nep-dem New Economics Papers
on Demographic Economics
Issue of 2011‒09‒16
nineteen papers chosen by
Clarence Nkengne Tsimpo
University of Montreal and World Bank Group

  1. Does parenthood increase happiness? Evidence for Poland. By Anna Baranowska; Anna Matysiak
  2. Population Dynamics in India and Implications for Economic Growth By David E. Bloom
  3. Marriage Premium in Turkey By Mercan, Murat A.
  4. Population aging and endogenous economic growth By Klaus Prettner
  5. Pauvreté et mortalité différentielle chez les personnes âgées By Mathieu Lefebvre; Pierre Pestieau; Grégory Ponthière
  6. Mothers Do Matter: New Evidence on the Effect of Parents' Schooling on Children's Schooling Using Swedish Twin Data By Amin, Vikesh; Lundborg, Petter; Rooth, Dan-Olof
  7. Gender ratios at top PhD programs in economics By Galina Hale; Tali Regev
  8. Demographics and Development Policy By David E. Bloom; David Canning
  9. Are girls the fairer sex in India? Revisiting intra-household allocation of education expenditure By Mehtabul Azam; Geeta Kingdon
  10. Implications of Population Aging for Economic Growth By David E. Bloom; David Canning; Günther Fink
  11. How can infrastructures reduce child malnutrition and health inequalities? Evidence from Guatemala By Thomas Poder; Jie He
  12. Why Does Population Aging Matter So Much for Asia? Population Aging, Economic Security and Economic Growth in Asia By Sang-Hyop LEE; Andrew MASON; Donghyun PARK
  13. Microcredit and Women’s Empowerment: Through the Lens of Time Use Data from Rural India By Supriya Garikipati
  14. Racial, Ethnic and Gender Differences in Physical Activity By Henry Saffer; Dhaval M. Dave; Michael Grossman
  15. Population Aging: Facts, Challenges, and Responses By David E. Bloom; Axel Boersch-Supan; Patrick McGee; Atsushi Seike
  16. The Future of South Asia: Population Dynamics, Economic Prospects, and Regional Coherence By David E. Bloom; Larry Rosenberg
  17. Demographic Change and Economic Growth in South Asia By David E. Bloom; David Canning; Larry Rosenberg
  18. A Community College Instructor Like Me: Race and Ethnicity Interactions in the Classroom By Robert Fairlie; Florian Hoffmann; Philip Oreopoulos
  19. Sex and Credit: Is There a Gender Bias in Microfinance? By Thorsten Beck; Patrick Behr; Andreas Madestam

  1. By: Anna Baranowska; Anna Matysiak (Institute of Statistics and Demography, Warsaw School of Economics)
    Abstract: In the recent decade demographers turned their attention to investigating the effects of children on self-rated happiness or life satisfaction. The underlying idea of this strand of research is to find out whether it pays off to individuals to become parents in terms of their subjective wellbeing, given the costs of having children. This paper follows this line of research and studies the impacts of childbearing on individual-level happiness in Poland; a country which experienced a rapid decline in fertility despite particularly strong attachment of young Poles to family values. To this end, we applied methods for panel data analysis which allowed us to control for endogeneity of subjective well-being and parenthood. Our results reveal a significantly positive effect of the first child on the subjective well-being of mothers. For men, this impact is weaker and most likely temporary since it weakens with an increase in child’s age. Importantly, neither for men nor for women does the positive impact of parenthood rise with an increase in parity. This may explain persistence of low fertility in this country.
    Keywords: happiness , life satisfaction, fertility, childbearing, parenthood
    JEL: J13 J17
    Date: 2011
  2. By: David E. Bloom (Harvard School of Public Health)
    Abstract: Demographic change in India is opening up new economic opportunities. As in many countries, declining infant and child mortality helped to spark lower fertility, effectively resulting in a temporary baby boom. As this cohort moves into working ages, India finds itself with a potentially higher share of workers as compared with dependents. If working-age people can be productively employed, India's economic growth stands to accelerate. Theoretical and empirical literature on the effect of demographics on labor supply, savings, and economic growth underpins this effort to understand and forecast economic growth in India. Policy choices can potentiate India's realization of economic benefits stemming from demographic change. Failure to take advantage of the opportunities inherent in demographic change can lead to economic stagnation.
