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Journal of Population Economics

Newsletter 2/2010

Edited at IZA, Bonn, Germany (address see below)
Editor-in-chief: Klaus F. Zimmermann
For correspondence, please use: popecon@iza.org

"Does a food for education program affect school outcomes? The Bangladesh case"

MENG, Xin
Economics Program, Research School of Social Sciences, Australian National University, Canberra, 0200, Australia
Email: Xin.Meng@anu.edu.au

RYAN, Jim
International Policy Research Institute, Washington, DC, USA

Abstract.The Food for Education (FFE) program was introduced to Bangladesh in 1993. This paper evaluates the effect of this program on school participation and duration of schooling using household survey data collected in 2000. Using propensity score matching combined with difference-in-differences methodologies, we find that the program is successful in that eligible children on average have 15% to 26% higher school participation rates, relative to their counterfactuals who would have been eligible for the program had they lived in the program-eligible areas. Conditional on school participation, participants also stay at school 0.7 to 1.05 years longer than their counterfactuals.

"Free education, fertility and human capital accumulation"

AZARNERT, Leonid
Department of Economics, Bar Ilan University, Ramat Gan, 52900, Israel
Email: azarnel@mail.biu.ac.il

Abstract.This article analyzes the effect of free public education on fertility, private educational investments, and human capital accumulation at different stages of economic development. The model shows that, when fertility is endogenous, parental human capital levels are crucial for determining the effect of free education. At early stages of development when parental human capital is low, free access to basic education may provide the only chance to leave poverty. In contrast, at advanced stages of development when parental human capital is high, the availability of free education crowds out private educational investments, stimulates fertility, and may impede growth.

"Parental transfers, student achievement, and the labor supply of college students"

KALENKOSKI, Charlene M.
Ohio University, Athens, USA

PABILONIA, Sabrina W.
Division of Productivity Research and Program Development, Bureau of Labor Statistics, 2 Massachusetts Avenue, NE Rm. 2180, Washington, DC 20212, USA
Email: Pabilonia.Sabrina@bls.gov

Abstract. Using nationally representative data from the NLSY97 and a simultaneous equations model, this paper analyzes the financial motivations for and the effects of employment on U.S. college students’ academic performance. The data confirm the predictions of the theoretical model that lower parental transfers and greater costs of attending college increase the number of hours students work while in school, although students are not very responsive to these financial motivations. They also provide some evidence that greater hours of work lead to lower grade point averages (GPAs).

"Central exit examinations increase performance... but take the fun out of mathematics"

JÜRGES, Hendrik
MEA, Universität Mannheim, L13,17, 68131 Mannheim, Germany
Email: juerges@mea.uni-mannheim.de

SCHNEIDER, Kerstin
University of Wuppertal, Wuppertal, Germany

Abstract. We study the causal effect of state-mandated (central) exit examinations (CEEs) on student performance in Germany and find a small positive effect. We also investigate what actually drives this effect. We find that the teachers’ main reaction to CEEs is to increase the amount of homework and to check and discuss homework more often. Students report increased learning pressure, which has sizeable negative effects on student attitudes toward learning. Students who take central exit exams in mathematics like mathematics less, think it is less easy, and are more likely to find it boring.

"Arab immigrants in the United States: how and why do returns to education vary by country of origin?"

ALY, Ashraf El-Araby
Institute of National Planning, Cairo, Egypt

RAGAN, James
Department of Economics, Kansas State University, Manhattan, KS 66506, USA
Email: jfrjr@ksu.edu

Abstract.Using U.S. census data, the authors analyze the earnings of Arab males who completed their schooling before migrating to the United States. There is little return to precollege education, but education beyond 12 years is rewarded highly. Although Arabs share a common ethnicity, they are not a homogeneous group. Returns to education vary significantly by source-country, e.g., high for immigrants from Kuwait, low for Yemeni immigrants. Returns are related to economic development in the source-country and to pupil/teacher ratios. These findings have implications for immigration policy and point to the hazards of generalizing on the basis of ethnicity.

"Firm-Level Social Returns to Education"

JIN, Jim Y.
University of St Andrews, St Andrews, UK

MARTINS, Pedro S.
School of Business and Management, Queen Mary, University of London, Mile End Road, London, E1 4NS, UK, and IZA, Bonn, Germany, CEG-IST, Lisbon, Portugal
Email: p.martins@qmul.ac.uk

Abstract.Do workers benefit from the education of their co-workers? We examine this question first by introducing a model of learning, which argues that educated workers may transfer part of their general skills to uneducated workers, and then by examining detailed matched employer–employee panel data from Portugal. We find evidence of large firm-level social returns (between 14% and 23%), much larger than standard estimates of private returns, and of significant returns accruing to less educated workers but not to their more educated colleagues.

