MATERNAL EDUCATION,HOME ENVIRONMENTS,AND THE DEVELOPMENT OF CHILDREN AND ADOLESCENTS

We study the intergenerational effects of maternal education on children’s cognitive achievement, behavioral problems, grade repetition, and obesity, using matched data from the female participants of the National Longitudinal Survey of Youth 1979 (NLSY79) and their children. We address the endogeneity of maternal schooling by instrumenting it with variation in schooling costs during the mother’s adolescence. Our results show substantial intergenerational returns to education. Our data set allows us to study a large array of channels which may transmit the effect of maternal education to the child, including family environment and parental investments at different ages of the child. We discuss policy implications and relate our findings to the literature on intergenerational mobility.     

EDUCATION AND MOBILITY

We show that the length of compulsory education has a causal impact on regional labor mobility. We reach this conclusion from an analysis of a quasi‐exogenous staged Norwegian school reform, using register data on the whole population. Based on the results, we conclude that part of the US–Europe difference, as well as the European North–South difference in labor mobility, is likely to be due to differences in levels of education in the respective regions.     

Is There Still a Wage Penalty for Being Overeducated But Well‐matched in Skills? A Panel Data Analysis of a Swiss Graduate Cohort

Using two periods' panel data from the Swiss Graduate Survey, this study examines the incidence, persistence and wage effects of overeducation. An alternative measure of overeducation that accounts for graduate heterogeneity in perceived skills mismatch is used. This analysis differs from previous panel data studies in that two estimation methods are applied to control for unobserved ability. Results indicate that graduates who are overeducated and mismatched in skills are the most penalized in terms of earnings. This evidence is still valid when unobserved ability is accounted for, whereas the pay penalty is no more significant for graduates who are overeducated but matched in skills. This result is robust to different definitions of perceived skills mismatch and is consistent with the notion that apparent overeducation reflects a lack of unobserved attributes, such as ability.     

THE RELATIONSHIP BETWEEN CHILD HEALTH,DEVELOPMENTAL GAPS,AND PARENTAL EDUCATION: EVIDENCE FROM ADMINISTRATIVE DATA

We use administrative German data to examine the role of physical and mental health conditions in explaining developmental gaps between children whose parents have different educational levels. Specifically, we employ sibling fixed effect models to estimate the effect of a comprehensive list of childhood health conditions—diagnosed by government physicians—on the cognitive and verbal ability of pre‐school children. We also apply decomposition methods to examine the extent to which gaps in child development can be attributed to child health conditions. While most physical health conditions have small and insignificant effects, mental health conditions, in particular hyperactivity, have a large and significant effect on development. Mental health conditions account for 14%–36% of the gap in cognitive ability and for 23%–24% of that in verbal ability. Thus, policies aimed at reducing disparities in child development and socioeconomic inequalities later in life should focus more on the early diagnosis and effective treatment of mental health conditions.     

IMMIGRATION,JOBS, AND EMPLOYMENT PROTECTION: EVIDENCE FROM EUROPE BEFORE AND DURING THE GREAT RECESSION

In this paper we analyze the impact of immigrants on the type and quantity of native jobs. We use data on 15 Western European countries during the 1996–2010 period. We find that immigrants, by taking manual‐routine type of occupations pushed natives towards more “complex” (abstract and communication) jobs. This job upgrade was associated to a 0.7% increase in native wages for a doubling of the immigrants' share. These results are robust to the use of an IV strategy based on past settlement of immigrants across European countries. The job upgrade slowed but did not come to a halt during the Great Recession. We also document the labor market flows behind it: the complexity of jobs offered to new native hires was higher relative to the complexity of lost jobs. Finally, we find evidence that such reallocation was larger in countries with more flexible labor laws.     

Estimating the Return to College in Britain Using Regression and Propensity Score Matching

College graduates tend to earn more than non‐graduates but it is difficult to ascertain how much of this empirical association between wages and college degree is due to the causal effect of a college degree and how much is due to unobserved factors that influence both wages and education (e.g. ability). In this paper, I use the 1970 British Cohort Study to examine the college premium for people who have a similar ability level by using a restricted sample of people who are all college eligible but some never attend. Compared with using the full sample, restricting the sample to college‐eligible reduces the return to college significantly using both regression and propensity score matching estimates. The finding suggests the importance of comparing individuals of similar ability levels when estimating the return to college.     

Inept or Badly Matched? — Effects of Educational Mismatch in the Labor Market

Negative wage effects of educational mismatch have become a stylized fact. Whether these are explained by differences in unobserved productivity or poor matching is still to be answered conclusively. In an empirical analysis based on data from the German Socio‐Economic Panel and the International Adult Literacy Survey, a broad econometric strategy is applied to solve the problem of unobserved heterogeneity and reveal the mechanism underlying wage differences between matched and mismatched workers. Results show that wage differentials can be explained by a poor matching in the labor market, rejecting the hypothesis that mismatched workers compensate for unobserved productivity differences.     

