nep-dem New Economics Papers
on Demographic Economics
Issue of 2018‒10‒22
seven papers chosen by
Héctor Pifarré i Arolas
Max-Planck-Institut für demografische Forschung

  1. Is Marriage for White People? Incarceration, Unemployment, and the Racial Marriage Divide By Elizabeth Caucutt; Nezih Guner; Christopher Rauh
  2. An up-to-date joint labor supply and child care choice model By Thor O. Thoresen; Trine E. Vattø
  3. Validating the collective model of household consumption using direct evidence on sharing By Olivier Bargain; Guy Lacroix; Luca Tiberti
  4. Why did Rich Families Increase their Fertility? Inequality and Marketization of Child Care By Bar, Michael; Hazan, Moshe; Leukhina, Oksana; Weiss, David; Zoabi, Hosny
  5. Health Shocks, the Added Worker Effect, and Labor Supply in Married Couples: Evidence from South Korea By Kyeongkuk Kim; Sang-Hyop Lee; Timothy J Halliday
  6. Education, labour, and the demographic consequences of birth postponement in Europe By Hippolyte D'Albis; Angela Greulich; Grégory Ponthière
  7. Population aging and cross-country redistribution in integrated capital markets By Davoine, Thomas

  1. By: Elizabeth Caucutt (Western University Canada); Nezih Guner (CEMFI); Christopher Rauh (University of Cambridge, INET Institute)
    Abstract: The black-white differences in marriages in the US are striking. While 83% of white women between ages 25 and 54 were ever married in 2006, only 56% of black women were: a gap of 27 percentage points. Wilson (1987) suggests that the lack of marriageable black men due to incarceration and unemployment is responsible for low marriage rates among the black population. In this paper, we take a dynamic look at the Wilson Hypothesis. We argue that the current incarceration policies and labor market prospects make black men riskier spouses than white men. They are not only more likely to be, but also to become, unemployed or incarcerated than their white counterparts. We develop an equilibrium search model of marriage, divorce and labor supply that takes into account the transitions between employment, unemployment and prison for individuals by race, education, and gender. We estimate model parameters to be consistent with key statistics of the US economy. We then investigate how much of the racial divide in marriage is due to differences in the riskiness of potential spouses. We find that differences in incarceration and employment dynamics between black and white men can account for half of the existing black-white marriage gap in the data.
    Keywords: Marriage, race, incarceration, Inequality, unemployment
    JEL: J12 J21 J64
    Date: 2018–10
  2. By: Thor O. Thoresen; Trine E. Vattø (Statistics Norway)
    Abstract: Norwegian parents of preschool children base their care choices on a completely different choice set from their predecessor. Now there is essentially only one type of nonparental care – center-based care – and on the parental side fathers take a more pivotal role in early childhood care. In the present paper we develop and estimate a joint labor supply and child care choice model that takes account of these new characteristics, on the assumption that this model points to current and future modeling directions for several other economies too. Estimations suggest that the average wage elasticity for mothers is 0.25–0.30.
    Keywords: family policy; child care; structural labor supply model
    JEL: J13 J22 C25
    Date: 2018–10
  3. By: Olivier Bargain; Guy Lacroix; Luca Tiberti
    Abstract: Recent advances in the collective model literature suggest ways to estimate the complete allocation of resources within households, using assignable goods and assuming adult preference similarity across demographic groups (or across spouses). While it makes welfare analysis at the individual level possible, the predictive power of the model is unknown. We propose the Örst validation of this approach, exploiting a unique dataset from Bangladesh in which the detailed expenditure on private goods by each family member is collected. Individualized expenditure allows us to test the identifying assumptions and to derive ëobservedíresource sharing within families, which can be compared to the resource allocation predicted by the model. Sharing between parents and children is well predicted on average while the model detects key aspects like the extent of pro-boy discrimination. Results overall depend on the identifying good: clothing provides the best Öt compared to other goods as it best validates the preference-similarity assumption. The model leads to accurate measures of child and adult poverty, indicating the size and direction of the mistakes made when using the traditional approach based on per adult equivalent expenditure (i.e. ignoring within-household inequality). This assessment of existing approaches to measure individual inequality and poverty is crucial for both acad- emic and policy circles and militates in favor of a systematic use of collective models for welfare analyses.
