Showing papers in "Journal of Human Resources in 1980"

Incorporating Occupational Attainment in Studies of Male-Female Earnings Differentials

Abstract: Differences in the occupational distributions of men and women represent an important source of male-female differentials Yet most studies of wage differences concentrate only on either occupational segregation or the problem of unequal pay for equal work This study refines and merges these two approaches, allowing for variation both in occupational distribution and in wages resulting from differences in job qualifications and productivity indicators Our approach uses multinomial logit analysis to predict occupational attainment for men from a set of personal characteristics and then simulates an occupational distribution for women Wages are estimated as a function of productivity measures for both men and women within each occupation Our model finds that only 14 to 17 percent of the total wage differential is attributable to differences in endowments and that more of the unexplained difference results from within-rather than across-broad occupational categories

The Relationship between Wages and Weekly Hours of Work: The Role of Division Bias

Abstract: During the last 25 years, annual hours worked by prime aged men fell by the equivalent of six 40-hour workweeks. The reduction was more pronounced among those younger than among mid-age workers, among black men than among white men, and among those with ...

Parental Care of Children: Time Diary Estimates of Quantity, Predictability, and Variety.

Abstract: Time inputs to children are measured using data from the recent Time Use Survey conducted by the University of Michigan. We analyze time parents devote to their children, particularly in their preschool years, in an attempt to find out if there are social-class and education-of-wife differentials in this particular time use that may provide some insight into the intergenerational transmission of income inequality. We also offer some comment on labor supply of women and child care by men. We find that more-educated women spend more time playing with children, helping with the teaching of children, and in child-related travel.

The relationship between medical resources and measures of health: some additional evidence.

Abstract: The relationship between an area's medical resources and physiological measures of individual health status is examined. Variables such as age, sex, race, education, and income are controlled for. The physiological measures include diastolic blood pressure, serum cholesterol concentration, electrocardiogram, chest X-ray, varicose veins, and periodontal disease. Although additional education and income were associated with fewer abnormal chest X-rays and less periodontal disease, the physiological measures were little affected by additional medical resources. The results are consistent with the view that what the individual does (or does not) do for himself affects health more than do additional medical resources.

Further Evidence on the Returns to School Quality.

