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     

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.     

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.     

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     

Group living decisions as youths transition to adulthood

This study follows teens through young adulthood as they transition to independent living. We focus on a little studied issue: why some youths live in groups rather than alone or with parents. This choice is important because the size of the group has a substantial impact on the demand for dwelling units; the more youths per dwelling the lower is aggregate demand and the greater is population density. Our study also adds to the knowledge of which factors influence youths' choice of destination as they leave the parental home. The empirical testing uses a discrete hazard model within a multinomial logit framework to allow for more than one possible state transition. We find that economic variables have little impact on the decision of whether to exit to a large versus a small group, while socio-demographic variables matter. We also test a new push-pull hypothesis and find that the pull of economic variables on the probability of exiting the parental home increases as youths reach their mid to late twenties. Received: 15 July 1999/Accepted: 15 May 2000     

Effects of sexual preferences on earnings in the Netherlands

A small literature suggests that bisexual and homosexual workers earn less than their heterosexual fellow workers and that a discriminating labormarket is partly to blame. In this paper we examine whether sexual preferences affect earnings at the beginning of working careers in the Netherlands. Using an alternative, and quite possibly a better, measure of sexual identity, we find (i) that young and highly educated gay male workers earn about 3% less than heterosexual men; (ii) that similarly qualified lesbian workers earn about 3% more than their heterosexual female co-workers; and (iii) that among homosexual workers the gender gap is not observed. From this we conclude that the Dutch labor market does not discriminate on the basis of both sexual orientation and gender in entry-level jobs.All correspondence to Erik Plug. Both authors would like to thank Jim Albrecht, Mikael Lindahl, Hessel Oosterbeek, Susan Vroman and an anonymous referee for their helpful comments on earlier drafts of this paper. Responsible editor: Daniel S. Hamermesh.     

Leaving the parental home in Australia over the generations: Evidence from the Household,Income and Labour Dynamics in Australia (Hilda) Survey

The decision to remain in or leave the parental home represents the first housing career choice of young people. In this paper, we examine the parental home leaving outcomes for Australian birth cohorts in the twentieth century using recall questions contained in the Household, Income and Labour Dynamics in Australia Survey. The findings from survival analysis and hazard function modelling is that a continuous, gradual reduction in the age of first leaving the parental home in Australia is evident up to the 1947–51 birth cohort, followed by stability and then a rise in age of first leaving home for the most recent birth cohorts. Birth cohort effects remain significant even after other measured determinants of parental home leaving are taken into account. The paper confirms the strong roles that education, family background and ethnicity have on parental home leaving outcomes.     

Timing,togetherness and time windfalls

With appropriate data the analysis of time use, labor supply and leisure can move beyond the standard questions of wage and income elasticities of hours supplied. I present four examples: 1) American data from 1973 through 1997 show that the amount of evening and night work in the U.S. has decreased. 2) The same data demonstrate that workers whose relative earnings increase experience a relative diminution of the burden of work at unpleasant times. 3) U.S. data for the 1970s and 1990s demonstrate that spouses' work schedules are more synchronized than would occur randomly; synchrony among working spouses diminished after the 1970s; and the full-income elasticity of demand for it was higher among wives than among husbands in the 1970s but equal in the 1990s. 4) Dutch time-budget data for 1990 show that the overwhelming majority of the windfall hour that occurred when standard time resumed was used for extra sleep. Received: 6 July 2000/Accepted: 20 January 2001 Daniel S. Hamermesh is Edward Everett Hale Centennial Professor, University of Texas at Austin; research associate, National Bureau of Economic Research, and Forschungsinstitut zur Zukunft der Arbeit. I thank the National Science Foundation for support under Grants SBR-9422429 and SES-9904699, and two anonymous referees, Gerard Pfann, the late Lee Lillard, Gerald Oettinger, Steve Trejo and participants at the ESPE Conference and at seminars at the University of Bristol and Warwick University for helpful comments. Responsible editor: Klaus F. Zimmermann.     

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.     

