nep-dem New Economics Papers
on Demographic Economics
Issue of 2021‒01‒25
eight papers chosen by
Héctor Pifarré i Arolas
Universitat Pompeu Fabra

  1. Why Does Consumption Fluctuate in Old Age and How Should the Government Insure it? By Margherita Borella; Mariacristina De Nardi
  2. Are Marriage-Related Taxes and Social Security Benefits Holding Back Female Labor Supply? By Margherita Borella; Mariacristina De Nardi; Fang Yang
  3. Gender Norms and Specialization in Household Production: Evidence from a Danish Parental Leave Reform By Lassen, Anne Sophie
  4. Deaths of Despair and the Incidence of Excess Mortality in 2020 By Casey B. Mulligan
  5. When Opportunity Knocks: Confronting Theory and Empirics about Dynamics of Gender Wage Inequality By Tyrowicz, Joanna; van der Velde, Lucas
  6. Moms' Time—Married or Not By Hamermesh, Daniel S.
  7. Family and Government Insurance: Wage, Earnings, and Income Risks in the Netherlands and the U.S. By Mariacristina De Nardi; Giulio Fella
  8. Epidemics, Pandemics and Income Inequality By Esseau-Thomas, C.; Galarraga, O.; Khalifa, S.

  1. By: Margherita Borella; Mariacristina De Nardi
    Abstract: In old age, consumption can fluctuate because of shocks to available resources and because health shocks affect utility from consumption. We find that even temporary drops in income and health are associated with drops in consumption and most of the effect of temporary drops in health on consumption stems from the reduction in the marginal utility from consumption that they generate. More precisely, after a health shock, richer households adjust their consumption of luxury goods because their utility of consuming them changes. Poorer households, instead, adjust both their necessary and luxury consumption because of changing resources and utility from consumption.
    JEL: D10 D11 D12 D14 E20 E21 H20 H31 H51
    Date: 2020–10–23
  2. By: Margherita Borella; Mariacristina De Nardi; Fang Yang
    Abstract: In the United States, both taxes and old age Social Security benefits depend on one's marital status and tend to discourage the labor supply of the secondary earner. To what extent are these provisions holding back female labor supply? We estimate a rich life cycle model of labor supply and savings for couples and singles using the method of simulated moments (MSM) on the 1945 and 1955 birth-year cohorts and use it to evaluate what would happen without these provisions. Our model matches well the life cycle profiles of labor market participation, hours, and savings for married and single people and generates plausible elasticities of labor supply. Eliminating marriage-related provisions drastically increases the participation of married women over their entire life cycle, reduces the participation of married men after age 60, and increases the savings of couples in both cohorts, including the later one, which has similar participation to that of more recent generations. If the resulting government surplus were used to lower income taxation, there would be large welfare gains for the vast majority of the population.
    JEL: E21 H20 J22 J31
    Date: 2020–10–23
  3. By: Lassen, Anne Sophie (Department of Economics, Copenhagen Business School)
    Abstract: This paper shows that decisions regarding intra-household specializations are determined by gender norms rather than standard economic incentives. To test theoretical predictions of both the standard model of intra-household time allocation and the role of gender identity, social category and prescriptions, I use variation from a Danish parental leave reform. I find large effects among mothers and virtually unchanged behavior among fathers, irrespective of relative earnings in the household. This is consistent with the notion of pay-off from gender identity. Subsequently, I find peer effects among sisters and interpret this as reform-induced prescriptions regarding extensive leave for mothers.
    Keywords: Intra-household specialization; Gender norms; Parental leave; Peer effects
    JEL: D13 J13 J16 J18 J22
    Date: 2021–01–08
  4. By: Casey B. Mulligan
    Abstract: Weekly mortality through October 3 is partitioned into normal deaths, COVID, and nonCOVID excess deaths (NCEDs). Before March, the excess is negative for the elderly, likely due to the mild flu season. From March onward, excess deaths are approximately 250,000 of which about 17,000 appear to be a COVID undercount and 30,000 non-COVID. Deaths of despair (drug overdose, suicide, alcohol) in 2017 and 2018 are good predictors of the demographic groups with NCEDs in 2020. The NCEDs are disproportionately experienced by men aged 15-55, including men aged 15-25. Local data on opioid overdoses further support the hypothesis that the pandemic and recession were associated with a 10 to 60 percent increase in deaths of despair above already high pre-pandemic levels.
    JEL: H22 I18 L51
    Date: 2020–12
  5. By: Tyrowicz, Joanna (University of Warsaw); van der Velde, Lucas (GRAPE)