Abstract: Census data from 1960 and 1970, augmented with schooling data (expenditures per pupil as well as other measures of school quality) from the various Biennial Surveys of Education, are utilized to analyze the impact of school quality on earnings and to investigate secular changes in rates of return to school quality. This research indicates that the effect of expenditures per pupil on earnings is smaller than that estimated by previous researchers. However, there has been a substantial improvement for blacks in the last decade, while the returns to the investment in the quality of education of white males have been unchanged. The major focus of research on the economic benefits of education has been on the returns to additional years, that is, the quantity, of schooling. Comparatively little emphasis on the returns to school quality can be found in the literature, primarily because of the lack of adequate data. However, in recent years a literature that uses data on the resource inputs into schooling as a proxy for quality has emerged. Most of this literature uses average per pupil school expenditures as a measure of school quality. The returns to school expenditures have been examined with small and/or specialized data sets by Morgan and Sirageldin [12], Johnson and Stafford [7], Morgenstern [13], Ribich and Murphy [14], Link and Ratledge [10, 11], Wachtel [17, 18], and most recently in this Journal by Akin and Garfinkel [1]. In addition, several authors have examined the returns to other measures of school quality such as teacher-pupil ratios and the length of the school year (see Wachtel [17] and Welch [19]). Rizzuto is a member of thefaculty of the University of Den ver. Wachtel is a member ofthe faculty of the Graduate School of Business Administration, New York University. [Manuscript received June 1978; accepted February 1979.] The Journal of Human Resources * XV * 2 0022-166x/80/0002-0240 $01.00/0 ? 1980 by the Regents of the University of Wisconsin System This content downloaded from 207.46.13.62 on Fri, 14 Jul 2017 17:38:56 UTC All use subject to http://about.jstor.org/terms Rizzuto and Wachtel | 241 In general, the conclusions to be drawn from this literature can be summarized as follows: First, expenditures per student exert a positive and significant influence on earnings. Second, the returns to school quality are substantially greater for blacks than for whites. Third, there are diminishing returns to per pupil expenditures on schooling. Fourth, there exists a tradeoff between the quantity and quality of education (i.e., years of schooling and expenditures per pupil can be viewed as substitutes for one another). Fifth, society's marginal rate of return to the investment in school quality is at least as large as its marginal return to investment in additional years of schooling. Finally, expenditures per student have a positive effect on the level of educational attainment.' In spite of these findings, there are several gaps in the research on school quality. First, the finding that returns to school quality for blacks are substantially greater than those for whites must be viewed as tentative because they are often based on small samples of blacks. Second, because of the lack of comparability among the samples utilized, there has been no discussion of the secular movements in the marginal social rates of return to school quality and, in particular, the change in rates of return of blacks relative to whites. Finally, most results are based on expenditures per pupil as a measure of school quality, which is likely to be an imperfect proxy.2 In this paper, these issues are investigated with earnings data from the U. S. Census of Population for 1960 and 1970 which is augmented, as discussed below, with schooling data from the various Biennial Surveys of Education. This data set is particularly useful in addressing these issues because it provides large and representative samples of the population for both blacks and whites. In addition, this unique data set provides comparable samples for 1960 and 1970 so that secular changes in the returns to schooling can be examined. 1 However, Morgenstern [13] and Ribich and Murphy [14] found little or no relationship between expenditures per student and earnings (i.e., average hourly wage for Morgenstern and lifetime earnings in the case of Ribich and Murphy). Aspects of the methodology utilized in each case may be suspect. Morgenstern's school-quality variable was expenditure per pupil in the state where the person spent his formative years divided by the national average of expenditures per pupil for the same time period. The division by the national average was supposed to remove the effect of inflation in school costs, but may also introduce errors in variables. Ribich and Murphy use data on individual earnings and occupation obtained five years after scheduled high school graduation to construct estimates of lifetime earnings. Not only are a single year's earnings and occupation a poor proxy for future earnings, earnings at such an early age also are likely to be lower since individuals with large investments in education tend to have jobs with more on-the-job training. 2 This is because it is difficult to deflate expenditures for both changes in costs over time and differences in costs among areas. Of the studies mentioned, only Akin and Garfinkel [1] do both. Furthermore, a simultaneity problem makes interpretation of the earnings/expenditure relationship difficult. Areas with high average incomes are likely to have high average schooling expenditures, so the direction of causality is uncertain. This content downloaded from 207.46.13.62 on Fri, 14 Jul 2017 17:38:56 UTC All use subject to http://about.jstor.org/terms 242 THE JOURNAL OF HUMAN RESOURCES MODEL SPECIFICATION AND DATA The Structure of the Model The basic model that was utilized to investigate the relationship between earnings and human capital investment, in the form of schooling, is the following: lnY = ao + a1EXP + a2EXP2 + a3lnW + a4S + a51nQ + a6URB + U where lnY = the natural logarithm of annual earnings, EXP = years of labor market experience, EXP2 = years of labor market experience squared, lnW = the natural logarithm of the number of weeks worked, S = years of schooling, lnQ = the natural logarithm of annual expenditures per elementary school pupil in average daily attendance, URB = one/zero dummy variable to represent urban residence at the time of the Census, and U = the residual. The conceptual framework underlying this earnings function as well as its functional form have been well documented in the human capital literature.3 Briefly, years of experience (EXP) and the experience squared term (EXP2) reflect the net returns to investment in on-the-job training. The weeks worked variable (lnW) is a way of standardizing for variation in work effort, chiefly unemployment and work-leisure preferences. The years of schooling (S) and the school quality (lnQ) variables represent measures of the investment in human capital. The expenditure variable is in logarithmic form so that its coefficient is an estimate of the elasticity of earnings with respect to school expenditures. Finally, urban residence (URB) has been added since earnings tend to be greater in urban areas.

