nep-dem New Economics Papers
on Demographic Economics
Issue of 2014‒04‒05
nine papers chosen by
Michele Battisti
University of Munich

  1. Reallocation of Resources Across Age in a Comparative European Setting By Bernhard Hammer; Alexia Prskawetz; Inga Freund
  2. Happiness - before and after the Kids By Mikko Myrskylä; Rachel Margolis
  3. Home Bitter Home? Gender, Living Arrangements, and the Exclusion from Home-Ownership among Older Europeans By Daniele Vignoli; Maria Letizia Tanturri; Francesco Acciai
  4. Consumption inequality and family labor supply By Blundell, Richard; Pistaferri, Luigi; Saporta-Eksten, Itay
  5. Risk and ambiguity preferences and the adoption of new agricultural technologies: Evidence from field experiments in rural India: By Ward, Patrick S.; Singh, Vartika
  6. Aid effectiveness for poverty reduction: lessons from cross-country analyses, with a special focus on vulnerable countries By Patrick GUILLAUMONT; Laurent WAGNER
  7. Do we need to worry if people bowl alone? Results from a field experiment with voluntary association members By Giacomo Degli Antoni
  8. Education and Intergenerational Mobility: Help or Hindrance? By Jo Blanden; Lindsey Macmillan
  9. Micro and macro analysis on household income, wealth and saving in the euro area By Honkkila, Juha; Kavonius, Ilja Kristian

