Differences In Economic Outcomes Research Articles

Economic returns to reproducing parents' field of study.

Research on the influence of family background on college graduates' earnings has not considered the importance of the match between parents' and children's field of study. Using a novel design based on within-family comparisons, I examine long-term earnings returns to reproducing parents' field of study in Denmark. I find that individuals whose field of study matches that of a parent have earnings that are 2 percent higher than those of their siblings with college degrees in different fields, on average. Earnings returns to field inheritance are highest in the fields of law (9 percent), medicine (6 percent), and engineering (4 percent) and are driven mainly by income from self-employment. I find no direct evidence of nepotism as the earnings advantage does not arise from inheritance of parents' firms or employment in parents' occupational network. My findings indicate that, although a college degree generally equalizes family background differences in economic outcomes, there are additional payoffs to field inheritance, particularly in traditional fields characterized by a high degree of social closure and self-employment.

Integrating gender into a labour economics class

This article argues that a systematic integration of gender into labour economics courses based on standard textbooks is both beneficial and straightforward. An undergraduate course in labour economics presents an ideal opportunity to introduce students to the importance of gender differences in economic outcomes. We provide a prototype of such a course, and we show how gender-aware content and pedagogical tools can complement a course based on a standard textbook or set of articles. We also review the most popular textbooks in labour economics and show how gender issues are mostly contained in a single chapter on labour market discrimination rather than thoroughly integrated throughout the text. In addition to exposing students to more diverse content and methodologies, mainstreaming gender into an undergraduate labour economics class can help cultivate inclusivity and belongingness in the discipline.

Gender inequality in the one percent: A look under the hood of high incomes in Germany.

Gender differences in economic outcomes are important topics in social science research. However, the study of gender differences among economic elites-"the top one percent"-has received surprisingly little attention, likely also due to a lack of empirical data. This paper investigates gender differences in individual and household income among the top one percent of individual monthly net incomes and top two percent of net household incomes using data from the German Microcensus from 2006 to 2016 covering more than 3.3 million individuals. I find that women account for only around 14% of the one percent in individual incomes. Additionally, regarding the household level, women's incomes are sufficient to achieve two percent status in fewer than 10% of all households. Both numbers did hardly change over the decade from 2006 to 2016. Furthermore, women's pathways to belonging to a high-income household are far more dependent on their partner's education and employment status than men's. Overall, the findings thus show dramatic gender differences among the German economic elite that do not narrow over time.

Teaching development economics from a gender perspective

An undergraduate course in development economics presents an ideal opportunity to introduce students to the importance of gender differences in economic outcomes. The authors of this article argue that a systematic integration of gender into development economics courses based on standard textbooks is feasible and desirable. They provide a gendered narrative of how to engender a development economics course in the Global North using as examples topics that are commonly taught and show how gender-aware scholarly articles, classroom activities, and assignments can complement a course based on a standard textbook or set of articles. They engender three main sections of a prototype development economics course: meanings and measures of economic development; strategies for economic development; and salient issues in development; and they add a forward-looking section on creating equitable development.

Social Identity, Behavior, and Personality: Evidence from India

Hierarchies in social identities are integrally related to divergences in economic status. In India, caste is a significant social identity where discriminatory practices have resulted in poor outcomes for the lower castes. While there is considerable research on differences in economic outcomes along caste lines, there is limited work on behavioral preferences and personality traits that can also be adversely affected by such identity hierarchies, and that are important determinants of educational attainment and labor market performance. Combining rich data from incentivized tasks and surveys conducted among a large sample of university students, we find that the historically marginalized Scheduled Castes and Scheduled Tribes (SCSTs) and Other Backward Classes (OBCs) report lower scores than upper castes along several dimensions of economic behavior, such as competitiveness and confidence and personality traits, such as grit, locus of control, and conscientiousness. Further, socioeconomic status has a limited compensatory role in mitigating these gaps.

Is inequality in subjective well-being meritocratic? Danish evidence from linked survey and administrative data.

This paper decomposes inequality in subjective well-being into inequality due to socioeconomic background (SEB) and meritocratic inequality due to differences in individual merits such as school performance. We measure the meritocratic share of well-being, defined as the share of explained variation in life satisfaction attributable to variation in merits not related to SEB. The empirical evidence from Denmark combines survey information on well-being with administrative data on individual characteristics. We find systematic differences in well-being already in early adulthood, where differences in economic outcomes are not yet visible. At age 18–19, about 40 percent of the inequality in well-being is meritocratic. The role of merits rises to 65–85 percent in midlife (age 40–55), where it is also higher than the role of merits in income inequality. The positive conclusions that inequality in well-being is more meritocratic than income inequality and more meritocratic as people grow older get support by corresponding results using an equal opportunity approach.

