Using nationally representative longitudinal household survey data, this study finds that China’s one-child policy (OCP), one of the most extreme forms of birth control in recorded history, has amplified the intergenerational transmission of inequality in the country. Rural/poor Chinese families, whose fertility choices are less constrained by the OCP than those of urban/rich ones, have more children but invest less in their human capital. Since education is a major determinant of earnings, income inequality persists and increases across generations. Our results also show that the OCP accounts for 35.4%–51.5% of the decline in intergenerational income mobility in recent decades.
{"title":"One-Child Policy, Differential Fertility, and Intergenerational Transmission of Inequality in China","authors":"Yewen Yu, Yi Fan, Junjian Yi","doi":"10.2139/ssrn.3677016","DOIUrl":"https://doi.org/10.2139/ssrn.3677016","url":null,"abstract":"Using nationally representative longitudinal household survey data, this study finds that China’s one-child policy (OCP), one of the most extreme forms of birth control in recorded history, has amplified the intergenerational transmission of inequality in the country. Rural/poor Chinese families, whose fertility choices are less constrained by the OCP than those of urban/rich ones, have more children but invest less in their human capital. Since education is a major determinant of earnings, income inequality persists and increases across generations. Our results also show that the OCP accounts for 35.4%–51.5% of the decline in intergenerational income mobility in recent decades.","PeriodicalId":18085,"journal":{"name":"Macroeconomics: Employment","volume":"41 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-05-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73147507","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Estimation of the activities of the informal sector in an economy poses a serious problem for obtaining a correct estimate of GDP. This happens to be so because of the fact that informal sector activities are not registered. The literature has tried to solve the problem of estimation of the informal sector using the method of latent variables. The standard approach is generally aims to estimate for a single point. The present paper aims to model the statistical estimation of informal sector of many countries in a common framework and the evolution of the informal sector over time. Thus the adopted approach in this paper is panel estimation for a group of 22 countries, both from the developed and developing world. The study contributes in the literature by way of developing statistical model ‘Panel Dynamic Multiple Indicators and Multiple Causes’ model to account for the variations in the contribution of informal sector. Using the statistical model the paper presents modified estimates of the informal sector of the group of countries over a period ranging from 1990 through 2018. Our estimates of the informal sector are found to be generally higher, sometimes more than 10% for the developing country group while the estimates for the developed countries show little variability.
{"title":"Informal Sector in GDP: A Panel Estimation Method","authors":"N. Kansara, G. Basak, P. Das","doi":"10.2139/ssrn.3808169","DOIUrl":"https://doi.org/10.2139/ssrn.3808169","url":null,"abstract":"Estimation of the activities of the informal sector in an economy poses a serious problem for obtaining a correct estimate of GDP. This happens to be so because of the fact that informal sector activities are not registered. The literature has tried to solve the problem of estimation of the informal sector using the method of latent variables. The standard approach is generally aims to estimate for a single point. The present paper aims to model the statistical estimation of informal sector of many countries in a common framework and the evolution of the informal sector over time. Thus the adopted approach in this paper is panel estimation for a group of 22 countries, both from the developed and developing world. The study contributes in the literature by way of developing statistical model ‘Panel Dynamic Multiple Indicators and Multiple Causes’ model to account for the variations in the contribution of informal sector. Using the statistical model the paper presents modified estimates of the informal sector of the group of countries over a period ranging from 1990 through 2018. Our estimates of the informal sector are found to be generally higher, sometimes more than 10% for the developing country group while the estimates for the developed countries show little variability.","PeriodicalId":18085,"journal":{"name":"Macroeconomics: Employment","volume":"76 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-03-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86267149","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper is one of three country studies of successful anti-poverty measures during upper middle-income levels, the other two being Japan and the Republic of Korea. Though the US did not advance an explicit anti-poverty agenda until the 1960s, assisting the economically distressed was a key priority of the New Deal. Average education, life expectancy and earnings all increased during 1920-1960. Poverty fell by two-thirds to around 22 percent as the mean income rose and income inequality fell beginning in the 1940s. Economic gaps among Black Americans, women, the South, and rural areas converged, though these gaps persist to this day. Migration, urbanization, and the structural shift away from agricultural jobs transformed the economy. These, along with factors such as strong collective bargaining and access to education, helped keep low incomes rising amidst overall growth. New Deal policies that impacted market incomes (labor laws, farm subsidies, education) fueled poverty reduction more than transfers (direct relief, work relief, social insurance). Though welfare programs helped lower the poverty gap and were important policy innovations, the payment levels were too low to bring people out of poverty—defined in a manner appropriate for a country on the cusp of high income—until well after 1960.
