Cointegration modeling of fertility in the United States

This paper presents estimates of a multiple time series model of fertility, female labor force participation, women's wages, and the relative cohort size of younger to older adult males. Cointegration methods permit modeling of these nonstationary variables, yielding estimates of the long-run relation among the variables, and the dynamic response of each variable to displacements from the steady state. The estimated steady state relation between fertility and the other variables is consistent with economic models of fertility, with fertility negatively related to female wages and male relative cohort size. Fertility responds to cohort size in a manner that is consistent with Easterlin's relative income model of household behavior. Finally, both female labor market variables adjust significantly to departures from the steady state relation, implying that they cannot be treated as exogenous in time series models of fertility.     

Does time preference change with age?

This study looks at compensating differentials in the National Longitudinal Survey of Youth (NLSY) to derive estimates of the levels of time preference for labor force participants in each of 15 waves of data from 1979 to 1994. With these estimates the evolution of time preference over the life course is described. Future utility among labor force participants appears to be valued more highly by subjects who are older, more schooled, white, or male. Controlling for schooling level, a higher IQ is associated with a preference for more immediate rewards.If social rates of time preference are correlated with individual rates of time preference then population aging could create intergenerational asymmetries in the social rate of time preference.This phenomenon could make the optimal investments of young populations appear selfish to future generations that are older.Support from Hopkins Population Center (R24) is gratefully acknowledged. I am thankful for helpful comments received from Jim Burgess, Mike Grossman, Bruce Hamilton, Fritz Laux, Athanasios Orphanides, Katie Roche, and Eric Slade. All errors are my own. Responsible editor: Alessandro Cigno.     

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.     

Optimal age of retirement and population growth

The purpose of this paper is to study intergenerational optimal resources sharing when the social planer can choose the retirement age in addition to consumptions and investment. We use the extension of the Diamond analysis by Hu [1979] that incorporates endogenous retirement age. We found that the optimal retirement age is an increasing function of the population growth rate if the elasticity of substitution of old agents' labor for young agents' labor is lower than one. In the millian case, when the size of a population does not matter, and when the elasticity of substitution of old agents' labor for young agents' labor is strictly higher than one, the optimal retirement age is a decreasing function of the population growth rate. In the benthamite case, the change in the optimal retirement age is indeterminate. Received: 19 February 1999/Accepted: 27 February 2001 All correspondence to Bertrand Crettez. We would like to thank Jean-Pierre Vidal for very helpful comments on an earlier draft. An anonymous referee provided insightful comments on a previous version of this paper. Responsible editor: Alessandro Cigno.     

Private versus public financing of education and endogenous growth: A comment on Bräuninger and Vidal

This note shows that the long-run effect in the case of a low skill trap in Br?uninger and Vidal (Journal of Population Economics (2000) 13:387–401) contains a mistake. While not affecting the paper's basic intuition, this implies that the discussion in the short-run analysis also applies in the long-run. Received: 24 April 2001/Accepted: 9 June 2001 I wish to thank Alessandro Cigno and an anonymous referee for useful comments. Responsible editor: Alessandro Cigno.     

An analysis of variations in U. S. fertility and female labor force participation trends

This study is based on time series data from 1947–1977 on fertility and female labor force participation, and examines (a) the effects of male relative income and female earnings on the level and timing of fertility and female labor force participation, and (b) the relative importance of variations in relative income and female wage rates in explaining the fluctuations in both fertility and female labor supply. The results suggest that relative income exerts a significant positive effect on fertility and a negative effect on female work effort. However, female wage rates appear to be the dominant factor in explaining variations in fertility and female labor force participation over the past two decades, with increases in female earnings leading to both depressed fertility and increased labor force participation of women.     

How does social security affect economic growth? Evidence from cross-country data

This paper investigates how social security interacts with growth and growth determinants (savings, human capital investment, and fertility). Our empirical investigation finds that the estimated coefficient on social security is significantly negative in the fertility equation, insignificant in the saving equation, and significantly positive in the growth and education equations. By contrast, the estimated coefficient on growth is insignificant in the social security equation. The results suggest that social security may indeed be conducive to growth through tipping the trade-off between the number and quality of children toward the latter.All correspondence to Junsen Zhang. We would like to thank the editor, two anonymous referees, Jim Davies, Frank Denton, Se-Jik Kim, and Mike McAleer for helpful comments and suggestions. Any remaining omissions and errors are the authors responsibility. Responsible editor: Alessandro Cigno.     

