Showing papers in "Journal of Human Resources in 1997"

Do husbands and wives pool their resources?: evidence from the United Kingdom child benefit

Abstract: Common preference models of family behavior imply income pooling, a restriction on family demand functions such that only the sum of husband's income and wife's income affects the allocation of goods and time. Testing the pooling hypothesis is difficult because most family income sources are not exogenous to the allocations being analyzed. In this paper, we present an alternative test based on a "natural experiment"-a policy change in the United Kingdom that transferred a substantial child allowance to wives in the late 1970s. Using Family Expenditure Survey data, we find strong evidence that a shift toward greater expenditures on women's clothing and children's clothing relative to men's clothing coincided with this income redistribution.

Instrumental Variables: A Study of Implicit Behavioral Assumptions Used in Making Program Evaluations.

Abstract: This paper considers the use of instrumental variables to estimate the mean effect of treatment on the treated, the mean effect of treatment on randomly selected persons and the local average treatment effect. It examines what economic questions these parameters address. When responses to treatment vary, the standard argument justifying the use of instrumental variables fails unless person-specific responses to treatment do not influence decisions to participate in the program being evaluated. This requires that individual gains from the program that cannot be predicted from variables in outcome equations do not influence the decision of the persons being studied to participate in the program. In the likely case in which individuals possess and act on private information about gains from the program that cannot be fully predicted by variables in the outcome equation, instrumental variables methods do not estimate economically interesting evaluation parameters. Instrumental variable methods are extremely sensitive to assumptions about how people process information. These arguments are developed for both continuous and discrete treatment variables and several explicit economic models are presented.

Why don't schools and teachers seem to matter? : assessing the impact of unobservables on educational productivity

Abstract: Using data drawn from the National Educational Longitudinal Study of 1988, which allows students to be linked to particular teachers and classes, we estimate the impact of observable and unobservable schooling characteristics on student outcomes. A variety of models show some schooling resources (in particular, teacher qualifications) to be significant in influencing tenth-grade mathematics test scores. Unobservable school, teacher, and class characteristics are important in explaining student achievement but do not appear to be correlated with observable variables in our sample. Thus, our results suggest that the omission of unobservables does not cause biased estimates in standard educational production functions.

Intergenerational correlations in labor market status: A comparison of the United States and Germany

Abstract: This paper uses data from the Panel Study of Income Dynamics and the German Socioeconomic Panel to calculate comparable measures of the intergenerational correlations of earnings hours and education in the US and Germany. The results indicate that there is remarkable similarity across the two countries in the correlations of earnings and of annual work hours of fathers and sons. All of the correlations which involve women appear to be weaker in Germany than the US perhaps due to the greater integration of women in the US into the labor market. They find weak correlations in earnings and work hours for parent-child pairs of different sexes in both countries. They also find that intergenerational correlations in educational attainment are considerably stronger in the US. (authors)

The Fall in Men's Return to Marriage: Declining Productivity Effects or Changing Selection?

Abstract: Historically one of the most robust findings from human capital wage equations has been that married men earn more than men who never marry. However the earnings premium paid to [U.S.] married compared with never-married men declined by more than 40 percent during the 1980s. Data from the National Longitudinal Surveys (young men and youth cohorts) are used to explore two competing explanations for this decline: changes in the selection of high-wage men into marriage and changes in the productivity effects of marriage due to declining specialization within households. The results suggest that the drop in the marriage wage premium was due largely to a decline in the productivity effects associated with marriage. Instrumental variables estimation suggests that these declining productivity effects can be explained by a reduction in the average degree of specialization across households coupled with an increase in the wage penalty associated with wives labor market hours. (EXCERPT)

Housework, Fixed Effects, and Wages of Married Workers

Abstract: Although the primacy of household responsibilities in determining gender differences in labor market outcomes is universally recognized, there has been little investigation of the direct effect of housework on wages Using data from the Panel Study of Income Dynamics, cross-sectional wage regressions reveal a substantial negative relation between wages and housework for wives, which persists in specifications controlling for individual fixed effects The evidence for husbands is inconclusive Married women's housework time is, on average, three times that of married men's The addition of housework time to the wage equations increases the explained component of the gender wage gap from 27-30 percent to 38 percent

The Benefits and Costs of JTPA Title II-A Programs. Key Findings from the National Job Training Partnership Act Study.

