nep-dem New Economics Papers
on Demographic Economics
Issue of 2013‒09‒26
thirty-one papers chosen by
Clarence Nkengne Tsimpo
University of Montreal and World Bank Group

  1. The Gender Unemployment Gap By Albanesi, Stefania; Sahin, Aysegul
  2. Cohabitation and the Uneven Retreat from Marriage in the U.S., 1950-2010 By Shelly Lundberg; Robert A. Pollak
  3. A Theory of Demographic Transition and Fertility Rebound in the Process of Economic Development By Dimitrios Varvarigos
  4. What Explains the Stagnation of Female Labor Force Participation in Urban India? By Klasen, Stephan; Pieters, Janneke
  5. Poverty and Transitions in Health By Maja Adena; Michal Myck
  6. Age Groups and the Measure of Population Aging By d'Albis, Hippolyte; Collard, Fabrice
  7. Bridging Education Gender Gaps in Developing Countries: The Role of Female Teachers By Karthik Muralidharan; Ketki Sheth
  8. Reading to young children: a head-start in life? By Kalb, Guyonne; van Ours, Jan C
  9. The Importance of Parental Knowledge and Social Norms: Evidence from Weight Report Cards in Mexico By Silvia Prina; Heather Royer
  10. Reallocation of Resources Across Age in a Comparative European Setting By Bernhard Hammer; Alexia Prskawetz; Inga Freund
  11. Exploitation, Altruism, and Social Welfare: An Economic Exploration By Doepke, Matthias
  12. You Get What You Pay For: Schooling Incentives and Child Labor By Eric V. Edmonds; Maheshwor Shrestha
  13. Socio-demographic determinants of planning suicide and marijuana use among youths: are these patterns of behaviour causally related? By Rosa Duarte; José Julián Escario; José Alberto Molina
  14. Tribe or title? Ethnic enclaves and the demand for formal land tenure in a Tanzanian slum By Matthew Collin
  15. (Lack of) Pension Knowledge By Barrett, Alan; Mosca, Irene; Whelan, Brendan J.
  16. Is there a closure penalty? Cohesive network structures, diversity, and gender inequalities in career advancement By Lutter, Mark
  17. Accounting for the Rise of Health Spending and Longevity By Raquel Fonseca; Pierre-Carl Michaud; Arie Kapteyn; Titus Galama
  18. Can Educational Attainment Explain the Rise in Labor Force Participation at Older Ages? By Gary Burtless
  19. The Value of Democracy: Evidence from Road Building in Kenya By Burgess, Robin; Jedwab, Remi; Miguel, Edward; Morjaria, Ameet; Padró i Miquel, Gerard
  20. Costs and Benefits of Labour Mobility between the EU and the Eastern Partnership Partner Countries. Country report: Ukraine By Tom Coupé; Hannah Vakhitova
  21. The ex-ante effects of non-contributory pensions in Colombia and Peru By Javier Olivera; Blanca Zuluaga
  22. Leaving Boys Behind: Gender Disparities in High Academic Achievement By Nicole M. Fortin; Philip Oreopoulos; Shelley Phipps
  23. The effect of firms' partial retirement policies on the labour market outcomes of their employees By Martin Huber; Michael Lechner; Conny Wunsch
  24. Shelter from the Storm: Upgrading Housing Infrastructure in Latin American Slums By Sebastian Galiani; Paul Gertler; Ryan Cooper; Sebastian Martinez; Adam Ross; Raimundo Undurraga
  25. China’s Demography and its Implications By Il Houng Lee; Xu Qingjun; Murtaza H. Syed
  26. Recessions, Healthy No More? By Christopher J. Ruhm
  27. Peer Groups, Employment Status and Mental Well-being among Older Adults in Ireland By Hudson, Eibhlin; Barrett, Alan
  28. When Strong Ties are Strong: Networks and Youth Labor Market Entry By Kramarz, Francis; Nordström Skans, Oskar
  29. The Caloric Costs of Culture: Evidence from Indian Migrants By Atkin, David
  30. Walk the Line: Conflict, State Capacity and the Political Dynamics of Reform By Jain, Sanjay; Majumdar, Sumon; Mukand, Sharun
  31. Global Production Networks and Employment: A Developing Country Perspective By Ben Shepherd; Susan Stone

  1. By: Albanesi, Stefania; Sahin, Aysegul
    Abstract: The unemployment gender gap, defined as the difference between female and male unemployment rates, was positive until 1980. This gap virtually disappeared after 1980, except during recessions when men's unemployment rate always exceeds women's. We study the evolution of these gender differences in unemployment from a long-run perspective and over the business cycle. Using a calibrated three-state search model of the labor market, we show that the rise in female labor force attachment and the decline in male attachment can mostly account for the closing of the gender unemployment gap. Evidence from nineteen OECD countries also supports the notion that convergence in attachment is associated with a decline in the gender unemployment gap. At the cyclical frequency, we find that gender differences in industry composition are important in recessions, especially the most recent, but they do not explain gender differences in employment growth during recoveries.
