Production and consumption externalities of human capital: an empirical study for Italy

The estimation of the effect of local human capital on wages only might not identify properly human capital spillovers. Appropriate identification requires considering the joint effect of local human capital on both wages and rents. Empirically, we study the effects of local human capital on household-level rents and individual-level wages for a sample of Italian local labour markets. Our results show a positive and robust effect of local human capital on rents, supporting the idea that human capital generates positive externalities at the local level. Our results also suggest that consumption and production externalities have a similar impact on wages.

The economic determinants of ethnic assimilation

A human capital model is developed that distinguishes between ethnic-specific skills (applicable only to a specific indigenous or immigrant group) and shared or general skills. An important determinant of assimilation is the extent to which these two forms of human capital are complements, thus promoting both assimilation and ethnic persistence, or anti-complements, promoting either assimilation or ethnic retention but not both. Implications of the model are developed for various applications including intermarriage, the effects of group size, language and religion as a basis for ethnic mergers, and the transfer society as a potential barrier to assimilation.

Enclaves, language, and the location choice of migrants

Empirical studies in the migration literature have shown that enclaves (networks) negatively affect the language proficiency of migrants. Most of these studies do not address the choice of location as a function of language skills. Using data on Mexican migration to the US, we show that migrants choose smaller networks as their English language proficiency improves.

Population Density is a Key Factor in Declining Human Fertility

In studying the complex determinants of human fertility, social scientists have given little attention to population density, although reproduction has been shown to be density-dependent for a wide variety of other species. Using fixed effects models on the time series of 145 countries and controlling for key social and economic variables, we find a consistent and significant negative relationship between human fertility and population density. Moreover, we find that individual fertility preferences also decline with population density. These findings suggest that population density should be included as a variable in future studies of fertility determinants.

Earnings mobility among Italian low-paid workers

This paper uses Italian panel data to analyse low pay transitions since the early 1990s. Results indicate that having more human capital reduces the probability of falling into low pay, but there is little impact on raising exit rates from low pay. Human capital effects are found to be larger for women than for men. There is considerable state dependence: the experience of low pay raises the probability of subsequent low pay episodes. Also, there is substantial unobserved heterogeneity associated with factors such as initial conditions, mobility out of the earnings distribution and educational attainment.

The role of marriage in immigrants’ human capital investment under liquidity constraints

This paper presents a two-period human capital investment model, which is used to study the optimal investment decisions of credit-constrained married immigrants relative to single immigrants and native couples facing a perfect capital market. The model predicts that: (1) The comparative advantage in investment in local skills of one of the spouses may emerge from his/her higher growth rate of imported human capital. (2) The optimal investment of each spouse is non-increasing in the level of imported human capital of the spouse with the comparative advantage in investment, while it is non-decreasing in the level of imported human capital of the other spouse. (3) When two immigrants get married, the spouse with the comparative advantage in investment invests more than when he/she was single whereas the other spouse invests less.

Social Capital and Community Heterogeneity

Recent findings indicate that more pronounced community heterogeneity is associated with lower levels of social capital. These studies, however, concentrate on specific aspects in which people differ (such as income inequality or ethnic diversity). In the present paper, we introduce the number of parties in the local party system as a more encompassing measure of community heterogeneity. This builds on the argument that the number of relevant socio-economic cleavages in the population (i.e. heterogeneity) determines the level of party system fragmentation. Using data on 307 Flemish municipalities, we find that municipalities with a more heterogeneous population indeed have lower levels of social capital. Hence, our study endorses—and generalizes—previous results linking community heterogeneity to lower levels of social capital.

Child mortality, fertility, and human capital accumulation

This article analyzes the impact of decline in child mortality on fertility and economic growth. The study shows that the timing of mortality relative to education is crucial to implications of mortality decline. If child mortality is realized before education starts, an exogenous decline in child mortality leads to a decline in education—a finding that is opposite to those of studies that considered a decline in mortality after the cost of education has been incurred. The work also demonstrates the role of parental human capital in reducing child mortality and the causal link between rising education and declining child mortality.

Quantifying the costs of drought: new evidence from life satisfaction data

We estimate the cost of droughts by matching rainfall data with individual life satisfaction. Our context is Australia over the period 2001 to 2004, which included a particularly severe drought. Using fixed-effect models, we find that a drought in spring has a detrimental effect on life satisfaction equivalent to an annual reduction in income of A$18,000. This effect, however, is only found for individuals living in rural areas. Using our estimates, we calculate that the predicted doubling of the frequency of spring droughts will lead to the equivalent loss in life satisfaction of just over 1% of GDP annually.

Avowed Happiness in Confucian Asia: Ascertaining its Distribution,Patterns, and Sources

This study reviewed three philosophical accounts of happiness, and then tested those accounts with the Asiabarometer surveys conducted in six Confucian societies during the summer of 2006. Statistical analyses of these surveys reveal that East Asians tend to experience happiness to a greater extent when they experience enjoyment together with achievement and/or satisfaction. The preponderance of such multi-dimensional conceptions in all those societies poses a direct challenge to a single dimensional account of happiness in the West. The analyses also reveal that positive assessments of interpersonal relationships matter more than the amount of knowledge or wealth in living a happy life in Confucian societies.

