investment in human capital and gender wage differences evidence from the nlsy this paper uses data from the national longitudinal survey of youth nlsy to investigate gender differences in returns to various forms of human capital since the nlsy includes relatively detailed information regarding on and off the job training we place special emphasis on measuring gender differences in the incidence of and returns to formal post school training also considered is the role of nonhuman capital factors such as industry and occupation in explaining the wage gap it is found that about 60 of the gender wage gap in the sample is explained by mean differences in individual characteristics and market circumstances this suggests a smaller role for discrimination in explaining the wage gap than previous research has found the research indicates that training does not affect the gender wage gap also it is found that there is no statistically significant difference in the rate of return to other measures of human capital for women versus men our research suggests that the largest factor

measuring positive externalities from unobservable victim precaution an empirical analysis of lojack lojack is a hidden radio transmitter device used for retrieving stolen vehicles because there is no external indication that lojack has been installed it does not directly affect the likelihood that a protected car will be stolen there may however be positive externalities due to general deterrence we find that the availability of lojack is associated with a sharp fall in auto theft rates of other crime do not change appreciably at least historically the marginal social benefit of an additional unit of lojack has been fifteen times greater than the marginal social cost in high crime areas those who install lojack however obtain less than 10 percent of the total social benefits leading to underprovision by the market

squealer dealers the market for information in federal drug trafficking prosecutions never rat on your friends and always keep your mouth shut jimmy conway goodfellas citing his invaluable aid in the war against the mafia a federal judge yesterday rewarded a once powerful mob figure who became a major government informer by sentencing him to just five years in prison despite his admitted involvement in 19 murders the new york times september 27 19941 i introduction since the seminal theoretical work of becker 1968 the economics of crime has developed an extensive empirical literature 2 this article adds to that literature by studying markets for information in federal prosecutions of drug trafficking conspiracies in these markets law enforcement demands information that can help prosecute and imprison suspected drug traffickers while other drug traffickers supply the information 3 the price over which demanders and suppliers higgle is the size of an informer s sentence reduction 4 mustard 2001 using federal sentencing data found that different demographic groups have different rates relative quantities of providing substantial assistance the federal legal term meaning information against other defendants 5 this article adds to mustard 2001 by using federal sentencing of convicted drug traffickers to uncover whether different demographic groups have different relative prices for their information i e whether different groups receive larger sentence reductions higher prices or smaller sentence reductions lower prices when providing substantial assistance then in a simple manner similar to well known examinations of the returns to education in the 1970s and 1980s levy and mumane 1992 murphy and welch 1989 price and quantity determine whether certain groups experience different relative demand or relative supply for their testimony groups experiencing high relative demand have their information highly sought by law enforcement and therefore have high rates quantities of providing substantial assistance and large sentence reductions prices when doing so those with low relative demand have low quantities and low prices groups with high relative supply of substantial assistance have high quantities but low prices while those with low relative supply have low quantities and high prices this article further adds to the literature by going beyond demographic factors and examining what criminality related factors e g criminal history role in a criminal conspiracy and type of drug dealt affect supply and demand for information and by examining supply and demand conditional on expected prison sentence results show that women and better educated defendants experience high relative demand for information while blacks hispanics and non u s citizens experience low relative demand groups facing long prison sentences dealers of harder drugs those with long criminal histories and high level dealers have high relative supply while those facing short sentences primarily low level dealers have low relative supply when controlling for expected sentence crack dealers high level dealers and dealers with long criminal histories experience low demand race specific estimations show that women of all races experience high relative demand for information the rest of this article is organized as follows section ii discusses the federal criminal justice system emphasizing reforms established by the sentencing reform act of 1984 and the anti drug abuse act of 1986 section iii discusses the data and provides summary statistics section iv discusses my empirical methodology section v shows results and section vi attempts to explain them section vii discusses results from race specific estimations and section viii concludes ii federal criminal sentencing through most of the 1980s and before federal judges possessed near total discretion in determining sentences for criminals convicted of violating federal statutes e