    Keywords: gender differences in unemployment; labor force participation; labor market flows
    JEL: E24 J64
    Date: 2013–04
  2. By: Shelly Lundberg; Robert A. Pollak
    Abstract: Since 1950 the sources of the gains from marriage have changed radically. As the educational attainment of women overtook and surpassed that of men and the ratio of men's to women's wage rates fell, traditional patterns of gender specialization in work weakened. The primary source of the gains to marriage shifted from the production of household services and commodities to investment in children. For some, these changes meant that marriage was no longer worth the costs of limited independence and potential mismatch. Cohabitation became an acceptable living arrangement for all groups, but cohabitation serves different functions among different groups. The poor and less educated are much more likely to rear children in cohabitating relationships. The college educated typically cohabit before marriage, but they marry before conceiving children and their marriages are relatively stable. We argue that different patterns of child-rearing are the key to understanding class differences in marriage and parenthood, not an unintended by-product of it. Marriage is the commitment mechanism that supports high levels of investment in children and is hence more valuable for parents adopting a high-investment strategy for their children.
    JEL: I24 I3 J11 J12 J13
    Date: 2013–09
  3. By: Dimitrios Varvarigos
    Abstract: Recent evidence of increasing fertility rates in developed countries, offers support to the idea that, from the onset of early industrialisation to the present day, the dynamics of fertility can be represented by an N-shaped curve. An OLG model with parental investment in human capital can account for these observed movements in fertility rates during the different phases of demographic change. A demographic transition with declining fertility emerges at the intermediate phase, when parents engage on a child quantity-quality tradeoff. At later stages however, the continuing process of economic growth generates sufficient resources so that households can rear more children while still providing the desirable amount of educational investment per child.
    Keywords: Demographic transition; Fertility rebound; Human capital
    JEL: J11 O41
    Date: 2013–09
  4. By: Klasen, Stephan (University of Göttingen); Pieters, Janneke (IZA)
    Abstract: We study the surprisingly low level and stagnation of female labor force participation rates in urban India between 1987 and 2009. Despite rising growth, fertility decline, and rising wages and education levels, women's labor force participation stagnated at around 18%. Using five large cross-sectional micro surveys, we find that a combination of supply and demand effects have contributed to this stagnation. The main supply side factors were rising household incomes, husband's education, stigmas against educated women engaging in menial work, and falling selectivity of highly educated women. On the demand side, employment in sectors appropriate for educated women grew less than the supply of educated workers, leading many women to withdraw from the labor force.
    Keywords: female labor force participation, education, India
    JEL: J20 J16 I25 O15
    Date: 2013–08
  5. By: Maja Adena; Michal Myck
    Abstract: Using a sample of Europeans aged 50+ from twelve countries in the Survey of Health, Ageing and Retirement in Europe (SHARE) we analyse the role of poor material conditions as a determinant of changes in health over a four-year period. We find that poverty defined with respect to relative incomes has no effect on changes in health. However, broader measures of poor material conditions such as subjective poverty or low relative value of wealth significantly increase the probability of transition to poor health among the healthy and reduce the chance of recovery from poor health over the time interval analysed. In addition to this the subjective measure of poverty has a significant effect on mortality, increasing it by 40.3% among men and by 58.3% among those aged 50-64. Material conditions matter for health among older people. We suggest that if monitoring of poverty in old age and corresponding policy targets are to focus on the relevant measures, they should take into account broader definitions of poverty than those based only on relative incomes.
    Keywords: health transitions, material conditions, poverty, mortality
    JEL: I14 I32 J14
    Date: 2013
  6. By: d'Albis, Hippolyte; Collard, Fabrice
    Abstract: This paper proposes the use of optimal grouping methods for determining the various age groups within a population. The cuto� ages for these groups, such as the age from which an individual is considered to be an older person, are then endogenous variables that depend on the entire population age distribution at any given moment. This method is applied to the age distributions of some industrialized countries, for which cuto� ages as well as the main indicators of aging are calculated over the last 50 years.
    Keywords: Population Aging, Age Distributions, Aging Indexes, Optimal Grouping, Old Age, Demographic Measures.
