nep-dem New Economics Papers
on Demographic Economics
Issue of 2013‒09‒28
27 papers chosen by
Clarence Nkengne Tsimpo
University of Montreal and World Bank Group

  1. HIV Does Matter for Fertility: Human Capital, Mortality and Family Size By Günther Fink; Sebastian Linnemayr
  2. Economic Conditions at Birth, Birth Weight, Ability, and the Causal Path to Cardiovascular Mortality By van den Berg, Gerard J.; Modin, Bitte
  3. Bargaining and the Gender Wage Gap: A Direct Assessment By Card, David; Cardoso, Ana Rute; Kline, Patrick
  4. The Effect of Maternal Employment on Children’s Academic Performance By Rachel Dunifon; Anne Toft Hansen; Sean Nicholson; Lisbeth Palmhøj Nielsen
  5. Effects of Early Childhood Intervention on Child Development and Early Skill Formation. Evidence from a Randomized Controlled Trial By Sandner, Malte
  6. China's Savings Multiplier By Mehlum, Halvor; Torsvik, Ragnar; Valente, Simone
  7. Healthy, wealthy, wise, and happy? An exploratory analysis of the interplay between aging and subjective well-being in low and middle income countries By Gabriela Flores; Michael Ingenhaag; Jürgen Maurer
  8. Labour-market database for South Africa with HIV/AIDS detail By Louise Roos
  9. Flexible pension take-up in social security By Jan Bonenkamp; Yvonne Adema; Lex Meijdam
  10. Are Women More Attracted to Cooperation Than Men? By Peter J. Kuhn; Marie-Claire Villeval
  11. The Impact of Mothers’ Earnings on Health Inputs and Infant Health By Naci Mocan; Christian Raschke; Bulent Unel
  12. Measuring Investment in Human Capital Formation: An Experimental Analysis of Early Life Outcomes By Orla Doyle; Colm Harmon; James J. Heckman; Caitriona Logue; Seong Moon
  13. Culture, Entrepreneurship, and Growth By Doepke, Matthias; Zilibotti, Fabrizio
  14. Educational Attainment, Wages and Employment of Second-Generation Immigrants in France By Gabin Langevin; David Masclet; Fabien Moizeau; Emmanuel Peterle
  15. Why Does the Health of Immigrants Deteriorate? Evidence from Birth Records By Giuntella, Osea
  16. DYPES: A Microsimulation model for the Spanish retirement pension system By F. J. Fernández-Díaz; C. Patxot; G. Souto
  17. Developing countries in need: Which characteristics appeal most to people when donating money? By Paul Hansen; Nicole Kergozou; Stephen Knowles; Paul Thorsnes
  18. The effect of firms' partial retirement policies on the labour market outcomes of their employees By Huber, Martin; Lechner, Michael; Wunsch, Conny
  19. The ARDL Test of Gender Kuznets Curve for G7 Countries By Dilara Kýlýnç; Esra Onater; Ý. Hakan Yetkiner
  20. Impact of Sectoral Allocation of Foreign Aid on Gender Equity and Human Development By Lynda Pickbourn; Léonce Ndikumana
  21. Compulsory Education and the Benefits of Schooling By Melvin Stephens, Jr.; Dou-Yan Yang
  22. Relationship-specific Investment as a Barrier to Entry By Hiroshi Kitamura; Akira Miyaoka; Misato Sato
  23. The Long-Term Direct and External Effects of Jewish Expulsions in Nazi Germany By Mevlude Akbulut Yuksel; Mutlu Yuksel
  24. Cycling to School: Increasing Secondary School Enrollment for Girls in India By Muralidharan, Karthik; Prakash, Nishith
  25. The Inter-generational and Social Transmission of Cultural Traits: Theory and Evidence from Smoking Behavior By Rebekka Christopoulou; Ahmed Jaber; Dean R. Lillard
  26. Modeling Area-Level Health Rankings By Charles Courtemanche; Samir Soneji; Rusty Tchernis
  27. Does Growing Up in a High Crime Neighborhood Affect Youth Criminal Behavior? By Anna Piil Damm; Christian Dustmann

  1. By: Günther Fink (Harvard School of Public Health); Sebastian Linnemayr (Harvard School of Public Health)
