Earning or Learning? How Extending Closing Time in the Retail Sector Affects Youth Employment and Education

This paper estimates the causal impact of increased demand for low‐skilled workers on youth employment, and short and long run education. We exploit quasi‐experimental demand shifts for retail workers due to changes in allowed opening hours for retail stores across Norwegian municipalities. We find that relaxed restrictions on opening hours increased employment in the sector and permanently reduced educational attainment for affected high school students. The results suggest that policies or shocks that increase demand for low‐skilled workers in the short term might have negative long‐run effects in terms of reduced educational attainment.     

Developments in Survey Research over the Past 60 Years: A Personal Perspective

Many developments have occurred in the practice of survey sampling and survey methodology in the past 60 years or so. These developments have been partly driven by the emergence of computers and the continuous growth in computer power over the years and partly by the increasingly sophisticated demands from the users of survey data. The paper reviews these developments with a main emphasis on survey sampling issues for the design and analysis of social surveys. Design‐based inference based on probability samples was the predominant approach in the early years, but over time, that predominance has been eroded by the need to employ model‐dependent methods to deal with missing data and to satisfy analysts' demands for survey estimates that cannot be met with design‐based methods. With the continuous decline in response rates that has occurred in recent years, much current research has focused on the use of non‐probability samples and data collected from administrative records and web surveys.     

Self-employment,educational attainment and employment protection legislation

We analyse how educational attainment and employment protection influence an individual's decision to become self-employed. By altering expected income from dependent employment, employment protection is likely to affect an individual's choice of occupation, although such a link has not been established in the literature so far. We argue that an interaction between an individual's educational attainment and the institution of employment protection exists when it comes to the decision regarding whether to become self-employed. Based on survey data from OECD countries, we find evidence for a negative interaction, and conclude that only after taking this interaction into account can the effect of employment protection and educational attainment on self-employment rates be assessed.     

Appropriate assumption on cross-hauling national input–output table regionalization

Input–output tables are useful for regional economic analyses. Although scholars often regionalize national input–output tables, cost-related issues make surveying regional trade flow difficult; hence, non-survey approaches are implemented instead. While location quotient (LQ) approaches have been used widely, they ignore cross-hauling in interregional trade. Therefore, alternative non-survey approaches with different assumptions on cross-hauling are used, such as cross-hauling depends on regional size and cross-hauling is proportional to its potential determined by output or demand. This study concludes that the most appropriate assumption, as per the relative performance of non-survey approaches, is that cross-hauling is in proportion to trade volume.     

On estimating trade flows in interregional input output models

Non-survey techniques have previously been devised for adjusting regional technical requirements matrices so as to account for commodity imports. Surrogates such as the location quotient have been utilised for estimating trading coefficients in a regional input output table. Extensions of these techniques to an interregional system are generally considered. It is shown that non-survey techniques are conceptually improved as a result of this extension. Particular regard is given to calibration methods that achieve consistency between estimates of exports and imports within an interregional system. The RAS method and some variants are compared and an additive algorithm is demonstrated to be efficient for this purpose.     

DETAILED ESTIMATION OF WORKLIFE EXPECTANCY FOR THE MEASUREMENT OF HUMAN CAPITAL: ACCOUNTING FOR MARRIAGE AND CHILDREN

Abstract Measuring an individual's human capital at a point in time as the present actuarial value of expected net lifetime earnings has a lengthy history. Calculating such measures requires accurate estimates of worklife expectancy. Here, worklife estimates for men and women in the USA categorized by educational attainment, race, marital status, parental status and current labour force status are presented. Race has a much larger impact on the worklife expectancy of men than women. Education is associated with larger worklife differentials for women. The association between marriage and worklife expectancy is significant, but of opposite sign, for men and women: married women (men) have a lower (higher) worklife expectancy than single women (men). Parenthood is associated with a reduction in the worklife expectancy of women; the association is smaller and varies from positive for some education/marital status groups to negative for others for men.     

The economic returns to schooling for Italian men. An evaluation based on instrumental variables

We study the relationship between (log) hourly earnings and schooling for male household heads in Italy, using cross-sectional data from the 1993 and 1995 waves of the Bank of Italy (BI) survey on the income and wealth of Italian households. In line with international evidence, we find that OLS under-estimate the return to schooling. When the endogeneity of schooling is taken into account, the return to an additional year in school increases from 4.8% to 5.6%. This estimate is lower than the estimates tabulated by Card [Card, D., 1994. Earnings, Schooling and Ability Revisited. NBER Working Paper no. 4832.] for the United States. We also find evidence that this return increases with higher levels of educational attainment.     

Estimating the validity of administrative variables

Administrative data have become more important for both official statistics and academic research. One possible problem with such data is that they are biased and have a low validity. Although this problem is often mentioned in a qualitative respect, the validity is seldom quantitatively measured. This article presents a method to estimate the validity of administrative variables. By applying the classical test theory, the validity can be determined by using linked survey and administrative data which should measure the same concepts. This idea is elaborated with an empirical example in which the construct validity of age, gender, educational attainment and wages is determined simultaneously. A linear structural equations model with a measurement component is used to compute the construct validity. The analyses reveal that educational attainment and wages show some bias, but not higher than the bias found in the survey.     

