Child-custody reform, marital investment in children, and the labor supply of married mothers

Research on child custody primarily focuses on the well-being of children following divorce. We extend this literature by examining how the prospect of joint child custody affects within-marriage investment in children through changes in household bargaining power. Variation in the timing of joint-custody reforms across states provides a natural-experiment framework with which to examine within-marriage investment in children. The probability of children's private school attendance declines by 12% in states that adopt joint-custody laws. We also find evidence linking joint-custody reform to higher rates of labor force participation for married mothers, which may indicate less time devoted household production.     

Heterogeneous effects of child disability on maternal labor supply: Evidence from the 2000 US Census

Previous research has documented a negative relationship between child disability and maternal labor supply. Because of data limitations, most studies in this literature use broad measures of disability, which may obscure important differences among children with limiting health conditions. This paper presents new evidence on the labor supply of women with disabled children, exploiting disability information provided by 2000 US Census. This large nationally representative sample allows us to test for differences across different types of disabling conditions. We find that accounting for this heterogeneity in conditions is important. Using a broad definition of disability results in small differences between women with and without a disabled child. When we use a more detailed classification, we find larger labor supply reductions for mothers of children with physical disabilities or limitations in their ability to care for themselves. There is less evidence that having a child with either mental or emotional limitations or a sensory impairment is negatively related to employment or weekly hours. We also test for heterogeneous effects related to child age and maternal education. We find no clear pattern with respect to age and some evidence that the relationship between child disability and maternal labor supply is stronger for less educated mothers.     

School calendars,child care availability and maternal employment

A year-round calendar redistributes schools days around the year. This paper studies how this redistribution of school days, and therefore child care days available through school, affects maternal employment. The presence of year-round calendars in a district could be correlated with other district level attributes that might affect female employment rates. I therefore use a differencing method that compares the influence of district year-round enrollment on the employment rates of women with school-aged children relative to women whose eldest child is pre-school-aged. Unobserved district factors should affect employment rates of women with school-aged and pre-school-aged children similarly, yet only women with school-aged children should be directly impacted by school calendar. I find that redistributing child care days available through school into shorter intervals over time negatively impacts maternal employment. Among those women with school-aged children, those also having pre-school-aged children have the hardest time adjusting to differences in existing availability.     

Effects of Care Leave and Family Social Policy: Spotlight on the United States

Consistent with Pope Francis's efforts to eradicate social exclusion, most countries in the world have already adopted care leave policies in an effort to reduce the conflict between being an employee and being a caregiver. Care leave policies allow workers time off for family or for self‐care. Historically, care leave policies such as maternity leave are viewed as an employee benefit akin to short‐term disability leave, providing job‐protected time off for new mothers. This study reviews the literature of the short‐ and long‐run economic and societal effects of care leave policies globally, with a specific focus on care leave policies in the United States. Care leave produces positive labor market and health outcomes, including increases in leave taking, improvement in replacement wages, improvements to profitability and employee morale, increases in female workforce participation and continuity, increases in birth weight, and decreases in infant mortality. Despite positive effects, labor market inequalities such as decreases in female labor market participation rates, gender wage gaps, and occupational segregation are often promoted by care leave policies. The conflicted findings in care leave research muddle the anticipated effects of paid care leave but allow room for alternative policy recommendations.     

The effect of household appliances on female labor force participation: Evidence from microdata

We estimate the effect of household appliance ownership on the labor force participation rate of married women using micro-level data from the 1960 and 1970 U.S. Censuses. In order to identify the causal effect of home appliance ownership on married women's labor force participation rates, our empirical strategy exploits both time-series and cross-sectional variation in these two variables. To control for endogeneity, we instrument a married woman's ownership of an appliance by the average ownership rate for that appliance among single women living in the same U.S. state. Single women's labor force participation rates did not increase between 1960 and 1970. We find evidence in support of the hypothesis that the diffusion of household appliances contributed to the increase in married women's labor force participation rates during the 1960's.     

Provision and price of child care services: For-profits and nonprofits

We study the market for child care services, with a special focus on examining competition between for- and nonprofits. We estimate a two-stage oligopoly model of product differentiation. The first stage estimates a model of endogenous market structure and the second stage corrects for market structure to examine the prices charged and capacity choices for child care centers. We find that the actions of “same-type” providers have a statistically significant impact on a provider’s entry and pricing decisions but we fail to find evidence that the actions of “other types” have a significant impact. Nonprofit child care providers and Head Start centers do not appear to crowd out for-profit providers. Further, we find that for-profits and nonprofits respond differently to market characteristics generating spatial differences in the types of center available in a market. Our data suggest that for-profits are more likely to enter markets with higher percentages of economically disadvantaged students, but they primarily serve those who work, rather than live, in the market. The prevalence of disadvantaged students does not impact the entry decision of nonprofits leaving disadvantaged areas with relatively fewer non-profit options to serve residents. Policies to encourage for-profit daycare would likely lead centers to locate in markets where they can provide service for workers, whereas a policy to encourage nonprofit entry might be more effective in providing low cost care for nearby residents.     