{"title":"Poverty Reduction in the United States During its Middle-Income Stage of Development","authors":"I. Gill, Eric Dixon","doi":"10.2139/SSRN.3801852","DOIUrl":"https://doi.org/10.2139/SSRN.3801852","url":null,"abstract":"This paper is one of three country studies of successful anti-poverty measures during upper middle-income levels, the other two being Japan and the Republic of Korea. Though the US did not advance an explicit anti-poverty agenda until the 1960s, assisting the economically distressed was a key priority of the New Deal. Average education, life expectancy and earnings all increased during 1920-1960. Poverty fell by two-thirds to around 22 percent as the mean income rose and income inequality fell beginning in the 1940s. Economic gaps among Black Americans, women, the South, and rural areas converged, though these gaps persist to this day. Migration, urbanization, and the structural shift away from agricultural jobs transformed the economy. These, along with factors such as strong collective bargaining and access to education, helped keep low incomes rising amidst overall growth. New Deal policies that impacted market incomes (labor laws, farm subsidies, education) fueled poverty reduction more than transfers (direct relief, work relief, social insurance). Though welfare programs helped lower the poverty gap and were important policy innovations, the payment levels were too low to bring people out of poverty—defined in a manner appropriate for a country on the cusp of high income—until well after 1960.","PeriodicalId":18085,"journal":{"name":"Macroeconomics: Employment","volume":"50 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-03-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83426783","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Sven Resnjanskij, Jens Ruhose, Simon Wiederhold, Ludger Woessmann
We study a mentoring program that aims to improve the labor-market prospects of school- attending adolescents from disadvantaged families by offering them a university-student mentor. Our RCT investigates program effectiveness on three outcome dimensions that are highly predictive of adolescents' later labor-market success: math grades, patience/social skills, and labor-market orientation. For low-SES adolescents, the one-to-one mentoring increases a combined index of the outcomes by half a standard deviation after one year, with significant increases in each dimension. Part of the treatment effect is mediated by establishing mentors as attachment figures who provide guidance for the future. The mentoring is not effective for higher-SES adolescents. The results show that substituting lacking family support by other adults can help disadvantaged children at adolescent age.
{"title":"Can Mentoring Alleviate Family Disadvantage in Adolescence? A Field Experiment to Improve Labor-Market Prospects","authors":"Sven Resnjanskij, Jens Ruhose, Simon Wiederhold, Ludger Woessmann","doi":"10.5282/UBM/EPUB.75258","DOIUrl":"https://doi.org/10.5282/UBM/EPUB.75258","url":null,"abstract":"We study a mentoring program that aims to improve the labor-market prospects of school- attending adolescents from disadvantaged families by offering them a university-student mentor. Our RCT investigates program effectiveness on three outcome dimensions that are highly predictive of adolescents' later labor-market success: math grades, patience/social skills, and labor-market orientation. For low-SES adolescents, the one-to-one mentoring increases a combined index of the outcomes by half a standard deviation after one year, with significant increases in each dimension. Part of the treatment effect is mediated by establishing mentors as attachment figures who provide guidance for the future. The mentoring is not effective for higher-SES adolescents. The results show that substituting lacking family support by other adults can help disadvantaged children at adolescent age.","PeriodicalId":18085,"journal":{"name":"Macroeconomics: Employment","volume":"85 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85821643","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The Phillips curve has flattened out over the last decades. We develop a model that rationalizes this phenomenon as a result of the observed increase in polarization in many industries, a process along which a few top firms gain an increasing share of their industry market. In the model, firms compete à la Bertrand and there is exit and endogenous market entry, as well as optimal up and downgrading of technology. Firms with larger market shares find optimal to dampen the response of their price changes, thus cushioning the shocks to their marginal costs through endogenous countercyclical markups. Thus, regardless of its causes (technology, competition, barriers to entry, etc.), the recent increase in polarization in many industries emerges in the model as the key factor in explaining the muted responses of inflation to movements in the output gap witnessed recently.
