nep-dem New Economics Papers
on Demographic Economics
Issue of 2012‒11‒24
eighteen papers chosen by
Clarence Nkengne Tsimpo
University of Montreal and World Bank Group

  1. Job Security and Fertility: Evidence from German Reunification By Marcus Klemm
  2. Macroeconomic Impact of Population Aging in Japan: A Perspective from an Overlapping Generations Model By Muto, Ichiro; Oda, Takemasa; Sudo, Nao
  3. Kindergarten for All: Long Run Effects of a Universal Intervention By Drange , Nina; Havnes, Tarjei; Sandsør, Astrid M. J.
  4. New estimates of settler life span and other demographic trends in South Africa, 1652–1948 By Jeanne Cilliers; Johan Fourie
  5. Children at Risk: The Effect of Crop Loss on Child Health in Rural Mexico By Maren M. Michaelsen; Songül Tolan
  6. "United we stand divided we fall": maternal social participation and children's nutritional status in Peru By Favara, Marta
  7. Does schooling improve cognitive functioning at older ages? By Nicole Schneeweis; Vegard Skirbekk; Rudolf Winter-Ebmer
  8. Does schooling improve cognitive functioning at older ages? By Nicole Schneeweis; Vegard Skirbekk; Rudolf Winter-Ebmer
  9. Assortative Matching and Gender By Merlino, Luca Paolo; Parrotta, Pierpaolo; Pozzoli, Dario
  10. Mental Health and Labour Supply – Evidence from Mexico‘s Ongoing Violent Conflicts By Maren M. Michaelsen
  11. Unretirement in England: An empirical perspective By Ricky Kanabar
  12. Specific measures for older employees and late career employment By Boockmann, Bernhard; Fries, Jan; Göbel, Christian
  13. Alike in Many Ways: Intergenerational and Sibling Correlations of Brothers' Earnings By Bingley, Paul; Cappellari, Lorenzo
  14. Obesity, Weight Loss, and Employment Prospects – Evidence from a Randomized Trial By Arndt Reichert
  15. Longevity and Schooling: The Case of Retirement By Nina Boberg-Fazlic
  16. Czy Polska jest skazana na spadek poda¿y pracy w przysz³oœci? – wyniki analizy wra¿liwoœci za³o¿eñ prognoz d³ugookresowych By Pawe³ Strzelecki
  17. Sons‘ Unexpected Long Term Scarring due to Fathers‘ Unemployment By Michael Kind; John P. Haisken-DeNew
  18. On aggregating human capital across heterogeneous cohorts By Jakub Growiec; Christian Groth

  1. By: Marcus Klemm
    Abstract: This paper uses the special occupational status of German civil servants in combination with the unforeseen event of German reunification to study empirically the relationship between job security and fertility. The civil servant-status provides extreme job security as well as good possibilities to combine work and family lives. The fast introduction of the civil service system after reunification represents an exogenous (re-)assignment of individual employment risks in Eastern Germany, and thus allows one to control for occupational self-selection. While no strong evidence for a link between job security and fertility emerges for men, the paper demonstrates a clear link between labor market and demographic outcomes for women, especially in Western Germany and most pronounced for higher educated females between age 25 and 40. This strong relationship is the result of occupational self-selection coupled with a civil servantspecific birth timing pattern and a small causal impact of job security on fertility. It shows that female civil servants are not primarily a selected group of very family oriented individuals, but rather both family as well as career oriented.
    Keywords: Job security; fertility; occupational choice
    JEL: D12 J13 J24
    Date: 2012–10
  2. By: Muto, Ichiro; Oda, Takemasa; Sudo, Nao
    Abstract: Due to a sharp decline in the fertility rate and a rapid increase in longevity, Japan's population aging is the furthest advanced in the world. In this study we explore the macroeconomic impact of population aging using a full-fledged overlapping generations model. Our model replicates well the time paths of Japan’s macroeconomic variables from the 1980s to the 2000s and yields future paths for these variables over a long horizon. We find that Japan’s population aging as a whole adversely affects GNP growth by dampening factor inputs. It also negatively impacts on GNP per capita, especially in the future, mainly due to the decline in the fraction of the population of working-age. For these findings, fertility rate decline plays a dominant role as it reduces both labor force and saver populations. The effects of increased longevity are expansionary, but relatively minor. Our simulations predict that the adverse effects will expand during the next few decades. In addition to closed economy simulations, we examine the consequences of population aging in a small open economy setting. In this case a decline in the domestic capital return encourages investment in foreign capital, mitigating the adverse effects of population aging on GNP.
