Labor Market Dynamics and Structural Change: Evidence from China

Structural change theories usually assume agents are homogeneous. However, because of demand‐side or supply‐side heterogeneities, the probability of switching among sectors differs across people. This paper reveals these differences through restoring a long‐period, individual‐level panel dataset from China's Urban Household Survey for 1986–2009. We find that both for people who started working for the first time and those who switched jobs, the sector choice depends on personal characteristics. In particular, women and people with higher educational attainment or a previous white‐collar job are more likely to join the tertiary sector and less likely to join the primary sector. These effects are substantial even if the macroeconomic variables used in conventional structural change theories are controlled. They are also robust in various periods and at more detailed industry levels. Our research suggests that it is important to pay greater attention to the labor composition when making policy related to economic structural change.     

The Implicit Costs of Motherhood over the Lifecycle: Cross-Cohort Evidence from Administrative Longitudinal Data

It is well known that the explicit costs of raising a child have grown over the past several decades. Less well understood are the implicit costs of having a child, and how they have changed over time. In this article, we are the first to examine the evolution of the implicit costs of motherhood over the lifecycle and across generations using high quality administrative data. We estimate that the lifetime labor market income gap between mothers and women who never have children (never-mothers) decreases from around $350,000 to $280,000 between women born in the late 1940s and late 1960s. Gaps tend to increase monotonically over the lifecycle, and decrease monotonically between cohorts. Our evidence suggests that changes in the gaps are caused by changing labor force participation rates.     

Sex,Race, and Job Satisfaction Among Highly Educated Workers

There has been a considerable amount of work focusing on job satisfaction and sex, generally finding that women are more satisfied than men despite having objectively worse job conditions. But there is little evidence on whether job satisfaction differs by race or ethnicity. We use data from the 2010 National Survey of College Graduates to examine the relation between job satisfaction and race and ethnicity among Asian, black, Hispanic/Latino, and white workers. Overall job satisfaction does not differ by sex among college graduates. Relative to white workers of the same sex, Asian and black workers are far less satisfied. The lower satisfaction of Asian and black workers relative to white workers is not explained by immigrant status, job match, or other individual or job characteristics.     

Same‐sex relationship escalation with uncertain marriage legality: Theory and empirical implications

We develop a strategic model of same‐sex dating, cohabitation, and potential marriage with location‐specific marriage legality. With an initial illegal location, couples bargain over a relationship path that internalizes the probability of future legalization and potential migration‐for‐marriage. Our model generates testable, empirical implications on relationship hazard rates, migration, and utility due to changes in migration costs and legalization probabilities. Specifically, we show that decreased migration costs or increased legalization probabilities will increase relationship hazard rates (dissolution) for both daters and cohabitators. These changes will also decrease utility for an identifiable segment of the relationship quality distribution.     

The Role of Economic Shocks on Health: Evidence from German Reunification

Sudden economic shocks impact the everyday lives of people from one day to the next. A number of studies have examined the association between economic fluctuations and health; however, no consensus on the nature of this relationship has been established. By exploiting the dramatic economic fluctuations following the German Reunification of 1990, which included a sudden change from a socialist to a capitalist system in East Germany, this study examines the association between broad negative economic shocks and health. The article finds that increases in state unemployment rates are associated with large and statistically significant declines in health outcomes. Estimates are stronger for people who became unemployed shortly after reunification, for low‐income individuals, and for East Germans, a group confronted with larger economic fluctuations. When examining potential mechanisms that could explain the observed health deteriorations, the study finds significant reductions in exercise frequency and increases in economic uncertainty and overall stress.     

Family size,labor supply,and job prestige: Evidence from three decennial censuses in China

This study investigates the relationship between family size and parents’ labor market performance, measured by labor supply and occupational prestige scores, based on three census waves in 1990, 2000, and 2010. To address the endogeneity problem of family size, we use the indicator of twins at first birth as an instrumental variable. Our results suggest that in nuclear households, family size affects the labor market performance only of mothers, not of fathers, with the negative effects fading and gradually disappearing over time. More specifically, an increase in family size decreases female labor supply in the 1990 wave, leads to lower prestige scores among working mothers in the 2000 wave, and has no impact on labor supply or occupational prestige scores in the 2010 wave. Our subsample analysis indicates that the negative effects of family size are more severe for parents of households with all children under seven years old and for husbands or wives with lower education level than that of their partners. In addition, we find that the negative effects of family size on parental labor market outcomes are not observed in extended households, especially when no grandparents are aged 65 years or older.     

