Showing papers in "Journal of Population Economics in 2007"

The changing nature of wage inequality

Abstract: The paper reviews recent developments in the literature on wage inequality with a particular focus on why inequality growth has been particularly concentrated in the top end of the wage distribution over the last 15 years. Several possible institutional and demand-side explanations are discussed for the secular growth in wage inequality in the United States and other advanced industrialized countries.

Immigrants’ educational disadvantage: an examination across ten countries and three surveys

Abstract: Studies on immigrants’ disadvantage focus predominantly on labour market perspectives. Immigrants’ poor education is a subject much less examined especially in a cross-national context. This paper examines differences in educational achievement between immigrants and natives across ten OECD countries. In English-speaking countries, immigrants fare best, while in Continental European countries they fare worse compared to natives. Whilst language skills seem to explain immigrants’ disadvantage in English-speaking countries, socioeconomic background and school segregation are further important determinants of immigrants’ gap in Continental Europe. Results presented are predominantly robust across three sources of achievement data: PISA, TIMSS and PIRLS.

Are there gender and country of origin differences in immigrant labor market outcomes across European destinations

Abstract: The paper uses the 1994-2000 waves of the European Community Household Panel to conduct a systematic analysis of the earnings of immigrants as compared to native workers, in particular to test whether there is any systematic variation in the labor market performance of immigrants across gender related to duration in the destination, schooling, age at immigration, country of origin, or country of destination. We find a significant negative effect of immigrant status on individual earnings of around 40% at the time of arrival in the pooled sample, although the difference is somewhat smaller for women. Those differences, however, vary greatly across countries with migrants in Germany and Portugal faring best relative to natives, and those in Sweden, Denmark, Luxembourg or Spain the worst, particularly among non-EU born migrants. Gender differences are more important among those born outside the European Union, with women doing relatively better than men. Among men, those from Asia, Latin-America and Eastern Europe receive the lowest earnings. LatinAmerican and Eastern European women are at the bottom of the women’s distribution. Earnings increase with duration in the destination and the foreign born “catch-up” to the native born, others variables being the same, at around 18 years in the destination among both men and women. Education matters more for women in terms of explaining earnings, whereas language skills are relatively more important for men.

Labor market institutions and demographic employment patterns

Abstract: We study collective bargaining’s effect on relative employment for youth, women, and older individuals. Our model of collective wage setting predicts that unionization reduces employment more for groups with relatively elastic labor supply: youth, older individuals, and women. We test this implication using data from 17 Organization for Economic Cooperation and Development (OECD) countries over the 1960–1996 period. We find that time-varying indicators of unionization decrease the employment–population ratio of young and older individuals relative to the prime-aged, and of prime-aged women relative to prime-aged men, and unionization raises the unemployment rate of prime-aged women and, possibly, young men compared to prime-aged men.

The mismatch between employment and child care in Italy: the impact of rationing

Abstract: In Italy the women’s participation is among the lowest in Europe. The female employment rate stands almost 13 percentage points below the EU average and 22 below the Lisbon target. One of the most important reasons is related to the characteristics of child care system. We analyze the characteristics of the child care system in Italy and its relationship to the labor market participation decision of mothers. The two decisions are jointly considered in a discrete choice framework, which also allows for simple forms of rationing. We go on to estimate a bivariate probit model of the child care and employment decisions and find evidence that rationing is an important factor in interpreting price effects on utilization rates and employment decisions.

Production and consumption externalities of human capital: an empirical study for Italy

Abstract: The estimation of the effect of local human capital on wages only might not identify properly human capital spillovers. Appropriate identification requires considering the joint effect of local human capital on both wages and rents. Empirically, we study the effects of local human capital on household-level rents and individual-level wages for a sample of Italian local labour markets. Our results show a positive and robust effect of local human capital on rents, supporting the idea that human capital generates positive externalities at the local level. Our results also suggest that consumption and production externalities have a similar impact on wages.

