nep-dem New Economics Papers
on Demographic Economics
Issue of 2012‒09‒30
48 papers chosen by
Clarence Nkengne Tsimpo
University of Montreal and World Bank Group

  1. Education and Fertility: Evidence from a Policy Change in Kenya By Chicoine, Luke E.
  2. With Strings Attached: Grandparent-Provided Child care, Fertility, and Female Labor Market Outcomes By Eva Garcia-Moran; Zoe Kuehn
  3. Spouses' Retirement and Hours Outcomes: Evidence from Twofold Regression Discontinuity with Differences-in-Differences By Stancanelli, Elena G. F.
  4. Family and Labor Market Choices: Requirements to Guide Effective Evidence-Based Policy By Kurowska, Anna; Myck, Michal; Wrohlich, Katharina
  5. Do Higher Childcare Subsidies Improve Parental Well-being? Evidence from Québec's Family Policies By Brodeur, Abel; Connolly, Marie
  6. Getting Back into the Labor Market: The Effects of Start-Up Subsidies for Unemployed Females By Caliendo, Marco; Künn, Steffen
  7. Birth Order and Child Outcomes: Does Maternal Quality Time Matter? By Monfardini, Chiara; See, Sarah Grace
  8. Saving Lives at Birth: The Impact of Home Births on Infant Outcomes By N. Meltem Daysal; Mircea Trandafir; Reyn van Ewijk
  9. Political Decentralization, Women's Reservation and Child Health Outcomes: A Case Study of Rural Bihar By Santosh Kumar; Nishith Prakash
  10. Water Scarcity and Birth Outcomes in the Brazilian Semiarid By Rocha, Rudi; Soares, Rodrigo R.
  11. Does It Pay for Women to Volunteer? By Sauer, Robert M.
  12. Remember When It Rained: The Elusiveness of Gender Discrimination in Indian School Enrollment By Zimmermann, Laura
  13. Explaining the Birth Order Effect: The Role of Prenatal and Early Childhood Investments By Lehmann, Jee-Yeon K.; Nuevo-Chiquero, Ana; Vidal-Fernández, Marian
  14. Migration and the transition to adulthood in contemporary Malawi By Beegle, Kathleen; Poulin, Michelle
  15. New evidence of the causal effect of family size on child quality in a developing country By Souza, André Portela; Ponczek, Vladimir P.
  16. Projecting the Effect of Changes in Smoking and Obesity on Future Life Expectancy in the United States By Samuel H. Preston; Andrew Stokes; Neil K. Mehta; Bochen Cao
  17. Sharing high growth across generations:pensions and demographic transition in China By Zheng Song; Kjetil Storesletten; Yikai Wang; Fabrizio Zilibotti
  18. Pre-marital Confinement of Women: A Signaling and Matching Approach By Birendra Rai; Kunal Sengupta
  19. The Gorbachev Anti-Alcohol Campaign and Russia's Mortality Crisis By Bhattacharya, Jay; Gathmann, Christina; Miller, Grant
  20. Critical Periods during Childhood and Adolescence: A Study of Adult Height among Immigrant Siblings By van den Berg, Gerard J.; Lundborg, Petter; Nystedt, Paul; Rooth, Dan-Olof
  21. Assimilation through Marriage By Epstein, Gil S.; Lindner Pomerantz, Renana
  22. Self investments of adolescents and their cognitive development By Daniela Del Boca; Chiara Monfardini; Cheti Nicoletti
  23. Two can live as cheaply as one... But three's a crowd By Christopher R. Bollinger, Cheti Nicoletti and Stephen Pudney
  24. Collateral effects of a pension reform in France. By Helene Blake;; Clementine Garrouste
  25. Trade Liberalization and Female Labor Force Participation: Evidence from Brazil By Gaddis, Isis; Pieters, Janneke
  26. What's Best for Women: Gender Based Taxation, Wage Subsidies or Basic Income? By Colombino, Ugo; Narazani, Edlira
  27. Childcare Subsidies and Labor Supply: Evidence from a large Dutch Reform By L.J.H. Bettendorf; Egbert L.W. Jongen; Paul Muller
  28. Ethnic Segregation in Germany By Glitz, Albrecht
  29. Macroeconomic Implications of Demographic Changes: A Global Perspective By Ronald Lee
  30. Decomposing Differences in Labour Force Status between Indigenous and Non-Indigenous Australians By Kalb, Guyonne; Le, Trinh; Hunter, Boyd H.; Leung, Felix
  31. Stochastic mortality, macroeconomic risks, and life insurer solvency By Hanewald, Katja; Post, Thomas; Gründl, Helmut
  32. Demographic Change and Directed Technological Change By KOBAYASHI Keiichiro
  33. Welfare-Induced Migration of the Elderly in Japan - Gender differences in welfare migration patterns among the elderly By Katsuyoshi Nakazawa
  34. An Anatomy of Racial and Ethnic Trends in Male Earnings By Winters, John V.; Hirsch, Barry T.
  35. Gender Gaps in Spain: Policies and Outcomes over the Last Three Decades By Guner, Nezih; Kaya, Ezgi; Sánchez-Marcos, Virginia
  36. Can an Ethnic Group Climb Up from the Bottom of the Ladder? By Epstein, Gil S.; Siniver, Erez
  37. Pension Coverage for Parents and Educational Investment in Children: Evidence from Urban China By Mu, Ren; Du, Yang
  38. Human capital and longevity. Evidence from 50,000 twins. By Petter Lundborg;; Carl Hampus Lyttkens;; Paul Nystedt;
  39. Behavioral Effects of Social Security Policies on Benefit Claiming, Retirement and Saving By Alan L. Gustman; Thomas L. Steinmeier
  40. Self investments of adolescents and their cognitive development By Daniela Del Boca, Chiara Monfardini and Cheti Nicoletti
  41. On financing retirement with an aging population By Ellen R. McGrattan; Edward C. Prescott
  42. Statistical Discrimination or Prejudice? A Large Sample Field Experiment By Michael Ewens; Bryan Tomlin; Liang Choon Wang
  43. Recent Longitudinal Evidence of Size and Union Threat Effects across Genders By Wunnava, Phanindra V.
  44. Are temporary work agencies stepping-stones into regular employment? By Hveem, Joakim
  45. Leadership and Gender in Groups: An Experiment By Philip J. Grossman; Mana Komai; James E. Jensen
  46. Global Pension Systems and Their Reform: Worldwide Drivers, Trends, and Challenges By Holzmann, Robert
  47. Moving to Segregation: Evidence from 8 Italian Cities By Boeri, Tito; De Philippis, Marta; Patacchini, Eleonora; Pellizzari, Michele
  48. Migration Challenge for PAYG By Gurgen Aslanyan

  1. By: Chicoine, Luke E. (DePaul University)
    Abstract: This paper investigates the relationship between women's education and fertility by exploiting a 1985 policy change in Kenya that lengthened primary school by one year. An instrumental variables approach measures the exogenous variation in treatment intensity across birth cohorts. The reform led to an increase in education, a delay in marriage, and reduced fertility beginning at the age of 20. The effect on fertility becomes increasingly negative through age 25. The findings suggest that postponement of marriage, reduction in the marital education gap, and increased early use of modern contraceptives contribute to reduced fertility. These results are consistent with women having greater control over their fertility decision.