UNDERSTANDING THE EVOLUTION OF THE US WAGE DISTRIBUTION: A THEORETICAL ANALYSIS

In this paper, we propose an analytically tractable overlapping‐generations model of human capital accumulation and study its implications for the evolution of the US wage distribution from 1970 to 2000. The key feature of the model, and the only source of heterogeneity, is that individuals differ in their ability to accumulate human capital. Therefore, wage inequality results only from differences in human capital accumulation. We examine the response of this model to skill‐biased technical change (SBTC) theoretically. We show that in response to SBTC, the model generates behavior consistent with some prominent trends observed in the US data including (i) a rise in overall wage inequality both in the short run and long run, (ii) an initial fall in the education premium followed by a strong recovery, leading to a higher premium in the long run, (iii) the fact that most of this fall and rise takes place among younger workers, (iv) a rise in within‐group inequality, (v) stagnation in median wage growth (and a slowdown in aggregate labor productivity), and (vi) a rise in consumption inequality that is much smaller than the rise in wage inequality. These results suggest that the heterogeneity in the ability to accumulate human capital is an important feature for understanding the effects of SBTC and interpreting the transformation of the US labor markets since the 1970s.     

Informal Referrals,Employment, and Wages: Seeking Causal Relationships

Employers and job seekers rely extensively on informal referrals to fill vacancies or to find a job. The widespread use of job contacts has been largely associated with labor outcomes, such as finding a job or even affecting wages. This paper explores whether the use of informal referrals on the job search process affects labor market outcomes of Colombian urban workers. Results indicate that informal referrals are slightly more successful than other job search strategies in term of job seeker's placement. However, referred workers earn in average less than their non‐referred counterparts. Yet, this is only true in formal‐sector positions.     

Earning While Learning: When and How Student Employment is Beneficial

Although studies of student employment (‘earning while learning’) mostly find positive wage effects, they do not adequately consider the relation of the employment to the field of study. We investigate how different types of student employment during tertiary education affect short‐ and long‐term labour market returns. Beyond examining differences between non‐working and part‐time working students, we distinguish between student employment related and unrelated to the field of study. Our results show significant positive labour market returns of ‘earning while learning’ only for student employment related to the field of study. These returns consist of a lower unemployment risk, shorter job‐search duration, higher wage effects, and greater job responsibility.     

Social Network and Wage: Evidence from Cameroon

Using Cameroonian data, this paper investigates the effects of social network on wage. Social network is measured in terms of using friends and relatives while looking for a job. In order to evaluate the effectiveness of social network with regard to wage, we make use of Heckman selection model. Our findings contrast with previous studies. After factoring the endogeneity and sample selection, we find that Job seekers who make use of social network exhibit a wage premium of 1.53 per cent of average wage. We also find that social network contributes to explain wage differential according to gender and institutional sectors (formal versus informal).     

PRODUCT MARKET REGULATION,FIRM SELECTION,AND UNEMPLOYMENT

This paper analyzes the effect of product market regulation (PMR) on unemployment in a search model with heterogeneous multiple‐worker firms. In our setup, PMR modifies the distribution of firm productivities, thereby affecting the equilibrium rate of unemployment. We distinguish between PMR related to entry costs and PMR that generates recurrent fixed costs. We find that: (i) higher entry costs raise the rate of unemployment mainly through our novel selection effect, (ii) higher fixed costs decrease unemployment through the selection effect and increase it through the competition effect analyzed in Blanchard and Giavazzi (2003, Quarterly Journal of Economics, 118, 879–907). Firm heterogeneity magnifies the impact of both types of regulatory costs. We propose econometric evidence consistent with the unemployment effects of sunk versus recurring costs.     

IMMIGRATION,WAGES, AND COMPOSITIONAL AMENITIES

There is strong public opposition to increased immigration throughout Europe. Given the modest economic impacts of immigration estimated in most studies, the depth of anti‐immigrant sentiment is puzzling. Immigration, however, does not just affect wages and taxes. It also changes the composition of the local population, threatening the compositional amenities that natives derive from their neighborhoods, schools, and workplaces. In this paper we use a simple latent‐factor model, combined with data for 21 countries from the 2002 European Social Survey (ESS), to measure the relative importance of economic and compositional concerns in driving opinions about immigration policy. The ESS included a unique battery of questions on the labor market and social impacts of immigration, as well as on the desirability of increasing or reducing immigrant inflows. We find that compositional concerns are 2–5 times more important in explaining variation in individual attitudes toward immigration policy than concerns over wages and taxes. Likewise, most of the difference in opinion between more‐ and less‐educated respondents is attributable to heightened compositional concerns among people with lower education.     

