THE LIFE-CYCLE LABOR SUPPLY OF MARRIED WOMEN AND ITS IMPLICATIONS FOR HOUSEHOLD INCOME INEQUALITY

In a life-cycle model of married womens' labor supply the husband's expected lifetime income should have a greater effect on his wife's labor supply than should his current income. Using the Panel Study of Income Dynamics data, the husband's average lifetime income (over the panel years) does have a greater negative income effect than current income. However, this income effect has declined over time: the labor supply of wives is becoming less sensitive to their husbands' incomes. This declining elasticity would cause household income inequality to worsen over time, but has been offset by other factors.     

GENDER DIFFERENCES IN THE PSYCHOLOGICAL WELL-BEING OF MARRIED MEN AND WOMEN: An Asian Case

Using a wide variety of measures of psychological well-being obtained from a representative sample of married men and women in Bangkok, Thailand, we examine gender differences in psychological well-being. We find that, in Bangkok, as in the United States, married men generally enjoy a higher level of psychological well-being than do married women. We find no support for role strain theory, but we do find support for role enhancement theory. We find that social support has little effect on psychological well-being, but that social strain not only has a significant effect on well-being but also largely accounts for gender differences in well-being. The mixed findings suggest the importance of testing theories in different societal contexts, for they may or may not be easily portable from one culture to another.     

GEOGRAPHIC DIFFERENCES IN U.S. UNEMPLOYMENT RATES: A VARIANCE DECOMPOSITION APPROACH

This paper analyzes the determinants of the geographic dispersion of unemployment rates. The model presented here recognizes that structural labor market relationships differ across areas and that area unemployment rates and some of the explanatory variables are determined simultaneously. Most importantly, the methodology introduced here provides an estimate of the impact of each of the explanatory variables on the overall dispersion of unemployment rates, allowing comparison of several competing hypotheses that purport to explain why areas differ so widely in terms of their unemployment rates. The empirical results indicate that inter-area differences in product market demand and in sensitivity to changes in conditions in the product market are the most important factors accounting for geographic differences in unemployment rates. More generally, the results indicate that unemployment rates differ widely across areas not so much because areas differ in terms of the underlying characteristics that determine unemployment rates but because areas are so heterogeneous with respect to labor market structure.     

LIFETIME CONSUMPTION, LABOR SUPPLY AND FERTILITY: A COMPLETE DEMAND SYSTEM

This paper applies an empirical method based on a complete demand system to the study of lifetime consumption, labor supply and fertility. Previous research in this area has not used complete demand systems or rigorously connected empirical analysis with the theoretical model. An approach to estimating crucial but unmeasured variables is proposed. The results are generally supportive of a price-income effects model.     

MATERNAL LABOR SUPPLY AND THE AVAILABILITY OF PUBLIC PRE‐K: EVIDENCE FROM THE INTRODUCTION OF PREKINDERGARTEN INTO AMERICAN PUBLIC SCHOOLS

In the 1980s and 1990s, many states and districts began to provide funding for prekindergarten (PK) programs for the first time. This paper takes advantage of the staggered timing in program funding to investigate the effect that increased availability of PK programs has on the labor supply of mothers with 4‐year‐olds. I find that mothers with a 4‐year‐old and no younger children were significantly more likely to be in the labor force and employed once PK became available. Mothers with a 4‐year‐old and other younger children were also significantly more likely to be in the labor force and employed. (JEL I20, J01, J20)     

EASING THE CONSTRAINTS OF MOTHERHOOD: THE EFFECTS OF ALL‐DAY SCHOOLS ON MOTHERS' LABOR SUPPLY

Low rates of female labor force participation (LFP) have been linked to the absence of childcare policies. This article examines the degree to which extending the school day by 3.5 hours in elementary schools, a large implicit childcare subsidy, affects LFP, the number of weekly hours worked, and the monthly earnings of females with elementary‐school‐age children. To do so, we exploit within‐individual variation in access to full‐time schools and a rotating panel of households that contains 12 years of individual‐level data on labor outcomes and sociodemographic characteristics. Results from long‐difference models show that extending the school day increases mothers' labor supply, increasing LFP by 5.5 percentage points and the number of weekly hours worked by 1.8. Moreover, these increases are accompanied by a raise in monthly earnings. (JEL I25, J13, J22)     

INFLATION DYNAMICS AND LABOR MARKET SPECIFICATIONS: A BAYESIAN DYNAMIC STOCHASTIC GENERAL EQUILIBRIUM APPROACH FOR JAPAN'S ECONOMY

