nep-dem New Economics Papers
on Demographic Economics
Issue of 2012‒09‒16
twenty papers chosen by
Clarence Nkengne Tsimpo
University of Montreal and World Bank Group

  1. Is it money or brains? The determinants of intra-family decision power By Graziella Bertocchi; Marianna Brunetti; Costanza Torricelli
  2. Birth order and child outcomes: does maternal quality time matter? By C. Monfardini; S. G. See
  3. Executive Board Composition and Bank Risk Taking By Allen N. Berger; Thomas Kick; Klaus Schaeck
  4. Private versus public old-age security By Barnett, Richard C.; Bhattacharya, Joydeep; Puhakka, Mikko
  5. Do Migrant Girls Always Perform Better? Differences between the Reading and Math Scores of 15-Year-Old Daughters and Sons of Migrants in PISA 2009 and Variations by Region of Origin and Country of Destination By Kornder Nils; Dronkers Jaap
  6. Heterogeneity in the Relationship between Happiness and Age: Evidence from the German Socio-Economic Panel By Gregori Baetschmann
  7. Recessions, Older Workers, and Longevity: How Long Are Recessions Good For Your Health? By Courtney C. Coile; Phillip B. Levine; Robin McKnight
  8. Pension Payments and Receipts by New Zealand Birth Cohorts, 1916–1986 By Andrew Coleman
  9. Coordinating Healthcare and Pension Policies : An Exploratory Study By Azad Singh Bali; Mukul G. Asher
  10. Coordinating Healthcare and Pension Policies : An Exploratory Study By Azad Singh Bali; Mukul G. Asher
  11. Heterogeneity in expected longevities By Josep Pijoan-Mas; Jose-Victor Rios-Rull
  12. Early-Life Health and Adult Circumstance in Developing Countries By Janet Currie; Tom Vogl
  13. Age Effects in the Okun's Law within the Eurozone By Oliver Hutengs; Georg Stadtmann
  14. Working Time Preferences, Hours Mismatch and Well-Being of Couples: Are There Spillovers? By Christoph Wunder; Guido Heineck
  15. Loan regulation and child labor in rural India By Basab Dasgupta; Christian Zimmermann
  16. The Intergenerational Transmission of Cognitive and Non-Cognitive Skills during Adolescence and Young Adulthood By Silke Anger
  17. Reforming the Public Pension System in the Russian Federation By Mauricio Soto; Frank Eich; Charleen Gust
  18. Introducción a la econometría espacial: Una aplicación al estudio de la fecundidad en la Argentina usando R. By Herrera Gómez, Marcos; Cid , Juan Carlos; Paz , Jorge Augusto
  19. That’s what friends are for? The impact of peer characteristics on early school-leaving By Traag Tanja; Lubbers Miranda Jessica; Velden Rolf van der
  20. Training Participation of a Firm's Aging Workforce By Christian Pfeifer; Simon Janssen; Philip Yang; Uschi Backes-Gellner

  1. By: Graziella Bertocchi; Marianna Brunetti; Costanza Torricelli
    Abstract: We empirically study the determinants of intra-household decision power with respect to economic and financial choices using a direct measure provided in the 1989-2010 Bank of Italy Survey of Household Income and Wealth. Focusing on a sample of couples, we evaluate the effect of each spouse's characteristics, household characteristics, and background variables. We find that the probability that the wife is in charge is affected by household characteristics such as family size and total income and wealth, but more importantly that it increases with the difference between hers and her husband's characteristics in terms of age, education, and income. The main conclusion is that decision-making power over family economics is not only determined by strictly economic differences, as suggested by previous studies, but also by differences in human capital and experience. Finally, exploiting the time dimension of our dataset, we show that this pattern is increasing over time.