    Abstract: We present empirical evidence that large structural shocks are followed by changes in labor market inequality. Specifically, we study short-run fluctuations in adjusted gender wage gaps (unequal pay for equal work) following episodes of structural shocks in the labor markets, using several decades of individual data for a wide selection of transition countries. We find that for cohorts who entered the labor market after the onset of transition. Labor market shocks lead to significant declines in the gender wage gap. This decrease is driven mostly by episodes experienced among cohorts who enter the labor market during the transition. By contrast, we fail to find any significant relation for cohorts already active in the labor market at the time of transition. We provide plausible explanations based on sociological and economic theories of inequality.
    Keywords: gender wage gap, transition, non-parametric estimates, worker flows
    JEL: C24 J22 J31 J71
    Date: 2021–01
  6. By: Hamermesh, Daniel S. (Barnard College)
    Abstract: Using time-diary data from the U.S. and six wealthy European countries, I demonstrate that non-partnered mothers spend slightly less time performing childcare, but much less time in other household activities than partnered mothers. Unpartnered mothers' total work time—paid work and household production—is slightly less than partnered women's. In the U.S. but not elsewhere they watch more television and engage in fewer other leisure activities. These differences are independent of any differences in age, race/ethnicity, ages and numbers of children, and household incomes. Non-partnered mothers feel slightly more pressured for time and much less satisfied with their lives. Analyses using the NLSY79 show that mothers whose partners left the home in the past two years became more depressed than those whose marriages remained intact. Coupled with evidence that husbands spend substantial time in childcare and with their children, the results suggest that children of non-partnered mothers receive much less parental care—perhaps 40 percent less—than other children; and most of what they receive is from mothers who are less satisfied with their lives.
    Keywords: time use, marital status, life satisfaction, time stress, depression
    JEL: J22 J12 I31
    Date: 2020–12
  7. By: Mariacristina De Nardi; Giulio Fella
    Abstract: We document new facts about risk in male wages and earnings, household earnings, and pre- and post-tax income in the Netherlands and the United States. We find that, in both countries, earnings display important deviations from the typical assumptions of linearity and normality. Individual-level male wage and earnings risk is relatively high at the beginning and end of the working life, and for those in the lower and upper parts of the income distribution. Hours are the main driver of the negative skewness and, to a lesser extent, the high kurtosis of earnings changes. Even though we find no evidence of added-worker effects, the presence of spousal earnings reduces the variability of household income compared to that of male earnings. In the Netherlands, government transfers are a major source of insurance, substantially reducing the standard deviation, negative skewness, and kurtosis of income changes. In the U.S. the role of family insurance is much larger than in the Netherlands. Family and government insurance reduce, but do not eliminate nonlinearities in household disposable income by age and previous earnings in either country.
    Keywords: Self-insurance; Wage risk; Social insurance; Life cycle; Progressive taxation; Redistribution
    JEL: D31 E24 H31 J31
    Date: 2020–10–26
  8. By: Esseau-Thomas, C.; Galarraga, O.; Khalifa, S.
    Abstract: The novel coronavirus is part of a series of infectious disease outbreaks that include: Ebola, Avian influenza, Middle East respiratory syndrome coronavirus (MERS-CoV), Influenza A (H1N1), and others. This paper addresses the question of how do these epidemics and pandemics affect income inequality in countries around the world during the first two decades of the 21st century. To achieve its objective, the paper explores the effect on the Gini coefficient of a dummy variable that indicates the occurrence of an epidemic or a pandemic in a country in a given year, in addition to the fatality rate of the epidemic or the pandemic. The panel estimations show that the dummy variable has a statistically significant positive effect on income inequality, while the fatality rate does not have a statistically significant nor an economically important effect on income inequality. To properly address potential endogeneity, we implement a Three-Stage-Least Squares technique. The estimation shows that both epidemics indicators have a statistically significant positive effect on income inequality, while income inequality does not have a statistically significant effect on the epidemics and pandemics indicators.
    Keywords: Epidemics; income inequality
    JEL: I14 D31
    Date: 2020–12

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