Returns to education in the Irish youth labour market

Using data from two large-scale household surveys in 1987 and 1994, we estimate wage equations which show substantial increases in returns to university education for young Irish workers over the period, despite the exceptional increase in numbers with these qualifications. Returns to non-degree third level certificates and diplomas fell in relative terms, but returns to qualifications obtained by those leaving school at about 16 years of age rose. We argue that the increased return to university education primarily reflects the generalised shift in demand towards skilled labour internationally and the open nature of the Irish labour market. However, a floor may have been placed under earnings for low-skilled youth by the increased generosity of income support available to them. Received: 29 December 1997/Accepted: 7 August 1998     

Aboriginals as unwilling immigrants: Contact, assimilation and labour market outcomes

Like immigrants, aboriginal populations' economic success may be enhanced by the acquisition of skills and traits appropriate to the “majority” culture in which they reside. Using 1991 Canadian Census data, we show that Aboriginal labour market success is greater for Aboriginals whose ancestors intermarried with non-Aboriginals, for those who live off Indian reserves, and for those who live outside the Yukon and Northwest Territories. While these three “facts” could also be explained by a combination of other processes, such as discrimination, physical remoteness, and selection, only the skill/trait acquisition, or “assimilation” hypothesis is consistent with all three. Received: 04 August 1998/Accepted: 12 October 2000     

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     

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     

Natives and migrants in the London labour market, 1929–1931

Migrants are sometimes regarded as marginal workers in metropolitan labour markets. London has long been a major destination for migrants from elsewhere in Britain and abroad. In this paper we examine the earnings and unemployment experience in 1929–1931 of male workers who migrated to London, or within London. We use data from the New Survey of London Life and Labour, a large survey of working class households, the records from which have recently been computerised. Our findings indicate that migrants were not marginal, in fact they enjoyed slightly higher earnings and lower unemployment incidence than native Londoners. Much of the advantage can be explained by differences in average skill levels and personal characteristics. Received: 2 November 1999/Accepted: 3 August 2000     

The performance of immigrants in the Norwegian labor market

This paper tests the assimilation hypothesis with Norwegian data. Using both cross-section and cohort analyses, the results show that the 1970–1979 immigrant cohort experienced an earnings growth of about 11% between 1980 and 1990, when their earnings profile was compared to that of natives. This is lower than the 19% assimilation rate predicted by the cross-section method. On the contrary, the results reveal a rapid earnings divergence across cohorts, and between the 1960–1969 cohort and natives. It is also shown that the „quality” of successive immigrant waves has declined over time, thus biasing the cross-section estimates of assimilation. Received: 8 August 1995 / Accepted: 7 January 1997     

The socioeconomic consequences of young women's childbearing: Reconciling disparate evidence

Recent studies have begun to examine rigorously the links between early childbearing and subsequent socioeconomic status. Prominent in this literature has been a set of analyses that have used sibling fixed effects models to control for omitted variables bias. These studies report that the siblings difference procedure leads to smaller estimates of the effects of teen fertility than does standard regression analysis. While it is well known that the siblings fixed effects procedure makes strong assumptions regarding the type of omitted variables and is not necessarily robust to alternative assumptions, the assumptions of the procedure have not been explicitly examined. This paper uses 1979–1992 data from the National Longitudinal Survey of Youth to compare estimates of the income and education consequences of teenage and young adult fertility from standard regression and siblings fixed effects models with estimates from more general, alternative siblings models. Received: 19 January 1998/Accepted: 6 April 1999     

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     

Welfare measurement in labour supply models with nonlinear budget constraints

This paper is concerned with the measurement of individual welfare in labour supply models which allow for the impact of income taxation and income support schemes on labour supply decisions. The paper is motivated by the concern over the need to have measures which can be interpreted easily, which can be compared with net income, and which can be meaningfully aggregated. To illustrate the issues we use estimates of a discrete choice model of labour supply for United Kingdom lone mothers to compute alternative welfare measures which might be considered as having intuitive appeal to policy-makers. We compute welfare change based on these measures arising from a recent reform of the child support payments system. Received: 25 February 1997/Accepted: 12 March 1998     

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     

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     

The relative risk aversion hypothesis of educational choice

Analysing young people's educational choices, we derive and test implications of a relative risk aversion hypothesis: that educational choices are made so as to minimize the risk of ending up with a lower level of education than one's parents. These implications are in general different from what one would expect from human capital theory. We use a unique data set which combines data from administrative registers on young people's pathways through the educational system and their family background with survey data on their academic abilities at lower secondary school. The evidence is partly in favour of the relative risk aversion hypothesis. Received: 19 August 1999/Accepted: 10 January 2001 All correspondence to Eskil Heinesen. We are grateful to Karin Blix Mogensen and Martin B?g for excellent research assistance, and to two anonymous referees, John F. Ermisch, Martin Browning, Michael Rosholm, Paul Bingley, and participants at the conference of the European Society for Population Economics in Turin, 1999, for valuable comments and suggestions. Responsible editor: John F. Ermisch.     