Abstract: This paper examines the benefits and costs of Job Training Partnership Act (JTPA) Title II-A programs for economically disadvantaged adults and out-of-school youths. It is based on a 21,000-person randomized experiment conducted within ongoing Title II-A programs at 16 local JTPA Service Delivery Areas (SDAs) from around the country. In the paper, we present the background and design of our study, describe the methodology used to estimate program impacts, present estimates of program impacts on earnings and educational attainment, and assess the overall success of the programs studied through a benefit-cost analysis.

Labor Market Returns to Community Colleges: Evidence for Returning Adults.

Abstract: Kane and Rouse (1993) furnish evidence that enrollment in a two-year-or four-year-college program increases earnings by 5 to 8 percent per year of college credits, whether or not a degree is earned. This evidence has provided the intellectual basis for policy recommendations to increase access by adult workers to long-term education and training programs, such as those supplied by community colleges. Yet to be answered, however, is the question whether these favorable return estimates hold for experienced adult workers who return to school. For both A.A. and nondegree community college programs, our results indicate returns that are positive and of essentially the same size for returning adults as they are for continuing high school graduates. Among males in nondegree programs, in fact, returning adults enjoy an incremental earnings effect of 8 to 10 percent above that received by continuing students.

Local Violence and Educational Attainment.

Abstract: Violence in and around schools has drawn increasing attention lately from both the public and policymakers. Despite the importance of the problem, however, research on this topic has been limited. In this paper I analyze how local violence affects high school graduation and college attendance. Using data from the High School and Beyond survey, I find that local violence has important effects. Moderate levels of violence reduce the likelihood of high school graduation by 5.1 percentage points on average, and lower the likelihood that a student will attend college by 6.9 percentage points.

Racial Differences in Marriage and the Role of Marriage Markets

Abstract: This paper examines the role of marriage markets in explaining racial differences in the timing of marriage. Using data from the National Longitudinal Study of the High School Class of 1972 evidence is presented on the magnitude and significance of differences in the timing of first marriage between whites and blacks in the United States....This paper examines marriage markets defined at various levels of geographic aggregation alternative definitions of what males are considered `marriageable market variables that control for the education level of the participants and changes over time in marriage markets. One of the primary results...is that relative to the local level the variables defined at the state level are able to account for more of the racial differences in the timing of marriage. The paper concludes with an examination of this issue and reveals evidence that suggests that measurement error in the variables defined at the local level may be underlying this result. (EXCERPT)

Understanding the Twentieth-Century Growth in U.S. School Spending.

Abstract: Persistent increases in spending on elementary and secondary schools have gone virtually undocumented. Real expenditure per student increased 3½ percent per year over the period 1890-1990. Decomposition of the spending growth shows that it resulted from a combination of falling pupil-staff ratios, increasing real wages to teachers, and rising expenditure outside of the classroom. Although the expansion of education for the handicapped has had a disproportionate effect on spending, most of the growth in expenditure during the 1980s came from other sources. Significant teacher salary increases, particularly for females, have failed to keep up with wages in other occupations.

New evidence on the economic progress of foreign-born men in the 1970s and 1980s.

Abstract: This study examines the economic progress of foreign-born men in the United States. Europeans entered the United States with relatively high wages and earned wages comparable to natives over their life course. Japanese Korean and Chinese men entered with lower wages but quickly caught up with U.S.-born workers. Mexicans and Central Americans entered with low wages and the wage gap between themselves and U.S.-born workers has not shrunk. Disparities in completed years of education and whether education was received in the United States can explain a large share of the differences in the level of wages. For immigrants from some countries it is found that more highly educated men assimilate more quickly. The rate of economic progress has not improved for more recent arrivals from any country but this is most problematic among Mexicans and Central Americans because of their relatively low rates of wage growth. (EXCERPT)

Age Discrimination, Job Separations, and Employment Status of Older Workers. Evidence from Self-Reports.

