EMPLOYMENT AND THE DISTRIBUTION OF INCOME. Andrés Velasco
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1 EMPLOYMENT AND THE DISTRIBUTION OF INCOME Adrés Vlasco Ju 2011
2 Motivatio My xpric as Fiac Miistr Chil: hatd discussios o iquality. But... Focus oly o th wag distributio Discussios o th shap of th wag distributio vry idological: grat mor hat tha light Littl rcogitio that wag distributio oft chags slowly, alog with its fudamtal dtrmiats (g. ducatio) Cavat: focus today o distributio of labor icom. Govrmt trasfr policy ca ad dos hav a larg impact o iquality, but that is wll udrstood
3 Motivatio (cot.) Ca w do bttr? O altrativ: focus o mploymt prformac Thr ar larg diffrcs i this prformac, v amog coutris of similar pr-capita icom Ar thr low hagig fruit hr? Tim advatag Cavat: wh thikig about improvig mploymt prformac, also d to gt away from idological divids Right: mak labor markt flxibl ad vrythig will b ok Lft: hac collctiv bargaiig ad vrythig will b ok
4 I. Th issus
5 Th issu To masur iquality w oft us th distributio of pr capita houshold icom (PCHY) If workig is a biary choic, for houshold j PCHY M j = umbr of popl workig i houshold N j = umbr of mmbrs of houshold Y ij = icom of prso i If all workig popl rciv th sam icom, M Y ij i= j = 1 N j YjM PCHY j = N j Housholds diffr gratly ot oly i thir Y ij, but i thir M j ad N j as wll. Also i th umbr of hours thy work, ot cosidrd hr. j
6 Today Focus o th implicatios of variatios i M j ad N j o th distributio of icom If M j ad N j ar uqually distributd ad if N j varis gativly with Y j ad M j varis positivly with Y j th iquality i PCHY ca b vry larg idd Mor a pla for mor rsarch tha a prstatio of a fiishd rsarch projct
7 This issu i th litratur Prst, but ot ctral, i th litratur o th microdyamics of icom distributio Bourguigo, Frrira ad Lustig (1998) Bourguigo, Frrira ad Lit (2002) Székly ad Hilgrt (2000) Largly abst from flagship publicatios 2006 WDR: Equity ad Dvlopmt 1999 IDB: Facig up to Iquality i Lati Amrica 2004 IDB: Good Jobs Watd Pla: focus o this!
8 Th road map I. Th issus II. Employmt rats ad th distributio of mploymt: cross coutry vidc III. Chil: th distributio of mploymt ad icom IV. Chil: th distributioal impact of chags i mploymt rats V. Low icom housholds with low mploymt rats: what ar thy lik? VI. Ttativ policy implicatios
9 II. Employmt rats ad th distributio of mploymt: cross coutry vidc
10 Employmt rats amog th (mostly) rich T u rk y H u g a ry Ita ly S p a i C h il M x ic o P o la d G r c E u ro p Ir la d B lg iu m S lo v a k R p u b lic O E C D c o u tri s E u ro p a U io 1 9 K o r a N o rth A m ric a E u ro p a U io 1 5 F ra c U it d S ta t s G 7 c o u tri s E sto ia L u x m b o u rg P o rtu g a l C z c h R p u b lic S lo v ia O c a ia U it d K i g d o m A u stra lia F i la d A u stria G rm a y C a a d a Ja p a N th rla d s D m a rk N w Z a la d S w d N o rw a y S w itz rla d Ic la d Mals Fmals Total Sourc: OECD Employmt rat (25-64), OECD Coutris
11 Employmt rats amog th ot-so rich Employmt rat (25-64), Lati Amrica Mal Fmal Total Sourc: Ow calculatios usig coutry s coomic survys
12 Th uqual distributio of mploymt Employmt rat by icom dcil Mxico Uruguay Argtia Brasil Chil Sourc: Ow calculatios usig coutry s coomic survys
13 III. Chil: th distributio of mploymt ad icom
14 Chil: icom dist. amog thos who work Mothly icom thos who work (dollars) /10 ratio: Sourc: Ow calculatios usig CASEN 2009.
15 Chil: houshold icom distributio Mothly houshold icom (dollars) /10 ratio: 46, Sourc: Ow calculatios usig CASEN 2009.
16 Chil: pr capita houshold icom dist. Mothly houshold icom pr capita (dollars) /10 ratio: 78, Sourc: Ow calculatios usig CASEN 2009.
17 Chil: a sad distributioal story Mothly icom pr capita, total houshold icom ad icom of thos who work (US dollars) /10 ratio: /10 ratio: 46,2 10/10 ratio: 78,5, Gii: Icom pr capita Icom of thos who work Houshold icom Sourc: Ow calculatios usig CASEN 2009.
