THE EFFECT OF HUSBAND'S JOB DISPLACEMENT ON THE TIMING AND SPACING OF BIRTHS IN THE UNITED STATES

I use husband's job displacement as an exogenous shock to identify the effect of income on the timing and spacing of births. Gradual adjustment of fertility to income shock is considered in life‐cycle model with uncertainty. Flexible hazard model, estimated jointly for the first three births, allows household's fertility to be affected not only in the period of displacement but also before and after. General displacements and layoffs have negative log‐run effect on the timing and spacing of only the first and the third births. The effect persists with nonparametric controls for woman‐ and transition‐specific heterogeneity, and after robustness checks. (JEL J13, J63, C41)     

The Role of the Natural Rate of Interest in Monetary Policy

This paper examines the role of the natural rate of interestin the conduct of monetary policy. The natural rate figuresprominently in many theories of the business cycle and of inflationfluctuations, and therefore has the potential to play a keyrole in monetary policy given the current mandates of many centralbanks. However, the presence of financial imperfections andmeasurement uncertainty draw into question whether estimatesof the natural rate can be reliable indicators of excess demandpressures. Natural rate-based theories may, nonetheless, provideuseful guidance in the formulation of desirable monetary policies.(JELE21, E31, E43, E58)     

The influence of rapid rural-urban migration on Korean national fertility levels

A autoregressive model is applied to personal migration and pregnancy histories recorded in the 1974 Korean World Fertility Survey to assess the adaptation effect of rural-urban migration on migrant fertility and national fertility levels. The objective of this study is to provide policy makers in developing nations with a model that will enable them to quantify the effects of rapid urbanization on the fertility level of migrant women and thus on national fertility levels. The fertility of rural-urban migrants is on the average lower than that of rural stayers; this study supports the adaptation hypothesis and indicates that rural-urban migrants experienced a significant reduction in 5 year fertility rates from those of comparable rural stayers after migration to the urban area. In addition, the city specific effects of migration on fertility are of considerable importance; migrants to larger cities adapt more over their lifetime than migrants to smaller cities. The completed adaptation by postmarital, rural-urban migrants is largest among migrants who are least educated. The autoregressive model controls the fertility level at the beginning of the observed period; it is assumed that this is a proxy for family size preferences. Results show that the completed fertility of migrant women with less than 4 years of school is 1.9 children fewer than that of comparable rural stayers, 1 child fewer for migrant women with 4 to 6 years of school, and .8 children fewer for migrant women with at least 6 years of school. For Korea, the overall effects on national fertility of rural-urban migration represent a reduction of 1.79 births per woman for the 1965-1970 period; it is estimated that the 945,400 rural-urban women migrants of this period would avoid, on average, 71,300 births annually for their expected average 24 years of urban life.     

Fiscal Stabilisation and EMU

This paper builds on the papers published by HM Treasury in2003 alongside the UK Government's assessment of the case forEMU entry. The paper considers the potential for fiscal policyto play a greater role in stabilisation policy if the UK wereinside EMU. The paper considers: the scope for strengtheningthe automatic stabilisers and the possible trade-offs; how institutionalchanges could increase the effectiveness of discretionary fiscalpolicy; which fiscal instruments might be most effective; andto what extent stabilisation might be promoted in other ways,such as through enhanced risk sharing by financial markets.(JEL E62, E63)     

The effect of the timing and spacing of births on the level of labor market involvement of married women

We analyze the effect of the timing and spacing of births on the labor supply of married women in a framework that accounts for the endogeneity of the labor market and fertility decisions, for the heterogeneity of the effects of children on labor supply and their correlation with the fertility decisions, and for the correlation of sequential labor market decisions. Delaying the first birth leads to higher pre-natal levels of labor market involvement and reduces the negative effect of the first child on labor supply. The effect of the second child increases with the spacing of the two births as women, returning to work after the first birth, finance child care time increasingly through reductions in market time. Individual heterogeneity is considerable; women with lower propensity for children have the first birth later in life and space subsequent births more closely together, work more before the birth of the first child, but face larger effects of children on their labor supply.     