Short‐run marginal medical costs from booze and butts: Evidence from the states

This article uses a panel data set of U.S. states over the 1980 to 2007 period to estimate the demands for medical care, cigarettes, and beer. The estimation process generates own‐price, income, and cross‐price elasticities for all three goods. Implied per capita beer and cigarette consumption elasticities of per capita health care expenditures, suggested by our baseline estimates, are 0.83 and 0.14, respectively. These results are robust to a number of specification tests. Simulations suggest that yearly marginal medical costs amount to approximately $12 per bottle and 27 cents per cigarette in the short run (in 2012 dollars). These results are likely to be driven by the much larger corresponding increases in the consumption of binge drinkers and heavy smokers.

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Social Transfer Benefits and Retirement Decisions: Evidence from South Africa

Population aging poses a new challenge to the fiscal sustainability of social security programs around the globe. As life expectancy increases, among other reasons, many governments in developed countries have begun to reform key features of their programs, such as increasing the eligibility age for access to social benefits. However, as in the case of South Africa, some opt to decrease the eligibility age for access to such pension benefits. The South African old age pension, which is one of the most expansive cash transfers in developing countries, puts a significant monthly cash transfer in the hands of its recipients. This cash transfer is conditioned on age and a means test that is very generous to most South Africans. In this paper, we seek to understand the impact of such an increase in non‐labour income on the labour force participation of older men by exploiting a phased‐in reduction in pension eligibility age. We estimate that, at the median predicted market wage, pension age‐eligibility reduces the probability of labour force participation by approximately 9.85% points for single males and 15.45% points for married males.     

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.     

Cross‐Country Evidence on Labor Market Institutions and Young Adult Employment through the Financial Crisis

I develop and analyze a set of cross‐country facts regarding employment and wage setting institutions over the decade surrounding the 2008 financial crisis. Among long‐industrialized countries, young adult employment declined more than prime age employment over this time period. I show that differences in countries' wage setting institutions strongly predict variations in the magnitude of declines in young adult employment. Both unconditionally and conditional on changes in macroeconomic conditions, young adult employment declined 5 percentage points less in countries where wage setting is driven by collective bargaining arrangements than in countries with statutory wage floors. Evidence on the evolution of legislated minimum wage rates and of an asymmetry in the relationship between growth and young adult employment suggest an important role for a standard “wage rigidity” mechanism.     

Financial Development,Market Deregulation and Growth: Evidence from China

In this paper, the relationship between finance and growth is analysed in the context of an endogenous growth model with government regulation and intervention. Our theoretical model suggests that financial intermediaries can affect the process of economic growth in several ways. Using the recent Generalized Method of Moments (GMM) techniques, we test our model in a panel data set covering 29 Chinese provinces over the period of 1990–2001. Empirical results show that financial development and government deregulation in the financial sector significantly promote China's economic growth.     

Institutions, wages, and inequality: The case of Europe and its periphery (1500–1899)

This paper explores the long-run relationship between institutions and wage outcomes in Europe and its periphery. I find that cities that exercised stronger institutional protection of private property experienced: (i) higher levels of both skilled and unskilled real wages, as well as (ii) lower levels of inequality as measured by the skilled–unskilled wage ratio. While the first result corroborates existing work on the positive growth effects of better institutions, the second finding is more novel to the literature. Some explanations are proposed for how stronger institutions can cause an increase in the relative supply of skilled workers, thus lowering wage inequality.     