    JEL: J11
    Date: 2013–02–05
  7. By: Karthik Muralidharan; Ketki Sheth
    Abstract: Recruiting female teachers is frequently suggested as a policy option for improving girls' education outcomes in developing countries, but there is surprisingly little evidence on the effectiveness of such a policy. We study gender gaps in learning outcomes, and the effectiveness of female teachers in reducing these gaps using a large, representative, annual panel data set on learning outcomes in rural public schools in the Indian state of Andhra Pradesh. We report six main results in this paper. (1) We find a small but significant negative trend in girls' test scores in both math (0.02σ/year) and language (0.01σ/year) as they progress through the public primary school system; (2) Using five years of panel data, school-grade and student gender by grade fixed effects, we find that both male and female teachers are more effective at teaching students of their own gender; (3) However, female teachers are more effective overall, resulting in girls' test scores improving by an additional 0.036σ in years when they are taught by a female teacher, with no adverse effects on boys when they are taught by female teachers; (4) The overall gains from having a female teacher are mainly attributable to their greater effectiveness at improving math test scores than male teachers (especially for girls); (5) We find no effect of having a same-gender teacher on student attendance, suggesting that the mechanism for the impact on learning outcomes is not on the extensive margin of increased school participation, but on the intensive margin of more effective classroom interactions; (6) Finally, the increasing probability of having a male teacher in higher grades can account for around 10-20% of the negative trend we find in girls' test scores as they move to higher grades.
    JEL: I21 J16 O15
    Date: 2013–08
  8. By: Kalb, Guyonne; van Ours, Jan C
    Abstract: This paper investigates the importance of parents reading to their young children. Using Australian data we find that parental reading to children at age 4 to 5 has positive and significant effects on reading skills and cognitive skills of these children at least up to age 10 or 11. Our findings are robust to a wide range of sensitivity analyses.
    Keywords: Cognitive skills; Reading to children
    JEL: C26 I21 J24
    Date: 2013–05
  9. By: Silvia Prina; Heather Royer
    Abstract: The rise of childhood obesity in less developed countries is often overlooked. We study the impact of body weight report cards in Mexico. The report cards increased parental knowledge and shifted parental attitudes about children's weight. We observe no meaningful changes in parental behaviors or children's body mass index. Interestingly, parents of children in the most obese classrooms were less likely to report that their obese child weighed too much relative to those in the least obese classrooms. As obesity rates increase, reference points for appropriate body weights may rise, making it more difficult to lower obesity rates.
    JEL: I12 I18 O54
    Date: 2013–08
  10. By: Bernhard Hammer; Alexia Prskawetz; Inga Freund
    Abstract: We investigate the reallocation of resources across age and gender in a comparative European setting. Our analysis is based on concepts and data from the National Transfer Accounts (NTA) project, as well as on data from income and time use surveys. We introduce the aggregate NTA life cycle deficit as a concept of an economic dependency ratio. This dependency measure allows for flexible age limits and age-specific levels of economic dependency. We then move beyond the current NTA methodology and study gender differences in the generation of income and extend our analysis by unpaid household work. We find large cross-country differences in the age- and gender-specific levels and type of production activities and consequently in the organisation of the resource reallocation across age. Our results clearly indicate that a reform of the welfare system needs to take into account not only public transfers but also private transfers, in particular the services produced within the households for own consumption (e.g. childcare, cooking, cleaning...).
    Keywords: Ageing, challenges for welfare system, demographic change, welfare state
    JEL: I38 J10
    Date: 2013–09
  11. By: Doepke, Matthias
    Abstract: Child labor is often condemned as a form of exploitation. I explore how the notion of exploitation, as used in everyday language, can be made precise in economic models of child labor. Exploitation is defined relative to a specific social welfare function. I first show that under the standard dynastic social welfare function, which is commonly applied to intergenerational models, child labor is never exploitative. In contrast, under an inclusive welfare function, which places additional weight on the welfare of children, child labor is always exploitative. Neither welfare function captures the more gradual distinctions that common usage of the term exploitation allows. I resolve this conflict by introducing a welfare function with minimum altruism, in which child labor in a given family is judged relative to a specific social standard. Under this criterion, child labor is exploitative only in families where the parent (or guardian) displays insufficient altruism towards the child. I argue that this welfare function best captures the conventional concept of exploitation and has useful properties for informing political choices regarding child labor.
    Keywords: altruism; child labor; exploitation; social welfare function
    JEL: D63 D64 J10 J47 J80
    Date: 2013–06
  12. By: Eric V. Edmonds; Maheshwor Shrestha
    Abstract: Can efforts to promote education deter child labor? We report on the findings of a field experiment where a conditional transfer incentivized the schooling of children associated with carpet factories in Nepal. We find that schooling increases and child involvement in carpet weaving decreases when schooling is incentivized. As a simple static labor supply model would predict, we observe that treated children resort to their counterfactual level of school attendance and carpet weaving when schooling is no longer incentivized. From a child labor policy perspective, our findings imply that “You get what you pay for” when schooling incentives are used to combat hazardous child labor.