    Keywords: age structure, China-India comparison, conditional convergence, demographic dividend, demographic transition, economic growth, economic growth in India, policy reform, population health, population of India
    Date: 2011–01
  3. By: Mercan, Murat A.
    Abstract: This paper contributes to the literature in three ways. Our first contribution is calculating the marriage premium for Turkey. Our results suggest that married men earn 27 percent more than single men and married women earn 4 percent less than single women. Our second contribution is calculating the marriage premium for Turkey’s regions. For men, the wage difference is the smallest, 0.43, in Istanbul. The difference is highest in Akdeniz region. For women, the wage difference is smallest, -0.04, in Ege and the highest, 0.62, in Dogu Anadolu. Finally, we estimated the relationship between age and the marriage premium. We found that for men, at younger ages the difference is high. For women, in most of ages single women earn more than married women.
    Keywords: marriage; earnings; marriage premium
    JEL: J12
    Date: 2011–09–09
  4. By: Klaus Prettner (Harvard Center for Population and Development Studies)
    Abstract: This article investigates the consequences of population aging for long-run economic growth perspectives. We introduce age specific heterogeneity of households into a model of research and development (R&D) based technological change. We show that the framework incorporates two standard specifications as special cases: endogenous growth models with scale eects and semi-endogenous growth models without scale effects. The introduction of an age structured population implies that aggregate laws of motion for capital and consumption have to be obtained by integrating over different cohorts. It is analytically shown that these laws of motion depend on the underlying demographic assumptions. Our results are that (i) increases in longevity have positive effects on per capita output growth, (ii) decreases in fertility have negative effects on per capita output growth, (iii) the longevity effect dominates the fertility eect in case of endogenous growth models and (iv) population aging fosters long-run growth in endogenous growth models, while the converse holds true in semiendogenous growth frameworks.
    Keywords: population aging, endogenous technological change, longrun economic growth
    Date: 2011–07
  5. By: Mathieu Lefebvre (CREPP - Center of Research in Public Economics and Population Economics - Université de Liège); Pierre Pestieau (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CREPP - Center of Research in Public Economics and Population Economics - Université de Liège, CORE - Center of Operation Research and Econometrics [Louvain] - Université Catholique de Louvain, CEPR - Center for Economic Policy Research - CEPR); Grégory Ponthière (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, ENS - Ecole Normale Supérieure de Paris - Ecole Normale Supérieure de Paris - ENS Paris)
    Abstract: Cette note a pour objectif d'illustrer, dans le cas de la Belgique et de ses régions, un problème particulier posé par la mesure de la pauvreté. Etant donné que la mortalité varie selon le niveau de revenu - les personnes aux revenus plus élevés vivant plus longtemps, en moyenne, que les personnes aux revenus plus faibles - les taux de pauvreté calculés pour les classes âgées dépendent non seulement de ce que l'on pourrait appeler la vraie pauvreté, mais aussi de la sélection induite par la mortalité différentielle selon le revenu. En calculant les taux de pauvreté que l'on observerait si des personnes avec différents niveaux de revenus avaient toute la même espérance de vie, on peut ainsi estimer la vraie pauvreté, en neutralisant les interférences dues à la mortalité différentielle. Cet ajustement des mesures de pauvreté est particulièrement intéressant pour la Belgique, où les écarts de longévité entre Flamands et Francophones et entre riches et moins riches sont importants.
    Keywords: Mesure de pauvreté ; mortalité différentielle ; revenu imputé
    Date: 2011–07
  6. By: Amin, Vikesh (Binghamton University, New York); Lundborg, Petter (Lund University); Rooth, Dan-Olof (Linneaus University)
    Abstract: Behrman and Rosenzweig (2002) used data on a small sample of MZ (monozygotic, identical) twin parents and their children to show that father's schooling is more important than mother's schooling for children's schooling in the U.S. Recent studies based on much larger samples of twins from registry data in Scandinavian countries reach similar conclusions. Most of these studies, however, are unable to distinguish between MZ and DZ (dizygotic, fraternal) twins. Using data from the Swedish Twin Registry, we replicate the finding that father's schooling matters more than mother's schooling in a combined sample of MZ and DZ twin parents. In contrast, results based on MZ twin parents show that mother's schooling matters at least as much as father's schooling for children's schooling. We also estimate the effect of parents' schooling separately by child gender and find this effect to be entirely driven by the impact of mother's schooling on daughter's schooling. Our results show that (1) it is vital to have zygosity information to estimate causal intergenerational effects and (2) the conclusions reached by Behrman and Rosenzweig (2002) for the U.S. do not apply in Sweden.