    Keywords: Collective Model, Engel Curves, Rothbarth Method, Sharing rule.
    JEL: D11 D12 I31 J12
    Date: 2018
  4. By: Bar, Michael (San Francisco State University); Hazan, Moshe (Tel-Aviv University; CEPR); Leukhina, Oksana (Federal Reserve Bank of St. Louis); Weiss, David (Tel Aviv University); Zoabi, Hosny (New Economic School)
    Abstract: A negative relationship between income and fertility has persisted for so long that its existence is often taken for granted. One economic theory builds on this relationship and argues that rising inequality leads to greater differential fertility between rich and poor. We show that the relationship between income and fertility has flattened between 1980 and 2010 in the US, a time of increasing inequality, as high income families increased their fertility. These facts challenge the standard theory. We propose that marketization of parental time costs can explain the changing relationship between income and fertility. We show this result both theoretically and quantitatively, after disciplining the model on US data. We explore implications of changing differential fertility for aggregate human capital. Additionally, policies, such as the minimum wage, that affect the cost of marketization, have a negative effect on the fertility and labor supply of high income women. We end by discussing the insights of this theory to the economics of marital sorting.
    Keywords: Income Inequality; Marketization; Differential Fertility; Human Capital; Minimum Wage
    JEL: E24 J13 J24 J31 J38
    Date: 2018–09–25
  5. By: Kyeongkuk Kim (University of Hawaii at Manoa Ministry of Strategy and Finance, Republic of Korea); Sang-Hyop Lee (University of Hawaii at Manoa); Timothy J Halliday (University of Hawaii at Manoa and IZA)
    Abstract: We investigate the effects of health shocks on labor supply among Korean married couples. Consistent with previous work, we find that own health shocks have substantial effects on own labor supply at the extensive margin. We also find evidence that spousal health shocks affect own labor supply, particularly, for wives. Specifically, we find that the onset of chronic illness for the husband reduces the probability of the wife exiting the labor force by 9.2 percentage points. This is the added worker effect (AWE). We find larger effects of spousal health shocks for chronic conditions than for acute conditions and accidents possibly because chronic conditions are associated with a smaller need for home care than acute conditions. Finally, we find stronger evidence of the AWE for households with co-residing adult children and for poorer household.
    Keywords: health, labor supply, couples
    JEL: I1 J14 J22 J26
    Date: 2018–10
  6. By: Hippolyte D'Albis (PSE - Paris School of Economics); Angela Greulich (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Grégory Ponthière (PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - ENPC - École des Ponts ParisTech - EHESS - École des hautes études en sciences sociales - INRA - Institut National de la Recherche Agronomique - ENS Paris - École normale supérieure - Paris)
    Date: 2017–01
  7. By: Davoine, Thomas
    Abstract: Population aging challenges the financing of social security systems in developed economies, as the fraction of the population in working age declines. The resulting pressure on capital-labor ratios translates into a pressure on factor prices and production. While European countries all face this challenge, the speed at which their population ages differs, and thus the pressure on capital-labor ratios. If capital markets are integrated, differences in population aging may lead to cross-country spillovers, as investors freely seek the best returns on capital. Using a multi-country overlapping-generations model covering 14 European Union countries, I quantify spillovers and find that capital market integration leads to redistribution across countries over the long run. For instance, GDP per capita would on average be 2.9 %-points lower in Germany in each of the next 50 years if capital markets were perfectly integrated and public debts kept constants with increases in labor income taxes, compared to a closed economy case; by contrast, GDP per capita would on average be 2.1 %-points higher in France, whose population ages slower than in Germany. I also show that pension reforms can change the cross-country redistribution patterns, some countries losing from capital market integration without the reform but winning with it.
    Keywords: population aging,pension reforms,capital markets,cross-country spillovers,overlapping-generations modelling
    JEL: C68 E60 F41 J11
    Date: 2018

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