    JEL: J22 J88 O15
    Date: 2013–08
  13. By: Rosa Duarte (Department of Economic Analysis, Faculty of Economics and Business Studies, Universidad de Zaragoza); José Julián Escario (Department of Economic Analysis, Faculty of Economics and Business Studies, Universidad de Zaragoza); José Alberto Molina (Department of Economic Analysis, Faculty of Economics and Business Studies, Universidad de Zaragoza)
    Abstract: We analyse whether there is a causal relationship between planning suicide and marijuana use among US youths. To that end, we specify a simultaneous probability model which is estimated by maximum likelihood using the YRBS (1999 and 2001). We place emphasis on a number of socio-demographic risk determinants (gender, age, ethnicity, environmental and peer group factors). Our results confirm that marijuana use and planning suicide are not the result of a single determinant, but rather emerge from a complex interaction of many socio-demographic factors. Moreover, they suggest the presence of reverse causality, with this implying that marijuana use increases the probability of planning suicide and, similarly, that youths who plan to commit suicide exhibit a higher probability of using marijuana.
    Keywords: Socio-Demographic determinants; Planning suicide; Marijuana use; Youths; Causality
    Date: 2013–03
  14. By: Matthew Collin
    Abstract: This paper examines the relationship between ethnic heterogeneity and the demand for formal land tenure in urban Tanzania. Using a unique census of two highly-fractionalized unplanned settlements in Dar es Salaam, I show that households located near coethnics are significantly less likely to purchase a limited form of land tenure recently offered by the government. I attempt to address one of the chief concerns - endogenous sorting of households - by conditioning on a household’s choice of coethnics neighbors upon arrival in the neighborhood. I also find that coethnic residence predicts lower levels of perceived expropriation risk, but not perceived access to credit nor contribution to local public goods. These results suggest that close-knit ethnic groups may be less likely to accept state-provided goods due to their ability to generate reasonable substitutes, in this case protection from expropriation. The results are robust to different definitions of coethnicity and spatial cut-offs, controls for family ties and religious similarity as well as spatial fixed effects. Finally, the main result is confirmed using a large-scale administrative data-set covering over 20,000 land parcels in the city, exploiting ethnically-unique last names to predict tribal affiliation.
    Keywords: Ethnicity, Land tenure, Tanzania, Unplanned settlements
    JEL: J15 Q15 R23
    Date: 2013
  15. By: Barrett, Alan (ESRI, Dublin); Mosca, Irene (Trinity College Dublin); Whelan, Brendan J. (Trinity College Dublin)
    Abstract: Governments are increasingly concerned about the capacity of pensions systems to meet demands in the coming years. According to the OECD, one part of the policy response in many countries will be greater private provision on the part of individuals through occupational and other pension arrangements. If such a strategy is to work, it requires that individuals are well-informed about pensions. However, there are many reasons to believe that individuals may not be well-informed due to the complexity of pensions systems and degrees of myopia. In this paper, we assess levels of knowledge of pensions using a representative sample of older Irish people. Looking at people who are enrolled in pension schemes, we find that two thirds of these people do not know what amount will be paid out on retirement and/or whether the payments will be in the form of lump-sums, monthly payments or both. Women are more likely not to know, as are people with lower levels of education. While one policy conclusion might be to direct pensions-related information at certain groups, another approach might be to extend the mandatory elements in pension systems such as contribution rates.
