Influence of a Wife's Working Status on Her Husband's Accumulation of Human Capital

Japanese household‐level data consisting of husband's earnings, wife's working status and their schooling levels are used to test three hypotheses, with particular consideration given to the time‐consuming process of human capital accumulation within marriages. The empirical results supports the following hypotheses: (i) a non‐working wife's schooling has a greater positive effect on her husband's earnings than a working wife's schooling; and (ii) the effect of a non‐working wife's schooling increases with the length of marriage, whereas the effect of a working wife's schooling does not change over the course of marriage.     

Estimating the earnings returns to exam-measured unobserved ability in China's urban labor market: Evidence for 2002–2013

China's education system uses exams to measure students' ability. How does the labor market reward the ability that raises exam scores? This paper uses proxies to estimate the labor market returns to ‘exam ability’ in China. The estimated returns to one standard deviation of the ‘exam ability’ are 8% in 2002, 12% in 2007, and 7% in 2013 for the urban population with local hukou and high school and above education. The exam ability explains more wage variation than years of schooling or the level of education degree. There is still a significant amount of unexplained wage variation. It is possible that there are more important labor market skills that are not captured by schooling and exam scores.     

Parental Education and child Nutrition in Indonesia

This study uses 1989 Susenas household data to examine the impact of parental education on pre-school children's nutritional status, as measured by weight-for-age Z-scores. Reduced form regressions are estimated separately for boys and girls in rural and urban areas; explanatory variables include mother's and household head's education; per capita household expenditure; and aspects of the household sanitary environment. The analysis controls for influence of unobserved heterogeneity at village level, e.g. differences in prices and medical service provision. The estimates show a significant effect of parental schooling on child health status, varying between urban and rural areas, and by child gender and age. Mothers with secondary education typically have healthier boys than those with less schooling, while this effect is seen for girls only if the mother has more than secondary education. Maternal schooling significantly affects 2–5 year olds' health, but has little direct effect on that of younger children.     

Is There any Threshold in the Relationship Between Mother's Education and Child Health? Evidence from Nigeria

The literature on mother's education and child health casually observes some nonlinearities and also a threshold in the relationship. Even though this nonlinearity or threshold has significant bearing on policy matters such as quality of education, any rigorous attempt to address this issue is missing in the literature. With height for age z‐score as a proxy for long‐run child health capital, regression results reveal that there are significant effects of mother's education on child health if mothers do not continue past primary school. Rather, poor quality of education at the primary level, especially literacy, is argued to have given rise to this threshold. It indicates that greater public investment in improving quality of education at the primary level is essential for maximizing the nonmarket outcomes of girls’ education in developing countries.     

Intergenerational transmission of education: The case of rural China

The intergenerational transmission of education has received considerable attention in recent empirical research in many countries. However, the research on intergenerational transmission of education in China is still relatively rare. This paper investigates the impact of parental schooling on their children's schooling in rural China using the data collected by the authors themselves. Our results show that (i) the intergenerational transmission of education in rural China is not as high as those have been reported in the literature for several other countries;(ii) There exists significant transmission effect of education in the subgroup born after the 1980s, but not for those who were born in the year of 1980 onward. The results also stand up to several different tests and robustness checks. Our findings suggest that promoting the equal education opportunity and investing in children of disadvantaged group will have long-term effects for the accumulation of human capital. China can promote increasing gains for its acquisition of human capital, and tap into this foundation for sustainable growth and development in the future.     

THE ROLE OF HUMAN CAPITAL IN CHINA'S TOTAL FACTOR PRODUCTIVITY GROWTH: A CROSS‐PROVINCE ANALYSIS

This paper studies the role of human capital in China's provincial total factor productivity (TFP) growth over 1985–2004. The stochastic frontier approach is employed to measure the productivity growth of Chinese provinces. Human capital is measured both qualitatively and quantitatively. In particular, enrolment rates at various levels of schooling are used to represent human capital composition. After controlling for endogeneity, we find that human capital has significant and positive effects on the TFP growth of Chinese provinces. However, when education quality is incorporated, productivity growth appears to be significantly enhanced by quality improvements in primary education only. Regional impacts of human capital are found to differ at various levels of schooling. In the eastern region of China, productivity growth is significantly associated with secondary education. TFP growth in the central region is mainly promoted by primary and university education. Yet in the western region, primary education plays the most prominent role.     

Losing the future: Household wealth from urban housing demolition and children's human capital in China

Some literature observes the negative but not very significant effect of household wealth growth on children's educational outcomes. This surprising finding is not easily reconciled with the traditional explanation that relaxed economic constraints caused by wealth growth can promote human capital accumulation. This paper proposes an alternative explanation for the causal relationship between wealth growth and human capital, which could be negative: individuals tend to reduce human capital investment following the decline in their labor supply induced by wealth growth, given that investing in human capital is mainly for employment competitiveness. This explanation is supported by evidence from the case of urban housing demolition in China, in which affected households could obtain substantial wealth growth by considerable demolition compensation thanks to the real estate boom in China. Specifically, using two nationally representative datasets, we find that Chinese households that have experienced demolition relatively have more wealth, less labor supply, lower propensity to accumulate children's human capital, and consequently, have children with lower educational achievement. These results suggest that China's economy may be losing its momentum because of the decline in labor supply and human capital accumulation brought about by the ongoing large-scale urban housing demolition.     

