Showing papers in "Journal of Human Resources in 1990"
TL;DR: In this article, the authors show that unearned income in the hands of a mother has a bigger effect on her family's health than income under the control of a father; for child survival probabilities the effect is almost twenty times bigger.
Abstract: If household income is pooled and then allocated to maximize welfare then income under the control of mothers and fathers should have the same impact on demand. With survey data on family health and nutrition in Brazil, the equality of parental income effects is rejected. Unearned income in the hands of a mother has a bigger effect on her family's health than income under the control of a father; for child survival probabilities the effect is almost twenty times bigger. The common preference (or neoclassical) model of the household is rejected. If unearned income is measured with error and income is pooled then the ratio of maternal to paternal income effects should be the same; equality of the ratios cannot be rejected. There is also evidence for gender preference: mothers prefer to devote resources to improving the nutritional status of their daughters, fathers to sons.
2,012 citations
TL;DR: In this article, a comprehensive statement of the empirical content of Nash-bargained household behavior, including a Nash generalization of Barten's (1966) fundamental matrix equation of the theory of consumer demand, is provided.
Abstract: In households whose allocation decisions can be represented as Nash-bargained household decisions, extrahousehold environmental parameters (EEPs) serve as pure shifters of the threat points. The comparative statics of changes in demands due to changes in these EEPs are given. These are incorporated into a comprehensive statement of the empirical content of Nash-bargained household behavior, including a Nash generalization of Barten's (1966) fundamental matrix equation of the theory of consumer demand. Estimation and data requirements are discussed along with nested testing of the following structure: the neoclassical model is nested in the Nash-bargained model which, in turn, is nested in an unrestricted model of household demands. Emphasized throughout is the enriched menu of explanatory variables for demand analysis provided by the Nash model, as well as the model's ability to jointly analyze (i) household formation and (ii) intrahousehold allocation decisions.
716 citations
TL;DR: The McElroy-Horney Nash-bargaining model of family demand behavior relaxes the restriction that non-earned income of husbands and wives has the identical effect on family labor supply and commodity demands as mentioned in this paper.
Abstract: The McElroy-Horney Nash-bargaining model of family demand behavior relaxes the restriction that nonearned income of husband and wife has the identical effect on family labor supply and commodity demands. This restriction of the neoclassical model offamily behavior is tested for the determination of husband and wife labor supply andfertility based on the 1981 Socioeconomic Survey of Thailand. The neoclassical restriction is rejected for female labor supply andfertility. Another unexplored limitation offamily demand studies, due to the sample self selection of intact marriages, is empirically treated through alternative estimation strategies. In this case, a more sharply focused theory of marital behavior is needed to identify family demand models.
684 citations
TL;DR: The authors showed that the implicit constraints required by maximum likelihood in estimation of a consumer-choice problem with nonlinear budget sets implicitly rely on the satisfaction of inequality constraints that translate into behaviorally meaningful restrictions that arise not as a consequence of economic theory, but instead as a requirement to create a properly defined statistical model.
Abstract: Recent surveys on the labor-supply responses of men document a divergence in the estimates of substitution and income effects obtained using various estimation approaches. Generally, studies accounting for nonlinear tax schedules in a static setting via a piecewise-linear approach produce estimates that typically imply higher substitution and lower income responses than are suggested by empirical work applying other approaches. This paper demonstrates that maximum likelihood estimation of a consumer-choice problem with nonlinear budget sets implicitly relies on the satisfaction of inequality constraints that translate into behaviorally meaningful restrictions. These constraints arise not as a consequence of economic theory, but instead as a requirement to create a properly defined statistical model. In the analysis of piecewise-linear budget sets, the implicit constraints required by maximum likelihood in estimation amount to imposition of Slutsky conditions at all wage-income combinations associated with kink points. In the analysis of differentiable budget sets, the tacit constraints invoked by maximum likelihood also involve inequality restrictions on Slutsky terms. The empirical work presented in this study supports the contention that these implicit constraints play a major role in explaining the discrepancies in estimates found in the literature on men's labor supply.
