THE EFFECTS OF EDUCATION ON FERTILITY: EVIDENCE FROM TAIWAN

This study investigates the impact of women's education on fertility. For identification, we use the 1968 compulsory education law change in Taiwan, which generated a regression discontinuity design (RDD) setting. We use the whole population of women from the 1980 and 2010 Population Censuses. Results of our RDD estimation using the exact date of birth suggest that the law change was effective in boosting women's education, but it did not have any impact on fertility. This is in stark contrast to most previous studies using only the birth year as the running variable or using it to construct instruments, which find that women's education depresses fertility. This study demonstrates that using a discrete running variable in RDD may generate a false discontinuity for an otherwise continuous regression function. (JEL J13, C21, I2)     

THE IMPACT OF LABOR CONTRACTS: EVIDENCE FROM BRAZIL

The conventional Keynesian model suggests that frictions created by nominal wage contracts generate a positive relationship between inflation and output. On the other hand, the New Classical/Real Business Cycle theory claims that firms and workers base their employment behavior, and hence output, on the marginal product of labor ignoring the efficiencies of fixed nominal wage contracts. Using Brazilian data, where nominal wages were indexed by law, tests show that fixed nominal wage contracts insignificantly affected output. Thus, the data support the view that fixed nominal wages play an insignificant role in determining the evolution of output. ( JEL E31)     

THE EMPLOYMENT EFFECT OF DEREGULATING SHOPPING HOURS: EVIDENCE FROM GERMAN FOOD RETAILING

We study the effect of deregulating weekday shop opening hours on employment in retailing. Using administrative data on all German food shops, a difference‐in‐differences analysis shows that relaxing restrictions on opening hours raised employment by 0.4 workers per shop corresponding to an increase by 4%. This effect is driven by part‐time employment and employment in large shops, and it implies an increase by 0.1 workers per additional actual weekly opening hour. While the wage bill increased by less than employment, the deregulation seems not to have reduced earnings of workers already employed in retailing before the deregulation. (JEL J23, L51, L81)     

THE PROCYCLICAL LEVERAGE EFFECT OF COLLATERAL VALUE ON BANK LOANS—EVIDENCE FROM THE TRANSACTION DATA OF TAIWAN

We investigated the empirical relationship between firms' collateral values and land-secured loans over asset price cycles. A simultaneous equation model of loan demand and supply was estimated using a transaction-level data set from Taiwan. The data set contains collateral information and identifies lenders and borrowers. We found that the value of collateralizable assets has positive and significant effects on loan amounts and that the leverage effect of collateral is procyclical to asset price cycles. Firms in the electronics industry, the star industry in the sample period, are found to borrow more than other firms do at each marginal dollar of collateral . ( JEL C50, E30, G20)     

EMPIRICAL EVIDENCE ON FTC ENFORCEMENT OF THE MERGER GUIDELINES

The Justice Department's 1982/1984: merger guidelines identify various factors – concentration, entry barriers, ease of collusion, efficiency –that would thereafter determine whether the government will challenge a merger. Analysts have criticized enforcement agencies, however, for not following the guidelines, and criticize the guidelines themselves for not identifying the weights attached to the factors. Using a 1982-86 sample of seventy horizontal mergers, we examine which factors influenced Federal Trade Commission decisions to challenge mergers. The relative importance of the guidelines and other factors in merger challenges is measured, and related empirical issues are also explored.     

THE DIFFERENTIAL EFFECT OF LABOR MARKET CONTEXT ON MARGINAL EMPLOYMENT OUTCOMES

Transformation of the labor market creates a complex and dynamic environment where jobs and skills are exchanged. Studies suggest that contemporary industrial shifts provided less opportunity than in the past, and that technological change led to a complicated melange of employment outcomes. Many of the new jobs are characterized by a series of negative qualities related to income and hours. Accordingly, this analysis concentrates on inadequate employment through low-wage work and involuntary part-time work. I examine the effect of contextual factors, specifically area levels of occupational sex-segregation and the size of the service sector industry, on men and women's marginal employment outcomes. Several findings stand out. First, women post higher chances of working for low-wages than their male counterparts. However, employment in the expanding service sector does reduce men and women's chances of experiencing part-time work. Second, the protection afforded by individual level, human capital qualities remains relatively constant for women across metro areas, but labor market context significantly affects women's odds of employment marginalization. Context is not as salient for men, but the value of their personal attributes vary across labor markets. Finally, women working in areas with higher levels of occupational sex-segregation were relatively worse off than those in areas with more integration. Industrial restructuring clearly contributed to recent shifts in U.S. employment and inequality. Studies suggest that contemporary industrial shifts have provided less opportunity than in the past, greater inequality between rich and poor, and a complicated melange of inadequate employment outcomes (Colclough and Tolbert 1992; Farley 1996; Harrison and Bluestone 1988; Morris, Bernhardt, and Handcock 1994; Sassen 1994). Deindustrialization, as it is sometimes called, offers opportunity for highly-educated, skilled, or technologically-innovative men and women. However, lower skilled workers or those with less education may face relatively good job markets filled with positions that are low quality in terms of wages, hours, or benefits. This bifurcation of work is credited with not only reducing the sex-wage gap, but also increasing inequality within sex groups (Bernhardt, Morris, and Handcock 1995). By employing a new structuralist approach and focusing on the area opportunity structure, along with the traditional human capital framework, I link both the local labor market context and individual qualities that affect employment outcomes (Browne 1997; Cotter et al. 1997; McCall 2000). In this article, I examine the effect of contextual factors, specifically the area industrial composition and the openness of the labor market, on men and women's marginal employment outcomes during the early 1990s.     

