“The Motherhood Wage Gap for Women in the United States: The Importance of College and Fertility Delay”

One of the stylized facts from the past 30 years has been the declining rate of first births before age 30 for all women and the increase rate of first births after age 30 among women with four-year college degrees (Steven P. Martin, Demography, 37(4), 523–533, 2000). What are some of the factors behind womens decision to postpone their childbearing? We hypothesize that the wage difference often observed between like-educated mothers and non-mothers (Jane Waldfogel, Journal of Labor Economics, 16, 505–545, 1998a; Journal of Economic Perspectives 12(1) 137–156, 1998b) may be affected by the postponement of childbearing until after careers are fully established. Hence, we focus on college-educated women because they are typically more career-oriented than their non-college educated counterparts and also the group most often observed postponing maternity. We use individual-level data on women from the 1979 National Longitudinal Survey of Youth (NLSY79) in order to control for individual-level unobserved heterogeneity as well as human capital characteristics, such as actual work experience, in our empirical analysis. We estimate wage equations, first producing base-line results to compare to the existing literature. Then, we expand the basic wage equation model to address fundamental econometric issues and the education/fertility issue at hand. Our empirical findings are two-fold. First, we find that college-educated mothers do not experience a motherhood wage penalty at all. In fact, they enjoy a wage boost when compared to college-educated childless women. Second, fertility delay enhances this wage boost even further. Our results provide an explanation for the observed postponement of maternity for educated women. We argue that the wage boost experienced by college-educated mothers may be the result of their search for family–friendly work environments, which, in turn, yields job matches with more female-friendly firms offering greater opportunities for advancement.JEL Codes: J13 and J3     

The Effect of a Family Policy Reform on Mother’s Pay: A Natural Experiment Approach

All parents in Norway with children aged one to three, who do not attend publicly subsidised day care, are entitled to a cash-for-care (CFC) subsidy. Studies have shown that the reform has reduced mothers labour supply. In this paper we analyse wage effects of the reform. We put forward a framework for evaluating reforms when reforms are uniformly and equally accessible nation-wide. First, running a simple Difference in differences (DD) analysis, results suggest that the CFC reform has reduced the mothers wages. However, after controlling for the age of the child effect, by running a triple difference approach, we no longer find any evidence of negative wage effects.This revised version was published online in May 2005 with corrections to the authors name and to the heading of table A2.     

“Economic Theory’s Stance On No-Fault Divorce”

This article explores key insights that economic theory can shed on the issue of no-fault divorce in the United States, addressing modifications in the incentive structure of individuals that resulted from the legislative reforms of the 1970s. After stressing the importance of correctly interpreting and classifying divorce laws, this work investigates the contributions of the theory of property rights, the contributions of game theory and intra-household bargaining, and the contributions of general equilibrium analysis in our understanding of how divorce laws work and what their impact is. By doing so, this exposé analyzes the theoretical consequences of no-fault divorce on the decision whether to get married or divorced, on the characteristics of spouses and divorcees, on divorce rates, and on marital-specific and non marital-specific investments.     

Demand for Immunization,Parental Selection,and Child Survival: Evidence from Rural India

This study focuses on the estimation of demand for immunization as well as its technological effect on the survival probability of a child in rural India. Careful attention is paid to the consequences of parental selection on survival technology and demand for health inputs. The results suggest that child mortality is negatively related to the likelihood of purchasing vaccination, but imperfect vaccination substantially reduce the beneficial effect. Results also suggest that a mother who perceives her child faces a risk of higher likelihood of death compensates for their beliefs in a beneficial way. Consequently, estimations that ignore this selection underestimate the impact of immunization on child survival. Mothers also engage in complementary behavior by reinforcing investment when they choose among health inputs. Estimations that ignore the complementarity substantially overstate the impact of prenatal care and delivery care on demand for immunization. The evidence for complementarity among measured inputs also implies that there might be favorable selection between measured and unmeasured inputs, although the adverse selection seems dominant in this study.Useful comments were received from Michael Grossman, John Strauss, Agnes Quisumbing, Robert Retherford, Rakesh Munshi, DoAnne Sanchez, Kathleen Beegle, seminar participants in the Econometric Society meeting and University of Hawaii, and two anonymous referees. I would like to thank Gayle Yamashita and Vicky Ho for their assistance with compiling data.     