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.     

Bequests as a heir "disciple device."

This paper develops a model ofinter vivos gifts and bequests in a setting of moral hazard and adverse selection. Altruistic parents do not perfectly know how much effort their children make to earn their living, nor do they know their true level of ability.Inter vivos gifts take place prior to the realization of the children's earnings whereas at the moment of bequests, parents do observe them. We show that an optimal transfer policy generally uses a mix ofinter vivos gifts — deemed as more efficient — and bequests — deemed as more redistributive.We are thankful to Allessandro Cigno, Jacques Cremer, Claude d Aspremont and anonymous referees for their comments.Responsible editor: Alessandro Cigno     

Economic growth and stagnation with endogenous health and fertility

This article offers a theory of economic growth, stagnation, and demo-economic transition that originates from external effects of child-bearing, health expenditure, and education under endogenous mortality. Facing a hierarchy of needs, parents always consume and want to have a family. Child quality, measured as a two-dimensional vector of child health and schooling, becomes only affordable when uncontrollable mortality is sufficiently low. Child quality expenditure initiates an economic take-off and convergence towards perpetual growth while its absence may cause convergence towards an equilibrium of economic stagnation and high fertility. This way, the article provides an explanation for diverging growth rates from a cross-country perspective.I would like to thank Noël Bonneuil, Piero Manfredi, Nikolaus Siegfried, Richard Tol, and two anonymous referees for useful comments. Responsible editor: Alessandro Cigno.     

On the surge of altruism

To date, many arguments to explain altruistic behavior were based on `kin selection'. This note shows that evolution can sustain altruism even if the players are not necessarily genetically linked. Depending on the payoff parameters in a prisoner's dilemma game, there can be four distinct types of equilibria, for each of them the proportion of altruists in the population is described. The author is grateful to an anonymous referee for valuable comments. Responsible editor: Alessandro Cigno.     

Trade Liberalization And Women’s Integration Into National Labor Markets: A Cross-Country Analysis

This paper examines the effects of trade liberalization and the risks associated with participation in the global trading system on women’s integration into national labor markets. Using data from 1970 to 1995, I identify two global determinants of the female share of national labor markets: trade openness and transnational corporate penetration. Several local predictors of women’s labor force participation are also identified. While a cross-sectional analysis indicates that women have been pulled into national labor markets as a result of neo-liberal economic reforms, more dynamic models show that these same forces can also lead to a preference for male, rather than female labor. Moreover, the analyses specify that the effects of trade openness and trade risk on female labor force participation are determined by position in the world-system and region. These results illustrate that arguments about the relationship between globalization and the feminization of the labor force, are too simplistic and neglect to account for the diverse consequences of global economic expansion on gender relations.     

The engagement game

Engagement is a costly social institution for which virtually no economic analysis exists. We explore the information gathering function of engagement in a game with a proposer who offers a long or short engagement, and a respondent, who may reject the proposal at various stages. Whether the proposer is a suitable match is uncertain, but a long engagement yields information with which the respondent can update prior probabilities. We consider pooling, separating and mixed strategy equilibria and relate our findings to the evolving institution of engagement and institutional circumstances that will improve its efficiency in generating successful matches.All correspondence to Amy Farmer. Responsible editor: Alessandro Cigno.     

On the contribution of sectoral natural population growth to the aggregate poverty change

This note extends the Ravallion and Huppi (World Bank Econ Rev 5(1):57–82, 1991) aggregate poverty change decomposition to account for the distinct contribution of migration and differential natural population growth between sectors to the aggregate poverty change. We apply our decomposition to three Least Developing countries. We find that accounting for sectoral difference in natural population growth has a considerable impact on national poverty change. Responsible editor: Alessandro Cigno     

Population dynamics and life-cycle consumption

This paper presents a model where aggregate consumption depends on both the level of wealth and the age structure of population. The explicit consideration of an endogenous rate of time preference permits to analyze the important role of population ageing as a determinant of aggregate saving. Received: 23 October 2001/Accepted: 13 February 2002 I would like to thank an anonymous referee for his comments. Financial support from CNR and MURST is gratefully acknowledged. Responsible editor: Alessandro Cigno.     