    Keywords: twins, twin-fixed effects, schooling, intergenerational mobility
    JEL: J0 I0 J1
    Date: 2011–08
  7. By: Galina Hale; Tali Regev
    Abstract: Analyzing university faculty and graduate student data for the top-ten U.S. economics departments between 1987 and 2007, we find that there are persistent differences in gender composition for both faculty and graduate students across institutions and that the share of female faculty and the share of women in the entering PhD class are positively correlated. We find, using instrumental variables analysis, robust evidence that this correlation is driven by the causal effect of the female faculty share on the gender composition of the entering PhD class. This result provides an explanation for persistent underrepresentation of women in economics, as well as for persistent segregation of women across academic fields.
    Keywords: Economics - Study and teaching ; Universities and colleges ; Economists
    Date: 2011
  8. By: David E. Bloom (Harvard School of Public Health); David Canning (Harvard School of Public Health)
    Abstract: By late 2011 there will be more than 7 billion people in the world, with 8 billion in 2025 and 9 billion before 2050. New technologies and institutions, and a lot of hard work have enabled us to avoid widespread Malthusian misery. Global income per capita has increased 150% since 1960, outpacing the growth of population. But we cannot be sure that incomes will continue to grow. One major difference is that now the world has a much larger population to support and, more notably, nearly all of the population increase that is projected in the coming decades will occur in the most politically, socially, and economically fragile countries. Fortunately, important insights into this demographic challenge have emerged in the past 10 years. Most important is that the rate of population growth is not the only demographic variable with consequences for economic growth and development: the age structure of the population is also fundamentally important.
    Keywords: demography, development, growth, demographic transition
    Date: 2011–01
  9. By: Mehtabul Azam; Geeta Kingdon
    Abstract: This paper revisits the issue of the intra-household allocation of education expenditure with the recently available India Human Development Survey which refers to 2005 and covers both urban and rural areas. In addition to the traditional Engel method, the paper utilizes a Hurdle model to disentangle the decision to enroll (incur any educational expenditure) and the decision of how much to spend on education, conditional on enrolling. Finally the paper also uses household fixed effects to examine whether any gender bias is a within-household phenomenon. The paper finds that the traditional Engel method often fails to pick up gender bias where it exists not only because of the aggregation of data at the household-level but also because of aggregation of the two decisions in which gender can have opposite signs. It is found that pro-male gender bias exists in the primary school age group for several states but that the incidence of gender bias increases with age – it is greater in the middle school age group (10-14 years) and greater still in the secondary school age group (15-19 years). However, gender discrimination in the secondary school age group 15-19 takes place mainly through the decision to enroll boys and not girls, and not through differential expenditure on girls and boys. The results also suggest that the extent of pro-male gender bias in educational expenditure is substantially greater in rural than in urban areas. Finally, our results suggest that an important mechanism through which households spend less on girls than boys is by sending sons to fee-charging private schools and daughters to the fee-free government-funded schools.
    Keywords: Gender bias, educational expenditure, Engel curve, Hurdle model, India.
    JEL: I21 J16 J71
    Date: 2011
  10. By: David E. Bloom (Harvard School of Public Health); David Canning (Harvard School of Public Health); Günther Fink (Harvard School of Public Health)
    Abstract: Between 2005 and 2050, the share of the population aged 60 and over is projected to increase in nearly every country in the world. Insofar as this shift will tend to lower both labor force participation and savings rates, it raises bona fide concerns about a future slowing of economic growth. These concerns apply to both developed and developing countries. An examination of past decades' data for OECD countries reveals that life expectancy has increased much faster than the legal age of retirement. Indications are similar in developing countries, which face the additional challenge of getting "old" before they get "rich". This paper analyses the implications of population aging for economic growth. Our main conclusion is that population aging poses challenges that are formidable, but not insurmountable.
