Can We Really Rely on Income Distribution Statistics? Some Issues in the Swedish Data

Authors: Anders Björklund,
Series: Issue: 7 2020

The Swedish Income Distribution Statistics have shown rising gaps in disposable income since the early 1980s. Several reports have shown that capital income is an important driver behind this development. I identify several weaknesses in the measurement of capital income in these statistics. One weakness is that realised capital gains, which generally are included in Swedish reports on income distribution but not in cross-national ones, are not adjusted for inflation from 1991 and onwards but were so until 1990. A considerable part of the capital gains included in data is thus compensation for inflation and not real gains. Further, there is a considerable rise in income shifting from earned income to capital income in closely held corporations and a decline of income shifting from capital income to pension income. New modes of saving, which are taxed according to a standard revenue principle, will most likely create severe problems for the Statistics in the near future but have not done so yet. A final section of the paper argues that the statistics do not account for the rising prevalence of shared residence for children of separated parents. Therefore, the statistics underestimate the economic standard of children with separated parents.

The baby year parental leave reform in the GDR and its impact on children’s long-term life satisfaction

This article investigates the effects of an increase in paid parental leave — twelve months instead of five months — on children’s long-term life satisfaction. The historical setting under study, namely the former German Democratic Republic (GDR), allows us to circumvent problems of selection of women into the labor market and an insufficient or heterogeneous non-parental child care supply, which are issues many other studies on parental leave reforms face. Using data from the German Socio-Economic Panel (SOEP) we analyze the birth cohorts from 1980 to 1989 at adult age, and apply a difference-in-difference design making use of the very specific timing of the GDR’s parental leave reforms in 1976 and 1986. We find significant and robust positive long-term parental leave effects on now-adult children’s life satisfaction. Further results suggest that a driving factor of the increase in life satisfaction is a better health for males and individuals with high educated mothers, and personality

Workplace Contact and Support for Anti-Immigration Parties

This paper studies the consequences of an increased presence of immigrants in the workplace on anti-immigration voting behavior by combining detailed Swedish workplace data with election outcomes for a large antiimmigration party (the Sweden Democrats). At each election precinct, we match the election outcomes with the share of non-European co-workers among the average native-born worker for three consecutive elections between 2006 and 2014. Using a fixed effects approach, we estimate a negative effect of an increased share of non-Europeans in the workplace on support for the Sweden Democrats: a one standard deviation increase in the average share of non-European co-workers decreases the precinct vote share for the Sweden Democrats by roughly 0.4 percentage points. We show that these results are solely driven by within-skill contact, and by contact within occupations that are less exposed to job loss. We interpret the results as supporting the contact hypothesis: that increased interactions with minorities reduce prejudice among native-born voters, which leads to lower support for antiimmigration parties.

No stratified effect of unemployment on incomes. How the market, state and household compensate for income loss in the UK and Switzerland

Unemployment is a critical life event that may affect the income trajectories of displaced workers very unequally. It may trigger a process of cumulative disadvantage and hit vulnerable groups hardest. Alternatively, it may level the playing field because higher classes have more to lose. We analyze heterogeneous effects of an unemployment spell on income for Britain and Switzerland. Our analysis is based on two household panels – UK Understanding Society 2009-2017 and the Swiss Household Panel 1999-2017 – and distinguishes two sources of income, from the labor market and welfare state, at two different levels, the individual and households. We match unemployed to employed workers and estimate fixed-effects regressions. Our results show that individual labor income drops in the two years after an unemployment spell by 20 and 25% in Switzerland and by 25 and 55% in the UK. Welfare state transfers reduce these losses by half in Switzerland, but have only a marginal impact in the UK at both the individual and household level. In both countries, income losses do not differ much across social classes. We thus find no evidence for a cumulative disadvantage. The lower classes are at greater risk of becoming unemployed, but this does not automatically translate into greater vulnerability to its consequences.

Application of the EU-SILC 2011 data module “intergenerational transmission of disadvantage” to robust analysis of inequality of opportunity

This data article describes the original data, the sample selection process and the variables used in Andreoli and Fusco (Andreoli and Fusco, 2019) to estimate gap curves for a sample of European countries. Raw data are from 2011 roaster of EU-SILC, cross-sectional sample of module “intergenerational transmission of disadvantage”. This article reports descriptive statistics of the using sample. It also discusses the algorithm adopted to estimate the main effects and details the content of additional Stata files stored on the online repository. These additional files contain raw estimates from bootstrapped samples, which form the basis for estimating gap curves and their variance-covariance matrices. The data article also reports representations of gap curves for all 16 selected countries.

