Clustering work and family trajectories by using a divisive algorithm

Summary.  We present an approach to the construction of clusters of life course trajectories and use it to obtain ideal types of trajectories that can be interpreted and analysed meaningfully. We represent life courses as sequences on a monthly timescale and apply optimal matching analysis to compute dissimilarities between individuals. We introduce a new divisive clustering algorithm which has features that are in common with both Ward's agglomerative algorithm and classification and regression trees. We analyse British Household Panel Survey data on the employment and family trajectories of women. Our method produces clusters of sequences for which it is straightforward to determine who belongs to each cluster, making it easier to interpret the relative importance of life course factors in distinguishing subgroups of the population. Moreover our method gives guidance on selecting the number of clusters.     

Combined Density Nowcasting in an Uncertain Economic Environment

We introduce a combined density nowcasting (CDN) approach to dynamic factor models (DFM) that in a coherent way accounts for time-varying uncertainty of several model and data features to provide more accurate and complete density nowcasts. The combination weights are latent random variables that depend on past nowcasting performance and other learning mechanisms. The combined density scheme is incorporated in a Bayesian sequential Monte Carlo method which rebalances the set of nowcasted densities in each period using updated information on the time-varying weights. Experiments with simulated data show that CDN works particularly well in a situation of early data releases with relatively large data uncertainty and model incompleteness. Empirical results, based on U.S. real-time data of 120 monthly variables, indicate that CDN gives more accurate density nowcasts of U.S. GDP growth than a model selection strategy and other combination strategies throughout the quarter with relatively large gains for the two first months of the quarter. CDN also provides informative signals on model incompleteness during recent recessions. Focusing on the tails, CDN delivers probabilities of negative growth, that provide good signals for calling recessions and ending economic slumps in real time.     

Financial Innovation and the Transactions Demand for Cash

We document cash management patterns for households that are at odds with the predictions of deterministic inventory models that abstract from precautionary motives. We extend the Baumol–Tobin cash inventory model to a dynamic environment that allows for the possibility of withdrawing cash at random times at a low cost. This modification introduces a precautionary motive for holding cash and naturally captures developments in withdrawal technology, such as the increasing diffusion of bank branches and ATM terminals. We characterize the solution of the model, which qualitatively reproduces several empirical patterns. We estimate the structural parameters using micro data and show that quantitatively the model captures important economic patterns. The estimates are used to quantify the expenditure and interest rate elasticity of money demand, the impact of financial innovation on money demand, the welfare cost of inflation, and the benefit of ATM ownership.     

Preference Theory and Low Fertility: A Comparative Perspective

The discussion on the causes of the most recent fertility decline in Europe, and in particular on the emergence of lowest-low fertility, emphasizes the relevance of cultural factors in addition to economic ones. As part of such a cultural framework, the heterogeneity of preferences concerning the “career vs. family” dichotomy has been systematized in the “Preference Theory” approach developed by Catherine Hakim. This heterogeneity in preferences, however, has so far been underinvestigated in a comparative framework. This paper makes use of comparative data from the 2004/2005 Round of the European Social Survey to test the links between individual-level preferences and both fertility outcomes and fertility intentions, in a variety of societal settings. Results confirm an association between work–family lifestyle preferences and realized fertility in a variety of European countries, while they do not show a relationship between lifestyle preferences and fertility intentions. Results further support the existence of heterogeneous patterns of association between lifestyle preferences and fertility choices among welfare regimes.     

Attitudes, Norms and Perceived Behavioural Control: Explaining Fertility Intentions in Bulgaria

In this article, we study fertility decision-making through timing parity-progression intentions. The theoretical framework builds on Ajzen’s social-psychological “Theory of Planned Behavior”: intentions are seen as directly dependent on three components: attitudes, norms and perceived behavioural control. We study the case of Bulgaria, a “lowest-low” fertility country. In 2002, a sample survey containing a specially designed module was conducted. This module included an implementation of our framework, with a special attention to the links between normative pressure and the social network of respondents. Results show that the three components are broadly predictive of fertility intentions. More specifically, attitudes are more relevant than norms for higher parities. Socio-economic, ideational, psychological and social capital-based factors are relevant background determinants.     