    Keywords: fertility, education, Kenya
    JEL: O15 J13 I25
    Date: 2012–08
  2. By: Eva Garcia-Moran (The Center for Economic and Political Research on Aging , University of Lugano); Zoe Kuehn (Departmento de Economia Cuantitativa, Universidad Complutense de Madrid.)
    Abstract: Grandparents are regular providers of free child care. Similar to any other form of child care, availability of grandparent-provided child care affects fertility and labor market decisions of women positively. We find that women in Germany, residing close to parents or in-laws are more likely to have children and that as mothers they are more likely to hold a regular part-or fulltime job. However, different from any other type of child care, for individuals to enjoy grandparent-provided child care on a regular basis, residence choices must coincide with those of parents or in-laws. Thus while living close provides access to free child care, it imposes costly spatial restrictions. We find that hourly wages of mothers residing close to parents or in-laws are lower compared to those residing further away, and having relatives taking care of ones' children increases the probability of having to commute. We build a general equilibrium model of residence choice, fertility decisions, and female labor force participation that can account for the relationships between grandparent-provided child care, fertility and female labor market outcomes. We simulate our model to analyze how women's decisions on residence, fertility, and labor force participation change under distinct scenarios regarding availability of grandparent provided childcare and different family policies.
    Keywords: informal child care, fertility, labor force participation, spatial restrictions, regional labor markets
    JEL: J13 J61 H42 R23
    Date: 2012–09
  3. By: Stancanelli, Elena G. F. (Sorbonne Economics Research Center Paris 1 University)
    Abstract: Earlier studies conclude that spouses' retirement strategies are not independent from each other and that policies affecting individuals in a couple are also likely to affect the economic behaviour of their partner. In this study, we exploit retirement age legislation in France as well as a retirement policy change to identify the effect of own and spousal retirement on spouses' hours. To this end, we use a Fuzzy Regression Discontinuity approach combined with Differences in Differences, for both spouses. The data for the analysis are drawn from French Labour Surveys pooled over thirteen years. The sample for the analysis includes over 85,000 dual-earner couples with spouses aged 50 to 70. We find evidence of large and significant jumps in the own retirement probability at the legal early retirement age for both men and women in a couple. We also conclude that the 1993 reform reduced significantly the probability of retirement at the early retirement age for married men while the effect was not significant for married women. Husbands' retirement probability increases significantly when the wife reaches early retirement age while her retirement probability is not responsive to his early retirement age. We conclude that hours fall significantly upon own and partner's retirement for both spouses. On average, her hours fall by 2.7 per cent when he retires while his hours fall by 5 per cent when she retires, implying an average reduction of one hour per week for women and two hours for men if their spouse retires.
    Keywords: ageing, retirement, regression discontinuity, policy evaluation
    JEL: J14 C1 C36 D04
    Date: 2012–08
  4. By: Kurowska, Anna (Warsaw University); Myck, Michal (Centre for Economic Analysis, CenEA); Wrohlich, Katharina (DIW Berlin)
    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: 2012–09
  5. By: Brodeur, Abel (Paris School of Economics); Connolly, Marie (University of Québec at Montréal)
    Abstract: In this paper, we investigate the effect of a change in childcare subsidies on parental subjective well-being. Starting in 1997, the Canadian province of Québec implemented a generous program providing $5-a-day childcare to children under the age of 5. By 2007, the percentage of children attending subsidized day care had tripled and mothers' labor force participation had increased substantially. Objectively, more labor force participation is seen as a positive improvement, bringing with it higher income, independence and bargaining power. Yet a decrease in women's subjective well-being over previous decades has been documented, perhaps due to a Second Shift effect where women work more but still bear the brunt of housework and childrearing (Hochschild and Machung, 1989). Using data from the Canadian General Social Survey, we estimate a triple-differences model using differences pre- and post- reforms between Québec and the rest of Canada and between parents with young children and those with older children. Our estimates suggest that Québec's family policies led to a small decrease in parents' subjective well-being. Of note, though, we find large and positive effects for poor household families and high school graduates and negative effects for middle household income families. We find similar negative effects on life satisfaction for both men and women, but different effects on satisfaction with work-life balance. This suggests that fathers' life satisfaction could be influenced by their wives' labor supply while their work-life balance is not.
    Keywords: childcare, labor supply, subjective well-being, life satisfaction, happiness, work-life balance
    JEL: I31 J20 J28
    Date: 2012–08
  6. By: Caliendo, Marco (University of Potsdam); Künn, Steffen (IZA)
    Abstract: A shortage of skilled labor and low female labor market participation are problems many developed countries have to face. Besides activating inactive women, one possible solution is to support the re-integration of unemployed women. Due to female-specific labor market constraints (preferences for flexible working hours, discrimination), this is a difficult task, and the question arises whether active labor market policies (ALMP) are an appropriate tool to do so. Promoting self-employment among the unemployed might be promising. Starting their own business might give women more independence and flexibility in allocating their time to work and family. Access to long-term informative data allows us to close existing research gaps, and we investigate the impact of two start-up programs on long-run labor market and fertility outcomes of female participants. We find that start-up programs persistently integrate former unemployed women into the labor market and partly improve their income situations. The impact on fertility is less detrimental than for traditional ALMP programs.
    Keywords: start-up subsidies, evaluation, long-term effects, female labor force participation, fertility
    JEL: J68 C14 H43
    Date: 2012–08
  7. By: Monfardini, Chiara (University of Bologna); See, Sarah Grace (University of Bologna)
    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.
