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     

Are Educational Mismatches Responsible for the ‘Inequality Increasing Effect’ of Education?

This paper asks whether educational mismatches can account for the positive association between education and wage inequality found in the data. We use two different data sources, the European Community Household Panel and the Portuguese Labour Force Survey, and consider several types of mismatch, including overqualification, underqualification and skills mismatch. We test our hypothesis using two different measurement methods, the ‘statistical’ and the ‘subjective’ approach. The results are robust to the different choices and unambiguously show that the positive effect of education on wage inequality is not due to the prevalence of educational mismatches in the labour market.     

Unskilled labor and wage determination: an empirical investigation for Germany

This article contributes to the ongoing debate on native wage impacts of immigration. I propose a mobile-fixed factor distinction as a framework in which to think about the differential impact of immigration on various labor market groups. Skilled workers are treated as a fixed factor of production since the strong reliance on skill certification in Germany inhibits mobility and shelters from competition. Unskilled workers, in contrast, receive competitive wages. Using data from the German Socio-Economic Panel for 1984–1989 I estimate panel wage regressions for groups of workers separated by skill certification. I find that university graduates‘ wages increase, and the wages of workers without postsecondary degree decrease, as the industry share of unskilled workers increases. The effect for apprentices is ambiguous. JEL classification: F22, J31 Received January 19, 1995 / Accepted August 14, 1995     

Evaluating the pin money hypothesis: the relationship between women's labour market activity,family income and poverty in Britain

In this paper we evaluate the hypothesis that the over-representation of women amongst the low paid is of little importance because women‘s earnings account for only a small proportion of total family income. Data from the General Household Survey (GHS), together with attitudinal evidence from three cross-sectional data sources, indicate that women‘s earnings are in fact an important and growing component of family income. The majority of the growth in the share of women‘s earnings occurs as a result of changing family labour structures; women‘s earnings are playing an increasingly important role in keeping their families out of poverty. JEL classification: J16; J31. Received April 9, 1996/Accepted August 22, 1996     

Wages, taxes and publicly provided day care

Public employment growth has been parallelled by increased female labour force participation, while real wages for typical female public sector occupations have not increased. In a theoretical model we, first, show that there is a tradeoff between day care provision and gross wages for occupations for which day care is a complement. It is possible to combine increased public labour demand with public day care provision leaving the wage unaffected. Second, non-parents will be in favour of increasing day care as long as day care productivity is higher than the inverse of the tax rate. This is because the effective labour supply and, therefore, the tax base increase. Third, parents want to push day care provision even further. They are prepared to accept a lower day care productivity than non-parents because day care provision relaxes the constraint on their desired labour supply. The Pareto efficient day care provision is between parents‘ and non-parents‘ preferred levels. Received: 12 December 1995 / Accepted: 17 September 1997     

Is demography destiny? The role of structural and demographic factors in Australis past and future labour supply

Following the release of the Intergenerational Report, the Australian Treasury identified the levers to address the economic effects of demographic ageing as ‘the three Ps’: population, participation and productivity. To date, the first ‘P’, population, has been treated as an exogenous factor, with the common view being that there is very little that the government can do to supplant demographic ageing. Focusing upon labour supply, this paper shows how variation in Australia’s underlying demography can significantly alter Australia’s future labour supply. Although governments cannot redirect the cohort flow component of population ageing, much can be achieved in promoting growth of the labour supply by maintaining or increasing fertility (in the longer term), or increasing targeted migration (in the short to medium term). This paper also decomposes the relative role of cohort flow, changing demography and changing labour force participation on the growth of the labour supply over the past 20 years. Over this period, the entry of the baby boom generation (cohort flow) and increased labour force participation of women accounted for almost all of the growth in the labour force. Changing demography had very little effect. However, Australias future labour supply will not include a large increase in cohort flow (as caused by the baby boomers) or a very large increase in female labour force participation. Regardless of the assumptions used, labour supply growth will be considerably lower in the next and subsequent 20 years, when compared to the previous 20.     

