Showing papers in "Journal of Human Resources in 2000"

The Wage and Employment Effects of the Americans with Disabilities Act

Abstract: The Americans with Disabilities Act of 1990 (ADA) is analyzed in terms of its effects on the employment and wages of disabled men using data from the Survey of Income and Program Participation. The results indicate that, as early as 1990, employment rates of men with disabilities decreased dramatically and continued to decrease through the beginning of 1995. On average over the post-ADA period, employment of men with disabilities was 7.2 percentage points lower than before the act was passed. In addition, wages of disabled men did not change with the passage of the ADA.

Measuring and Testing for Inequity in the Delivery of Health Care

Abstract: This paper compares two indices of horizontal inequity in the delivery of health care, the index proposed by Wagstaff, van Doorslaer, and Paci (1991), and another index derived in this paper. As well as discussing the computational aspects of these two indices, the paper also addresses the issue of statistical inference, comparing two estimators for the standard error of each index. The paper contains an empirical illustration of both sets of methods using data from the 1992 Dutch Health Interview Survey.

Self-employment, Family background, and Race

Abstract: The offspring of self-employed fathers are more likely than others to become self-employed. Thus the historically low rates of self-employment among African-Americans and Latinos may contribute to their low contemporary rates. National data show that African-Americans and Latinos whose fathers were self-employed have lower rates of self-employment than other men whose fathers were not self-employed. Other aspects of family background explain only a small portion of the self-employment gap between African-Americans and native-born white ancestry groups. Male immigrants who have self-employed fathers overseas are no more likely to be self-employed than other immigrants are.

Determinants of College Completion.

Abstract: We investigate whether the "match" between student ability and college quality is an important determinant of college graduation rates. We jointly estimate a multinomial probit model of college attendance decisions in which the alternatives are no college and attendance at college in four quality categories, and a binomial probit model of subsequent graduation decisions. By allowing the error terms to be correlated across alternatives and time periods, we identify the effects of observed factors net of their correlation with unobservables. We find that students of all ability levels have higher chances of graduating if the quality level of their college "matches" their observed skill level.

Accounting for the decline in AFDC caseloads: Welfare reform or the economy?

Abstract: We use state-level monthly panel data to assess the relative contributions of the macroeconomy and welfare reform in accounting for the 1993-96 decline in Aid to Families with Dependent Children (AFDC) caseloads. Our results suggest that the decline in per capita AFDC caseloads is attributable largely to the economic conditions in states and not to waivers from federal welfare policies. Nationwide, we attribute 66 percent of the decline to the macroeconomy. However, we do find substantial heterogeneity in the impact and timing of alternative waivers on AFDC caseloads. States with waivers impacting parental responsibilities experienced greater caseload declines than states with waivers that made work more attractive. Overall, our model predicts that had it not been for the influence of economic factors, welfare reform would not have led to any decrease in aggregate caseloads.

Is Child Like Parent? Educational Attainment and Ethnic Origin

Abstract: The speed at which immigrants assimilate is the subject of debate. Human capital formation plays a major role in this discussion. We compare second generation immigrants' educational attainments to those of similarly aged natives. Evidence from German data suggests ethnicity matters: ethnic network size has a positive effect on educational attainment, and a clear pattern is exhibited between countries-of-origin and education even in the second generation. For children of the foreign-born, parental schooling plays no role in educational choices. For Germans, contrary to the literature's general findings, there is a statistically significant difference in favor of father's over mother's education.

School Quality and the Longer-Term Effects of Head Start

Abstract: Research on Head Start suggests that effects on test scores "fade out" more quickly for black children than for white children. We use data from the 1988 wave of the National Educational Longitudinal Survey to show that Head Start black children go on to attend schools of worse quality than other black children. We do not see any similar pattern among whites. Moreover, when we stratify by an indicator of school quality, gaps in test scores between Head Start and other children are very similar for blacks and whites. Hence, the effects of Head Start may fade out more rapidly among black students, at least in part because black Head Start children are more likely to subsequently attend inferior schools.

Neighborhood Attributes as Determinants of Children's Outcomes How Robust are the Relationships?