    Keywords: birth order, achievement production, time use
    JEL: D13 J12 J13 J22 J24
    Date: 2012–08
  8. By: N. Meltem Daysal (Tilburg University and IZA); Mircea Trandafir (Université de Sherbrooke); Reyn van Ewijk (University Medical Centre Mainz and University of Mainz)
    Abstract: Many developed countries have recently experienced sharp increases in home birth rates. This paper investigates the impact of home births on the health of low-risk newborns using data from the Netherlands, the only developed country where home births are widespread. To account for endogeneity in location of birth, we exploit the exogenous variation in distance from a mother’s residence to the closest hospital. We find that giving birth in a hospital leads to substantial reductions in newborn mortality. We provide suggestive evidence that proximity to medical technologies may be an important channel contributing to these health gains.
    Keywords: Medical technology, birth, home birth, mortality
    JEL: I11 I12 I18 J13
    Date: 2012–09
  9. By: Santosh Kumar (University of Washington); Nishith Prakash (University of Connecticut)
    Abstract: In this paper, we investigate the impact of political decentralization and gender quota in local governance on different measures of health outcomes and behaviors. We use multiple waves of District Level Household Survey (DLHS) for two states in India, Bihar and Jharkhand, and employ differences-in-differences (DID) methodology to estimate the impacts. We find that political decentralization is positively associated with higher probabilities of institutional births, safe delivery, and births in public health facilities. We also find increased survival rate of children belonging to richer households. We argue that our results are consistent with local leaders having better information or greater concern for women and child health as argued in the literature (Bhalotra and Figuera, 2012). JEL Classification: I38, J15, J78 Key words: Affirmative Action, Woman, Ante-Natal Care, Institutional Delivery, Child Mortality, India
    Date: 2012–09
  10. By: Rocha, Rudi (Federal University of Rio de Janeiro (IE-UFRJ)); Soares, Rodrigo R. (Pontifical Catholic University of Rio de Janeiro (PUC-Rio))
    Abstract: This paper analyzes the impact of rainfall fluctuations during the gestational period on health at birth. We concentrate on the semiarid region of Northeastern Brazil to highlight the role of water scarcity as a determinant of early life health. We find that negative rainfall shocks are robustly correlated with higher infant mortality, lower birth weight, and shorter gestation periods. Mortality effects are concentrated on intestinal infections and malnutrition, and are greatly minimized when the local public health infrastructure is sufficiently developed (municipality coverage of piped water and sanitation). We also find that effects are stronger during the fetal period (2nd trimester of gestation), for children born during the dry season, and for mortality in the first 6 months of life. The results seem to be driven by water scarcity per se, and not by reduced agricultural production. Our estimates suggest that expansions in public health infrastructure would be a cost-effective way of reducing the response of infant mortality to rainfall shocks in the Brazilian semiarid.
    Keywords: water, rainfall, health, birth, infant mortality, sanitation, semiarid, Brazil
    JEL: I15 I18 H51 Q54
    Date: 2012–07
  11. By: Sauer, Robert M. (Royal Holloway, University of London)
    Abstract: This paper estimates the economic and non-economic returns to volunteering for prime-aged women. A woman's decision to engage in unpaid work, and to marry and have children, is formulated as a forward-looking discrete choice dynamic programming problem. Simulated maximum likelihood estimates of the model indicate that an extra year of volunteer experience increases wage offers in part-time work by 8.3% and wage offers in full-time work by 2.4%. The behavioral model also reveals an adverse selection mechanism which is consistent with the negative returns to volunteering found in reduced-form wage regressions. The negative selection is driven by differential unobserved market-productivity and heterogeneous marginal utilities of future consumption. The structural estimates also imply that the economic returns to volunteering are relatively more important than non-economic returns, and introduction of a tax-credit for volunteering-related childcare expenses would substantially increase volunteer labor supply and female lifetime earnings.
    Keywords: female labor supply, marriage, fertility, negative selection, attrition, dynamic programming, structural estimation, simulated maximum likelihood, volunteering
    JEL: C35 C53 C61 D91 J12 J13 J22 J24 J31 J64
    Date: 2012–08
  12. By: Zimmermann, Laura (University of Michigan)
    Abstract: Indian girls have significantly lower school enrollment rates than boys. Anecdotal evidence suggests that gender-differential treatment is the main explanation, but empirical support is often weak. I analyze school enrollment using rainfall shocks, a plausibly exogenous source of income variation. Rainfall shocks matter most for young children and monotonically decline with age. Girls' school enrollment is more vulnerable to rainfall shocks than that of boys for 6-10 year olds, but there are no gender differences for older children. I argue that these results need to be interpreted carefully since they are a combination of two underlying effects, but propose that one explanation are age-specific forms of gender discrimination.
    Keywords: rainfall, gender discrimination, school enrollment, education, India
    JEL: D13 I21 J16 O12 O15 Q54
    Date: 2012–09
  13. By: Lehmann, Jee-Yeon K. (University of Houston); Nuevo-Chiquero, Ana (University of Barcelona); Vidal-Fernández, Marian (University of New South Wales)
    Abstract: The critical role of prenatal and early childhood conditions on adult outcomes has been the focus of a rich body of research. In this paper, we examine various pre- and postnatal investments as possible sources behind the "birth order effect" – significant differences in the educational and labor market outcomes across children of varying birth orders. Taking advantage of a rich set of information on in utero and early childhood conditions in the Children of the NLSY79, we find that, within the same household, siblings of higher birth order experience a lower reduction in cigarette usage during pregnancy, are breastfed less often, and experience less cognitive stimulation and emotional support at ages 0 to 1. Next, we test for the presence of birth order effects in early cognitive and non-cognitive test scores and examine whether these differences can be explained by variations in prenatal and early childhood investments. Although there exists a significant negative relationship between birth order and early cognitive/non-cognitive test scores, the size and the significance of the negative birth order effects in test scores and educational attainment are robust to controlling for variations in early childhood factors.
    Keywords: birth order, early test scores, parental investment, prenatal investment, postnatal investment, early childhood investment, fetal origins hypothesis, cognitive outcomes, non-cognitive outcomes
    JEL: J10 J13 I24
    Date: 2012–07
  14. By: Beegle, Kathleen; Poulin, Michelle
    Abstract: In many African countries, the timing of important life events -- such as school-leaving, first marriage, and entry into the labor market -- is thought to be strongly tied to migration. This paper investigates the relationship between major life events, household characteristics, and migration among adolescents and young adults in contemporary Malawi. The specific research questions are twofold. First, what are the socio-economic and demographic determinants of migration? Second, how do school attendance, first marriage, and employment-seeking relate to migration patterns? The study uses panel data collected from a survey designed specifically to explore socioeconomic and demographic aspects of youth transitions to adulthood and which tracked respondents as they moved to new dwellings. Among the sample, they find that moves are not uncommon, and the predominant reasons for moves are non-economic. Although historically ethnic traditions in this area have held that girls and women usually did not move upon marrying, the data show that women were more likely to move between survey rounds than boys and men, and that marriage was the main reason for doing so. Closer ties to the head of the household are associated with less movement for both women and men.
