Human Capital,Wages and Family Interactions

The majority of studies of the returns to human capital investment have generally considered the relationship among wages and individuals’ investment in education. However, among factors which increase individuals’ stocks of human capital and affect their labour market performances there are variables linked to the relevant social environment, such as the family. This paper takes into consideration intra‐generational relations which form between spouses through marriage, as well as inter‐generational relationships between parents and their sons/daughters. The empirical work investigates the effects of some family background variables on individuals’ economic performances, using data drawn from the 1995 survey of household income and wealth conducted by the Bank of Italy. The results of the analysis show that individuals’ wages do not depend only on their own human capital endowment, but also on that of other family members (parents and partners).     

Transition to adulthood and recession: a qualitative study

While the transition to adulthood has been broadly examined, less is known about the impact of economic recession on the well-being and psychosocial functioning of young people. The present study used qualitative interviews with 12 college students to understand their experience. Consensual qualitative research was used to analyse data and develop core themes around young people's experiences. Interviews focused on how young people perceived the impact of the economic recession on their social context and on emotional, behavioural, and interpersonal dimensions. Although students showed a proactive attitude in dealing with the crisis, findings highlighted a negative impact on psychological functioning characterized by feelings of instability and helplessness and by difficulties in planning for the future. Other general themes emerged, including disengagement from community participation expressed by feelings of isolation, lack of interest, and distrust. Directions for future research and implications for practice are discussed.     

The Migrant Border Crossing Study: A methodological overview of research along the Sonora–Arizona border

Increased border enforcement efforts have redistributed unauthorized Mexican migration to the United States (US) away from traditional points of crossing, such as San Diego and El Paso, and into more remote areas along the US–Mexico border, including southern Arizona. Yet relatively little quantitative scholarly work exists examining Mexican migrants’ crossing, apprehension, and repatriation experiences in southern Arizona. We contend that if scholars truly want to understand the experiences of unauthorized migrants in transit, such migrants should be interviewed either at the border after being removed from the US, or during their trajectories across the border, or both. This paper provides a methodological overview of the Migrant Border Crossing Study (MBCS), a unique data source on Mexican migrants who attempted an unauthorized crossing along the Sonora–Arizona border, were apprehended, and repatriated to Nogales, Sonora in 2007–09. We also discuss substantive and theoretical contributions of the MBCS.     

Does patience matter in marriage stability? Some evidence from Italy

Time preferences can affect divorce probability by both affecting the quality of the match and affecting the spouses’ reactions to negative shocks. We analyse the relationship between time preferences and divorce decisions using data from the Italian Survey on Household Income and Wealth, which provides a measure of time preferences based on a hypothetical financial situation in which individuals have to decide how much money to give up in order to receive a certain amount of money immediately rather than in one year’s time. By controlling for a number of individual and family characteristics, we find that impatient individuals are more likely to experience divorce. The effect is robust to different specifications of our model and is not affected by reverse causality problems. We also find that the more risk averse individuals are, the less likely they are to experience divorce.     

LIVING ARRANGEMENTS IN WESTERN EUROPE: DOES CULTURAL ORIGIN MATTER?

Conventional economic analyses have not been successful in explaining differences in living arrangements and particularly the dramatic increase in the fraction of young adults living with their parents in Mediterranean Europe. This paper presents a cultural interpretation. I argue that the sexual revolution of the 1970s—by liberalizing parental attitudes—had a differential impact on living arrangements in Northern and Southern Europe on account of the closer parent–child ties in Southern Europe. Such an interpretation can easily explain both the shift in living arrangements over time and also observed North–South differentials. It receives support from data on the living arrangements of second‐generation immigrants in the United States, both in 1970 and 2000. This duplication of the European pattern in a neutral environment, with the same unemployment benefits, the same welfare code, and the same macroeconomic conditions suggests a major role for culture in determining living arrangements. (JEL: D1, J1, Z13)     

On the Representation of Incomplete Preferences Over Risky Alternatives

We study preferences over lotteries which do not necessarily satisfy completeness. We provide a characterization which generalizes Expected Utility theory. We show in particular that various sure-thing axioms are needed to guaranteee the representability in terms of utility intervals rather than numbers, and to provide a linear interval order representation which is very much in the spirit of Expected Utility theory.     

Children and Gender — Wage Differentials

ABSTRACT: In this paper we present a test of wage discrimination between women and men in Italy, controlling for individual productive characteristics. We emphasise the importance, in empirical tests of wage discrimination, of explicitly modelling the reproductive role of women within the family. We show that ignoring the impact on women wages of the presence of children can seriously bias the results in favour of the hypothesis of wage discrimination. Our results illustrate that a considerable wages gap exists, but that only part of the observed differential can be attributed to pure discrimination; the remainder is explained either by heterogeneous productivity of men and women or by the effect of having children on female human capital formation.     

INVESTMENT AND TIME TO PLAN AND BUILD: A COMPARISON OF STRUCTURES VS. EQUIPMENT IN A PANEL OF ITALIAN FIRMS

“Time‐to‐build” models of investment expenditures play an important role in many traditional and modern theories of the business cycle, especially for explaining the dynamic propagation of shocks. We estimate the structural parameters of a time‐to‐build model using annual firm‐level investment data on equipment and structures. For expenditures on equipment, we find no evidence of time‐to‐build effects beyond one year. For expenditures on structures, by contrast, there is clear evidence of such effects in the range of two to three years. The contrast between equipment and structures is intuitively reasonable and consistent with previous results. The estimates for structures also indicate that initial‐period expenditures are low and increase as projects near completion. These results provide empirical support for including “time‐to‐plan” effects for investment in structures. More generally, these results suggest a potential source of specification error for Q models of investment and production‐based asset pricing models that ignore the time required to plan, build, and install new capital. (JEL: D24, G31, C33, C34)     

A Latent Process Model for Temporal Extremes

This paper presents a hierarchical approach to modelling extremes of a stationary time series. The procedure comprises two stages. In the first stage, exceedances over a high threshold are modelled through a generalized Pareto distribution, which is represented as a mixture of an exponential variable with a Gamma distributed rate parameter. In the second stage, a latent Gamma process is embedded inside the exponential distribution in order to induce temporal dependence among exceedances. Unlike other hierarchical extreme‐value models, this version has marginal distributions that belong to the generalized Pareto family, so that the classical extreme‐value paradigm is respected. In addition, analytical developments show that different choices of the underlying Gamma process can lead to different degrees of temporal dependence of extremes, including asymptotic independence. The model is tested through a simulation study in a Markov chain setting and used for the analysis of two datasets, one environmental and one financial. In both cases, a good flexibility in capturing different types of tail behaviour is obtained.