Application of Granger-Sims causality tests to monthly fertility data, 1958–1984

When applied to monthly age specific data, Granger-Sims causality tests provide a useful technique for identifying the effective lag between business cycles and fertility in the United States. Male and female monthly age specific unemployment rates are used as a proxy for the business cycle, and test results are presented for first and higher order birth rates, as well as total age-specific monthly fertility rates. The period is subdivided (January 1958 – May 1973 and June 1973 – December 1984) in order to identify possible trends. Four results hold in all cases studied, with respect to the relationship between unemployment and fertility. (1) Noncausality is rejected in the direction from unemployment to fertility, and no feedback effect is indicated; thus the relationship is one of simple causality. (2) In the critical decision period from 9–16 months prior to realized fertility rates, the sign of the effect of unemployment on fertility is negative: this holds for both male and female unemployment rates. (3) There appears to have been a shortening of the effective lag between unemployment and fertility, of perhaps 2 – 3 months, between periods 1 (1959 – 1973) and 2 (1973 – 1984). (5) The strength of the (negative) relationship between unemployment and fertility appears to have increased from period 1 to period 2.Presented at the annual meeting of the Population Association of America, Chicago, April 30, 1987. This paper has benefitted from discussions with and comments by Andrew Weiss, Clive Granger, Lee Ohanian and Pietro Balestra, and from comments by two anonymous referees. For help in obtaining previously unpublished data, the authors are grateful to Stephanie Ventura (NCHS), G. P. Goings (BLS) and Paula Schneider (Bureau of the Census). Financial support was provided by the University of Southern California     

Did the association between fertility and female employment within OECD countries really change its sign?

Recent literature finds that in OECD countries the cross-country correlation between the total fertility rate and the female labor force participation rate, which until the beginning of the 1980s had a negative value, has since acquired a positive value. This result is (explicitly or implicitly) often interpreted as evidence for a changing sign in the time-series association between fertility and female employment within OECD countries. This paper shows that the time-series association between fertility and female employment does not demonstrate a change in sign. Instead, the reversal in the sign of the cross-country correlation is most likely due to a combination of two elements: First, the presence of unmeasured country-specific factors and, second, country-heterogeneity in the magnitude of the negative time-series association between fertility and female employment. However, the paper does find evidence for a reduction in the negative time-series association between fertility and female employment after about 1985.I benefited from stimulating discussions with Arnstein Aassve, Pau Baizan, Francesco Billari, Henriette Engelhardt, Hans-Peter Kohler and Alexia Prskawetz and a seminar in Rostock. Further, I am grateful to two anonymous referees for very useful suggestions that improved essentially the content of the paper. In addition, I thank Susan Masur, Susann Backer, and Elizabeth Zach for language editing. The views expressed in this paper are the authors own views and do not necessarily represent those of the Max Planck Institute for Demographic Research. Responsible editor: Junsen Zhang.     

Mothers in an insider-outsider economy: the puzzle of Spain

There is growing evidence that social policies towards mothers have important effects on their labour market behaviour. This article argues that these effects are less important in a Male Breadwinner Regime if there is employment insecurity in the household or if women intend to participate in the long-run. I consider the case of Spain, where the workforce has become polarized between insiders and outsiders and where social policies closely resemble the Male Breadwinner Regime. The results show that Spanish mothers fall into two groups: those who do not withdraw from the labor force after childbirth and those who withdraw and do not re-enter after their children arrive at school age. Entry or re-entry appears related to the husband's employment uncertainty. Married women in an insider household are less likely to be mobile than women in an outsider household.This research was initiated with the financial support from the Bank of Spain (Fondo para Estudios sobre el Mercado de Trabajo) and the CIRIT (Generalitat de Catalunya). An earlier version has been published in Spanish in Adam, 1995 a. I benefited from presentations in the session on Women's Labour Force Transitions in the ESPE ninth annual meeting at Lisbon, in the IESA (CSIC, Madrid) seminar, in the session on European Labour Markets in the IEA meeting at Tunis, and in the IGIER seminar. I thank Namkee Ahn, Siv Gustafsson, John Ermisch, Andrea Ichino, Sergi Jiménez, Dennis Snower, Robert Waldmann and an anonymous referee for comments. My very especial thanks go to my thesis supervisor, John Micklewright, to Gosta Esping-Andersen, John Myles and David Soskice. Responsible editors: Siv S. Gustafsson, John F. Ermisch.     