    Abstract: In this paper we provide new evidence regarding the long-term impact of HIV on fertility and economic development. We develop a theoretical framework where parents optimally allocate their resources between child-rearing and consumption, and incorporate both infant and adult mortality in their fertility decision. The model predicts an ambiguous overall effect of HIV on fertility, but suggests that the optimal fertility adjustment to HIV is larger for more educated parents than for parents with little or no formal education. We test this prediction using a novel data set combining historical individual level data from World Fertility Surveys (WFS) with recent data from the Demographic and Health Surveys (DHS) including nationally representative HIV-testing. The result that more educated women reduce fertility more than uneducated mothers in the presence of HIV appears to hold both in the longitudinal and the cross-sectional analysis. Our results imply that HIV is unlikely to have a significant effect on population size, but will negatively affect countries’ long term economic prospects through an adverse shift in the population’s human capital composition.
    Keywords: HIV, Fertility, Mortality, Family Size, Economic Development
    Date: 2013–09
  2. By: van den Berg, Gerard J. (University of Mannheim); Modin, Bitte (Centre for Health Equity Studies - CHESS)
    Abstract: We analyze interaction effects of birth weight and the business cycle at birth on individual cardiovascular (CV) mortality later in life. In addition, we examine to what extent these long-run effects run by way of cognitive ability and education and to what extent those mitigate the long-run effects. We use individual records of Swedish birth cohorts from 1915–1929 covering birth weight, family characteristics, school grades, sibling identifiers, and outcomes later in life including the death cause. The birth weight distribution does not vary over the business cycle. The association between birth weight (across the full range) and CV mortality rate later in life is significantly stronger if the individual is born in a recession. This is not explained by differential fertility by social class over the cycle. Ability itself, as measured at age 10, varies with birth weight and the cycle at birth. But the long-run effects of early-life conditions appear to mostly reflect direct biological mechanisms. We do not find evidence of indirect pathways through ability or education, and the long-run effects are not mitigated by education.
    Keywords: longevity, genetic determinants, health, business cycle, life expectancy, cardiovascular disease, school grades, siblings, fetal programming, cause of death, life course, developmental origins, nature and nurture, cognitive ability, education, stratified partial likelihood, recession
    JEL: I10 I12 I21 I31 J10 J13 N34 C41 E32
    Date: 2013–08
  3. By: Card, David (University of California, Berkeley); Cardoso, Ana Rute (IAE Barcelona (CSIC)); Kline, Patrick (University of California, Berkeley)
    Abstract: An influential recent literature argues that women are less likely to initiate bargaining with their employers and are (often) less effective negotiators than men. We use longitudinal wage data from Portugal, matched to balance sheet information on employers, to measure the relative bargaining power of men and women and assess the impact of the gender gap in bargaining strength on the male-female wage gap. We show that a model with additive fixed effects for workers and gender-specific fixed effects for firms provides a close approximation to the wage structure for both men and women. Building on this model we present three complementary approaches to identifying the impact of differential bargaining strength. First, we perform a simple decomposition by assigning the firm-specific wage premiums for one gender to the other. Second, we relate the wage premiums for men and women to measures of employer profitability. Third, we show that changes in firm-specific profitability have a smaller effect on the wage growth of female than male employees. All three approaches suggest that women are paid only 85-90% of the premiums that men earn at more profitable firms. Overall, we estimate that the shortfall in women‘s relative bargaining power explains around 3 percentage points – or 10-15% – of the gender wage gap in Portugal.
