Land Tenure Legacies,Household Life Cycles,and Livelihood Strategies in Upland China

Land tenure regimes shape how households use labor and other resources to construct livelihoods. Within a given tenure regime, shifting land‐labor relationships over the household life cycle present households with changing trade‐offs. In China, alongside growing market exchange of labor and produce, the legacies of land distribution following decollectivization—in particular, secure access to land and constraints on land transfers—create distinct patterns connecting livelihood strategies to household life cycles. Drawing on a household survey conducted in upland southwest China, we use latent class analysis to identify clusters of households with differing livelihood strategies. With multinomial logistic regression analyses, we evaluate the effects of household demographic composition, household resources, and community human ecological attributes on cluster membership. Households that had recently been established at the time of decollectivization have not divided their holdings. Their large labor and land endowments support diversifying strategies that include relatively large scale farming. Among other households, partitioning has yielded middle‐sized households with diversifying strategies and small households that specialize in on‐farm production or deactivate from agriculture. These clusters vary in labor exchange practices and agricultural input use. Rather than a cyclical pattern, this configuration reflects time‐bound relationships among national tenure institutions, local markets, and household processes.     

ASSET MANAGEMENT,ALLOCATION OF TIME,AND RETURNS TO SAVING*

The paper entertains the proposition that individuals' time performs a productive role in generating nonwage income through the management of nonhuman capital assets. The asset management hypothesis is used to develop a life cycle model of consumptive and productive decisions. The model allows for variations in gross rates of return both across persons at a point in time and for any one person over his life cycle. The behavioral implications developed show that differences across consumption units in their time allocations and in their borrowing, saving, and asset holding decisions may be the result of differences in opportunities rather than “tastes.”     

COSTLY INTERMEDIATION AND CONSUMPTION SMOOTHING

This paper studies quantitatively how intermediation costs affect household consumption loans and welfare. Agents face uninsurable idiosyncratic shocks to labor productivity in a production economy with costly financial intermediation and a borrowing limit. Reducing intermediation costs has two effects: (1) For a given decrease in the interest rate on borrowing, agents' ability to smooth consumption over time improves. (2) The demand for loans increases, which increases the interest rate. The net welfare gain of reducing intermediation costs from 3.927% (U.S. level) to 1% is about 1.14% of equivalent consumption in the baseline economy for an endogenous interest rate and 1.90% for an exogenous interest rate. The gains are distributed unevenly: households at the bottom wealth decile improve welfare by 3.96% and 5.86% of equivalent consumption, while those at the top decile have welfare gains of 0.35% and 0.2%, respectively. Sufficiently high intermediation costs eliminate borrowing and hence the welfare gain of reducing costs is not substantial. The welfare analysis includes transitional dynamics between steady states. (JEL D91, E60, G38)     

Changes in durable stocks, portfolio allocation, and consumption expenditure in the aftermath of the Kobe earthquake

To understand the household recovery process from unexpected serious damage caused by a natural disaster, we analyze household data from the Kobe earthquake in 1995. We address three questions—how damaged stocks of durable wealth are reinvested, how an ex post portfolio of borrowing or dissaving is reallocated to diversify the asset shocks caused by the disaster, and how formal and informal consumption insurance mechanisms are effective for amending home damage—all of which have been largely unanswered. We obtain three findings. First, people respond to negative income changes and housing damage by reinvesting damaged wealth. Second, households borrow extensively to amend the large housing damage caused by the earthquake. However, they dissave only for minor household asset damage. Third, consumption smoothing is not achieved for nondurable goods that are significantly affected by negative income changes and household asset damage. These findings suggest that asset shocks caused by a large natural disaster are not sufficiently diversified for households, indicating a large gap in designing effective insurance mechanisms.     

A tale of two decades: Relative intra-family earning capacity and changes in family welfare over time

The purpose of this paper is to assess the impact of economic changes in the 1990s and 2000s on the welfare of married households, taking into account the relative earnings structure of husband and wife. Modeling the household members’ joint labor supply, we find that families in which the wife is the higher wage earner experienced as much welfare gain in the 1990s and significantly higher welfare gains in the 2000s as families in which the husband is the higher wage earner.     

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.     