{"title":"Market Polarization and the Phillips Curve","authors":"J. Andrés, Oscar J. Arce, Pablo Burriel","doi":"10.2139/ssrn.3781594","DOIUrl":"https://doi.org/10.2139/ssrn.3781594","url":null,"abstract":"The Phillips curve has flattened out over the last decades. We develop a model that rationalizes this phenomenon as a result of the observed increase in polarization in many industries, a process along which a few top firms gain an increasing share of their industry market. In the model, firms compete à la Bertrand and there is exit and endogenous market entry, as well as optimal up and downgrading of technology. Firms with larger market shares find optimal to dampen the response of their price changes, thus cushioning the shocks to their marginal costs through endogenous countercyclical markups. Thus, regardless of its causes (technology, competition, barriers to entry, etc.), the recent increase in polarization in many industries emerges in the model as the key factor in explaining the muted responses of inflation to movements in the output gap witnessed recently.","PeriodicalId":18085,"journal":{"name":"Macroeconomics: Employment","volume":"39 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-02-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82194879","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Two Models are developed to analyze how would human capital development and inter-generational income mobility be affected when cognitive skills are differentiated from non-cognitive skills and multistage development are considered. The close link between human capital of children and parents would still be present although parenting skills are uncorrelated with parental incomes.Inter-generational income mobility would be lower if parenting skills and the quality of public education (which is assumed to be free and equally accessed by every individual till late childhood) are higher due to dynamic complementary effect in the process of multistage development. In the presence of strong impact of parents’ traits on both cognitive and non-cognitive skills of children, the relationship between human capital of parents and that of children becomes much complicated, so would be the analysis of inter-generational income mobility and poverty trap as now both composition and level of parent’s human capital matter.
{"title":"Human Capital Development and Inter-Generational Income Mobility","authors":"Tingting Chen","doi":"10.2139/ssrn.3760972","DOIUrl":"https://doi.org/10.2139/ssrn.3760972","url":null,"abstract":"Two Models are developed to analyze how would human capital development and inter-generational income mobility be affected when cognitive skills are differentiated from non-cognitive skills and multistage development are considered. The close link between human capital of children and parents would still be present although parenting skills are uncorrelated with parental incomes.Inter-generational income mobility would be lower if parenting skills and the quality of public education (which is assumed to be free and equally accessed by every individual till late childhood) are higher due to dynamic complementary effect in the process of multistage development. In the presence of strong impact of parents’ traits on both cognitive and non-cognitive skills of children, the relationship between human capital of parents and that of children becomes much complicated, so would be the analysis of inter-generational income mobility and poverty trap as now both composition and level of parent’s human capital matter.","PeriodicalId":18085,"journal":{"name":"Macroeconomics: Employment","volume":"27 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-01-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75016002","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper analyzes the optimal cyclical behavior of labor market policies in an economy with asset and labor market frictions. The policies of interest include unemployment insurance (UI) and employment protection (EP). In addition to their supply-side effects, labor market policies affect the aggregate demand via earning risk and redistribution channels. Under bilateral wage bargaining, I find that procyclical UI and countercyclical EP deliver superior welfare outcomes through stabilization via both supply and demand channels.
{"title":"Cyclical Labor Market Policy Adjustments Under Wage Bargaining","authors":"E. Jung","doi":"10.2139/ssrn.3899305","DOIUrl":"https://doi.org/10.2139/ssrn.3899305","url":null,"abstract":"This paper analyzes the optimal cyclical behavior of labor market policies in an economy with asset and labor market frictions. The policies of interest include unemployment insurance (UI) and employment protection (EP). In addition to their supply-side effects, labor market policies affect the aggregate demand via earning risk and redistribution channels. Under bilateral wage bargaining, I find that procyclical UI and countercyclical EP deliver superior welfare outcomes through stabilization via both supply and demand channels.","PeriodicalId":18085,"journal":{"name":"Macroeconomics: Employment","volume":"98 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85834609","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper studies the impact of immigration on native labor market outcomes in Korea. We exploit the variation in immigration flows in an education-experience cell and find that, on average, immigration has no harmful effect on the wages or employment of native workers. However, there is great heterogeneity in the wage effects across education groups: high school dropouts suffer from the adverse effects, whereas the effects for college graduates are positive. We find the potential explanation for these differential effects in the suggestive evidence on the degree of substitution. Specifically, we examine the similarity of occupational distribution between natives and immigrants. While the least-educated natives and immigrants have almost identical occupation distributions, highly educated natives are likely to work in different occupational segments from the corresponding immigrants.