Regulatory and Supervisory Independence and Financial Stability

Despite its importance, the issue of financial sector regulatoryand supervisory independence (RSI) has received only marginalattention in literature and practice. However, experience hasdemonstrated that improper supervisory arrangements have contributedsignificantly to the deepening of several recent systemic bankingcrises. In this paper we argue that RSI is important for financialstability for the same reasons that central bank independence(CBI) is important for monetary stability. The paper lays outfour key dimensions of RSI-regulatory, supervisory, institutionalbudgetary - and discusses ways to achieve them. We also discussinstitutional arrangements needed to make independence workin practice. The key issue in this respect is that agency independenceand accountability need to go hand in hand. The paper discussesa number of accountability arrangements. (JEL G18, G28, K23,L50).     

CONTROVERSIES IN THE THEORY OF EMPLOYMENT

The guarded and undogmatic attitude of the best economists hasnot prevailed against the general opinion that an individualisticlaissez-faire is both what they ought to teach and what in factthey do teach (J. M. Keynes, The End of Laissez-Faire, 1926)     

UNDERSTANDING MEASURES OF NONMARITAL FERTILITY: THE ROLES OF MARRIAGE AND ACCESS TO HUMAN CAPITAL

This paper proposes an explanation for several decades of rising U.S. nonmarital birth rates and shares, and for cross‐sectional differences in black‐white fertility. Significantly, the explanation does not rely on changes over time or differences across races in individual fertility behavior. It is consistent with the rising nonmarital fertility measures observed in the United States since the mid‐1970s, higher measured fertility for unmarried blacks than whites, and differences across races in the timing of childbearing, despite nearly constant total fertility rates and increasingly similar target family sizes for blacks and whites. The explanation relies on a selection effect associated with changes in the marriage rate and on racial differences in access to human capital investment opportunities. We find strong support for the explanation using U.S. data over the period 1957–2002. Our findings suggest caution in interpreting the results of empirical studies of childbearing that examine marital and nonmarital fertility rates separately, as these studies typically ignore the selection effect of marriage. (JEL J12, J13, I38)     

Towards a Macroprudential Framework for Financial Supervision and Regulation?

Over the last decade or so, addressing financial instabilityhas risen to the top of the policy agenda. This essay arguesthat in order to improve the safeguards against financial instability,it may be desirable to strengthen further the macroprudentialorientation of current prudential frameworks, a process thatis already under way. The essay defines, compares and contraststhe macro- and microprudential dimensions that inevitably coexistin financial regulatory and supervisory arrangements, examinesthe nature of financial instability against this backgroundand draws conclusions about the broad outline of desirable policyefforts.(JEL G2) "Words, like nature, half reveal and half conceal the soul within" Alfred Lord Tennyson "When I use a word... it just means what I choose it to mean– neither more, nor less" Humpty Dumpty     

Optimal fertility along the life cycle

We explore the optimal fertility timing in a four-period OLG economy with physical capital, whose specificity is to include not one, but two reproduction periods. It is shown that, for a given total fertility rate, the economy exhibits quite different dynamics, depending on the timing of births. If all births take place in the late reproduction period, there exists no stable stationary equilibrium and the economy exhibits cyclical dynamics due to labor growth fluctuations. We characterize the long-run social optimum and show that optimal consumptions and capital depend on the optimal cohort growth factor, so that there is no one-to-one substitutability between early and late fertility. We also extend Samuelson’s Serendipity Theorem to our economy and study the robustness of our results to: (1) endogenizing fertility timing, (2) assuming rational anticipations about factor prices, (3) adding a third reproduction period.     

The Workout of Banking Crises: A Macroeconomic Perspective

This paper provides a macroeconomic perspective for governmentinterventions in banking crisis. Such crisis occur when a largenumber of banks fail to meet capital requirements or are insolvent.Using a macroeconomic model with financial intermediation, ouranalyis suggests that strict enforcement of capital-adequaterules suffices in prosperous periods. Capital requirements serveas an indicator for crises interventions in critical stateswhich may require interest rate intervention and restructuringof the banking industry. These policies can be reinforced byrandom bailouts and temporary financial relief, with a largepercentage of the costs being covered by current and futureowners of banks. (JEL D41, E4, G2)     

Rate of profit and interest in a growth theory with endogenous money

This paper attempts to incorporate an endogenous money approachinto post-Keynesian growth theory in order to derive the fullemployment equilibrium rate of interest as well as that of profit.This rate of interest, named the ideal rate of interest, differsfrom the rate of profit in that it is in proportion to a monetaryvariable, not a real variable. Further, the rate of profit alsodiffers from the rate of interest as a premium because it isproductive. The rate of interest could be important in explainingcircumstances in which financial capital has been accumulatedin excess.     