Aging

"Aging, fertility, social security and political equilibrium"

JIN, Jim Y.
Chukyo University, Showa-ku Nagoya, Japan

KITAURA, Koji
Chukyo University, Showa-ku Nagoya, Japan

YAKITA, Akira
Graduate School of Systems and Information Engineering, University of Tsukuba, 1-1-1 Tennodai, Tsukuba 305-8573, Japan
Email: yakita@sk.tsukuba.ac.jp

Abstract. We analyze the effect of population aging on the political choice of the size of a pay-as-you-go (PAYG) social security system, incorporating the heterogeneity of individuals in their preference for having children, and hence the endogenous fertility choices of individuals, into a simple overlapping generations model. We show that population aging may result in an increase in the contribution rate, increasing the share of the retired population who prefer a higher contribution rate; and that, if the system involves redistribution between retirees with different contributions, the increased contribution rate raises the number of individuals who have children, i.e., future contributors.

"Population aging, health care and growth"

HASHIMOTO, Ken-ichi
Graduate School of Economics, Kobe University, Rokko-dai 2-1, Kobe 657-8501, Japan
Email: hashimoto@econ.kobe-u.ac.jp

TABATA, Ken
Kobe City University of Foreign Studies, Kobe, Japan

Abstract. This paper constructs a small open two-sector (health care and non-health care) overlapping generations model and investigates how changes in the demand for health care induced by population aging influence the economy’s employment structure and per capita income growth rate. We show that population aging induces a shift in labor from the non-health care sector to the health care sector and lowers the per capita income growth rate. This paper also investigates public policy for child care and demonstrates the existence of an intergenerational conflict between current and future generations concerning public policy on child care.

"Hiring older workers and employing older workers: German evidence"

HEYWOOD, John S.
Department of Economics, University of Wisconsin-Milwaukee, Milwaukee, WI 53201, USA
Email: heywood@uwm.edu

JIRJAHN, Uwe
Leibniz University of Hanover, Hanover, Germany

TSERTSVARDZE, Georgi
Feri Rating and Research AG, Bad Homburg, Germany

Abstract. Using German establishment data, we examine the relationship between delayed compensation, training, and hiring of older workers. Both those establishments that delay compensation and those with greater human capital requirements are less likely to hire older workers. We demonstrate that the routinely used control for the age of existing workers is endogenous and that instrumenting provides stronger evidence for the role of delayed compensation. Specifically, delayed compensation is simultaneously a negative determinant of hiring older workers but a positive determinant of employing older workers and, thus, more clearly associated with employing older workers but not hiring them.

"Do early life and contemporaneous macroconditions explain health at older ages?"

PORTRAIT, France
Institute for Health Sciences, VU University Amsterdam, De Boelelaan 1085, 1081 HV Amsterdam, The Netherlands, and Tinbergen Institute, Amsterdam, The Netherlands
Email: france.portrait@falw.vu.nl

ALESSIE, Rob
Tinbergen Institute, Amsterdam, The Netherlands, and Utrecht University, Utrecht, and Netspar, Tilburg, The Netherlands

DEEG, Dorly
VU University Amsterdam Medical Center, Amsterdam, The Netherlands

Abstract. This paper presents an approach that assesses the role of early life and contemporaneous macroconditions in explaining health at older ages. In particular, we investigate the role of exposure to diseases and economic conditions during infancy and childhood, as well as the effect of current health care facilities. Specific attention is paid to the impact of unobserved heterogeneity, selective attrition, and omitted relevant macrovariables. We apply our approach to self-reports on functional limitations of Dutch older individuals. The prevalence of functional limitations is found to increase in the 1990s, in part due to restricted access to hospital care.

"Do the elderly reduce housing equity? An international comparison"

CHIURI, Maria Concetta
University of Bari, Bari, Italy

JAPPELLI, Tullio
Department of Economics, University of Naples Federico II, CSEF, Via Cinzia 45, 80126 Naples, Italy
Email: tullioj@tin.it

Abstract. We explore the pattern of elderly homeownership using 60 microeconomic surveys on about 300,000 individuals residing in 15 OECD countries. In all countries, the survey is repeated over time, permitting construction of an international dataset of repeated cross-sectional data. We find that ownership rates decline considerably after age 60. However, a large part of the decline depends on cohort effects. Adjusting for them, we find that ownership rates start falling after age 70 and reach a percentage point per year decline after age 75. We find that differences across country ownership trajectories are correlated with indicators measuring market regulation degree.