439 citations
TL;DR: This article showed that teachers who are paid more stay longer in teaching, that teachers with high opportunity costs, as measured by test scores and subject specialties, stay in teaching less long than other teachers do, and that salaries influence duration less for teachers with higher test scores than for teachers having lower scores.
Abstract: This paper shows that teachers who are paid more stay longer in teaching, that teachers with high opportunity costs, as measured by test scores and subject specialties, stay in teaching less long than other teachers do, and that salaries influence duration less for teachers with high test scores than for teachers with lower scores. The research is based on a new longitudinal dataset providing information on the career histories of 13,890 North Carolina teachers. The empirical work uses a generalized least squares estimation technique that accommodates censored observations, time-varying covariates, and fixed effects.
353 citations
TL;DR: In this article, the effect of income taxation on the labor supply of prime age married men and women in the United States was examined using econometric methods similar to those used in the influential work of Jerry Hausman.
Abstract: The effect of income taxation on the labor supply of prime age married men and women in the United States is examined using econometric methods similar to those used in the influential work of Jerry Hausman. Male labor supply is found to be relatively invariant to the net wage and virtual income in all specifications estimated. The estimated impact of taxation on the labor supply of married women depends critically on the method used to estimate the labor supply function. Estimated net wage and virtual income elasticities are considerably larger when data on nonparticipants are included than when the estimation is conducted conditional on hours being greater than zero.
269 citations
TL;DR: In this article, the authors discuss three problems in standard estimates of these responses and then illustrate their implications for nutrient demand relations for a poor sample from rural south India, and discuss the importance of household and individual fixed effects.
Abstract: Good estimates of nutrient intake responses to prices and income are very useful for the evaluation of the numerous efforts to improve nutrition in many developing countries through pricesubsidy and income-generation policies. We discuss three problems in standard estimates of these responses and then illustrate their implications for nutrient demand relations for a poor sample from rural south India. (1) Intra-household nutrient allocations usually are ignored. In this case nutrient intakes for females systematically have algebraically lower price elasticities than do those for males, which may leave the females particularly vulnerable at times of food shortages. (2) Unobserved fixed effects may bias the estimates of responses to observed variables. In this case not only the community fixed effects on which the previous literature has focused, but also household and individual fixed effects are important. Failure to control for them results in substantial algebraically upward biases in many estimated price responses. (3) Most previous studies use current instead of permanent income, which a priori may account for the low estimated income elasticities. In this case, however, the use of permanent income does not change the conclusion that the nutrient intakes responses to income are quite small.
267 citations
TL;DR: The relationship between executive income and firm size is shown to be relatively stable over time and in different countries as mentioned in this paper, with evidence of a decline in the earnings of top executives, controlling for firm size.
Abstract: Using several data sets, the relationship between executive income and firm size is shown to be relatively stable over time and in different countries. The elasticity of executive earnings to firm size is about the same today as it was in the 1930s, with evidence of a decline in the earnings of top executives, controlling for firm size. In addition to the effects of size and other firm and industry characteristics, there are returns to age and experience. There is also substantial variability in the level of compensation among firms of comparable size, indicating that there may be impediments to mobility.
228 citations
TL;DR: In this paper, the authors present a method used to test the crowding hypothesis and then describe an extension of this design for estimating the phenomenon that comparable worth policies address, and the limitations of this analysis are discussed.
Abstract: Although women's pay and occupational distribution have improved during the past few years, it is still true that women earn considerably less than men and that their occupational distribution is substantially different. Because progress has been slow toward equality in the labor market, some have called for a comparable worth policy. Proponents of this approach argue that occupational segregation contributes to the earnings disparity between women and men. One theoretical justification for this position is the crowding hypothesis. This paper first explains this theory and presents a method used to test its principal hypothesis. It then describes an extension of this design for estimating the phenomenon that comparable worth policies address. Empirical studies conducted in this area are viewed and new findings are presented. Finally, limitations of this analysis are discussed. I. Introduction
188 citations
TL;DR: In this article, the authors analyzed the grade point average (GPA) of more than 5,000 undergraduates at the University of California, San Diego and found that personal background strongly affects GPA.
Abstract: The paper analyzes the Grade Point Average (GPA) of more than 5,000 undergraduates at the University of California, San Diego. Personal background strongly affects GPA. Graduates of different high schools obtain significantly different GPAs, even after ...