    Keywords: Family economics, intra-household decision power, gender differences
    JEL: J12 D13 E21 G11
    Date: 2012–06
  2. By: C. Monfardini; S. G. See
    Abstract: Higher birth order positions are often associated with poorer outcomes, possibly due to fewer resources received within the household. Using a sample of PSID-CDS children, we investigate whether the birth order effects in their outcomes are due to unequal allocation of the particular resource represented by maternal quality time. OLS regressions show that the negative birth order effects on various test scores are only slightly diminished when maternal time is included among the regressors. This result is confirmed when we account for unobserved heterogeneity at the household level, exploiting the presence of siblings in the data. Our evidence therefore suggests that birth order effects are not due to differences in maternal quality time received.
    JEL: D13 J12 J13 J22 J24
    Date: 2012–09
  3. By: Allen N. Berger (University of South Carolina); Thomas Kick (Deutsche Bundesbank); Klaus Schaeck (Bangor Business School)
    Abstract: Little is known about how socioeconomic characteristics of executive teams affect corporate governance in banking. Exploiting a unique dataset, we show how age, gender, and education composition of executive teams affect risk taking of financial institutions. First, we establish that age, gender, and education jointly affect the variability of bank performance. Second, we use difference-in-difference estimations that focus exclusively on mandatory executive retirements and find that younger executive teams increase risk taking, as do board changes that result in a higher proportion of female executives. In contrast, if board changes increase the representation of executives holding Ph.D. degrees, risk taking declines.
    Keywords: Banks, executives, risk taking, age, gender, education
    JEL: G21 G34 I21 J16
    Date: 2012–02
  4. By: Barnett, Richard C.; Bhattacharya, Joydeep; Puhakka, Mikko
    Abstract: We compare two institutions head on, a family compact – a parent makes a transfer to her parent in anticipation of a possible future gift from her children – with a pay-as-you-go, social security system in a lifecycle model with endogenous fertility wherein children are valued both as consumption and investment goods. Our focus is strictly on the pension dimension of these competing institutions. We show that an optimally-chosen family compact and a social security system cannot co-exist; indeed, the former may be preferred. A strong-enough negative shock to middle-age incomes destroys family compacts. While such a setting might appear ideal for the introduction of a social security system – as the experience of Europe, circa 1880s, would suggest – this turns out not to be the case: if incomes are too depressed to allow family compacts to flourish, they are also too low to permit introduction of an optimal social security system.
    Keywords: Fertility; social security; pensions; family compacts; intergenerational cooperation; self-enforcing constitutions
    JEL: E21 E32
    Date: 2012–09–04
  5. By: Kornder Nils; Dronkers Jaap (METEOR)
    Abstract: As a follow-up of earlier analyses of the educational performance of all pupils with a migrationbackground with Programme for International Student Assessment (PISA) waves 2003 and 2006, weanalyze the differences between the educational performance of 15-year old daughters and sons ofmigrants from specific regions of origin countries living in different destination countries. Weuse the newest PISA 2009 wave. Instead of analyzing only Western countries as destinationcountries, we analyze the educational performance of 16,612 daughters and 16,804 sons of migrantsin destination countries across Asia, Europe, Latin America, and Oceania. We distinguish 62 origincountries and 12 origin areas in 30 destination countries. We test three hypotheses: 1) Thedaughters of migrants from poorer, more traditional regions perform much better in reading thancomparable sons of migrants from the same origin regions, while the daughters of migrants frommore affluent and liberal regions perform slightly better in reading than comparable sons ofmigrants from the same regions. 2) Individual socioeconomic background has a stronger effect onthe educational performance of daughters of migrants than on the performance of sons of migrants.3) The performance of female native pupils has a higher influence on the performance of migrantdaughters than the performance of male native pupils has on the performance of migrant sons. Thefirst hypothesis can only partly be accepted. Female migrant pupils have both higher reading andmath scores than comparable male migrant pupils, and these gender differences among migrant pupilsare larger than among comparable native pupils. The additional variation in educationalperformance by region of origin is, however, not clearly related to the poverty or traditionalismof regions. Neither the second nor the third hypothesis can be accepted, given our results.