Technical efficiency and region The U.S. manufacturing sector 1972–1977

In this paper we estimate the extent of technological bias in an interregional context for U.S. manufacturing during the period 1972–1977 using a factor augmenting production function approach. We present estimates of the elasticity of factor substitution for each of the 48 states in the sample using a variable elasticity of substitution production function. Next, we use these estimates to generate estimates of the rates of change in the efficiencies of capital and labor inputs and compare these estimates across states and census regions. We also examine and compare estimates of total factor productivity across states and regions. We ,find that the average annual rates of growth of capital efficiency during the period are 5.5 percent in the Northeast, 5.3 percent in the Northcentral, 5.6 percent in the West and 3.1 percent in the South. The rates of change of the efficiencies of labor are found to be negative across all regions except the South. The rates of change of total factor productivity are found to be 1.7 percent in the Northeast, 2.3 percent in the Northcentral, 2.4 percent in the West and 1.7 percent in the South. We also find that between 33 percent and 56 percent of the growth of output across regions is due to technical progress.     

The social and private micro-level consequences of homeownership

This paper reviews the literature that describes the micro-level economic and social consequences of homeownership. We adopt an interdisciplinary approach and include studies from economics, sociology, geography, political science, psychology, and other disciplines. Our focus is on the set of consequences of homeownership in developed countries. Our list of potential outcomes of homeownership includes the impact on household wealth and portfolio choice, mobility, labor force participation, urban structure and segregation, home maintenance, political and social activities, health, demographics, self-esteem, and child outcomes. There is substantial evidence that homeownership has important effects on some household behaviors and outcomes. However, we find that much of the past 30-year's literature on consequences of homeowning is deficient from a theoretical or econometric perspective. We suggest solutions and identify research gaps present in the literature.     

Smoothed binary regression quantiles

This paper extends results regarding smoothed median binary regression to general smoothed binary quantile regression, discusses the interpretation of the resulting estimators under alternative assumptions, and shows how they may be used to obtain semiparametric estimates of counterfactual probabilities. The estimators are applied to a model of labour force participation of married women in the USA. We find that the elasticity with respect to non‐labour income is significantly negative only for women that belong to the middle of the conditional willingness‐to‐participate (WTP) distribution. In comparing the quantile models with parametric logit and semiparametric single‐index specifications, we find that the models agree closely for women around the centre of the WTP distribution, but there are considerable disagreements as we move towards the tails of the distribution. Copyright © 2006 John Wiley & Sons, Ltd.     

Illicit drug use among arrestees, prices and policy

Prior studies, by relying on nationally representative surveys, have overlooked the important fact that use of addictive substances is not uniformly distributed; subgroups of hardcore users account for most of the drug consumption. This study employs the Arrestee Drug Abuse Monitoring system to analyze the demand for cocaine and heroin by urban arrestees, employing objective indicators of use based on urinalysis. The data are repeated city cross sections, and panel data methodology is employed to account for endogeneity. Cocaine and heroin prices have a negative effect on the probability of use even among this group of heavy users. Results indicate that subjective, self-reported measures of participation are likely to be under-reported, which may impart bias to estimates of the price elasticity. The own-price cocaine participation elasticity is about −0.15, and the own-price heroin participation elasticity is about −0.10 for arrestees. This contemporaneous elasticity understates the full effect, and the long-run price elasticity is about twice the magnitude. The magnitude of the price response is substantially smaller relative to the estimates in the prior literature, and calculations suggest that further enforcement and interdiction-driven increases in drug prices may not be cost-effective.     

Cost-Optimal Scale of Child Care Institutions

In this paper we explore the scale properties in the operation of child care institutions. The main issue is whether or not there exists a technically optimal scale of operation. Our results, based on a homothetic production function model and data from a sample of Norwegian child care institutions, suggest that a technically optimal scale does exist. This confirms some of the results recently obtained for US child care institutions.     

Disability and the labor force participation of older men in Canada

I use a latent variable model to estimate the effect of disability status on the labor force participation of older men in Canada, with data from the National Population Health Survey. The estimates from this paper indicate that disability status has a large negative effect on the labor force participation of older Canadian males. It is difficult to compare these estimates with previous Canadian estimates because of differences in methodology and data. However, my estimates appear to be larger than those from US data. Some of the implications of these estimates for disability policy are also discussed.     