Do Working Wives Increase Family Income Inequality

Abstract: This paper provides distribution-free inferences for testing marginal rank dominance and Lorenz, and generalized Lorenz dominances Marginal dominances refer to ordinary dominance relationships holding between an income distribution and its dependent

Jobs, Cash Transfers, and Marital Instability: A Review and Synthesis of the Evidence.

Abstract: Expanding welfare benefits to include two-parent families has long been considered an option for a public policy designed to strengthen family units. The negative income tax experiments employed this option, and it was found that the experimental group experienced 50 percent higher marital instability than the control group that was eligible for the current set of income-maintenance programs-AFDC and Food Stamps. Marital instability increased even when an experimental plan was no more generous than AFDC for the splitting wife. The conclusion must be either that because of differences in information, stigma, or transaction costs, the experiments produced more powerful independence effects than an equivalent amount of AFDC, or that receiving NIT payments somehow reduced the attractiveness of the married state by calling into question the success of the husband as provider. These findings suggest that, if strengthening marriages is a public-policy objective, two-parent families would be better aided by wage subsidies that reduce the unemployment of family heads and raise the earnings of the family's working members.

Work Expectations, Human Capital Accumulation, and the Wages of Young Women.

Abstract: This article estimates the impact that young women's ex ante preferences for future labor force attachment have on their human capital accumulation and pay Empirical evidence from the National Longitudinal Surveys of Young Women aged 14 to 24 in 1968 supports the human capital hypothesis that receipt of on-the-job training is positively related to expectations of future labor force participation Comparing the actual labor force attachment of mature women with preferences for future participation of young women indicates that young women (as a group) may underestimate their future labor force attachment This implies that some young women may underinvest in on-the-job training

The Effects of Negative Income Tax Programs on Marital Dissolution

Abstract: We review the reasons for expecting a negative income tax (NIT) to affect marital dissolution rates and present a stochastic model of marital dissolution The analysis reveals that the experimental NIT programs increased the martial dissolution rates for blacks and whites but not Chicanos The differences in the magnitude of the responses by NIT guarantee level suggest that there are nonpecuniary differences between the experimental programs and existing income-support programs We compare the Seattle and Denver Income Maintenance Experiments findings with the findings from the other income maintenance experiments and discuss implications for welfare reform

Validating performance indicators for employment and training programs

Abstract: Proxies are used to indicate the impact of employment and training programs. CETA prime sponsors and the Labor Department rely on these performance indicators for fund allocations. This study correlates eight indicators with the impact on earnings of participation in four types of programs. The study shows that performance indicators presently being used, which are primarily constructed from placement data, provide no useful information for judging relative program effectiveness. Other indicators, particularly changes in weeks in the labor force, weeks employed, and wage rates, while far from perfect, are correlated much more with earnings gain.

The Facts About the Declining Economic Value of College

Abstract: This paper examines the hypothesis that "overeducated" workers receive lower earnings returns to a year of educational attainment than those who are not mismatched. Data from the Current Population Survey reveal that those who are mismatched actually ...

An Exchange: The Economic Decline of College Graduates: Fact or Fallacy?.

Abstract: Using Census data and information from the Department of Labor on the skill requirements of jobs, two models were tested in order to evaluate changes in the position of workers between 1969 and 1975. The first model was based on workers' mean weekly earnings. The second model was based on the discrepancy between the skill requirements of jobs and workers' educational skills. The results indicate that the economic position of male college graduates compared to high school graduates did not decline during this period in terms of relative earnings, but did decline in terms of the relative utilization of educational skills.

Long-Term Returns to Vocational Training: Evidence from Military Sources.