    Keywords: wage differentials, discrimination, gender, linked employer-employee data
    JEL: J16 J31 J71
    Date: 2013–08
  4. By: Rachel Dunifon; Anne Toft Hansen; Sean Nicholson; Lisbeth Palmhøj Nielsen
    Abstract: Using a Danish data set that follows 135,000 Danish children from birth through 9th grade, we examine the effect of maternal employment during a child’s first three and first 15 years on that child’s grade point average in 9th grade. We address the endogeneity of employment by including a rich set of household control variables, instrumenting for employment with the gender- and education-specific local unemployment rate, and by including maternal fixed effects. We find that maternal employment has a positive effect on children’s academic performance in all specifications, particularly when women work part-time. This is in contrast with the larger literature on maternal employment, much of which takes place in other contexts, and which finds no or a small negative effect of maternal employment on children’s cognitive development and academic performance.
    JEL: J13 J22
    Date: 2013–08
  5. By: Sandner, Malte
    Abstract: This paper presents results from a randomized evaluation of a home visiting program for disadvantaged first-time mothers and their families implemented in Germany. 12 months after birth, the intervention increases infants' cognitive development by 0.18 SD. However, the effect fades out after 24 months. Gender analyses reveal that the intervention was more beneficial for girls. Furthermore, sensitivity analyses show that the estimated effects seem downward biased by additional treatment for the control families. Analyzing the infant skill formation process reveals self-productivity of skills but in different magnitude for boys and girls.
    Keywords: Early Childhood Intervention, Randomized Experiment
    JEL: J13 J12 I21 H52
    Date: 2013–09
  6. By: Mehlum, Halvor (Dept. of Economics, University of Oslo); Torsvik, Ragnar (Norwegian University of Science and Technology); Valente, Simone (Norwegian University of Science and Technology)
    Abstract: China's growth is characterized by massive capital accumulation, made possible by high and increasing domestic savings. In this paper we develop a model with the aim of explaining why savings rates have been high and increasing, and we investigate the general equilibrium effects on capital accumulation and growth. We show that increased savings and capital accumulation stimulates further savings and capital accumulation, through an intergenerational distribution effect and an old-age requirement effect. We introduce what we term the savings multiplier, and we discuss why and how the one-child policy, and the dismantling of the cradle-to-grave social benefits provided through the state owned enterprises, have stimulated savings and capital accumulation.
    Keywords: China; One-child policy; Overlapping generations; Growth; Savings
    JEL: D91 E21 O11
    Date: 2013–07–04
  7. By: Gabriela Flores; Michael Ingenhaag; Jürgen Maurer
    Abstract: In this paper, we address the relationship between age and several dimension of subjective well-being. Whilst literature generally finds a U-shaped age-profile in subjective well-being, this age-pattern might only hold after controlling for objective life circumstances. The observed U-shaped age-profile might further not generalize to other dimensions of well-being and might vary across countries and cultures. Our study examines the relationship between age and several dimensions of well-being as well as the effect of objective life circumstances using the WHO Study on Global AGEing and Adult Health (SAGE). Our results suggest a decreasing age profile in the raw data associated with evaluative well-being, while experienced well-being shows a rather flat or slightly increasing pattern. However, age per se is not a cause of a decline in evaluative well-being. The negative age-profile in evaluative well-being is mainly explained by changes in life circumstances associated with aging. Controlling for socio-demographic factors, we find higher levels of well-being for older persons relative to their middle-aged counterparts. In contrast, we find that changes in life circumstances have a much smaller effect on experienced well-being.
