nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2010‒07‒03
three papers chosen by
Maximo Rossi
University of the Republic

  1. How Do Immigrants Spend Their Time? The Process of Assimilation By Hamermesh, Daniel S.; Trejo, Stephen
  2. Education and Family Background: Mechanisms and Policies By Björklund, Anders; Salvanes, Kjell G.
  3. Demographic Change, Human Capital and Welfare By Alexander Ludwig; Thomas Schelkle; Edgar Vogel

  1. By: Hamermesh, Daniel S. (University of Texas at Austin); Trejo, Stephen (University of Texas at Austin)
    Abstract: Using 2004-2008 data from the American Time Use Survey, we show that sharp differences between the time use of immigrants and natives become noticeable when activities are distinguished by incidence and intensity. We develop a theory of the process of assimilation – what immigrants do with their time – based on the notion that assimilating activities entail fixed costs. The theory predicts that immigrants will be less likely than natives to undertake such activities, but conditional on undertaking them, immigrants will spend more time on them than natives. We identify several activities – purchasing, education and market work – requiring the most interaction with the native world, and these activities more than others fit the theoretical predictions. Additional tests suggest that the costs of assimilating derive from the costs of learning English and from some immigrants’ unfamiliarity with a high-income market economy. A replication using the 1992 Australian Time Use Survey yields remarkably similar results.
    Keywords: time use, fixed costs, incidence, intensity
    JEL: J11 J22
    Date: 2010–06
  2. By: Björklund, Anders (SOFI, Stockholm University); Salvanes, Kjell G. (Norwegian School of Economics and Business Administration)
    Abstract: In every society for which we have data, people’s educational achievement is positively correlated with their parents’ education or with other indicators of their parents’ socioeconomic status. This topic is central in social science, and there is no doubt that research has intensified during recent decades, not least thanks to better data having become accessible to researchers. The purpose of this chapter is to summarize and evaluate recent empirical research on education and family background. Broadly speaking, we focus on two related but distinct motivations for this topic. The first is equality of opportunity. Here, major the research issues are: How important a determinant of educational attainment is family background, and is family background – in the broad sense that incorporates factors not chosen by the individual – a major, or only a minor, determinant of educational attainment? What are the mechanisms that make family background important? Have specific policy reforms been successful in reducing the impact of family background on educational achievement? The second common starting point for recent research has been the child development perspective. Here, the focus is on how human-capital accumulation is affected by early childhood resources. Studies with this focus address the questions: what types of parental resources or inputs are important for children's development, why are they important and when are they important? In addition, this literature focuses on exploring which types of economic policy, and what timing of the policy in relation to children's social and cognitive development, are conducive to children's performance and adult outcomes. The policy interest in this research is whether policies that change parents' resources and restrictions have causal effects on their children.
    Keywords: intergenerational mobility, sibling correlations, education, education reform
    JEL: I21 J13 J24
    Date: 2010–06
  3. By: Alexander Ludwig; Thomas Schelkle; Edgar Vogel (Mannheim Research Institute for the Economics of Aging (MEA))
    Abstract: This paper employs a large scale overlapping generations (OLG) model with endogenous human capital formation using a Ben-Porath (1967) technology to evaluate the quantitative role of human capital adjustments for the economic consequences of demographic change. We find that endogenous human capital formation is a quantitatively important adjustment mechanism which substantially mitigates the macroeconomic impact of population aging. On the aggregate level, the predicted decrease of the rate of return to physical capital is only one third of the predicted decrease in a standard model with a fixed human capital profile. In terms of welfare, while young agents with little assets gain up to 0.8% in consumption from increasing wages in both models, welfare losses from decreasing returns of older and asset rich households are substantial. But importantly, these losses are about 50 − 70% higher in the model without endogenous human capital formation. Ignoring this adjustment channel thus leads to quantitatively important biases of the welfare assessment of demographic change. We also document that not reforming the social security system but letting contribution rates increase will largely offset any positive welfare effects for future generations.
    JEL: C68 E17 E25 J11 J24
    Date: 2010–01–15

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