    Keywords: Population Aging; Overlapping Generations Model; Capital Flow
    JEL: E20 J11
    Date: 2012–11
  3. By: Drange , Nina (Statistics Norway); Havnes, Tarjei (University of Oslo); Sandsør, Astrid M. J. (University of Oslo)
    Abstract: Theory and evidence point towards particularly positive effects of high-quality child care for disadvantaged children. At the same time, disadvantaged families often sort out of existing programs. To counter differences in learning outcomes between children from different socioeconomic backgrounds, European governments are pushing for universal child care. However, evidence on the effects of universal programs is scarce. We provide evidence on the long-run effect on schooling of mandating kindergarten at age 5–6. Our identifying variation comes from a reform that lowered school starting-age from 7 to 6 in Norway in 1997. Our precise DD estimates reveal hardly any effect, both overall, across subsamples, and over the grading distribution. A battery of specification checks support our empirical strategy.
    Keywords: kindergarten, early childhood intervention, distributional effects, difference-in-differences, child care, child development
    JEL: J13 H40 I28
    Date: 2012–11
  4. By: Jeanne Cilliers (Department of Economics, University of Stellenbosch); Johan Fourie (Department of Economics, University of Stellenbosch)
    Abstract: To date very little has been known about the demography of European settlers in South Africa, since descriptions have only been based on Ross’s 1975 calculations of a small sample of 300 observations in the Cape Colony. In this paper we provide a broader and deeper account, using a dataset drawn from the Genealogical Institute of South Africa (2008) that includes information on 401,602 observations of settlers in South Africa and spans the period 1652 to 1948. We estimate useful descriptive statistics on key demographic indicators: population dynamics, age distribution, longevity, marriage patterns, and dependency burdens. These shed new light on the development and demographic transition of the South African settler population and enable international comparisons.
    Keywords: historical demography, economic development, population dynamics, living standards, family life, life span, age distribution, marriage patterns, South Africa
    JEL: N37
    Date: 2012
  5. By: Maren M. Michaelsen; Songül Tolan
    Abstract: This study investigates the effect of an economic shock due to crop loss on health outcomes of children in rural Mexico. Data from the Mexican Family Life Survey for the years 2002 and 2005 off er retrospective information on economic shocks since 1997 and height-for-age z-scores (HAZ) to measure long-term effects on child health. Since crop losses are exogenous to the children, simple OLS regressions are used to estimate the effect of crop loss overall and over time. Children who were hit by crop loss have on average 0.4 standard deviations smaller HAZ two and three years after the shock than other children. For boys and children aged 25 to 60 months being hit by crop loss also increases the probability of being stunted by 20 and 27 percentage points, respectively. The findings demonstrate that, albeit its large poverty reduction programs, Mexico has to invest more to combat poverty and provide mechanisms to help households to cope with sudden economic losses.
    Keywords: Economic shock; crop loss; child health; Mexico
    JEL: I15 J13 Q12
    Date: 2012–10
  6. By: Favara, Marta
    Abstract: In previous literature, social capital has been hypothesized as a substitute for other forms of capital, such as physical and human capital. This paper contributes to this literature, studying the association between mothers'access to social capital via participation in community organizations and their children's nutritional status at 1 and 5 years. Using the Peruvian sample of the Young Lives project, this study suggests that, where human capital is scarce, social capital might have important implications for child development. Maternal social capital is positively associated with height at 1 year old for those children whose mothers have no formal education. No significant association is found at 5 years of age.
    Keywords: Health Monitoring&Evaluation,Population Policies,Social Capital,Social Inclusion&Institutions,Social Cohesion
    Date: 2012–11–01
  7. By: Nicole Schneeweis; Vegard Skirbekk (International Institute for Applied Systems Analysis IIASA, Laxenburg, Austria); Rudolf Winter-Ebmer
    Abstract: We study the relationship between education and cognitive functioning at older ages by exploiting compulsory schooling reforms, implemented in six European countries during the 1950s and 1960s. Using data of individuals aged 50+ from the Survey of Health, Aging and Retirement in Europe (SHARE), we assess the causal effect of education on old-age memory, uency, numeracy, orientation and dementia. We find a positive impact of schooling on memory. One year of education increases the delayed memory score by about 0.3, which amounts to 16% of the standard deviation. Furthermore, for women, we find that more education reduces the risk of dementia.