Pauvreté et convergence des consommations au Canada*

To study changes in household consumption patterns, five socio‐economic household groups were defined using a new multidimensional index (IMPR) composed of three dimensions: satisfaction of basic needs, marginalization relative to a reference population, and total disposable household income. When household incomes rose from 1969 to 1992, lower socio‐economic groups did not display the same consumption behaviours as upper‐income classes. The growth in household income during their life‐cycles did not allow them to catch up to higher‐income households. Middle‐class households experienced marked changes in consumption over their life‐cycle's, but in the 1990s, they experienced difficulties. Cinq groupes socioéconomiques de ménages sont définis à l'aide d'un nouvel indice multidimensionnel de pauvreté‐richesse (IMPR), construit à partir de trois dimensions: satisfaction des besoins de base, marginalisation par rapport à une population de référence et revenu total disponible du ménage. De 1969 à 1992, quand les revenus des ménages augmentent, les classes socioéconomiques qui occupent des positions inférieures n'ont pas les mêmes comporte‐ments de consommation que les classes supérieures. La croissance des revenus des ménages les moins riches au cours de leur cycle de vie ne leur permet pas de rattraper les positions des ménages plus riches. Dans les années 1990, la classe moyenne connaît une situation difficile.     

Household Assets and Food Security: Evidence from the Survey of Program Dynamics

This study uses the Survey of Program Dynamics data to examine the independent role of household assets in food security. It further examines whether assets provide a buffer for low-income households to food insecurity in the face of income losses. Results of the Two-Part Model analyses show that household assets have a significant association with food security in both the full sample and the low-income sample. In the presence of household assets, income’s effect on food security decreases. In addition, the significant interaction terms of income loss and household assets indicate that assets provide resources to smooth food consumption. The findings of this study suggest a consideration of asset building strategies in asset related provisions of current food assistance policy.     

Loss Aversion and Saving Behavior: Evidence from the 2007 U.S. Survey of Consumer Finances

This study uses data from the 2007 Survey of Consumer Finances to examine household saving behavior based on the two-period model of consumption/saving presented by Bowman et al. (Econ Behav Organ 38:155–178, 1999). The main focus of the model is the existence of an asymmetry in saving behavior in response to positive and negative adjustments in income. The results of the logistic regression analysis support the existence of loss aversion at the household level, where having income below the household’s reference level significantly decreases the likelihood of saving, but having income above the household’s reference level does not have a significant effect on the likelihood of saving.     

Rural Agricultural Change and Individual Out‐migration

We investigate the impact of household use of labor‐saving farm technologies on first‐time out‐migration after the household agriculture and consumption survey was conducted in 1996. Building on the labor substitution framework, we hypothesize that household use of labor‐saving technologies (e.g., tractors, farm implements, chemical fertilizers, and pesticides) increases individual out‐migration. To estimate the effects of the use of labor‐saving farm technologies on out‐migration, we use uniquely detailed panel data from the rapidly changing rural agrarian, migrant‐sending setting of Nepal. The results of our multilevel, discrete‐time, event history models suggest that net of other known factors associated with out‐migration, household use of farm technology—particularly the use of tractors—significantly increases out‐migration.     

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)     

RISING TOP INCOMES AND INCREASED BORROWING IN THE REST OF THE DISTRIBUTION

One potential consequence of rising top‐income concentration is borrowing by less‐affluent households attempting to maintain relative living standards. This paper evaluates the “keeping up with the Joneses” phenomenon, examining the responsiveness of payment‐to‐income ratios for different debt types across the income distribution to changes in income among affluent households. The analysis provides evidence for the responsiveness of debt to rising top incomes. Middle‐ and upper‐middle‐income households take on more housing‐related debt and have higher payments in places with higher top‐income levels. Among lower‐income households non‐mortgage borrowing and debt payments decline, consistent with restrictions in the supply of credit. (JEL D63, D14)     

Temporary Migration Overseas and Household Labor Supply: Evidence from Urban Philippines

The impact of international migration on the labor supply of workers' nonmigrant relatives has not been well documented in the literature. Using household survey data representing mostly overseas contract workers, i.e., temporary migrants, this paper shows that labor supplies of migrants and their nonmigrant relatives are inseparable. Migrants reduce the labor supply of nonmigrant relatives, which translates into lower earnings from local labor markets. Households substitute income for more leisure – a significant and previously little recognized benefit of emigration for Philippine households. This benefit varies by gender of nonmigrants and is generally higher for men.     