Community-Based Institutions Shape Cheese Co-Production in a French Alpine Valley

Livestock systems are vital to socioeconomic livelihoods in mountain territories, yet quantitative analyses of their diverse modes of production beyond farm level are missing. We used the concept of nature's contributions to people to account for these various society–ecosystem interactions. We investigated the role of biophysical constraints, resources, and community-based institutions (CBIs) for agricultural production at municipal scale. We asked: What are the driving variables that govern the agricultural system at municipal scale in a mountain territory, and what is the role of CBIs? Based on qualitative research with local informants, we identified the most relevant resources for agricultural production in 53 municipalities that are part of a cheese-producing CBI in Maurienne Valley (French Alps). Correlation analyses showed how biophysical constraints and external drivers from tourism shape the agricultural management of ecosystems. The inductive clustering to 3 production typologies suggested that the CBIs could buffer resulting differences in economic outcomes. Our results display how such mixed-method analyses can inform policymaking in heterogeneous mountain territories.

Historical Development of Fiscal Policy Operation among Sub-Saharan African Countries

In recent decades, economists and historians have increasingly turned to Africa’s colonial past to explain contemporary differences in economic outcomes – especially fiscal stance within the African continent, as well as differences between Africa and other regions of the world. This study joins the debate by exploring the historical records of colonial state finances to see their development and possible link with recent fiscal outcomes among Sub-Saharan African countries. The study applies simple descriptive statistical tools for the analysis of data. The study found that taxes constitute the financial and political backbone of the colonial state and were vital to the state building efforts of colonial governments. Similarly, there are significant differences and similarities between British and French territories in terms of tax administration and expenditure policies. In addition, there is greater importance on education expenditure in British colonies, stronger reliance on direct taxation in French colonies. The remarkable achievements in fiscal policy reforms by some SSA countries in recent years has its root to colonial era. To consolidate the gains and to tackle the challenges, it is imperative that SSA policy makers commit themselves – and remain firmly committed – to sound fiscal policies to ensure sustainable growth and development.

Social Proximity to Capital: Implications for Investors and Firms

Abstract We show that institutional investors are more likely to invest in firms from regions to which they have stronger social ties but find no evidence that these investments earn a differential return. Firms in regions with stronger social ties to locations with many institutional investors have higher valuations and liquidity. These effects are largest for small firms with little analyst coverage, suggesting that the investors’ behavior is explained by their increased awareness of firms in socially proximate locations. Our results highlight that the social structure of regions affects firms’ access to capital and contributes to geographic differences in economic outcomes. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

Gender differentiated economic responses to crises in developing countries: insights for COVID-19 recovery policies.

COVID-19 has wide-ranging and long-term implications for individual and household outcomes. Policymakers expect that the economic impact of COVID-19, channeled through labor markets, will disproportionately fall on women and girls, relative to men and boys. Surprisingly, little evidence exists for informing gender-sensitive COVID-19 recovery policies. This study examines the existence of gender-differentiated dynamic responses of labor market and other household welfare outcomes to GDP contractions using historical country level panel data for South/South-East Asia and West Africa. The econometric results reveal large gender differences in economic outcomes post crisis and provide insights for designing gender-sensitive COVID-19 recovery policies.

Social Proximity to Capital: Implications for Investors and Firms

We use social network data from Facebook to show that institutional investors are more likely to invest in firms from regions to which they have stronger social ties. This effect of social proximity on investment behavior is distinct from the effect of geographic proximity. Social connections have the largest influence on investments of small investors with concentrated holdings as well as on investments in firms with a low market capitalization and little analyst coverage. We also find that the response of investment decisions to social connectedness affects equilibrium capital market outcomes: firms in locations with stronger social ties to places with substantial institutional capital have higher institutional ownership, higher valuations, and higher liquidity. These effects of social proximity to capital on capital market outcomes are largest for small firms with little analyst coverage. We find no evidence that investors generate differential returns from investments in locations to which they are socially connected. Our results suggest that the social structure of regions affects firms' access to capital and contributes to geographic differences in economic outcomes. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Australia's Immigration Selection System and Labour Market Outcomes in a Family Context: Evidence from Administrative Data