Abstract: Although several studies have examined the effects of vocational training on earnings, little empirical attention has been devoted to long-run returns. This paper reports on an investigation of returns to a sample, drawn from the NLS data, of mid-career white male workers who received military vocational training in World War II and immediately thereafter. In contrast to the largely ambiguous regressions from short-run studies, the cross-section earnings regressions reported here strongly suggest that those who use their vocational training receive long-term premiums. Those who took training but report not using it appear to earn no premiums, indicating that the training effects are job-specific.

A Direct Measure of the Relationship between Human Capital and Productivity

Abstract: The problem of hidden action in organizations makes direct measurement of managerial performance problematic. But in English association football hidden action is unlikely to be as serious a problem because the owner observes the manager's performance ...

Marihuana and work performance: results from an experiment.

Abstract: Determining the relationship between marihuana and economic activity is an important factor in establishing social policy in this area. The effects of marihuana availability and consumption on production, hours worked, and output per hour are reported from an experimental microeconomy involving resident volunteer human subjects. The statistical analysis shows no effect of marihuana on total output or total hours worked for experimental as compared to control conditions, although marihuana use was generally associated with a simultaneous decision to engage in passive leisure activities in the period immediately following smoking. These results suggest a hypothesis about the general relationship between marihuana and economic activity that is used to integrate the results of several other studies with those reported here.

An empirical analysis of the fixed coefficient "manpower requirements" model, 1960-1970

Abstract: The fixed coefficient "manpower requirements" model has the advantage of providing information on the effect of changes in the industrial composition of an economy on demand for labor in highly disaggregated occupations, although at the cost of neglecting factor substitution. This study examines the ability of the fixed coefficient model to explain changes in employment in 3-digit occupations in the United States from 1960 to 1970 and develops an "augmented requirements" model that uses changes in wages as well as fixed coefficient shifts in demand to analyze changes in employment. The study finds that (1) by themselves, the requirements shifts account for much of the change in employment among detailed occupations in the period studied; (2) demand for detailed skills is far from zero elastic; and (3) the fixed coefficient model seems to work, not because demand and supply are economically unresponsive, but because the variation in the wage structure and corresponding incentive to alter input coefficient is moderate relative to the variation in the shift in demand due to changes in industrial mix.

Union spillover effects on unorganized labor markets

Abstract: Previous research has found that union standard rate policies lower the dispersion of union wages and that unions indirectly raise nonunion wage levels, as firms weigh the probability of unionizing and wage costs. These two findings imply that unions ...

Teenage Unemployment: Some Evidence of the Long-Run Effects on Wages.

Abstract: While the issue of teenage unemployment has received a great deal of attention by policy-makers and the popular press, there is little systematic research on the long-run effects of this experience. This study attempts to address this question by examining the influence of teenage unemployment on subsequent wage rates. Using the young men's cohort of the National Longitudinal Surveys, we find that for the average out-of-school youth, teenage unemployment has little effect on the wages earned as a young adult eight years later. In general, the experience is a positive one for white and black youth, though more so for the former. While extended teen unemployment diminishes these benefits for both races, only black youth suffer a drop in subsequent wages. There is indirect evidence that government training programs offset part of the effect of long-term teenage unemployment.

Has the Golden Age of American Higher Education Come to an Abrupt End

Abstract: When producers are uncertain or have imperfect information about the profitability of adopting new technology, their adoption behavior depends on the endowment of human capital and the investment in adoption information This study analyzes the role of

Program Participation and Labor-Supply Response

Abstract: In this paper, a model of participation in the Seattle and Denver Income Maintenance Experiments (SIME/DIME) is developed and estimated. The model explains why a family chooses to receive negative income tax (NIT) payments, chooses to remain in the experiment but not receive payments, or chooses to leave the experiment (attrition). It is assumed that an individual selects the option that yields the greatest amount of utility. The empirical formulation of the model relates program participation to experimentally induced changes in wage rates, nonwage income, and disposable income, and several nonexperimental variables. Based on the participation results, a model of labor supply with varying participation rates is specified and estimated.

