarchies as well as to offer a (semi)continuous welfarist analogue of Wilson’s theorem. We also include a characterization of the class of continuous, n-separable and n-scale independent, p ≥ 3, social orderings in terms of what we call homogeneous oligarchies.     

Choice in ordered-tree-based decision problems

Decision makers often have to choose alternatives which appear in an exogenous structure. For example, consider choosing a dish in a restaurant after going through different menu cards (a menu card for buffet, another for combo offers etc.). The decision maker observes the items displayed (as a list) on a menu card and she switches to another menu card to see the items displayed on it (again in the form of another list). Thus the set of all items appears as an “ordered-tree” to the decision maker. There are other examples of decision making where alternatives appear in the form of an ordered-tree. In this paper we consider the cases of choice from ordered-trees (in particular, “lists of lists”) and characterize the choice functions. We impose the axioms of Backward Consistency and Replacement Indifference on choice functions and obtain characterization results for \(k\) -ary ordered-trees and more general ordered-trees. We show that the results for \(k=2\) are similar to those of (Rubinstein and Salant 2006), in which the cases of choice from lists are considered. However the results for \(k \ge 3\) and general ordered-trees are different and allow for instance, a richer class of tie-breaking rules in special cases.     

Assessment of the distributive impact of national trade reforms in Brazil

This paper quantifies the distributional and poverty effects of trade liberalization in Brazil using household survey data. We estimate the consumption and labor impact of Mercosur trade reform following the methodology suggested by Porto (J Int Econ 70:140–160, 2006) and Nicita (J Dev Econ 89(1):19–27, 2009). Results show that trade liberalization had a pro-poor effect in Brazil. This result is largely explained by two major observations: the fact that consumption good prices decreased after Brazil entered Mercosur and a close to zero labor income effect. We find that poverty decreased after national trade liberalization (both for women and men). Additionally, we obtained no significant inequality effects after national trade reforms.     

Invariance axioms for preferences: applications to social choice theory

I investigate the role played by the combination of two invariance axioms for preferences in utility theory; namely, those of zero-independence and scale-independence, respectively. I provide a characterization of the preference relations on ${\mathbb{R}^{n}}$ that satisfy these two axioms as those which are either trivial, or what I call a two-serial total preorder on ${\mathbb{R}^{n}}$ . This result is then applied in social choice theory to characterize those social welfare functions that satisfy IIA and PI. Other characterizations involving the usual Pareto concepts are also provided.     

On Social Capital and Diversity in a Feminized Industry: Further Developing a Theory of Internal Public Relations

Women's work relationships with other women in public relations management settings provide context for further developing Kennan and Hazleton's (2006 Kennan , W. R. , & Hazleton , V. ( 2006 ). Internal public relations, social capital, and the role of effective organizational communication . In C. H. Botan and V. Hazleton (Eds.) Public relations theory II (pp. 311 – 338 ). Mahwah , NJ : Lawrence Erlbaum Associates . [Google Scholar]) conception of internal public relations (IPR) theory. To date, undertheorized in the public relations literature are intra-management relationships, social capital-diversity links, and connections between practitioners’ day-do-day lives and organizational contexts. Interviewed were 42 senior-level female public relations managers (African American, Asian American, Caucasian, and Hispanic) whose experiences reveal outcomes of woman/woman dyad work relationships over the past 5 decades and ways these may impact IPR in feminized industries. Explication of IPR theory and suggestions for further development are offered.     

Is There a Motherhood Penalty? Decomposing the Family Wage Gap in Colombia

The aim of this paper is to provide an estimation and decomposition of the motherhood wage penalty in Colombia. Our empirical strategy was based on the matching procedure designed by Ñopo (The Review of Economics and Statistics, 90(2), 290–299, 2008a) for the case of gender wage gaps. This is an alternative procedure to the well-known Blinder–Oaxaca decomposition method. Using the cross-sectional data of the Colombian Living Standard Survey, the wage gap was decomposed into four components, according to the characteristics of mothers and non-mothers. Three of the components are explained by differences in observable characteristics of women, while the other is the unexplained part of the gap. We found that mothers earn, on average, 1.73 % less than their counterparts without children and that this gap slightly decreased when the group included older women. It is observed from the results that, once schooling was included as a matching variable, the unexplained part of the gap considerably decreased and became non-significant. Thus, we did not find evidence of wage discrimination against mothers in the Colombian labor market.     

EXPECTATIONS RELATING TO CHILDCARE AMONG FRENCH AND SWEDISH FAMILIES

This paper investigates how policy and values interrelate concerning expectations of childcare based on 80 interviews with 40 families with young children from France and Sweden, respectively. Upbringing, learning and socialization are important expectations among French parents. The results presented here are in line with educational goals that may have been influenced by policy. The findings suggest that France may, in terms of expectations on childcare, still belong to the conservative cluster as categorized by Esping-Andersen (1990 Esping-Andersen, G. 1990. The three worlds of welfare capitalism, Cambridge: Polity Press.  [Google Scholar]), although family policy may differ from that of, for example, Germany and Italy in the same cluster. Swedish parents stress the importance of the individual child as well as pedagogy, thus, indicating compatibility between a parental wish for the individual development of the child and an emphasis on collective care in Swedish family policy.     

Inequality and the time structure of earnings: evidence from Germany

This paper studies the relationships between annual and subannual inequality and mobility during the course of the year. We apply an exact decomposition framework as outlined in Wodon and Yitzhaki (Econ Bull 4:1–8, 2003), and in Yitzhaki and Wodon (Research on Economic Inequality 12:179–199, 2004). Earnings records of pension insurants in Germany serve as the database. The long time horizon of our database allows us to investigate the stability and robustness of the parameters of the decomposition over time. Specifically, we show that the mobility component of the decomposition, as measured by Gini correlation coefficients, changes over the observation period. This makes it difficult to predict the impact of the income accounting period on inequality in a more general context. Thus, it is of paramount importance to use income data from a uniform accounting period in distributional analyses.