The influence of wages on parents’ allocations of time to child care and market work in the United Kingdom

We use time-diary data on couples with children from the 2000 United Kingdom Time Use Survey to examine the impacts of own and partner’s wages on parents’ provision of child care and market work on weekdays and on weekends and holidays. We find that increases in partners’ wages increase women’s primary care on all days and decrease their market work on weekdays, while increases in women’s own wages increase their market work on weekdays. There is little evidence that men’s time use responds to changes in their own wages. However, an increase in men’s partners’ wages increases men’s passive child-care time on weekends and reduces their market-work time on weekends.

Is the German apprenticeship system a panacea for the U.S. labor market?

This paper explores the structure of incentives undergirding the German system of apprenticeship training. We first describe characteristics of the German labor market which may lead firms to accept part of the cost of general training, even in the face of worker turnover. We then compare labor market outcomes for apprentices in Germany and high school graduates in the United States. Apprentices in Germany occupy a similar position within the German wage structure as held by high school graduates in the United States labor market. Finally, we provide evidence that – in both countries – the problem of forming labor market bonds is particularly acute for minority youth. JEL classification: J24, J31, J60 Received: July 4, 1996 / Accepted February 4, 1997     

Stepping stones for the unemployed: the effect of temporary jobs on the duration until (regular) work

Transitions from unemployment into temporary work are often succeeded by a transition from temporary into regular work. This paper investigates whether temporary work increases the transition rate to regular work. We use longitudinal survey data of individuals to estimate a multi-state duration model, applying the ‘timing of events’ approach. The data contain multiple spells in labour market states at the individual level. We analyse results using novel graphical representations, which unambiguously show that temporary jobs shorten the unemployment duration, although they do not increase the fraction of unemployed workers having regular work within a few years after entry into unemployment.     

The long-run labour market consequences of teenage motherhood in Britain

Common wisdom states that teenage childbearing reduces schooling, labour market experience and adult wages. However, the decisions to be a teenage mother, to quit school, and be less attached to the labour market might all stem from some personal or family characteristics.  Using the National Child Development Study (NCDS), we find that in Britain teenage childbearing decreases the probability of post-16 schooling by 12–24%. Employment experience is reduced by up to three years, and the adult pay differential ranges from 5% to 22%. The negative impact of teen motherhood on various adult outcomes is not only due to some pre-motherhood characteristics; hence policies aiming to encourage return to school and participation in the labour market may be an efficient way to reduce the long-term consequences of teenage pregnancy. Received: 10 October 2000/Accepted: 3 April 2002 All correspondence to Arnaud Chevalier. We are indebted to Martyn Andrews, Colm Harmon, Gauthier Lanot, Ian Walker and to the participants at the EEEG annual meeting (Southampton, 2000) and seminars at Keele University, LSE and Warwick University for their comments that greatly improved earlier versions of this paper. We also thank two anonymous referees and Christoph Schmidt for their insightful comments. All remaining errors are ours. The data was supplied by the Economic and Research Council's Data Archive at the University of Essex and are used with permission of the Controller of Her Majesty's Stationery Office. Responsible editor: Christoph M. Schmidt.     

Segregation, entrepreneurship and work values: the case of France

This paper studies the interaction between labour market integration, “work values” and entrepreneurial capital inside minority communities. A simple model of labour market segmentation with ethnic capítal and endogenous transmission of cultural values inside a minority group is presented. It emphasizes the role of entrepreneurial capital as an important driver of labour market integration and as a promoter of meritocratic work values inside the community. The case immigrants in France is then empirically studied as an example. We show that the contrasted labour market outcomes and work values of immigrants from Maghreb versus Southern Europe are, statistically, totally explained away by their different levels of entrepreneurial capital.     

