Family size,schooling and child labor in Peru -- an empirical analysis

This paper analyzes the effects of being indigenous, number of siblings, sibling activities and sibling age structure on child schooling progress and child non-school activity. The analysis is based on the Peru 1991 Living Standards Survey. The analysis shows that family size is important. However, the analysis also demonstrates the importance of taking into consideration the activities of siblings. The number of siblings not entrolled in school proves to be an important control variable in at least one specification of the empirical model. However, more research is needed on the interactions between siblings, their activities and their age structure. In other words, an attempt must be made to find ways of taking into account the “life cycle effects” of one‘s siblings on their schooling performance and labor force activity. The analysis also shows that the age structure of siblings is important, but in conjunction with their activities. That is, having a greater number of younger siblings implies less schooling, more age-grade distortion in the classroom and more child labor. JEL classification: J22, J23, I21 Received August 1, 1996 / Accepted February 21, 1997     

Labor market assimilation and the self-employment decision of immigrant entrepreneurs

This paper uses data from the 1980 and 1990 U.S. Censuses to study labor market assimilation of self-employed immigrants. Separate earnings functions for the self-employed and wage/salary workers are estimated. To control for endogenous sorting into the sectors, models of the self-employment decision are estimated. Self-employed immigrants are found to do substantially better in the labor market than wage/salary immigrants. Earnings of self-employed immigrants are predicted to converge with natives' wage/salary earnings at about age 30 and natives' self-employed earnings at about age 40. Including the self-employed in the sample reduces the immigrant-native earnings gap by, on average, 14%. Received: 10 November 1999/Accepted: 3 August 2000     

Evaluating the pin money hypothesis: the relationship between women's labour market activity,family income and poverty in Britain

In this paper we evaluate the hypothesis that the over-representation of women amongst the low paid is of little importance because women‘s earnings account for only a small proportion of total family income. Data from the General Household Survey (GHS), together with attitudinal evidence from three cross-sectional data sources, indicate that women‘s earnings are in fact an important and growing component of family income. The majority of the growth in the share of women‘s earnings occurs as a result of changing family labour structures; women‘s earnings are playing an increasingly important role in keeping their families out of poverty. JEL classification: J16; J31. Received April 9, 1996/Accepted August 22, 1996     

Child labor versus educational attainment: some evidence from Latin America

The paper addresses the issue of child labor in relation to the educational attainment of working children. The empirical analysis is based on household surveys in Bolivia and Venezuela. It was found that labor force participation is non-trivial among those below the legal working age or supposed to be in school. Working children contribute significantly to total household income. The fact that a child is working reduces his or her educational attainment by about 2 years of schooling relative to the control group of non-working children. Grade repetition, a common phenomenon in Latin America, is closely associated with child labor. JEL classification: J13, J21, I21 Received May 2, 1996/Accepted August 14, 1996     

Long-Term Earnings Differentials Between African American and White Men by Educational Level

This paper investigates long-term earnings differentials between African American and white men using data that match respondents in the Survey of Income and Program Participation to 30 years of their longitudinal earnings as recorded by the Social Security Administration. Given changing labor market conditions over three decades, we focus on how racial differentials vary by educational level because the latter has important and persistent effects on labor market outcomes over the course of an entire work career. The results show that the long-term earnings of African American men are more disadvantaged at lower levels of educational attainment. Controlling for demographic characteristics, work disability, and various indicators of educational achievement does not explain the lower long-term earnings of less-educated black men in comparison to less-educated white men. The interaction arises because black men without a high school degree have a larger number of years of zero earnings during their work careers. Other results show that this racial interaction by educational level is not apparent in cross-sectional data which do not provide information on the accumulation of zero earnings over the course of 30 years. We interpret these findings as indicating that compared to either less-educated white men or highly educated black men, the long-term earnings of less-educated African American men are likely to be more negatively affected by the consequences of residential and economic segregation, unemployment, being out of the labor force, activities in the informal economy, incarceration, and poorer health.     

Retirement patterns in Hong Kong: a censored regression analysis

This paper provides an overview of retirement patterns in Hong Kong on the basis of limited data. A censored regression model is used to infer the retirement age from people‘s current retirement status and their current age. This model is equivalent to a restricted probit model, and the interpretation of parameters is straightforward. The results clearly show a negative income effect on the retirement decision. The retirement age seems to be positively related to lifetime earnings but negatively related to the rate of decline of earnings with age. JEL classification: C24, J14, J26 Received May 6, 1996 / Accepted February 5, 1997     

Explaining changes in married mothers’ employment over time

Employment of married mothers with preschool children rose dramatically between 1971 and 1990. Using CPS data, we find that about one-fifth of the increase in labor supply can be attributed to changes in mothers’ demographic characteristics (age, education, and number of children). Changes in the earnings opportunities of new mothers and their husbands explain another one-fifth of the growth in employment. Over the two decades, infants up to three months old became less of a barrier to employment, while women’s labor supply became more sensitive to their own earnings opportunities and less sensitive to those of their husbands.     