    Keywords: Population Policies,Population&Development,Anthropology,Adolescent Health,Gender and Social Development
    Date: 2012–09–01
  15. By: Souza, André Portela; Ponczek, Vladimir P.
    Abstract: This paper presents new evidence of the causal effect of family size on child quality in a developing-country context. We estimate the impact of family size on child labor and educational outcomes among Brazilian children and young adults by exploring the exogenous variation of family size driven by the presence of twins in the family. Using the Brazilian Census data for 1991, we nd that the exogenous increase in family size is positively related to labor force participation for boys and girls and to household chores for young women. We also and negative e ects on educational outcomes for boys and girls and negative impacts on human capitalformation for young female adults. Moreover, we obtain suggestive evidence that credit and time constraints faced by poor families may explain the findings.
    Date: 2012–09–12
  16. By: Samuel H. Preston; Andrew Stokes; Neil K. Mehta; Bochen Cao
    Abstract: We project the effects of declining smoking and increasing obesity on mortality in the United States over the period 2010-2040. Data on cohort behavioral histories are integrated into these projections. Future distributions of body mass indices are projected using transition matrices applied to the initial distribution in 2010. In addition to projections of current obesity, we project distributions of obesity when cohorts were age 25. To these distributions we apply death rates by current and age-25 obesity status observed in the National Health and Nutrition Examination Survey, 1988-2006. Projections of the effects of smoking are based on observed relations between cohort smoking patterns and cohort death rates from lung cancer. We find that both changes in smoking and in obesity are expected to have large effects on mortality. For males, the reductions in smoking have larger effects than the rise in obesity throughout the projection period. By 2040, male life expectancy at age 40 is expected to have gained 0.92 years from the combined effects. Among women, however, the two sets of effects largely offset one another throughout the projection period, with a small gain of 0.26 years expected by 2040.
    JEL: I0 I1 I12 I18 J1 J11 J18
    Date: 2012–09
  17. By: Zheng Song (Department of Economics, University of Chicago Booth, Chicago, Illinois, United States); Kjetil Storesletten (Federal Reserve Bank of Minneapolis, Minnesota, United States); Yikai Wang (Department of Economics, University of Zurich, Switzerland); Fabrizio Zilibotti (CEPRA, Institute of Economics, Universita' della Svizzera Italiana)
    Abstract: Intergenerational inequality and old-age poverty are salient isuues in contemporary China. China's aging population threatens the fiscal sustainability of its pension system, a key vehicle for intergenerational redistribution. We analyze the positive and normative effects of alternative pension reforms, using a dynamic general equilibrium model that incorporates population dynamics and productivity growth. Although a reform is necessary, delaying its implementation implies large welfare gains for the (poorer) current generations, imposing only small costs on (richer) future generations. In contrast, a fully funded reform harms current generations, with small gains to future generations. High wage growth is key for these results.
    Keywords: China, credit market imperfections, demographic transition, economic growth, fully funded system, inequality, intergenerational redistribution, labor supply, migration, pensions, poverty, rural-urban reallocation, total fertility rate, wage growth
    JEL: E21 E24 G23 H55 J11 J13 O43 R23
    Date: 2012–07
  18. By: Birendra Rai; Kunal Sengupta
    Abstract: Parents in several cultures `discipline' their daughters to inculcate the supposedly feminine virtues and improve their prospects in the marriage market. This process invariably involves imposing restrictions on their behavior, movement, and social relations. We formalize the idea that pre-marital confinement of women can be understood as an equilibrium outcome of a game of asymmetric information between parents of girls and prospective suitors. The paper presents a parsimonious framework involving signaling followed by matching in a marriage market where transfers are possible. The framework encompasses the different theories proposed by social scientists and permits a discussion of how socio-economic factors like rules of descent, production technology, and wealth inequality affect the likelihood of observing a norm of pre-marital confinement.
    Keywords: Signaling, Matching, Norms, FGM
    JEL: C72 J16 Z13
    Date: 2012–09
  19. By: Bhattacharya, Jay (Stanford University); Gathmann, Christina (University of Heidelberg); Miller, Grant (Stanford University)
    Abstract: Political and economic transition is often blamed for Russia's 40% surge in deaths between 1990 and 1994 (the "Russian Mortality Crisis"). Highlighting that increases in mortality occurred primarily among alcohol related causes and among working-age men (the heaviest drinkers), this paper investigates an alternative explanation: the demise of the 1985-1988 Gorbachev Anti-Alcohol Campaign. We use archival sources to build a new oblast-year data set spanning 1970-2000 and find that: (1) The campaign was associated with substantially fewer campaign year deaths, (2) Oblasts with larger reductions in alcohol consumption and mortality during the campaign experienced larger transition era increases, and (3) Other former Soviet states and Eastern European countries exhibit similar mortality patterns commensurate with their campaign exposure. The campaign's end explains a large share of the mortality crisis, suggesting that Russia's transition to capitalism and democracy was not as lethal as commonly suggested.
    Keywords: mortality, transition, alcohol, Russia
    JEL: I18 I15 P35 P36 P37
    Date: 2012–08
  20. By: van den Berg, Gerard J. (Department of Economics, University of Mannheim); Lundborg, Petter (Department of Economics, Lund University); Nystedt, Paul (Department of Economics, Linköping University); Rooth, Dan-Olof (Linnaeus University)
    Abstract: We identify the ages that constitute critical periods in children’s development towards their adult health status. For this we use data on families migrating into Sweden from countries that are poorer, with less healthy conditions. Long-run health is proxied by adult height. The relation between siblings’ ages at migration and their heights after age 18 allows us to estimate the causal effect of conditions at certain ages on adult height. We effectively exploit that for siblings the migration occurs simultaneously in calendar time but at different developmental stages (ages). We find some evidence that the period just before the puberty growth spurt constitutes a critical period.