    Keywords: Aging; Subjective Well-being; Low and middle income countries
    JEL: I31 J14
    Date: 2013–09
  8. By: Louise Roos
    Abstract: This paper describes the construction of a database that underlies the labour supply module developed for South Africa, with a specific focus on HIV/AIDS. The labour supply theory imposes a stock/flow dynamic mechanism on labour market groups distinguished by labour market activity, age, gender, race, and HIV status/stage. Broadly, the theory specifies that at the start of year t, people aged 15-65 (the working age population, hereafter the WAP) are divided into categories based on common characteristics. These characteristics are age, gender, race, HIV status/stage and labour-market activity undertaken in year t-1. People in categories offer their labour services to activities performed during year t. At the end of year t, people still part of the WAP progress one year in age and may change their HIV status/stage. Some people leave the WAP due to retirement or death. After this transition, people are again grouped into categories, based on common characteristics. The process of labour supply from a category to an activity is then repeated. For the implementation of this theory, we need to create a database that contains matrices that form the initial solution of the model. Three characteristics of this database are noted: (1) it contains detailed information regarding the structure of the WAP in the base year (2002); (2) it includes a transition matrix that allows adults to change their age and HIV stage between year t-1 and year t and (3) it includes matrices describing the flow of adults from categories to activities. This paper is organised in three parts. The first part describes the construction of the activities matrix in the base year. The activities matrix describes the number of people in each labour-market activity by age, gender, race and HIV stage. The second part of this paper explains the construction of the categories matrix and the flow matrices. The categories matrix shows the number of people in each labour-market activity by age, gender, race and HIV stage at the start of the year. The flow matrices show the number of people by age, gender, race and HIV stage, moving from a labour-market category to an activity. The third part of the paper describes the construction of the transition matrix. This matrix allows people in each labour-market activity, given their gender and race, to change their age from to and change their HIV stage from to .
    Keywords: Africa, HIV/AIDS
    JEL: I19 O55
    Date: 2013–05
  9. By: Jan Bonenkamp; Yvonne Adema; Lex Meijdam
    Abstract: This paper studies the redistribution and welfare effects of increasing the flexibility of individual pension take-up. We use an overlapping-generations model with Beveridgean pay-as-you-go pensions, where individuals differ in ability and life span. We find that introducing flexible pension take-up can induce a Pareto improvement when the initial pension scheme contains within-cohort redistribution and induces early retirement. Such a Pareto-improving reform entails the application of uniform actuarial adjustment of pension entitlements based on average life expectancy. Introducing actuarial non-neutrality that stimulates later retirement further improves such a flexibility reform.
    JEL: H55 H23 J26
    Date: 2013–09
  10. By: Peter J. Kuhn; Marie-Claire Villeval
    Abstract: We conduct a real-effort experiment where participants choose between individual compensation and team-based pay. In contrast to tournaments, which are often avoided by women, we find that women choose team-based pay at least as frequently as men in all our treatments and conditions, and significantly more often than men in a well-defined subset of those cases. Key factors explaining gender patterns in attraction to co-operative incentives across experimental conditions include women’s more optimistic assessments of their prospective teammate’s ability and men’s greater responsiveness to efficiency gains associated with team production. Women also respond differently to alternative rules for team formation in a manner that is consistent with stronger inequity aversion
    JEL: C91 J16 J24 J31 M5
    Date: 2013–08
  11. By: Naci Mocan; Christian Raschke; Bulent Unel
    Abstract: This paper investigates the impact of mothers’ earnings on birth weight and gestational age of infants. It also analyzes the impact of earnings on mothers’ consumption of prenatal medical care, and their propensity to smoke and drink during pregnancy. The paper uses census-division- and year-specific skill-biased technology shocks as an instrument for mothers’ earnings and employs a two-sample instrumental variables strategy. About 14 million records of births between 1989 and 2004 are used from the Natality Detail files along with the CPS Annual Demographic Files from the same period. The results reveal that an increase in weekly earnings prompts an increase in prenatal care of low-skill mothers (those who have at most a high school degree) who are not likely to be on Medicaid, and that earnings have a small positive impact on birth weight and gestational age of the newborns of these mothers. An increase in earnings does not influence the health of newborns of high-skill mothers (those with at least some college education). Variations in earnings have no impact on birth weight for mothers who are likely to be on Medicaid.