This paper examines the efficacy of the Australian points system in a family context among working‐age permanent resident immigrants who arrived between 2000 and 2011 when there was a major focus on skills selection. Sixty‐seven per cent of these immigrants were granted a skilled visa while 25 per cent hold a spousal visa (spouses of Australian citizens). More than half of the skilled visa recipients are the spouses of the primary applicants. Primary applicants among skilled visa holders are assessed for their skills in line with the Australian points system but secondary applicants, such as spouses, among skilled visa holders and spousal visa holders are not subject to any skills assessment before becoming permanent residents. We study differences in economic outcomes by permanent visa types and the role of points system factors in explaining these differences using the Personal Income Tax and Migrants Integrated Dataset and the Australian Census Longitudinal Dataset. We find that primary skilled visa holders earn at least 26–28 per cent more than spousal visa holders, and this is similar for both genders. However, spouses of primary skilled visa holders earn 13–18 per cent more than spousal visa holders. This difference is higher among females than males. Occupation differences can account for nearly half of the differences in income and can entirely capture the role of education and English proficiency. Primary skilled immigrants and their spouses have higher rates of labour force participation and employment than spousal visa holders, starting in the first year of arrival, and the gap is much higher for primary skilled visa holders, but these differences do not disappear quickly.

Australia's Immigration Selection System and Labour Market Outcomes in a Family Context: Evidence from Administrative Data

This paper examines the efficacy of Australian points system in a family context among working-age permanent resident immigrants who arrived between 2000 and 2011 when there was a major focus on skills selection. 67% of these immigrants were granted a skilled visa while 25% hold a spousal visa (spouses of Australian citizens). More than half of the skilled visa recipients are the spouses of the primary applicants. Primary applicants among skilled visa holders are assessed for their skills in line with Australian points system but secondary applicants, such as spouses, among skilled visa holders and spousal visa holders are not subject to any skills assessment before becoming permanent residents. We study differences in economic outcomes by permanent visa types and the role of points system factors in explaining these differences using Personal Income Tax and Migrants Integrated Dataset and Australian Census Longitudinal Dataset. We find that primary skilled visa holders earn at least 26-28 percent higher than spousal visa holders and this is similar for both genders. However, spouses of primary skilled visa holders earn 13-18 percent higher than spousal visa holders. This difference is higher among females than males. Occupation differences can account for nearly half of the differences in income and can entirely capture the role of education and English proficiency. Primary skilled immigrants and their spouses have higher rates of labour force participation and employment than spousal visa holders starting in the first year of arrival and the gap is much higher for primary skilled visa holders but these differences do not disappear quickly.

Social Proximity to Capital: Implications for Investors and Firms

Abstract We show that institutional investors are more likely to invest in firms from regions to which they have stronger social ties but find no evidence that these investments earn a differential return. Firms in regions with stronger social ties to locations with many institutional investors have higher valuations and liquidity. These effects are largest for small firms with little analyst coverage, suggesting that the investors’ behavior is explained by their increased awareness of firms in socially proximate locations. Our results highlight that the social structure of regions affects firms’ access to capital and contributes to geographic differences in economic outcomes.

Family Life Courses, Gender, and Mid-Life Earnings

AbstractThere is a long-standing debate on whether extensive Nordic family policies have the intended equalizing effect on family and gender differences in economic outcomes. This article compares how the combination of family events across the life course is associated with annual and accumulated earnings at mid-life for men and women in an egalitarian Nordic welfare state. Based on Finnish register data (N = 12,951), we identify seven typical family life courses from ages 18 to 39 and link them to mid-life earnings using sequence and cluster analysis and regression methods. Earnings are highest for the most normative family life courses that combine stable marriage with two or more children for men and women. Mid-life earnings are lowest for unpartnered mothers and never-partnered childless men. Earnings gaps by family lives are small among women but sizeable among men. Gender disparities in earnings are remarkably high, particularly between men and women with normative family lives. These gaps between married mothers and married fathers remain invisible when looking only at motherhood penalties. Results further highlight a large group of (almost) never-partnered childless men with low earnings who went largely unnoticed in previous research.

Modeling the Choice Between Risperidone Long-Acting Injectable and Generic Risperidone from the Perspective of a Japanese Hospital.