FERTILITY RISK IN THE LIFE CYCLE

In this article, I study fertility decisions with special emphasis on the timing of births and abortions over the life cycle. Given the policy debate regarding abortion availability and recent evidence of its positive impact on women's outcomes, understanding the fertility process should help guide the discussion. Here, I present a life‐cycle model of consumption–savings and fertility decisions in an environment with uninsurable income shocks and imperfect fertility control. My model presents a framework in which both opportunity costs of child rearing and technological restrictions (in the form of contraception effectiveness) have roles shaping lifetime fertility choices.     

International migration,transfer of norms and home country fertility

This paper examines the relationship between international migration and source country fertility. The impact of international migration on source country fertility may have a number of causes, including a transfer of destination countries' fertility norms. We provide a rigorous test of the diffusion of fertility norms using highly detailed original data on migration. Our results provide evidence of a significant transfer of destination countries' fertility norms from migrants to their country of origin: a 1% decrease (increase) in the fertility norm to which migrants are exposed reduces (raises) home country fertility by about 0.3%. JEL classification: J13, J61, O11     

Isolating the Family Cap Effect on Fertility Behavior: Evidence From New Jersey's Family Development Program Experiment

This study examines the unbundled impacts of a family cap policy and enhanced JOBS program on the fertility of 2100 women on welfare who were randomly assigned to experimental and control groups as part of New Jersey's welfare reform program. Data were collected quarterly from December 1992 through March 1997 on births, abortions, contraceptive pill use, and contraceptive sterilizations from welfare and Medicaid claim files. Results indicate that the family cap lowered births and increased abortions and contraception use but only for women who were short-time welfare users. Enhanced JOBS exerted an independent effect on fertility of more chronic recipients. (JEL I38 )     

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 female schooling reduce fertility? Evidence from Nigeria

The literature generally points to a negative relationship between female education and fertility. Citing this pattern, policymakers have advocated educating girls and young women as a means to reduce population growth and foster sustained economic and social welfare in developing countries. This paper tests whether the relationship between fertility and education is indeed causal by investigating the introduction of universal primary education in Nigeria. Exploiting differences in program exposure by region and age, the paper presents reduced form and instrumental variables estimates of the impact of female education on fertility. The analysis suggests that increasing female education by one year reduces early fertility by 0.26 births.     

Has Devolution Injured American Workers? State and Federal Enforcement of Construction Safety

Although the issue of regulatory devolution has received muchscholarly scrutiny, rigorous empirical studies of its effectson important policy outcomes are scarce. This article exploresthe effects of partial regulatory devolution in the occupationalsafety arena by exploiting a unique historical anomaly wherebysome US states enforce protective labor regulations that areenforced elsewhere by the federal Occupational Safety and HealthAdministration. Analyzing data from the construction industry,this article contains several important findings. First, stateinspectors use traditional enforcement tools more sparinglythan their federal counterparts, typically citing fewer violationsand collecting lower fines per violation. Second, although federalenforcement significantly lowers the estimated frequency ofnonfatal construction injuries, it also predicts a significantincrease in occupational fatalities. I suggest that althoughhigher underreporting of nonfatal injuries in federally regulatedstates could explain this puzzling finding, it is equally possiblethat different regulatory styles have different "comparativeadvantages" in deterring nonfatal injuries on one hand and occupationalfatalities on the other. (JEL D73, D78, H73, I18, J08, J28,J88, K00, K23, K31, K32, L51, and L74)     

Levels of fertility and reproduction and differential fertility in Sholapur City

This paper presents the main findings of a survey conducted in 1955 regarding the fertility of women in the city of Sholapur. 1203 families (3535 males and 3289 females) comprised the sample. 1337 women were of childbearing age and the total number of children born to women the year before the inquiry was 321. The overall total marital fertility rate for Sholapur women was 7106.01 children/1000 women or about 7 children/woman. Proportion of female births to total births in the sample was 0.4829. Gross reproduction was 2.9 per woman. Paternal and maternal net reproduction rates of 1.8 and 1.5 represented a rate of increase in the male and female populations per 33 and 27 years respectively. None of the biological and social factors considered was found to have any differential effect on marital fertility of the women. This result was expected, as evidence suggest that the various social, religious, educational, and economic classes in Sholapur are quite similar with regards to marriage and contraceptive behavior. Tables on values of chi-square are also appended.