CONSTRUCTION OF MULTI-REGIONAL INPUT–OUTPUT TABLES USING THE CHARM METHOD

Subnational multi-regional input–output tables (IOT) are important tools for studying interregional socio-economic and/or environmental interrelations that help to address a wide range of current societal, ecological and economic challenges. However, the lack of subnational input–output data is a major obstacle which leads to a wide use of non-survey methods. Like other non-survey methods, the cross-hauling adjusted regionalization method (CHARM) was originally developed for the construction of single-regional IOT. In this paper, we extend CHARM to the case of bi- and multi-regional IOT. We find that the original CHARM formula has two limitations that are also of great importance for the single-regional case: First, cross-hauling in interregional trade is implicitly set to zero and, second, accounting balances may be violated owing to structural differences between the regional and national economies. We present a modified formula addressing these issues and examine its performance in terms of a case study.     

Estimates of the return to schooling in Sweden from a large sample of twins

A large sample of twins was used to examine whether conventional estimates of the return to schooling in Sweden are biased because ability is omitted from the earnings–schooling relationship. Ignoring measurement error, the results indicate that omitting ability from the earnings–schooling relationship leads to estimates that are positively biased. However, reasonable estimates of the measurement-error-adjusted returns are both above and below the unadjusted estimates, showing that the results depend crucially on a parameter not known at this time. However, an estimate of the reliability ratio was obtained using two measures on educational attainment. With this estimate of the reliability ratio, the measurement-error-adjusted estimate of the return to schooling in the sample of identical twins indicates that there is at most a slight ability bias in the conventional estimates of the return to schooling. The fundamental assumption of this kind of study is that within-pair differences in educational attainment are randomly determined. This assumption was also tested, but no strong evidence to reject it was found.     

Screening the impacts of municipal service policy changes

The planning of municipal service delivery systems requires accurate forecasts of demand, and particularly of the effects the quality of service delivery has on demand. A metholology for this problem should meet three criteria, if it is to be useful for municipal planning: it must be low-cost and use generally available data; it must be based on user behavior, so that the effects of policy changes can be correctly attributed; and it must allow testing of the transferability of the results, since this is required for general forecasting use. This paper develops such a methodology, based on econometric analysis of data from a number of service areas within a number of regions, forming a double cross-section. Empirical tests of the methodology were performed for two local government services where the effect of service quality on demand is important: sewer and highway construction, which have been hypothesized to affect the patterns of development within regions; and solid waste collection, where the level of service provided affects how much waste enters the collection system and how much is littered, burned or recycled. The two case studies and other analyses suggest that the methodology is a useful tool for testing whether policy changes have an effect on the demand for service, but not for accurate demand forecasting. Thus, these simple models are relevant for the role of screening the effect of policy changes, but more detailed and localized approaches are necessary for system design.     

Estimating International Interindustry Linkages: Non-survey Simulations of the Asian-Pacific Economy

This paper evaluates a recently published semi-survey international input–output table for nine East-Asian countries and the USA with four non-survey estimation alternatives. A new generalized RAS procedure is used with stepwise increasing information from both import and export statistics as optimisation constraints on the four non-survey tables. The results show that the estimated table improves when increasing information from both sources is used, despite the well known inconsistencies between import and export data in trade statistics. It is concluded that the new procedure can be useful as a critical analysis of newly published (semi-)survey international tables and/or as an early updating tool during the construction process.     

Family income and children's education: Using the Norwegian oil boom as a natural experiment

Parental income is positively correlated with children's educational attainment. This paper addresses the causality of this observed link. We have a unique data set for Norwegians born in the period 1967–1969, with a measure of permanent family income in the children's adolescence. This enables us to examine the long-term effect of family income on children's educational attainment. The Norwegian oil shock in the 1970s is used as an instrument, because this – in some regions but not in others – implied a general increase in income unrelated to parents' abilities. This variation in income is used to estimate the causal effect of family income on children's educational attainment. We find no such causal relationship. This result is robust with respect to different specification tests.     

RETURN TO EXPERIENCE AND INITIAL WAGE LEVEL: DO LOW WAGE WORKERS CATCH UP?

This paper estimates the relationship between initial wage and return to experience. We use a Mincer‐like wage model to non‐parametrically estimate this relationship allowing for an unobservable individual permanent effect in wages and unobservable individual return to experience. The relationship between return to experience and unobservable individual ability is negative when conditioning on educational attainment, while the relationship between return to experience and educational attainment is positive. We link our findings to three main theories of wage growth, namely search, unobserved productivity and learning, and human capital. We devise several empirical tests in order to separate the theories. We find evidence in favor of the unobserved productivity and learning model and mixed evidence regarding the search model. We find no evidence in support of the human capital model. Copyright © 2013 John Wiley & Sons, Ltd.     

