nep-dem New Economics Papers
on Demographic Economics
Issue of 2011‒11‒21
sixteen papers chosen by
Clarence Nkengne Tsimpo
University of Montreal and World Bank Group

  1. Poverty Traps and Climate Change By Tol, Richard S. J.
  2. The Effects of Children's ADHD on Parents' Relationship Dissolution and Labor Supply By Kvist, Anette Primdal; Nielsen, Helena Skyt; Simonsen, Marianne
  3. Marriage with Labor Supply By Nicolas Jacquemet; Jean-Marc Robin
  4. Famiglia, figli e sviluppo sostenibile By Luigi Pierfranco Campiglio
  5. Exploring the Impacts of Public Childcare on Mothers and Children in Italy: Does Rationing Play a Role? By Ylenia Brilli; Daniela Del Boca; Chiara Pronzato
  6. Marriage penalties, marriage, and cohabitation By Fisher, Hayley
  7. Erwerbseinstieg und bisheriges Erwerbsleben der deutschen Babyboomerkohorten 1959 und 1965 : Vorarbeiten zu einer Kohortenstudie By Tisch, Anita; Tophoven, Silke
  8. Corruption, growth and ethnic fractionalization: a theoretical model By Roy Cerqueti; Raffaella Coppier; Gustavo Piga
  9. From Shame to Game in One Hundred Years: A Macroeconomic Model of the Rise in Premarital Sex and its De-Stigmatization By Jesus Fernandez-Villaverde; Jeremy Greenwood; Nezih Guner
  10. Economic Crises, Maternal and Infant Mortality, Low Birth Weight and Enrollment Rates: Evidence from Argentina's Downturns By Cruces, Guillermo; Glüzmann, Pablo; López-Calva, Luis Felipe
  11. Seeds of hope: Assessing the effect of development aid on the reduction of child mortality By Roberto Burguet; Marcelo Soto
  12. Menstrual Cycle and Competitive Bidding By Pearson, Matthew; Schipper, Burkhard C.
  13. Demography, Capital Flows and Unemployment By Marchiori, Luca; Pierrard, Olivier; Sneessens, Henri R.
  14. Measuring the (Income) Effect of Disability Insurance Generosity on Labour Market Participation By Olivier Marie; Judit Vall Castello
  15. Ethnic origin, local labour markets and self-employment in Sweden: A Multilevel Approach By Andersson, Lina; Hammarstedt, Mats; Hussain, Shakir; Shukur, Ghazi
  16. Local Industrial Structures and Female Entrepreneurship in India By Ejaz Ghani; William R. Kerr; Stephen D. O'Connell

  1. By: Tol, Richard S. J.
    Abstract: We use a demo-economic model to examine the question of whether climate change could widen or deepen poverty traps. The model includes two crucial mechanisms. Parents are risk averse when deciding how many children to have; fertility is high when infant survival is low. High fertility spreads scarce household resources thin, resulting in children being poorly educated. At the macro level, technological progress is slow because of decreasing returns to scale in agriculture. With high population growth and slow technological progress, the economy stagnates. If, on the other hand, infant survival is high, then fertility is low, education is high, and the economy grows exponentially. Diarrhea and malaria are among the leading causes of infant mortality; both are sensitive to weather and climate. There may thus be a climate-related poverty trap where climate change increases disease burdens that reinforce poverty. We estimate finite-mixture models of per capita income, fertility, and mortality at the national scale. As predicted by the model, the observations are bi-modal. Temperature has statistically significant effects: hotter countries are more likely to be classified as poor; hotter countries are more likely to be classified as high mortality; and the number of children per woman in high fertility societies increases with temperature. We then use the model to simulate a number of different futures, focusing on the question whether climate change may widen and deepen the health/fertility poverty trap. The results suggest that this is unlikely for reasonable parameter choices. Climate change may have a substantial effect on specific causes of infant mortality, but the effect on total infant mortality is more muted. More importantly, the model is driven by infant survival, and climate change has a much smaller proportional effect on survival than on mortality. Furthermore, climate change will be relatively small over the next few decades. In the medium term, the impact of climate change is therefore dwarfed by other factors (health and education in this model). In the long term, climate change is more important, but the long term is primarily shaped by the medium term.
    Keywords: children/Climate change/education/fertility/growth/infant mortality/population/poverty/poverty traps/risk
    Date: 2011–11
  2. By: Kvist, Anette Primdal (University of Aarhus); Nielsen, Helena Skyt (University of Aarhus); Simonsen, Marianne (University of Aarhus)
    Abstract: This paper uses Danish register-based data for the population of children born in 1990-1997 to investigate the effects on parents of having a child with attention-deficit/hyperactivity-disorder (ADHD). Ten years after birth, parents of children diagnosed with ADHD have a 75% higher probability of having dissolved their relationship and a 7-13% lower labor supply. Exploiting detailed information about documented risk factors behind ADHD, we find that roughly half of this gap is due to selection. However, a statistically and economically significant gap is left, which is likely related to the impact of high psychic costs of coping with a child with ADHD.