Assessing the effects of an early retirement program

We investigate induced retirement effects of the Norwegian early retirement program AFP and emphasize effects caused by relocations of some individuals from disability pension and unemployment to AFP. Theoretical considerations predict that AFP unambiguously induces more early retirement. Analyzing Norwegian register data 1994–96 with parametric and non-parametric methods, we demonstrate that i) economic incentives influence the retirement decision, ii) there is a significant net induced retirement effect, iii) by a conservative judgment, at least 50% of the AFP retirees would have stayed in the labor force without the scheme.All correspondence to Espen Bratberg. We are indebted to the referees for detailed remarks, which significantly improved the paper. Financial support from the Norwegian Research Council and the Ministry of Health and Social Affairs is greatly appreciated. We are grateful for valuable comments from Erik Hernæs and Astrid Grasdal, seminar participants at the Norwegian School of Management in Oslo, the Institute for International Economic Studies in Stockholm, and the University of Linz, the 2000 Conference of the European Society for Population Economics in Bonn, and the German-Norwegian Seminar on Social Insurance in Berlin, 2000. Bratberg would also like to thank the Humboldt University for its hospitality during a stay in the winter of 2003. Responsible editor: Christoph M. Schmidt.     

Welfare participation and welfare dependence among the unemployed

We regard individual unemployment duration as an important determinant of individuals welfare dependence. Welfare receipt is modelled for a unique data set of 4,655 Finnish unemployed individuals. A two-stage binomial hurdle model is applied, and estimations are made by both ML and GMM. Disregarding the full interrelation between unemployment and welfare clearly underestimates the importance of the former. Unemployment has a clear impact on both the probability of welfare participation and on welfare dependence among recipients. Using a finite mixture model we find that there is a small minority of unemployed welfare recipients who are locked-in in welfare dependence.All correspondence to Maria Melkersson. We thank participants at the ESPE 2001 conference, João Santos Silva and two anonymous referees for valuable comments. Financial support from Rektor för Åbo Akademi is gratefully acknowledged (Saarela). Responsible editor: Junsen Zhang.     

Immigrant and native responses to welfare reform

We investigate the effect of welfare reform in the US on the employment and hours of work of low-educated foreign-born and native-born women. For foreign-born women, we investigate whether the effect of welfare reform differed by year of immigration. We also examine whether the immigrant provisions of welfare reform had a chilling effect on those who remained eligible for benefits. Results suggest that welfare reform induced low-educated women to increase their labor market attachment; reform had larger effects on the least educated native-born women and among foreign-born, larger effects on more recent arrivals. The chilling hypothesis is not supported.All correspondence to Robert Kaestner. The authors thank Lynn Karoly, Christoph Schmidt, seminar participants at the University of Illinois and New School University, and several anonymous referees for comments on a previous draft of this paper. Robert Kaestner is grateful to the Luce Foundation for partial support for this research. Responsible editor: Christoph M. Schmidt.     

The effect of maternal employment on teenage childbearing

This paper estimates the effect of a mothers employment on her teenage daughters likelihood of birth. Using data from the United States, the National Education Longitudinal Survey of 1988, the author finds that teenagers with working mothers who attend relatively wealthy schools are more likely (77%) to have a birth compared to teens who attend similar schools but have non-working mothers. In contrast, teenagers with working mothers who attend relatively poor schools are less likely (18%) to have a birth compared to teens who attend similar schools but have non-working mothers.I am indebted to Marcia Carlson, Thomas DeLeire, Angela Fertig, Brian Jacob, Darren Lubotsky, Scott Lynch, Susan Mayer, Sara McLanahan, Robert Michael, German Rodriguez, seminar participants at Princeton University and The University of Chicago, and two anonymous referees for insightful suggestions made on earlier versions of this paper. I also gratefully acknowledge financial support from a Northwestern University/University of Chicago Joint Center for Poverty Research Graduate Fellowship, a Robert R. McCormick Tribune Foundation Graduate Fellowship, the Bendheim-Thoman Center for Research on Child Wellbeing at Princeton University, and the Office of Population Research at Princeton University, which is supported by center grant 5 P30 HD32030 from the NICHD. Responsible editor: Junsen Zhang.     