The economic return to schooling in Ireland

Recent developments in the schooling returns literature have focused on exploiting alternative instruments. A number of instruments are available in an Irish dataset, including parental background variables (social class and educational attainment), and variables measuring changes in the schooling system (the introduction of free secondary schooling in the mid-1960s, accompanied by a rapid rise in educational participation rates, and the raising of the school-leaving age in 1972). The results suggest, however, that OLS estimates of rates of return are not significantly downward biased as would be suggested by recent arguments in the literature.     

Using weather ensemble predictions in electricity demand forecasting

Weather forecasts are an important input to many electricity demand forecasting models. This study investigates the use of weather ensemble predictions in electricity demand forecasting for lead times from 1 to 10 days ahead. A weather ensemble prediction consists of 51 scenarios for a weather variable. We use these scenarios to produce 51 scenarios for the weather-related component of electricity demand. The results show that the average of the demand scenarios is a more accurate demand forecast than that produced using traditional weather forecasts. We use the distribution of the demand scenarios to estimate the demand forecast uncertainty. This compares favourably with estimates produced using univariate volatility forecasting methods.     

From network ties to network structures: Exponential Random Graph Models of interorganizational relations

Theoretical accounts of network ties between organizations emphasize the interdependence of individual intentions, opportunities, and actions embedded in local configurations of network ties. These accounts are at odds with empirical models based on assumptions of independence between network ties. As a result, the relation between models for network ties and the observed network structure of interorganizational fields is problematic. Using original fieldwork and data that we have collected on collaborative network ties within a regional community of hospital organizations we estimate newly developed specifications of Exponential Random Graph Models (ERGM) that help to narrow the gap between theories and empirical models of interorganizational networks. After controlling for the main factors known to affect partner selection decisions, full models in which local dependencies between network ties are appropriately specified outperform restricted models in which such dependencies are left unspecified and only controlled for statistically. We use computational methods to show that networks based on empirical estimates produced by models accounting for local network dependencies reproduce with accuracy salient features of the global network structure that was actually observed. We show that models based on assumptions of independence between network ties do not. The results of the study suggest that mechanisms behind the formation of network ties between organizations are local, but their specification and identification depends on an accurate characterization of network structure. We discuss the implications of this view for current research on interorganizational networks, communities, and fields.     

Spatiotemporal wind forecasting by learning a hierarchically sparse inverse covariance matrix using wind directions

Given the advances in online data acquisition systems, statistical learning models are increasingly used to forecast wind speed. In electricity markets, wind farm production forecasts are needed for the day-ahead, intra-day, and real-time markets. In this work, we use a spatiotemporal model that leverages wind dynamics to forecast wind speed. Using a priori knowledge of the wind direction, we propose a maximum likelihood estimate of the inverse covariance matrix regularized with a hierarchical sparsity-inducing penalty. The resulting inverse covariance estimate not only exhibits the benefits of a sparse estimator, but also enables meaningful sparse structures by considering wind direction. A proximal method is used to solve the underlying optimization problem. The proposed methodology is used to forecast six-hour-ahead wind speeds in 20-minute time intervals for a case study in Texas. We compare our method with a number of other statistical methods. Prediction performance measures and the Diebold–Mariano test show the potential of the proposed method, specifically when reasonably accurate estimates of the wind directions are available.     

Creating an Environment for Economic Growth: Creativity,Entrepreneurship or Human Capital?

Scholars and policymakers interested in the growth and prosperity of regions have long recognized that talent and knowledge are fundamental. Yet the question is what types of talent are needed in a growing twenty‐first‐century economy: human capital, creativity and innovation, or entrepreneurship? The latter we define broadly to include any type of risk taking, and not only radical innovation. The literature does not clearly point to one factor as being the most essential. This study assesses this question separately for rural and urban United States (US) counties. We find that human capital––measured by educational attainment––is considerably more conducive to employment growth than the share of creative occupations. Likewise, the share of small and medium businesses is also very conducive to local growth, although this does not apply to the self‐employment share. Rural and urban areas experience similar patterns, although the magnitude thereof tends to be larger for urban counties, whereas high‐technology employment share has had a positive effect in rural areas. Policy conclusions suggest that enhancing small business development and increasing educational attainment are the two strategies that are most likely to succeed.     

Beyond Intermediates: The Role of Consumption and Commuting in the Construction of Local Input–Output Tables

Estimating intermediate trade using conventional non-survey methods produces biased results. This problem has led to a methodological recommendation that emphasizes the accurate estimation of intermediate trade flows. This paper argues for a qualification of the consensus view: when simulating input–output (IO) tables, analysts need also to consider spillover effects driven by wage and consumption flows. In particular, for metropolitan economies, capturing wage and consumption flows is essential to obtain accurate Type II multipliers. This is demonstrated by constructing an interregional IO table that captures the interdependence between a city and its commuter belt, nested within the wider regional economy.