    Keywords: pensions, knowledge, older workers
    JEL: I38 J14
    Date: 2013–08
  16. By: Lutter, Mark
    Abstract: That social capital matters is an established fact in the social sciences. How different forms of social capital affect gender disadvantages in career advancement is less clear, however. Qualitative research suggests that women face disadvantages in project-based labor markets where recruitment practices are based on informal and personal networks. Focusing on a project-based type of labor market, namely the U.S. film industry, this study argues that women suffer from social closure and face severe career disadvantages when collaborating in cohesive teams. At the same time, gender disadvantages are reduced for women who build social capital in open networks with a higher degree of diversity and information flow. I test and demonstrate these assumptions using a large-scale longitudinal dataset containing full career profiles of more than 1.2 million performances by 101,090 film actors in 483,949 feature film productions between the years 1900-2010. In particular, I analyze career survival models and interaction effects between gender and different measures of social capital and information openness. The findings reveal that female actors have a higher risk of career failure than their male colleagues when affiliated in cohesive networks, but have better survival chances when embedded in open and diverse structures. This study contributes to the understanding of how and what type of social capital can be either a beneficial resource for otherwise disadvantaged groups or a constraining mechanism that intensifies gender differences in career advancement. -- Sozialkapital stellt insbesondere auf projektorientierten Arbeitsmärkten eine wichtige Erfolgsressource dar. Auf die Frage, wie verschiedene Formen der sozialen Einbettung auf geschlechtsspezifische Erfolgsungleichheiten wirken, gibt es jedoch bislang keine eindeutige Antwort. Bisherige Einzelfalluntersuchungen legen nahe, dass Frauen besonders dann benachteiligt sind, wenn Rekrutierungspraktiken in hohem Maße auf informellen und auf persönlichen Netzwerken beruhen. Am Beispiel eines projektorientierten und durch informelle Rekrutierung gekennzeichneten Winner-take-all-Arbeitsmarktes - der US-Filmbranche - wird argumentiert, dass Frauen besonders dann Benachteiligungen erfahren, wenn sie ihre Karriere häufiger in engmaschigen, stark kohäsiven Teams aufbauen. Dagegen können sie Benachteiligungen deutlich reduzieren, wenn sie sich häufiger in Projektteams bewegen, die sich durch offene Netzwerkstrukturen und breite Erfahrungshintergründe auszeichnen. Auf Basis von Ereignisdatenanalysen und der Untersuchung vollständiger Karriereprofile von 101.090 US-Filmschauspielern in 483.949 Spielfilmproduktionen mit mehr als 1,2 Millionen Engagements testet der Beitrag diese Argumentation und zeigt - anhand diverser Indikatoren zur Messung von Teamkohäsion, Kollaborationshäufigkeit, Informationszugang und -vielfalt -, dass kohäsive Netze geschlechtsspezifische Karriereungleichheiten verstärken, während offene Netzwerke Benachteiligungen deutlich reduzieren. Vermutlich sind der in diesen Netzen höhere Informationsfluss und vor allem die Diversität der geteilten Informationen entscheidende Faktoren, die geschlechtstypische Benachteiligungen aufheben können. Diese Studie erweitert das Verständnis darüber, wie und unter welchen Bedingungen Sozialkapital zu einer vorteilhaften Ressource für benachteiligte Gruppen wird, und wann es beschränkende, Benachteiligungen intensivierende Wirkungen entfaltet.
    Date: 2013
  17. By: Raquel Fonseca; Pierre-Carl Michaud; Arie Kapteyn; Titus Galama
    Abstract: We estimate a stochastic life-cycle model of endogenous health spending, asset accumulation and retirement to investigate the causes behind the increase in health spending and longevity in the U.S. over the period 1965-2005. We estimate that technological change and the increase in the generosity of health insurance on their own may explain 36% of the rise in health spending (technology 30% and insurance 6%), while income explains only 4% and other health trends 0.5%. By simultaneously occurring over this period, these changes may have led to complementarity effects which we find to explain an additional 57% increase in health spending. The estimates suggest that the elasticity of health spending with respect to changes in both income and insurance is larger with co-occurring improvements in technology. Technological change, taking the form of increased health care productivity at an annual rate of 1.3%, explains almost all of the rise in life expectancy at age 25 over this period while changes in insurance and income together explain less than 10%. Welfare gains are substantial and most of the gain appears to be due to technological change.
    Keywords: Demand for health, life cycle, health spending, technology, insurance, longevity
    JEL: J01 I1 O33
    Date: 2013
  18. By: Gary Burtless
    Abstract: The labor force participation of men age 60-74 has increased in recent years. Since reaching a post-World War-II low point in 1993, the share of such older men either working or looking for work jumped about 11 percentage points, from 33 percent in 1993 to 44 percent in 2010. The increase came at a time when changes in the retirement income system provided incentives for career workers to remain in the labor force longer. The share of earnings that Social Security replaced at any given age was falling due to the rise in the program’s Full Retirement Age. Workers could partly or fully offset the decline by retiring later. Workers were also becoming increasingly dependent on 401(k)s for their workplace retirement savings. Unlike traditional (defined-benefit) pension plans, 401(k) plans do not offer strong financial incentives to retire earlier rather than later. Working longer provides more time to save and earn investment income and shortens the time in retirement that must be financed with 401(k) savings. The rise in labor force participation can thus be seen as a response to changes in the retirement income system that reduce benefits available at any given age and reward working longer. The question addressed in this brief is the extent to which the increased educational attainment of older men helps explain their increased participation in the labor force.Educational attainment is a key determinant of worker productivity. Better educated workers are paid more and have more employment opportunities. At older ages they also tend to have better health. An increase in the educational attainment of older men can thus be expected to increase the willingness and ability of older men to work longer. The discussion proceeds as follows. The first section presents data on the rising educational attainment of older men and the closing of the educational gap between older and prime-age men. The second section examines the wages earned by older and younger workers to see whether these educational gains made older men more attractive to employers. The third section reports the results of an analysis assessing the extent to which the rise in educational attainment can explain the rise in participation. The final section concludes that the rise in educational attainment is a significant factor that makes older men more willing and able to remain in the labor force. But the gains in older men’s schooling attainment, both absolutely and relative to attainment of younger workers, are slowing. Therefore, the gains we have seen in labor force participation among older men will probably slow in the near future.