"The spillover effects of population aging, international capital flows and welfare"

ITO, Hiroyuki
Osaka University, Toyonaka Osaka, Japan

TABATA, Ken
Kwansei Gakuin University School of Economics, 1-1-155, Uegahara-ichiban-cho, Nishinomiya-shi Hyogo, 662-8501, Japan
Email: tabataken@kwansei.ac.jp

Abstract. This paper considers how a rise in old-age survival probability in a country with a higher old-age dependency ratio (the home country) influences the welfare of a country with a lower old-age dependency ratio (the foreign country). In a dynamically efficient steady-state equilibrium, we show that the old-age survival probability in the home country, when relatively low (high), has a positive (negative) effect on the welfare of the foreign country. We also show that the reform of a social security program in the home country may improve not only domestic welfare but also the welfare of the foreign country.

"Mortality, fertility, education and capital accumulation in a simple OLG economy"

LUDWIG, Alexander
Mannheim Research Institute for the Economics of Aging (MEA), University of Mannheim, L13, 17, 68131 Mannheim, Germany
Email: ludwig@mea.uni-mannheim.de

VOGEL, Edgar
University of Mannheim, Mannheim, Germany

Abstract. We develop a simple OLG model to analytically show that aging leads to increased educational efforts through a general equilibrium effect. The mechanism is that scarcity of raw labor increases the return of human relative to physical capital. While a reduction in the birth rate is shown to unambiguously increase educational efforts, increases in the survival rate have ambiguous effects. Falling birth rates also increase capital per worker, but the effects of rising survival rates are again ambiguous. We conclude that our model is a useful laboratory to highlight potentially offsetting effects in models with endogenous education and overlapping generations.

Pensions

"Growth and unemployment in an OLG economy with public pensions"

ONO, Tetsuo
Graduate School of Economics, Osaka University, 1-7, Machikaneyama, Toyonaka Osaka, 560-0043, Japan
Email: tono@econ.osaka-u.ac.jp

Abstract. This paper develops an overlapping generations model including (1) a productive externality as an engine of endogenous growth and (2) wage setting by trade unions as the cause of unemployment. Within this framework, the paper considers growth and unemployment affected by public pensions under the following two types of pension system: the proportionate pension system where only the contributors, that is, the employed, receive pensions, and the lump-sum pension system where both the employed and the unemployed receive pensions. It is shown that public pensions create a trade-off between growth and employment in the former system, whereas they produce no trade-off in the latter.

"Pension reform and labor market incentives"

FISHER, Walter H.
Institute for Advanced Studies, Vienna, Austria

KEUSCHNIGG, Christian
CEPR and CESifo, University of St. Gallen (IFF-HSG), Varnbuelstrasse 19, 9000 St. Gallen, Switzerland
Email: Christian.Keuschnigg@unisg.ch

Abstract. This paper investigates how parametric reform in a pay-as-you-go pension system with a tax-benefit link affects retirement and work incentives of prime-age workers. We find that postponed retirement tends to harm incentives of prime-age workers in the presence of a tax-benefit link, thereby creating a policy trade-off in stimulating aggregate labor supply. We show how several popular reform scenarios are geared either towards young or old workers or, indeed, both groups under appropriate conditions. We characterize the excess burden of pension insurance and show how it depends on the supply elasticities of both decision margins and the effective tax rates.

"Mixing Bismarck and child pension systems: an optimal taxation approach"

FENGE, Robert
University of Munich, Schackstr. 4, 80539 Munich, Germany
Email: fenge@ifo.de

VON WEIZÄCKER, Jakob
Bruegel, Brussels, Belgium

Abstract. Pensions with a strong tax-benefit link (Bismarck pensions) minimise the labour-leisure distortion of the public pension system. By contrast, pensions with a strong link of benefits to the number of children (child pensions) minimise the fertility distortion. When both types of distortion are present, we obtain a Corlett-Hague result regarding the optimal mix of the two pension formulae: the Bismack pension should be given a positive weight if and only if children are more complementary to leisure than consumption. Alternative fertility instruments such as child benefits turn out to be perfect substitutes to a child pension.

"Do Beveridgian pension systems increase growth?"

HACHON, Christophe
Paris School of Economics, CES, University Paris 1 Panthéon-Sorbonne, 106-112 Boulevard de l’hôpital, 75 013 Paris, France
Email: Christophe.Hachon@malix.univ-paris1.fr

Abstract. In this paper, we explain why the structure of pension systems has an impact on the growth rate of an economy. Using a capital accumulation model, we show that the more a pension system is Beveridgian, the higher the growth rate of the economy is.