Abstract: Estimates of neighborhood effects on children's outcomes vary widely among the studies that seek to identify their existence and magnitude, reflecting substantial variation in data and model specification. Here, we review that literature, and ask if the disparity in estimates of neighborhood effects may reflect the differences among studies in the specification of family characteristics, and hence omitted variables bias. We report a systematic set of robustness results for three youth outcomes (high school graduation, the number of years of completed schooling, and teen nonmarital childbearing) using data on about 2,600 children from the Panel Study of Income Dynamics. We observe these children over a period of at least 21 years and have included an extensive set of neighborhood variables for these individuals measured over the entire school-age period. We measure the relationship of these neighborhood variables to the three outcomes, moving from basic models containing no individual and family characteristic variables to models containing an extensive set of individual and family statistical controls. We conclude that the reliability of estimates of these impacts may be an artifact of the degree to which family background is characterized in model specification. Confidence that reported neighborhood effects reveal true relationships requires statistical controls for the full range of family and individual background that may also influence children's attainments; not all variables with coefficients showing asterisks have significant effects.

An Evaluation of Public Sector Sponsored Continuous Vocational Training Programs in East Germany

Abstract: This study analyses the effect of public sector sponsored continuous vocational training and retraining in East Germany after unification with West Germany in 1990. It presents estimates of the average gains from training participation in terms of earnings, employment probabilities and career prospects after the completion of training. The data is from the German Socio-Economic Panel (GSOEP, 1990-1994). The GSOEP allows to observe individual behaviour on a monthly, respectively yearly, basis. The results suggest that despite public expenditures of more than DM 25 bn (1991 to 1993), there are no positive effects in the first year after training, but that participants expect positive effects over a longer time horizon. The latter however is beyond the sampling period.

School Performance and Choice The Chilean Experience

Abstract: How to achieve quality in education is a topic of increasing concern throughout the world. Many countries have made a wide variety of reforms and spent an increasing amount of resources to improve the quality of education, but often the results have not lived up to expectations. Chile has made innovative reforms to its educational system. One of the most interesting has been the introduction of a voucher-type subsidy system and the entry of private agents in the market to provide free educational services. This paper examines the Chilean experience by analyzing educational performance in different types of school.

Differential mortality and wealth accumulation

Abstract: The issue of asset accumulation and decumulation is central to the life cycle theory of consumer behavior and to many policy questions. One of the main implications of the life cycle model is that assets are decumulated in the last part of life. Most empirical studies in this area use cross-sectional data of estimate mean or median wealth-age profiles. The use of cross-sections to estimate the age profile of assets is full of pitfalls. For example, if wealth and mortality are related, in that poorer individuals die younger, one overestimates the last part of the wealth-age profile when using cross-sectional data because means (or other measures of location) are taken over a population which becomes 'richer' as it ages. This paper examines the effect of differential mortality on cross-sectional estimates of wealth-age profiles. Our approach is to quantify the dependence of mortality rates on wealth and use these estimates to 'correct' wealth-age profiles for sample selection due to differential mortality. We estimate mortality rates as a function of wealth and age for a sample of married couples drawn from the Survey of Income and Program Participation (SIPP). Our results show that accounting for differential mortality produces wealth profiles with significantly more dissaving among the elderly.

Trends in Self-Employment among White and Black Men during the Twentieth Century

Abstract: We examine white and black male nonagricultural self-employment from 1910 to 1997. Self-employment rates fell through 1970 and then rose. White male trends were due to declining rates within industries, ending in 1970, counterbalanced by a continuing shift toward high self-employment industries. Social security and immigration do not explain the recent upturn. Black male rates have been roughly one-third of white rates from 1910 to 1997. Blacks are not concentrated in low self-employment rate industries. Absent continuing forces limiting black self-employment, a simple inter-generational model suggests quick convergence of black and white rates.