18 Mssag Th umbr of popl who work pr houshold mak a big diffrc Th umbr of mmbrs of th houshold mak a big diffrc Ad both ar vry uvly distributd accross icom dcils
19 Th uqual distributio of jobs Houshold siz, jobs pr houshold ad jobs pr capita /10 ratio: 0,8 10/10 ratio: 3,2 10/10 ratio: 4, Sourc: Ow calculatios usig CASEN Houshold siz Jobs pr houshold Jobs pr capita
20 IV. Chil: th distributioal impact of chags i mploymt rats
21 Simulatio 1 Tak all housholds with a pr capita icom lss tha th atioal avrag Assum that i ach of thm th umbr of popl (18-64) who work is qual to th atioal avrag Thos who bgi workig mak th avrag of what popl alrady mad i that houshold If thr was o o workig, th trat maks th avrag wag for that dcil Cosidr two cass: fixd wags (uppr boud for ffct) ad wags that adjust (lowr boud)
22 Equilibrium i th markt for labor S W high A C W low B D, D L low L high
23 Simulatio 1: Rsults % 150% 100% 50% 0% Bfor Aftr: Costat wags Aftr: No-costat wags Costat wags No-costat wags 10/10 ratio = 78,5, Gii = 0,584 10/10 ratio = 32.3, Gii = 0,541 10/10 ratio = 34.9, Gii = 0,567
24 Simulatio 2 Tak all housholds with a pr capita icom lss tha th atioal avrag Assum that i ach of thm th umbr of popl (18-64) who work is qual to th atioal avrag I additio, assum that i ach of ths housholds all workrs work 45 hours a wk Thos who bgi workig mak th avrag hourly wag i that houshold If thr was o o workig, th trat maks th avrag hourly wag for that dcil Cosidr two cass: fixd wags (uppr boud for ffct) ad wags that adjust (lowr boud)
25 Simulatio 2: Rsults % 300% 200% 100% 0% Bfor Aftr: Costat wags Aftr: No-costat wags Costat wags No-costat wags 10/10 ratio = 78,5, Gii = 0,584 10/10 ratio = 21.5, Gii = 0,534 10/10 ratio = 17,5, Gii = 0,547
26 Simulatio 3 Tak all housholds with a pr capita icom lss tha th atioal avrag Assum that i ach of thm th umbr of popl (18-64) who work is qual to th umbr i dcil 10 I additio, assum that i ach of ths housholds all workrs work 45 hours a wk Thos who bgi workig mak th avrag hourly wag i that houshold If thr was o o workig, th trat maks th avrag hourly wag for that dcil Cosidr two cass: fixd wags (uppr boud for ffct) ad wags that adjust (lowr boud)
27 Simulatio 3: Rsults % 400% 300% 200% 100% 0% Bfor Aftr: Costat wags Aftr: No-costat wags Costat wags No-costat wags 10/10 ratio = 78,5, Gii = 0,584 10/10 ratio = 17.4, Gii = 0,512 10/10 ratio = 15,1, Gii = 0,531
28 V. Low icom housholds with low mploymt rats: what ar thy lik?
29 Poorr workrs work fwr hours Mothly hours of work (18-65 yars) Total Mals Fmals Sourc: Ow calculatios usig CASEN 2009.
30 Poorr dcils hav spcially low mploymt amog th youg Employmt rat by ag Dcil Sourc: Ow calculatios usig CASEN 2009.
31 Poor dcils hav spcially low mploymt amog wom Fmal mploymt rat by ag Dcil Sourc: Ow calculatios usig CASEN 2009.
32 Poorr dcils hav mor slf-mployd workrs, mor domstic srvats & fwr public mploys Dcil Employr Slf-mployd Public sctor Privat c ompais Domst ic srvats Sourc: Ow calculatios usig CASEN 2009.
33 Poorr dcils hav mor wom Fmal amog populatio by dcil (%) Sourc: Ow calculatios usig CASEN 2009.
34 Poorr dcils hav mor housholds with childr udr four Prctag of housholds with childr yougr tha 4 yars Sourc: Ow calculatios usig CASEN 2009.
35 Poorr dcils hav mor rural rsidts Prctag of housholds i rural aras (%) Sourc: Ow calculatios usig CASEN 2009.
36 Poorr dcils hav lss schoolig Yars of schoolig (popl ag 18-65) Sourc: Ow calculatios usig CASEN 2009.
37 Poorr dcils hav mor hadicappd popl Prctag of hadicappd popl Sourc: Ow calculatios usig CASEN 2009.
38 VI. Ttativ policy implicatios
39 What kps poor popl from rgular mploymt? Ky obsrvatio: thr is o o factor, ad thrfor thr is o o solutio You d a approach that dos mor tha simply mak th labor markt mor flxibl.
40 Possibl policy prioritis Supply sid Child car Urba, housig ad trasport policy Employmt subsidis (supply sid) Dmad sid Flxibility of workig hours ad shifts Prudc with miimum wags Employmt subsidis (dmad sid) Ati-discrimiatio lgislatio with tth Brigig supply ad dmad togthr Facilitat iformatio flows Ctraliz ifo: bolsas d trabajo Nd mor rsarch o th subjct!
41 EMPLOYMENT AND THE DISTRIBUTION OF INCOME Adrés Vlasco Ju 2011
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