Abstract: This paper explores the consequences of age discrimination in the work-place by analyzing self-reports of discrimination in the National Longitudinal Survey of Older Men, for the period 1966-80. Workers with positive reports were much more likely to separate from their employer and less likely to remain employed than workers who report no employer-related age discrimination. The findings for job separations, but not employment status, are robust to numerous attempts to correct the estimates for the inherent limitations of self-reported data, particularly heterogeneity in the propensity to report discrimination, the influence of mandatory retirement, and the possibility that other negative labor market outcomes are attributed to discrimination.

Are Brothers Really Better? Sibling Sex Composition and Educational Achievement Revisited

Abstract: In this paper, I examine the relationship between sibling sex composition and educational achievement. First, I replicate the study of Butcher and Case (1994) using data on a more recent birth cohort. Contrary to the findings of that study, I find basically no effect of sibling sex composition on the educational attainment of white males or females, although among black adults, those who grew up with a sister, or who had relatively more sisters, had greater levels of educational attainment than black adults with no or fewer sisters. Second, I broaden the analysis by examining the educational outcomes of children and teenagers. This extension is important because it provides an additional opportunity to test for sibling sex composition effects, and it helps differentiate between potential causes of a sibling sex composition effect. The results obtained from the analysis of child and teen outcomes suggest that sibling sex composition had little effect on educational achievement. The only group to be affected was black teens between the ages of 15 and 18. Those who grew up with sisters had higher educational achievement levels than those who grew up with brothers.

A Statistical Analysis of Crime Against Foreigners in Unified Germany

Abstract: Germany has experienced a high and rising rate of anti-foreigner vio- lence during the early 1990s. To analyze the determinants of crime against foreigners we assembled a new data set on the number and na- ture of such crimes at the county level based on newspaper reports. We find significant differences in the patterns of violence in the eastern and western parts of the country. The incidence of anti-foreigner crime is higher in the east and rises with distance from the former West German border. Economic variables like unemployment and wages matter little for the level of crime once location in the east is taken into account. The relative number offoreigners in a county has no relationship with the incidence of ethnic crimes in the west, whereas in the east it has a positive association with the number of crimes per resident and a nega- tive association with the number of crimes per foreign resident.

The effect of child support enforcement on marital dissolution.

Abstract: This paper examines the effect of government child support enforcement (CSE) on marital dissolution [in the United States]. By raising the financial obligation of the absent father to the single mother under divorce CSE generally lowers the wifes cost of divorce. On the other hand it raises the husbands cost. Hence the net effect of CSE on divorce is a priori ambiguous in sign. Using Current Population Survey data matched to CSE program data I find empirical evidence that stronger CSE reduces marital breakup. This effect is larger for couples in which the wife is more likely to be a welfare recipient under divorce. (EXCERPT)

The Production of Quality in Child Care Centers.

Abstract: This paper reports estimates of models of the determinants of quality in day care centers The analysis examines the sensitivity of the results to specification issues that have not been investigated previously In the best-fitting models that survive an extensive set of specification tests, group size and child-staff ratio have small impacts on the quality of care provided The effects of staff education and training are typically small as well The results raise questions about the knowledge base on which to make policy recommendations concerning the benefits of regulations and subsidies intended to improve the quality of child care

Health Information and the Demand for Preventive Care among the Elderly in Taiwan

Abstract: This paper uses a direct measure of information to empirically investigate the determinants of consumer health information and the linkage of the information to demand for preventive care. In our analysis, two equations are estimated: (1) health information and (2) demand for preventive care, which includes health information as an endogenous explanatory variable. Overall, the results show that more and better health information increases the probability that the elderly will use preventive care. This result, in combination with the finding that health information is not uniform among the elderly, suggests that poor information can become an access barrier to preventive care.

The effect of premiums on the small firm's decision to offer health insurance

Abstract: Many small firms (fewer than 50 employees) do not offer health insurance. We investigated the role of premiums in the small firm's decision to offer health insurance, using data from a 1993 survey of 2,000 small firms in Minnesota. Selectively-corrected equations were estimated to predict the premiums faced by firms offering and not offering insurance. The elasticity of demand for health insurance, calculated at the mean of the data, was -3.91 for single coverage and -5.82 for family coverage. We contrast these results to the much lower responsiveness found in experimental studies and suggest that our findings are more likely to model the small firm's demand for health insurance.

