nep-dem New Economics Papers
on Demographic Economics
Issue of 2012‒09‒03
nineteen papers chosen by
Clarence Nkengne Tsimpo
University of Montreal and World Bank Group

  1. Normative and allocation role strain: role incompatibility, outsourcing, and the transition to a second birth in Eastern and Western Germany By Liat Raz-Yurovich
  2. Family and Labor Market Choices: Requirements to Guide Effective Evidence-Based Policy By Anna Kurowska; Michal Myck; Katharina Wrohlich
  3. Does Retirement Age Impact Mortality? By Hernaes, Erik; Markussen, Simen; Piggott, John; Vestad, Ola
  4. Gender Imbalance at Birth and Parents' Anxiety about Old Age in China By Yoshihiko Kadoya; Ting Yin
  5. Black and White Fertility, Differential Baby Booms: The Value of Civil Rights By Tamura, Robert; Simon, Curtis; Murphy, Kevin M.
  6. Long-Distance Moves and Labour Market Outcomes of Dual-Earner Couples in the UK and Germany By Philipp M. Lersch
  7. Quantifying the role of alternative pension reforms on the Austrian economy By Miguel Sánchez Romero; Joze Sambt; Alexia Prskawetz
  8. Family Background, Informal Networks and the Decision to Provide for Old Age: A Siblings Approach By Bettina Lamla
  9. The externalities of crime: The effect of criminal involvement of parents on the educational attainment of their children By Rud, I.; Van Klaveren, C.; Groot, W. and Maassen van den Brink, H.
  10. Household Structure, and Household Income and its Components over the Life-Cycle in Turkey By Seyit Mümin Cilasun; Murat Güray Kýrdar
  11. Back to the Future? Abortion Before & After Roe By Theodore J. Joyce; Ruoding Tan; Yuxiu Zhang
  12. Smokers’ Preference for Divorce and Extramarital Sex By Yamamura, Eiji
  13. Coordinating Healthcare and Pension Policies: An Exploratory Study By Bali, Azad Singh; Asher, Mukul G.
  14. Ethnic Minorities in Northern Mountains of Vietnam: Poverty, Income and Assets By Nguyen Viet, Cuong
  15. Time Is Money: The Influence of Parenthood Timing on Wages By Michael Kind; Jan Kleibrink
  16. Benefit incidence analysis, needs and demography. Measurement issues and an empirical study for Kenya By Isis Gaddis; Lionel Demery
  17. The Link between Extreme Poverty and Young Dependents in the Philippines:Evidence from Household Surveys By Mapa, Dennis S.; Albis , Manuel Leonard F.; Lucagbo, Michael
  18. Application of the transaction cost approach to households – the demographics of households’ ‘make or buy’ decisions By Liat Raz-Yurovich
  19. Conspicuous consumption and the distribution of income within social groups By Andreas Chai; Wolfhard Kaus

  1. By: Liat Raz-Yurovich (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: The challenges women face in reconciling their work and family responsibilities are at the heart of current explanations concerning the low fertility levels in developed countries. This study examines the role of the outsourcing of household labor and of childcare responsibilities in reducing the incompatibility of women’s roles and in increasing fertility in the two different institutional and normative contexts of Eastern and Western Germany. Using the German Socio-Economic Panel, we analyzed whether Eastern and Western German women who outsourced childcare responsibilities to formal and informal care providers in the first and in the third years after the first birth were at higher risk of having a second child. Drawing on Goode’s role strain theory, we suggest that the incompatibility of women’s roles is affected not only by allocation role strain, but also by normative role strain. Our results indicate that the outsourcing of childcare to formal providers and to grandparents reduces, rather than increases, the propensity to have a second child among Western German women, due to normative role strain. We also find a significant positive effect of the outsourcing of housework on the transition to a second birth in Germany, due to the decline in allocation role strain.