    Keywords: ADHD, child health, marital dissolution, labor supply
    JEL: I12 J12 J13 J22
    Date: 2011–10
  3. By: Nicolas Jacquemet (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Jean-Marc Robin (Sciences Po - Department of Economics)
    Abstract: We propose a search-matching model of the marriage market that extends Shimer and Smith (2000) to allow for labor supply. We characterize the steady-state equilibrium when exogenous divorce is the only source of risk. The estimated matching probabilities that can be derived from the steady-state flow conditions are strongly increasing in both male and female wages. We estimate that the share of marriage surplus appropriated by the man increases with his wage and that the share appropriated by the woman decreases with her wage. We find that leisure is an inferior good for men and a normal good for women.
    Keywords: Marriage search model, collective labor supply, structural estimation.
    Date: 2011–10
  4. By: Luigi Pierfranco Campiglio (DISCE, Università Cattolica)
    Abstract: The aim of this paper is to explain the economic causes and consequences of the sharp decline in Italy’s fertility rate, the most dramatic decline in the world together with that in Japan. The main cause is shown to originate in the mid-seventies: a sudden increase in the unemployment rate among young people, which has remained at a high level since then, for 40 years being closely associated with the country’s economic activity. The same pattern has been found for many other countries, albeit in a less severe form. The main consequence of high unemployment among young people is the delay in achieving a level of permanent income such as to permit the starting of a family: this economic constraint is further reinforced by the length of formal education, especially for young women. We show that in Italy it is essential to form a two-earner family in order to pass the threshold for a decent standard of living, especially when there are children. The main consequence of the decline in fertility in Italy has been a dramatic increase in the proportion of elderly dependent members of the family, absorbing households’ savings and decreasing the domestic financing of investment. We suggest that in the face of a sharp fertility decline, two options are viable: a market option, namely an increase in immigration, as in Italy, or the adoption of more capital-intensive and labour-saving techniques, as in Japan; we argue that both are short-lived solutions. A political option, i.e. intervention which intentionally rebalances and stabilizes permanent family income, as in family policy in France and northern European countries, has proved to be a solution. We show that past political decisions in Italy have gone in the opposite direction, rendering disposable family income lower and even more unstable. As a consequence, there is the distinct possibility that the first “lost decade” of the Italian economy will be just the beginning of a steady decline. We suggest that in this situation the only way out is a policy of “tying one’s hands”, in other word an economic and social pact which takes the long-term interest of the country seriously and therefore considers the young and especially the very young as a priority. We argue that in Italy at this point the only credible instrument able to change the political agenda immediately is that of giving a voice in the political process to the very young and the young.
    Keywords: family, unemployment, fertility
    JEL: J13 E24 O15
    Date: 2011–09
  5. By: Ylenia Brilli (DEFAP, Graduate School in Economics and Finance of Public Administration (Catholic University of Milan and University of Milano-Bicocca)); Daniela Del Boca (University of Turin, CHILD, Collegio Carlo Alberto and IZA); Chiara Pronzato (University of Turin, CHILD and Collegio Carlo Alberto)
    Abstract: This paper investigates the effects of public childcare availability in Italy on mothers' working status and children's scholastic achievements. We use a newly available dataset containing individual standardized test scores of pupils attending second grade of primary school in 2008-09 in conjunction with data on public childcare availability. Public childcare coverage in Italy is scarce (12.7 percent versus the OECD average of 30 percent) and the service is "rationed": each municipality allocates the available slots according to eligibility criteria. We contribute to the existing literature taking into account rationing in public childcare access and the functioning of childcare market. Our estimates indicate that childcare availability has positive and significant effects on both mothers' working status and children's language test scores. The effects are stronger when the degree of rationing is high and for low educated mothers and children living in lower income areas of the country.
    Keywords: childcare, female employment, child cognitive outcomes
    JEL: J13 D1 H75
    Date: 2011–09
  6. By: Fisher, Hayley
    Abstract: I examine the effect of marriage penalties in the US income tax system on marital status. I construct a simulated instrument that exploits variation in the tax code over time and between US states to deal with potential endogeneity between the marriage penalty a couple faces and their marital status. I find that a $1000 increase in the marriage penalty faced reduces the probability of marriage by 1.7 percentage points, an effect four times larger than previously estimated. Those in the lowest education groups respond by as much as 2.7 percentage points, with the average response declining as education increases.
