Transfers among divorced couples: evidence and interpretation

An analysis of the economic impact of divorce settlements in the United States is presented using data for a white cohort taken from the National Longitudinal Study of the High School Class of 1972. "The effects of spouses' incomes on the divorce transfer are estimated and used to simulate the welfare effects of divorce on husbands, wives, and children under alternative assumptions about marriage contracts and the ability of a couple to continue coordinating resources in the aftermath of divorce. We find a positive (negative) relationship between divorce transfers and the growth of husband's (wife's) earnings during marriage. The estimated expenditure on children in the divorce state is only half the accustomed level during marriage."     

Wives' motives and fertility

This analysis assumes that childhood learning has a strong impact on the measured motivations of adults. This study uses responses among 354 White married women in 1976 to the Thematic Apperception Test (TAT). Wives' responses to four pictures are expected to mirror the following four typologies: affiliation imagery (AFF), power imagery (POW), power and affiliation imagery (POWAF), and without references to affiliation or power (CULT). CULT is presumed to reflect the motivation of the wife in the average family. Expected relationships between these root motives and fertility are identified. Findings show that families with persuasive affiliative wives allocated more time to child care and had lower family incomes than other families. AFF wives worked fewer hours per week than other wives and allocated more time per child than other wives. Husbands helped them with child care sometimes or often. Households sacrificed material possessions for children. Findings did not support the inference that low income was due to husband's low earnings but did support the inference that low income might be due to the wives' short work week. The logistic model that controls for hours worked per week and number of years at the present job shows that wives were happiest in their marriage, if wives had high power motivation. Family income was a significant determinant of achievement satisfaction and not of affiliation satisfaction. Nerlove's hypothesis that there is an inverse relationship between wife's level of education and her taste for children was rejected. The wife's motivation toward her husband was an important factor that impacted on her preference for children and for work and her perceived level of utility. Wives who asserted themselves in socially acceptable situations (high in power motivations) were most likely to report having a happier than average marriage. Both affiliative and persuasive affiliative wives took satisfaction in their children's happiness and achievements.     

Gender Wage Differentials and Occupational Segregation in Hong Kong, 1981–1996

This paper analyses gender wage differentials and the role of occupational segregation in Hong Kong. It is found that the female–male earnings ratio increased substantially from 0.710 in 1981 to 0.839 in 1996. A decomposition which takes into account occupational differences shows that the gender pay gap is mostly within occupations and most of the intra‐occupation wage gap is unexplained. The gender pay differential due to occupational differences is small; in fact, the overall occupational segregation favours females in Hong Kong.     

Having It All? Employment,Earnings, and Children*

We study the effect of family policies on female employment, fertility, and the gender wage gap. We develop a life‐cycle model of heterogeneous households featuring endogenous labor supply, human capital accumulation, fertility, and home production. Our results suggest that human capital accumulation is important in accounting for the widening of the gender wage gap following children. We find that, in aggregate, childcare subsidies promote maternal employment and fertility, although the effects are heterogeneous across couples. A subsidy on home goods increases female employment, but primarily later in life. Thus, it does not dampen the widening of the gender gap.     

Increasing dispersion of skills and rising earnings inequality

In recent decades many countries have simultaneously liberalized their trading regimes and expanded their education systems. The theoretical effect of these regime shifts on the wage differential between skilled and unskilled workers is ambiguous. On the one hand, openness to trade causes demand shifts in the labor market which may widen or narrow the differential. This result depends on whether the unskilled wage is depressed, as in the case of importing countries, or raised, as in the case of exporting countries. On the other hand, an increased supply of more educated workers reduces their wages and narrows the skill wage gap. In this study of the labor market of Hong Kong, we document that recent changes in response to the trade liberalization of Mainland China and expanded access to education have increased the earnings differential between skilled and unskilled workers. Using detailed census data, we argue that the main reason for this outcome is the widened dispersion of skills across the earnings distribution, resulting from demand and supply shifts in the labor market caused by trade openness and expanded access to higher education.     