    Keywords: Germany, child care, fertility
    JEL: J1 Z0
    Date: 2012–08
  2. By: Anna Kurowska; Michal Myck; Katharina Wrohlich
    Abstract: Microsimulation methods and models of labor market decisions have attracted a lot of attention as an approach to the assessment of consequences of family related policies in the area of labor market and fertility. We set these models in the context of relevant demographic theories and present them from the point of view of their potential as tool to guide effective policy making with the aim to reconcile the objectives of increasing female participation and fertility and reducing poverty levels among families with children.
    Keywords: microsimulation, labor supply, fertility, evidence-based policy
    JEL: J22 J13 J18
    Date: 2012
  3. By: Hernaes, Erik (Ragnar Frisch Centre for Economic Research); Markussen, Simen (Ragnar Frisch Centre for Economic Research); Piggott, John (ARC Centre of Excellence in Population Ageing Research); Vestad, Ola (Ragnar Frisch Centre for Economic Research)
    Abstract: This paper studies the relationship between retirement and mortality, using a unique administrative data set covering the full population of Norway. We make use of a series of retirement policy changes in Norway, which reduced the retirement age for a group of workers but not for others. By employing a difference-in-differences framework based on monthly birth cohort and treatment group status we first establish that the early retirement program significantly reduced the retirement age – this remains true when we account for program substitution, for example into the disability pension. Using instrumental variables estimation we find that retirement age has no effect on mortality.
    Keywords: Retirement age; Mortality; Instrumental variables; Policy evaluation
    JEL: H55 I10 J11 J26
    Date: 2012–06–11
  4. By: Yoshihiko Kadoya; Ting Yin
    Abstract: Chinese parents prefer to have sons as they depend on their sons for support in old age, according to most of the literature. This paper uses the Preference Parameters Study, which randomly interviewed individuals in six major cities in China in 2011, to present empirical evidence about the possible cause of the problematic gender imbalance at birth in China. From the dataset, this paper compares sons' and daughters' commitment to parental care from a selection of respondents who were married, aged 20-70, had at least one living parent, and had no missing answers to the interview questions. The results indicate that Chinese sons (and their wives) are more likely, compared to daughters (and their husbands), to be primary caregivers for parents. Nonetheless, parents' dependency on their children would not necessarily decrease with social security, although children with highly educated spouses appear to present an exception. The current study supports the initial claim found in literature; however, the solution to the gender imbalance at birth in China may not be the development of a social security system.
    Date: 2012–08
  5. By: Tamura, Robert; Simon, Curtis; Murphy, Kevin M.
    Abstract: This paper presents new estimates of the benets of equal education opportunity for blacks over the period 1820-2000. For the better part of US history, blacks have enjoyed less access to schooling for their children than whites. This paper attempts to quantify the value of this discrimination. Our estimates of the welfare cost of this form of discrimination prior to the Civil War range between 1.7 and 10 times black wealth, and between 1.6 and 4 times black wealth prior to 1960. Further we find that the Civil Rights era was valued by blacks in the South by between 1 percent to 2 percent of wealth. Outside of the South we find significant costs of discrimination prior to 1960, ranging from 8 percent to 100 percent of black wealth! For these divisions from 1960-2000 blacks have attained rough parity in schooling access. The welfare magnitudes are similar to the hypothetical gains to blacks if they had white mortality rates.
    Keywords: cost of discrimination; unequal access to education; fertility; schooling
    JEL: J13 O11 J15 J24
    Date: 2012–08–27
  6. By: Philipp M. Lersch
    Abstract: Chances are high that partners in dual-earner couples do not receive equal occupational returns from long-distance moves, because job opportunities are distributed heterogeneously in space. Which partners are more likely to receive relatively higher returns after moves? Recent research shows the stratification of returns by gender and highlights the importance of gender roles in mobility decisions. I extend past literature in two ways. First, while past research mostly examined partners separately, I directly test for gender differences in matched pairs of women and men in dual-earner couples and account for the nonindependence of both careers. Second, I compare evidence from the United Kingdom (UK) and Germany to shed light on the effects of institutional and normative contexts. For my analysis, I draw longitudinal data from the British Household Panel Survey and the German Socio-Economic Panel Study (1991-2008). My results show that women in dual-earner couples are temporarily adversely affected in their careers by long-distance moves in the UK and West Germany after controlling for various characteristics of both partners. Women in East Germany are not affected by long-distance moves. Moves do not change wage rates significantly for women and men that stay in employment in both countries.