Attention Deficit Hyperactivity Disorder (ADHD) and Earnings in Later-Life Self-Employment

Recent studies have shown that individuals with attention deficit hyperactivity disorder (ADHD) are relatively often engaged in self-employment. We analyze whether self-employment mediates the relationship between ADHD and earnings. To overcome endogeneity concerns in the estimation of this relationship, we use the polygenic risk score (PRS) for ADHD. In our longitudinal sample of 7,905 individuals (50–65 years old) from the Health and Retirement Study, a standard deviation increase in the PRS for ADHD increases the odds of self-employment by 32% and decreases yearly earnings by 5%. Self-employment explains (mediates) 59% of the negative relationship between the PRS for ADHD and earnings.

ADHD and later-life labor market outcomes in the United States

This study analyzes the relation between attention-defcit hyperactivity disorder (ADHD) and later-life labor market outcomes in the United States and whether these relationships are mediated by educational attainment. To overcome endogeneity concerns in the estimation of these relationships, we exploit the polygenic risk score (PRS) for ADHD in a cohort where the diagnosis of and treatment for ADHD were generally not available. We fnd that an increase in the PRS for ADHD reduces the likelihood of employment, individual income, and household wealth. Moreover, it increases the likelihood of receiving social security disability benefts, unemployment or worker compensation, and other governmental transfers. We provide evidence that educational attainment mediates these relationships to a considerable extent (14–58%).

Effect of Genetic Propensity for Obesity on Income and Wealth Through Educational Attainment

Objective: This study contributes to the literature on the income and wealth consequences of obesity by exploiting recent discoveries about the genetic basis of BMI.
Methods: The relation between a genetic risk score (GRS) for BMI, which reflects the genetic predisposition to have a higher body weight, and income and wealth was analyzed in a longitudinal data set comprising 5,962 individuals (22,490 individual‐year observations) from the US Health and Retirement Study.
Results: Empirical analyses showed that the GRS for BMI lowers individual income and household wealth through the channel of lower educational attainment. Sex‐stratified analyses showed that this effect is particularly significant among females.
Conclusions:This study provides support for the negative effects of the GRS for BMI on individual income and household wealth through lower education for females. For males, the effects are estimated to be smaller and insignificant. The larger effects for females compared with males may be due to greater labor market taste‐based discrimination faced by females.

Understanding the education gap in immigration preferences across countries over time: A decomposition approach

Authors: Henning Finseraas,
Issue: 2019

The structure and dynamics of the education gap in immigration preferences are not well understood. Does the gap increase when the economy contracts? To what extent does the gap reflect labour market conflicts versus value polarization? Does the structure of the gap change with labour market and refugee shocks? I use European Social Survey data to decompose the gap into parts reflecting labour market position, social background, and value orientation, and explore how their importance in accounting for the gap change over time. I find no uniform trends in preferences or in the size of the gap, but the gap varies with the unemployment rate and the strength of trade unions. Moreover, positions in the labour market are more important for the gap in times of high unemployment, at the expense of the importance of value orientations. The results show the enduring importance of labour market conflicts for the gap.

Association of Preterm Birth and Low Birth Weight With Romantic Partnership, Sexual Intercourse, and Parenthood in Adulthood: A Systematic Review and Meta-analysis

Question Are adults who were born preterm or with low birth weight less likely to experience social transitions normative of adulthood, such as romantic partnerships, sexual intercourse, or parenthood?
Findings In this systematic review and meta-analysis of 21 studies describing up to 4.4 million participants, adults who were born preterm or with low birth weight were less likely to experience a romantic partnership, sexual intercourse, or parenthood than their peers who were born full-term. The likelihood of experiencing these social transitions decreased with lower gestational age and birth weight, and was similar in both young and middle adulthood.
Meaning The findings suggest that adults who were born preterm or with low birth weight are less likely to have sexual or partner relationships than adults born full-term, which might put them at increased risk of decreased well-being and poorer physical and mental health.