Self-selection,earnings, and out-migration: A longitudinal study of immigrants to Germany

In this paper we examine the process of out-migration and investigate whether cross-sectional earnings assimilation results suffer from selection bias due to out-migration. Our 14 year longitudinal study reveals that emigrants are negatively selected with respect to occupational prestige and to stable full time employment. Our results show no selectivity with respect to human capital or gender. The likelihood of return migration is strongly determined by the range and nature of social attachments to Germany and origin countries. It is also the highest during the first five years since arrival, and grows higher toward retirement. Selective emigration, however, does not appear to distort cross-sectional estimates of earnings assimilation in a relevant way.All Correspondence to Douglas S. Massey. This study has been made possible through various research visits to DIW Berlin and IZA in Bonn. We are grateful for the access to the data, and many useful comments on various drafts by Klaus F. Zimmermann. Earlier drafts were presented at the annual conference of the Population Association of America in Atlanta, and research seminars at Princeton University and IZA, Bonn. We wish to thank many participants for stimulating discussions and useful comments. We have benefitted in making revisions from the comments of three anonymous referees. Responsible editor: Klaus F. Zimmermann.     

Brother correlations in earnings in Denmark, Finland, Norway and Sweden compared to the United States

The correlation in economic status among siblings is a useful “omnibus measure” of the overall impact of family and community factors on adult economic status. In this study we compare brother correlations in long-run (permanent) earnings between the United States, on one hand, and the Nordic countries (Denmark, Finland, Norway and Sweden) on the other. Our base case results, based on very similar sample criteria and definitions for all countries, show that this correlation is above 0.40 in the United States and in the range 0.14–0.26 in the Nordic countries. Even though these results turn out to be somewhat sensitive to some assumptions that have to be made, we conclude that the family and community factors are more important determinants of long-run earnings in the United States than in the Nordic countries. Received: 27 July 2000/Accepted: 7 March 2001 All correspondence to: Anders Bj?rklund. Comments from two referees, conference participants at ESPE2000 and the Canadian Employment Research Forum, seminar participants in Aarhus, Uppsala, Bonn, and Stockholm are gratefully acknowledged. We thank NOS-S for financial support. The Swedish data collection was also supported by HSFR and SFR. The Finnish data were obtained with support from the Yrj? Jahnsson Foundation. We thank Tom Erik Aab? for preparing the Norwegian data, and Esben Agerbo for computational assistance with the Danish data. Responsible editor: John F. Ermisch.     

A structural approach to women's hometime and experience-earnings profiles: Maternity leave and public policy

The differential availability of maternity leave benefits is shown to be an important factor in the earnings attainment process of women. Interaction effects with this job characteristic are found for experience, occupational status, and crowding. The human capital model's explanation of the relationship between women's hometime, women's job choice, and public policy is critically examined. The results indicate that the provision of adequate child care needs to be coupled with parental leave policies if women are to make significant gains in earnings from reducing their time spent at home.The data and tabulations used in this study were made available by the Inter-University Consortium for Political and Social Research. The data were originally collected by Robert P. Quinn and Graham L. Staines. Neither they nor the Consortium bear any responsibility for the analysis or interpretations presented here. This paper was presented at the 1989 American Sociological Association meetings.     

Earnings assimilation of immigrants in Norway – A reappraisal

The relative earnings growth for immigrants in Norway is computed. Unlike Hayfron (1998, this journal) we define immigrants by country of origin rather than citizenship and perform separate studies of immigrants from inside and outside the OECD region. Replicating Hayfron op.cit. we find that the earnings assimilation is considerably weaker. Further, we find that the earnings of OECD immigrants are comparable to those of natives, while Non-OECD immigrants earn considerably less than natives at the time of entry, but that their relative earnings improve gradually over time. Earnings of different immigrant cohorts converged from 1980 to 1990, indicating a non-linear rate of assimilation. Received: 7 April 2000/Accepted: 4 January 2001     

Parenthood and Leaving Home in Young Adulthood

With increases in nonmarital fertility, the sequencing of transitions in early adulthood has become even more complex. Once the primary transition out of the parental home, marriage was first replaced by nonfamily living and cohabitation; more recently, many young adults have become parents before entering a coresidential union. Studies of leaving home, however, have not examined the role of early parenthood. Using the Young Adult Study of the 1979 National Longitudinal Survey of Youth (n = 4,674), we use logistic regression to analyze parenthood both as a correlate of leaving home and as a route from the home. We find that even in mid-adolescence, becoming a parent is linked with leaving home. Coming from a more affluent family is linked with leaving home via routes that do not involve children rather than those that do, and having a warm relationship with either a mother or a father retards leaving home, particularly to nonfamily living, but is not related to parental routes out of the home.     