THE QUANTITATIVE ROLE OF CHILD CARE FOR FEMALE LABOR FORCE PARTICIPATION AND FERTILITY

I document that the labor force participation rate of West German mothers with children aged zero to two exceeds the corresponding child‐care enrollment rate, while the opposite is true for mothers whose children are older than two but below the mandatory schooling age. These facts also hold for a cross‐section of E.U. countries. I develop a life‐cycle model that explicitly accounts for this age‐dependent relationship by including various types of nonpaid and paid child care. I calibrate this model to data for West Germany and use the calibrated model for policy analysis. Increasing the supply of subsidized child care for children aged zero to two generates an increase in the maternal labor force participation rate consistent with empirical evidence from other settings; however, this increase is too small to conclude that the lack of subsidized child care accounts for the low labor force participation rate of mothers with children aged zero to two. The response along the intensive margin suggests that a large fraction of part‐time working mothers would work full‐time if they had greater access to subsidized child care. Finally, making subsidized child care available to more women does not achieve one of the commonly stated goals of such reforms, namely to increase the fertility rate.     

Wage Expectations for Higher Education Students in Spain

We assess students' ability to forecast future earnings by using data on expected wages self‐reported by college students with different graduation horizons. We find a significant gender gap, by which wage expectations are systematically lower for women than for men. However, women do not fully account for the gender gap in their future earnings. We also find that student performance, degree type, and graduation horizon play a relevant role in wage forecasts. In any case, students' expectations do not conform market wages but become more realistic as they approach graduation.     

The Access of the Young Graduates in Sciences into R&D Profession: A Switching Model Treatment for the French Case

We address the question concerning the choice of graduates in sciences and engineering to look for employment in research and development. We use an endogenous switching regression to avoid the existence of self‐selection biases. The study shows that human capital is decisive where both employment opportunities and remuneration are concerned within, but not without, this sector. The results also suggest that in the early stages of a career, the R&D sector is less rewarding than other types of employment only for doctors and not for graduates from engineering schools.     

THE RISE OF THE EAST AND THE FAR EAST: GERMAN LABOR MARKETS AND TRADE INTEGRATION

We analyze the effects of the unprecedented rise in trade between Germany and “the East” (China and Eastern Europe) in the period 1988–2008 on German local labor markets. Using detailed administrative data, we exploit the cross‐regional variation in initial industry structures and use trade flows of other high‐income countries as instruments for regional import and export exposure. We find that the rise of the East in the world economy caused substantial job losses in German regions specialized in import‐competing industries, both in manufacturing and beyond. Regions specialized in export‐oriented industries, however, experienced even stronger employment gains and lower unemployment. In the aggregate, we estimate that this trade integration has caused some 442,000 additional jobs in the economy and contributed to retaining the manufacturing sector in Germany. This is almost exclusively driven by the rise of Eastern Europe, not by China. We also conduct an analysis at the individual worker level, and find that trade had a stabilizing overall effect on employment relationships.     

CLASH OF CAREER AND FAMILY: FERTILITY DECISIONS AFTER JOB DISPLACEMENT

In this paper we investigate how career considerations may affect fertility decisions in the presence of a temporary employment shock. We compare the birth rates of women displaced by a plant closure with those of women unaffected by job loss after establishing the pre‐displacement comparability of these groups. Our results reveal that job displacement reduces average fertility by 5%–10%, and that these effects are largely explained by the response of women in more skilled occupations. We offer an explanation of our results based on career interruptions of women.     

Workplace Job Satisfaction in Britain: Evidence from Linked Employer–Employee Data

The paper examines the nature of workplace job satisfaction in Britain using an ‘overall’ and domain‐specific job satisfaction outcomes from linked employer–employee data. A measure of aggregate job satisfaction alone might mask domain‐specific differences in satisfaction, something the combined approach in this paper addresses. As well as controlling for a rich set of correlates on employees and their workplaces, the paper deploys alternative empirical models that account for employee‐ and workplace‐level unobserved heterogeneity. The paper reports interesting results on the link between job satisfaction and observed as well as unobserved characteristics of employees and their workplaces.     

THE EFFECT OF JOINT CUSTODY ON FAMILY OUTCOMES

Since the 1970s almost all US states have introduced a form of joint custody after divorce. I analyze the causal effect of these custody law reforms on different family outcomes. My identification strategy exploits the different timing of reforms across the US states. Estimations based on state panel data suggest that the introduction of joint custody led to an increase in marriage rates, an increase in overall fertility (including a shift from nonmarital to marital fertility), and an increase in divorce rates for older couples. Accordingly, female labor market participation decreased. Further, male suicide rates and domestic violence fell in treated states. The empirical evidence is consistent with the hypothesis that joint custody increased the relative bargaining power of men within marriage.