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     

Religion as a determinant of marital fertility

This paper develops hypotheses about the effects of husbands‘ and wives‘ religious affiliations on fertility. The hypotheses are based on two central ideas. First, religions differ in their fertility norms and corresponding tradeoffs between the quality and quantity of children; differences in religious beliefs between husband and wife may thus lead to conflict regarding fertility decisions and possible resolution through bargaining. Second, a low level of religious compatibility between the spouses may raise the expected probability of marital dissolution and thereby decrease the optimal amount of investments in spouse-specific human capital. Analyses of data from the 1987–1988 National Survey of Families and Households conducted in the United States suggest that both of these effects play important roles in explaining the observed linkages between the religious composition of unions and fertility behavior. JEL classification: J1, J11, J13 Received February 17, 1995 / Accepted February 15, 1996     

Individual and institutional determinants of multidimensional poverty: A European comparison

In this article we evaluate to what extent between-country differences in the probability of being ‘multidimensional’ poor can be explained by a range of ‘domain-specific’ indicators of welfare regime arrangements. To this end, a so-called micro-macro model is estimated, testing the ‘independent’ effect of institutions, as opposed to alternative explanations such as between-country differences in population composition and economic affluence. Although we conclude that institutional arrangements do influence the risk of multidimensional poverty in the expected direction, we also find that bringing the ‘economy’ back into the analyses has a non-trivial impact. Our results point at several avenues for further discussion and research. First, although the more elaborate welfare regimes generally do a better job in preventing poverty, the level of transfers is not always ‘proportional’ to the general standard of living in these countries. Second, we only find partial confirmation for the often cited ‘negative’ impact of labour market flexibility and the related equality-jobs trade-off. While stricter employment regulations do reduce the poverty risk (be it only after controlling for economic affluence), flexibility in terms of the availability of fixed-term labour seems to be preferable to unemployment, even if at the individual level, labour market flexibility increases the likelihood of being poor quite severely.

Regional mismatch and unemployment: theory and evidence from Italy, 1977–1998

We describe the functioning of a two-region economy characterized by asymmetric wage setting. Labour market tightness in the leading-region affects wages in the whole economy. In equilibrium, net labour demand shifts towards the leading region raise unemployment elsewhere and leave regional wages unchanged, causing an increase in aggregate unemployment. Based on SHIW micro-data on earnings, we find strong evidence that wages in Italy only respond to Northern unemployment. We estimate that around 33% of the increase in Italian unemployment during 1977–1998 can be explained by regional mismatch, mainly due to an excess labour supply growth in the South.

How young workers get their training: A survey of Germany versus the United States

The recent economic literature on the incidence of various forms of post-secondary on-the-job and off-the-job training in Germany and the United States, as well as on the effects of training on wages, inequality, and labor mobility is surveyed. Young workers in Germany receive substantially more company-based (apprenticeship) training than United States workers. In the United States, high turnover deters firms from investing in general skills while it results in improved job matches. The received literature consents that key institutional elements required to make the German apprenticeship system work are absent in the United States. JEL classification: I2, J3, J24 Received December 14, 1995 / Accepted February 19, 1996     

Banking on fewer children: financial intermediation,fertility and economic development

This paper shows that financial intermediation can influence fertility and labor allocation decisions by raising market wages. The increase in wages induces some households to abandon “traditional” labor intensive methods of production managed at the household level and supply labor to “modern” sector firms. Since it is optimal for households in the modern sector to have fewer children, the labor allocation decision leads to lower national fertility. A panel VAR using financial intermediation, fertility and industrial employment share data in 87 countries is estimated. The empirical results show that the data are consistent with the theoretical predictions. Received: 20 October 1997/Accepted: 31 August 1998     

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     

A conversation with Richard Easterlin

After an introduction touching on various biographical highlights, this paper summarizes a wide-ranging discussion with Richard Easterlin which occurred in the Autumn of 1996. We considered the Easterlin Hypothesis – its genesis and current status, together with Easterlin‘s views on attempts to develop measures of relative income – and then moved on to “The Fertility Revolution” and questions regarding the applicability of the theory of household choice in modernizing societies. This was followed by a discussion of his early career development and influences on him at that time, ending with ruminations regarding the current state of economics, and the validity of training given to young economists today. JEL classification: J10, J11, J13 Received February 13, 1997 / Accepted February 26, 1997