educational expenditure in urban china income effects family characteristics and the demand for domestic and overseas education analysing survey data from 32 selected cities across china in 2003 this article examines parents expenditure on their children s education from two aspects factors affecting domestic education expenditure and factors affecting expenditure on overseas education the main findings that emerge from this study are as follows first household income has significant effects on the magnitude of the domestic and overseas educational expenditures second households where mothers have senior secondary school or college education and fathers are working in professional occupations are likely to spend more on education for their children third being in the highest income category having a college educated father having a mother who is a cadre or middle professional and living in a coastal area significantly enhances the probabilities for the households sending their children overseas for education

crime rates and local labor market opportunities in the united states 1979 1997 the labor market prospects of young unskilled men fell dramatically in the 1980s and improved in the 1990s crime rates show a reverse pattern increasing during the 1980s and falling in the 1990s because young unskilled men commit most crime this paper seeks to establish a causal relationship between the two trends previous work on the relationship between labor markets and crime focused mainly on the relationship between the unemployment rate and crime and found inconclusive results in contrast this paper examines the impact of both wages and unemployment on crime and uses instrumental variables to establish causality we conclude that both wages and unemployment are significantly related to crime but that wages played a larger role in the crime trends over the last few decades these results are robust to the inclusion of deterrence variables controls for simultaneity and controlling for individual and family characteristics

child allowances and allocative decisions in romanian households in this paper it is tested whether increasing child allowances will affect the intra household allocation of consumption measured by child and adult goods holding total household resources constant the analysis is based on household survey data collected in romania where cash payments are made to families according to the number and age of children selectivity is controled for since there is the potential for self selection bias in terms of the level of child allowances received the findings suggest that holding total household resources constant child allowances increase demand for child goods and calories and reduce demand for adult goods

does increasing women s schooling raise the schooling of the next generation the positive cross sectional relationship between the schooling of mothers and their children is substantially biased upward due to correlations between schooling and heritable ability as well as assortative mating an increase in the schooling of women would not have beneficial effects in terms of the schooling of children increased maternal schooling leads to reduced home time for mothers anticipating the consequences of investing in women s schooling requires attention to the role that schooling plays in the marriage market as well as to opportunities in the labor market for women

bargaining and distribution in marriage the standard economic model of the family is a common preference model that assumes that a family maximizes a single utility function and implies that family behavior is independent of which individuals receive income or control resources in recent years this model has been challenged by game theoretic models of marriage that do not impose pooling and are therefore consistent with empirical evidence that income controlled by husbands and wives does have different effects on family behavior in this paper the authors review a number of simple bargaining models and relevant empirical evidence and discuss their implications for distribution within marriage

measuring crack cocaine and its impact numerous social indicators turned negative for blacks in the 1980s and rebounded a decade later we explore whether crack cocaine explains these patterns absent a direct measure we construct a crack prevalence index using multiple proxies our index reproduces spatial and temporal patterns described in ethnographic accounts of the crack epidemic it explains much of the 1980s rise in black youth homicide and more moderate increases in adverse birth outcomes although our index remains high through the 1990s crack s deleterious social impact fades changes over time in behavior crack markets and the user population may have mitigated crack s damaging impacts jel k42 j15 i30

haddad lawrence john hoddinott and harold alderman eds intrahousehold resource allocation in developing countries models methods and policy baltimore md johns hopkins university press 1997 384 pp 55 00 in this volume economists demographers sociologists and anthropologists collaborate in the study of how resources are allocated within households in developing countries and why it matters from a policy perspective surveying a broad range of theory and evidence the contributors examine the many social and cultural factors that influence decisions about the family and household level about the allocation of time income assets and other resources ths contributors show that a more complete understanding of intrahousehold behaviour can increase the likelihood that policies will reach the people they are intended to affect