The Gender Wage Gap in Belarus

A new release of the Belarusian Household Survey on Incomes and Expenditures provides the unique opportunity for an in-depth study of the gender pay gap in Belarus. The econometric analysis involves estimates of augmented earnings equations, also corrected for sample selection bias, as well as for least absolute deviations estimates at different quantiles of the wage distribution. The results suggest that the gender wage gap is smaller than in other countries of the Commonwealth of Independent States and Central and Eastern European countries, as one would expect considering the slow transition process, and is reduced after controlling for unobservable characteristics. Moreover, the gap increases as one moves from the 10th to the 90th quantile. This means that having jobs providing generally higher levels of wages for a woman, it is more and more difficult to get the same wage as that of a man.     

Gender composition of friendship networks and age at first intercourse: a life-course data analysis

We investigate the impact of some characteristics of friendship networks on the timing of the first sexual intercourse. We assume that the gender-segregated composition of such networks explains part of the particularly late age at first intercourse in Italy. We use new data from a survey on sexual behavior and reproductive health of Italian first and second-year university students. The survey has been carried out in 15 different universities in 2000-2001 and it includes retrospective data on age at first intercourse, as well as retrospectively-collected time-varying measures for the gender composition of the friendship network at different ages, for almost 5,000 cases. After having described the data as transition frequencies, we use a Cox proportional hazards model with time-varying covariates. Results are in accordance with the hypothesis that having friendship networks that include more members of the other gender and talking about sex with friends increases the relative risk of first sexual intercourse.     

CLS asymptotic variance for a particular relevant bilinear time series model

The main purpose of this paper is to gain inference about the parameter estimated via the CLS method for a particular bilinear model. We propose a new CLS estimator which is strongly consistent and the CLT and LIL hold with milder conditions on the moments. Furthermore, we derive a closed form expression for the asymptotic variance of this CLS estimator.     

Web-Based Accountability Practices in Non-profit Organizations: The Case of National Museums

Stakeholder theory posits that accountability systems depend on the strength and the number of their stakeholders. This paper aims to analyze the empirical validity of stakeholder theory, focusing on accountability systems in the museum sector. Based on Wikipedia resources, we have selected all of the “National Museums” (134 museums) in the major developed countries: Australia, Canada, France, Germany, Italy, the United Kingdom, and the US. After we control for type of activity (art or other), cost per visitor and country, the results of an OLS multivariate model show that size of the museum, which is assumed to represent the strength and number of stakeholders, and the amount of funds received, which represents the power of a particularly salient category of stakeholders (donors), are the two main determinants of the accountability level. We conclude that accountability, in the absence of shareholders, is driven by the number and the power of different stakeholders, validating the stakeholder theory.     

Are European social safety nets tight enough? Coverage and adequacy of Minimum Income schemes in 14 EU countries

Figari F, Matsaganis M, Sutherland H. Are European social safety nets tight enough? Coverage and adequacy of Minimum Income schemes in 14 EU countries This study explored and compared the effectiveness of Minimum Income (MI) schemes for persons of working age in the European Union (EU). Using the European microsimulation model EUROMOD, we estimated indicators of coverage and adequacy of MI schemes in 14 EU countries. In terms of coverage, we found that in several countries, some individuals are ineligible for MI even when they fall below a poverty line set at 40 per cent of median income. With respect to adequacy, we show that in certain countries, a large fraction of those entitled to MI remain at very low levels of income even when MI benefit is added. Overall, our findings suggest that MI schemes in Europe remain divergent, and that their clustering may be more complex than has hitherto been allowed for. Key Practitioner Message: ?The ability of European welfare states to fight poverty is a key policy question, especially at times of crisis;?Adequacy and coverage of Minimum Income schemes are crucial aspects of the answer;?Microsimulation allows us to separate the effectiveness of MI schemes ‘by design’, from issues of benefit administration, targeting errors and so forth.