Which labor market specification is better able to describe inflation dynamics, a widely used sticky wage model or a recently investigated labor market search model? Using a Bayesian likelihood approach, we estimate these two models with Japan's data. This article shows that the labor market search model is superior to the sticky wage model in terms of both marginal likelihood and out‐of‐sample forecast performance, particularly regarding inflation. The labor market search model is better able to replicate the cross‐correlation among inflation, real wages, and output in the data. Moreover, in this model, real marginal cost is determined by both hiring cost and unit labor cost that varies with employment fluctuations, which gives rise to a high contemporaneous correlation between inflation and real marginal cost as represented in the New Keynesian Phillips curve. (JEL E24, E32, E37)     

ROUTINIZATION‐BIASED TECHNICAL CHANGE AND GLOBALIZATION: UNDERSTANDING LABOR MARKET POLARIZATION

There is now ample evidence that jobs and wages have been polarizing at the extremes of the skill distribution since the early 1990s. Possible explanations include, among others, routinization‐biased technical change (technical progress substituting more easily for labor in performing routine rather than nonroutine tasks) and globalization (more specifically, offshore outsourcing by multinational firms). In this article, we develop a unified theoretical general equilibrium model and examine the implications of each competing hypotheses for labor market polarization. (JEL J21, J23, J24, F66)     

INFORMAL LABOR MARKETS AND ON‐THE‐JOB TRAINING: EVIDENCE FROM WAGE DATA

This study examines whether informal sector jobs are a source of training for young less‐educated workers. Controlling for worker and job characteristics, it is found that, in the early years of workers' careers in Mexico, wage growth in the informal sector is higher than in the formal sector. This result is consistent with general human capital investment on‐the‐job if the informal labor market is more competitive than the formal labor market due to frictions generated by labor regulations. (JEL O17, J24, J310)     

CAN THE HUMAN CAPITAL APPROACH EXPLAIN LIFE‐CYCLE WAGE DIFFERENTIALS BETWEEN RACES AND SEXES?

Using data from the National Longitudinal Survey of Youth–1979 cohort (NLSY79), this paper shows the importance of postschool human capital investment in describing both gender and racial wage gaps. The empirical results suggest that male-female wage gaps, regardless of race, are mainly caused by gender differences in the human capital production process; generally, men gain more work experience and therefore have lower marginal costs of human capital production. Black-white lifetime wage differentials could partly result from higher implicit interest rates for blacks, while the deterioration of black males' relative economic status as they age can be attributed to higher depreciation rates of their human capital stock. ( JEL J24, J30, C61)     

A DESIGNER'S CHOICE BETWEEN SINGLE‐PRIZE AND PARALLEL TOURNAMENTS

In this article, I theoretically and experimentally compare a designer's profits from two tournament designs. The first design is a standard winner‐take‐all tournament with a single prize. The second design features two winner‐take‐all (parallel) tournaments with different prizes where individuals choose which tournament to enter before competing. I develop a simple model that illustrates how the relative performances of these designs change as contestants' abilities differ. The theoretical model shows that the designer's profit is higher (lower) in the parallel tournament when contestants' abilities differ greatly (are similar). I complement these findings with experimental evidence. The experiments show that the parallel tournament is more profitable under high heterogeneity, whereas under low heterogeneity, the designer is better off with the single‐prize tournament. Furthermore, high‐ability agents under‐participate and low‐ability agents over‐participate in the high‐prize tournament relative to the theoretical prediction. (JEL C72, D82, J33, M51, M52)     

UNEMPLOYMENT AND OTHER MEASURES OF LABOR MARKET INEFFICIENCY: A COMPARISON OF U.K. AND U.S. LABOR MARKETS 1931–96

Although unemployment is often used as a measure of labor market inefficiency, economic theory indicates that market inefficiency is determined by both the gap between and the elasticities of supply and demand. Using time series data for the United States and United Kingdom, this article investigates how good the unemployment rate is as a measure of labor market inefficiency by calculating the deadweight loss associated with unemployment rates over time. Results show that the loss arising from unemployment is low across time and countries and that the unemployment rate is often a weak proxy for comparing labor market inefficiency. (JEL J6 )     

THE REAL EXCHANGE RATE AND REAL INTEREST DIFFERENTIALS: THE ROLE OF THE TREND‐CYCLE DECOMPOSITION

We propose an alternative model and method to reconcile the puzzling feature in the relationship between the real exchange rate and real interest rate differentials. Our simple two‐country model with preset prices, along with firms' misperception about the future exchange rate, implies that the real exchange rate follows an ARIMA(0,1,p) process. This allows us to compute the exact Beveridge‐Nelson decomposition, which is a model‐consistent decomposition. In accordance with our model, unit roots in the real exchange rates are found; and statistical inference is partially found to be affirmative regarding the link between the real exchange rate detrended by the Beveridge‐Nelson decomposition and corresponding real interest differentials. (JEL F31, F41)     