Labour force participation and marital fertility of Italian women: The role of education

This paper uses data from the 1993 Survey of Household Income and Wealth conducted by the Bank of Italy in order to estimate a reduced form purist model of female marital fertility and labour force participation. It focuses in particular on the effect of formal education on both fertility and labour force participation, and accounts for the potential endogeneity of education. Our estimates show that increasing education up to the upper secondary level exerts ceteris paribus a positive effect on marital fertility at ages 21–39 and that highly educated women postpone fertility and have a higher labour market attachment.I wish to thank participants at the 15 ^th Annual Conference of the European Society for Population Economics 2001 (Athens), the 16 ^{t h} Italian Conference of Labour Economics 2001 (Florence), especially my discussant Emilia Del Bono, the Royal Economic Society Annual Conference 2002 (Warwick), Luca Mancini, Jeremy Smith and the anonymous referee of this Journal for useful comments. The usual disclaimer applies. The Bank of Italy is gratefully acknowledged as the original depository of the Survey of Household Income and Wealth data used in this paper. Funding from the Italian Ministry of University and Scientific Research (MURST) Project Too many or too few? The relationship between population dynamics and socio-economic development is also gratefully acknowledged. Responsible editor: Alessandro Cigno.     

Public policy and the labor market adjustment of new immigrants to Australia

Two separate cohorts of immigrants to Australia are compared in order to assess the potential role of immigrant selection criteria, labor market conditions, and income-support policy in facilitating the labor market adjustment of new arrivals. Although these two cohorts entered Australia only five years apart, their initial labor market outcomes varied dramatically. The results indicate that changes in immigration policy may have led to increased human capital endowments that in turn resulted in higher participation rates and reduced unemployment. At the same time, improvement in Australian labor market conditions and changes in income-support policy over the 1990s – which most likely altered the returns to human capital – were probably instrumental in reinforcing the effects of tighter immigrant selection criteria. As much as half of the fall in unemployment rates among women and one third the decline among men appears to have occurred as the result of changes in the returns to demographic and human capital characteristics. Responsible editor:Christoph M. Schmidt     

The school-to-work transition of 2<Superscript>nd</Superscript> generation immigrants in Denmark

2^nd generation immigrants from less developed countries have less education and a lower employment frequency compared to the native Danish youth. We analyse the school-to-work transition of these groups using panel data for the years 1985–1997. The educational gap between 2^nd generation immigrants and the Danish youth is to some extent explained by age structure, while age does not explain the native-immigrant gap concerning the duration of waiting time until first job and the duration of first employment spell. Instead parental capital and neighbourhood effects seem to play a major role. We find large gender differences among 2^nd generation immigrants in the school-to-work transition.All Correspondence to Nina Smith. Thanks to Thomas Haugaard Jensen, Anne-Sofie Reng Rasmussen and Mette Skak-Nielsen who have done part of the computational work. We also want to thank two anynomous referees and participants in the ESF-conference on Migration and Development in Naples 2000 and the ESPE conference in Athens 2001 for many valuable comments. The project has been financed by the Danish Social Science Research Council (FREJA), the Danish Ministry of Labour and TSER. Furthermore, Helena Skyt Nielsen has been supported financially by the Danish Social Science Research Council (SSF), while this work was undertaken. Responsible editors: David Card and Christopher M. Schmidt.     

The Easterlin hypothesis in the recent experience of higher-income OECD countries: A panel-data approach

The Easterlin hypothesis emphasizes the effect of relative cohort size on fertility. Models based on the Easterlin hypothesis have performed well in explaining time series fertility data, although these results have been for long historical time series and have typically been restricted to single country studies. These models are not adequate to determine if the hypothesis still holds and if the success of the Easterlin hypothesis is an artifact of the time period chosen. We use panel data analysis and temporal causality tests to see of the Easterlin hypothesis holds for higher-income OECD countries. The results support the Easterlin hypothesis.All correspondence to Yongil Jeon. An earlier version, The Easterlin hypothesis in OECD countries, was presented at the annual conference of the European society for population economics, Bilbao, Spain, June 2002. We are grateful to two anonymous referees for their helpful comments. The usual caveat applies. Responsible editor: Junsen Zhang.     