---

Ethnic and parental effects on schooling outcomes before and during the transition: evidence from the Baltic countries

This paper examines human capital gap between titular ethnicities and Russian-speaking minorities, which has emerged in Estonia, Latvia, and Lithuania during the transition and remains significant after controlling for parental education. For recent cohorts, unexplained gap is declining in Lithuania (despite absence of Russian language tertiary education) and in Estonia. Furthermore, we investigate intergenerational mobility in the Baltic countries. Parental education has a strong positive effect on propensity to obtain tertiary education, both in the Soviet era and post-Soviet period. Transition to the market has weakened mother’s education effect for titular ethnicities, while the opposite is true for minorities.

Personality traits and gender-specific income expectations in Dutch higher education

In this article we examine gender differences in income expectations of students in higher education. We found quite large gender differences. Men and women differ significantly in the income they expect to earn at the top of their career. We examined how much personality traits contribute to explain gender differences in income expectations, and to what extent personality typologies can add to insights about earnings potential derived from human capital theory. The research shows that personality does affect expected income, that impact goes beyond personality’s indirect effects, which are conveyed largely through gender differences and students’ choice of study subject.

Sibling similarities and economic inequality in the US

I use a new methodological approach and larger US samples than previous studies and estimate that the sibling correlation across a range of economic outcomes is around 0.5. This suggests that half of economic inequality in the US can be attributed to family and community influences. A comparison with noneconomic outcomes suggests that individual choices rather than a simple mechanical relationship governs the intergenerational transmission of income. A decomposition of the sibling correlation suggests that the acquisition of human capital is an important channel through which family background affects future success but that noncognitive factors also play a role.

Environmental defensive expenditures,expectations and growth

Nowadays many agents meet defensive expenditures to protect themselves against environmental deterioration. Such expenditures may contribute to support economic growth. Environmental degradation, in fact, may induce agents to work harder to replace depleted environmental goods with substitute goods. The consequent rise in the activity level may further deplete the environment, worsening the agents’ expectations on the future environmental quality and increasing their demand for substitute goods. To examine this issue, we adopt a simple model in which agents formulate expectations on the future environment that can be right or wrong and examine how such expectations influence capital accumulation and growth.

Household skills and low wages

Household skills provide job skills when tasks in jobs and household production are similar and jobs produce substitutes for home-made services. Opportunity costs of higher education are foregone earnings during schooling and foregone household production while studying and later in life. I show that individuals in jobs requiring household skills accept lower wage rates than traditional human capital theory predicts, and that individuals with low household skills tend to enter higher education. According to these results, declining household skills may have contributed to the observed increasing demand for higher education by women.

The effect of immigration on the labor market performance of native-born workers: some evidence for Spain

This paper provides an approximation to the labor market effects of immigrants in Spain, a country where labor market institutions and immigration policy exhibit some peculiarities, during the second half of the 1990s, the period in which immigration flows accelerated. By using alternative data sets, we estimate both the impact of legal and total immigration flows on the employment rates and wages of native workers, accounting for the possible occupational and geographical mobility of immigrants and native-born workers. Using different samples and estimation procedures, we have not found a significant negative effect of immigration on either the employment rates or wages of native workers.

Temporary Employment and Social Inequality in Canada: Exploring Intersections of Gender, Race and Immigration Status

Using data from the 2002–2004 waves of Survey of Labour and Income Dynamics, this article investigates the consequences of different types of temporary employment—fixed-term or contract, casual, agency and seasonal employment—for differently situated workers in Canada. Attention to intersecting social locations of gender, race and immigrant status helps capture the complex implications of temporary work for inequality. In particular, it highlights the salience of gender relations in shaping workers’ experience of insecurity in different types of temporary employment.

The within-household schooling decision: a study of children in rural Andhra Pradesh

Using microdata from a field survey of children in rural Andhra Pradesh, India, we estimate econometric models which aim to identify the key explanatory factors in the decision on schooling. The approach adopted is to focus on the effects of sibling competition within the household, by paying close attention to the number, age and gender of a child's siblings, while also taking account of the characteristics of the household and community. Our findings suggest that the schooling decision depends as much on the child's characteristics and position within the household, as on the circumstances in which the child lives.

Changes in the earnings of Arab men in the US between 2000 and 2002

Using public-use microdata samples from the American Community Survey, we find that Middle Eastern Arab men and Afghan, Iranian, and Pakistani men experienced a significant earnings decline relative to non-Hispanic whites between 2000 and 2002. Further analyses based on the Juhn–Murphy–Pierce wage decomposition technique as well as quantile regression indicate that this earnings decline is not explained by changes in the structure of wages or in observable characteristics beyond ethnicity. Our interpretation is that the unanticipated events of September 11th, 2001 negatively affected the labor-market income of the groups most closely associated with the ethnicity of the terrorists.

Physical capital taxation and labor income taxation in an endogenous growth model with new generations

This paper examines the growth and welfare effects of physical capital taxation and labor income taxation. It is found that the impact of a rise in the physical capital tax rate on the balanced growth rate is crucially related to the birth rate, but a rise in the labor income tax rate definitely reduces the balanced growth rate regardless of the birth rate. It is also found that an increase in the physical capital income tax rate will harm the older but will benefit the younger, while an increase in the labor income tax rate will benefit the older but will harm the younger.