    Date: 2013–09
  19. By: Burgess, Robin; Jedwab, Remi; Miguel, Edward; Morjaria, Ameet; Padró i Miquel, Gerard
    Abstract: Ethnic favoritism is seen as antithetical to development. This paper provides credible quantification of the extent of ethnic favoritism using data on road building in Kenyan districts across the 1963-2011 period. Guided by a model it then examines whether the transition in and out of democracy under the same president constrains or exacerbates ethnic favoritism. Across the 1963 to 2011 period, we find strong evidence of ethnic favoritism: districts that share the ethnicity of the president receive twice as much expenditure on roads and have four times the length of paved roads built. This favoritism disappears during periods of democracy.
    JEL: D72 L92 O55 R48
    Date: 2013–09
  20. By: Tom Coupé; Hannah Vakhitova
    Abstract: Ukraine is a migration-intensive country, with an estimated 1.5-2 million labour migrants (about 5% of the working-age population). Slightly over a half of these migrants travel for work to the EU. This study discusses the impact of this large pool of migrants on both the sending and receiving countries. It also assesses how liberalisation of the EU visa regime, something that the EU is currently negotiating with Ukraine, will affect the stream of Ukrainian labour migrants to EU countries. Our study suggests that the number of tourists will increase substantially, whereas the increase in the number of labour migrants is unlikely to be very large. We also suggest that the number of legal migrants is likely to increase, but at the same time the numer of illegal migrants will decline because currently only a third of migrants from Ukraine have both residence and work permits in the EU, while about a quarter of them stay there illegally.
    Keywords: Labour Economics, Labour Markets, Labour Mobility, Ukraine
    JEL: D78 F22 F24 I25 J01 J15 J40 J61 J83
    Date: 2013–09
  21. By: Javier Olivera (UCD Geary Institute, PEARL Institute for Research on Social Inequality, University of Luxembourg); Blanca Zuluaga (Department of Economics, Icesi University)
    Abstract: The aim of this paper is to study the ex-ante effects of the implementation of a Non Contributory Pension (NCP) program in Colombia and Peru. Relying on household survey data, we simulate the potential impact of the transfer on poverty, inequality, fiscal cost, and the probability of affiliation to the contributory pension system. This last effect is the most direct behavioural effect one can expect from the implementation of a NCP scheme. For the behavioural response we estimate a Nested Logit Model. Our results show that a NCP in Colombia and Peru contributes to the reduction of poverty and inequality among the elderly, particularly in rural areas at affordable fiscal costs. Furthermore, there is not a large impact on the probability of affiliation to contributory pensions when the program is targeted to the poor (and extreme poor), with the exception of Peruvian women.
    Keywords: non-contributory pensions, social security, old-age, poverty
    JEL: D30 I32 I38 J14 J26
    Date: 2013–09–10
  22. By: Nicole M. Fortin; Philip Oreopoulos; Shelley Phipps
    Abstract: Using three decades of data from the “Monitoring the Future” cross-sectional surveys, this paper shows that, from the 1980s to the 2000s, the mode of girls’ high school GPA distribution has shifted from “B” to “A”, essentially “leaving boys behind” as the mode of boys’ GPA distribution stayed at “B”. In a reweighted Oaxaca-Blinder decomposition of achievement at each GPA level, we find that gender differences in post-secondary expectations, controlling for school ability, and as early as 8th grade are the most important factor accounting for this trend. Increases in the growing proportion of girls who aim for a post-graduate degree are sufficient to account for the increase over time in the proportion of girls earning “A’s”. The larger relative share of boys obtaining “C” and C+” can be accounted for by a higher frequency of school misbehavior and a higher proportion of boys aiming for a two-year college degree.
    JEL: I20 J16 J24
    Date: 2013–08
  23. By: Martin Huber; Michael Lechner; Conny Wunsch (University of Basel)
    Abstract: In this paper, we assess the impact of firms introducing part-time work schemes for gradual labour market exit of elderly workers on their employees’ labour market outcomes. The analysis is based on unique linked employer-employee data that combine high-quality survey and administrative data. Our results suggest that partial or gradual retirement options offered by firms are an important tool to alleviate the negative effects of low labour market attachment of elderly workers in ageing societies.