    Keywords: Residential mobility, gender inequalities, cross-national comparison, actor-partner interdependence model
    Date: 2012
  7. By: Miguel Sánchez Romero (Max Planck Institute for Demographic Research, Rostock, Germany); Joze Sambt; Alexia Prskawetz (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: This paper investigates the role of recent pension reforms for the development of the social security system and economic growth in Austria. We use a computable general equilibrium model that is built up of overlapping generations that differ by their household structure, longevity, educational attainment, and capital accumulation. Each household optimally decides over its consumption paths, work effort, and retirement age according to the life-cycle theory of labor, while they face survival risk. We find that the pension reforms implemented from 2000 to 2004, although in the correct direction, are not sufficient to solve the labor market distortion caused by the Austrian PAYG pension system. Using alternative policy options, our simulations indicate that a change to a notional defined contribution system and an increase in the educational distribution of the work force would increase the incentive for later retirement ages and thereby increase labor supply and economic growth.
    Keywords: Austria, ageing, retirement, social security
    JEL: J1 Z0
    Date: 2012–08
  8. By: Bettina Lamla
    Abstract: In order to encourage people to take out voluntary private pensions to supplement decreasing statutory provisions Germany introduced the so-called Riester pensions. The complex design of the new product might have created entry barriers into the market helping to explain the slow adaption path in the eligible population until today. Existing empirical evidence has not properly taken into account the search and decision costs related to Riester pensions. I use information on family background in order to account for the predisposed ability to manage relevant information as well as to capture the impact of information sharing within families. I conclude that parental erudition as well as experience in financial matters are determinants of their children’s preferences and ability in financial decision making, however, omission does not seem to lead to misleading results on other coefficients. Contemporaneous as well as sequential correlations in Riester ownership between siblings are pronounced. While the former might be due to shared preferences, I take the latter as evidence for information sharing. Positive externalities help to overcome entry barriers in the Riester market by dispersing information. The family as a source of information becomes less important with time as the number of Riester owners in other social circles grows. Once a critical mass has been reached positive spillovers create a social multiplier which should result in dynamic demand for Riester contracts. Indeed official statistics exhibit increasing uptake rates among low income individuals for whom initial entry barriers were comparably high.
    JEL: D83 D91
    Date: 2012
  9. By: Rud, I.; Van Klaveren, C.; Groot, W. and Maassen van den Brink, H.
    Abstract: The empirical literature on education and crime suggests that both criminal behavior and educational attainment are transferred from parents to children. However, the impact of criminal involvement of parents on educational outcomes of children tends to be ignored, even though the entailed social costs may be substantial. This study examines the effects of parents‟ criminal involvement on the educational attainment of their children. A multinomial probit model is applied in combination with a Mahalanobis matching approach to identify this effect. The findings suggest that having criminally involved parents: (1) increases the probability of only finishing primary education by 8 percentage points, and (2) decreases the probability of having a higher education degree by 13 percentage points.
    Keywords: Educational attainment, Criminal involvement, Intergenerational effects
    Date: 2012
  10. By: Seyit Mümin Cilasun (Atýlým University); Murat Güray Kýrdar (Middle East Technical University)
    Abstract: In this study, using the 2003 Turkish Household Budget Survey (HBS), we investigate the life-cycle profiles of household income and its components by educational attainment, and compare these profiles with those reported for various developed and developing countries. A key aspect of our analysis is that we examine the link between household structure and household income over the life-cycle. The most interesting finding of the study is that household income profiles conditional on educational attainment in Turkey are nondecreasing and quite flat over the life-cycle. This is in stark contrast to the hump-shaped household income profiles reported for developed countries. There are three main reasons for this fact in Turkey: i) Multiple nuclear families live together in the same household, especially when the household head is very young or old, and many adult children who are employed live in their parents’ households. ii) Many household heads are still employed at end of their life cycle, especially among the less-educated. iii) Pension income levels, for those who are qualified for them, are relatively high compared to other components of income.
