nep-dem New Economics Papers
on Demographic Economics
Issue of 2019‒03‒11
eight papers chosen by
Héctor Pifarré i Arolas
Universitat Pompeu Fabra

  1. On the evolution of individual preferences and family rules By Alessandro Cigno; Alessandro Gioffré; Annalisa Luporini
  2. Intra-household inequality and child welfare in Argentina By Echeverría, Lucía; Menon, Martina; Perali, Federico; Berges, Miriam
  3. Inferring Inequality with Home Production By Boerma, Job; Karabarbounis, Loukas
  4. Detecting Gender Discrimination in Intrahousehold Resource Allocation By Maldonado, Javier
  5. Fertility response to climate shocks By Sylvain Dessy; Francesca Marchetta; Roland Pongou; Luca Tiberti
  6. Demographics and the Natural Rate of Interest in Japan By Fei Han
  7. Short-Run Health Consequences of Retirement and Pension Benefits: Evidence from China By Nikolov, Plamen; Adelman, Alan
  8. Socialized Healthcare and Women’s Fertility Decisions By Resul Cesur; Pinar Mine Gunes; Erdal Tekin; Aydogan Ulker

  1. By: Alessandro Cigno; Alessandro Gioffré; Annalisa Luporini
    Abstract: We study how the distribution of an inherited trait evolves through marriage if couples are formed at random. If the matching occurs across the entire population, the variance of the trait tends to diminish, and the distribution converges to a common trait. If the matching is restricted to specific subpopulations, each of these converges to a different trait. This has implications for the consequences of immigration. Using a specific model where the trait is a parameter measuring a person's taste for receiving filial attention (a good without perfect market substitutes) in old age, we also show that it may be in a couple's interest to obey a rule requiring them to give specified amounts of the good to their respective parents. The matching is random in this model because preferences are private monitoring. In the long run, if the matching extends to the entire population, either everybody obeys the rule, or nobody does. In the interim, some do, and some do not. If the matching is restricted to specific ethnic or religious groups, the population will tend to break down into a number of sharply characterized subpopulations. That may undermine social cohesion and call for policy intervention.
    Keywords: Marriage, evolution, random matching, family rule, immigration
    JEL: C78 D13 J12
    Date: 2019
  2. By: Echeverría, Lucía; Menon, Martina; Perali, Federico; Berges, Miriam
    Abstract: Are two parents and single parents allocating household resources to children in the same way? Which factors affect intra-household inequality? Do mothers re-distribute more income to children as they are more empowered? We focus on child welfare in the context of two parent and single parent families, which is relevant for policy recommendation. We model households behavior in a collective framework, which allows us to understand the rule governing the allocation process between adults and children. Using consumption data from Argentina from three consecutive expenditures surveys (1996, 2004 and 2012) we analyze intra-household behavior over three different socio-economic contexts. We estimate a collective quadratic demand system following a structural approach to identify the fraction of total household expenditure that is devoted to children and adults, exploiting the observability of assignable goods. We provide the first evidence of intra-household inequality and individual poverty levels for Argentina. Our results indicate that family structure matters in the intra-household distribution. We find a positive gender bias in expenditure when children are females for both types of families, and we document that children fare better when mothers have a higher bargaining power in the allocation process, measured by their employment status. Further, we find several features of intra-household behavior which are persistent in time.
    Keywords: Gasto de los Hogares; Asignación de Recursos; Bienestar; Niños; Argentina;
    Date: 2019–01
  3. By: Boerma, Job; Karabarbounis, Loukas
    Abstract: We revisit the causes, welfare consequences, and policy implications of the dispersion in households' labor market outcomes using a model with uninsurable risk, incomplete asset markets, and home production. Accounting for home production amplifies welfare-based differences across households meaning that inequality is larger than we thought. Home production does not offset differences that originate in the market sector because productivity differences in the home sector are significant and the time input in home production does not covary with consumption expenditures and wages in the cross section of households. The optimal tax system should feature more progressivity taking into account home production.
    Keywords: Consumption; Home Production; inequality; Labor Supply
    JEL: D10 D60 E21 J22
    Date: 2019–02
  4. By: Maldonado, Javier
    Abstract: The usual methodology for measuring boy-girl discrimination in the intrahousehold resource allocation is the Engel Curve Approach proposed by Deaton (1989). This method is based on the concept of demographic separability in goods, that formalises the idea of certain goods (adult goods) being little or not at all related to some demographic groups (children). The method suggests that, by analysing the consumption on adult goods when a new child is born, it is possible to determine the existence of gender bias. However, in spite of the great popularity of this method, it fails to detect gender discrimination even in societies in which there are huge evidences of its existence. In this paper, I propose to measure gender bias by exploiting the methodological intelligence of the Deaton (1989) procedure, but testing the demographic separability in preferences instead of in goods. To make this concept feasible, I define the system of budget shares as a latent factor model in which the factors represent the underlying motives of the consumption decisions. By testing demographic separability in preferences,the main difficulties faced by the Engel Curve Approach are solved. Finally, this new procedure is illustrated by measuring gender discrimination in the commonly used data from the 1889/90 US Bureau of Labor report, which consists of 1024 budgets of British families. Two consumption drivers are clearly identified: the first one can be associated to basic necessities (e.g food), and the second to luxuries (e.g. alcohol=). In contrast with the results obtained in the literature, a strong evidence of gender discrimination is found.
