nep-dem New Economics Papers
on Demographic Economics
Issue of 2019‒06‒17
seven papers chosen by
Héctor Pifarré i Arolas
Universitat Pompeu Fabra

  1. Skills, education and fertility -and the confounding impact of family background By Kramarz, Francis; Nordström Skans, Oskar; Rosenqvist, Olof
  2. EU Faces a Tough Demographic Reckoning By Richard Grieveson; Sandra M. Leitner; Robert Stehrer
  3. The Impact of Abortion on Crime and Crime-Related Behavior By Hjalmarsson, Randi; Mitrut, Andreea; Pop-Eleches, Cristian
  4. Old age or dependence. Which social insurance? By Yukihiro Nishimura; Pierre Pestieau
  5. Discrimination in Hiring Based on Potential and Realized Fertility: Evidence from a Large-Scale Field Experiment By Sascha O. Becker; Ana Fernandes; Doris Weichselbaumer
  6. Reducing Mommy Penalties with Daddy Quotas By Allison Dunatchik; Berkay Özcan
  7. Lost in translation: What do Engel curves tell us about the cost of living? By Ingvild Almås; Timothy K.M. Beatty; Thomas F. Crossley

  1. By: Kramarz, Francis (CREST, École Polytechnique, CEPR;); Nordström Skans, Oskar (Nationalekonomiska institutionen, Uppsala universitet); Rosenqvist, Olof (IFAU - Institute for Evaluation of Labour Market and Education Policy)
    Abstract: Skilled and educated women have on average fewer children and are more likely to remain childless than the less skilled and educated. Using rich Swedish register data, we show that these negative associations found in most previous studies largely disappear if we remove the impact of family background factors using twin (or sibling) fixed effects. For males, human capital measures are virtually unrelated to fertility, but this again masks the role of family background factors: more educated and skilled males tend to have more children than their less skilled peers once we use twin/sibling fixed effects to remove family background factors. Hence, for both men and women, human capital and fertility become more positively associated once the joint family components are removed, i.e. when studying the within-family associations. The one human capital measure which deviates from these patterns is non-cognitive ability, which has a very strong overall positive association with fertility, an association which instead is muted within families. We end by showing that these results can be reconciled in a stylized theoretical model where family-specific preferences for fertility shape the relative investments in different types of skills and traits when children are small as well as the choices, in terms of family formation and human capital investments, these children make when they enter into adulthood.
    Keywords: Fertility; education; grades; cognitive ability; non-cognitive ability; twins
    JEL: I24 J13 J24
    Date: 2019–05–17
  2. By: Richard Grieveson (The Vienna Institute for International Economic Studies, wiiw); Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw); Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: By 2030, labour demand could be equal to labour supply in most of the EU, creating significant challenges for policy-makers and firms. The ‘tipping point’ at which labour demand will become equal to labour supply in the EU – that is, when labour will become a constraint on economic growth – is now imminent. If current trends continue, most EU countries will hit this ‘tipping point’ during the next decade, many by 2025. Vacancy rates and surveys of employers find that firms in some sectors are already facing severe labour constraints on production. Most of CEE will be hit first, not least because they are still losing so many workers to Western Europe. For Western Europe, however, the situation will also become difficult soon, especially for Germany. This is an enormous challenge for policy-makers, and will become even more so in the future. Policy options to counter demographic trends can be split into four main areas higher productivity, immigration, activity rates, or fertility. However, none is a silver bullet. Even if all of these policies are pursued successfully and in combination, they are unlikely to fundamentally alter the picture. The implications of this demographic decline do not have to be all negative. Combined with intelligent upgrading of infrastructure and investment in productivity-enhancing improvements in industry, there is no reason that these population trends cannot go hand-in-hand with increases in per capita GDP and living standards. Much can be learned from Japan in this regard. The politics of the future in the EU is likely to be defined by generational questions, and potentially inter-generational conflict. Policy discussions are likely to centre ever more on immigration, how to fund old-age and child care, how to extend working lives, automation, and the problematic issue of financial incentives to increase fertility rates.
    Keywords: demographics, migration, emigration, immigration, automation
    JEL: F22 J01 J08 J11 J21 J23 J61
    Date: 2019–06
  3. By: Hjalmarsson, Randi (Department of Economics, School of Business, Economics and Law, Göteborg University); Mitrut, Andreea (Department of Economics, School of Business, Economics and Law, Göteborg University); Pop-Eleches, Cristian (SIPA, Columbia University, USA)