    Date: 2012
  11. By: Theodore J. Joyce; Ruoding Tan; Yuxiu Zhang
    Abstract: Next year marks the 40th anniversary of the U.S. Supreme Court decision in Roe v. Wade. We use unique data on abortions performed in New York State from 1971-1975 to analyze the impact of legalized abortion in New York on abortion and birth rates of non-residents. We estimate that abortion rates declined by 12.0 percent for every hundred miles a woman lived from New York in the years before Roe. If Roe were overturned average travel distance to the nearest abortion provider would increase by 157 miles in the 31 states expected to prohibit abortion. Under this scenario abortion rates would fall by 14.9 percent nationally, resulting in at most, 178,800 additional births or 4.2 percent of the U.S. total in 2008. A ban in 17 states would result in a 6.0 percent decline in abortions and at most, 1.7 percent rise in births.
    JEL: J13 J18
    Date: 2012–08
  12. By: Yamamura, Eiji
    Abstract: Smokers are more impatient and, unlike nonsmokers, they tend to prefer current benefits. In this paper, individual-level data from Japan are used to examine how preferences for divorce and extramarital sex are different between smokers and nonsmokers. After controlling for various individual characteristics, the major findings are as follows: (1) smokers are more likely to have a positive view about divorce than nonsmokers; (2) smokers are more likely to have a positive view about extramarital sex than nonsmokers. These results were observed regardless of the individual’s marital status. The findings here about smoker’s preferences are consistent with the characteristics of smokers suggested in the literature.
    Keywords: smokers; divorce; extramarital sex
    JEL: I12 J12
    Date: 2012–08–20
  13. By: Bali, Azad Singh (Asian Development Bank Institute); Asher, Mukul G. (Asian Development Bank Institute)
    Abstract: Rapid ageing of the population globally represents an unprecedented historical trend. As pension and healthcare costs are positively correlated with rising incomes, ageing, urbanization, and a shift from communicable to life-style diseases, managing these costs is a major challenge. There are many linkages between healthcare and pension arrangements—in terms of costs, exposure to risks, and as they jointly impact on crucial policy decisions. This paper discusses the rationale for coordination between various programs to better manage the cost of ageing. The current difficult macroeconomic environment, including fiscal stringency conditions, strengthens the case for such coordination.
    Keywords: population ageing; pension policies; healthcare policies; urbanization
    JEL: J10 J40
    Date: 2012–08–16
  14. By: Nguyen Viet, Cuong
    Abstract: This study examines the asset and income pattern of poor ethnic minorities in Northern Mountains of Vietnam using data from a 2010 Northern Mountain Baseline Survey (NMBS) of the Second Northern Mountains Poverty Reduction Project and Vietnam Household Living Standard Survey (VHLSS) 2010. The poor ethnic minorities in Northern Mountains have lower assets and income than ethnic minorities in other regions. Their income is mainly from crops and livestock. Compared with Kinh/Hoa and ethnic minorities in other regions, poor ethnic minorities in Northern Mountain have substantially lower income from wages and non-farm activities. The difference in the income gap between Northern Mountain ethnic minorities and other households is mainly explained by the gap in wages and non-farm income. Northern Mountain ethnic minorities spend less time on wages and non-farm employment. Compared with other households, their non-farm income per working hours and also farm income per working hours is substantially lower.
    Keywords: Ethnic minority; household income; poverty; decomposition; Vietnam
    JEL: I31 I32
    Date: 2012–02–20
  15. By: Michael Kind; Jan Kleibrink
    Abstract: This paper studies the effect of parenthood timing on future wages. Using data from the German Socio-Economic Panel (SOEP), we employ an instrumental variable approach to identify the causal effect of delaying parenthood on wages of mothers and fathers. Consistent with previous studies, we provide evidence for a positive delaying effect on wages. We further study the underlying mechanisms of the wage premium, paying particular attention to the relationship between career stage and fertility timing. We find that delaying parenthood by one additional year during the career implies a wage premium of 7%.