determinants of the demand for education in spain the aim of this paper is to estimate an equation for household demand for both secondary and university education using an estimation of the opportunity cost associated with the decision to invest in education limited dependent variable models are applied to the data provided by the family budget survey 1991 for spain the results show that the social and economic status of the family has a comparatively greater impact on household expenditure on secondary education than on university education the opportunity cost is also shown to be a decisive variable in the decision to invest in secondary education although the results are less conclusive in the case of university education

the interactive effects of human capital and quality of life on economic growth abstractto bridge the gap in the quality of life qol and economic growth literature and understand the reinforcing effects of qol and human capital on economic development we examine the interactive effects of these two factors on wage growth from 2000 to 2007 at the county level across the united states first a rosen roback model is employed to estimate implicit values of amenities including climate clean air and other natural attributes which are used to generate qol indices second qol human capital represented by the share of college graduates and their interaction serve as key variables in the wage growth model an instrumental variable approach and location fixed effects are used to address endogeneity of human capital and control for location specific unobservable characteristics results suggest that human capital and qol significantly contribute to economic growth and the growth effects are even larger in nonmetropolitan counties importantly we find that the effect of human capital on

looking for boy girl discrimination in household expenditure data the ability to test for discrimination in the allocation of goods between boys and girls is hampered by a lack of data on intrahousehold distribution the analysis presented here allows inferences about intrahousehold allocation to be made from householdlevel expenditure data for a given level of income families with children will spend less on adult goods in order to purchase children s goods if household purchasing favors boys over girls smaller expenditures on adult goods would be made by families with boys as compared with those with girls a method for determining adult goods is described and the procedure for detecting gender bias is applied to data from c6te d lvoire and thailand the data show no evidence of discriminatio n between boys and girls in c6te d lvoire and a small and statistically insignificant bias in favor of boys in thailand how commodities are allocated among the members of a household has recently occasioned a good deal of interest assessments of poverty and income distribution based on household incomes or expenditures will be misleading if allocation within the household is unequal the position of women and girls has been of particular concern and there is a considerable amount of empirical evidence much of it from the indian subcontinent that documents discrimination against females see in particular bhagwati 1973 sen 1984 sen and sengupta 1983 miller 1981 bardhan 1982 and kynch and sen 1983 as well as survey papers by behrman 1987 and harriss 1987 much of the evidence is concerned with measurements of nutritional outcomes mortality and health status rather than with the direct allocation of goods by gender the difficulty in trying to determine the intrahousehold allocation of goods is that household budget surveys the obvious source of data record consumption not of individuals but of households and while attempts can be made to the author is a professor of public affairs and of economics and international affairs at princeton university and is a consultant to the population and human resources department of the world bank the author thanks dwayne benjamin who provided for excellent research assistance he is grateful to him and to members of the economic growth center at yale university for helpful comments this is a revised and shortened version of living standards measurement study working paper 39 the allocation of goods within the household adults children and gender june 1987 the results from thailand were not included in the working paper 1989 the international bank for reconstruction and development the world bank

plea bargaining and prosecutorial discretion a model of plea bargaining with asymmetric information is presented the prosecutor s private information consists of the strength of the case while the defendant s private information consists of h is guilt or innocence in equilibrium a fraction of cases are dismis sed because they are too likely to involve an innocent defendant in the remaining cases the prosecutor s offer of a sentence in exchange for a plea of guilty reveals the strength of the case it is shown t hat unlimited prosecutorial discretion may be socially disadvantageou s since it carries with it the requirement of sequential rationality copyright 1988 by american economic association

parental investment in children s human capital in urban china the present study tests the extent of parental forgone consumption used instead to invest in children s human capital by use of intrahousehold resource allocation models using an unusual comprehensive data set for urban china there is more spending on boys aged 13 to 15 but more on girls aged 16 to 18 suggesting that standard human capital theories and traditional perceptions of gender bias do not completely explain educational expenditure decisions the evidence from urban china is consistent though with human capital models which consider parental intertemporal preferences also the findings suggest that the perceived bias in favour of sons exists weakly in contemporary urban china