The Relationship Between Wife’s Education and Husband’s Earnings: Evidence from 1960 to 2000

Previous research finds a positive relationship between a wife’s education and her husband’s earnings using data from the 1960s. Earlier theories suggest that benefits accrue from informational sharing between partners in a marriage. This paper tests the hypothesis that a wife’s education is positively associated with her husband’s earnings, using data from the 1960, 1970, 1980, 1990, and 2000 Censuses. Between 1960 and 2000, the educational attainment and labor-force participation of married women has increased dramatically. As women have embarked upon their own careers, has their education continued to be positively associated with their husbands’ earnings? Yes. The coefficient of the wife’s education remains positive and significant for all the years under study. The size of the coefficient decreases, however, from 1960 to 2000.     

Does Returning to Work After Childbirth Affect Breastfeeding Practices?

This study examines the effect of the timing and intensity of returning to work after childbirth on the probability of initiating breastfeeding and the number of weeks of breastfeeding. Data come from the National Longitudinal Survey of Youth (NLSY79). Baseline probit models and family-level fixed effects models indicate that returning to work within 3 months is associated with a reduction in the probability that the mother will initiate breastfeeding by 16–18%. Among those mothers who initiate breastfeeding, returning to work within 3 months is associated with a reduction in the length of breastfeeding of 4–5 weeks. We find less consistent evidence that working at least 35 h per week (among mothers who return to work within 3 months) detracts from breastfeeding. Future research is needed on understanding how employers can design policies and workplaces that support breastfeeding.     

A neoclassical Kaldor model of real wage declines

A model linking macroeconomic equilibrium and income distribution in balanced growth equilibria is developed as a variant to the Kaldor model of factor shares. It departs from the original Kaldor model in assuming equal saving rates and a neoclassical production function. Macroeconomic equilibrium (national savings equal to investment) combines with competitive microeconomic behavior to determine the real wage and real interest rate. An increase in the ratio of national debt to labor reduces the real wage, explaining recent declines.     

Mutual-Fund Benchmarking and Market Bubbles: A Behavioral Approach

Dynamics of equity risk premium is not directly measurable on the market. Numerous studies and empirical research analyse its volatility also considering the time span, concluding that the dynamics of equity risk premium over time is inversely proportional to the economic cycle. This study analyses the passive role that, implicitly, would place institutional investors in such a context. In reality, savings management is delegated to a small number of professional operators (institutional investors), as opposed to pure theoretical models in which every person can act directly on the market thus ensuring unlimited price elasticity. Institutional investors should be rational and completely informed so that they can assume an anticyclical position on the market. Thus, supply and demand should quickly smooth over emerging price pressures and avoid price bubbles. We analyse one possible explanation for this situation not to occur, namely, that professionals suffer from operational limits that prevent them from doing their job in the best possible way. Using empirical evidence from the Italian Stock Exchange (Comit Index), we conclude that three factors reduce the freedom of institutional investors to manage their portfolios – the market target size, the fund structure, and the benchmarking – and discuss some implications for each of them.     

Rating System as a Banking Performance Regulator in the Conditions of Transition Economy

Taking into consideration the importance of having a strong banking system, the issue of bank performance evaluation and analysis becomes essential for the bank regulation process in the countries with an emerging economy. For banking performance evaluation and analysis various methods are used in international practice. These methods have many disadvantages and are unusable for the banking systems in the countries with transition economy. In this article a new and complex system of analysis and evaluation of bank performance is described. This is a multidimensional system of bank performance indicators. This system enables to analyze bank performance through integrated indicators, viewing them in corresponding surfaces. Implementation of this system will allow to efficiently analyze bank performance by different directions, to reveal existing problems in the bank, to make corresponding regulation decisions for each bank, and to and group banks according to different criteria.