Motivation of Parent–Child Co‐residence Behavior: Evidence from the China Health and Retirement Longitudinal Study

This paper examines the motivations of parent‐child co‐residence behavior in China using data from the China Health and Retirement Longitudinal Study. We test three possible motives: social norms, self‐interest and altruism. We find that social norms play an important role in household co‐residence behavior, showing that the belief that “sons take care of parents” is strong, and children in different birth orders take different responsibilities. Taking the one‐child policy as a natural experiment, we compared co‐residence behavior between only‐child and multi‐child families. This allowed us to test whether children in multi‐child families with wealthier parents more often co‐reside in order to compete for a bequest. We find that parents' wealth is more appealing to children in multi‐child families. The results support the life cycle theory that co‐residence decisions are motivated by self‐interest. We also find some evidence of altruism when parents and children make co‐residence decisions. These findings provide some insights for designing future elder‐support policies in China.     

Men,women, and the ballot: Gender imbalances and suffrage extensions in the United States

Women's suffrage led to one of the greatest enfranchisements in history. Voting rights, however, were not won by force or threats thereof, a fact leading political economy theories find hard to explain. Studying the timing of suffrage extensions in US states between 1869 and 1919, we find that a scarcity of women strongly promoted early transitions to women's suffrage. Such scarcity significantly reduced the political costs and risks for male grantors of the suffrage. It might also have made women's suffrage attractive as a means to attract more women.     

Glass Ceilings versus Sticky Floors: Evidence from Southeast Asia and an International Update

Using counterfactual decompositions combined with quantile regression, we investigate the pattern of gender wage differentials in Asian and Latin American countries and combine the findings with existing evidence for European and other mostly developed countries. While in the group of Latin American countries glass ceilings are prevalent, no clear evidence of glass ceilings is found in the group of Asian countries where, generally, sticky floors or a mixed pattern is the norm. The findings are robust with as well as without occupation controls. In addition, analysis by sector points to glass ceilings in the public sector in most countries, while in the private sector the patterns vary. Combining the new evidence from the present study with existing evidence (in total we consider 60 countries), a comprehensive global picture of gender wage differentials is provided. Possible explanations for differences in patterns of gender wage differentials are discussed.     

The Impact of Self‐Perceived Relative Income on Life Satisfaction: Evidence from British Panel Data

This is the first article that uses panel data to investigate the impact of individuals' self‐perceived relative income on life satisfaction. Analyses show that the self‐perceived relative income has a significant impact on life satisfaction, but the impact is asymmetric. The decline in life satisfaction is much more significant due to perceiving a lower relative income in comparison to the rise in life satisfaction because of perceiving a higher relative income. Absolute income is only significantly and positively associated with life satisfaction in the pooled ordinary least squares estimations, but the association is never significantly different from zero when individual fixed effects are controlled. Household savings have a positive but small impact on life satisfaction. Among different financial‐related shocks, people's self‐perceived relative income varies the most due to changes in household net income, total savings, and employment status.     

Estimating the Aboriginal Population in Early Colonial Australia: The Role of Chickenpox Reconsidered

Noel Butlin radically altered the debate about the pre-colonial Aboriginal population when he provided a set of hypothetical demographic scenarios, which nonetheless were both grounded in economic theory or human ecological considerations and broadly consistent with what we know about the historical record. This research builds on Butlin's legacy by exploring how his scenarios are consistent with both the medical understandings of the infectiousness and mortality of various diseases and the history of settlement. Another contribution from this paper is to highlight the possible role of chickenpox in the Aboriginal depopulation in the early colonial period.     

Seasonal Migration and Microcredit During Agricultural Lean Seasons: Evidence from Northwest Bangladesh

This paper investigates the interlinkage between microcredit and temporary seasonal migration, an issue which has been given little attention in the standard rural–urban migration literature. Seasonal migration due to agricultural downturns is a common phenomenon in developing countries. Using primary data from a cross‐sectional household survey of the northwest part of Bangladesh, this paper quantifies the factors that influence such migration decisions. Our results suggest that people with prior access to microcredit are more likely to migrate during an agricultural lean season. Furthermore, we find evidence of a negative selection effect between microcredit and seasonal migration, conditional on an individual's village of residence and observed characteristics. Our results have numerous potential policy implications, including the design of typical microcredit schemes for developing countries.