striking at the roots of crime the impact of welfare spending on crime during the great depression abstractduring the great depression contemporaries worried that people hit by hard times would resort to crime president franklin roosevelt argued that the massive government relief efforts struck at the roots of crime by providing subsistence income to needy families after constructing a panel data set for 81 large american cities for the years 1930 40 we estimate the effect of relief spending by all levels of government on crime rates the analysis suggests that a 10 percent increase in relief spending during the 1930s reduced property crime by roughly 1 5 percent by limiting the amount of relief recipients free time work relief may have been more effective than direct relief in reducing crime more generally our results indicate that social insurance which tends to be understudied in economic analyses of crime should be more explicitly and more carefully incorporated into the analysis of temporal and spatial variations in criminal activity

does political competition lessen ethnic discrimination evidence from sri lanka abstract the impact of political competition on ethnic discrimination remains largely unexplored to address this gap this paper explores the relationship between the level of political competition and the probability of receiving government transfers among ethnic minorities in sri lanka in the run up to the national elections of 2000 the paper shows that making politicians dependent on the votes of members of ethnic groups other their own can encourage moderation in discriminatory practices towards ethnic minorities specifically we find that political competition positively influenced the distribution of government food stamps among sri lankan tamils who otherwise are less likely to receive food stamps relative to the sinhalese majority the negative impact of political competition on discrimination is higher when minorities form part of swing constituencies than when they form part of the base support for political parties lessons learnt here suggest that having built in incentives in the design of the electoral process for intergroup bargaining and cooperation in countries with ethnically heterogeneous societies can be an effective restraint on ethnic discrimination this is consistent with other research that considers political institutions to be a key lever for making ethnically divided societies more inclusive

salaries plea rates and the career objectives of federal prosecutors abstract we examine the relation between local labor markets and the behavior of federal prosecutors empirical evidence is provided that assistant u s attorneys in districts with high private salaries are more likely to take cases to trial than are assistants in districts with low private salaries we explain this finding as follows in high salary districts government salaries are not competitive relative to the private sector therefore federal prosecutor positions are sought by individuals who want the trial experience needed to secure desired private sector employment the following additional evidence further supports this explanation first the turnover of assistant u s attorneys is higher in high private salary districts than in low private salary districts second individuals who leave their employment as assistant u s attorneys are of higher quality in districts with higher private lawyer salaries third assistant u s attorneys with more trial experience are more likely to take position

ethnic capital and intergenerational mobility this paper analyzes the extent to which ethnic skill differentials are transmitted across generations i assume that ethnicity acts as an externality in the human capital accumulation process the skills of the next generation depend on parental inputs and on the quality of the ethnic environment in which parents make their investments or ethnic capital the empirical evidence reveals that the skills of today s generation depend not only on the skills of their parents but also on the average skills of the ethnic group in the parent s generation

investment credit and child labour it is generally assumed that credit has a positive effect on children s schooling among poor households this article shows that need not be the case when households obtain credit for investment purposes in fact investment loans may not have any effect on the likelihood of schooling for children who work in their family business our estimates confirm that this is the case credit used to finance investments has no effect on the odds of schooling for employed children this may be because investment loans increase children s labour productivity which in turn increases the opportunity cost of schooling the results of this study suggest that improving access to credit may not by itself constitute a solution to the problem of child labour in developing countries