Determinants of Female Fertility in Taiwan, 1966–2001: Empirical Evidence from Cointegration and Variance Decomposition Analysis*

This study investigates the determinants of the fertility rate in Taiwan over the period 1966–2001. Consistent with theory, the key explanatory variables in Taiwan's fertility model are real income, infant mortality rate, female education and female labor force participation rate. The test for cointegration is based on the recently developed bounds testing procedure while the long‐run and short‐run elasticities are based on the autoregressive distributed lag model. Among our key results, female education and female labor force participation rate are found to be the key determinants of fertility in Taiwan in the long run. The variance decom‐position analysis indicates that in the long run approximately 45percent of the variation in fertility is explained by the combined impact of female labor force participation, mortality and income, implying that socioeconomic development played an important role in the fertility transition in Taiwan. This result is consistent with the traditional structural hypothesis.     

Does productive microcredit improve rural children's education? Evidence from rural Vietnam

Whether increasing access to microcredit results in better educational outcomes for children’s education in rural areas remains an important but inconclusive topic in development literature. This paper contributes to this strand of research both theoretically and empirically. We develop a theoretical model where a representative household uses microcredit to fund its family business and maximises its lifetime utility. Based on the outcomes of its business, the parents make an optimal decision on the level of their children’s schooling investment. Solving the maximisation problem, we show that a household’s optimal education for its children is directly related to the level of microcredit. Empirically, we utilise the Vietnam Access to Resources Household Survey (VARHS) dataset from 2008 to 2016 to estimate the impact of microcredit on rural children’s schooling. We find that microcredit borrowing by rural households negatively affects their children’s education, which is more profound for boys than girls. Policymakers need to be aware of such side effects in designing microcredit policy and adopt auxiliary measures, such as incorporating a clause on children's education in the borrowing terms, to alleviate the negative impact on children’s educational outcomes.     

Public Company Audits and City‐Specific Labor Characteristics

Prior research emphasizes the centrality of audit offices in understanding auditing practices, and documents significant interoffice variation in audit outcomes based on industry expertise and office size. Our study examines how two city‐specific labor characteristics also affect audit offices and local audit markets: the city's average educational attainment, and the number of accountants in a city, which proxy for a city's human capital. Our argument draws on the urban economics literature and predicts that the level of human capital in a city is positively associated with an audit office's ability to conduct high‐quality audits. As expected, there is a positive association between audit quality (quality of audited earnings and accuracy of going‐concern reports) and average education level in the city in which the lead engagement office is located. This association is generally significant for both Big 4 and non‐Big 4 offices, but is relatively stronger for non‐Big 4 firms that are more tied to local labor markets. A company is also more likely to choose a non‐Big 4 auditor in cities with higher educational levels and relatively more accountants, and there is evidence of higher non‐Big 4 audit fees as a city's education level increases. Collectively, these results suggest that local labor characteristics affect audit offices, audit quality, and the ability of non‐Big 4 auditors to compete with Big 4 auditors in the audits of public companies.     

CHILD LABOR AND SCHOOL ENROLLMENT IN RURAL INDIA: WHOSE EDUCATION MATTERS?

This paper empirically analyzes the determinants of child labor and school enrollment in rural Andhra Pradesh, India. A village fixed‐effect logit model for each child is estimated with the incidence of child labor or school enrollment as the dependent variable, in order to investigate individual and household characteristics associated with the incidence. Among the determinants, this paper focuses on whose education matters most in deciding the status of each child, an issue not previously investigated in the context of the joint family system. The regression results show that the education of the child's mother is more important in reducing child labor and in increasing school enrollment than that of the child's father, the household head, or the spouse of the head. The effect of the child's mother is similar on boys and girls while that of the child's father is more favorable on boys.     

Immigrant Specificity and the Relationship between Trade and Immigration: Theory and Evidence

Studies routinely document that immigrant employment concentrates in non‐traded goods sectors and that many immigrants have low inter‐sectoral mobility. We consider these observed characteristics of immigrant employment with regard to the question of how immigration affects a nation's pattern of production and trade. We model an economy producing three goods; one is non‐traded. Domestic labor and capital are domestically mobile but internationally immobile. Allowing that some new immigrants will become specific to the non‐traded goods sector, the model indicates that the effects of immigration on output and trade depend importantly on the sectoral pattern of employment of both new and existing immigrants. Empirical investigation in a panel data set of OECD countries supports the model's prediction that immigration raises the output of non‐traded goods. Consistent with the model, we also find that immigration and trade are complements. Given its empirical support, the model's implications for immigration policy are then discussed.     