An Efficiency Enhancing Minimum Wage

We consider an economy with a tax on all labor earnings. We discover that a slightly binding minimum wage on one sector can enhance efficiency. The minimum wage attracts high‐reservation wage workers into the minimum‐wage sector. If the labor demand curve in the free sector is quite flat, the vast majority of workers displaced by the minimum wage find employment in the free sector, raising aggregate employment. This displacement of workers by the only slightly binding minimum wage has negligible effects on efficiency. So efficiency and tax revenue rise as the minimum wage pulls labor out of untaxed leisure, where too much of the labor force is lurking, into taxed work.     

CHILDCARE USE AND PARENTS’ LABOUR SUPPLY IN AUSTRALIA*

Based on data which are representative of the Australian population in 2002, this paper first analyses the demand for and cost of formal and informal childcare for couple and sole‐parent families, shedding light on factors which affect the demand for childcare. The predicted demand of formal childcare and the predicted costs of informal childcare arising from these models are then used to impute total childcare costs at different levels of labour supply. Finally, the predicted total costs are incorporated in the estimation procedure of structural labour supply models for couple and sole parent families. By making several extensions to the methodology adopted in Doiron and Kalb (2005a ), who estimated similar models based on 1996 Australian data and which this paper largely replicates in terms of methodology, it is found that the average elasticities of labour supply with regard to the cost of childcare are quite similar to the earlier estimates. The elasticities remain at the lower end of the range found in the international literature with the exception of the elasticities for sole parents with preschool children and/or on relatively low wages.     

INEQUALITY OF WAGE RATES,EARNINGS AND FAMILY INCOME IN THE UNITED STATES, 1975–2002

This paper analyzes distributional changes over the last quarter of the twentieth century. We focus on four distinct distributions: the distribution of hourly wage rates, the distribution of annual earnings of individuals, the distribution of annual earnings of families, and the distribution of total family income adjusted for family size. Both male wage rate inequality and family income inequality accelerated during the early 1980s, increased at a slower rate through the early 1990s and then stabilized at a high level through the early 2000s. The similarity in the timing of changes in these two distributions has been used as evidence that increased family income inequality primarily reflects increased inequality of wage rates. We show that other important factors were also at work.     

Assimilation of Hong Kong Immigrants in Canada

A flood of emigration from Hong Kong to Canada was observed prior to the handover from Britain back to China in 1997. I pool Canadian Census data from 1991 to 2006 to study the labour market assimilation of Hong Kong immigrants. The findings suggest that these immigrants faced a significant negative wage gap upon entry in comparison with Canadian‐born individuals, and this was larger for cohorts arriving closer to 1997, suggesting a decline in cohort quality. The results also indicate that earnings convergence with the Canadian‐born was slow for the majority of these immigrants.     

A DYNAMIC MODEL OF TOURISM, EMPLOYMENT AND WELFARE: THE CASE OF HONG KONG

Abstract.  The present paper uses a dynamic open-economy model with wage indexation to examine the impact of tourism on employment and welfare. Both short-run and long-run situations are analysed. It is well known that tourism converts non-traded goods into tradable goods. An increase in the demand for a non-traded good raises its relative price, which results in an expansion of the non-traded sector at the expense of the traded goods sector. This output shift raises labour employment in the short run. However, in the long run, the higher relative price leads to higher wages, resulting in a negative impact on labour employment. If the output effect is dominant, the expansion in tourism raises employment and welfare. However, under realistic conditions tourism may lower both labour employment and welfare due to rising costs. These results are demonstrated by simulating a dynamic model for the case of Hong Kong.     

Public Housing,School Segregation,and Children’s Education: Evidence from Hong Kong

Evidence in the literature shows that public-housing residents move less frequently than others. This tendency may restrict school choice for children from public-housing families and lead to school segregation and lower educational outcomes for those children. Our empirical findings from Hong Kong show three strands of evidence that support this hypothesis. (1) Children from public-housing families are more likely to drop out of school after compulsory education. The result is robust after controlling for family background and a series of parental characteristics. (2) Public-housing families with school-age children are less likely to move than their private-housing counterparts. (3) Children from public-housing families are more likely to study in local community schools, which are located on the outskirts of Hong Kong and are of lower education quality. These findings have important policy implications for the public-housing programs such as those which have been implemented in Mainland China since 2011.     