    Keywords: Fertility; Wage Differentials; Career Path
    JEL: J13 J24 J31
    Date: 2012
  16. By: Isis Gaddis (Georg-August-University Göttingen); Lionel Demery
    Abstract: Benefit incidence analysis is an extremely popular tool to assess the distribution of benefits from government expenditure in developing countries, particularly in the social sectors. The analysis describes the welfare impact of public spending on groups of people or households, typically along the income distribution. While benefit incidence analysis has generated useful insights into the distribution of benefits from public spending in a variety of sectors, many studies fail to take into account differences in needs for public services across population groups. This can lead to an inappropriate and potentially misleading assessment of equity in public spending. This article reviews the evidence and introduces techniques to account better for heterogeneous needs in benefit incidence analysis. Using the example of an empirical benefit incidence study of education expenditure in Kenya, we show that our understanding of the distributional implications of public spending is greatly improved if we account for demographic differences between population groups.
    Keywords: Benefit incidence; public spending; education; demography; population-normalization; stochastic dominance; Kenya
    JEL: D3 I2 I3 H4
    Date: 2012–08–21
  17. By: Mapa, Dennis S.; Albis , Manuel Leonard F.; Lucagbo, Michael
    Abstract: The high level of extreme poverty or those experiencing hunger in the country is the most pressing issue that needs to be addressed by our policymakers. Official government statistics and data from self-rated hunger surveys show an increasing trend in hunger incidence among households. On the one hand, latest data from the National Statistical Coordination Board (NSCB) show that the percentage of population experiencing hunger almost remained the same from 11.1 percent in 2003 to 10.8 percent in 2009. On the other hand, the Social Weather Stations (SWS) quarterly surveys on hunger incidence show an increasing trend in the percentage of families that experienced hunger, reaching 18.4 percent (about 3.8 million households) in the 2nd Quarter of 2012. This study looks at the determinants of extreme poverty among households using the data from the Family Income and Expenditures Survey (FIES) and the household surveys of SWS. Using a logit model on the pooled data, the results show that presence of a young dependent in the household increases the probability that the household will be extremely poor, controlling for other factors. Other variables that influence the probability of the household being extremely poor are the education of the household head and percentage of cash transfer from abroad. Moreover, regional characteristics such as varying food prices and underemployment rate (quality of jobs) explain a lot about the probability of the household being extremely poor. The study shows that we cannot ignore the evidence linking population growth and poverty. Development policies aimed at addressing poverty incidence in the country must include measures that will manage the country’s bourgeoning population.
    Keywords: Extreme Poverty; Young Dependents; Logit Model; Population Management
    JEL: J13 R20 C25 I32
    Date: 2012–08
  18. By: Liat Raz-Yurovich (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: This study suggests that outsourcing to service providers is becoming the third edge in the economics of households in the 21st century. By referring to the household as an organizational unit, we use the transaction cost approach of the organizational economists to discuss and conceptualize the questions of what, why, and how 21st-century households decide to outsource. Our analysis demonstrates that the efficient boundaries of households are flexible, so that the core functions of households are being outsourced with different levels of intensity and scope. Moreover, we find that better cost control, access to technical expertise, and the potential for time savings might foster outsourcing by households; while normative and social beliefs, trust problems, power relations, and asymmetric information might inhibit outsourcing. With regard to the question of how, we find that households ‘make and buy’ rather than ‘make or buy’. Both the demand and the supply aspects of the outsourcing phenomenon are further discussed with regard to institutional mechanisms. Our analysis also offers theoretical contributions to the transaction cost approach, both by proposing the governance structure of ‘make and buy’, and by emphasizing the role of power in the organizational decision-making process regarding outsourcing.
    JEL: J1 Z0
    Date: 2012–08
  19. By: Andreas Chai; Wolfhard Kaus
    Keywords: Conspicuous consumption, income distribution, signaling, status, South Africa
    JEL: J15 D83 D12 O12
    Date: 2012–02

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