    Keywords: early-life conditions; migration; parental education; adult health; height retardation; age; fetal programming; developmental origins
    JEL: F22 I10 I12 I18 I20 I30 J10 N30
    Date: 2012–09–12
  21. By: Epstein, Gil S. (Bar-Ilan University); Lindner Pomerantz, Renana (Bar-Ilan University)
    Abstract: During the last few decades cultural changes have been taking place in many countries due to migration. The degree to which the foreign culture influences the local culture, differs across countries. This paper shows how the willingness of locals and immigrants to intermarry influences the culture and the national identity of the host country. We use a search-theoretic approach to show that, even in situations where migrants and natives prefer to marry within their own community, the search process may lead to intermarriage. The exogamy can take on two forms: either migrants and natives each hold on to their own culture or the immigrants take on the natives' culture. In the first case we will see new cultures developing and the local culture will not survive over time. In the second case the local culture will survive. We show the conditions for assimilation versus no assimilation between the groups.
    Keywords: assimilation, migration, marriage, culture
    JEL: F22 R23
    Date: 2012–09
  22. By: Daniela Del Boca; Chiara Monfardini; Cheti Nicoletti
    Abstract: While a large literature has focused on the impact of parental investments on child cognitive development, very little is known about the role of child?s own in- vestments. Information on how children invest their time separately from parents is probably little informative for babies and toddlers, but it becomes more and more important in later stages of life, such as adolescence, when children start to take decisions independently. By using the Child Development Supplement of the PSID (Panel Study of Income Dynamics), we model the production of cognitive ability of adolescents and extend the set of inputs to include the child?s own time investments. Looking at investments during adolescence, we ?nd that child?s investments matter more than mother?s investments. On the contrary, looking at investments during childhood, it is the mother?s investments that are more important. Our results are obtained accounting for potential unobserved child?s and family?s endowments and are robust across several speci?cations and samples, e.g. considering and not considering father?s investments and non-intact families.
    Keywords: time-use, cognitive ability, child development, adolescence.
    JEL: J13 D1
    Date: 2012
  23. By: Christopher R. Bollinger, Cheti Nicoletti and Stephen Pudney
    Abstract: To measure poverty, incomes must be equivalized across households with different structures. In this paper, we use a very flexible ordered response model to analyze the relationship between income, demographic structure and subjective assessments of financial wellbeing drawn from the 1991-2008 British Household Panel Survey. Our results suggest the existence of large scale economies within marital/cohabiting couples, but substantial diseconomies from the addition of children or further adults. This pattern contrasts sharply with commonly-used equivalence scales, and is consistent with explanations in terms of the capital requirements associated with additions to the core couple.
    Keywords: Equivalence scales, subjective wellbeing
    JEL: I32 J12 J13
    Date: 2012–09
  24. By: Helene Blake;; Clementine Garrouste
    Abstract: How does the retirement age affect the physical and mental health of seniors? We identify this effect based on the 1993 reform of the French pension system, which was heterogeneously introduced among the population. The French government gradually increased the incentive to work using two tools: the contribution period required for entitlement to a full pension and the number of reference earning years taken to calculate pensions. This created heterogeneity of incentives to work among the population. We use a unique database on health and employment in France in 1999 and 2005, when the cohorts affected by the reform started to retire. Taking the reform as a tool to filter out the potential influence of health on employment choices, we show that retirement improves physical and social health. The more physically impacted are the low-educated individuals. Subsequently, a difference-indifferences approach among the working population, with the control group comprising public sector employees (not concerned by the 1993 reform), finds that the people more affected by the reform, and hence with a stronger incentive to work, were those posting less of an improvement and even a deterioration in their health between 1999 and 2005.
    Date: 2012–07
  25. By: Gaddis, Isis (University of Göttingen); Pieters, Janneke (IZA)
    Abstract: While there is a large literature analyzing the distributional impacts of trade reforms across the income or skill distribution, very little is known about the gender effects of trade reforms. This paper seeks to fill this gap and investigates the impact of Brazil's 1987-1994 trade liberalization on labor force participation of women. To identify the causal effect of trade reforms we exploit exogenous variation in exposure to tariff reductions across states linked to spatial differences in states' initial industry composition. We find that tariff reductions were associated with an increase in female labor force participation and employment after a period of around two years. Our results are robust to a variety of different approaches in dealing with the potential endogeneity of regional exposure to trade liberalization, alternative measures of trade protection and different time periods. Moreover, we find evidence that employment flows across sectors, especially an accelerated shift from agriculture and manufacturing to trade and other services, but also greater labor market insecurity and male unemployment are behind the observed increase in female economic activity. This suggests that both push and pull factors induced women to join the labor force.
    Keywords: female labor force participation, trade liberalization, Brazil
    JEL: F13 F16 J16 J21 O15
    Date: 2012–08
  26. By: Colombino, Ugo (University of Turin); Narazani, Edlira (University of Turin)
    Abstract: We use a microeconometric model of household labour supply in order to evaluate, with Italian data, the behavioural and welfare effects of gender based taxation (GBT) as compared to other policies based on different optimal taxation principles. The comparison is interesting because GBT, although technically correct, might face implementation difficulties not shared by other policies that in turn might produce comparable benefits. The simulation procedure accounts for the constraints implied by fiscal neutrality and market equilibrium. Our results support to some extent the expectations of GBT's proponents. However it is not an unquestionable success. GBT induces a modest increase of women's employment, but similar effects can be attained by universal subsidies on low wages. When the policies are evaluated in terms of welfare, GBT ranks first among single women but for the whole population the best policies are subsidies on low wages, unconditional transfers or a combination of the two.
    Keywords: gender based taxation, wage subsidies, basic income, guaranteed minimum income, labour supply, social welfare
    JEL: H2 I3 J2
    Date: 2012–08
  27. By: L.J.H. Bettendorf (CPB Netherlands Bureau for Economic Policy Analysis); Egbert L.W. Jongen (CPB Netherlands Bureau for Economic Policy Analysis); Paul Muller (VU University Amsterdam)
    Abstract: Over the period 2005-2009 the Dutch government increased childcare subsidies substantially, reducing the average effective parental fee by 50%, and extended subsidies to so-called guestparent care. We estimate the labour supply effect of this reform with a difference-in-differences strategy, using parents with older children as a control group. We find that the reform had a moderately sized impact on labour supply. Furthermore, the effects are an upper bound since there was also an increase in an earned income tax credit for the same treatment group over the same period. The joint reform increased the maternal employment rate by 2.3%-points (3.0%). Average hours worked by mothers increased by 1.1 hours per week (6.2%). Decomposing the hours effect we find that most of the increase in hours is due to the intensive margin response. A number of robustness checks confirm our results.