The extent of labour specialization in the extended family: A theoretical and empirical analysis

In this paper we present a simple model of labour supply that is cast within the framework of an extended family. The model emphasizes a Ricardian division of labour whereby the specialization is solely driven by marginal productivity and value of time differentials. The empirical implications of the model are derived and tested using data that was collected in France to study the extent of trade within the family network. We find evidence that the extent of specialization is sensitive to the value of time differentials. Received: 17 May 1995 / Accepted: 20 February 1997     

Labor market assimilation and the self-employment decision of immigrant entrepreneurs

This paper uses data from the 1980 and 1990 U.S. Censuses to study labor market assimilation of self-employed immigrants. Separate earnings functions for the self-employed and wage/salary workers are estimated. To control for endogenous sorting into the sectors, models of the self-employment decision are estimated. Self-employed immigrants are found to do substantially better in the labor market than wage/salary immigrants. Earnings of self-employed immigrants are predicted to converge with natives' wage/salary earnings at about age 30 and natives' self-employed earnings at about age 40. Including the self-employed in the sample reduces the immigrant-native earnings gap by, on average, 14%. Received: 10 November 1999/Accepted: 3 August 2000     

Family leave policies and women's retention after childbirth: Evidence from the United States, Britain, and Japan

This paper uses labour force survey data to examine the employment rates and employment decisions of women with young children in the United States, Britain and Japan. Our results confirm that young children have a very strong negative effect on women's employment; this effect is most pronounced in Britain. We then take advantage of panel data to investigate the effects of family leave coverage on women's job retention after childbirth. We find that family leave coverage increases the likelihood that a woman will return to her employer after childbirth in all three countries, with a particularly marked effect in Japan. This result suggests that the recent expansions in family leave coverage in the sample countries are likely to lead to increased employment of women after childbirth. Received: 10 July 1997/Accepted: 8 June 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.     

Should I stay or should I go? Educational choices and earnings: An empirical study for Portugal

We analyse educational choices and earnings of individuals at two different levels in the Portuguese educational system. At each exit we consider two decisions: the decision to continue studying and the employment decision. We find empirical support for the existence of selectivity bias as the errors of the earnings functions are in general correlated with the disturbances of the decision functions. The obtained rates of return to education vary between 2.4 and 9.4 percent, depending on whether or not selectivity and quantity effects are excluded from the computations. Note that selectivity represents three quarters of this difference. Received: 5 March 2001/Accepted: 10 October 2001 I am grateful for the comments of the editor and two anonymous referees. Responsible editor: John F. Ermisch.     

The association between the frequency of wife assault and marital dissolution in Canada

A strong positive association between wife abuse in the first marriage and the probability of that marriage ending is documented and investigated using the 1993 Violence Against Women survey (VAWS) for Canada and controlling for the endogeneity of abuse. A sensitivity analysis suggests that systematic reporting differences are not likely to account for the findings. Received: 2 June 1999/Accepted: 13 June 2000     

Welfare generosity, pregnancies and abortions among unmarried AFDC recipients

Even before the 1996 overhaul of the U.S. welfare system, a number of states had ended the practice of paying extra benefits to families who have additional children while receiving welfare. Proponents believe that this reform can reduce births to recipients, however many worry that it may encourage women to obtain abortions. Using a sample of unmarried AFDC recipients from the NLSY, we estimate a bivariate probit model of pregnancy and, conditional on becoming pregnant, the probability of abortion. Our results lend some support for the proposition that reducing incremental AFDC benefits will decrease pregnancies without increasing abortions. Received: 16 April 1998/Accepted: 11 March 1999     

Analysis of child labour in Peru and Pakistan: A comparative study

This paper analyses child labour participation and its key determinants using data sets from Peru and Pakistan. The results include tests of the ‘Luxury’ and ‘Substitution’ hypotheses that play key roles in recent studies on child labour and child schooling. The results reject both hypotheses in the context of child labour in Pakistan and suggest that income and related variables do not have the expected negative effect on children's work input. Rising wages of adult female labour in Pakistan, and falling adult male wage in Peru lead to increased participation of children in the labour market. The results on the combined country data formally establish the presence of strong individual country effects in the estimated regressions. For example, ceteris paribus, a Peruvian child is more likely to experience schooling than a Pakistani child. However, both countries agree on the positive role that adult female education and infrastructure investment in basic amenities can play in discouraging child labour and encouraging child schooling. Received: 24 August 1998/Accepted: 10 March 1999