Evolution of Education Premiums in Cambodia: 1997–2007

This paper evaluates education premiums in Cambodia over the past decade using data from the 1997, 2003–2004 and 2007 Socio‐economic Surveys of Households. The Cambodian labor market has undergone a transformation over the past decade. In 1997, the earnings of workers employed for wages exhibited limited association with education and skills. The picture was dramatically different by 2003 and more so by 2007. The profitability of education had increased sharply, especially for women. There is evidence that the human capital model is now applicable to both men and women, resulting in a wider distribution of earnings. Instrumental variables estimates of the return to an additional year of schooling for male wage earners are found to be higher than the corresponding OLS estimates, but only in the private sector.     

Human capital investment in children: An empirical study of household child education expenditure in China, 2007 and 2011

Household education expenditure is an important component of human capital investment in children. In China, the rising child education expenditure and the subsequent financial burden on families have attracted much research and policy attention in the recent years. Using 2007 and 2011 data from the Urban Household Education Surveys, our empirical study provides new evidence on the education expenditure level, ratio of expenditure to household income, and inequality in this expenditure. We also elucidate changes in China's household education expenditure and explore factors associated with such changes. From the analysis, we obtain the following findings. First, education expenditure incurred outside the school significantly contributes to increasing household education expenditure. Second, compulsory education programs are effective in curbing in-school education expenditure; however, it does not prevent the rapidly increasing education investment outside school. Third, education expenditure disproportionally increases with family income. In other words, a larger share of the income earned by lower income families is spent on children's education, compared to higher income families.     

China's human capital investment

This paper discusses human capital investment in China. China's current policies favor physical capital investment over schooling and urban human capital investment over rural human capital investment. Current migration policies discriminate against children of migrants. A more balanced investment strategy across rural and urban regions and types of capital is appropriate. Private funding for education through tuition and fees should be encouraged and can supplement government funding and make schools more financially self-sufficient. However, if this policy is enacted, capital markets for financing education need to be developed to avoid discouraging students from poor families from attending school.     

Impact of International Remittances on Schooling in the Philippines: Does the Relationship to the Household Head Matter?

We study the impact of international remittances on schooling in the Philippines, taking into account the school‐age individual's relationship to the household head. This consideration is important because employment opportunities abroad may be taken at the expense of the quality of child rearing. Our estimation results indicate that there are, indeed, significant negative guardian effects on school attendance and education expenditures when children with overseas parents are looked after by a relative other than a parent or grandparent. However, these negative effects tend to be outweighed by the positive impact of remittance flows from overseas.     

The impact of education on income inequality and intergenerational mobility

This paper analyses the effects of innate ability, compulsory education (grades 1–9), and non-compulsory education (grades 10–12 and higher education) on inequality and intergenerational mobility of income, by constructing a four-period overlapping-generation model. We find that innate ability and family investment in early education play important roles in explaining income inequality and intergenerational income mobility. Though children from the wealthiest families are only 1.36 times ‘smarter’ that those from the poorest, the gap in human capital expands to 2.35 at the end of compulsory education and to 2.89 at the end of non-compulsory education. One important reason for the increase is that poor families invest relatively less in children's early education than do wealthy families; therefore, their children attend lower-quality schools, which results in them being much less likely to participate in higher education. By simulating policy experiments for different types of government education expenditure, we find that direct subsidies to poor parents are the most efficient and effective policy for mitigating poor families' budget constraints with regard to early-education investment in their children.     

The long-term and intergenerational effects of early-life hunger experience on human capital and labor market outcomes

Using individual-level retrospective data on early-life hunger experience from China, we investigate the long-term effects of early nutritional deprivation on one's own and adult children's human capital and labor market outcomes. With an instrumental variable approach, we find that hunger experience lowers educational attainment and job quality of the first generation. But this negative impact on human capital does not transmit to the second generation, possibly due to parents' compensatory behavior of human capital investment and extra attention given to children. Our findings imply that the negative impact of non-extreme nutritional adversities on human capital and labor market outcomes are likely to decrease over generations.     

DETERMINANTS OF SCHOOL ENROLMENT AND EDUCATION ATTAINMENT: EMPIRICAL EVIDENCE FROM KENYA1

This paper investigates the determinants of demand for schooling in Kenya. Probit and ordered probit methods are used to model enrolment and attainment respectively. The results show that child characteristics, parental education and other household characteristics, quality and cost of schooling are important determinants of demand for education services in Kenya. The results further show that girls would be more affected by policy changes than boys. The findings call for targeting in efforts to boost and sustain demand for schooling in Kenya. The study recommends immediate policy interventions focusing on improving quality of education and poverty alleviation.     

Parental Education and Children's School and Work Status in Urban Ethiopia: A Note on Gender Bias

This paper examines gender bias in the parental education–child status link using data from urban Ethiopia. Gender bias is defined here, specifically, as the differential impact of a parent's education on a child's status depending on the gender of the parent vis‐à‐vis the child. Children's status is measured by school enrolment and participation in market work. Results from a basic model point to same‐gender bias – father–son, mother–daughter in school enrolment and father–son in market work. In an extended model, results show that father–son bias in market work may be particularly pertinent for middle‐ to later‐born children. Policy interventions should be mindful of such differential effects, particularly if the aim is to address persistent gender disparities in children's status.