The determinants and consequences of child care subsidies for single mothers in the USA

Abstract: This paper provides an analysis of child care subsidies under welfare reform in the USA. We used data from the 1999 National Survey of America's Families to analyze the determinants of receipt of a child care subsidy and the effects of subsidy receipt on employment, school attendance, unemployment, and welfare participation. Ordinary least-squares estimates that treat subsidy receipt as exogenous show an effect of subsidy receipt on employment of about 13 percentage points. Two-stage least-squares estimates that treat subsidy receipt as endogenous and use county dummies as identifying instruments show an effect of 33 percentage points on employment, 20 percentage points on unemployment, and no effects on schooling and welfare receipt.

Heterogeneity in the intergenerational transmission of educational attainment: evidence from Switzerland on natives and second-generation immigrants

Abstract: This study applies rich data from the 2000 Swiss census to investigate the patterns of intergenerational education transmission for natives and second generation immigrants. The level of secondary schooling attained by youth aged 17 is related to their parents' educational outcomes using data on the entire Swiss population. Based on economic theories of child educational attainment we derive hypotheses regarding the patterns in intergenerational education transmission. The data yields substantial heterogeneity in intergenerational transmission across population groups. Only a small share of this heterogeneity is explained by the predictions of economic theory.

Can consumers detect lemons? An empirical analysis of information asymmetry in the market for child care

Abstract: This paper tests adverse selection in the market for child care. A unique data set containing quality measures of various characteristics of child care provided by 746 rooms in 400 centers, as well as the evaluation of the same attributes by 3,490 affiliated consumers (parents) in the U.S., is employed. Comparisons of consumer evaluations of quality to actual quality show that after adjusting for scale effects, parents are weakly rational. The hypothesis of strong rationality is rejected, indicating that parents do not utilize all available information in forming their assessment of quality. The results demonstrate the existence of information asymmetry and adverse selection in the market, which provide an explanation for low average quality in the U.S. child care market.

A discrete choice model for labor supply and childcare

Abstract: A discrete choice model for labor supply and childcare for mothers of preschoolers is presented. The mothers are assumed to make choices from a finite set of job possibilities and from a finite set of childcare options. Options in the markets for childcare are characterized by opening hours, fees and quality attributes. Similarly, jobs are characterized by a fixed wage rate, working hours and a number of variables related to job satisfaction. In the estimation of the model, we take into account that the number of options available might vary across work/care combinations and that some mothers are rationed in the market for care at day care centers. The model is employed to simulate the female labor supply effects of the Norwegian home care allowance reform.

Family structure and child outcomes in the USA and Sweden

Abstract: Previous research shows that living in a non-intact family is associated with educational disadvantages. This paper compares the relationships between childhood family structure, schooling, and earnings in Sweden and the USA. This comparison is interesting because both family structure and public policies differ significantly. We find a negative relationship between living in a non-intact family and child outcomes, and the estimates are remarkably similar in both countries. After using sibling-difference models, the correlation with family structure is no longer significant. These results cast doubt on the causal interpretation of the negative relationship between non-intact family structures and child outcomes.

Measuring the extent, depth, and severity of food insecurity: an application to American Indians in the USA

Abstract: Within the extensive food insecurity literature, little work has been done regarding (a) the depth and severity of food insecurity and (b) the food insecurity of American Indians. This paper addresses both these topics with data from the 2001 to 2004 Core Food Security Module of the Current Population Survey. To measure food insecurity, three axiomatically derived measures of food insecurity are used. As expected, given the worse economic conditions facing American Indians, their food insecurity levels are generally higher than non-American Indians. However, the magnitude and significance of these differences differ depending on the choice of food insecurity measure.