    Keywords: part-time work, elderly employees, treatment effects, matching
    JEL: J14 J26 C21
    Date: 2013
  24. By: Sebastian Galiani; Paul Gertler; Ryan Cooper; Sebastian Martinez; Adam Ross; Raimundo Undurraga
    Abstract: This paper provides rigorous empirical evidence on the causal effects that upgrading slum dwellings has on the living conditions of the extremely poor. In particular, we study the impact of providing better houses in situ to slum dwellers in El Salvador, Mexico and Uruguay. We experimentally evaluate the impact of a housing project run by the NGO TECHO, a youth-led program which provides basic pre-fabricated houses to members of extremely poor population groups in Latin America. The main objective of the program is to improve household well-being. Our findings show that better houses have a positive effect on overall housing conditions and general well-being: the members of treated households are happier with their quality of life. In two countries, we also document significant improvements in children’s health; in El Salvador, slum dwellers also feel that they are safer than before. There are no statistically significant effects on the possession of durable goods or in terms of labor outcomes. Our results are unusually robust in terms of both internal and external validity because they are derived from experiments in three different Latin American countries.
    JEL: C93 D63 O0
    Date: 2013–08
  25. By: Il Houng Lee; Xu Qingjun; Murtaza H. Syed
    Abstract: In coming decades, China will undergo a notable demographic transformation, with its old-age dependency ratio doubling to 24 percent by 2030 and rising even more precipitously thereafter. This paper uses the permanent income hypothesis to reassess national savings behavior, with greater prominence and more careful consideration given to the role played by changing demography. We use a forward-looking and dynamic approach that considers the entire population distribution. We find that this not only holds up well empirically but may also be superior to the static dependency ratios typically employed in the literature. Going further, we simulate global savings behavior based on our framework and find that China’s demographics should have induced a negative current account in the 2000s and a positive one in the 2010s given the rising share of prime savers, only turning negative around 2045. The opposite is true for the United States and Western Europe. The observed divergence in current account outcomes from the simulated path appears to have been partly policy induced. Over the next couple of decades, individual countries’ convergence toward the simulated savings pattern will be influenced by their past divergences and future policy choices. Other implications arising from China’s demography, including the growth model, the pension system, the labor market, and the public finances are also briefly reviewed.
    Keywords: Savings;China;Current account;Aging;Labor markets;Pensions;Public finance;China, Aging, Demographics, Savings, Current Account, Global Imbalances
    Date: 2013–03–28
  26. By: Christopher J. Ruhm
    Abstract: Using data from multiple sources, over the 1976-2009 period, I show that total mortality has shifted over time from strongly procyclical to being essentially unrelated to macroeconomic conditions. The relationship also shows some instability over time and is likely to be poorly measured when using short (less than 15 or 20 year) analysis periods. The secular change in the association between macroeconomic conditions and overall mortality primarily reflects trends in effects for specific causes of death, rather than changes in the composition of total mortality across causes. Deaths due to cardiovascular disease and transport accidents continue to be procyclical (although possibly less so than in the past), whereas strong countercyclical patterns of cancer fatalities and some external sources of death (particularly those due to accidental poisoning) have emerged over time. The changing effect of macroeconomic conditions on cancer deaths may partially reflect the increasing protective influence of financial resources, perhaps because these can be used to obtain sophisticated (and expensive) treatments that have become available in recent years. That observed for accidental poisoning probably has occurred because declines in mental health during economic downturns are increasingly associated with the use of prescribed or illicitly obtained medications that carry risks of fatal overdoses.
    JEL: E3 I1 I12 I18
    Date: 2013–08
  27. By: Hudson, Eibhlin (Trinity College Dublin); Barrett, Alan (ESRI, Dublin)
    Abstract: Research has shown that employment status, such as being unemployed or retired, can be related to well-being. In addition, the direction and size of these relationships can be influenced by the employment status of one's peer group. For example, it has been shown that the well-being of the unemployed tends to be higher for those living in high-unemployment areas compared to the unemployed living in low-unemployment areas. In this paper, we explore whether such employment peer effects impact upon the well-being of older workers. This is an important issue in the context of promoting longer working lives. If the well-being of older people in employment is lowered by low employment levels in their peer group, then sustaining high employment among older workers will be more difficult. We use data from the Irish Longitudinal Study on Ageing (TILDA) which is a nationally representative sample of people aged fifty and over and living in Ireland, collected between 2009 and 2011. Employment peer effects are proxied using the peer group non-employment rate where a peer is defined as someone in the same age-group and region and of the same gender. We find that for the employed, an increase in peer non-employment is associated with an increase in reported depressive symptoms, whereas for those not employed such an increase is associated with a decrease in reported depressive symptoms. However, these findings hold mainly for men.