THE EFFECTS OF JOB RELOCATION ON SPOUSAL CAREERS: EVIDENCE FROM MILITARY CHANGE OF STATION MOVES

We investigate the impact of military job relocation on spousal earnings and employment by creating a unique longitudinal database that tracks over 900,000 military spouses over the period 2001–2012, based on data from two administrative sources—military records on personnel and their dependents, and Social Security earnings records. This database allows us to estimate the effects of military change of station moves controlling for some key observable characteristics of the service‐member and household and controlling for individual spouse fixed effects. We find that military moves cause a substantial decline in spousal earnings in the year of the move, on the order of $2,100, or 14% of average spousal earnings. Moves also increase the likelihood that the spouse has no earnings for the year. We find larger earnings reductions for moves that cross state lines, and for older spouses, male spouses, and those with young children. The career costs persist over time and spouses continue to experience significantly lower earnings 2 years after the move. This persistence, combined with the typical military member experiencing a change of station move every 2 or 3 years, may substantially limit the ability of military spouses to accumulate human capital over time. (JEL H56, R23, J45, J16, J64)     

THE HEALTH EFFECTS OF MILITARY SERVICE: EVIDENCE FROM THE VIETNAM DRAFT

There is a strong cross-sectional association between military service and adverse health. However, veterans differ very significantly in their observable characteristics from nonveterans, suggesting that some of the association between military service and adverse health may be due to omitted variables bias. To address this problem, we use draft eligibility as an instrument for military service. Despite a very strong first-stage relationship between draft eligibility and military service, the two-stage least squares estimates of the difference in health between veterans and nonveterans are statistically insignificant and too imprecise to preclude the differences in health found in the cross-sectional regressions. ( JEL H56, I12, I18)     

EMPLOYMENT AND DEADWEIGHT LOSS EFFECTS OF OBSERVED NONWAGE LABOR COSTS

To assess the employment effects of labor costs, it is crucial to have reliable estimates of the labor cost elasticity of labor demand. Using a matched firm‐worker data set, we estimate a long‐run unconditional labor demand function, exploiting information on workers to correct for endogeneity in the determination of wages. We evaluate the employment and deadweight loss effects of observed employers' contributions imposed by labor laws (health insurance, training, and taxes) as well as of observed workers' deductions (social security and income tax). We find that nonwage labor costs reduce employment by 17% for white collars and by 53% for blue collars, with associated deadweight losses of 10% and 35% of total contributions, respectively. Since most firms undercomply with mandated employers' and workers' contributions, we find that full compliance would imply employment losses of 4% for white collars and 12% for blue collars, with respective associated deadweight losses of 2% and 6%. (JEL J23, J32)     

INTERNATIONAL TRADE AND THE COMPOSITION OF LABOR MARKET TURNOVER

The composition of labor market turnover is shown to influence patterns of international trade. Job and worker turnover have opposing marginal effects on industry export intensity, highlighting the importance of relative turnover shares on either side of the labor market, as opposed to total volumes of labor mobility, in shaping economic outcomes. Industries with relatively greater shares of worker turnover export more of total production, and those with higher job turnover export less. Furthermore, relatively high job turnover hinders industry adjustment following trade liberalization. These predictions receive support for U.S. manufacturing industries using turnover data in the Quarterly Workforce Indicators available from the U.S. Census Bureau. (JEL F16)     

REGIONAL AND SECTORAL EVIDENCE OF THE MACROECONOMIC EFFECTS OF LABOR REALLOCATION: A PANEL DATA ANALYSIS

This article revisits the sectoral shifts hypothesis by examining unemployment fluctuations for 48 U.S. states over the period 1990:M01–2011:M12. We develop a panel approach that incorporates dynamics, parameter heterogeneity, aggregate factors, and cross‐sectional dependence (CSD). Our findings provide support for a positive and significant effect of the employment dispersion index on unemployment. This outcome is robust under alternative specifications and measures of employment dispersion. The empirical evidence corroborates the presence and relevance of CSD and heterogeneity among states. The results show that, once unobserved common factors and cross‐state heterogeneity are taken into account, labor reallocation has a significant effect on unemployment that is half the size of the estimate when cross‐sectional dependence is not taken into account. (JEL E24, E32, J21, R23, C23)     