    JEL: I10 I12 J31
    Date: 2013–09
  12. By: Orla Doyle; Colm Harmon; James J. Heckman; Caitriona Logue; Seong Moon
    Abstract: The literature on skill formation and human capital development clearly demonstrates that early investment in children is an equitable and efficient policy with large returns in adulthood. Yet little is known about the mechanisms involved in producing these long-term effects. This paper presents early evidence on the nature of skill formation based on an experimentally designed, five-year home visiting program in Ireland targeting disadvantaged families - Preparing for Life (PFL). We examine the impact of investment between utero to 18 months of age on a range of parental and child outcomes. Using the methodology of Heckman et al. (2010a), permutation testing methods and a stepdown procedure are applied to account for the small sample size and the increased likelihood of false discoveries when examining multiple outcomes. The results show that the program impact is concentrated on parental behaviors and the home environment, with little impact on child development at this early stage. This indicates that home visiting programs can be effective at offsetting deficits in parenting skills within a relatively short timeframe, yet continued investment may be required to observe direct effects on child development. While correcting for attrition bias leads to some changes in the precision of estimates, overall the results are quite similar.
    JEL: C12 C93 J13 J24
    Date: 2013–08
  13. By: Doepke, Matthias; Zilibotti, Fabrizio
    Abstract: We discuss the two-way link between culture and economic growth. We present a model of endogenous technical change where growth is driven by the innovative activity of entrepreneurs. Entrepreneurship is risky and requires investments that affect the steepness of the lifetime consumption profile. As a consequence, the occupational choice of entrepreneurship hinges on risk tolerance and patience. Parents expecting their children to become entrepreneurs have an incentive to instill these two values in their children. Cultural transmission is Beckerian, i.e., parents are driven by the desire to maximize their children's happiness. We also consider, in an extension, a paternalistic motive for preference transmission. The growth rate of the economy depends on the fraction of the population choosing an entrepreneurial career. How many entrepreneurs there are in a society hinges, in turn, on parental investments in children's patience and risk tolerance. There can be multiple balanced-growth paths, where in faster-growing countries more people exhibit an "entrepreneurial spirit". We discuss applications of models of endogenous preferences to the analysis of socio-economic transformations, such as the British Industrial Revolution. We also discuss empirical studies documenting the importance of culture and preference heterogeneity for economic growth.
    Keywords: culture; economic growth; endogenous preferences; entrepreneurship; innovation; preference transmission
    JEL: J20 O10 O40
    Date: 2013–06
  14. By: Gabin Langevin (CREM UMR CNRS 6211, University of Rennes 1, France); David Masclet (CREM UMR CNRS 6211, University of Rennes 1 and CIRANO, France); Fabien Moizeau (CREM UMR CNRS 6211, University of Rennes 1 and IUF, France); Emmanuel Peterle (CREM UMR CNRS 6211, University of Rennes 1, France)
    Abstract: We use data from the Trajectoires et Origines survey to analyze the labor-market outcomes of both second-generation immigrants and their French native counterparts. Second-generation immigrants have on average a lower probability of employment and lower wages than French natives. We find however considerable differences between second-generation immigrants depending on their origin: while those originating from Northern Africa, Sub-Saharan Africa and Turkey are less likely to be employed and receive lower wages than French natives, second-generation immigrants with Asian or Southern- and Eastern-European origins do not differ significantly from their French native counterparts. The employment gap between French natives and second-generation immigrants is mainly explained by differences in their education; education is also an important determinant of the ethnic wage gap. Finally we show that these differences in educational attainment are mainly explained by family background. Although the role of discrimination cannot be denied, our findings do point out the importance of family background in explaining lifelong ethnic inequalities.