Skill premium effects on fertility and female labor force supply

In the last twenty years the United States has seen a positive relationship between female labor supply and total fertility rates, which differs from the pattern observed over the preceding years. We construct a general equilibrium overlapping generations model capable of generating this changing relationship between fertility and female labor supply. We argue that skilled biased technological change in recent decades has increased the skill premium and has therefore decreased the relative cost of (unskilled) child care services. The positive effect of the increase in female mean wages on fertility rates, and the inducement for labor force participation provided by the reduction in the relative cost of child care services, generated the positive relationship between fertility rates and female labor force participation in the last two decades.All correspondence to Amaia Iza. This paper has benefited particularly from comments by Juan Carlos Conesa, Pedro Mira and Sara de la Rica. We also acknowledge countless conversations with María Paz Espinosa and useful comments from Jaime Alonso, Jose María Da-Rocha, Tim Kehoe, José Victor Rios-Rull, when the paper was presented at the IV Workshop of Dynamic Macroeconomics held in Vigo (Spain, July 1999) and in Universidade de Vigo (October, 2000). We also thank an anonymous referee whose comments enabled us to improve the paper considerably. Financial support from Universidad del País Vasco 9UPV 00035.321-13511/2001, Ministerio de Educación y Ciencia PB097-0620, MCYT BEC2000/1394 and Instituto de la mujer (Ministerio de Trabajo y Asuntos Sociales) MTAS 33/00 is gratefully acknowledged. Any remaining errors are the authors responsibility. Responsible editor: Junsen Zhang.     

Education,employment, and fertility in Kinshasa and prospects for changes in reproductive behavior

This paper examines fertility behavior of women in Kinshasa, Zaire's capital city with a population of roughly four million. We look at relationships linking women's education, employment, and fertility behavior (children ever born, age at first marriage, contraception, abortion, breastfeeding, and postpartum abstinence), using data from a 1990 survey of reproductive-age women. Other things equal, there are significant differences by educational attainment and by modern sector employment in lifetime fertility and in most of the proximate determinants as well. The results suggest that modern contraception and abortion are alternative fertility control strategies in Kinshasa, with abortion appearing to play an important role in contributing to the observed fertility differentials by education and employment. The dramatic increases that have taken place in women's access to secondary and higher education are likely to reduce fertility in the future, while the effects of Zaire's current economic and political crisis are uncertain. Our findings are consistent with some of the arguments of Caldwell et al. (1992) on a new type of fertility transition in sub-Saharan Africa. If Zaire seeks to lower fertility, policy efforts should be made to soften the impact of economic crisis on school enrollments and enhance opportunities for young women to remain in school, at least well into the secondary level. Policy should also seek to promote more effective marketing and delivery of modern family planning services, so as to induce women to substitute modern contraception for abortion as a means of controlling their fertility.     

Fertility of rural China: effects of local family planning and health programs

The rationing of births in China after the 1979 announcement of the one-child family policy has been held responsible for the rapid decrease in Chinese fertility, whereas other observers have noted that parallel fertility declines occurred with voluntary behavior in other East and Southeast Asian countries. This paper assesses the joint contribution of local family planning and health programs, individual characteristics of women, and the development of their communities, as explanatory variables for Chinese fertility in rural areas of three provinces in 1985. Given the explicit quantitative reproductive goals of the government, an ordered Probit model for cumulative fertility is estimated for women age 15–34 and 35–49.The authors appreciate the comments on and corrections of our paper by John Ermisch and the programming assistance of Paul McGuire. The financial support of the Rockefeller Foundation is acknowledged.     