    Keywords: Factor Models; Engel Curves; Gender Discrimination; Intrahousehold Resource Allocation
    Date: 2019–02
  5. By: Sylvain Dessy (Université Laval); Francesca Marchetta (CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique); Roland Pongou (uOttawa - University of Ottawa [Ottawa], Harvard University [Cambridge]); Luca Tiberti (Université Laval)
    Abstract: In communities highly dependent on rainfed agriculture for their livelihoods, the common oc-currence of climatic shocks such as droughts can lower the opportunity cost of having children, and raise fertility. Using longitudinal household data from Madagascar, we estimate the causal effect of drought occurrences on fertility, and explore the nature of potential mechanisms driving this effect. We exploit exogenous within-district year-to-year variation in rainfall deficits, and find that droughts occurring during the agricultural season significantly increase the number of children born to women living in agrarian communities. This effect is long lasting, as it is not reversed within four years following the drought occurrence. Analyzing the mechanism, we find that droughts have no effect on common underlying factors of high fertility such as marriage timing and child mortality. Furthermore, droughts have no significant effect on fertility if they occur during the non-agricultural season or in non-agrarian communities, and their positive effect in agrarian communities is mitigated by irrigation. These findings provide evidence that a low opportunity cost of having children is the main channel driving the fertility effect of drought in agrarian communities.
    Keywords: Climatic shocks,Droughts,Agricultural season,Opportunity cost of children,Fertility,Irrigation
    Date: 2019–03–01
  6. By: Fei Han
    Abstract: Japan’s aging and shrinking population could lower the natural rate of interest and, together with low inflation expectations, challenge the Bank of Japan’s efforts to reflate the economy. This paper uses a semi-structural model to estimate the impact of demographics on the natural rate in Japan. We find that demographic change has a significantly negative impact on the natural rate by lowering trend potential growth. We also find that the negative impact has been increasing over time amid stronger demographic headwinds. These findings highlight the importance of boosting potential growth to offset the negative demographic impact and lift the natural rate in Japan.
    Date: 2019–02–15
  7. By: Nikolov, Plamen; Adelman, Alan
    Abstract: This paper examines the impact of the New Rural Pension Scheme (NRPS) in China. Exploiting the staggered implementation of an NRPS policy expansion that began in 2009, we used a difference-in-difference approach to study the effects of the introduction of pension benefits on the health status, health behaviors, and healthcare utilization of rural Chinese adults age 60 and above. The results point to three main conclusions. First, in addition to improvements in self-reported health, older adults with access to the pension program experienced significant improvements in several important measures of health, including mobility, self-care, usual activities, and vision. Second, regarding the functional domains of mobility and self-care, we found that the females in the study group led in improvements over their male counterparts. Third, in our search for the mechanisms that drive positive retirement program results, we find evidence that changes in individual health behaviors, such as a reduction in drinking and smoking, and improved sleep habits, play an important role. Our findings point to the potential benefits of retirement programs resulting from social spillover effects. In addition, these programs may lessen the morbidity burden among the retired population. (JEL H55, H75, I10, I12, I19, J26)
    Keywords: life-cycle, retirement, pension, health, aging, developing countries, China.
    JEL: H55 H75 I10 I12 I15 I19 J26 J32 O11
    Date: 2018–11–30
  8. By: Resul Cesur; Pinar Mine Gunes; Erdal Tekin; Aydogan Ulker
    Abstract: This paper examines the effect of a nationwide healthcare reform implemented in Turkey on women’s fertility decisions. The Family Medicine Program (FMP), introduced in 2005, provided a wide-range of primary healthcare services, free of charge, and achieved universal access by matching each citizen to a specific family physician, who operates at neighborhood clinics, called Family Health Centers, on a walk-in basis. Although reducing fertility was not specified among the goals of the reform, reproductive-health and family-planning services have been covered under the FMP. To establish causality, we exploit the staggered rollout of the FMP implementation across Turkish provinces over time using a difference-in-differences estimation strategy. Our estimates indicate that the FMP significantly reduced childbearing among both teenagers and women ages 20-29. These results can be explained by increased access to and reduced cost of reproductive-health and family-planning services. However, the patterns in which the program effect has evolved over time differs between the two groups of women in a way that provides additional insights about the mechanisms. For teenagers, the FMP had a direct effect on childbearing, reflected by an immediate and rapidly-increasing pattern, which is not surprising given the broad agreement about the negative consequences of teenage childbearing among government and public health officials, including those in Turkey. For women ages 20-29, however, the program had a gradual and slowly-increasing effect, which is consistent with an empowerment channel. This should be interpreted as an unintended consequence of the program because, if anything, Turkey is a country where the government’s position is to encourage fertility behavior and discourage birth control practices among women at prime childbearing ages.
    JEL: I10 I12 I13 I18 J13
    Date: 2019–02

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