The Taylor principle fights back,Part II

The existing literature holds that the Taylor principle often leads to indeterminacy in New Keynesian models that allow for capital accumulation and limited asset market participation. This conclusion is special, however, to the case of continuous full employment. When the assumption of perfect wage flexibility is relaxed very slightly so that the labor market clears quickly but not instantaneously, determinacy is the norm. The threat of indeterminacy is limited to a tiny, irrelevant corner of the parameter space where the elasticity of labor supply is unusually high and real wage adjustment is unbelievably fast. Everywhere else, the Taylor principle guarantees a unique rational expectations equilibrium. The dramatic difference in results reflects the sensitivity of the monetary transmission mechanism to the speed of adjustment in the labor market.     

Women of color in the labor market

While the labor force participation rates of women have increased, and women work in a wider range of occupations than they did two decades ago, there remain gaps between the status of women and men, as well as between white women and women of color. Additionally, as the female labor force becomes more diverse, there are also differences among women of color in labor force participation, unemployment, and occupational status. Based on projections regarding the future structure of the labor force, it is likely that even as the status of some women of color improves, many will remain stuck in low-wage service and clerical jobs.     

Efficient employment of cohorts of labor in the U.S. economy: An illustration of a method

This paper presents a model for the analysis of efficient labor force participation in the U.S. economy. Ridge regression estimates of the elasticities of cohorts of labor, classified by sex and occupation, are used in conjunction with wage data to illustrate the derivation of efficient allocation of labor cohorts in five economic sectors. These efficient constructs are compared with actual census data for 1960 and 1970. The results, while tentative, show a trend toward more efficient utilization of labor and greater participation by women in the work force.     

Social security and the labor supply of older married couples

This paper provides estimates of the impact of social security benefits on the labor force behavior of older married couples in the United States, with the ‘spouse benefit’ provision receiving particular attention. The empirical results using data from the Retirement History Survey show that the spouse benefit provision has a moderately small negative impact on labor force participation by older married women and a small positive impact on the labor force participation of older married men. The results are used to evaluate the potential labor supply impact of a proposal to eliminate spouse benefits and replace them with earnings sharing.     

Quantile-regression estimates of cigarette demand elasticities for the United States

Using a simple model and state-level cross-section U.S. data from 1993 to 1999, quantile-regression estimates of price elasticity and income elasticity for cigarette demand are obtained. It is noted that price elasticity shows a sizable variation across the high and low quantity-quartiles. There is a similar variability in the income elasticity, but most of these estimates lack statistical significance. Besides providing an indication of the variation in the price (and income) elasticity for different consumption levels, the exercise suggests some interpretative caution in regard to estimates from constant-elasticity models.     

WHAT HAVE WE LEARNED FROM THREE DECADES OF RESEARCH ON THE PRODUCTIVITY OF PUBLIC CAPITAL?

The last three decades have witnessed a great deal of research effort devoted to measuring the private output elasticity of public capital. The wide range of available estimates have precluded any consensus so far, however. This paper reconciles the empirical findings of the literature by quantitatively analyzing a sample of 578 estimates collected from 68 studies for the 1983–2008 period. Using meta‐regression analysis, we show how study design characteristics and publication bias can explain a large fraction of the variation across estimates. We find a short‐run output elasticity of public capital supplied at the central government level of 0.083, which increases to 0.122 in the long run. If, in addition, only core infrastructure at a regional/local level of government is considered, these estimates are almost doubled. The average output elasticity of public capital amounts to 0.106. Our results suggest that public capital is undersupplied in OECD economies.     

The work disincentive effects of the disability insurance program in the 1990s

In this paper we evaluate the work disincentive effects of the disability insurance (DI) program during the 1990s using comparison group and regression-discontinuity methods. The latter approach exploits a particular feature of the DI eligibility determination process to estimate the program's impact on labor supply for an important subset of DI applicants. Using merged survey-administrative data, we find that during the 1990s the labor force participation rate of DI beneficiaries would have been at most 20 percentage points higher had none received benefits. In addition, we find even smaller labor supply responses for the subset of ‘marginal’ applicants whose disability determination is based on vocational factors.     

A Time Series Analysis of U.K. Lottery Sales: Long and Short Run Price Elasticities

This paper estimates the long- and short-run elasticities for Lotto. It is particularly concerned with the dynamic response to price variations since, for some goods, this has sometimes been used to infer the presence of addiction. The price elasticity is identified through variation in the expected value of a Lotto ticket induced by rollovers whose high frequency results in surprisingly high variation in the expected value of holding a ticket. Unit root tests are applied to the series in order to identify their time series properties and to avoid a spurious regression problem. The series are found to be stationary. We apply instrumental variables to account for the endogeneity which arises due to correlation between the expected value and the dependent sales variable. The estimated long-run elasticity exceeds the short-run elasticity and this supports the hypothesis that there is an element of addictive behaviour in sales. The Lottery is regulated and the regulator's objective is to maximize sales. Our estimated long-run price elasticity of demand is inconsistent with revenue maximization and we find that greater revenue for the 'good causes' could be raised from the game if a smaller proportion of sales revenue were allocated to them.