    Keywords: population aging, economic growth, economic policy, labor force participation, life expectancy, retirement age
    Date: 2011–01
  11. By: Thomas Poder (UETMIS - CHU de Sherbrooke, GREDI - Université de Sherbrooke); Jie He (University of Sherbrooke, GREDI)
    Abstract: With the propensity score matching method, we carried out an average benefit incidence analysis that helps disclose those who really benefited from the sanitary services in Guatemala. Specifically, we tested the role of income, maternal education and social capital on how sanitary infrastructures affect child health. Results indicated that the child health benefits from infrastructure increase (decrease) with the household’s socioeconomic status when the infrastructure is a complement (substitute) of the private inputs provided by the household, and that the role of the infrastructure (complement or substitute) itself depends on the household’s socioeconomic status. Finally, results revealed that the battle against child malnutrition and health inequalities could be improved by combining sanitary infrastructure investments with effective public promotion of maternal education, social trust, and poverty reduction.
    Keywords: Malnutrition, infrastructure, health inequality, Guatemala
    Date: 2011–08
  12. By: Sang-Hyop LEE (Sang-Hyop LEE East West Center and University of Hawaii at Manoa, USA); Andrew MASON (Andrew MASON East West Center and University of Hawaii at Manoa, USA); Donghyun PARK (Donghyun PARK Economics and Research Department, Asian Development Bank, Philippines)
    Abstract: Asia as a whole is experiencing a rapid demographic transition toward older population structures. Within this broader region-wide trend, there is considerable heterogeneity, with different countries at different stages of the demographic transition. In this paper, we document Asia’s population aging, describe the region’s old-age support systems, and draw out the regional socioeconomic implications of population aging and old-age support systems. Population aging gives rise to two fundamental challenges for the region – (1) developing socioeconomic systems that can provide economic security to the growing number of elderly and (2) sustaining strong growth in the face of aging over the next few decades. Successfully addressing those two challenges will be vital for ensuring Asia’s continued economic success in the medium and long term.
    Date: 2011–08–01
  13. By: Supriya Garikipati
    Abstract: This study examines the impact of microcredit on male and female time use and draws on this analysis to explore the linkages between credit and women’s empowerment. A study of time use can help understand these linkages because credit targeted at women with the intent of influencing their livelihoods must also influence the way they allocate their work time. Its other advantages are that it does not suffer from much time lag and can be objectively measured. We use survey data from rural India. Our findings show that while microcredit has little impact on women’s time use, it helps their husbands shift away from wage-work, which is associated with bad pay and low status, to self-employment. We find that this is because women’s loans are typically used to enhance male ownership of household’s productive assets. Further, we find that only women who use loans in self-managed enterprises are able to allocate more time to self-employment. We conclude that if credit is to increase the value of women’s work time then it is not access to loan but use of loan that matters. Specifically, women’s control over loan created assets is critical.
    Date: 2011–09
  14. By: Henry Saffer; Dhaval M. Dave; Michael Grossman
    Abstract: This study examines racial, ethnic and gender differentials in physical activity. Individuals engage in physical activity during leisure-time and also during in many other activities such as walking to work, home maintenance, shopping and child care. Physical activity also occurs on the job is this is referred to as work physical activity. Prior studies have shown that non-work physical activity has a positive impact on health while work physical activity has a negative impact on health. Many prior studies have relied primarily on leisure-time physical activity, which typically constitutes only about 10% of non-work physical activity and does not capture specific information on the intensity or duration of the activity. This study addresses these limitations by constructing measures of physical activity from the American Time Use Surveys, which are all-inclusive and capture the duration of each activity combined with its intensity based on the Metabolic Equivalent of Task (MET). Non-work physical activity tends to be significantly lower for Blacks, Hispanics, other racial groups than for Whites and lower for males than for females. These adjusted differentials are consistent with racial, ethnic and gender differentials in health. About 25-46% of the differentials in non-work physical activity can be attributed to differences in education, socio-economic status, proxies for time constraints, and locational attributes.