The impact of the labour market on the timing of marriage and births in Spain

Abstract: This paper investigates how education and the labour market affect Spanish individual decisions on the timing of marriage and births, using a Cox hazard approach. It disentangles men and women, and two groups, Cohort 1945–1960 and Cohort 1961–1977. Results show that female employment delays marriage in Cohort 1945–1960, but it has a reverse effect in Cohort 1961–1977. We also find evidence that employment is a barrier for family formation since employed women postpone births in both cohorts. The precarious Spanish labour markets, captured by female unemployment rates, delay family formation, especially by putting off marriage. Male unemployment, at the individual level, impacts negatively on fertility only through delaying marriage.

Oppositional identities and the labor market

Abstract: We develop a model in which nonwhite individuals are defined with respect to their social environment (family, friends, and neighbors) and their attachments to their culture of origin (religion or language), and in which jobs are mainly found through social networks. We find that depending on how strong peer pressures are, nonwhites choose to adopt “oppositional” identities because some individuals may identify with the dominant culture and others may reject that culture, even if it implies adverse labor market outcomes.

Immigrant Overeducation: Evidence from Denmark *

Abstract: Anecdotes abound in the Danish public debate about well-educated immigrants that are in jobs they are formally overqualified for. Using a 1995-2002 panel data set based on Danish registers, this study attempts to find out how large a problem immigrant overeducation is in the context of the Danish labor market. More specifically, three questions are posed: First, to what extent are immigrants overeducated and are they more likely to be so than native Danes? Second, why are some immigrants more likely to become overeducated than others? And finally, what are the consequences of overeducation for individual wages? The authors find that among wage earners with at least a vocational education or higher, 25 percent of male non-Western immigrants are overeducated. The same applies for 15 percent of native Danes. Particularly immigrants with a foreign-acquired education risk becoming overeducated - here the share is 30 percent among those with a vocational education or higher. The authors find that Danish labor market experience is extremely important in reducing the likelihood of becoming overeducated. Years spent in the country without accumulating labor market experience do not improve an individual's chances of an appropriate job-to-education match. In terms of earnings consequences, the study concludes that years of overeducation do increase wages for immigrants, but much less so than years of adequate education. This is also true for native Danes, but the relative penalty for overeducation is much larger for immigrants than for Danes.

Does single parenthood increase the probability of teenage promiscuity, substance use, and crime?

Abstract: There is longstanding evidence that youths raised by single parents are more likely to perform poorly in school and partake in “deviant” behaviors such as smoking, sex, substance use, and crime. However, there is not widespread agreement as to whether the timing of the marital disruption differentially impacts youth outcomes. Using the National Longitudinal Survey of Youth and its Young Adult Supplement, we find that an additional 5 years with the biological father decreases the probability of smoking, drinking, engaging in sexual activity, marijuana use, and conviction by approximately 5.3, 1.2, 3.4, 2.2 and 0.3 percentage points, respectively.

The Catalan premium: language and employment in Catalonia

Abstract: In this paper, I measure the contribution of knowing Catalan to finding a job in Catalonia. In the early 1980s, a drastic language policy change (normalitzacio) promoted the learning and use of Catalan in Catalonia and managed to reverse the falling trend of its relative use vs Castilian (Spanish). Using census data for 1991 and 1996, I estimate a significant positive Catalan premium: the probability of being employed increases between 3 and 5 percentage points if individuals know how to read and speak Catalan; it increases between 2 and 6 percentage points for writing Catalan.

The magnitude of educational disadvantage of indigenous minority groups in Australia

Abstract: Indigenous groups are amongst the most disadvantaged minority groups in the developed world. This paper examines the educational disadvantage of indigenous Australians by assessing academic performance at a relatively early age. We find that, by the age of 10, indigenous Australians are substantially behind non-indigenous Australians in academic achievement. Their relative performance deteriorates further over the next 2 years. School and locality do not appear to be important determinants of the indigenous to non-indigenous achievement gap. However, geographic remoteness, indigenous ethnicity and language use at home have a marked influence on educational achievement. A current focus of Australian indigenous policy is to increase school resources. Our results suggest that this will not eliminate indigenous educational disadvantage on its own.