DO MEN “NEED” A SPOUSE MORE THAN WOMEN?: PERCEPTIONS OF THE IMPORTANCE OF MARRIAGE FOR MEN AND WOMEN

This study examines how important men and women feel marriage is for men and for women. Using data from the National Survey of Families and Households, we find that both men and women feel that men need to be married more than women do. Women are more likely than men to think that both men and women can have satisfying lives without marriage, but they are also more likely to think that only women can have satisfying lives without marriage. Younger, more educated people are less likely to emphasize marriage. On the other hand, religious people and those who are married with children are particularly likely to think that neither men nor women can have satisfying lives without marriage.     

ON THE SEARCH FOR TALENT IN ACADEMIC LABOR MARKETS: EASILY OBSERVABLE LATER‐GRADUATE STUDY OUTCOMES AS PREDICTORS OF EARLY‐CAREER PUBLISHING,PLACEMENT, AND TENURE

Three easily observed later‐graduate study outcomes, working with a prominent advisor, publishing while in graduate school, and coauthoring with the advisor are demonstrated to be significant determinants of early‐career publishing success for a sample of nearly 3,000 Ph.D. recipients from more than 100 domestic programs between 1990 and 1993. Out‐of‐sample predictions for 681 Ph.D. recipients from the class of 1994 indicate that these easily observed later‐graduate study signals dramatically improve our ability to forecast which students become prolific and which students fail to publish more than one article. Analyzing initial domestic tenure‐track economics placements indicates that hiring departments placed far more emphasis on Ph.D. program pedigree, leading to an initial tenure rate of less than 50% but eventually nearly three‐fourths currently hold tenured positions in the United States. (JEL J24, J44)     

TEMPTATION‐DRIVEN BEHAVIOR AND TAXATION: A QUANTITATIVE ANALYSIS IN A LIFE‐CYCLE MODEL

This paper examines the impact of labor and capital income taxes in a stochastic overlapping generations (OLG) economy where agents face borrowing constraints and their behavior is temptation driven. We quantitatively establish that the existence of temptation in preferences may function as an opposing mechanism to modeling choices, such as liquidity constraints, life‐cycle structure, and idiosyncratic earnings risks, that are critical in delivering a positive capital income tax rate. We show that a sufficiently large measure of individuals having self‐control preferences, or alternatively, a sufficiently high cost of exercising self‐control, puts downward pressure on the optimal capital income tax rate. (JEL E21, E62, H55)     

“A DIAMOND IS FOREVER” AND OTHER FAIRY TALES: THE RELATIONSHIP BETWEEN WEDDING EXPENSES AND MARRIAGE DURATION

In this study, we evaluate the association between wedding spending and marriage duration using data from a survey of more than 3,000 ever‐married persons in the United States. Controlling for a number of demographic and relationship characteristics, we find evidence that marriage duration is inversely associated with spending on the engagement ring and wedding ceremony. (JEL J12, Z1, D1)     

SOYBEAN EXPORTS AND DEFORESTATION FROM A WORLD‐SYSTEMS PERSPECTIVE: A Cross‐National Investigation of Comparative Disadvantage

This article draws on world‐system theorizing to explore the relationship between deforestation and the vertical flow of soybean exports from less‐developed nations to more‐developed nations as a specific form of ecologically unequal exchange. Despite overwhelming case‐study research exploring soybean–deforestation dynamics in less‐developed countries, the current literature lacks any cross‐national investigation of this trend. Ordinary least squares regression is used to examine whether soybean exports are associated with deforestation and if the magnitude of this relationship varies by region. Overall, the findings confirm the proposed hypotheses and suggest that having a comparative advantage in soybean production is not a viable development strategy.     

MILITARY SPENDING AND THE GROWTH‐MAXIMIZING ALLOCATION OF PUBLIC CAPITAL: A CROSS‐COUNTRY EMPIRICAL ANALYSIS

In this paper we present an endogenous growth model to analyze the growth maximizing allocation of public investment among N different types of public capital. Using this general model of public capital formation, we analyze the stability of the long‐run equilibrium and we derive the growth‐maximizing values of the shares of public investment allocated to the different types of public capital, as well as the growth‐maximizing tax rate (amount of total public investment as a share of GDP). Then we proceed with an empirical investigation of the theoretical implication of the model that both the effects of the shares of public investment and the tax rate on the long‐run growth rate are non‐linear, following an inverse U‐shaped pattern. Using data of public investment in infrastructure and military capital formation, we derive empirical estimations that confirm the theoretical implications of the model. (JEL E62, H56, O40).