    Keywords: Childcare subsidies; labour participation; hours worked; difference-in-differences
    JEL: C21 H40 J13 J22
    Date: 2012–09–13
  28. By: Glitz, Albrecht (Universitat Pompeu Fabra)
    Abstract: This paper provides a comprehensive description of the nature and extent of ethnic segregation in Germany. Using matched employer-employee data for the universe of German workers over the period 1975 to 2008, I show that there is substantial ethnic segregation across both workplaces and residential locations and that the extent of segregation has been relatively stable over the last 30 years. Workplace segregation is particularly pronounced in agriculture and mining, construction, and the service sector, and among low-educated workers. Ethnic minority workers are segregated not only from native workers but also from workers of other ethnic groups, but less so if they share a common language. From a dynamic perspective, for given cohorts of workers, the results show a clear pattern of assimilation, reminiscent of typical earnings assimilation profiles, with immigrants being increasingly less likely to work in segregated workplaces with time spent in the host country.
    Keywords: ethnic minorities, residential segregation, workplace segregation
    JEL: J61 J63 J31
    Date: 2012–09
  29. By: Ronald Lee (Professor of Demography and Economics, University of California, Berkeley (E-mail:
    Abstract: The populations of the World are aging, in both rich and poor countries. Older people work much less than younger adults, and earn far less than their consumption costs. The difference is made up in part by public or private transfers from working age adults, and in part from asset income. As countries grow richer, labor supply at older ages drops while consumption at older ages rises relative to younger, due mainly to the rising costs of publicly provided health care. For these reasons, population aging becomes more costly with economic development. As populations age in the coming decades, support ratios will drop, slowing the growth of per capita consumption by .3% to .8% per year. However, the same processes that lead to population aging also may lead to increased investment in both human capital and in physical and financial assets, raising the capital intensity of the economy and raising labor productivity. The rising labor productivity should offset the declining support ratio, and increased asset income will further offset these declines. However, the extent to which these offsetting processes unfold depends on the institutional structures and public policies that are in place. While population aging will place severe strains on particular public programs, overall, the economic challenges of population aging need not be overwhelming, and need not pose a major threat to economic well-being.
    Keywords: population aging, macroeconomic, demographic transition, human capital, economic growth, support ratio, demand for wealth
    JEL: E2 E6 I2 J11 J14 O11
    Date: 2012–09
  30. By: Kalb, Guyonne (Melbourne Institute of Applied Economic and Social Research); Le, Trinh (Melbourne Institute of Applied Economic and Social Research); Hunter, Boyd H. (Australian National University); Leung, Felix (Melbourne Institute of Applied Economic and Social Research)
    Abstract: Despite several policy efforts to promote economic participation by Indigenous Australians, they continue to have low participation rates compared to non-Indigenous Australians. This study decomposes the gap in labour market attachment between Indigenous and non- Indigenous Australians in non-remote areas, combining two separate data sources in a novel way to obtain access to richer information than was previously possible. It shows that among women at least two thirds of the gap can be attributed to differences in the observed characteristics between the two populations. For men, the differences in observed characteristics of the two populations can account for 36 to 47 percent of the gap. A detailed decomposition shows that lower education, worse health, and larger families (particularly for women) explain the lower labour market attachment of Indigenous Australians to a substantial extent. Compared with previous studies, this study is able to explain a larger proportion of the gap in employment between Indigenous and non-Indigenous people due to being able to include a larger set of explanatory variables.
    Keywords: labour market attachment, Indigenous Australians, non-linear decomposition
    JEL: J15 J21
    Date: 2012–08
  31. By: Hanewald, Katja; Post, Thomas; Gründl, Helmut
    Abstract: Motivated by a recent demographic study establishing a link between macroeconomic fluctuations and the mortality index kt in the Lee-Carter model, we develop a dynamic asset-liability model to assess the impact of macroeconomic fluctuations on the solvency of a life insurance company. Liabilities in this stochastic simulation framework are driven by a GDP-linked variant of the Lee-Carter mortality model. Furthermore, interest rates and stock prices react to changes in GDP, which itself is modelled as a stochastic process. Our simulation results show that insolvency probabilities are significantly higher when the reaction of mortality rates to changes in GDP is incorporated. --
    Date: 2011
  32. By: KOBAYASHI Keiichiro
    Abstract: In this paper, we analyze the implications of demographic change, i.e., the aging of society, on the direction of technological change and the rate of economic growth.<br />Taking demographic change as an exogenous event, the simple variant of Acemoglu's theory of directed technical change implies that (1) the elderly-care related technology must be a promising area of innovation and (2) the optimal growth rate must be lower in aging societies than in young ones, suggesting that the slowdown of economic growth may be an optimal response of the economy to population aging. The analytical framework is simple and robust such that this model can be used to assess various policy options concerning the demographic change in Japan and other countries.
    Date: 2012–09
  33. By: Katsuyoshi Nakazawa (University of Toyo)
    Abstract: In Japan, there is a shortage of long-term care facilities for the elderly and families are having difficulty supporting the elderly at home. Thus, the elderly in Japan often want to move to municipalities that have a greater availability in long-term care facilities. The purpose of this paper is to examine whether there is a gender difference in the elderly’s welfare migration patterns in Japan. The analysis was performed by calculating net migration data by gender and age group using available plural statistical materials. Results showed a clear gender difference for both the early-stage and late-stage elderly. Results also revealed that the hypothesis of welfare migration is more appropriate for the late-stage elderly rather than the early-stage elderly, and confirmed that welfare-induced migration was a trend among males, especially those at the early-stage. The effect of the long-term care facilities was found to be the strongest for migration patterns among late-stage elderly females. In addition, the pattern for female migration showed consistent inflow to the larger cities. Implications of these findings on long-term care policy in Japan are discussed.
    JEL: H73 H75 I38 R23
    Date: 2012
  34. By: Winters, John V. (University of Cincinnati); Hirsch, Barry T. (Georgia State University)
    Abstract: Progress in narrowing black-white earnings differences has been far from continuous, with some of the apparent progress resulting from labor force withdrawal among lower-skilled African Americans. This paper builds on prior research and documents racial and ethnic differences in male earnings from 1950 through 2010 using data from the decennial census and American Community Surveys. Emphasis is given to annual rather than weekly or hourly earnings. Treatment of imputed earnings greatly affects measured outcomes. We take a quantile approach, providing evidence on medians and other percentiles of the distribution. Black male joblessness rose to over 40% in 2010, the median black-white earnings gap being the largest in at least sixty years. The experience of black men contrasts with that of Hispanic men during the last decade, who exhibited earnings growth similar to white men. Black men are being left behind economically, a process exacerbated by weak labor market conditions.