Changes in HIV/AIDS knowledge and testing behavior in Africa: how much and for whom?

Abstract: Demographic and Health Survey data from nine African countries make it clear that HIV/AIDS prevention knowledge has been increasing. Still, in many cases, fewer than half of adult respondents can identify specific prevention behaviors. Knowledge is lowest in rural areas and among women. HIV testing generally remains rare but is highly variable across countries, likely reflecting differences in the supply of testing services. In most cases, schooling and wealth impacts on prevention knowledge have either been stable or have increased; hence, in the majority of contexts, initial disparities in knowledge by education and wealth levels have persisted or widened.

Colourism and African-American wealth: Evidence from the nineteenth-century south

Abstract: Black is not always black. Subtle distinctions in skin tone translate into significant differences in outcomes. Data on more than 15,000 households interviewed during the 1860 US federal census exhibit sharp differences in wealth holdings between white, mulatto, and black households in the urban South. We document these differences, investigate relationships between wealth and recorded household characteristics, and decompose the wealth gaps to examine the returns to racial characteristics. The analysis reveals a distinct racial hierarchy. Black wealth was only 20% of white wealth, but mulattoes held nearly 50% of whites’ wealth. This advantage is consistent with colourism, the favouritism shown to those of lighter complexion.

The within-household schooling decision: a study of children in rural Andhra Pradesh

Abstract: Using microdata from a field survey of children in rural Andhra Pradesh, India, we estimate econometric models which aim to identify the key explanatory factors in the decision on schooling. The approach adopted is to focus on the effects of sibling competition within the household, by paying close attention to the number, age and gender of a child's siblings, while also taking account of the characteristics of the household and community. Our findings suggest that the schooling decision depends as much on the child's characteristics and position within the household, as on the circumstances in which the child lives.

Dropping out of post-compulsory education in the UK: an analysis of determinants and outcomes

Abstract: We analyse the decision to drop out of post-compulsory education over the period 1985–1994 using data from the Youth Cohort Surveys. We show that the dropout rate declined between 1985 and 1994, in spite of the rising participation rate in education, but is still substantial. Dropping out is more or less constant over the period of study, though the risk of dropout does vary with young people’s prior attainment, ethnicity, family background and the state of the labour market. The course of study has a substantial effect on the risk of dropout.

Earnings mobility among Italian low-paid workers

Abstract: This paper uses Italian panel data to analyse low pay transitions since the early 1990s. Results indicate that having more human capital reduces the probability of falling into low pay, but there is little impact on raising exit rates from low pay. Human capital effects are found to be larger for women than for men. There is considerable state dependence: the experience of low pay raises the probability of subsequent low pay episodes. Also, there is substantial unobserved heterogeneity associated with factors such as initial conditions, mobility out of the earnings distribution and educational attainment.

Time, money, peers, and parents; some data and theories on teenage behavior

Abstract: In the first part of the paper, I analyze a data set on teenage behavior. The data is a sample of high school students in The Netherlands and contains information on teenage time use, income, expenditures, and subjective measures of well-being and self-esteem. As all students in a sampled class are interviewed in principle, the data set has rich information on the behavior of potentially important peers of each respondent. I estimate models to assess (bounds on) the magnitude of endogenous social interactions. For some types of behavior (e.g., truancy, smoking, pocket money, and alcohol expenditures), endogenous social interactions within school classes are strong; for other behaviors, they are moderate or unimportant. Within-gender interactions are generally stronger than interactions between boys and girls, with some intriguing exceptions. In the second part of the paper, I discuss a number of theories that might help to understand the empirical patterns. Key concepts in the discussion are interdependent preferences, endogenous social norms, identity, and intergenerational interactions.