    Keywords: microeconomics ;
    Date: 2012
  6. By: Gregori Baetschmann
    Abstract: This paper studies the evolution of life satisfaction over the life course in Germany. It clarifies the causal interpretation of the econometric model by discussing the choice of control variables and the underidentification between age, cohort and time effects. The empirical part analyzes the distribution of life satisfaction over the life course at the aggregated, subgroup and individual level. To the findings: On average, life satisfaction is mildly decreasing up to age fifty-five followed by a hump shape with a maximum at seventy. The analysis at the lower levels suggests that people differ in their life satisfaction trends, whereas the hump shape after age fity-five is robust. No important differences between men and women are found. In contrast, education groups differ in their trends: highly educated people become happier over the life cycle, where life satisfaction decreases for less educated people.
    Keywords: Aging, life satisfaction, well-being, happiness methodology
    JEL: C23 I31 D91
    Date: 2012
  7. By: Courtney C. Coile; Phillip B. Levine; Robin McKnight
    Abstract: This paper examines the impact of exposure to higher unemployment rates in the pre-retirement years on subsequent mortality. Although past research has found that recessions reduce contemporaneous mortality, these short-term effects may reverse over time, particularly for older workers. If workers experience an economic downturn in their late 50s, they may face several years of reduced employment and earnings before “retiring” when they reach Social Security eligibility at age 62. They also may experience lost health insurance, and therefore higher financial barriers to health care, through age 65, when Medicare becomes available. All of these experiences could contribute to weaker long-term health outcomes. To examine these hypotheses, we use Vital Statistics mortality data between 1969 and 2008 to generate age-specific cohort survival probabilities at older ages. We then link these survival probabilities to labor market conditions at earlier ages. We also use data from the 1980-2010 March Current Population Surveys and the 1991-2010 Behavioral Risk Factor Surveillance System surveys to explore potential mechanisms for this health effect. Our results indicate that experiencing a recession in one’s late 50s leads to a reduction in longevity. We also find that this exposure leads to several years of reduced employment, health insurance coverage, and health care utilization which may contribute to the lower long-term likelihood of survival.
    JEL: I18 J26
    Date: 2012–09
  8. By: Andrew Coleman (Motu Economic and Public Policy Research and the New Zealand Treasury)
    Abstract: This paper analyses how much different cohorts can expect to contribute into the PAYGO-funded New Zealand Superannuation scheme, and contrasts it with the amount each cohort can be expected to obtain in benefits if the current scheme is continued. The analysis is based on historic census and contributions data and SNZ projections of future population trends. The results show that cohorts born prior to 1980 can expect to pay half as much as they can expect to get in retirement benefits, because of the small number of pension recipients when they made the bulk of their payments.
    Keywords: retirement incomes, intergenerational transfers, government pension schemes
    JEL: E24 H55
    Date: 2012–09
  9. By: Azad Singh Bali (Asian Development Bank Institute (ADBI)); Mukul G. Asher
    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: Pension, health care, coordination of healthcare and pension programs
    JEL: J1 J4
    Date: 2012–08
  10. By: Azad Singh Bali (Asian Development Bank Institute (ADBI)); Mukul G. Asher
    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: Pension, health care, coordination of healthcare and pension programs
    JEL: J1 J4
    Date: 2012–08
  11. By: Josep Pijoan-Mas; Jose-Victor Rios-Rull
    Abstract: We develop a new methodology to compute differences in the expected longevity of individuals who are in different socioeconomic groups at age 50. We deal with two main problems associated with the standard use of life expectancy: that people’s socioeconomic characteristics evolve over time and that there is a time trend that reduces mortality over time. Using HRS data for individuals from different cohorts, we estimate a hazard model for survival with time-varying stochastic endogenous covariates that yields the desired expected durations. We uncover an enormous amount of heterogeneity in expected longevities between individuals in different socioeconomic groups, albeit less than implied by a naive (static) use of socioeconomic characteristics. Our analysis allows us to decompose the longevity differentials into differences in health at age 50, differences in mortality conditional on health, and differences in the evolution of health with age. Remarkably, it is the latter that is the most important for most socioeconomic characteristics. For instance, education and wealth are health protecting but have little impact on two-year mortality rates conditional on health. Finally, we document an increasing time trend of all these differentials in the period 1992–2008, and a likely increase in the socioeconomic gradient in mortality rates in the near future. The mortality differences that we find have huge welfare implications that dwarf the differences in consumption accruing to people in different socioeconomic groups.