HAS NEW ZEALAND'S EMPLOYMENT CONTRACTS ACT INCREASED EMPLOYMENT AND REDUCED WAGES?*

The Employment Contracts Act 1991 substantively altered the structure of the industrial relations system in New Zealand. This study estimates the effects of this legislation on employment levels and average hourly earnings in this country using disaggregate industry level data from 1986(1) to 1996(2). In the five years following the enactment of the ECA, nonagricultural union membership declined from 49.5 to 27.2 per cent of the work force. This is an important consideration because our regression analysis suggests that this decrease in unionisation is solely responsible for any effects of the ECA on the labour market. Full-time equivalent employment grew by 14.2 per cent between 1991(2) and 1996(2). At least 2.3 percentage points of this employment growth can be attributed to this legislation. If the ECA was partly responsible for the recent economic recovery, then more of this employment growth could be credited to this act. There are two basic reasons why the ECA might have increased employment over the past five years. It could have lowered hourly earnings, or increased effective labour demand. Estimates of a reduced-form wage equation and a structural labour demand function both point to the latter explanation. Since there is no statistical evidence that ECA reduced hourly earnings, falling unionisation must have increased effective labour demand.     

Wage Differentials and Labour Supply of Married Women in Japan: Part-time and Informal Sector Work Opportunities

This paper studies the pattern of labour supply of Japanese married women. The study develops and tests a discrete work choice model with a differing level of fixed cost of work and equalizing wage differential s. This accounts for differences in work characteristics of the regular status and part-time status work at firms, the family and self-employment. A 20 to 30 per cent hourly wage differential was obser ved between work categories with control on skills, region and other variables. Different effects are studied of the numbe r and ages of children, a grandmother's presence and the wife's educational attainments on the category of work selected.
The data employed come from The Occupational History and Mobility Survey of Women 1983 (OHMS), conducted by the National Institute for Vocational and Occupational Research, and allow detailed wage regression and consideration of different work categories which were not feasible in previous works. Empirical regulari ties of the Japanese labour market, such as the absence of growth in labour participation for mothers with small children, are better explained when work categories are dealt with separately.     

The motherhood wage penalty in times of transition

Depopulation trend in Ukraine caused to a large extent by the lowest low fertility rates raises serious concerns about the long-term economic growth and the country's future in general. In this paper we investigate the existence and the extent of the motherhood wage penalty as a potential impediment to having (more) children in a unique institutional environment. This environment is characterized by: de jure family supportive labor laws but de facto no legal enforcement of these laws; publicly subsidized childcare; and low cultural support for maternal employment, combined with extensive involvement of grand-parents. Relying on the data from the Ukrainian Longitudinal Monitoring Survey over the period from 1997 to 2007, we find that the overall motherhood wage penalty in Ukraine is much lower than in countries with similar de jure family policies and cultural norms. It constitutes approximately 19%, controlling for individual unobserved heterogeneity, a number of human capital characteristics, actual time in the labor force, and selection into employment. We also find that the motherhood wage penalty differs by education, age at birth of first child, and marital status.     

CROSS‐MARKET TRADING IN CHINA'S LARGE STATE‐OWNED COMMERCIAL BANKS, 2006–2011

This paper examines the differential between the share prices of China's large state‐owned commercial banks traded in Shanghai versus prices observed in Hong Kong. We find a significant role for investor sentiment, as reflected in relative price‐earnings ratios, in explaining these price differentials for all four banks. The share price in Shanghai tends to move ahead of the share price in Hong Kong when more positive sentiment in Shanghai makes local investors willing to pay more for the same predicted earnings. We also identify common trends in relative bank price‐earnings ratios and price differentials across the two markets. (JEL G14, G15)     

Fertility Decisions and Gender Differences in Labor Turnover, Employment, and Wages