3. Content of Volume 23, 2010

Issue 1, 2010

Fertility

"The fertility effect of catastrophe: U.S. hurrican births"

EVANS, Richard
HU, Yingyao
ZHAO, Zhong

"Life expectancy, fertility and educational investment"

CHEN, Hung-Ju

"Variety expansion and fertility rates"

MARUYAMA, Akiko
YAMAMOTO, Kazuhiro

"Child mortality and fertility: public vs private education"

FIORONI, Tamara

"Demographic transitions: analyzing the effects of mortality on fertility"

ANGELES, Luis

Households

"Mobility, information, and bequest: The "other side" of the equal division puzzle"

FARMER, Amy
HOROWITZ, Andrew

"Reconciling workless measures at the individual and household level. Theory and evidence from the United States, Birtain, Germany, Spain and Australia"

GREGG, Paul
SCUTELLA, Rosanna
WADSWORTH, Jonathan

"Household vulnerability and child labor: the effect of shocks, credit rationing, and insurance"

GURACELLO, Lorenzo
MEALLI, Fabrizia
ROSATI, Furio Camillo

"Siblings, child labor, and schooling in Nicaragua and Guatemala"

DAMMERT, Ana C.

"Household division of labor and cross-country differences in household formation rates"

SEVILLA-SANZ, Almudena

Labor

"Are there Asymmetries in the Effects of Training on the Conditional Male Wage Distribution?"

ARULAMPALAM, Wiji
BOOTH, Alison L.
BRYAN, Mark L.

"Are Wages in Southern Europa more Flexible? The Effects of Cohors Size in European Earnings"

BRUNELLO, Giorgio

"How performance related pay affects productivity and employment"

GIELEN, Anne C.
KERKHOFS, Marcel J.M.
VAN OURS, Jan C.

"Binge drinking and labor market success: a longitudinal study on young people"

KENG, Shao-Hsun
HUFFMAN, Wallace E.

""Making work pay" in a rationed labor market"

BARGAIN, Olivier
HAAN, Peter
CALIENDO, Marco
ORSINI, Kristian

"Occuptational Language Requirements and the Value of English in the U.S. Labor Market"

CHISWICK, Barry R.
MILLER, Paul W.

"Explaining welfare recidivism: what role do unemployment and initial spells have? "

AYALA, Luis
RODRIGUEZ, Magdalena

Issue 2, 2010

see above

Issue 3, 2010

not yet published

Issue 4, 2010

not yet published

4. About the JOURNAL OF POPULATION ECONOMICS

The Journal of Population Economics is an international quarterly that publishes original theoretical and applied research and survey articles on topics dealing with broadly defined relationships between economic and demographic problems. Both extensive surveys of wider areas and shorter reviews of important new developments are considered.

For more information please see: www.popecon.org

5. Editorial Board

Editor-in-chief:

KLAUS F.ZIMMERMANN, IZA, Bonn
Fax: +49-228-3894210 / E-mail: zimmermann@iza.org

Editors:

ALESSANDRO CIGNO, University of Florence, Italy
Fax: +39-055-472102 / E-mail: cigno@unifi.it

Erdal Tekin Georgia State University, USA
Fax: +1-404 413-0145/ Email: tekin@gsu.edu

JUNSEN ZHANG, Chinese University of Hong Kong, Hong Kong
Fax: +852-26035805 / E-mail: jszhang@cuhk.edu.hk

Associate Editors:

HEATHER ANTECOL, Claremont McKenna College, USA
ORLEY ASHENFELTER, Princeton University, USA
KAUSHIK BASU, Cornell University, USA
DAVID CARD, University of California, Berkeley, USA
BARRY R. CHISWICK, University of Illinois at Chicago, USA
GIAM P.CIPRIANI, Università di Verona, Italy
HELMUT CREMER, GREMAQ and IDEI, Universitè de Toulouse, France
GIL S. EPSTEIN, Bar-Ilan University, Israel
JOHN F. ERMISCH, ISER, University of Essex, UK
DENIS FOUGÈRE, CREST/INSEE, Paris, France
ODED GALOR, Brown University, USA
IRA N. GANG, Rutgers University, New Brunswick, USA
NEZIH GUNER, ICREA, Universitat Autonoma de Barcelona and Barcelona GSE, Spain
DANIEL S. HAMERMESH, University of Texas at Austin, USA
JAMES J. HECKMAN, University of Chicago, USA
KAI A. KONRAD, Science Center Berlin, Germany
PETER KOOREMAN, Tilburg University, The Netherlands
FRANCIS KRAMARZ, CREST/INSEE, France
RONALD D. LEE, University of California, Berkeley, USA
SHELLY LUNDBERG, University of Washington Seattle, USA
LISA LYNCH, Tufts University, USA
GIOVANNI PERI, University of California, Davis, USA
DAVID RIBAR, University of North Carolina at Greensboro, USA
CHRISTOPH M. SCHMIDT, RWI Essen, Germany
T. PAUL SCHULTZ, Yale University, New Haven, USA

JOURNAL OF POPULATION ECONOMICS

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