164 citations
TL;DR: In this paper, the authors discuss some issues in the empirical implementation of game theoretic models of household labor supply, and focus on the identification problems inherent in many of these models, which are referred to as identifying problems.
Abstract: This paper discusses some issues in the empirical implementation of game theoretic models of household labor supply. In particular we focus on the identification problems inherent in many of these models. As an illustration, we estimate a game theoretic model which uses data on preferred working hours as additional identifying information.
TL;DR: This paper developed an approach to estimate marginal school effects at the state level, and then documents and estimates the magnitude of biases introduced by commonly employed estimators of school quality, showing that direct estimates of achievement growth or value-added are far superior to any alternative correction that is commonly employed.
Abstract: Evaluation of the efficacy of school policies requires measures of student performance across schools and states, but conventional approaches to constructing the relevant data can be very misleading. This paper develops an approach to estimating marginal school effects at the state level. It then documents and estimates the magnitude of biases introduced by commonly employed estimators of school quality. Direct estimates of achievement growth, or value-added, are shown to be far superior to any alternative correction that is commonly employed. Especially at the state level, nonrepresentative data such as aggregate SAT scores provide very biased measures of school quality differences-even when statistical adjustments for demographic differences and varying participation rates are employed.
TL;DR: In this paper, both linear and quadratic supply functions are estimated, with and without random preferences, for married men and women in Sweden using data from 1980, taking account of the complete form of individuals' budget constraints.
Abstract: This paper estimates labor supply functions for married men and women in Sweden using data from 1980, taking account of the complete form of individuals' budget constraints. Both linear and quadratic supply functions are estimated, with and without random preferences. A novel feature is that for women the wage rate and labor supply functions are estimated simultaneously using a full information maximum likelihood method. This method yields substantially larger wage and income elasticities than does the previously used two step methods. Another result is that the quadratic supply function wage elasticities for men and women are virtually the same if the elasticities are evaluated at the same net wage rate and hours of work for men and women. The estimated functions are used to calculate the effect of tax reforms.
TL;DR: This paper found that nonsmokers and seatbelts are more likely to suffer a nonfatal lost workday injury compared to nonsmoking workers who wear seat belts, with no evidence of a positive valuation for workers who smoke and do not wear a seatbelt.
Abstract: Using an original data set that allowed us to measure the job risk perceived by individuals as well as smoking and seatbelt use, we found that cigarette smokers and nonseatbelt wearers receive a lower compensating differential for risk than nonsmokers and seatbelt wearers. While workers on average have an implicit value of a nonfatal lost workday injury of $48,000, this value is $81,000 for nonsmoking workers who wear seatbelts, with no evidence of a positive valuation for workers who smoke and do not wear a seatbelt. Our results imply that individual differences in other health-related activities are influential determinants of the observed wage-risk tradeoff. We also found significant compensating differentials for several nonrisk job attributes.
TL;DR: In this paper, two models of individual labor supply are discussed, the first one is the classical Hausman-type model with convex piecewise linear budget constraints, in which both random preferences and optimization errors are incorporated by means of normally distributed random variables.
Abstract: In this paper, two models of individual labor supply are discussed. The first one is the by now classical Hausman-type model with convex piecewise linear budget constraints, in which both random preferences and optimization errors are incorporated by means of normally distributed random variables. Estimated coefficients are plausible but the model has the shortcoming that unemployment for males is not captured and that the simulated hours distribution misses the spikes in the sample distribution of working hours. Therefore, an alternative model is introduced which explicitly takes into account demand side restrictions on working hours. The difference with the standard model is the replacement of the optimization error by the assumption that each individual can choose from a finite set of wage hours packages and either picks the job offer yielding highest utility or decides not to work. It turns out that this model captures the sample distribution of working hours very well, for males as well as females. Wage and income elasticities according to the two models are similar and in line with other recent findings in The Netherlands. Dead weight loss calculations for the second model which explicitly take the hours restrictions into account, imply that the dead weight loss is much smaller than as calculated with the standard model.
TL;DR: In this paper, the authors provided sequential labor supply estimates for French married men and women under specifications analogous to those used by Hausman to account for the effects of taxation upon the budget constraint.