    JEL: I12
    Date: 2011–09
  15. By: David E. Bloom (Harvard School of Public Health); Axel Boersch-Supan (Mannheim Research Institute for the Economics of Aging); Patrick McGee; Atsushi Seike
    Abstract: The world’s population is growing older, leading us into uncharted demographic waters. There will be higher absolute numbers of elderly people, a larger share of elderly, longer healthy life expectancies, and relatively fewer numbers of working-age people. There are alarmist views – both popular and serious – in circulation regarding what these changes might mean for business and economic performance. But the effects of population aging are not straightforward to predict. Population aging does raise some formidable and fundamentally new challenges, but they are not insurmountable. These changes also bring some new opportunities, because people have longer, healthier lives, resulting in extended working years, and different capacities and needs. The key is adaptation on all levels: individual, organizational, and societal. This article explores some potentially useful responses from government and business to the challenges posed by aging.
    Keywords: population, aging, longevity, fertility
    Date: 2011–05
  16. By: David E. Bloom (Harvard School of Public Health); Larry Rosenberg (Harvard School of Public Health)
    Abstract: What do we foresee for South Asia in 2060, in light of the significant changes it has undergone in the past few decades? India has experienced rapid economic growth, but continues to suffer widespread, extreme poverty as well. Afghanistan, Nepal, and Sri Lanka have seen major conflicts, with Pakistan always seeming on the verge of a major eruption. Nepal and Sri Lanka finally seem to have moved toward peace. As elsewhere, the region's many developments and crosscurrents make reliable predictions difficult, but one relatively neglected set of factors – demographic change – may shed some light on the region's future. Throughout the world, falling mortality rates and declining birth rates have been predictive of growing per-capita incomes, and theoretical reasoning and related evidence are sufficiently compelling to think that the links may indeed be causal. In this vein, this essay explores South Asia's economic prospects through a demographic lens. In addition, as we will see, there are some similar demographic trends across the countries of South Asia, but there are also a number of extreme differences. Regional heterogeneity bears on the question, "to what extent is South Asia a coherent region?"
    Keywords: South Asia, demographic change, economic prospects, demographic trends, regional heterogeneity
    Date: 2011–02
  17. By: David E. Bloom (Harvard School of Public Health); David Canning (Harvard School of Public Health); Larry Rosenberg (Harvard School of Public Health)
    Abstract: Identifying factors that influence the pace of national economic growth is a time-worn activity of economists. Strangely, demographic change has often been absent from consideration. But new thinking and evidence have highlighted the powerful contribution that demographic change can make to economic growth, and this line of inquiry has some salient implications for understanding past growth in South Asia and assessing and shaping its future prospects.
    Keywords: economic growth, South Asia, demographic change
    Date: 2011–02
  18. By: Robert Fairlie; Florian Hoffmann; Philip Oreopoulos
    Abstract: This paper uses detailed administrative data from one of the largest community colleges in the United States to quantify the extent to which academic performance depends on students being of similar race or ethnicity to their instructors. To address the concern of endogenous sorting, we use both student and classroom fixed effects and focus on those with limited course enrolment options. We also compare sensitivity in the results from using within versus across section instructor type variation. Given the computational complexity of the 2-way fixed effects model with a large set of fixed effects we rely on numerical algorithms that exploit the particular structure of the model’s normal equations. We find that the performance gap in terms of class dropout and pass rates between white and minority students falls by roughly half when taught by a minority instructor. In models that allow for a full set of ethnic and racial interactions between students and instructors, we find African-American students perform particularly better when taught by African-American instructors.
    JEL: I20 I23 J24 J71
    Date: 2011–09
  19. By: Thorsten Beck; Patrick Behr; Andreas Madestam
    Abstract: This paper examines the effects of group identity in the credit market. Exploiting the quasi-random assignment of first-time borrowers to loan officers of a large Albanian lender, we test for own-gender bias in the loan officer-borrower match. We find that borrowers pay on average 29 basis points higher interest rates when paired with a loan officer of the other sex. The results indicate the presence of a taste-based rather than a statistical bias, as borrowers’ likelihood of going into arrears is independent of loan officer gender. Ending up with an opposite-sex loan officer also affects demand for credit, with borrowers being 11.5 percent less likely to return for a second loan. The bias is more pronounced when the social distance, as proxied by difference in age between the loan officer and the borrower, increases and when financial market competition declines. This is consistent with theories that predict a taste-based bias to be stronger when the psychological costs of being biased are lower and the disretion in setting interest rates is higher. Taken together, the findings suggest that own-gender preferences can have substantial welfare effects.
    Date: 2011

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