On the Persistence of Inequality in the Distribution of Personal Abilities and Income

In this paper we discuss the impact of malnutrition on the distribution of abilities and income in a simple overlapping generations framework. Workers are distributed uniformly over a low-ability and a high-ability range. If workers earn below subsistence wages, the probability that their children will have low abilities is higher than with above subsistence wages due to the malnutrition resulting from low incomes. Using a nested Ethier production function we find that there is an optimal share of low-ability workers in the economy which maximizes output. Due to the intergenerational propagation of low abilities resulting from malnutrition, economies may however get trapped in sub-optimal equilibria with too large shares of low-ability workers. Distributing food coupons financed by taxes of the parent generation to the offspring of these low-ability workers will increase the likelihood that they will be in the high-ability range, permanently increasing output for future generations. Using a numerical example, we show that this type of redistributive policy is welfare improving if the parent generation alive during the initiation of the policy is reimbursed for their loss in utility due to taxes.Income Distribution, Wage Differentials, Skills

Age-dependent Effects of Socio-economic Background on Educational Attainment - Evidence from Germany

The impact of socio-economic background on a child's educational attainment has been discussed as a static concept so far. Existing economic literature as well as the psychology of education literature point however towards a dynamic process where the impact of socio-economic background depends on the age of the child. We explore this possibility using German micro-data. Using instrumental variable methods we estimate the causal effects of parental education and household income on school success of a child at two points in time of his school career. The estimates indicate that household income has a more important effect on the educational success of children in a more advanced point during the education while the effect of parental education seems to be stable.school choice, demand for schooling, human capital

On the Persistence of Inequality in the Distribution of Abilities and Income

Abstract In this paper we discuss the im pact of malnutrition on the distribution of abilities and income in a simple overlapping generations framework. Workers are distributed uniformly over a low-ability and a high-ability range. If workers earn below subsistence wages, the prob ability that their children will have low abilities is higher than with above subsistence wages due to the malnutrition resulting from below subsistence level incomes. Using a nested Ethier production function, we find that in this economy aggregate productivity output is a humpshaped function of the share of low-ability w orkers. A s the model generates multiple equilibria with respect to the share of low-ability workers, the economy can get trapped in a low productivity distribution of abilities within the population, giving rise to new generations with relatively low abilities resulting from malnutrition. A consumption subsidy financed by a wage tax on the parent generation to the offspring of low-ability workers will increase the likelihood that their offspring will be in the high-ability range, thus permanently increasing output for all future generations. Using a numerical example, we show that this type of redistributive policy is welfare improving as the parent generation alive during the initiation of the policy can be reimbursed for its utility loss arising from the wage tax if the intrinsic productivity difference between people with relatively low abilities and people with relatively high abilities is sufficiently large

Coordination of Pension Provision in a Divided Europe: The Role of Citizens' Preferences

This paper explores the underlying factors which explain the diversity in public opinion of EU citizens on the preferred way of financing pensions and the implications for international policy coordination. We find that preferences are mainly determined by the current pension provision and unspecified nation-specific effects, while personal characteristics only play a minor role. Furthermore, some countries have substantial regional differences, others have rather homogeneous regions. Overall, our results suggest that policy making on pension financing at the EU level is not feasible, the more so when taking regional differences into account. Policy coordination within several subgroups of countries whose citizens share similar opinions would be a more realistic option.international policy coordination, opinion, pensions

Explaining Europeans' preferences for pension provision

This paper analyses which factors are most important for explaining why people in fifteen European countries prefer either public, occupational or private pension provision. We make a distinction between personal characteristics such as age, gender and occupation, nationality and the actual, current kind of pension provision that respondents have. Using a large European survey, we find that although all three types of variables are important, the current pension provision and nation-specific effects have a much stronger effect than personal characteristics.Attitude Opinion Pensions Welfare state

Estimating the population exposed to a risk factor over a time window: A microsimulation modelling approach from the WHO/ILO Joint Estimates of the Work-related Burden of Disease and Injury.

ObjectivesBurden of disease estimation commonly requires estimates of the population exposed to a risk factor over a time window (yeart to yeart+n). We present a microsimulation modelling approach for producing such estimates and apply it to calculate the population exposed to long working hours for one country (Italy).MethodsWe developed a three-model approach: Model 1, a multilevel model, estimates exposure to the risk factor at the first year of the time window (yeart). Model 2, a regression model, estimates transition probabilities between exposure categories during the time window (yeart to yeart+n). Model 3, a microsimulation model, estimates the exposed population over the time window, using the Monte Carlo method. The microsimulation is carried out in three steps: (a) a representative synthetic population is initiated in the first year of the time window using prevalence estimates from Model 1, (b) the exposed population is simulated over the time window using the transition probabilities from Model 2; and (c) the population is censored for deaths during the time window.ResultsWe estimated the population exposed to long working hours (i.e. 41-48, 49-54 and ≥55 hours/week) over a 10-year time window (2002-11) in Italy. We populated all three models with official data from Labour Force Surveys, United Nations population estimates and World Health Organization life tables. Estimates were produced of populations exposed over the time window, disaggregated by sex and 5-year age group.ConclusionsOur modelling approach for estimating the population exposed to a risk factor over a time window is simple, versatile, and flexible. It however requires longitudinal exposure data and Model 3 (the microsimulation model) is stochastic. The approach can improve accuracy and transparency in exposure and burden of disease estimations. To improve the approach, a logical next step is changing Model 3 to a deterministic microsimulation method, such as modelling of microflows

Global, regional, and national burdens of ischemic heart disease and stroke attributable to exposure to long working hours for 194 countries, 2000-2016: A systematic analysis from the WHO/ILO Joint Estimates of the Work-related Burden of Disease and Injury

International audienceBACKGROUND: World Health Organization (WHO) and International Labour Organization (ILO) systematic reviews reported sufficient evidence for higher risks of ischemic heart disease and stroke amongst people working long hours (≥55 hours/week), compared with people working standard hours (35-40 hours/week). This article presents WHO/ILO Joint Estimates of global, regional, and national exposure to long working hours, for 194 countries, and the attributable burdens of ischemic heart disease and stroke, for 183 countries, by sex and age, for 2000, 2010, and 2016. METHODS AND FINDINGS: We calculated population-attributable fractions from estimates of the population exposed to long working hours and relative risks of exposure on the diseases from the systematic reviews. The exposed population was modelled using data from 2324 cross-sectional surveys and 1742 quarterly survey datasets. Attributable disease burdens were estimated by applying the population-attributable fractions to WHO’s Global Health Estimates of total disease burdens. RESULTS: In 2016, 488 million people (95% uncertainty range: 472-503 million), or 8.9% (8.6-9.1) of the global population, were exposed to working long hours (≥55 hours/week). An estimated 745,194 deaths (705,786-784,601) and 23.3 million disability-adjusted life years (22.2-24.4) from ischemic heart disease and stroke combined were attributable to this exposure. The population-attributable fractions for deaths were 3.7% (3.4-4.0) for ischemic heart disease and 6.9% for stroke (6.4-7.5); for disability-adjusted life years they were 5.3% (4.9-5.6) for ischemic heart disease and 9.3% (8.7-9.9) for stroke. CONCLUSIONS: WHO and ILO estimate exposure to long working hours (≥55 hours/week) is common and causes large attributable burdens of ischemic heart disease and stroke. Protecting and promoting occupational and workers’ safety and health requires interventions to reduce hazardous long working hours