A striking observation of the U.S. and other labor markets is the weak position of women in terms of job attachment, employment, and earnings relative to men. We develop a model of fertility and labor market decisions to study the impact of fertility on gender differences in labor turnover, employment, and wages. In our framework, individuals search for jobs and accumulate general (experience) and specific (tenure) human capital when they work. They can also increase their wage by moving to a job of higher quality. Labor market decisions (e.g., job acceptance and job mobility) may differ across genders: females that give birth may decide to interrupt their labor market attachment in order to enjoy the value of staying at home with their children. The model economy is successfully calibrated to match aggregate statistics in terms of fertility, employment, and wages. We find that fertility decisions generate important gender differences in turnover rates, with long lasting effects in employment and wages. These differences in labor turnover account for almost all the U.S. gender wage gap that is attributed to labor market experience by Blau and Kahn (2000, Journal of Labor Economics15(1), 1–42). The model also implies a very small role of tenure capital in accounting for wage differences between males and females (gender gap), and between females with and without children (family gap). Journal of Economic Literature Classification Numbers: E24, J13, J21, J31.     

Does the early bird catch the worm? The effect of school starting age on educational attainment and labor market outcomes: Evidence from Chinese urban twins data

This paper estimates the effects of school starting age (SSA) on educational attainment and labor market outcomes by using unique urban adult twins data from China. Ordinary least squares (OLS) estimates indicate that late enrollment in primary school lowers years of education, earnings, wage rate, and probability of employment. However, when we use the within-monozygotic (MZ)-twin fixed effects method to exclude unobservable endowments and family factors, the effects of SSA on years of education become less negative. For earnings, wage rate, and the probability of employment, the within-twin fixed effects estimates become insignificant. The results indicate that a one-year delay in primary school starting age lowers schooling by 0.51 years but does not affect earnings, wage rate, or probability of employment. The difference between OLS and within-MZ-twin fixed effects estimates indicates that the negative return to SSA is due to unobservable family variables and omitted individual-specific endowments. We further find that the earlier primary school starters fail to obtain a level of education with high return. Specifically, early birds do not have a high probability of getting a vocational school degree or above.     

EARNINGS INEQUALITY, LABOUR SUPPLY AND SCHOOLING IN HUSBAND–WIFE FAMILIES

This paper describes the association between market work and earnings inequality across families over the life cycle and over calendar time with special attention to the different experiences of college‐educated and high‐school‐educated people. A concise and effective accounting framework is developed that allows for an assessment of the effect of the growing market employment of married women on family earnings inequality. Applying this framework to pseudo‐panel data from successive Current Population Surveys indicates that the increase in wives' employment has diminished the growth in family earnings inequality especially for well‐educated couples. Inferences about the level and change in earnings inequality depend on the degree of labor market attachment of the people studied especially in the case of wives.     

Getting By with a Little Help from Your Family: Toward a Policy-Relevant Model of the Household

Recent decades have seen dramatic changes in the ways in which households in developed Western economies gain their livelihoods, with marked elements of a return to old ways of working. There has been a shift from reliance upon one family wage to the need for family employment as well as growing reliance on self-employment and small business. These changes mean that childcare for working parents, and the promotion of new small enterprise, are key areas of policy concern. Drawing on original English empirical research around both these themes, this article shows the ways in which UK households draw on redistribution between the generations as a v - v generally decommodified v - v contribution to livelihoods and "getting by." We argue that these results confound widely utilized models of how people behave, and take particular issue with how economists and policy-makers model the household and its boundaries as the institutional context for individual decisions.     

ESCAPING POVERTY THROUGH WORK: THE PROBLEM OF LOW EARNINGS CAPACITY IN THE UNITED STATES, 1973–88

This paper documents the changes in earnings capacity poverty that occurred between 1973 and 1088. Families are "Earnings Capacity Poor" if they are unable to generate enough income to lift them out of poverty, even if all working-age adults in the family work full-time, year-round. Data from the March 1974 and March 1989 Current Population Surveys indicate that earnings capacity poverty increased more rapidly than official poverty. Much of this increase can be attributed to the rise in earnings capacity poverty among whites, intact families, and family heads with more than a high school diploma. Most alarming, the percentage of children in earnings capacity poor families is considerably higher than it is among persons over eighteen; in 1988, nearly 15 percent of children under six lived in families that could not have escaped poverty even if the adults in their family were working and earning at their full capacity levels.