Abstract: This paper provides sequential labor supply estimates for French married men and women under specifications analogous to those used by Hausman to account for the effects of taxation upon the budget constraint. Results suggest that, even though labor force participation follows the expected pattern, work hours are quite rigid, most of the variation in the latter being attributed to measurement errors. The second part of the paper concentrates on the simultaneous estimation of male and female labor supply. Conditional maximum likelihood techniques are shown to permit the separate estimation of work hours for both spouses with an appropriate set of instruments aimed at correcting for the biases arising from simultaneity, selectivity, and the nonlinearity of the budget constraint. Although consistent, the resulting estimates apparently contradict the usual rationality restrictions on family labor supply behavior and seem to confirm the lack of flexibility in work hours.
TL;DR: In this article, a model of a labor market with enclaves of Spanish speakers is proposed, where a large enclave provides better jobs for persons lacking skills in English and a larger enclave lowers earnings returns to English.
Abstract: In a model of a labor market with enclaves of Spanish speakers, a large enclave provides better jobs for persons lacking skills in English. Consequently, the larger enclave lowers earnings returns to English. Returns to English also vary with the distribution of English skills among Spanish-speaking workers. Returns to English rise if the distribution becomes skewed toward less proficiency in English and fall if it becomes skewed toward more proficiency in English. The model has broad implications for the consequences of enclaves. The model is tested with an application to Hispanic men in the United States using the 1980 Census of Population. Empirical results are consistent with theoretical predictions: enclaves do reduce the earnings losses associated with limited English skills for Hispanic men, and increasing the fraction of Hispanic men who speak English only does lower the returns to English.
TL;DR: In this paper, the authors focus on the disabled working age population and track the changes in their labor market performance, their receipt of public income transfers, and their economic well-being over the 1962-1984 period.
Abstract: This paper focuses on the disabled working age population and tracks the changes in their labor market performance, their receipt of public income transfers, and their economic well-being over the 1962-1984 period. The changes over time in these indicators are compared with those of the nondisabled population. The paper concludes that from the 1960s until the mid-1970s, the disabled improved their performance in the labor market; their real earnings rose both absolutely and relatively. The economic well-being of disabled males also increased rapidly during this period. However, in the last half of the 1970s the earnings of the disabled population fell rapidly, although the rapid growth of transfer income cushioned this fall until the late 1970s. Then, and especially after 1980, the controversial retrenchment in disability benefit programs struck, and the well-being of the disabled fell further.
TL;DR: The Characteristics of Business Owners (CBO) data base was created in 1987 by the U.S. Bureau of the Census as discussed by the authors, which was based upon a 1986 survey of 125,000 self-employed persons; it includes five self-contained samples of 25,000 each: 1) Hispanics, 2) blacks, 3) all other minorities, 4) females, and 5) nonminority males.
Abstract: The Characteristics of Business Owners (CBO) data base was created in 1987 by the U.S. Bureau of the Census. It was based upon a 1986 survey of 125,000 self-employed persons; it includes five self-contained samples of 25,000 each: 1) Hispanics, 2) blacks, 3) all other minorities, 4) females, and 5) nonminority males. Two versions of the CBO data files focus, respectively, upon 1) self-employed persons, and 2) small firms. For each observation, data were collected upon owner human capital, demographic traits, and financial capital investment in one's firm. Firm specific data are extensive, including sales, profits, employment, payroll, etc.
TL;DR: In this paper, the authors estimate a neoclassical household labor supply model for married individuals, incorporating the main elements of the tax system, using Italian microdata, and use these results to measure the behavioral and welfare effects of alternative tax systems: the actual tax system where the unit of taxation is the individual, joint family taxation; and a flat tax.
Abstract: In this research we estimate a neoclassical household labor supply model for married individuals, incorporating the main elements of the tax system, using Italian microdata. We found that while the labor supply of women is rather elastic with respect to wages and income variation, men's labor supply is inelastic with respect to variation in both. We use these results to measure the behavioral and welfare effects of alternative tax systems: the actual tax system, where the unit of taxation is the individual; joint family taxation; and a flat tax. The simulation results show that relative to the actual system the joint tax implies a higher average social cost but is more equally distributed. The flat tax implies a lower social cost but is less equally distributed.