{"title":"Wage and Employment Effects of Immigration: Evidence from Korea","authors":"Hyejin Kim","doi":"10.2139/ssrn.3752539","DOIUrl":"https://doi.org/10.2139/ssrn.3752539","url":null,"abstract":"This paper studies the impact of immigration on native labor market outcomes in Korea. We exploit the variation in immigration flows in an education-experience cell and find that, on average, immigration has no harmful effect on the wages or employment of native workers. However, there is great heterogeneity in the wage effects across education groups: high school dropouts suffer from the adverse effects, whereas the effects for college graduates are positive. We find the potential explanation for these differential effects in the suggestive evidence on the degree of substitution. Specifically, we examine the similarity of occupational distribution between natives and immigrants. While the least-educated natives and immigrants have almost identical occupation distributions, highly educated natives are likely to work in different occupational segments from the corresponding immigrants.","PeriodicalId":18085,"journal":{"name":"Macroeconomics: Employment","volume":"38 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-12-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77529452","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Using data from the Canadian Employer-Employee Dynamics Database between 2001 and 2015, we examine the impact of firms' hiring and pay-setting policies on the gender earnings gap in Canada. Consistent with the existing literature and following Card, Cardoso, and Kline (2016), we find that firm-specific premiums explain nearly one quarter of the 26.8% average earnings gap between female and male workers. On average, firms' hiring practices – due to difference in the relative proportion of women hired at high-wage firms, or sorting – and pay-setting policies – due to differences in pay by gender within similar firms – each explain about one half of this firm effect. The compositional difference between the two channels varies substantially over the life-cycle, by parental and marital status, and across provinces.
利用2001年至2015年加拿大雇主-雇员动态数据库的数据，我们研究了加拿大公司招聘和薪酬设定政策对性别收入差距的影响。与现有文献以及Card, Cardoso, and Kline(2016)的后续研究一致，我们发现企业特定保费解释了男女工人26.8%的平均收入差距的近四分之一。平均而言，公司的招聘做法——由于高工资公司中女性雇员的相对比例不同，或分类——和薪酬设定政策——由于类似公司中性别薪酬的差异——各解释了这种公司效应的一半左右。这两种渠道的构成差异在整个生命周期、父母和婚姻状况以及各省之间都有很大差异。
{"title":"What is the Role of Firm-Specific Pay Policies on the Gender Earnings Gap in Canada?","authors":"Jiang Li, B. Dostie, Gaëlle Simard-Duplain","doi":"10.2139/ssrn.3778806","DOIUrl":"https://doi.org/10.2139/ssrn.3778806","url":null,"abstract":"Using data from the Canadian Employer-Employee Dynamics Database between 2001 and 2015, we examine the impact of firms' hiring and pay-setting policies on the gender earnings gap in Canada. Consistent with the existing literature and following Card, Cardoso, and Kline (2016), we find that firm-specific premiums explain nearly one quarter of the 26.8% average earnings gap between female and male workers. On average, firms' hiring practices – due to difference in the relative proportion of women hired at high-wage firms, or sorting – and pay-setting policies – due to differences in pay by gender within similar firms – each explain about one half of this firm effect. The compositional difference between the two channels varies substantially over the life-cycle, by parental and marital status, and across provinces.","PeriodicalId":18085,"journal":{"name":"Macroeconomics: Employment","volume":"29 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-12-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87875932","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper analyzes the impact of minimum wages on different margins of firm dynamics using Costa Rica's occupation-specific minimum wage setting. To this purpose, I assemble rich administrative data covering the universe of workers and firms in the 2006-2017 period to construct firm-level exposure measures to the minimum wage policy, and estimate the impact of differential exposure to the minimum wage on firm outcomes at several year horizons. The analysis yields two important results: First, minimum wages induce firms to increase their labor shares, but with a negative and persistent impact on their profitability. The positive effect on the labor shares moderates as firms reduce their employment levels and expand their capital stocks. Second, raising minimum wages increases firm exit and lowers firm entry, with an estimated adverse effect on employment of 0.8 percent due to the missing entrants associated with the policy.
{"title":"Minimum Wages and Firm Dynamics: Evidence From Costa Rica's Occupation-Based System","authors":"J. Garita","doi":"10.2139/ssrn.3727791","DOIUrl":"https://doi.org/10.2139/ssrn.3727791","url":null,"abstract":"This paper analyzes the impact of minimum wages on different margins of firm dynamics using Costa Rica's occupation-specific minimum wage setting. To this purpose, I assemble rich administrative data covering the universe of workers and firms in the 2006-2017 period to construct firm-level exposure measures to the minimum wage policy, and estimate the impact of differential exposure to the minimum wage on firm outcomes at several year horizons. The analysis yields two important results: First, minimum wages induce firms to increase their labor shares, but with a negative and persistent impact on their profitability. The positive effect on the labor shares moderates as firms reduce their employment levels and expand their capital stocks. Second, raising minimum wages increases firm exit and lowers firm entry, with an estimated adverse effect on employment of 0.8 percent due to the missing entrants associated with the policy.","PeriodicalId":18085,"journal":{"name":"Macroeconomics: Employment","volume":"40 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-11-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80549318","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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