Til Death or Taxes Do Us Part The Effect of Income Taxation on Divorce

Abstract: There is now much empirical evidence that economic incentives affect the divorce decision via their impact on the flow of benefits of divorced vs married individuals. However the effect of the individual income tax on divorce has been neglected in this work. The income tax in the US is structured so that tax liability often changes with marriage. Some couples incur a "marriage penalty" in the form of higher taxes when they marry while others receive a "marriage subsidy" because their tax burden falls with marriage. In this paper the authors examine the impact of the individual income tax on the likelihood of divorce in the US. Using data from the Panel Study on Income Dynamics they estimate a discrete-time hazard model of the probability of divorce from the first marriage to test the hypothesis that the probability of divorce rises with the marriage penalty; they also examine the role of other economic factors in the divorce decision. The authors find that individuals respond to tax incentives in their decision to divorce although these responses are typically small and differ for men and women. (authors)

Testing for Bias in Graduate School Admissions

Abstract: This paper provides an empirical examination of the factors that influence graduate admissions decisions. It exploits a unique, large data set on applications and admissions to 48 leading graduate schools in five disciplines, including economics. The analysis shows that these graduate schools in the aggregate gave substantial preference in four out of five fields to U.S. citizens over foreign applicants, modest preference in three fields to women over men, and substantial preference in all fields to underrepresented minorities over other U.S. citizens. The findings suggest that higher standards are applied to overrepresented groups to achieve more diverse enrollments.

Cost functions, efficiency, and quality in day care centers

Abstract: Using a new data set, this paper finds that there is no quality difference between nonprofit and for-profit day care centers, and with the exception of one segment of the nonprofit sector, there is no efficiency difference. The cost of increasing the quality from mediocre to good is between 12 and 16 cents per child-hour. Centers have inelastic demand for workers. Child care workers with 13 to 15 years of education and workers with more than 16 years of education are substitutes; workers with more than 16 years of education are complements to workers with 12 or fewer years of education. There are economies of scale and scope in production.

Estimating the determinants of child health when fertility and mortality are selective.

Abstract: Most studies of the effects of education and health infrastructure on child health have not taken fertility decisions into account. They assume that the composition of the population of children classified by health is unrelated to prior fertility decisions. The author however estimates the determinants of child mortality and child health allowing for the possibility that samples of children are choice-based reflecting prior selective fertility and mortality behavior. Parameter identification is the most serious practical problem in controlling for fertility and mortality selection. If parents care about the health outcomes of potential births then any exogenous variable which affects health also affects the fertility decision. The author adopts a new approach to the problem by imposing a random-effects structure upon the error correlation matrix for the set of fertility mortality and health behaviors. Fertility selection is found to be statistically significant in the estimation of the determinants of mortality in all 14 sub-Saharan Demographic and Health Survey data sets studied and fertility and mortality selection is found to be significant in the determination of child height in Zambia. Nonetheless most parameters are only slightly changed when selection is accounted for.

Labor and Women's Nutrition: The Impact of Work Effort and Fertility on Nutritional Status in Ghana

Abstract: A nutrition production function was estimated for 3130 women aged 18 years or older with an average age of 38 using individual- household- and community-level data from the 1987-88 Ghana Living Standards (GLSS) incorporating control for energy expenditure. The theoretical model underlying the analysis was an extension of Rosenzweig and Schultz (1983) estimating the current nutritional status of the member of the household depending on a set of current nutrition-related inputs conditioned on individual and household characteristics and factors contributing to the current local health environment as well as the net effect of all relevant individual household and community factors. The dependent variable in the nutrition production function was the body mass index (BMI) defined as kilograms of weight per squared meter of height. 63% of the women were rural 41% resided in the moist forest zone and 24% in the semiarid savannah. The average parity was 4.5 children. 10% of the women had primary school and 28% had secondary school education. The normal BMI levels range between 18.5 and 23. Based on this 17% of the women were undernourished in Ghana and under 2% suffered from severe caloric deficiency. 73% of the women worked outside the home and 21% reported working at least two jobs. The model showing a typical nutrition production function excluding variables measuring energy expenditure due to work effort indicated that the caloric coefficient was relatively small and insignificant (p = 0.51). Expenditure on health care had a positive and significant effect on BMI (p = 0.0001). The fertility variable showed a significantly negative parity effect (p = 0.04). The other model included three time allocation variables and showed significance for the caloric coefficient (p = 0.01) and for the impact of recent morbidity (p = 0.03). All three time allocation variables were significant (p-values of 0.01 0.0001 and 0.04 respectively) supporting the hypothesis that an individuals time allocation pattern plays an important role in determining nutritional status.