Labor market institutions and demographic employment patterns

We study collective bargaining’s effect on relative employment for youth, women, and older individuals. Our model of collective wage setting predicts that unionization reduces employment more for groups with relatively elastic labor supply: youth, older individuals, and women. We test this implication using data from 17 Organization for Economic Cooperation and Development (OECD) countries over the 1960–1996 period. We find that time-varying indicators of unionization decrease the employment–population ratio of young and older individuals relative to the prime-aged, and of prime-aged women relative to prime-aged men, and unionization raises the unemployment rate of prime-aged women and, possibly, young men compared to prime-aged men.

Have the relative employment prospects for the low-skilled deteriorated after all?

Has the relative unemployment propensity for the low-skilled increased during the 1990s? We address this question empirically, based on two notions of low skills; i) low education, and ii) low ability, conditioned on education and work experience. Ability is identified by previous earnings. Evaluated by the education-based measure, we find that unemployment propensity has not developed unfavourably for the low-skilled. Evaluated by the ability-based measure, it has. We uncover a steady deterioration of employment prospects for persons with low ability relative to others with similar formal qualifications. The adverse employment effects of being low-skilled are stronger the higher is formal education.All correspondence to Knut Røed. The paper is part of the project Sorting, exposed groups and labour market programs financed by the Research Council of Norway. We wish to thank Rolf Aaberge, Paul Gertler, Harald Goldstein, Karl Ove Moene, Jon Strand, Steinar Strøm, Asbjrn Rødseth and an anonymous referee for helpful comments. Responsible editor: John F. Ermisch.     

The impact of the labour market on the timing of marriage and births in Spain

This paper investigates how education and the labour market affect Spanish individual decisions on the timing of marriage and births, using a Cox hazard approach. It disentangles men and women, and two groups, Cohort 1945–1960 and Cohort 1961–1977. Results show that female employment delays marriage in Cohort 1945–1960, but it has a reverse effect in Cohort 1961–1977. We also find evidence that employment is a barrier for family formation since employed women postpone births in both cohorts. The precarious Spanish labour markets, captured by female unemployment rates, delay family formation, especially by putting off marriage. Male unemployment, at the individual level, impacts negatively on fertility only through delaying marriage.

Fertility Policy and Employment: Implications from the Former Soviet Union

Using individual-level survey data that were collected in Russia in 1993, we analyze the fertility-employment relationship for a sample of urban women who bore children during the Soviet era. Although some Russian policy makers advocate policies that reduce female employment to stimulate fertility, we find little empirical support to ensure success of these policies. Specifically, we find no connection between employment and fertility for our sample of Russian females, perhaps because of their historic, mandated commitment to the labor market. Instead, we find that demographics and attitudes influence fertility decision making. These results, in combination with the findings that our sample of Russian women hold more traditional attitudes toward family and egalitarian attitudes toward work than similar American women, suggest that policies to stimulate fertility by reducing employment may not be effective for women raised during the Soviet era unless a dramatic shift in attitudes away from a strong work commitment also occurs.     

Interregional migration and labor market imbalances

This paper investigates the effects of internal migration in developed countries on widening wage inequality and high unemployment, and it addresses the geographical dimension of both problems. A two-region dynamic model is developed, which accounts for the skill composition of recent internal migration flows; it also innovates on the existing literature on migration by introducing capital-skill complementarity in the production function. The main conclusion is that migration can actually aggravate labor market imbalances. In a competitive set-up, migration temporarily amplifies the geographical dispersion of unskilled workers wages and raises the average wage premium of the economy. When wage rigidities are introduced, labor mobility increases regional dispersion of unskilled workers employment. In the short-run it may even reduce the total employment of the economy.A previous version of this paper circulated with the title Migration Flows and Interregional Labor Market Disequilibrium. I would like to thank Samuel Bentolila, Federico Biagi, Fabio Canova, Alessandra Casarico, Rosa Maria Fernandez, Juan Francisco Jimeno, Adriana Kugler, Javier Ortega, Ferdinando Regalia, Gilles Saint-Paul, Etsuro Shioji, Marco Vannini, two anonymous referees, participants at UPF Macro Workshop, 1997 ASSET meeting, Marseille, 1998 ESPE Annual Conference, Amsterdam, and 1999 Winter Meeting of the European Econometric Society, Rotterdam, for helpful comments and suggestions; Alix Beith for her friendly help. The usual disclaimer applies. Responsible editor: Allessandro Cigno.