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     

Immigrant earnings: Language skills, linguistic concentrations and the business cycle

This study of the determinants of earnings among adult foreign-born men using the 1990 Census of Population focuses on the effects of the respondent's own English language skills, the effects of living in a linguistic concentration area, and the effects of the stage of the business cycle at entry into the U.S. labor market. The analysis demonstrates the importance of English language fluency among the foreign born from non-English speaking countries. There is also strong evidence for the complementarity between language skills and other forms of human capital. Furthermore, there is strong evidence using selectivity correction techniques for the endogeneity between language and earnings. Received: 30 November 1999/Accepted: 6 February 2001     

Gender,Turning Points,and Boomerangs: Returning Home in Young Adulthood in Great Britain

The idea of a generation of young adults “boomeranging” back to the parental home has gained widespread currency in the British popular press. However, there is little empirical research identifying either increasing rates of returning home or the factors associated with this trend. This article addresses this gap in the literature using data from a long-running household panel survey to examine the occurrence and determinants of returning to the parental home. We take advantage of the longitudinal design of the British Household Panel Survey (1991–2008) and situate returning home in the context of other life-course transitions. We demonstrate how turning points in an individual’s life course—such as leaving full-time education, unemployment, or partnership dissolution—are key determinants of returning home. An increasingly unpredictable labor market means that employment cannot be taken for granted following university graduation, and returning home upon completion of higher education is becoming normative. We also find that gender moderates the relationship among partnership dissolution, parenthood, and returning to the parental home, reflecting the differential welfare support in Great Britain for single parents compared with nonresident fathers and childless young adults.     

Feathered nest/gilded cage: Parental income and leaving home in the transition to adulthood

The growing study of leaving home in young adulthood in the United States has been hampered by data and measurement problems, which are producing a major theoretical confusion about the role of parental resources in influencing young adults’ leaving home. Does high parental income retain young adults in the home or subsidize their leaving (and parental privacy)? This paper uses the 1984 panel of Survey of Income and Program Participation to clarify this issue, and shows that the effects of parental resources differ depending on the route out of the home under consideration (marriage or premarital residential independence). Effects change substantially over the nest-leaving ages, but relatively few differences are found between young men and young women.     

The role of income in marriage and divorce transitions among young Americans

The paper investigates the importance of income in young Americans decisions to form and dissolve households. Using data on young American men and women from the NLSY, an important role for income in both these transitions is found. There are significant differences between young men and women. High earnings capacity increases the probability of marriage and decreases the probability of divorce for young men. High earnings capacity decreases the probability of marriage for young women, and has no impact on divorce.Thanks are due to seminar audiences at Bristol and the Royal Economic Society, two anonymous referees and the Editor for useful comments, and to Matt Dickson for preparation of the tables. Any errors are those of the authors. Responsible editor: John F. Ermisch.     

Children and return migration

We explore reasons for return migrations which are motivated by immigrants concerns about their children. We develop a simple model, where parents have paternalistic preferences. We show that parental concerns about the child may lead to an increase, or to a decrease in the tendency to return to the home country. Our model suggests that return plans of the parent may respond differently to the presence of daughters than to the presence of sons. The empirical test of our models relies on the exogeneity of childrens gender. We use a survey panel data set, containing information on both return realisations over 14 years, and intended return plans. Our results lend support to the hypothesis that children influence return plans of their parents.I am grateful to Jerome Adda, Jaap Abring, David Card, Slobodan Djajic, and Ian Preston for comments on earlier versions of this paper. Responsible editor: Christoph M. Schmidt.