The impact of local labour markets on investment in further education: Evidence from the England and Wales youth cohort studies

The paper focuses on the individual's choice of activity on completion of compulsory schooling – to remain in full-time education or to seek employment – and the factors influencing this decision. Information from the England and Wales Youth Cohort Studies, coupled with labour market data, is used to estimate of logit model of choice and assess the role played by social and market factors. The results show that labour market conditions play an influential role in determining outcomes, particularly in the case of young males with weaker academic qualifications. Consistent with the time-series evidence, we find that participation rates in further education for both males and females are positively related to the unemployment rate in the local labour market, the effects being greater at times of economic recession when unemployment rates are rising. Received: 5 May 1997/Accepted: 17 July 1998     

Post-high school choices: New evidence from a multinomial logit model

A multinomial logit model is estimated to investigate the destination of students one-year after graduating from high school. The appropriate specification of the choice set available to high school leavers is as follows: private four-year college, public four-year college, private two-year college, public two-year college, employed and unemployed. We test for several possible combinations of these choices and find that these pooled models are all rejected in favour of the full model. The transition from high school to college and to work is more complex than previous studies have recognised. Received: 12 July 2002/Accepted: 2 November 2002 All correspondence to Jim Taylor. The authors are grateful to Steve Bradley and an anonymous referee for valuable comments on a previous draft of this paper. We alone are responsible for the errors and omissions. Anh Nguyen is grateful to the ESRC for providing financial support. Responsible editor: Daniel S. Hamermesh.     

A note on the rate of intergenerational convergence of earnings

We show that “convergence” to mean earnings in intergenerational earnings mobility models will be a function not only of the single-generation correlation of earnings, but also of the properties of the unobserved stochastic distribution of shocks to earnings. Received: 24 March 1998/Accepted: 13 November 1998     

IRCA's impact on the occupational concentration and mobility of newly-legalized Mexican men

We examine the occupational concentration and mobility of a group of unauthorized Mexican men who received amnesty under IRCA to shed light on the role of legal status in the assimilation process. Initially these men are concentrated in a small number of traditional migrant jobs. Although their occupational mobility rate is high, it partly represents churning through these same occupations. When we consider the direction – either upward or downward – of occupational change, we find that English language ability and the characteristics of the occupation, itself, are strongly correlated with mobility before legalization. After legalization, few characteristics surpass in importance the common experience of having received amnesty. Received: 22 July 1997/Accepted: 2 February 1999     

Family structure,economic status,and educational attainment

This study examines the effect of family structure on high school graduation by race and gender using data from the first twenty-one waves of the Panel Study of Income Dynamics and recently available retrospective marital histories. The nature of the data allows for a more complete specification of family structure than has been heretofore possible. The analysis tests the hypothesis that the negative effect on educational attainment often associated with living in a mother-only or stepfather family stems primarily from the reduced level of economic resources available to these households. Empirical findings indicate that living with a widowed, divorced, or separated mother has little or no effect on educational attainment once we control for economic status. However, living in a stepfather family appears to have a persistent negative effect on high school graduation rates. Received: 24 July 1995 / Accepted: 9 September 1997     

The decisions of Spanish youth: A cross-section study

This paper presents a simultaneous model for the joint decisions of working, studying and leaving the parental household by young people in Spain. Using cross-section data from the 1990–1991 Encuesta de Presupuestos Familiares, the model is estimated by a two stage estimation method. Endogeneity of the three decisions proves to be important in order to understand the dynamics of household formation. Our results also confirm a number of plausible intuitions about the effect of individual characteristics and economic variables on these decisions, and provide some new insights into the reasons for young people in Spain remaining in large numbers in the parental home. Most of the results are gender independent. Received: 18 September 1998/Accepted: 24 October 2000     

Male-female differences in labor market outcomes during the early transition to market: The cases of Estonia and Slovenia

Changes in women's relative wages and employment are analyzed, using social security data from Slovenia (1987–1992) and a retrospective labor force survey in Estonia (1989–1994). Estonia adopted liberal labor market policies. Slovenia took an interventionist approach. Nevertheless, relative wages for women rose in both countries. Factors favoring women included: returns to human capital rose in transition, benefiting women; relative labor demand shifted toward predominantly female sectors; low-wage women had a disproportionate incentive to exit the labor market, especially in Estonia. However, women were less mobile across jobs in both countries, so men disproportionately filled new jobs in expanding sectors. Received: 27 November 1997/Accepted: 20 December 1998     