    Keywords: peer groups, well-being, older adults
    JEL: I10 J26 C21
    Date: 2013–08
  28. By: Kramarz, Francis; Nordström Skans, Oskar
    Abstract: The conditions under which young workers find their first real post-graduation jobs are both very important for the young’ future careers and insufficiently documented given their potential importance for young workers welfare. To study these conditions, and in particular the role played by social ties, we use a Swedish population-wide linked employer-employee data set of graduates from all levels of schooling which includes detailed information on family ties, neighborhoods, schools, class composition, and parents’ and children’ employers over a period covering years with both high and low unemployment, together with measures of firm performance. We find that strong social ties (parents) are an important determinant for where young workers find their first job. The effects are larger if the graduate’s position is “weak” (low education, bad grades), during high unemployment years, and when information on potential openings are likely to be scarce. On the hiring side, by contrast, the effects are larger if the parent’s position is “strong” (long tenure, high wage) and if the parent’s plant is more productive. The youths appear to benefit from the use of strong social ties through faster access to jobs and by better labor market outcomes as measured a few years after entry. In particular, workers finding their entry jobs through strong social ties are considerably more likely to remain in this job, while experiencing better wage growth than other entrants in the same plant. Firms also appear to benefit from these wage costs (relative to comparable entrants) starting at a lower base. They also benefit on the parents’ side; parents’ wage growth drops dramatically exactly at the entry of one of their children in the plant, although this is a moment when firm profits tend to be growing. Indeed, the firm-side benefits appear large enough for (at least small) firms to increase job creation at the entry level in years when a child of one of their employees graduates.
    Keywords: network; strong tie; youth employment
    JEL: J30
    Date: 2013–09
  29. By: Atkin, David
    Abstract: Anthropologists have long documented substantial and persistent differences across social groups in the preferences and taboos for particular foods. One natural question to ask is whether such food cultures matter in an economic sense. In particular, can culture constrain caloric intake and contribute to malnutrition? To answer this question, I first document that inter-state migrants within India consume fewer calories per Rupee of food expenditure compared to their non-migrant neighbors, even for households with very low caloric intake. I then form a chain of evidence in support of an explanation based on culture: that migrants make nutritionally-suboptimal food choices due to cultural preferences for the traditional foods of their origin states. First, I focus on the preferences themselves and document that migrants bring their origin-state food preferences with them when they migrate. Second, I link together the findings on caloric intake and preferences by showing that the gap in caloric intake between locals and migrants is related to the suitability and intensity of the migrants' origin-state food preferences: the most adversely affected migrants (households in which both husband and wife migrated to a village where their origin-state preferences are unsuited to the local price vector) would consume 7 percent more calories if they possessed the same preferences as their neighbors.
    Keywords: Culture; India; Migrants; Nutrition
    JEL: D12 I10 O10 Z10
    Date: 2013–07
  30. By: Jain, Sanjay (Cambridge University); Majumdar, Sumon (Queen’s University); Mukand, Sharun (University of Warwick)
    Abstract: This paper develops a dynamic framework to analyze the political sustainability of economic reforms in developing countries. First, we demonstrate that economic reforms that are proceeding successfully may run into a political impasse, with the reform’s initial success having a negative impact on its political sustainability. Second, we demonstrate that greater state capacity, to make compensatory transfers to those adversely a.ected by reform, need not always help the political sustainability of reform, but can also hinder it. Finally, we argue that in ethnically divided societies, economic reform may be completed not despite ethnic conflict, but because of it.
    Keywords: Economic Reform, State Capacity, Politics, Redistribution, Compensation, Ethnic Conflict
    Date: 2013
  31. By: Ben Shepherd; Susan Stone
    Abstract: This paper provides evidence of the links between Global Value Chains (GVCs) and labour market outcomes, focusing on developing economies. The literature generally indicates that firms with international linkages—which we use here as a proxy for GVC involvement—tend to employ more workers, pay higher wages, and employ more skilled workers than firms that deal exclusively with the domestic market. Our results are consistent with existing evidence found in developed economies, with internationalised firms tending to hire more workers and pay higher wages in developing economies as well. We also find a positive significant relationship between the number of skilled workers and firms with international linkages but not in certain key economies. However, this comes more from firms who are importers, exporters and foreign affiliates rather than engaging in any of these activities individually. We attribute this finding to the predominance of assembly work performed in many of the economies under consideration, where unskilled workers tend to dominate. Finally, we see a strong, positive association between shares of female workers and firms with international linkages. Engaging in international activity is shown to provide greater opportunities for women to enter the formal labour market.
    Keywords: international trade, employment, wages, global value chains, skills, gender
    JEL: F14 F16 F23
    Date: 2013–05–14

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