    Keywords: Life expectancy
    Date: 2012
  12. By: Janet Currie; Tom Vogl
    Abstract: A growing literature documents the links between long-term outcomes and health in the fetal period, infancy, and early childhood. Much of this literature focuses on rich countries, but researchers are increasingly taking advantage of new sources of data and identification to study the long reach of childhood health in developing countries. Health in early life may be a more significant determinant of adult outcomes in these countries because health insults are more frequent, the capacity to remediate is more limited, and multiple shocks may interact. However, the underlying relationships may also be more difficult to measure, given significant mortality selection. We survey recent evidence on the adult correlates of early-life health and the long-term effects of shocks due to disease, famine, malnutrition, pollution, and war.
    JEL: I12 I15 J24 O15
    Date: 2012–09
  13. By: Oliver Hutengs; Georg Stadtmann
    Abstract: We estimate Okun coefficients for five different age cohorts for several Eurozone countries. We find a stable pattern for all countries: The relationship between business-cycle fluctuations and the unemployment rate is the strongest for the youngest cohort and gets smaller for the elderly cohorts.
    Keywords: Okun's law, labor market, youth unemployment
    JEL: E24 F50 C23
    Date: 2012
  14. By: Christoph Wunder; Guido Heineck
    Abstract: We analyze how well-being is related to working time preferences and hours mismatch. Selfreported measures of life satisfaction are used as an empirical approximation of true wellbeing. Our results indicate that well-being is generally lower among workers with working time mismatch. Particularly underemployment is detrimental for well-being. We further provide first evidence on spillovers from the partner’s working time mismatch. However, the spillover becomes insignificant once we control for the partner’s well-being. This suggests that well-being is contagious, and the spillover is due to interdependent utilities. Females experience the highest well-being when their partner is working full-time hours. Male wellbeing is unaffected over a wide interval of the partner’s working hours.
    Keywords: Subjective well-being, life satisfaction, working time preferences, working time mismatch, spillovers, utility interdependence
    JEL: I31 J21 J22
    Date: 2012
  15. By: Basab Dasgupta; Christian Zimmermann
    Abstract: We study the impact of loan regulation in rural India on child labor with an overlapping-generations model of formal and informal lending, human capital accumulation, adverse selection, and differentiated risk types. Specifically, we build a model economy that replicates the current outcome with a loan rate cap and no lender discrimination by risk using a survey of rural lenders. Households borrow primarily from informal moneylenders and use child labor. Removing the rate cap and allowing lender discrimination markedly increases capital use, eliminates child labor, and improves welfare of all household types.
    Keywords: Loans ; Child labor ; India
    Date: 2012
  16. By: Silke Anger
    Abstract: This study examines cognitive and non-cognitive skills and their transmission from parents to children as one potential candidate to explain the intergenerational link of socio-economic status. Using representative data from the German Socio-Economic Panel Study, we contrast the impact of parental cognitive abilities (fluid intelligence, crystallized intelligence) and personality traits (Big Five, locus of control) on their adolescent and young adult children’s traits with the effects of parental background and childhood environment. While for both age groups intelligence and personal traits were found to be transmitted from parents to their children, there are large discrepancies with respect to the age group and the type of skill. The intergenerational transmission effect was found to be relatively small for adolescent children, with correlations between 0.12 and 0.24, whereas the parent-child correlation in the sample of adult children was between 0.19 and 0.27 for non-cognitive skills, and up to 0.56 for cognitive skills. Thus, the skill gradient increases with the age of the child. Furthermore, the skill transmission effects are virtually unchanged by controlling for childhood environment or parental education, suggesting that the socio-economic status of the family does not play a mediating role in the intergenerational transmission of intelligence and personality traits. The finding that non-cognitive skills are not as strongly transmitted as cognitive skills, suggests that there is more room for external (non-parental) influences in the formation of personal traits. Hence, it is more promising for policy makers to focus on shaping children’s non-cognitive skills to promote intergenerational mobility. Intergenerational correlations of cognitive skills in Germany are roughly the same or slightly stronger than those found by previous studies for other countries with different institutional settings. Intergenerational correlations of non-cognitive skills revealed for Germany seem to be considerably higher than the ones found for the U.S.. Hence, skill transmission does not seem to be able to explain cross-country differences in socio-economic mobility.