    Keywords: labor-market discrimination, second-generation immigrants, educational attainment, family background, decomposition methods
    JEL: I2 J15 J24 J41
    Date: 2013–09
  15. By: Giuntella, Osea (University of Oxford)
    Abstract: Despite their lower socioeconomic status, Hispanic immigrants in the United States initially have better health outcomes than natives. Paradoxically while second-generation immigrants assimilate socio-economically, their health deteriorates. I show that a model of selection and intergenerational transmission of health reverses the apparent paradox, predicting a worse deterioration than the one observed in the data. While higher incidence of risk factors and acculturation are associated with poorer health, the “reverse paradox” is explained by the relative persistence in healthy behaviors among Hispanics. These effects hold true even in a subset of siblings, and holding constant grandmother-fixed effects.
    Keywords: birth outcomes, birthweight, intermarriage, risky behaviors, siblings, Latino paradox
    JEL: I10 J15
    Date: 2013–08
  16. By: F. J. Fernández-Díaz; C. Patxot; G. Souto
    Abstract: This paper presents the results of DyPeS, the first dynamic microsimulation model of the retirement pensions system applied to the Spanish case. The simulation of the reform approved in 2011 shows that only the delay in retirement age (from 65 to 67) would have a significant effect on pension expenditure, while other measures changing the computation of the initial pension for new retirees have a limited impact. Paradoxically, it is found that the consideration of more contribution years in the computation of the initial pension amount, despite fostering the Bismarckian nature of the system, has a positive impact on redistribution.
    Date: 2013–09
  17. By: Paul Hansen (Department of Economics, University of Otago, New Zealand); Nicole Kergozou (Reserve Bank of New Zealand); Stephen Knowles (Department of Economics, University of Otago, New Zealand); Paul Thorsnes (Department of Economics, University of Otago, New Zealand)
    Abstract: A discrete choice experiment was conducted to discover the relative importance of five characteristics of developing countries, as suggested by the literature, considered by people when choosing countries to donate money to. The experiment was administered via an online survey involving almost 700 student participants (potential donors) from a New Zealand university. The most important recipient-country characteristic for participants on average is hunger and malnutrition (a weight of 0.29), followed by child mortality (0.24), quality of infrastructure (0.21), income per capita (0.18), and, least importantly, ties to New Zealand (0.09). A cluster analysis of participants' individual `part-worth utilities' representing the relative importance of the country characteristics reveals they are not strongly correlated with participants' demographic characteristics. Our findings overall indicate that to maximise the donations they receive, non-governmental aid organisations are better to focus their marketing efforts on emphasising country characteristics associated with hunger, malnutrition and child mortality than other things.
    Keywords: foreign aid, charitable giving, discrete choice experiment, conjoint analysis, PAPRIKA method
    JEL: A13 C91 D64 O1
    Date: 2013–09
  18. By: Huber, Martin; Lechner, Michael; Wunsch, Conny
    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. When combined with financial incentives to hire unemployed or young jobseekers as replacement, they seem to be particularly beneficial, especially when labour market conditions are difficult. Under such circumstances, they can even have positive spill-over effects on younger workers. Firms should thus be encouraged to offer such schemes.
    Keywords: elderly employees; matching; part-time work; treatment effects
    JEL: C21 J14 J26
    Date: 2013–07
  19. By: Dilara Kýlýnç (Department of Economics, Izmir University of Economics); Esra Onater (Department of Economics, Izmir University of Economics); Ý. Hakan Yetkiner (Department of Economics, Izmir University of Economics)
    Abstract: The Gender Kuznets Curve (GKC) hypothesis argues that economic development has a non-linear effect on the female share of workers. There is, however, growing debate on the exact shape of this non-linear relationship. The aim of this paper is to test the GKC hypothesis in order to determine whether data supports a quadratic or a cubic GKC for each G7 countries in the long run. The ARDL bounds testing approach of cointegration yields evidence for the following: Canada, United Kingdom and United States have an inverted U-shaped GKC; Japan has an S-shaped GKC and France has an inverted-S shaped GKC; and finally that Italy and Germany have no long run GKC relationship in the respective periods of countries considered. We conclude that gender equality is not a direct result of development, and therefore policy makers having a gender equalization policy need to subsidize the employment of female workers in periods of fall.