    Keywords: inequality, race, earnings, wages, median regression, imputed earnings
    JEL: J15 J31
    Date: 2012–07
  35. By: Guner, Nezih (MOVE, Barcelona); Kaya, Ezgi (Universitat Autònoma de Barcelona); Sánchez-Marcos, Virginia (Universidad de Cantabria)
    Abstract: We document recent trends in gender equality in employment and wages in Spain. Despite an impressive decline in gender gap in employment, females are still less likely to work, and if they work they are more likely to be employed part time and with temporary contracts. The gender gap (after controlling for worker and job characteristics) is about 20% and did not change between 1995 and 2006. Furthermore, the gender gap in wages is driven mainly by differences in returns to individual characteristic. While women are more qualified than men in observable labor market characteristics, they end up earning less. Public policy seems to affect female employment. In particular, there was a significant acceleration of female employment in 2000s. This was a period in which many policies that were implemented after early 1990s started to have their longer term effects. It was also a period during which Spain received a large number of immigrants, which had a positive impact on female labor force participation.
    Keywords: gender employment gap, gender wage gap, occupational segregation, quantile regressions, public policy
    JEL: J16 J21 J22 J24
    Date: 2012–08
  36. By: Epstein, Gil S. (Bar-Ilan University); Siniver, Erez (College of Management, Rishon Lezion Campus)
    Abstract: Studies in the US have shown that black immigrants have remained at the bottom of the wage ladder and that other groups of immigrants have overtaken them over time. The goal of this research is to determine whether a specific group of immigrants can displace a group at the bottom of the ladder. We use Israeli data to compare two ethnic groups: Israeli Arabs and Ethiopian immigrants. Israeli Arabs were considered to be the least successful ethnic group in the Israeli labor market until they were displaced by the Ethiopian immigrants. The results of our analysis show that an ethnic group at the bottom of the wage ladder can be replaced by another.
    Keywords: wage differences, immigrants
    JEL: J15 J24 J31
    Date: 2012–08
  37. By: Mu, Ren (Texas A&M University); Du, Yang (Chinese Academy of Social Sciences)
    Abstract: When social security is established to provide pensions to parents, their reliance upon children for future financial support decreases; and their need to save for retirement also falls. We use the expansion of pension coverage from the state sector to the non-state sector in urban China as a quasi-experiment to analyze the intergenerational impact of social security on educational investments in children. With a difference-in-differences framework, we find a significant increase in the total education expenditure attributable to pension expansion. The results are unlikely to be driven by trends in medical insurance, wages, bonus income, and housing values. They are robust to the inclusion of a large set of control variables and to different specifications, including one based on the instrumental variable method.
    Keywords: pension, education expenditure, gender difference, urban, China
    JEL: J26 J24 O15 D13
    Date: 2012–08
  38. By: Petter Lundborg;; Carl Hampus Lyttkens;; Paul Nystedt;
    Abstract: Why do well-educated people live longer? We use unique and high-quality data on about 50,000 monozygotic and same-sex dizygotic twins, born between 1886-1958, to address this question. We demonstrate a positive and statistically signiÂ…cant relation between years of schooling and longevity, which remains when we exploit the twin design. This result is robust to controlling for speciÂ…c within-twin-pair differences in early life factors, such as birth weight and proxies for ability and health in the form of body height, as well as to restricting the sample to monozygotic twins.
    Keywords: death, longevity, education, endogeneity, stratiÂ…ed partial likelihood, duration analysis; twins
    JEL: I12 I11 J14 J12 C41
    Date: 2012–07
  39. By: Alan L. Gustman (Dartmouth College); Thomas L. Steinmeier (Texas Tech University)
    Abstract: This paper specifies three behavioral variants of a structural model of retirement and saving to bring predicted Social Security claiming rates closer to the rates observed in the data. The model, estimated with Health and Retirement Study data, is used to examine three potential policies: increasing early entitlement age, increasing normal retirement age, and eliminating payroll taxes after normal retirement age. Behavioral responses to increasing early entitlement age and eliminating the payroll tax are not affected by the behavioral variant used. Predicted effects of increasing the normal retirement age exhibit more sensitivity. Heterogeneity shapes the responses to these policy changes.
    Date: 2012–08
  40. By: Daniela Del Boca, Chiara Monfardini and Cheti Nicoletti
    Abstract: While a large literature has focused on the impact of parental investments on child cognitive development, very little is known about the role of child’s own investments. Information on how children invest their time separately from parents is probably little informative for babies and toddlers, but it becomes more and more important in later stages of life, such as adolescence, when children start to take decisions independently. By using the Child Development Supplement of the PSID (Panel Study of Income Dynamics), we model the production of cognitive ability of adolescents and extend the set of inputs to include the child’s own time investments. Looking at investments during adolescence, we find that child’s investments matter more than mother’s investments. On the contrary, looking at investments during childhood, it is the mother’s investments that are more important. Our results are obtained accounting for potential unobserved child’s and family’s endowments and are robust across several specifications and samples, e.g. considering and not considering father’s investments and non-intact families.
    Keywords: time-use, cognitive ability, child development, adolescence
    JEL: J13 D1
    Date: 2012–09
  41. By: Ellen R. McGrattan; Edward C. Prescott
    Abstract: A problem facing the United States and many other countries is how to finance retirement consumption as the number of their workers per retiree falls. Policy analysts are increasingly advocating a move to a savings-for-retirement system. An apparent problem with this move is the shortage of good savings opportunities given the limited ability of government to honor its debt. We find that there is no problem because there is much more productive capital than commonly assumed in macroeconomic modeling. We also find that eliminating capital income taxes will greatly increase savings opportunities and make a savings-for-retirement system feasible with only a modest amount of government debt. The tax policy changes we consider are phased in smoothly and are relatively modest. The switch from a system close to the current U.S. retirement system, which relies heavily on taxing workers’ incomes and making lump-sum transfers to retirees, to one without capital income taxes will increase the welfare of all birth-year cohorts alive today and particularly the welfare of the yet unborn cohorts.
    Keywords: Debt - United States ; Taxation
    Date: 2012
  42. By: Michael Ewens; Bryan Tomlin; Liang Choon Wang
    Abstract: A model of racial discrimination provides testable implications for two features of statistical discriminators: differential treatment of signals by race and heterogeneous experience that shapes perception. We construct an experiment in the U.S. rental apartment market that distinguishes statistical discrimination from taste-based discrimination. Responses from over 14,000 rental inquiries with varying applicant quality show that landlords treat identical information from applicants with African-American and white sounding names differently. This differential treatment varies by neighborhood racial composition and signal type in a way consistent with statistical discrimination and in contrast to patterns predicted by a model of taste-based discrimination.