Social security policy with public debt in an aging economy

This paper analyzes a social security policy with public debt in an overlapping generations growth model. In particular, the paper considers a situation in which population aging causes a heavy burden of social security payments where public debt is issued by the government to finance the payment. In the model presented below, an economy with an aging population may achieve two dynamically inefficient equilibria. Under certain conditions, the effects of pension reform and population aging on capital accumulation are entirely different between the two equilibria. Received: 23 July 2001/Accepted: 22 August 2002 I am deeply grateful to an anonymous referee and Professor A. Cigno, the Editor of this journal, for their valuable comments and suggestions. I am also grateful to Kazuyo Tanimoto and Kiheiji Nishida for their research assistance. Any remaining errors are my own. The research reported here was conducted as part of a larger study, the “Project on Intergenerational Equity” at the Institute of Economic Research, Hitotsubashi University. Financial support from Kani Hoken Bunka Zaidan is also gratefully acknowledged. Responsible editor: Alessandro Cigno.     

The causal relationship between female labor supply and fertility in the USA: updated evidence via a time series multi-horizon approach

The purpose of this paper is to investigate the causality between female labor supply and fertility in the presence of auxiliary variables such as education, female wages, and male relative cohort size. We employ annual time series data spanning the period 1948 to 2007 for both an aggregate and an age-specific group. Our econometric specification follows closely the concepts and procedures proposed by Dufour and Renault (Econometrica 66(5):1099–1125, 1998) and Dufour et al. (J Econom 132:337–362, 2006) in that we conduct multi-horizon causality tests that allow for direct and indirect effects to take place. The sign and economic importance of our results is assessed via the estimation of impulse response functions. Our results establish bidirectional indirect causality between female labor supply and fertility and suggest interesting causal chains among the system variables. Causality effects are stronger for the age-specific group.     

Domestic Outsourcing in an Ultra-Low Fertility Context: Employing Live-in Domestic Help and Fertility in Hong Kong

The fertility rate in Hong Kong has been very low for decades. Because work–family conflict is one of the major barriers for married couples in actualizing their fertility ideals, domestic outsourcing that relieves women from the burden of domestic labor may help reduce the gap between ideal and actual fertility. Hiring live-in domestic helpers, who co-reside with the hiring families and work on a full-time basis, is gaining popularity in Hong Kong. However, past studies neither inside nor outside of East Asia have examined how employing live-in helpers affects fertility. This study investigates the relationship between live-in helpers and fertility by analyzing retrospective event-history data we collected from a representative survey of married couples in Hong Kong (n?=?1697). Our results show that married couples employing live-in helpers tend to have more children than couples not employing live-in helpers. Specifically, the practice is associated with higher odds of first childbirth and of second childbirth, with no evidence of a positive effect beyond bearing a second child. The findings have implications for other East Asian societies, which share similar backgrounds of ultra-low fertility rates, rising female labor force participation rates, rigid gender inequalities in domestic labor, and demanding work cultures.

     

Demographics,the Third Age and partial retirement: Policy proposals to accommodate the changing picture of female retirement in Canada

Much concern has been raised around the potential impact of the retirement of the large baby boom generation. This article specifically addresses the unique issues surrounding the retirement of female baby boomers. Demographic changes, including increased labor force participation, coupled with declining fertility rates, have resulted in a social transformation of the roles women play in society. Despite these changes, women still bear much of the caregiving responsibilities in the household, which can complicate retirement choices. This article examines female retirement in the Canadian context and presents three policy proposals to expand women’s retirement choices, encourage longer-term labor force participation, and thereby extend their working lives into the Third Age.     

Total fertility rate,women's education,and women's work: What are the relationships?

This paper presents the results of a statistical study, using cross-national data, on the relationships between total fertility rate and women's level of education and women's labor participation. Aggregate data on seventy-one countries were collected from numerous sources. Eight variables related to women's fertility, mortality, economic status, labor participation, and education are analyzed using multivariate linear regression analyses. Two models are considered. The first model regresses five variables on total fertility rate: per capita Cross National Product (GNP), percentage of women ages 15 to 19 who are married, female life expectancy at birth, calories available as a percentage of need, and percentage of married couples using contraception. The second model includes two additional regressors: the average number of years of schooling for women, and the percentage of women in the labor force. These seven variables are regressed on total fertility rate. Although the data are crude, the results of the analyses suggest that the model which incorporates women's level of education and women's labor participation captures the data better than the smaller model. The full model suggests that the percentage of women in the labor force is directly related to total fertility rate, whereas the average number of years of education for women is indirectly related to total fertility rate.