Worker Perceptions of Job Insecurity in the Mid-1990s: Evidence from the Survey of Economic Expectations

Abstract: This paper analyzes the probabilistic measures of job insecurity that have recently become available through the nationwide Survey of Economic Expectations (SEE). Since 1994, employed SEE respondents have been asked questions eliciting their subjective probabilities of job loss in the coming year and their expectations of a good outcome should they lose their current job and have to engage in job search. The responses of 3,561 persons interviewed from 1994 through early 1998 are analyzed here. It is found that workers vary considerably in their perceptions of job insecurity, with most workers perceiving little or no risk but some perceiving moderate to high risk. Expectations of job loss tend to decrease markedly with age, but so do expectations of a good outcome should job search become necessary. The net result is that job insecurity tends not to vary at all with age. Subjective probabilities of job loss tend to decrease with schooling and subjective probabilities of good search outcomes tend to increase with schooling; hence composite job insecurity tends to decrease with schooling. Perceptions of job insecurity vary little by sex. Perceptions of job insecurity vary substantially by race, the main differences being that subjective probabilities of job loss among blacks tend to be nearly double those of whites. Self-employed workers see themselves as facing less job insecurity than do those who work for others. Worker perceptions of job insecurity peaked in 1995. Expectations within groups are heterogeneous, the covariates (age, schooling, sex, race, employer, year) collectively explaining only a small part of the sample variation in worker expectations. Moving beyond descriptive analysis, the paper connects the empirical findings to modern theories of the labor market. A competing-risks formalization of job separations by the two routes of job loss and voluntary quits is used to draw conclusions about workers' expectations of exogenous job destruction in the year ahead. The theory of job search is used to interpret the empirical finding that the distribution of search-outcome expectations is symmetric and quite dispersed.

Education Demand and Age at School Enrollment in Tanzania.

Abstract: In Tanzania, actual school enrollment takes place 2 or 3 years later on average than the legal enrollment age. In this paper, we develop a micro-economic model that allows us to disentangle various explanations for such delays. We simultaneously estimate enrollment age and schooling duration by maximum likelihood techniques using data from the Human Resource Development Survey carried out in Tanzania in 1992-93. A particularly interesting result of our econometric analysis is that boys and girls follow fundamentally different patterns of schooling. Our model suggests that this could be due to different return from pre-school training in the family's economic activities or it could be related to the wish to have girls ready to be married as early as possible.

Family Structure and Youths' Outcomes: Which Correlations are Causal?

Abstract: Growing up in a family that lacks a biological father is correlated with a number of poor outcomes for youths. This study uses the National Educational Longitudinal Survey of 1988 (NELS) to examine the extent to which the apparent effects of divorce or remarriage are not causal, but are due to pre-existing problems or advantages of the family or youth. We find that the correlations between family structure and youth outcomes are causal: neither divorce nor remarriage appear to be related to pre-existing characteristics of the youth or family. Finally, unlike some previous research, we do not find gender differences in the effects of the presence of a father or stepfather.

International Comparisons of Poverty Intensity: Index Decomposition and Bootstrap Inference

Abstract: This paper proposes an alternative formulation for the Sen-Shorrocks-Thon (SST) index of poverty intensity that is appropriate for survey data with sampling weights. It also decomposes the SST index into the poverty rate, the average poverty gap ratio among the poor, and the overall Gini index of poverty gap ratios. To account for sampling variation in estimates of poverty intensity, this paper uses the bootstrap method to compute confidence intervals and presents international comparisons using Luxembourg Income Study (LIS) data from the 1970s to the 1990s. Cross-sectional and longitudinal analyses indicate that the percentage change in poverty intensity can be approximated by the sum of percentage changes in the poverty rate and average poverty gap ratio, since changes in the overall Gini index of poverty gap ratios are negligible. In the early 1970s poverty intensity in Canada and the United States was almost indistinguishable, but in the 1970s Canadian poverty intensity decreased. Large increases in poverty intensity occurred in the 1980s in the United States, the United Kingdom, and Sweden.

School Desegregation, Academic Attainment, and Earnings.

Abstract: Voluntary and enforced compliance by school districts has reduced the segregation of U.S. public schools. A key question is whether desegregation programs have raised lifetime earnings for blacks, either through the expansion of interracial contact or improvements in school quality. This paper uses information on school demographic composition, district desegregation efforts, school resources, and the academic performance of nonblacks to investigate the impact of school desegregation on academic attainment and earnings. The results provide support for the belief that raising school quality is likely to be much more effective than the reallocation of students among schools as a means to improve academic and labor market outcomes for blacks.

Educational Choice, Families, and Young People's Earnings.