Married women's resource position and household food expenditures in Cebu,Philippines

This study analyzes how married women use their access to and control over economic resources to increase household spending on food. Using data from Cebu, Philippines, where child malnutrition is high, this study finds that the more income women earn and control, the more households spend on food. Women's control over their income is particularly important for increasing food expenditures in the poorest households. In richer households, women who earn little of their own income also use spouse income transfers to increase food expenditures. The findings from this study suggest that in a developing country setting, improving women's economic status so that they earn and control more household resources can increase household spending on goods that benefit children.     

The Impact of Living with an Elder Parent on Adult Daughter's Labor Supply and Hours of Work

A pooled cross-sectional sample compiled from eleven years of the Panel Study of Income Dynamics is used to compare the impact of individual and household characteristics on labor supply probabilities and work hours of adult daughters in two types of households: (a) households in which adult daughters co-reside with elder parents; and (b) households in which adult daughters have living elder parents, but they do not co-reside with elder parents. Labor market entry and market work hours of co-residing daughters are impacted by both the presence and the characteristics of their elder parent. The daughter's age, race, and work experience have differential impacts on labor supply probabilities for co-residing daughters compared to those not co-residing. The daughters' work experience, non-wage income, family composition, and local unemployment rates have differential impacts on the number of hours of work in the two types of households.     

The Labor Supply of Female Heads of Household: Comparisons With Male Heads and Wives*

This paper compares a model of labor supply for female heads of household, male heads, and wives. Not only have female-headed households increased significantly as a proportion of all households in recent years, but these households are also more likely to be in poverty than are other households. Yet, the determinants of labor supply for this increasingly important demographic group still are largely unknown. Analyses are performed on a sample of employed female and male heads and wives from the 1976 Survey of Income and Education. We examine the effects of wages, unearned income, number of children, and several other variables on hours worked per year, allowing for race interactions. We find that female heads and wives are similar in the effects of wages on their labor supply, while female and male heads are similar in the positive effect of children. We conclude that although financial need, as evidenced by low wages and children, increases female heads’labor supply, employment in more advantaged, non-female dominated jobs and core industries is needed to promote their full participation in the labor force.     

HOUSEHOLD PRODUCTION AND SEXUAL ORIENTATION

The 2006 Canada census is used, along with a well‐known model of household production, to estimate the value of household commodities produced by gay, lesbian, and heterosexual couples. The results show some intriguing differences and similarities. Unlike heterosexuals, gay and lesbian couples respond differently to changes in the cost of time. However, all couples are characterized by the importance of market goods over time and the importance of human capital in the market over the home, with respect to household production. Hence, although there are differences in the sexual division of labor between households of different sexual orientations, the value of household commodities is mostly driven by differences in the amount of market goods used in the home. Market goods are determined by income, and differences in income within a couple‐type swamp differences in income across couple‐types, and as a result there is no statistical difference in the value of household commodities produced across the three sexual orientations. (JEL D13)     

The effect of parental labor migration on children��s educational progress in rural china

Due to China’s restrictive household registration system and increasing educational costs tens of millions of internal labor migrants have difficulty enrolling their children in urban schools. As a result, many children are left behind in rural areas when their parents seek urban employment. Using data from two provinces in northeastern China we find that parental labor migration is associated with a .7 grade-level lag in educational attainment among girls. Given that our models control for educational costs and total consumption expenditure, we interpret this as resulting from a re-allocation of girls’ time towards home production in migrant households.     

Welfare Sharing Within Households: Identification from Subjective Well-being Data and the Collective Model of Labor Supply

The paper proposed a novel approach to identifying intra-household allocations in households with two decision-makers. We addressed the issue by using the collective model of labor supply. Most empirical studies based on the collective approach were restricted to the identification of the sharing rule guiding individual allocations up to a constant. We suggested using individual welfare satisfaction data as an additional source of identification. An empirical example was given using the Russian Longitudinal Monitoring Survey. The sharing rule was found to be related to the spouses’ wage and age differences and number of children. Sharing varied with the level of household income: In low-income households, sharing was equal; in middle (high) income households men held a slight (strong) advantage.