IntroductionThe Japanese government’s current policy is to encourage hospitals to discharge hospital patients with schizophrenia earlier and provide them with community care. This study aims to analyze clinical and economic outcomes of different discharge strategies in psychiatric hospitals in Japan.MethodsA simulation was conducted to compare patient relapse and hospital revenues for different discharge plans. We constructed a decision tree where each tree consists of a different Markov chain that models hospital revenue for four different discharge plans: discharge of the patient after 1, 2, or 3 months, or 4 months or more. The simulation also included variations in the medical treatment regimen in an outpatient setting as part of the discharge strategy. In particular, we looked at the choice between risperidone long-acting injectable (RLAI) and generic risperidone (RIS GE).ResultsThe use of RLAI in an outpatient setting reduced the number of rehospitalizations compared to generic risperidone use under all discharge plans. Different discharge plans were associated with differences in economic outcomes as well. One of the key revenue drivers for the hospital was the continuation of treatment in the outpatient setting after discharge.ConclusionThe use of RLAI in an outpatient setting could help to prevent rehospitalization, thereby contributing to better community care.FundingThe Rapid Service Fee was funded by Janssen KK.

Decomposition of changes in the consumption of macronutrients in Vietnam between 2004 and 2014

Vietnam is undergoing a nutritional transition like many middle-income countries. This transition is characterized by an increase in per capita total calorie intake resulting from an increase in the consumption of fat and protein while the carbohydrate consumption decreases. This paper proposes to highlight the sociodemographic drivers of this transition over the period 2004–2014, using Vietnam Household Living Standard Survey data. We implement a method of decomposition of between-year differences in economic outcomes recently proposed in the literature. This method decomposes the between-year change in various indicators related to the outcome distribution (mean, median, quantiles, etc.) into (1) the effect due to between-year change in the conditional distribution of the outcome given sociodemographic characteristics, or “structure effect”, and (2) the effect due to the differences in sociodemographic characteristics across years, or “composition effect”. In turn, this last effect is decomposed into direct contributions of each sociodemographic characteristics and effects of their interactions. The composition effect, always positive, generally outweighs the structure effect when considering the between-year changes in distributions of per capita calorie intake or calorie intake coming from protein or fat. The effects of changes in the composition of the Vietnamese population thus overcome the effects of changes in preferences of the same population. This finding is reversed in the case of carbohydrates. Food expenditure and household size appear to be the main contributors to the composition effect. The positive effects of these two variables explain well most of the between-year shifts observed in the calorie intake distributions. Urbanization and level of education contribute negatively to the composition effect, with the noticeable exception of fat where the effect of urbanization is positive. But these two variables effects are negligible compared to those of food expenditure and household size.

Americans misperceive racial economic equality

The present research documents the widespread misperception of race-based economic equality in the United States. Across four studies (n = 1,377) sampling White and Black Americans from the top and bottom of the national income distribution, participants overestimated progress toward Black-White economic equality, largely driven by estimates of greater current equality than actually exists according to national statistics. Overestimates of current levels of racial economic equality, on average, outstripped reality by roughly 25% and were predicted by greater belief in a just world and social network racial diversity (among Black participants). Whereas high-income White respondents tended to overestimate racial economic equality in the past, Black respondents, on average, underestimated the degree of past racial economic equality. Two follow-up experiments further revealed that making societal racial discrimination salient increased the accuracy of Whites' estimates of Black-White economic equality, whereas encouraging Whites to anchor their estimates on their own circumstances increased their tendency to overestimate current racial economic equality. Overall, these findings suggest a profound misperception of and unfounded optimism regarding societal race-based economic equality-a misperception that is likely to have any number of important policy implications.

Drivers and Obstacles to Competitiveness in the EU: The Role of Value Chains and the Single Market

This report offers an extensive analysis of the effects of the EU Single Market. It sheds light on four interrelated aspects: It first reveals the asymmetric economic performance across member countries, which also mirrors structural differences. These differences in economic outcomes are next confronted with measures of the Single Market, economic institutions, changes in demand patterns, industrial turbulence and producer price developments. Next, the changes in value chains are tracked over time, and also put into a global perspective. Eventually, firm level evidence complements the findings. The results are highly relevant for economic policies at the member country and the EU level.

Is higher inequality less legitimate? Depends on How You Frame it!

Economic inequality is increasing both globally and in various countries around the world, and such inequality has been linked to worsening health, well-being, and social cohesion. A key predictor for whether people take action against inequality is the extent to which they perceive it as illegitimate. We investigate how two variables jointly predict the legitimization of inequality, namely the perceived magnitude of differences in economic outcomes and the way these differences are described. Two experiments (total N=190) tested whether framing the same difference in outcomes as an advantaged group having more or as a disadvantaged group having less moderates whether higher inequality is perceived as less legitimate. Participants perceived bigger differences as less legitimate when these differences were framed as the disadvantaged group having less. When they were framed as the advantaged group having more, the perceived magnitude of differences and legitimacy beliefs were unrelated. Together, this research highlights the importance of language for how people perceive and respond to inequality.