Abstract: This paper presents two optimizing models of educational choice, discusses issues of identification, estimates earnings equations in the context of these models, and presents conditions under which we can test one against the other. The estimates indicate that education is endogenous for young people's earnings, creating a downward bias in estimated returns from education that assume exogeneity. Identification and estimation relies on family background information from a special sample from the British Household Panel Study 1991-95, which matches mothers and their young adult children. Our estimates favor a family model over an individual model, and they suggest that parents allocate resources to education to compensate for differences in their children's earnings endowments.

An Intergenerational Model of Wages, Hours and Earnings

Abstract: We develop a model in which a set of unobserved parental and sibling factors drives wages and work preferences. These factors lead to similarities within families in wages, work hours, and earnings. We estimate the model using data on parents and siblings in the National Longitudinal Surveys. We find that parental and sibling wage factors influence the wages of both sons and daughters. We also find strong similarities in work hours that run along gender lines and are due primarily to linkages in preferences. The effect of wages on earnings is direct rather than through a labor supply response.

The Impact of Public Testing for Human Immunodeficiency Virus

Abstract: In this paper, we estimate the behavioral responses by individuals to the type of information-intervention a public human immunodeficiency virus (HIV) testing program would typify. A unique feature of the data we use is that the survey itself altered the allocation of information held by respondents by administrating a blood test for HIV as part of a longitudinal survey. Our framework for the demand for information on HIV implies that because only individuals who are surprised by the results of the intervention respond to it, in our case low-risk individuals who test HIV-positive or high-risk individuals who test HIV-negative, an information-intervention of this type may have surprising effects. Our framework also implies that looking just at the aggregate effects of an HIV testing program is a misleading indicator of the behavioral responsiveness of the average individual to the information intervention. We find that although the aggregate effect of the testing program is quite small, the effects disaggregated by private beliefs are consistent with information elastic behavior for the average individual. In addition, the subgroups of the population affected by a publicly subsidized testing program may have roughly offsetting behavioral responses, which may lead to little effect or possibly even perverse outcomes with regards to an objective of lowering disease transmission.

Medicaid Policy, Physician Behavior, and Health Care for the Low-Income Population

Abstract: Responding to concerns about the health of poor children and mothers, Medicaid eligibility for pregnant women was expanded during the 1980s and 1990s and Medicaid fees paid to physicians for prenatal care and delivery were increased. We examine physician responses to these policy changes using data on physician practices. We find that expanded eligibility for Medicaid did increase access to physician services. Contrary to some earlier findings, however, increases in access are only apparent for the physicians in "public" institutions such as public clinics and hospital clinics; we find no evidence that increases in eligibility increase access to private, office-based physicians.

AFDC benefits and non-marital births to young women.

Abstract: This document re-examines the effect of Aid to Families With Dependent Children (AFDC) benefits on early nonmarital childbearing based on recent research by Mark Rosenzweig. In his studies Rosenzweig finds that AFDC benefits have a statistically significant and quantitatively large positive effect on early nonmarital fertility. His analysis differed in three important ways: 1) it included fertility through age 22; 2) it incorporated a marital birth as a separate choice; and 3) it included both state and cohort fixed effects to control for unmeasured characteristics that may influence early fertility. Using data from the Panel Study of Income Dynamics the researchers were able to reproduce Rosenzweigs main finding that AFDC generosity influences nonmarital childbearing when state and cohort fixed-effects are included. However model specification matters significantly. Estimates of AFDC effects on early nonmarital births are very sensitive to inclusion of state effects and also to the exact specification of the state fixed effect. Findings in this study highlighted several issues for future research.

Exit and Inefficiency: The Effects of Ownership Type

Abstract: This study uses data on hospital closures to examine the relation between exit and inefficiency in an industry where for-profit, not-for-profit, and government firms coexist. The likelihood of hospital exit over the period 1986-91 is estimated as a function of hospital relative inefficiency, ownership type, and other factors, where hospital relative inefficiency is measured using residuals from estimation of a stochastic frontier cost function. We find that less efficient hospitals were more likely to exit when ownership was for-profit or not-for-profit, but that relative inefficiency did not have a significant effect on the probability of exit for government hospitals.