testing among models of intrahousehold resource allocation households are the locus for much economic decision making households function as producers investors in human and physical capital managers of risk and as consumers many resources are allocated within households and the effects of many policies depend on the dynamics of household decision making for example household decisions about allocating food among individual household members may determine who benefits from programs to improve health nutrition or welfare in many microeconomic studies the household is treated as an individual for analytical purposes in other words it is assumed that a household acts as a single entity with a single set of preferences recently however a number of economists have recognized that households are sites of conflict as well as cooperation and have begun to use new classes of models to explain how resources are allocated among household members this literature has especially improved our understanding of households in which income is not completely pooled in such a setting standard household models may offer misleading conclusions about the effects of policies on individual household members i this paper goes beyond recent surveys of intrahousehold issue by explicitly examining the assumptions predictions and empirical implications of different intrahousehold models in particular it analyzes empirical tests that distinguish among competing models by clarifying the similarities and differences among alternative models this paper also clarifies what has actually been demonstrated and what has not been demonstrated by previous empirical studies in so doing the paper points to specific topics in need of further research this paper is organized as follows section 2 analyzes the assumptions and predictions of each of the five main classes of intrahousehold resource allocation models section 3 describes empirical tests of these assumptions along with an analysis of empirical work that has been generated sections 4 and 5 discuss the questions that remain unanswered and directions for future research

crime and economic incentives we explore the role that economic incentives particularly changes in wages at the bottom end of the wage distribution play in determining crime rates we use data on the police force areas of england and wales between 1975 and 1996 and find relative falls in the wages of low wage workers lead to increases in crime we carry out a number of experiments with different wage measures including a wage measure that accounts for the effects of changes in the composition of employment these reinforce the picture of a strong association between the low wage labor market and crime the result that incentives play a central role is reinforced further by the strong impact on crime of deterrence measures and of a measure of the returns to crime

market wages and youth crime to study the problem of widespread youth crime i analyze a timeallocation model in which consumers face parametric wages and diminishing marginal returns to crime the theory motivates an econometric model that i estimate using data from the national longitudinal survey of youth my estimates suggest that youth behavior is responsive to price incentives and that falling real wages may have been an important determinant of rising youth crime during the 1970s and 1980s moreover wage differentials explain a substantial component of both the racial differential in criminal participation and the age distribution of crime

the booker decision and discrimination in federal criminal sentences i introduction the sentencing reform act passed by congress in 1984 established the federal sentencing guidelines the guidelines were designed to improve standardization in punishments handed out to convicted criminals by limiting what had been federal judges nearly unfettered discretion in sentencing anderson kling and stith 1999 stith and cabranes 1998 for federal crimes committed after november 1 1987 the act established that sentences of incarceration were to be determined by a table mapping the severity of the offense a level between 1 and 43 and the defendant s criminal history a level between i and vi to a potential range of months imprisonment table 1 shows the united states sentencing commission s ussc sentencing table a defendant for example with a final offense level of 20 and a criminal history category of ih should according to the guidelines be sentenced to somewhere between 41 and 51 months in federal prison the actual sentence would be an integer within that range 1 the act also abolished parole for federal crimes though up to 15 of an inmate s sentence could be reduced for good behavior 2 the sentencing reform act declared that table 1 s guideline ranges were mandatory federal judges had to incur a nontrivial cost to sentence a defendant outside them but on january 12 2005 the united states supreme court ruled in the two part decision u s vs booker that a the sentencing guidelines violated a defendant s constitutional fight to a jury trial 3 and b in order to maintain constitutionality the guidelines were to be effectively advisory instead of mandatory 4 legal observers had expected the overturning of the federal sentencing guidelines system since june 2004 when the supreme court decision blakely v washington invalidated washington state s sentencing guidelines system because it violated a defendant s right to a jury trial denniston 2004 by making the sentencing guidelines advisory rather than mandatory booker reduced the cost of sentencing outside the guidelines and increased the ambiguity of federal judges sentencing decisions according to bertrand chugh and mullainathan 2005 ambiguity is one of three situations in which implicit discrimination is likely to occur the other two situations are inattentiveness to task and time pressure implicit discrimination unlike taste based discrimination becker 1957 or statistical discrimination aigner and cain 1977 reflects implicit attitudes that bertrand chugh and mullainathan 2005 state are unintentional and outside of the discriminator s awareness research indicating implicit discrimination include findings that national basketball association referees call fewer fouls against players of their own race price and wolfers 2010 that major league baseball umpires are more likely to call strikes when the pitcher is of their own race parsons et al 2007 and that screeners of resumes are more likely to ignore job applications with black names than ones with white names bertrand and mullainathan 2004 each of these scenarios describes a situation where ambiguity inattentiveness or time pressure is a factor and where a statistically significant amount of discriminatory treatment is detected 5 this paper tests whether the booker decision by increasing the ambiguity of federal judges sentencing decisions increased manifestations of discrimination in accordance with the hypothesis of bertrand chugh and mullainathan 2005 difference in difference results show that conditional on a defendant s table 1 guideline cell booker reduced sentences significantly for the default group of defendants white male u s citizens who never earned a high school diploma female defendants and defendants with terminal high school degrees received significantly larger booker related sentence reductions and college graduates received significantly smaller ones