  1. 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: 2014–03
  2. By: Mikko Myrskylä; Rachel Margolis
    Abstract: Understanding how having children influences the parents’ subjective well-being (“happiness”) has great potential to explain fertility behavior. We study parental happiness trajectories before and after the birth of a child using large British and German longitudinal data sets. We account for unobserved parental characteristics using fixed-effects models and study how sociodemographic factors modify the parental happiness trajectories. Consistent with existing work, we find that happiness increases in the years around the birth of the first child, then decreases to before-child levels. Moreover, happiness increases before birth, suggesting that the trajectories may capture not only the effect of the birth but also the broader process of childbearing which may include partnership formation and quality. Sociodemographic factors strongly modify this pattern. Those who have children at older ages or have more education have a particularly positive happiness response to a first birth, and although the first two children increase happiness, the third does not. The results are similar in Britain and Germany and suggest that up to two, children increase happiness, and mostly among those who postpone childbearing. This pattern is consistent with the fertility behavior emerging during the second demographic transition and provides new insights into low and late fertility.
    Keywords: Fertility, well-being, life course, parenthood
    Date: 2014
  3. By: Daniele Vignoli (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Maria Letizia Tanturri (Dipartimento di Scienze Statistiche, Università di Padova); Francesco Acciai (Department of Sociology, Population Research Institute, The Pennsylvania State University)
    Abstract: Home-ownership is the most important asset among the elderly in Europe, but in this domain very little is known about gender differences. This paper aims at exploring the link between gender, living arrangements, monetary poverty and home tenure among older Europeans, in order to identify the profiles of the elderly at a higher risk of being excluded from home-ownership. The analysis is based on the fourth wave of SHARE, and includes a sub-sample of about 56,000 individuals aged 50 or over, living in 16 European countries: Austria, Belgium, Czech Republic, Estonia, France, Germany, Hungary, Italy, the Netherlands, Poland, Portugal, Slovenia, Spain, Sweden, and Switzerland. Our findings show that women are generally more likely to be excluded from homeownership than men. However, a closer look suggests that the gender gap in home ownership is essentially generated by compositional differences between men and women, with the most relevant factor being the type of living arrangement.
    Keywords: Home tenure; older Europeans; gender; living arrangement, poverty
    JEL: J10 J12
    Date: 2014–03
  4. By: Blundell, Richard; Pistaferri, Luigi; Saporta-Eksten, Itay
    Abstract: In this paper we examine the link between wage inequality and consumption inequality using a life cycle model that incorporates household consumption and family labour supply decisions. We derive analytical expressions based on approximations for the dynamics of consumption, hours, and earnings of two earners in the presence of correlated wage shocks, non-separability and asset accumulation decisions. We show how the model can be estimated and identified using panel data for hours, earnings, assets and consumption. We focus on the importance of family labour supply as an insurance mechanism to wage shocks and find strong evidence of smoothing of male’s and female’s permanent shocks to wages. Once family labour supply, assets and taxes are properly accounted for there is little evidence of additional insurance. JEL Classification: D11, D12, D31, D91
    Keywords: consumption, earnings, inequality, labor supply
    Date: 2014–03
  5. By: Ward, Patrick S.; Singh, Vartika
    Abstract: Advances in agricultural development have largely been a direct result of increased usage of new technologies. Among other important factors, farmers’ perceptions of risks associated with the new technology as well as their ability or willingness to take risks greatly influences their adoption decisions. In this paper we conduct a series of field experiments in rural India in order to measure preferences related to risk, potential loss, and ambiguity. Disaggregating by gender, we find that on average women are significantly more risk averse and loss averse than men, though the higher average risk aversion arises due to a greater share of women who are extremely risk averse.
    Keywords: Technology adoption, rural population, Agricultural technology, uncertainty, propect theory,
    Date: 2014
  6. By: Patrick GUILLAUMONT (Ferdi); Laurent WAGNER (Ferdi)
    Abstract: Introduction: focus of the paper Following the adoption of the MDG, particularly the first one that is to reduce poverty by half between 1995 and 2015, numerous studies have examined how external aid can contribute to their achievement. The formula "doubling aid to reduce the poverty by half" relied on the implicit assumption that aid was an effective instrument for poverty reduction. The formula and corresponding assumption have been debated. Two opposite views clearly appeared, one, represented by Jeffrey Sachs in his End of Poverty, underlining the need for a big push to get low income countries out of poverty traps, the other one, illustrated by the attacks of William Easterly against aid as a support of a big push and the idea of a poverty trap, and also including arguments about a limited absorptive capacity. Elsewhere we have argued that the absorptive capacity of aid depends on aid modalities and can be enhanced by a reform of aid, a way by which big push and absorptive capacity views can be reconciled and to which we come back later (Guillaumont and Guillaumont Jeanneney, 2010). Actually the academic debate on aid effectiveness of the first millennium decade has been dominated by another controversy, relying on cross country regressions and initiated by the highly influential paper of Burnside and Dollar (2000). After so many cross country studies following their paper, supporting or, more often, criticizing it, there seems to be a temptation to consider this research orientation as a deadlock and to switch to micro impact analysis. Whatever the importance and need of impact micro-analyses, we argue that it would be a dangerous dismissal to give up the cross-section approach, for several reasons. First the methodological weaknesses of many studies does not entail that other ones relying on better methodology and data cannot lead to more robust results. Second, since cross section studies on aid effectiveness will never be totally given up, there is a risk to see only the most provocative (and possibly least robust) retaining the attention of media and policy makers, a policy challenge to be kept in mind in the orientation of research. Finally micro studies and impact analyses, while they supply policy makers with useful information in a given context, are not an appropriate tool for assessing the impact of macro-economic features of countries on aid effectiveness. The aim of this paper, relying on results of the cross country literature on aid effectiveness, and drawing only on those we consider as particularly relevant and robust is to examine how aid can contribute to poverty reduction, with a special focus on the way it can address the vulnerability of  many developing countries.
    JEL: F35 O11 O40 C21 I3
    Date: 2014–03
  7. By: Giacomo Degli Antoni (University of Parma, Department of Law)
    Abstract: Trust in strangers is key for economic development. Social capital theory posits that participation in associations is essential to propagate trust in society, because membership instils trust both towards other members and generalised others. We provide an experimental test for this thesis. We measure members' trust and trustworthiness when interacting with fellow members or with people from the general population, who are not association members. We find that members trust and reward trust more than non- members, and do not discriminate between members and the general population. However, we find no correlation between the intensity of associational participation and increased pro-sociality.Length: 17
    Keywords: trust; voluntary associations; ingroup favouritism; field experiment
    JEL: C93 D71 D69 D03
    Date: 2014–04
  8. By: Jo Blanden; Lindsey Macmillan
    Abstract: Evidence on intergenerational income mobility in the UK is dated. This paper seeks to update our knowledge by introducing new estimates of mobility for later measures of earnings in the 1958 and 1970 birth cohorts. Given poor or non-existent data on more recent cohorts we adopt an indirect approach to assessing more recent mobility trends. This exploits the close link between income persistence across generations and the gap in educational achievement by family background (referred to as educational inequality). We gather a comprehensive set of data which measures educational inequality for different cohorts at different points in the education system. We conclude that educational inequality has declined for cohorts born after 1980, and this is associated with rising average educational achievement. In contrast, evidence on high attainment does not reveal that educational inequality has declined; this suggests that policy seeking to promote equality of opportunity should encourage students to aim high.
    Keywords: Integenerational, income, social, mobility
    JEL: J13
    Date: 2014–01
  9. By: Honkkila, Juha; Kavonius, Ilja Kristian
    Abstract: The report on the Measurement of Economic Performance and Social Progress by Stiglitz, Sen and Fitoussi concludes that in the measurement of household welfare all material components should be covered, i.e. consumption, income and wealth, from both the micro as well as the macro perspective. Additionally, several other initiatives like the G20 finance ministers’ and central bank governors’ data gap initiative have emphasised to have an integrated micro-macro framework where consumption, income and wealth can be analysed. Current researches linking macro and micro information for the households have focused on income and consumption as these are the areas where most data sources are available. This paper extends the focus to household wealth using both survey data and financial accounts. It builds a link between wealth survey and national accounts’ income concepts. This paper aims to create a first set of macroeconomic accounts that include wealth broken down by household groups. JEL Classification: D30, D31, E01, E21
    Keywords: balance sheets, financial accounts, households, wealth, wealth survey
    Date: 2013–11

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