    Keywords: Gender Kuznets Curve; Economic Development; ARDL
    JEL: J16 O47 C32
    Date: 2013–09
  20. By: Lynda Pickbourn; Léonce Ndikumana
    Abstract: While developing countries have made some progress in human development since the turn of the century, many are still lagging behind in important goals such as education, health, nutrition and access to clean drinking water and improved sanitation. Moreover, gender equity remains a major challenge in most countries. In this paper for the United Nations University, Pickbourn and Ndikumana examine the role that foreign aid plays in generating these outcomes, using panel data from OECD-DAC on the sectoral allocation of development aid, in conjunction with country-level data on public expenditures, human development outcomes and other economic, social and political indicators. The paper attempts to assess whether the volume of aid and its sectoral allocation have an impact on human development outcomes and gender equity. We find that the impact of aid on many of the outcomes we study is largely dependent on initial levels of human development and per capita income. The results on the impact of aid vary by type of development outcome. While aid appears to be effective in reducing maternal mortality as well as the gender gap in youth literacy regardless of initial conditions, its effects are at best mixed for other indicators. The paper points to a number of policy issues that deserve further investigation.
    Keywords: foreign aid, human development, gender equity, education, health
    JEL: O1 O2 D0 E0
    Date: 2013
  21. By: Melvin Stephens, Jr.; Dou-Yan Yang
    Abstract: Causal estimates of the benefits of increased schooling using U.S. state schooling laws as instruments typically rely on specifications which assume common trends across states in the factors affecting different birth cohorts. Differential changes across states during this period, such as relative school quality improvements, suggest that this assumption may fail to hold. Across a number of outcomes including wages, unemployment, and divorce, we find that statistically significant causal estimates become insignificant and, in many instances, wrong-signed when allowing year of birth effects to vary across regions.
    JEL: J24
    Date: 2013–08
  22. By: Hiroshi Kitamura (Faculty of Economics, Kyoto Sangyo University); Akira Miyaoka (Graduate School of Economics, Osaka University); Misato Sato (Department of Economics, The George Washington University)
    Abstract: In this paper, we construct an interregional trade model that has en- dogenous fertility rates in the manner of Helpman and Krugman (1985). The presented model shows that fertility rates in a large region become lower than those in a small region because of the agglomeration of man- ufacturing firms in the former. The agglomeration of firms in a region lowers the relative price of manufactured goods to child rearing costs, which raises the fertility rates. We also find that a decline in transportation costs results in the ag- glomeration of manufacturing firms, which lowers fertility rates in both large and small regions. Finally, we extend our two-region model to a multi-region model and find that the number of manufacturing firms in larger regions is always greater than that in smaller regions, meaning that fertility rates in the former are always lower than those in the latter.
    Keywords: Vertical Relation; Entry Deterrence; Relationship-Specific Investment; Switch- ing Costs
    JEL: L12 L41 L42
    Date: 2013–09
  23. By: Mevlude Akbulut Yuksel (Dalhousie University, Halifax); Mutlu Yuksel (Dalhousie University, Halifax)
    Abstract: This paper examines the long-term direct and spillover effects of large-scale human capital loss caused by the persecution of Jewish professionals in Nazi Germany. Using region-by-cohort variation in the Jewish population as a quasi-experiment, we find that on average German children who were of school age during the persecutions have fewer years of schooling in adulthood, and are less likely to finish high school or go to college. These results are robust after controlling for regional unemployment and income, wartime destruction, Nazi and Communist Party support, the compulsory schooling reform, migration, urbanization and mortality.