    Keywords: Compulsory schooling, Instrumental Variables, Education, Cognitive functioning, Memory, Aging, Dementia
    JEL: I21 J14
    Date: 2012–10
  8. By: Nicole Schneeweis; Vegard Skirbekk (International Institute for Applied Systems Analysis IIASA, Laxenburg, Austria); Rudolf Winter-Ebmer
    Abstract: We study the relationship between education and cognitive functioning at older ages by exploiting compulsory schooling reforms, implemented in six European countries during the 1950s and 1960s. Using data of individuals aged 50+ from the Survey of Health, Aging and Retirement in Europe (SHARE), we assess the causal effect of education on old-age memory, fluency, numeracy, orientation and dementia. We find a positive impact of schooling on memory. One year of education increases the delayed memory score by about 0.3, which amounts to 16% of the standard deviation. Furthermore, for women, we find that more education reduces the risk of dementia.
    Keywords: Compulsory schooling, Instrumental Variables, Education, Cognitive functioning, Memory, Aging, Dementia
    JEL: I21 J14
    Date: 2012–10
  9. By: Merlino, Luca Paolo (Free University of Brussels); Parrotta, Pierpaolo (Aarhus School of Business); Pozzoli, Dario (Aarhus University)
    Abstract: Exploiting the richness of the Danish register data on individuals and companies, we are able to provide an overall assessment of the assortative matching patterns arising in the period 1996-2005 controlling for firms and individual characteristics. We find strong differences between men and women in assortativity. While positive assortative matching in job-to-job transitions emerges for good female workers, good male workers are more likely to be promoted. These differences are not present in female friendly firms which have high profits and where good female workers tend to find jobs. Complementary analysis on job-to-unemployment and job-to-self-employment transitions reveals a lower employer's willingness to retain women. Overall, we find strong evidence of glass-ceilings in certain firms preventing women to climb the carrier ladder and pushing them to look for better jobs offered by more female friendly firms.
    Keywords: assortative matching, gender gap, glass ceiling, sticky floor
    JEL: J16 J24 J62
    Date: 2012–11
  10. By: Maren M. Michaelsen
    Abstract: In Mexico, conflicts between drug-trafficking organisations result in a high number of deaths and immense suffering among both victims and non-victims every year. Little scientific research exists which identifi es and quantifi es the monetary and nonmonetary consequences of ongoing violent conflicts on individuals. Using the Mexican Family Life Survey for 2002 and 2005, the causal effect of mental health (symptoms of depression / anxiety) on the extensive and intensive margin of labour supply for working-aged men and women is estimated. Measures of the ongoing drug-related violent conflicts both at the macro level using intentional homicide rates by region, and at the micro level indicated by the presence of armed groups in the neighbourhood, serve as instruments for mental health. The results show a significant adverse impact of the conflicts on anxiety for men and women. Based on IV-Tobit model results, a worse mental health state decreases individual labour supply strongly and significantly for men. The findings demonstrate that Mexico‘s population not only suffers from the violent conflicts between drug-trafficking organisations by anxiety or even depression but also indirectly from less household income through less work which in turn has consequences for Mexico‘s social development and economic growth.
    Keywords: Mental health; labour supply; violent conflict; Mexico
    JEL: J22 I19 O12 D74
    Date: 2012–10
  11. By: Ricky Kanabar
    Abstract: Ageing populations place an increasing financial burden on governments. Retired older workers are a source of untapped economic capacity. Maestas (2010) finds 26% of Health and Retirement Study (HRS) sample respondent's `unretire'. We estimate an unretirement rate of 5.11% and 2.70% for women using The English Longitudinal Study of Ageing (ELSA). Earlier studies using US longitudinal data include Rust (1980), Gustman and Steinmeier (1984) and Hardy (1990) estimate similar rates. Results suggest: age, education, financial planning, unanticipated increases in debt, spouse and time effects play an important role in the decision for a male to unretire.