REPUTATION EFFECTS IN THE MARKET OF CERTIFIERS: EVIDENCE FROM THE AUDIT INDUSTRY

Certifiers verify unobserved product characteristics for buyers and thereby alleviate informational asymmetries and facilitate trade. When sellers pay for the certification, however, certifiers can be tempted to bias their opinion to favor sellers. Indeed, accounting scandals and inflated credit ratings suggest sellers may prefer to select dishonest certifiers. I test this proposition by estimating the effect of adverse quality signals on audit demand. Exploiting the natural experiment of Arthur Andersen's demise, I find that auditors with worse quality signals experience a fall in demand. This suggests that reputation effects are at work even in the presence of conflicts of interest. (JEL L15, L8, M4)     

INTERTEMPORAL SUBSTITUTION AND CONSTRAINTS ON LABOR SUPPLY: EVIDENCE FROM PANEL DATA

This paper tests an intertemporal labor supply model for workers who say they face quantity constraints on their hours and for workers who say they do not. The data reject the model for the first group but not for the second. I conclude from this evidence that employment fluctuations result mainly from changes in the severity of constraints—that is, changes in involuntary unemployment—rather than intertemporal substitution. It also appears that liquidity constraints influence labor supply. Finally, the paper proposes a new approach to identifying intertemporal labor supply equations.     

THE ROLE OF HOSPITAL COMPETITION ON TREATMENT EXPENDITURE AND OUTCOME: EVIDENCE FROM STROKE AND CARDIAC TREATMENT IN TAIWAN

This article examines whether market competition affects treatment expenditure and health outcomes of stroke and cardiac treatment in Taiwan. Our measure of treatment expenditure is the hospital expenditure paid at the index admission (short term) and the sum of inpatient and outpatient expenditures paid in the subsequent year (long term). Our measure of health outcome is the probability of death in 1 and 12 months after the hospital's discharge. Our measure of competition follows the method developed by Kessler and McClellan that calculates the Herfindal index based on the predicted patient flows using exogenous variables (e.g., traveling distance to hospitals). Using data of patients hospitalized for new stroke and cardiac treatment between 1997 and 2001 in Taiwan, we find that an increase of market competition results in an insignificant impact on a patient's mortality. In terms of treatment expenditure, our results indicate that hospitals facing more competition incur higher expenditures, either the short‐ or long‐term expenditure. Finally, we find evidence showing that an increase of treatment expenditure at admission is due to a raise of length of stay and treatment intensity per day as well as the usage of expensive equipment. (JEL I11, L13, L41)     

EFFICIENCY EFFECTS OF EXCLUSIVE TERRITORIES: EVIDENCE FROM THE INDIANA BEER MARKET

The welfare effects of vertically imposed exclusive territories and the appropriate antitrust policy toward them have long been debated. This paper sheds light on the exclusive-territory controversy by examing the effects of Indiana's 1979 ban on the grant of exclusive territories to beer wholesalers. Using time-series data for 1948–1990 we find the ban reduced beer consumption in Indiana by 6 percent. Coupled with previous evidence that Indiana's ban reduced price, our results suggest that exclusive territories in the beer industry increase demand and enhance welfare by stimulating the provision of dealer services.     

ENGLISH PROFICIENCY AND LABOR MARKET PERFORMANCE: EVIDENCE FROM THE ECONOMICS PROFESSION

This article investigates whether the global spread of the English language provides an inherent advantage to native English speakers. This question is studied within the context of the economics profession, where the impact of being a native English speaker on future publishing success is examined. English speakers may have an advantage because they are writing in their native language, the quality of writing is a crucial determinant of publishing success, and all the top economics journals are published in English. Using a ranking of the world's top 2.5% of economists, this article confirms that native English speakers are ranked 100 spots higher (better) than similar non‐native English speakers. A variety of extensions examine and dispel many other potential explanations. (JEL A11, J44, F66)     

WAGES,EMPLOYMENT, AND STATISTICAL DISCRIMINATION: EVIDENCE FROM THE LABORATORY

We report results from laboratory experiments designed to examine statistical discrimination. Our design expands upon existing research by generating data both on wage contracts and unemployment rates of directly competing worker groups. We find some evidence for statistical wage discrimination against workers having an identical expected productivity but a higher productivity variance. However, those same subjects are less likely to be unemployed, suggesting that our employer‐subjects view hiring choice and wage contracts as substitutable. A clear implication is that field data discrimination estimates based on wages alone may overestimate the true impact of such discrimination. (JEL C90, J71)     

THE EFFECTS OF EMPLOYMENT WHILE PREGNANT ON HEALTH AT BIRTH

Today, many pregnant women take a brief period of time off work to give birth. This article explores the effects of pregnancy employment on health at birth. Initial results show that pregnancy employment has beneficial effects. However, these effects often become statistically insignificant when I control for earnings from pregnancy employment and when I examine women employed prior to the pregnancy and siblings in fixed effects models. I conclude that beneficial effects of pregnancy employment are due to increased family income via earnings and to unobserved heterogeneity. There is no evidence that pregnancy employment adversely affects health at birth.(JEL J1 , J2 , J3 )