How to stimulate single mothers on welfare to find a job: evidence from a policy experiment

We present the results from a policy experiment in which single mothers on welfare were stimulated to enter the labor market and increase their work experience. The aim of the policy was not per se for single mothers to leave welfare completely but to encourage them to find a job if only a part-time job. Two policy instruments were introduced: an earnings disregard and job creation. The experiment was performed at the municipality level in the Netherlands, a country with relatively high benefits and low incentives for single mothers to leave welfare for work. In our analysis, we make a distinction between native and immigrant welfare recipients. For immigrant single mothers, we find a positive employment effect of an earnings disregard. Job creation in addition to the earnings disregard increased working hours for some groups of single mothers. Although the outflow from welfare was not affected, welfare expenditures were reduced.     

The effects of gender control on fertility and children's consumption

Effects of sex preference on investments in children‘s human capital, bequests and fertility are studied, with and without sex selection, in a model based on parental altruism. Both pure sex preference, a feature of the parental utility function, and indirect preference, which arises from gender-related differences in earnings opportunities, are examined. When there is no gender control the impact of pure sex preference is seen in smaller consumption for daughters than for sons. However, when gender control is exerted, sex preference raises the sex ratio and it is possible that sisters may, on average, consume no less than their more numerous brothers. In an example of the model with specific functional forms, parents who practise gender control have larger families than if sex selection techniques were unavailable. The effect is magnified if sons‘ earnings opportunities are better than daughters‘. JEL classification: D11, J13, J16 Received August 31, 1995 / Accepted May 2, 1996     

Parental transfers and the labor supply of children

To finance their personal consumption, children may rely on transfers in the form of pocket money made by their parents and on personal resources earned from labor market activities. In this paper that focuses on the interaction between these two sources of income, we consider a model of parental transfer where the child can choose his own income through labor supply. The parent commits to a transfer amount that the child takes as given. For our empirical analysis, we use a cross-sectional French survey that includes detailed information about pocket money from parents to schoolchildren. Using a maximum-likelihood method, we estimate a simultaneous-equations model and find that parental transfers do not significantly influence the child's labor supply.     

Social class and workers’ rent, 1983–2001

Sociologists and economists continue to seek explanations for the growth of earnings inequality since the late 1970s. In this article, we draw upon the structural tradition of labor market analysis in sociology in order evaluate the conjecture that selective rent destruction is a source of the recent increase in earnings inequality. In empirical analysis of the Outgoing Rotation Groups of the Current Population Surveys from 1983 to 2001, we demonstrate that (1) the earnings of workers at the bottom of the class distribution have declined relative to the earnings of those at the top and (2) the variance of wage premia associated with employment in alternative industries has declined relatively more for those at the bottom of the class distribution. Adopting the position from both the sociology and labor economics literatures that these industry wage premia are reasonable measures of industry rents, we conclude that the results support the rent destruction conjecture and, by implication, that structural models of labor markets can explain some of the increase in earnings inequality.     

Is the German apprenticeship system a panacea for the U.S. labor market?

This paper explores the structure of incentives undergirding the German system of apprenticeship training. We first describe characteristics of the German labor market which may lead firms to accept part of the cost of general training, even in the face of worker turnover. We then compare labor market outcomes for apprentices in Germany and high school graduates in the United States. Apprentices in Germany occupy a similar position within the German wage structure as held by high school graduates in the United States labor market. Finally, we provide evidence that – in both countries – the problem of forming labor market bonds is particularly acute for minority youth. JEL classification: J24, J31, J60 Received: July 4, 1996 / Accepted February 4, 1997     

Genetic ability and intergenerational earnings mobility

This paper examines the role of genetic ability in generating the strong positive intergenerational earnings correlation observed in the USA. We compare the intergenerational wage and earnings elasticities of adopted children with these of non-adopted children. Because adopted children’s genetic ability does not depend on that of their adoptive parents, the differences between these two samples reveal the importance of genetic ability in transmitting earnings ability across generations. We find that the earnings correlation between fathers and children would be halved if their biological link was removed. Our results suggest that inheritable ability plays a very important role in passing parents’ earnings ability on to their children.      

Trends in Economic Homogamy: Changes in Assortative Mating or the Division of Labor in Marriage?

The growing economic resemblance of spouses has contributed to rising inequality by increasing the number of couples in which there are two high- or two low-earning partners. The dominant explanation for this trend is increased assortative mating. Previous research has primarily relied on cross-sectional data and thus has been unable to disentangle changes in assortative mating from changes in the division of spouses’ paid labor—a potentially key mechanism given the dramatic rise in wives’ labor supply. We use data from the Panel Study of Income Dynamics (PSID) to decompose the increase in the correlation between spouses’ earnings and its contribution to inequality between 1970 and 2013 into parts due to (a) changes in assortative mating, and (b) changes in the division of paid labor. Contrary to what has often been assumed, the rise of economic homogamy and its contribution to inequality is largely attributable to changes in the division of paid labor rather than changes in sorting on earnings or earnings potential. Our findings indicate that the rise of economic homogamy cannot be explained by hypotheses centered on meeting and matching opportunities, and they show where in this process inequality is generated and where it is not.     