    Keywords: ELSA, Labour supply, Labour demand, Unretirement
    JEL: J26
    Date: 2012–11
  12. By: Boockmann, Bernhard; Fries, Jan; Göbel, Christian
    Abstract: We analyse the effects of specific measures for older employees (SMOE) on employment duration of workers aged 40 and above. Using longitudinal employer-employee data for German establishments, we account for worker and establishment heterogeneity and correct for stock-sampling. We find a positive effect of mixed-aged team work on employment duration and a negative effect of a part-time scheme addressed at older workers. Employment duration does not appear to be related to other SMOE, such as training and specific equipment of workplaces. --
    Keywords: older workers,human resources policies,SMOE,employment duration,linked employer-employee data,age,tenure
    JEL: J14 J21 J26
    Date: 2012
  13. By: Bingley, Paul (SFI - Danish National Centre for Social Research); Cappellari, Lorenzo (Università Cattolica del Sacro Cuore)
    Abstract: We model the correlations of brothers' life-cycle earnings separating for the first time the effect of paternal earnings from additional residual sibling effects. We identify the two effects by analysing sibling correlations and intergenerational correlations jointly within a unified framework. Our multi-person model of earnings dynamics distinguishes permanent earnings from transitory – serially correlated – shocks, allows for life-cycle effects and nests the models of previous research that have focussed either on intergenerational or sibling correlations. Using data on the Danish population of father/first-son/second-son triplets we find that sibling effects explain between one fourth and one half of inequality in life-cycle earnings, and largely account for individual differences in earnings growth. Intergenerational associations account for a considerable share of overall sibling correlations, between 30 and 60 per cent from youth to maturity. We also find that transitory shocks are correlated across family members, in particular between brothers. Extensions of the model show a distinctive effect of mothers' human capital on top of fathers' earnings and no evidence of differential intergenerational transmission between brothers.
    Keywords: intergenerational transmission, sibling correlations, life-cycle earnings
    JEL: D31 J62
    Date: 2012–11
  14. By: Arndt Reichert
    Abstract: This study presents credible estimates for the causal effect of a variation in obesity on employment. By exploring random assignment of a weight loss intervention based on monetary rewards, I provide convincing evidence that weight loss positively affects the employment prospects of obese women but not of obese men. Consistent with this, significant effects of weight loss on proxy variables for labor productivity are found only for obese women.
    Keywords: Obesity; weight loss intervention; IV estimation; sample selection; labor productivity; employment
    JEL: I10 I18 J24 J21
    Date: 2012–11
  15. By: Nina Boberg-Fazlic (University of Copenhagen, Department of Economics)
    Abstract: It is often conjectured that higher life expectancy leads to longer schooling. The reasoning behind this notion is that a longer lifespan increases the recovery period of human capital investment and thus, makes it more profitable to invest in education. This notion goes back to Ben-Porath (1967) and is therefore often termed the Ben-Porath mechanism. However, the original Ben-Porath mechanism concerns the length of economic life and not the length of life per se. This distinction is important in the presence of retirement and especially so as earlier retirement ages are observed in many western countries. This paper presents an overlapping generations model including both an educational and a retirement decision, thereby being able to test the Ben-Porath mechanism using the correct denition of length of working life. It is found that an increase in life expectancy does not necessarily increase the expected length of economic life as also early retirement can occur. Schooling still increases, however not due to the increase in the recovery horizon but due to an increase in the probability of surviving the recovery period.