Industrialization and skill intensity: the case of massachusetts*

Abstract: The impact of industrialization on an economy's overall demands for skill cannot be deduced on purely a priori grounds, but depends, rather, on such variables as the character of the agricultural sector at the onset of industrialization, the particular industries in which manufacturing employment is concentrated, and the distribution of tertiary-sector employment between professional, technical, and scientific occupations, and such relatively low-skill occupations as domestic service. An examination of the evolution of the Massachusetts economy between 1820 and 1880 concludes that there was no major increase in the overall demands for skilled and educated labor during this period, at least before 1870.

The effect of wives labor force participation on inequality in the distribution of family income.

Abstract: Using a simple computer simulation of the distributional effect of increasing labor force participation among wives we are able to estimate the entire range of possible effects under various assumptions and to undertake some projections into the future of likely outcomes (excerpt)

Government Employment and Black/White Relative Wages

Abstract: We examine the racial differential in job dismissals in an unexpected setting--the federal government. Blacks were more than twice as likely to be fired, after controlling for human capital variables, job tenure, detailed job title, union protection, ...

Overinvestment in College Training

Abstract: When producers are uncertain or have imperfect information about the profitability of adopting new technology, their adoption behavior depends on the endowment of human capital and the investment in adoption information. This study analyzes the role of ...

The Effect of Price and Income on Investment in Schooling.

Abstract: This paper investigates the impact of a negative income tax and a program of schooling subsidies on the demand for schooling of adult heads of families. A two-period model of labor supply is developed in which schooling is incorporated. An empirical version of the model is estimated using data from the first three years of the Seattle and Denver Income Maintenance Experiments. Strong effects of the schooling subsidies were found, but net effects of the negative income tax on schooling were not significant. The magnitude of the schooling subsidy effects implies a substantial positive social rate of return to schooling subsidies.

Experimental Design, the Conlisk-Watts Assignment Model, and the Proper Estimation of Behavioral Response

Abstract: Experimental Design, the Conlisk-Watts Assignment Model, and the Proper Estimation of Behavioral Response

Real returns to career decisions: the physician's specialty and location choices.

Abstract: In this article we estimate a spatial autoregressive multinomial probit model of the choice of location by general practitioners for establishing their initial practice This model allows us to account for potential interdependencies among location

Effects of SIME/DIME on Changes in Employment Status

Abstract: Ways in which heads of families in the Seattle and Denver Income Maintenance Experiments reduce their labor supply are analyzed in this paper By estimating transition rates of leaving and entering employment, the authors calculate the effect of the experiment on such measures as the average length of nonemployment, the likelihood of being employed at a given time, the number of entries into and exits from employment within a given period, and the average length of spells of employment Results indicate that heads of families on experimental negative income tax (NIT) programs have a greater tendency than controls to leave employment The results also indicate that the NIT programs substantially lengthen spells of nonemployment for all groups studied All groups also experience a significant decline in the probability of employment as a result of the NIT treatments

Labor Supply Response Over Time

Abstract: This study uses longitudinal data from the Seattle and Denver Income Maintenance Experiments to estimate a partial-adjustment model of labor-supply response. It is assumed that as a result of the experimental treatments, a person changes desired hours of work. The new desired hours of work are estimated empirically along with the speed at which the adjustment takes place. The results indicate that the financial treatments reduce desired hours of work by 9 percent for husbands, by 20 percent for wives, and by 25 percent for single female heads of families. The estimated time periods required for 90 percent adjustment are 2.4 years for husbands, 3.6 years for wives, and 4.5 years for single female heads. Tests are performed for differences in response by ethnicity, site, and experimental duration. The results indicate larger reductions in desired hours of work for blacks and Chicanos (relative to whites), for persons in Denver (relative to persons in Seattle), and for persons on the five-year programs (relative to persons on the three-year programs). Only in the case of husbands, however, are the ethnic, site, and duration differences statistically significant.