TL;DR: This paper developed a "sequential-regimes" job search model which allows search prior to displacement for workers with advance knowledge of layoff, with different search intensities before and after layoff.
Abstract: Recent studies of the effect of advance notice on jobless duration following displacement misspecify the relationship between these two variables by treating advance notice as a dummy regressor in conventional survival time models. Job search theory, however, suggests that the major impact of advance notice is not to alter the efficiency of search after job loss, but rather to allow workers to begin search before job loss. The authors develop a "sequential-regimes" job search model which allows search prior to displacement for workers with advance knowledge of layoff, with different search intensities before and after layoff. Maximum-likelihood estimates of the model are then computed using a pooled data set from the 1984 and 1986 Displaced Worker Surveys. Advance knowledge is found to significantly shorten jobless duration for most labor force groups. Using these estimates, the authors simulate the effect of various levels of advance knowledge on jobless duration. Their results indicate that relatively modest advance notice substantially benefits many displaced workers.
TL;DR: In this paper, the economic impact of a child support assurance system (CSAS) with microdata on custodial families in Wisconsin is simulated with a model of the labor supply decision representing the custodial parent's choice of whether to participate in CSAS or in the current AFDC system.
Abstract: The economic impact of a child support assurance system (CSAS) is simulated with microdata on custodial families in Wisconsin. The CSAS includes a uniform child support standard, automatic wage withholding, a minimum child support benefit, and wage subsidy for eligible families. The simulation incorporates a model of the labor supply decision representing the custodial parent's choice of whether to participate in CSAS or in the current AFDC system. The results suggest that CSAS can significantly reduce poverty as well as welfare caseloads. If child support collections increase by one-half of the difference between estimated ability to pay child support and current collections, CSAS will be less costly than the current system.
TL;DR: This response to changes in health insurance suggests that loss of insurance coverage during recessions may attenuate the effect of lower time prices in increasing birth rates in economic downturns.
Abstract: Data from a randomized controlled trial, The RAND Health Insurance Experiment, provide the opportunity to examine whether an exogenous short-term change in the cost of medical care affects fertility in a cross-section of women Women randomly assigned to receive free medical care for three to five years had 29 percent more births than women who were assigned to insurance plans requiring cost-sharing for health services This response to changes in health insurance suggests that loss of insurance coverage during recessions may attenuate the effect of lower time prices in increasing birth rates in economic downturns
TL;DR: In this paper, the authors used microsimulation modeling to estimate the annual burden off federal, state, and local taxes on the poor in two states and found that in 1988 the average burden of taxation on poor families and individuals was 15.3 percent in Massachusetts and 18 percent in New York.
Abstract: This paper uses microsimulation modeling to estimate the annual burden offederal, state, and local taxes on the poor in two states. We find that in 1988 the average burden of taxation on poorfamilies and individuals was 15.3 percent in Massachusetts and 18 percent in New York. As most of the burden is due to state and local taxes, federal tax reform had only a minor impact on the overall tax burdens faced by the poor. Though the analysis is for two state, we argue that the basic results are applicable for most other states. Given the high incidence of persistent poverty among those who are poor in any given year, we argue that annual burdens provide a good indication of long-run burden for a significant proportion of the poor.
TL;DR: In this paper, the authors view the role that social experiments in general, and the income maintenance experiments and work/welfare demonstrations in particular, have played in the policy process through the lens provided by the knowledge provided by social experiments.
Abstract: This paper is an exploratory attempt to view the role that social experiments in general, and the income maintenance experiments and work/welfare demonstrations in particular, have played in the policy process through the lens provided by the knowledge ...
TL;DR: In this article, the authors used data from the 1984 and 1989 National Longitudinal Youth Surveys to test the claim that promotion probabilities are lower for women than men and two related hypotheses concerning training and ability.
Abstract: This paper is motivated by the claim that promotion probabilities are lower for women than men. Using data from the 1984 and 1989 National Longitudinal Youth Surveys, this paper tests this claim and two related hypotheses concerning training and ability. ...