    Abstract: The 1966 abolition and 1989 legalization of abortion in Romania immediately doubled and decreased by about a third the number of births per month, respectively. To isolate the link between abortion access and crime while abstracting from cohort and general equilibrium effects, we compare birth month cohorts on either side of the abortion regime. For both the abolition and legalization of abortion, we find large and significant effects on the level of crime and risky-behavior related hospitalization, but an insignificant effect on crime and hospitalization rates (i.e. when normalizing by the size of the birth month cohort). In other words, the Romanian abortion reforms did affect crime, but all of the effect appears to be driven by cohort size effects rather than selection or unwantedness effects.
    Keywords: Abortion; crime; Risky behavior
    JEL: I18 J13 J18 K42
    Date: 2019–06
  4. By: Yukihiro Nishimura (Graduate School of Economics, Osaka University); Pierre Pestieau (CREPP, Universite de Li`ege, CORE)
    Abstract: We consider a society where individuals differ according to their productivity and their risk of mortality and dependency. We show that ac-cording to the most reasonable estimates of correlations among these threecharacteristics, if one had to choose between a public pension system anda long-term care social insurance, the latter should be chosen by a utili-tarian social planner. With a Rawlsian planner, the balance between thetwo schemes does depend on the comparison between the probabilities ofthe worst off individual and the probabilities of the rest of society.
    Keywords: long term care, pension, mortality risk, optimal taxation,liquidity constraints
    JEL: H2 H5
    Date: 2019–04
  5. By: Sascha O. Becker; Ana Fernandes; Doris Weichselbaumer
    Abstract: Due to conventional gender norms, women are more likely to be in charge of childcare than men. From an employer’s perspective, in their fertile age they are also at “risk” of pregnancy. Both factors potentially affect hiring practices of firms. We conduct a large-scale correspondence test in Germany, Switzerland, and Austria, sending out approx. 9,000 job applications, varying job candidate’s personal characteristics such as marital status and age of children. We find evidence that, for part-time jobs, married women with older kids, who likely finished their childbearing cycle and have more projectable childcare chores than women with very young kids, are at a significant advantage vis-à-vis other groups of women. At the same time, married, but childless applicants, who have a higher likelihood to become pregnant, are at a disadvantage compared to single, but childless applicants to part-time jobs. Such effects are not present for full-time jobs, presumably, because by applying to these in contrast to part-time jobs, women signal that they have arranged for external childcare.
    Keywords: Fertility, discrimination, experimental economics
    JEL: C93 J16 J71
    Date: 2019
  6. By: Allison Dunatchik; Berkay Özcan
    Abstract: This paper investigates whether daddy quotas - non-transferable paternity leave policies - mitigate motherhood penalties women face in the labor market. Using the introduction of a daddy quota in Quebec, Canada as a natural experiment, the authors employ labor force survey data to conduct a difference-in-difference estimation of the policy's impact on a range of mothers' career outcomes. The results suggest Quebec mothers exposed to the policy are 5 percentage points more likely to participate in the labor force and to work full-time, 5 percentage points less likely to work part-time, and 4 percentage points less likely to be unemployed. These results are robust to an alternative semiparametric difference-in-difference methodology and to a battery of placebo and sensitivity tests. However, the authors find that the policy's effects are largest two to three years post-reform, reducing in size and significance thereafter, raising questions about the durability of such effects.
    Keywords: Family policy, maternal employment, work-family balance, families and work, labor force participation
    JEL: J16 J18
    Date: 2019–05
  7. By: Ingvild Almås; Timothy K.M. Beatty; Thomas F. Crossley
    Abstract: The Hamilton method for estimating CPI bias is simple, intuitive, and has been widely adopted. We show that the method conflates CPI bias with variation in cost of-living growth across income levels. Assuming a single price index across the income distribution is not consistent with the downward sloping Engel curves that are necessary to implement the method. We suggest an approach that disentangles genuine CPI bias from differences caused by comparing changes in the cost of living across income levels– non-homotheticity. For the period Hamilton studies, this yields substantially lower estimates of CPI bias and therefore implies lower income growth.
    Keywords: Inflation, CPI-bias, Hamilton Method, Engel Curves
    JEL: D11 D12 E31
    Date: 2019–05

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