Using Establishment Size to Measure the Impact of Title VII and Affirmative Action

Abstract: Title VII of the 1964 Civil Rights Act and Affirmative Action apply most forcefully to large employers. The laws' focus on large employers implies that if Title VII and Affirmative Action were effective, then large employers should have increased their relative employment of blacks and women in the years following their institution. We show blacks and women did, in fact, move to larger employers after 1964. We also estimate that the move to large employers accounted for roughly 15 percent of aggregate black/white wage convergence over the 1965-80 period. Thus, whatever, its cause, blacks' movement to large employers was an important part of black economic progress after 1964.

Do the Cognitive Skills of School Dropouts Matter in the Labor Market

Abstract: Does the labor market reward cognitive skill differences among those with the fewest educational attainment-high school dropouts? This paper explores this question using a data set that provides information on the universe of dropouts who last attempted the GED exams in Florida and New York in 1989 and 1990. This sample reduces variation in unmeasured variables such as motivation that are correlated with cognitive skills. We examine the returns to basic cognitive skills as measured by GED test scores. The results indicate substantial earnings returns to cognitive skills for all groups except white male dropouts.

The Hausman-MaCurdy Controversy: Why Do the Results Differ across Studies?

Abstract: The two perhaps most influential empirical labor supply studies carried out in the United States in recent years, Hausman (1981) and MaCurdy, Green, and Paarsch (1990), report sharply contradicting labor supply estimates. In this paper we show that the seemingly irreconcilable views on the size of work disincentive effects and welfare losses can be attributed to the use of differing nonlabor income and wage measures in the two studies. Monte Carlo experiments suggest that the wage measure adopted by MaCurdy, Green, and Paarsch (1990) might cause a severely downward biased wage effect such that data falsely refute the basic notion of utility maximization.

Explaining Applications to the U.S. Disability System: A Semiparametric Approach

Abstract: This study investigates the determinants of applications for U.S. disability benefits between 1986 and 1993 using a semiparametric discrete factor procedure separately for men and women. Approximating a dynamic optimization model, the estimation accounts for a variety of potential biases that were unaddressed in prior studies. Our results indicate different responses of men and women to variations in policy measures. Past labor earnings and fringe benefits as well as benefit eligibility and benefit amounts clearly affect application behavior.

Worker Perceptions of Job Insecurity in the Mid-1990s.

Abstract: This paper analyzes the probabilistic measures of job insecurity that have recently become available through the nationwide Survey of Economic Expectations (SEE). Since 1994, employed SEE respondents have been asked questions eliciting their subjective probabilities of job loss in the coming year and their expectations of a good outcome should they lose their current job and have to engage in job search. The responses of 3,561 persons interviewed from 1994 through early 1998 are analyzed here. It is found that workers vary considerably in their perceptions of job insecurity, with most workers perceiving little or no risk but some perceiving moderate to high risk. Expectations of job loss tend to decrease markedly with age, but so do expectations of a good outcome should job search become necessary. The net result is that job insecurity tends not to vary at all with age. Subjective probabilities of job loss tend to decrease with schooling and subjective probabilities of good search outcomes tend to increase with schooling; hence composite job insecurity tends to decrease with schooling. Perceptions of job insecurity vary little by sex. Perceptions of job insecurity vary substantially by race, the main differences being that subjective probabilities of job loss among blacks tend to be nearly double those of whites. Self-employed workers see themselves as facing less job insecurity than do those who work for others. Worker perceptions of job insecurity peaked in 1995. Expectations within groups are heterogeneous, the covariates (age, schooling, sex, race, employer, year) collectively explaining only a small part of the sample variation in worker expectations. Moving beyond descriptive analysis, the paper connects the empirical findings to modern theories of the labor market. A competing-risks formalization of job separations by the two routes of job loss and voluntary quits is used to draw conclusions about workers' expectations of exogenous job destruction in the year ahead. The theory of job search is used to interpret the empirical finding that the distribution of search-outcome expectations is symmetric and quite dispersed.

Welfare Effects on the Marital Decisions of Never-Married Mothers

Abstract: The economic theory of marriage suggests that more generous welfare benefits should serve to reduce the probability of marriage among mothers who have given birth out of wedlock. This relationship is explored using data on never-married mothers in the National Longitudinal Survey of Youth. Only very limited evidence indicates that higher welfare payments lower the probability of marriage for nonblack never-married mothers. For black never-married mothers, the results suggest that higher benefits are associated with higher marriage rates.