Does Human Capital Raise Earnings for Immigrants in the Low-Skill Labor Market?

We use monthly Survey of Income and Program Participation data from 1996–1999 and 2001–2003 to estimate the determinants of differentiation in intercepts and slopes for age/earnings profiles of low-skill immigrant and native male workers. Our findings provide further depth of understanding to the“mixed” picture of earnings determination in the low-skill labor market that has been reported by others. On the positive side, many immigrants are employed in similar occupations and industries as natives. Both groups show substantial wage gains over time and generally receive similar returns to years of schooling completed. Immigrants also receive substantial returns to acculturation, measured as age at arrival and English language skill. These results cast doubt on the strong version of segmented labor market theory, in which low-skill immigrants are permanently consigned to dead-end jobs with no wage appreciation. On the negative side, immigrants earn approximately 24% less than natives and are less likely to occupy supervisory and managerial jobs. Latino immigrants receive lower returns to education than do white immigrants. Furthermore, age at arrival and language ability do not explain the lower returns to education experienced by Latino immigrants. These results suggest that Latino immigrants in particular may suffer from barriers to mobility and/or wage discrimination. Whether these negative labor market experiences occur primarily for illegal immigrants remains unknown.     

Child labour or school attendance? Evidence from Zambia

In this paper we investigate what affects school attendance and child labour in an LDC, using data for Zambia. Since the data comes from a household survey with information on all household members it allows us to take account of unobserved household effects by introducing household-specific effects in a logit model. The empirical analysis suggests that both economic and sociological variables are important determinants for the choice between school attendance and child labour. In particular, we find some support for the hypothesis that poverty forces households to keep their children away from school. JEL classification: J24, I21, O15 Received May 20, 1996/Accepted January 2, 1997     

Racial equity or racial equality

This study examines the relationship between racial equity in labor market processes and racial equality in future labor market rewards. In particular, a regression standardization procedure is used to project the degree of racial inequality in earnings that would exist among men at various future points in time based on three different sets of assumptions about attainment processes in labor market and educational institutions. The most important results suggest that even if racial discrimination were eliminated immediately in labor market and educational institutions, it would take almost 50 years for the black-white earnings ratio to reach .95. This incompatibility between equity and equality needs to be considered more explicitly both by those who advocate a color-blind labor market and those who advocate preferential treatment for blacks.     

Labor Market Segmentation and the Earnings of German Guestworkers

In this paper we study the occupational progress and earnings attainment of immigrants in Germany and compare them to native Germans. Our analysis is guided by the human capital, segmented labor market, and discrimination theories. To assess the separate effects of occupational segmentation and discrimination in the allocation of occupations and wages, we conceptualize the process of earnings attainment as occurring in three stages: initial occupational achievement, final occupational achievement after the accumulation of experience, and, contingent on the former, final earnings attainment. Our analysis of data from the German Socioeconomic Panel suggests a high degree of initial occupational segmentation, with mmigrants being less able to translate their human capital into a good first job than natives. We also find that immigrants experienced significant discrimination in the process of occupational attainment, yielding little job mobility over time, and a widening of the status gap between Germans and guestworkers. Holding occupational status constant, however, we find less evidence of direct discrimination in the process of earnings attainment. Although immigrants achieved lower rates of return to technical or vocational training than natives, their wage returns to experience, hours worked, years since migration, and academic high school were greater, yielding significant earnings mobility over time.     

Unskilled labor and wage determination: an empirical investigation for Germany

This article contributes to the ongoing debate on native wage impacts of immigration. I propose a mobile-fixed factor distinction as a framework in which to think about the differential impact of immigration on various labor market groups. Skilled workers are treated as a fixed factor of production since the strong reliance on skill certification in Germany inhibits mobility and shelters from competition. Unskilled workers, in contrast, receive competitive wages. Using data from the German Socio-Economic Panel for 1984–1989 I estimate panel wage regressions for groups of workers separated by skill certification. I find that university graduates‘ wages increase, and the wages of workers without postsecondary degree decrease, as the industry share of unskilled workers increases. The effect for apprentices is ambiguous. JEL classification: F22, J31 Received January 19, 1995 / Accepted August 14, 1995     

Gender-specific labor market conditions and family formation

Slack labor market conditions for women relative to men increase the marriage rate in the USA. This paper examines the long-term consequences of such marriages. Despite the significant effect on marriage timing, labor market conditions experienced in youth do not affect the probability that a woman will marry by the age of 30. Further, labor market conditions at the time of marriage are uncorrelated with the probability of divorce, spouses?? characteristics, or the number of children. These findings suggest that labor market fluctuations induce only intertemporal adjustments for marriage timing without affecting reservation match quality or total fertility.