Continuous training in Germany

Using data from the German Socio Economic Panel, I analyze the incidence, financing, and returns to workplace training in Germany for the years 1986 to 1989. Much of this training seems general, and is provided to workers by their employer at no direct cost. While workers typically report larger productivty gains from the training during work hours, such training has lower returns than training undertaken during leisure time. Workers with higher earnings growth seem more likely to participate in training. I deal with this selection problem by estimating models that allow for inidividual level heterogeneity in earnings growth rates. Received: 24 November 1997/Accepted: 27 March 2000     

The English language fluency and occupational success of ethnic minority immigrant men living in English metropolitan areas

This paper examines two crucial aspects of the assimilation experience of ethnic minority immigrants in the United Kingdom. It explores the determinants of their English language (speaking) fluency and the key role such skills play in their occupational success. Our sample is derived from the Fourth National Survey of Ethnic Minorities undertaken in 1994. Uniquely this data contains an interviewer-assessed measure of English language fluency. Importantly, we also attempt to control for possible endogeneity bias in the estimates of the effect of language fluency on occupational success. We find that fluency is associated with significantly higher mean hourly occupational wages. Received: 26 November 1999/Accepted: 03 August 2000     

Income and employment effects of health shocks A test case for the German welfare state

Using data from the first eleven waves of the German Socio-Economic Panel this study investigates the dynamic effects of health shocks on employment and economic well-being of older workers. A health shock trebles the probability of leaving the labor force and almost doubles the unemployment risk. The financial effects of health shocks are small on average and those individuals with the highest remaining earnings potential are least affected by the health shock. Welfare state instruments support the poorest section of the population but do not succeed in neutralizing the effects of a health shock for these groups. Received: 9 April 1997/Accepted: 28 May 1998     

Cohort effects in the educational attainment of second generation immigrants in Germany: An analysis of census data

Even though second generation immigrants make up ever increasing population shares in industrialized countries we know little about their social integration and wellbeing. This study focuses on the educational attainment of German born children of immigrants. Their schooling success still lags behind that of natives. This paper investigates school attendance and completed degrees of second generation immigrants and finds that even after controlling for characteristics the educational gap remains large and significant. The available evidence suggests that this group as a whole does not assimilate to native educational standards and instead increasingly falls behind.This research was completed while the author was guest at the Institute for the Study of Labor (IZA) in Bonn, Germany. I am grateful for IZAs hospitality and particularly for the help of Thomas K. Bauer. I thank the anonymous referees and the editors for very helpful comments. Responsible editors: David Card and Christoph M. Schmidt.     

Effect of childbearing on Filipino women's work hours and earnings

The effects of childbearing and work sector on women's hours and earnings in the 8 years following an index pregnancy were examined in a cohort of more than 2,000 women in the Cebu Longitudinal Health and Nutrition Survey. Change in cash earnings and hours worked were each modeled jointly with sector of labor force participation using an estimation strategy that deals with endogeneity of childbearing decisions and selectivity into sector of work. Two or more additional children born in the 8 year interval significantly reduced women's earnings, while having an additional child under 2 years of age in 1991 reduced hours worked. Received: 16 July 1998/Accepted: 22 March 2001 All correspondence to Linda Adair. The authors wish to thank Family Health International and the U.S. Agency for International Development (USAID) for their generous support. This publication was funded by USAID under Cooperative Agreement USAID/CCP-3060-A-00-3021-00 to Family Health International (FHI). David Guilkey's participation in this paper was also supported by the MEASURE Evaluation Project also with support from the United States Agency for International Development (USAID) under Contract Number HRN-A-00-97-00018-00. The conclusions expressed in this report do not necessarily reflect the policies of FHI or USAID. Helpful comments by two anonymous referees are gratefully acknowledged. Responsible editor: T. Paul Schultz.     

Do stepping-stone jobs exist? Early career paths in the medical profession

In the Netherlands, students who want to become a medical specialist have to enrol in a training program which is in limited supply. During the search for a position as trainee (or “junior medical specialist”), they may accept a temporary job as a medical assistant. We use a micro data set to investigate whether such work experience increases the probability of becoming junior medical specialist. To deal with selectivity, we simultaneously model the transitions from unemployment to trainee, from unemployment to medical assistant, from medical assistant to trainee and from medical assistant to unemployment. We find that a job as medical assistant helps to become a medical specialist. Received: 27 July 2000/Accepted: 31 January 2001 All correspondence to Gerard J. van den Berg. Responsible editor: John F. Ermisch.     