Scholastic ability vs family background in educational success: evidence from Danish sample survey data

Abstract: This research examines the role of scholastic ability and family background variables in the determination of educational attainment in Denmark A categorical representation of the highest level of education attained by the individual is the dependent variable It is analyzed by procedures that take account of the presence of unobservable factors Parent’s education and occupation, along with an indicator of scholastic ability which is represented by a set of aptitude tests, explain a small but significant portion of the variation in their children’s educational success Women are shown to respond differently to their environments than men, and including these test scores does not remove the need to deal with unmeasured attributes On the basis of the available data, family background variables as a group contribute more to the explained variation in the data than the test scores Finally, credit constraints do not appear to be a factor in educational attainments

A longitudinal analysis of the impact of health shocks on the wealth of elders

Abstract: We investigate the impact of health shocks on wealth, using all four waves of the Health and Retirement Study, and estimate not only the short-term effect but also the long-term effect of health shocks on wealth of the elderly. We find that new health events lower wealth in elders during the period in which such health shocks occur, but the impact tends to disappear over time. We also find that health shocks result in greater wealth depletion when they occur later in life. Together with existing health problems, the overall impact of health problems on wealth increases over time.

The economics of migrant ethnicity

Abstract: The rising importance of world-wide migration has fostered an increasing supply of ethnic diversity. This has generated concerns that supply is not sufficiently accommodated by an increase in demand for cultural diversity. It is argued that diversity has more potential to produce output than harm the economy. Ethnic enclaves may increase the difficulties for success in the host society. However, ethnic capital enables migrants to survive and perform. Differences between ethnic groups are largely relevant and may diminish but do not easily disappear over time. It is, therefore, important to understand the processes of how and why ethnic differences persist and interact with integration and economic performance. The need for additional knowledge concerning the causes and effects of ethnicity and migration for society and the economy has further increased as a result of the effects of globalization, the upcoming demographic burden, and the sluggish economic development in many parts of the world. Migration seems to be at the same time both a threat and a blessing in relation to many issues. A complication of migration is ethnicity; the affiliated ethnic diversity is understood as burden and potential. Hence, a research program on migrant ethnicity is timely and important, since it can deal with assimilation and persistence of ethnicities and the involved benefits and costs for societies. An economic framework for ethnicity that explains its persistence and identifies the determinants that cause the success or failure of migrants in the economy and J Popul Econ (2007) 20:487–494 DOI 10.1007/s00148-007-0155-6

Intergenerational education mobility of black and white South Africans

Abstract: Using the October Household Surveys, we found that the intergenerational education mobility of whites is higher than that of blacks. Among blacks, females have a higher intergenerational education mobility than males, while the poorest have the lowest intergenerational education mobility. The lower education mobility of blacks than that of whites indicate that factors such as access to the credit market, as well as the availability and quality of schools, are important determinants of educational attainment. Interestingly, the cross section estimates of black intergenerational education mobility do not differ from those obtained by using pseudopanel data, which control for unobserved community effects.

Effects of ability mixing in high school on adulthood earnings: quasiexperimental evidence from South Korea

Abstract: We estimate impacts of ability mixing compared to ability grouping in high school education on students’ adulthood earnings. To overcome endogeneity and selection problems that plagued the previous studies, we exploit a policy experiment in South Korea in the 1970s, which changed the education regime of general high schools from grouping to mixing in major cities. We find that the mixing treatment has a positive but statistically insignificant effect on average adulthood earnings. We also find that while mixing has positive effects on low ability students’ adulthood earnings, it has smaller positive or even negative effects on higher ability students.

Planned fertility and family background: a quantile regression for counts analysis

Abstract: This paper examines how education and family background affect the fertility plans of young individuals in Mexico. Quantile regression for count data is used for the analysis. Results indicate that education and family structure affect planned fertility only at the tails of the conditional distribution. Education reduces planned fertility only among women with relatively strong preferences towards children. An absent father reduces planned fertility mostly at the bottom of the conditional distribution.