rational cooperation in the finitely repeated prisoner s dilemma experimental evidence this paper presents experiments designed to examine the sequential equilibrium reputation hypothesis in the finitely repeated prisoner s dilemma the authors test the hypothesis by controlling the subjects ability to build reputations and by manipulating their beliefs that their opponent is irrational or altruistic the responses of subjects strongly support the sequential equilibrium prediction the results also suggest an important role for homemade altruism that is a natural tendency to cooperate that subjects bring to the experiment from the outside the authors find that there may be no difference between the beliefs that an opponent is altruistic and the actual chance it is so copyright 1993 by royal economic society

household income and child schooling in vietnam the stronger are the associations between household income and child schooling the lower is intergenerational social mobility and the less equal is opportunity this study estimates the associations between household income and children s school success in vietnam the estimates indicate that these associations are considerable this article also investigates some ways in which policies relate to household incomes school fees are progressive but school fees are only about one third of what households pay directly to schools and are a much smaller proportion of a household s total school related expenditures total household expenditures paid directly to schools increase with household income less proportionately than do school fees alone so the overall structure of such payments is less progressive than is the structure of school fees because school enrollment is positively related to household income moreover the structure of school fees is less progressive for the entire population than for the selected subset that has children enrolled in school further the two school quality measures that have the strongest positive association with children s school success are much more available to higher income households meaning that higher income households have greater school expenditures in part because they are obtaining higher quality schooling and not because charges for the same quality schooling are progressive across income classes

market opportunities genetic endowments and intrafamily resource distribution child survival in rural india the authors examine how intrafamily resource allocations respond to changes in economic conditions and to genetic differences in children by estimating the determinants of variations in the sex specific survival differentials of rural indian children based on standard census and household survey data they explore in particular the hypothesis that such differences are related to the relative returns to survival with households selectively allocating resources to children in response to variation in sex differences in their expected earnings opportunities as adults data are from the 1961 census and a 1971 household survey excerpt

do we punish high income criminals too heavily many critics believe that since high income criminals can afford to purchase better legal services they are less severely punished than poor criminals who commit equivalent crimes others are concerned that the penalties imposed on criminals are too small this paper shows that ignoring the effect conviction has on later earnings dramatically underestimates the total monetary penalty paid by those convicted and that the penalty structure is extremely progressive where evidence on the probability of conviction is available it shows that the highest income criminals face the highest expected penalties

women s income and boy girl anthropometric status in the cote d ivoire abstract this paper examines the effects of the intrahousehold distribution of income on children s anthropometric status in the c te d ivoire we find that increases in the proportion of cash income accruing to women increases boys height for age relative to girls and that this effect is statistically significant we suggest that this result may reflect efficiency and equity concerns which in this case reinforce each other

nobel lecture the economic way of looking at behavior an important step in extending the traditional theory of individual rational choice to analyze social issues beyond those usually considered by economists is to incorporate into the theory a much richer class of attitudes preferences and calculations while this approach to behavior builds on an expanded theory of individual choice it is not mainly concerned with individuals it uses theory at the micro level as a powerful tool to derive implications at the group or macro level the lecture describes the approach and illustrates it with examples drawn from my past and current work