    Keywords: marriage penalty; cohabitation; marriage
    Date: 2011–09
  7. By: Tisch, Anita (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Tophoven, Silke (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "With an ageing German work force, the relationship between work and workload with individual health and workability is of increasing public interest. The German Cohort Study on Work, Age and Health 'lidA - leben in der Arbeit' is designed to further investigate precisely this relationship, examining the birth cohorts of 1959 and 1965 exemplarily. Both cohorts were born during the German baby boom following the Second World War. Currently, they are on the threshold to higher working age. This report summarizes some preparatory work to the lidA-study and provides a detailed description of the labor market entry and labor participation of both cohorts considered in the lidA-study. Although growing up under similar institutional settings, members of the two birth cohorts have been confronted with different opportunities and constraints. While both cohorts have benefited from the educational expansion, their labor market entry was also determined by the labor market crises of the 1980s which affected them at different times of their labor-market entry phase. Nevertheless, the majority of the two cohorts was able to establish their careers later on. Rather, differences in labor force participation are seen in particular between men and women and between East and West German regions." (Author's abstract, IAB-Doku) ((en))<br><br><b>Additional Information</b><ul><li><a href=''>Weitere Informationen zum Projekt LidA.</a></li></ul>
    Keywords: ältere Arbeitnehmer, Gesundheit, Arbeitswelt, arbeitsbedingte Krankheit, Arbeitsbelastung, Berufsverlauf, Arbeitslosigkeit, Berufseinmündung, Erwerbsbeteiligung, Qualifikationsniveau
    Date: 2011–11–15
  8. By: Roy Cerqueti (University of Macerata); Raffaella Coppier (University of Macerata); Gustavo Piga (Faculty of Economics, University of Rome "Tor Vergata")
    Abstract: This paper analyzes the existing relationship between ethnic fractionalization, corruption and the growth rate of a country. We provide a simple theoretical model. We show that a nonlinear relationship between fractionalization and corruption exists: corruption is high in homogeneous or very fragmented countries, but low where fractionalization is intermediate. In fact, when ethnic diversity is intermediate, constituencies act as a check and balance device to limit ethnically-based corruption. Consequently, the relationship between fractionalization and growth rate is also non-linear: growth is high in the middle range of ethnic diversity, low in homogeneous or very fragmented countries.
    Keywords: corruption, ethnic fractionalization, monitoring cost, economic growth.
    JEL: D73 K42 O43
    Date: 2011–11–08
  9. By: Jesus Fernandez-Villaverde (University of Pennsylvania); Jeremy Greenwood (University of Pennsylvania); Nezih Guner (ICREA-MOVE, Universitat Autonoma de Barcelona, and Barcelona GSE)
    Abstract: Societies socialize children about sex. This is done in the presence of peer-group effects, which may encourage undesirable behavior. Parents want the best for their children. Still, they weigh the marginal gains from socializing their children against its costs. Churches and states may stigmatize sex, both because of a concern about the welfare of their fl‡ocks and the need to control the cost of charity associated with out-of-wedlock births. Modern contraceptives have profoundly affected the calculus for instilling sexual mores. As contraception has improved there is less need for parents, churches and states to inculcate sexual mores. Technology affects culture.
    Date: 2011–11
  10. By: Cruces, Guillermo (CEDLAS-UNLP); Glüzmann, Pablo (CEDLAS-UNLP); López-Calva, Luis Felipe (World Bank)
    Abstract: This study investigates the impact of recent crises in Argentina (including the severe downturn of 2001-2002) on health and education outcomes. The identification strategy relies on both the inter-temporal and the cross-provincial co-variation between changes in regional GDP and outcomes by province. These results indicate significant and substantial effects of aggregate fluctuations on maternal and infant mortality and low birth weight, with countercyclical though not significant patterns for enrollment rates. Finally, provincial public expenditures on health and education are correlated with the incidence of low birth weight and school enrollment for teenagers, with worsening results associated with GDP declines.
    Keywords: crisis, infant mortality, maternal mortality, low birth weight, poverty, Argentina
    Date: 2011–10
  11. By: Roberto Burguet; Marcelo Soto
    Abstract: The Millennium Declaration (2000) set as one of its targets a substantial reduction in child mortality. This paper studies whether the massive increase in development aid can account for part of the reduction in child mortality observed in developing countries since the year 2000. To do so, we analyze a panel of more than 130 developing countries over the 2000-2008 period. We use the time trend evolution of aid to identify an exogenous source of variation. Total aid has had no statistically significant effect on child mortality. However, a disaggregate analysis identifies certain sectors of aid that have had a significant impact. The effects have been larger in high mortality countries, including Sub-Saharan Africa. Projections based on our estimates strongly support the concern that most countries in that region will miss the Millennium Goals target on child mortality.
    Keywords: ODA, child mortality, aid effectiveness.