    Keywords: Cognitive abilities, personality, intergenerational transmission, skill formation
    JEL: J10 J24 I20
    Date: 2012
  17. By: Mauricio Soto; Frank Eich; Charleen Gust
    Abstract: Pension reform is a key policy challenge in Russia. This paper examines how pension spending could increase in Russia in the absence of reforms, quantifies the impact of some recent proposals, and suggests some alternatives that would ensure public pension benefits - relative to wages - not fall from current levels while containing spending.
    Keywords: Aging , Pension reforms , Pensions , Population , Russian Federation ,
    Date: 2012–08–10
  18. By: Herrera Gómez, Marcos; Cid , Juan Carlos; Paz , Jorge Augusto
    Abstract: Spatial econometrics is a relatively young branch econometric but with a great growth in the last decades. The complexity of spatial analysis and the estimation of spatial models has been the major obstacle for applied studies. The aim of this paper is to contribute to the diffusion of spatial tools developed. Specifically, this paper performs a concise review of the theoretical aspects that involve the spatial treatment. We also present an empirical application of the techniques discussed. Using the statistical program R, we analyze the determinants of fertility in Argentina.
    Keywords: Econometría Espacial; Autocorrelación Espacial; Fecundidad; Programa Estadístico R
    JEL: J13 R12 C21
    Date: 2012
  19. By: Traag Tanja; Lubbers Miranda Jessica; Velden Rolf van der (METEOR)
    Abstract: In this paper we investigate if peer relations affect a student’s risk of early school-leaving. Weuse the sociometric data collection from the Dutch “Secondary Education Pupil Cohort 1999” toidentify peer relations in a sample of almost 20,000 students in the first grade of secondaryeducation (mean age 13). This information is matched to data on educational attainment from 1999to 2010 for these students, to measure later early school-leaving by both the focal students aswell as their peers. Our results show that both being friends with future early school-leavers aswell as popularity among future early school-leavers increases the risk of students to be earlyschool-leavers later in their educational career while other characteristics of the peer groupsuch as gender composition, ethnic composition, average (non)cognitive skills and averagesocioeconomic background have no effects on the risk of early school-leaving. And whilecharacteristics like gender, ethnicity and socio-economic background play an important role inpeer selection, the future dropout status does not have a major impact on peer selection.
    Keywords: education, training and the labour market;
    Date: 2012
  20. By: Christian Pfeifer (Institute of Economics, Leuphana University Lüneburg and IZA Bonn, Germany); Simon Janssen (Department of Business Administration, University of Zurich); Philip Yang (Leibniz University Hannover, Institute of Labor Economics); Uschi Backes-Gellner (Department of Business Administration, University of Zurich)
    Abstract: We use a long panel data set for four cohorts of male blue-collar workers entering into an internal labor market to analyze the effect of age on the probability of participating in different employer-financed training measures. We find that training participation probabilities are inverted u-shaped with age and that longer training measures are undertaken earlier in life and working career. These findings are consistent with predictions from a human capital model that incorporates amortization period and screening effects.
    Keywords: Age; Human capital; Internal labor markets; Training
    JEL: J14 J24 M53
    Date: 2012–08

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