    Keywords: longevity, human capital, retirement, overlapping generations
    JEL: D91 I20 J10 J26
    Date: 2012–09–01
  16. By: Pawe³ Strzelecki (Institute of Statistics and Demography, Warsaw School of Economics)
    Abstract: Rok 2010 by³ prawdopodobnie ostatnim, w którym liczba osób w wieku produkcyjnym (15-64 lata) wzrasta³a. Oznacza to, ¿e odwróceniu ulega obserwowana w Polsce od II wojny œwiatowej ci¹g³a tendencja wzrostu liczby osób, które potencjalnie mog¹ byæ aktywne na rynku pracy. Projekcja liczby osób aktywnych zawodowo przygotowana przez Komisjê Europejsk¹ wskazuje, ¿e w latach 2010-2060 poda¿ pracy spadnie w Polsce o prawie 6 mln osób, a zmiany te ju¿ od 2015 roku mog¹ obni¿aæ roczny wzrost potencjalnego PKB w Polsce od 0,7 do 1,5 pp. rocznie. Celem niniejszego artyku³u jest zbadanie za pomoc¹ ró¿nych scenariuszy projekcji ludnoœci i aktywnoœci zawodowej, jaki wp³yw na zmiany poda¿y pracy w przysz³oœci mia³yby alternatywne za³o¿enia dotycz¹ce: (1) wzrostu dzietnoœci, (2) podnoszenia wieku emerytalnego, (3) dorównania w przysz³oœci odsetkowi osób aktywnych zawodowo w krajach bêd¹cych obecnie liderami w UE, (4) skali migracji zastêpczych wymaganych do zrównowa¿enia ubytków poda¿y pracy. Scenariusze te odzwierciedlaj¹ potencjalne efekty mo¿liwych do podjêcia dzia³añ ograniczaj¹cych spadek poda¿y pracy w Polsce. Wyniki symulacji wskazuj¹, ¿e ¿adne z rozwi¹zanie stosowane osobno nie jest w stanie trwale zahamowaæ spadku poda¿y pracy. Jedynie natychmiastowe podniesienie TFR do poziomu zastêpowalnoœci pokoleñ mog³oby ustabilizowaæ w przysz³oœci poda¿ pracy na poziomie ponad 2 mln ni¿szym ni¿ obecnie. Pozosta³e analizowane rozwi¹zania ³¹cznie z podnoszeniem wieku emerytalnego do 67 lub nawet 70 lat s¹ w stanie jedynie zmniejszyæ spadek poda¿y pracy o 1-2 mln osób w horyzoncie projekcji. Wp³yw sta¿enie siê populacji na poda¿ pracy mog³yby byæ jedynie teoretycznie równowa¿ony przez migracjê zastêpcz¹ (replacement migration). Wielkoœæ tej migracji w ci¹gu najbli¿szych 50 lat musia³aby wynieœæ jednak ok. 5,3 mln osób. Nawet czêœciowe osi¹gniêcie takiego poziomu nie wydaje siê jednak realne. Przeprowadzone symulacje wskazuj¹, ¿e jedynie jednoczesne i skuteczne zastosowanie polityk dotycz¹cych kilku analizowanych obszarów mo¿e przynieœæ w przysz³oœci zauwa¿alne ograniczenie spadku poda¿y pracy zwi¹zanego ze starzeniem siê populacji Polski.
    Keywords: prognoza ludnoœci, poda¿ pracy, prognoza TFR, wspó³czynniki aktywnoœci zawodowej, migracja zastêpcza, wiek emerytlany.
    JEL: J11 J21
    Date: 2012
  17. By: Michael Kind; John P. Haisken-DeNew
    Abstract: This study focuses on the long term effects of unemployment on subjective wellbeing in a family context for 17-24 year old sons living with at least one parent, using data from the German SOEP. As fathers enter unemployment, sons‘ subjective wellbeing is not only reduced immediately, but also 5 years into the future. As this future reduction remains unexpected by the sons, this suggests even higher true costs of unemployment than previously thought.
    Keywords: Life satisfaction; unemployment; intergenerational transmission; expectations
    JEL: Z1 J64 J65 J13
    Date: 2012–10
  18. By: Jakub Growiec (Warsaw School of Economics, Institute of Econometrics, and National Bank of Poland, Economic Institute); Christian Groth (University of Copenhagen, Department of Economics)
    Abstract: Based on a general framework for computing the aggregate human capital stock under heterogeneity across population cohorts, the paper derives aggregate human capital stocks in the whole population and in the labor force, and relates these variables to average years of schooling and average work experience. Under the scenarios considered here, the "macro-Mincer" (log-linear) relationship between aggregate human capital and average years of schooling is obtained only in cases which are inconsistent with heterogeneity in years of schooling and based on empirically implausible demographic survival laws. Our numerical results indicate that the macro-Mincer equation can be a reasonable approximation of the true relationship only if returns to schooling and work experience are roughly constant across countries.
    Keywords: human capital, aggregation, heterogeneity, population cohort, Mincer equation
    JEL: J24 O47
    Date: 2012–09–18

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