The fortunes of one's birth: Relative cohort size and the youth labor market in the United States

Using two different measures of relative cohort size – one indicating the size and placement of an individual's own birth cohort, and the other, the ratio of young to prime age adults in the United States in that year – it has been possible to isolate strong effects of the population age structure on wages in the United States over the past thirty-three years. These effects have been strong enough that virtually all of the observed change in the experience premium, and a substantial proportion of the changes in the college wage premium, can be explained by the relative cohort size variables alone. Even changes in the amount of within-group variance in wages appear to be largely a function of changing age structure, and absolute wage levels have been strongly affected by these demographic changes, suggesting that population growth can have positive effects on the economy. Received: 27 January 1998/Accepted: 6 June 1998     

Can skill-biased technological change compress unemployment rate differentials across education groups?

Our aim is to explain why the pattern of relative unemployment rates by education groups was non monotonic in most of the OECD countries. In a two-sector matching model, a simple unexpected productivity shock biased against unskilled labor can replicate the observed dynamics. Demographic effects of skill-biased shocks can be related to inequality in the distribution of wealth. Received: 27 April 1999/Accepted: 08 June 2000     

Transitions from employment among young Norwegian workers

In a large representative sample of young Norwegian workers, we estimate gross transitions to unemployment, education, and other exits in a multinomial logit. In line with received literature, we find that individuals with high education, experience, and income have significantly lower probabilities of job exits. While female education rates have increased to surpass those of males, female labour market outcomes are still more responsive to family related background characteristics as compared with the outcomes for males. Received: 17 October 1996/Accepted: 5 March 1999     

The roles of child support enforcement and welfare in non-marital childbearing

This paper examines the effects of stronger child support enforcement and declines in welfare benefits on changes in non-marital childbearing between 1980 and 1996. Economic theory suggests that stricter child support enforcement will increase the costs of children for unwed fathers, making them less likely to have a child outside marriage. Reductions in welfare benefits also are expected to increase the costs of non-marital childbearing for both mothers and fathers. We examine these hypotheses, using aggregate state-level data and fixed effects regression models to identify the effects of policies on non-marital birth rates. We find that both stricter child support enforcement and declines in welfare benefits deter non-marital births. However, the estimated effects of child support enforcement are more robust and larger than those of welfare. The estimates imply that in the 1980–1996 period, increases in child support enforcement led to a decline in non-marital birth rates in the range of 6% to 9%, whereas decreases in welfare benefits led to a decline in the range of 2% to 4%. Received: 28 June 2000/Accepted: 17 September 2001     

Joint decisions on household membership and human capital accumulation of youths. The role of expected earnings and local markets

This paper analyses the effects of expected earnings and local markets conditions on the behaviour of young adults with high school diplomas. Decisions to either remain in the parental home or form a new household are modelled jointly with those of either gaining work experience or investing in a university education. Expected lifetime earnings are found to play a crucial role in determining the choice of studying and residing with parents. Poor labour market opportunities discourage young people from working and induce them to study. The cost of housing greatly influences the choice of working and leaving the parental home. Received: 23 March 2001/Accepted: 26 November 2001 All correspondence to Gianna Claudia Giannelli. Helpful comments by two anonymous referees are gratefully acknowledged. Responsible editor: John F. Ermisch.     

Parental disruption and the labour market performance of children when they reach adulthood

This paper uses data from the age 33 wave of the British National Child Development Survey (NCDS) to analyze the effects of a parental disruption (divorce or death of a father) on the labour market performance of children when they reach adulthood. The NCDS is a longitudinal study of all children born during the first week of March 1958 in England, Scotland, and Wales. Controlling for a rich set of pre-disruption characteristics, the results indicate that a parental disruption leads to moderately less employment among males and considerably lower wage rates among females at age 33. If pre-disruption characteristics are not controlled for, larger effects are estimated for both males and females. Parental disruption also seems to cause substantial reductions in educational attainment for both males and females. Received: 22 May 1998/Accepted: 27 April 1999     

Immigrant quality and assimilation: a review of the U.S. literature

Empirical research on US immigrants is reviewed: their productivity and assimilation; their contribution and use of public services; and their impact on native Americans. I discuss the characteristics of cohorts of immigrants that enter the United States at different times, and then quantify the assimilation of immigrants, typically in terms of economic productivity of immigrants compared with natives. Few have found quantifiable negative effects of immigrants on native wages or unemployment in local labor markets, but a more general equilibrium approach than has been empirically implemented may be needed to draw any conclusions regarding the distributional consequences of immigration. Received: 22 September 1995 / Accepted: 2 March 1997