    Keywords: human capital formation, children, Jewish history
    JEL: I21 I28 J24 N34
    Date: 2013–09
  24. By: Muralidharan, Karthik (University of California, San Diego); Prakash, Nishith (University of Connecticut)
    Abstract: We study the impact of an innovative program in the Indian state of Bihar that aimed to reduce the gender gap in secondary school enrollment by providing girls who continued to secondary school with a bicycle that would improve access to school. Using data from a large representative household survey, we employ a triple difference approach (using boys and the neighboring state of Jharkhand as comparison groups) and find that being in a cohort that was exposed to the Cycle program increased girls' age-appropriate enrollment in secondary school by 30% and also reduced the gender gap in age-appropriate secondary school enrollment by 40%. Parametric and non-parametric decompositions of the triple-difference estimate as a function of distance to the nearest secondary school show that the increases in enrollment mostly took place in villages where the nearest secondary school was further away, suggesting that the mechanism for program impact was the reduction in the time and safety cost of school attendance made possible by the bicycle. We find that the Cycle program was much more cost effective at increasing girls' enrolment than comparable conditional cash transfer programs in South Asia, suggesting that the coordinated provision of bicycles to girls may have generated externalities beyond the cash value of the program, including improved safety from girls cycling to school in groups, and changes in patriarchal social norms that proscribed female mobility outside the village, which inhibited female secondary school participation.
    Keywords: conditional transfers, school access, gender gaps, bicycle, girls' education, female empowerment, India, Bihar, MDG
    JEL: H42 I2 O15
    Date: 2013–08
  25. By: Rebekka Christopoulou; Ahmed Jaber; Dean R. Lillard
    Abstract: The extant literature on cultural transmission takes competing cultures in society as given and parental cultural preferences as fixed. We relax these assumptions by endogenizing both societal and parental preferences. We use smoking as a case-study of a cultural trait which did not always exist, and which over time has switched from being perceived as socially acceptable to being perceived as undesirable. In our model, parents' preferred cultural traits depend on the perceived health costs of smoking, and societal preferences depend on the behavior of a tobacco industry that aims to maximize smoking prevalence. We derive conditions for the emergence and persistence of the smoking habit, and find new implications for the relationship between parental and societal influences. We then test explicitly for the validity of our theoretical framework using novel US data. We find that our framework is able to capture features of smoking behavior which existing models are unable to explain.
    JEL: D1 I1 Z1
    Date: 2013–08
  26. By: Charles Courtemanche; Samir Soneji; Rusty Tchernis
    Abstract: We propose a Bayesian factor analysis model to rank the health of localities. Mortality and morbidity variables empirically contribute to the resulting rank, and population and spatial correlation are incorporated into a measure of uncertainty. We use county-level data from Texas and Wisconsin to compare our approach to conventional rankings that assign deterministic factor weights and ignore uncertainty. Greater discrepancies in rankings emerge for Texas than Wisconsin since the differences between the empirically-derived and deterministic weights are more substantial. Uncertainty is evident in both states but becomes especially large in Texas after incorporating noise from imputing its considerable missing data.
    JEL: C11 I14
    Date: 2013–09
  27. By: Anna Piil Damm (Department of Economics and Business, Aarhus University); Christian Dustmann (University College London)
    Abstract: This paper investigates the effect of early exposure to neighborhood crime on subsequent criminal behavior of youth exploiting a unique natural experiment between 1986 and 1998 when refugee immigrants to Denmark were assigned to neighborhoods quasi-randomly. We find strong evidence that the share of young people convicted for crimes, in particular violent crimes, in the neighborhood increases convictions of male assignees later in life. No such effects are found for other measures of neighborhood crime including the rate of committed crimes. Our findings suggest social interaction as a key channel through which neighborhood crime is linked to individual criminal behavior.
    Keywords: Neighborhood effects, criminal convictions, social interactions, random allocation
    JEL: J0 H43
    Date: 2013–09–09

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