    JEL: O11 O15
    Date: 2011–01–14
  12. By: Pearson, Matthew (University of CA, Davis); Schipper, Burkhard C. (University of CA, Davis)
    Abstract: In an experiment using two-bidder first-price sealed bid auctions with symmetric independent private values and 400 participants, we collected information on the female participants' menstrual cycles and the use of hormonal contraceptives. We find that naturally cycling women bid significantly higher than men and earn significantly lower profits than men except during the midcycle when fecundity is highest. We suggest an evolutionary hypothesis according to which women are predisposed by hormones to generally behave more riskily during their fecund phase of their menstrual cycle in order to increase the probability of conception, quality of offspring, and genetic variety. We also find that women on hormonal contraceptives bid significantly higher and earn substantially lower profits than men. This may be due to progestins contained in hormonal contraceptives or a selection effect. We discuss how our study differs from Chen, Katuscak, and Ozdenoren (2009).
    JEL: C72 C91 C92 D44 D81 D87
    Date: 2011–11
  13. By: Marchiori, Luca (Central Bank of Luxembourg); Pierrard, Olivier (Central Bank of Luxembourg); Sneessens, Henri R. (University of Luxembourg)
    Abstract: This paper contributes to the already vast literature on demography-induced international capital flows by examining the role of labor market imperfections and institutions. We setup a two-country overlapping generations model with search unemployment, which we calibrate on EU15 and US data. Labor market imperfections are found to significantly increase the volume of capital flows, because of stronger employment adjustments in comparison with a competitive economy. We next exploit the model to investigate how demographic asymmetries may have contributed to unemployment and welfare changes in the recent past (1950-2010). We show that a policy reform in one country also has an impact on labor markets in other countries when capital is mobile.
    Keywords: demographics, capital flows, overlapping generations, general equilibrium, unemployment
    JEL: J11 F21 D91 C68
    Date: 2011–10
  14. By: Olivier Marie; Judit Vall Castello
    Abstract: We analyze the employment effect of a law that provides for a 36 percent increase in the generosity of disability insurance (DI) for claimants who are, as a result of their lack of skills and of the labour market conditions they face, deemed unlikely to find a job. The selection process for treatment is therefore conditional on having a low probability of employment, making evaluation of its effect intrinsically difficult. We exploit the fact that the benefit increase is only available to individuals aged 55 or older, estimating its impact using a regression discontinuity approach. Our first results indicate a large drop in employment for disabled individuals who receive the increase in the benefit. Testing for the linearity of covariates around the eligibility age threshold reveals that the age at which individuals start claiming DI is not continuous: the benefit increase appears to accelerate the entry rate of individuals aged 55 or over. We obtain new estimates excluding this group of claimants, and find that the policy decreases the employment probability by 8 percent. We conclude that the observed DI generosity elasticity of 0.22 on labour market participation is mostly due to income effects since benefit receipt is not work contingent in the system studied.
    Keywords: Disability insurance, labour market participation, income effect, regression discontinuity
    JEL: J14 J26 J40
    Date: 2011–11
  15. By: Andersson, Lina (Linnaeus University); Hammarstedt, Mats (Linnaeus University); Hussain, Shakir (University of Birmingham); Shukur, Ghazi (Jönköping International Business School & Linnaeus University)
    Abstract: We investigate the importance of ethnic origin and local labour markets conditions for self-employment propensities in Sweden. In line with previous research we find differences in the self-employment rate between different immigrant groups as well as between different immigrant cohorts. We use a multilevel regression approach in order to quantify the role of ethnic background, point of time for immigration and local market conditions in order to further understand differences in self-employment rates between different ethnic groups. We arrive at the following: The self-employment decision is to a major extent guided by factors unobservable in register data. Such factors might be i.e. individual entrepreneurial ability and access to financial capital. The individual’s ethnic background and point of time for immigration play a smaller role for the self-employment decision but are more important than local labour market conditions.
    Keywords: Self-employment; immigrant background; local labour market
    JEL: J15 R23
    Date: 2011–11–11
  16. By: Ejaz Ghani; William R. Kerr; Stephen D. O'Connell
    Abstract: We analyze the spatial determinants of female entrepreneurship in India in the manufacturing and services sectors. We focus on the presence of incumbent female-owned businesses and their role in promoting higher subsequent female entrepreneurship relative to male entrepreneurship. We find evidence of agglomeration economies in both sectors, where higher female ownership among incumbent businesses within a district-industry predicts a greater share of subsequent entrepreneurs will be female. Moreover, higher female ownership of local businesses in related industries (e.g., those sharing similar labor needs, industries related via input-output markets) predict greater relative female entry rates even after controlling for the focal district-industry’s conditions. The core patterns hold when using local industrial conditions in 1994 to instrument for incumbent conditions in 2000-2005. The results highlight that the traits of business owners in incumbent industrial structures influence the types of entrepreneurs supported.
    JEL: J16 L10 L26 L60 L80 M13 O10 R00 R10 R12
    Date: 2011–11

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