The Utility-Maximizing Self-Employed Physician

Abstract: We estimate a model of utility-maximizing physician behavior Our model accounts for the interdependence of physician input, output, and work/leisure choices, and includes an endogenous virtual wage for physician own time in the medical practice We find that solo practitioners respond to increases in marginal hourly earnings and nonpractice income by allocating less time to medical practice activities Our results also suggest that fee reductions induce the substitution of physician own time for auxiliaries, and the net effect of this adjustment is reduced patient loads and a decrease in supply from the existing stock of solo practitioners

Wage discrimination in the reemployment process

Abstract: This paper examines wage discrimination by gender in the reemployment market by looking at the experiences of unemployed individuals and decomposing their wage gap upon reemployment. The Neumark decomposition technique is extended to incorporate selectivity and counter-factual estimates are used to explain the development of the wage gap over time. Whereas total discrimination upon reemployment is declining over time, the part directly attributable to hiring is increasing. Policy-makers should consider that employers, constrained by existing legislation that does not address hiring issues directly, are switching over to discriminatory hiring practices that are becoming relatively easier to adopt, less likely to be detected and harder to prove in a court of law.

The Leisure Bias in Cost-benefit Analyses of Employment and Training Programs.

Abstract: Although increases in earnings that result from Employment and Training (E&T) programs typically come at the cost of losses of leisure to participants, this is almost never taken into account in cost-benefit analyses of E&T programs. This paper develops a method for adjusting for this bias and illustrates how the method can be used to reassess findings from earlier E&T cost-benefit analyses. Results in the paper suggest that the bias from ignoring lost leisure is likely to be sizable unless the E&T program that is subject to cost-benefit analysis increases earnings mainly by raising wage rates or participant reservation wages are near zero. Ignoring the bias will favor E&T programs that emphasize increases in hours of work by focusing on job search or work requirements at the expense of programs that increase wage rates through investments in human capital.

Self-Selection and the Redistributive Impact of In-Kind Transfers: An Econometric Analysis

Abstract: Self-targeting welfare programs have received increasing attention from economists and policymakers alike. This paper provides evidence on the redistributive impact of transferring low-quality goods in-kind. I study a school feeding program in Jamaica, which distributes a bland snack to all students. Poorer households and those with a greater number of eligible children are found significantly more likely to self-select into the program. But, against these targeting benefits is a large estimated dead-weight loss.

Empirical Analysis of Occupational Hierarchies

Abstract: Using data on U.S. engineers and the position of engineering jobs within firms, this paper estimates a model of hierarchies within firms. The model extends Rosen’s (1982) model of recursive production to two skills and multiple hierarchy levels. The model generates an empirical model that is nested within a general Roy (1951) model of self-selection. Maximum likelihood estimates of the parameters of the production technology and the skill-experience profiles are estimated. The results suggest that approximately two-thirds of changes in employment shares across hierarchy levels across time are explained by demographic shifts in the stock of engineering skills. Most of the returns to experience and to assignment to higher hierarchy levels within firms are caused by skill accumulation and self-selection rather than technological dierences across hierarchy levels.

Physician Fee Policy and Medicaid Program Costs

Abstract: We investigate the hypothesis that increasing access for the indigent to physicians' offices shifts care from hospital outpatient settings and lowers Medicaid costs (the so-called "offset effect"). To evaluate this hypothesis we exploit a large increase in physician fees in the Tennessee Medicaid program, using Georgia as a control. We find that beneficiaries shifted care from clinics to offices, but that there was little or no shifting from hospital outpatient departments or emergency rooms. Thus, we find no offset effect in outpatient expenditures. Inpatient admissions and expenditures fell, reducing overall program spending 8 percent. Because the inpatient reduction did not occur in ambulatory-care-sensitive diagnoses, however, we cannot demonstrate a causal relationship with the fee change.