    JEL: J15 J70 J71 R3
    Date: 2012–09
  43. By: Wunnava, Phanindra V. (Middlebury College)
    Abstract: Based on data from the National Longitudinal Surveys of Youth covering years 2000 through 2008, it is evident that both male and female workers in medium/larger establishments receive not only higher wages but also have a higher probability of participating in benefit programs than those in smaller establishments. This reinforces the well-documented 'size' effect. Further, the firm size wage effects are much larger for men than women. The union wage effect decreases with establishment size for both genders. This supports the argument that large nonunion firms pay higher wages to discourage the entrance of unions (i.e., the 'threat' effect argument). In addition, the union wage premium is higher for males for small and medium firm sizes relative to females. This implies that unions in the large establishments may have a role to play in achieving a narrowing of the gender union wage gap. In other words, the threat of unionization could reduce union wage premiums for both genders as firm size increases. Given the presence of noticeable gender differences in estimated union effects on the different components of the compensation structure, unions should not treat both genders similarly with respect to wages and benefits.
    Keywords: size effect, threat effect, random effects, fringe benefits, compensation, gender, union-nonunion
    JEL: J16 J31 J32 J51
    Date: 2012–08
  44. By: Hveem, Joakim (Stockholm University Linnaeus Center for Integration Studies - SULCIS)
    Abstract: This paper estimates the causal effect of temporary work agency (TWA) employment on the subsequent probability of employment in the regular labor market. The main purpose is to estimate the stepping-stone effect separately for natives and immigrants, where the latter group potentially benefits the most from TWA employment. Since no quasi-experiment is available, individual Differences-in-Differences and matching is used to deal with the potential selection bias. The results point at a negative regular employment effect, which slowly fades away over a couple of years. Thus no evidence of a stepping-stone effect is found. When conditioning on immigrants this negative effect is absent. A long-run significant effect is found on overall employment probability (including TWA employment), there is even a long-run positive effect on annual earnings (mainly driven by women). Unemployment probabilities decreased, however the results in the estimation were less stable over time compared to the employment estimates, suggesting that the TWAs might keep individuals from exiting the labor market. Stratification on gender showed that the negative regular employment effect on women persisted for two more years compared to men.
    Keywords: Temporary work agencies; stepping-stone; labor market; matching
    JEL: J15 J40 J60
    Date: 2012–09–12
  45. By: Philip J. Grossman; Mana Komai; James E. Jensen
    Abstract: We conduct a laboratory experiment with salient incentives, a technique used by economists to study gender differences in leadership. We strip the concept of leadership down to its most basic elements. Questions of style and evaluations of a leader based on style of leadership adopted are made irrelevant. Our leader is an average player who is distinguished merely by occupying the leadership position; his/her legitimacy is derived from superior information about the value of the project in hand. Legitimacy is conferred on the leader from the special information possessed. Followers voluntarily choose whether or not to follow the better informed leader. The effectiveness of the leader is reduced to two simple factors: is the leader willing or not to voluntarily place herself in a vulnerable position to achieve an outcome beneficial to both the leader and her followers and do followers trust their leaders to make the right choice? We provide experimental evidence that, when the leaders’ gender is revealed to their followers in mixed groups, female leaders hesitate to lead (send a costly signal) while followers’ behavior does not indicate any gender discrimination. Such behavior is not observed among the male leaders.
    Keywords: Leadership, Information, Gender, Free Riding, Coordination Problem.
    Date: 2012–09
  46. By: Holzmann, Robert (University of Malaya)
    Abstract: Across the world, pension systems and their reforms are in a constant state of flux driven by shifting objectives, moving reform needs, and a changing enabling environment. The ongoing worldwide financial crisis and the adjustment to an uncertain “new normal” will make future pension systems different from past ones. The objectives of this policy review paper are threefold: (i) to briefly review recent and ongoing key changes that are triggering reforms; (ii) to outline the main reform trends across pension pillars; and (iii) to identify a few areas on which the pension reform community will need to focus to make a difference. The latter includes: creating solutions after the marginalization or, perhaps, demise of Bismarckian systems in countries with high rates of informality; keeping the elderly in the labor market; and addressing the uncertainty of longevity increases in pension schemes.
    Keywords: population aging, longevity, financial crisis, multi pillar pension systems, social pension, NDC, MDC
    JEL: G23 H55 I3 J21 J26
    Date: 2012–08
  47. By: Boeri, Tito (Bocconi University); De Philippis, Marta (London School of Economics); Patacchini, Eleonora (Sapienza University of Rome); Pellizzari, Michele (OECD)
    Abstract: We use a new dataset and a novel identification strategy to analyze the effects of residential segregation on the employment of migrants in 8 Italian cities. Our data, which are representative of the population of both legal and illegal migrants, allow us to measure segregation at the very local level (the block) and include measures of house prices, commuting costs and migrants' linguistic ability. We find evidence that migrants who reside in areas with a high concentration of non-Italians are less likely to be employed compared to similar migrants who reside in less segregated areas. In our preferred specification, a 10 percentage points increase in residential segregation reduces the probability of being employed by 7 percentage points or about 8% over the average. Additionally, we also show that this effect emerges only above a critical threshold of 15-20% of migrants over the total local population, below which there is no statistically detectable effect. The negative externality associated with residential segregation arises only for the employment prospects of immigrants, whether legal or illegal. We do not find evidence of either spatial mismatch or skill bias as potential explanations of this effect. Statistical discrimination by native employers is the remaining suspect.
    Keywords: migration, residential segregation, hiring networks
    JEL: J15 J61 R23
    Date: 2012–09
  48. By: Gurgen Aslanyan
    Abstract: Immigration has been popularised in the economics literature as a tool to balance the troubled PAYG pension systems. A pivotal research by Razin and Sadka showed that unskilled immigration can surmount the pension problem and, further, boost the general welfare in the host economy. However a large strand of current economics literature is engaged in identifying mechanisms through which unskilled immigration, while solving the pension problem, causes undesired shifts in general welfare. This work shows that actually recurring unskilled immigration may challenge the entire pension system and decrease the pension benefits themselves.
    Keywords: Public Pensions, PAYG, Unskilled Migration
    JEL: J18 F22 H55 E61
    Date: 2012–09

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