the male marital wage premium sorting vs differential pay the authors examine whether male marital and parenthood premia arise due to differential pay by employers or from differential sorting of employees on occupations and establishments they investigate these premia using matched employee employer data from the period 1979 96 in norway a country with increased pressures on men to be more active in the family sphere and in which public policy has aimed at remaking the family institution we find that the effect of marriage and to a lesser extent of children occurs mostly through sorting on occupations and occupation establishment units the role of differential pay from employers is marginal in explaining the marital and parenthood premia results assessing within individual changes in wages suggest that about 80 of the marital premium is due to selection the men who eventually marry and or have children sort into the higher paying occupations and occupation establishment units even prior to marriage and parenthood

better schools less crime i estimate the impact of attending a first choice middle or high school on adult crime using data from public school choice lotteries in charlotte mecklenburg school district cms seven years after random assignment lottery winners had been arrested for fewer serious crimes and had spent fewer days incarcerated the gain in school quality as measured by peer and teacher inputs was equivalent to moving from one of the lowest ranked schools to one at the district average the reduction in crime comes largely from years after enrollment in the preferred school is complete the impacts are concentrated among high risk youth who commit about 50 less crime across several different outcome measures and scalings of crime by severity i find suggestive evidence that school quality explains more of the impact in high school whereas peer effects are more important in middle school copyright 2011 oxford university press

the male marital earnings premium in the context of bride wealth payments evidence from south africa abstract this study explores the nature of the male marital earnings premium in the context of a developing country in which the payment of bride wealth is practiced we use data from the south african labor force survey of september 2004 and the labor force survey panel 2001 4 the first national panel available in south africa we show that a robust and positive premium to marriage in cross sectional estimations is substantially reduced after controlling for individual fixed effects furthermore we find evidence of an additional source of endogeneity created by the positive selection of men into marriage with faster earnings growth in the initial periods of the panel our results are to be expected if the payment of bride wealth or ilobolo by a prospective husband to the bride s family is a significant constraint to marriage among black men in south africa

research design meets market design using centralized assignment for impact evaluation a growing number of school districts use centralized assignment mechanisms to allocate school seats in a manner that reflects student preferences and school priorities many of these assignment schemes use lotteries to ration seats when schools are oversubscribed the resulting random assignment opens the door to credible quasi experimental research designs for the evaluation of school effectiveness yet the question of how best to separate the lottery generated randomization integral to such designs from non random preferences and priorities remains open this paper develops easily implemented empirical strategies that fully exploit the random assignment embedded in a wide class of mechanisms while also revealing why seats are randomized at one school but not another we use these methods to evaluate charter schools in denver one of a growing number of districts that combine charter and traditional public schools in a unified assignment system the resulting estimates show large achievement gains from charter school attendance our approach generates efficiency gains over ad hoc methods such as those that focus on schools ranked first while also identifying a more representative average causal effect we also show how to use centralized assignment mechanisms to identify causal effects in models with multiple school sectors

labor migration and risk aversion in less developed countries in this paper we question the pioneering work of todaro which states that rural to urban labor migration in less developed countries ldcs is an individual response to a higher urban expected income we demonstrate that rural to urban labor migration is perfectly rational even if urban expected income is lower than rural income we achieve this under a set of fairly stringent conditions an individual decision making entity a one period planning horizon and global risk aversion we obtain the result that a small chance of reaping a high reward is sufficient to trigger rural to urban labor migration

does marriage really make men more productive this paper presents new descriptive evidence regarding marital pay premiums earned by white males longitudinal data indicate that wages rise after marriage and that cross sectional marriage premiums appear to result from a steepening of the earnings profile data from a company personnelfile that includes information on job grades and supervisor performance ratings reveal large marital status pay differences within a narrow range of occupations managers and professionals and environments a single firm married workers tend to be located in higher paying job grades there are very small pay differentials within grades married men receive higher performance ratings than single men as a result they are much more likely to be promoted controlling for rated performance however eliminates the promotion differential sanders korenman is an assistant professor of economics and public affairs at princeton university and is a faculty associate of the office of population research at princeton university and a research affiliate of the national bureau of economic research nber david neumark is an assistant professor of economics at the university of pennsylvania and a research affiliate of the nber korenman wishes to acknowledge the hewlett foundation and the harvard university center for population studies for financial support the authors are grateful to james medofffor making available an extract from the company personnelfile questions regarding data availability should be directed to professor james

school choice school quality and postsecondary attainment we study the impact of a public school choice lottery in charlotte mecklenburg schools on college enrollment and degree completion we find a significant overall increase in college attainment among lottery winners who attend their first choice school using rich administrative data on peers teachers course offerings and other inputs we show that the impacts of choice are strongly predicted by gains on several measures of school quality gains in attainment are concentrated among girls girls respond to attending a better school with higher grades and increases in college preparatory course taking while boys do not

persistence of interindustry wage differentials a reexamination using matched worker firm panel data we estimate interindustry wage differentials using new french longitudinal data that allow a tracking of workers and their firms over time we find that when measured on a cross sectional basis they primarily reflect the interindustry variations in unmeasured labor quality however interindustry wage differentials are only a minor component of interfirm wage differentials the average differential in wages paid to the same workers by different firms is about 20 30 in a given industry wage policies are more favorable to workers in large capital intensive firms

wealth driven selection in a financial market with heterogeneous agents we study the co evolution of asset prices and individual wealth in a financial market with an arbitrary number of heterogeneous boundedly rational investors using wealth dynamics as a selection device we are able to characterize the long run market outcomes i e asset returns and wealth distributions for a general class of competing investment behaviors our investigation illustrates that market interaction and wealth dynamics pose certain limits on the outcome of agents interactions even within the wilderness of bounded rationality as an application we consider the case of heterogeneous mean variance optimizers and provide insights into the results of the simulation model introduced by levy levy and solomon 1994

understanding the family gap in pay for women with children as the gender gap in pay between women and men has been narrowing the family gap in pay between mothers and nonmothers has been widening one reason may be the institutional structure in the united states which has emphasized equal pay and opportunity policies but not family policies in contrast to other countries that have implemented both the authors now have evidence on the links between one such family policy and women s pay recent research suggests that maternity leave coverage by raising women s retention after childbirth also raises women s levels of work experience job tenure and pay

male marital wage differentials training personal characteristics and fixed effects i introduction there is substantial evidence that married white men earn between 8 and 15 more than unmarried white men in the united states even after controlling for education and informal job market experience e g potential or actual experience cross section analysis indicates that both the level and the growth rate of wages increase during marriage these results suggest that men may become more productive after marriage an effect often attributed to the increased specialization possible following the formation of a multiperson household however panel estimates indicate that much of the differential is explained by individual specific fixed effects which suggest that more productive men are more likely to marry while these results and implications are well known the precise nature of the implied productivity differentials has received little attention in the literature using the 1979 cohort of the national longitudinal survey of youth nlsy79 we investigate the structure or source of the observed differential we do so by first extending the analysis to a sample of african american men in the united states to our knowledge ours is the first study to conduct a detailed analysis of the marital wage gap among african american men that is fully comparable to that already available for white men this extension is informative because african american households are known to exhibit less specialization along gender lines and because marital patterns are quite different by race next we explore formal job training as one avenue to productivity enhancement we outline a simple story suggesting that married men may be more receptive to training opportunities than unmarried men and present some evidence suggesting that firms may be more willing to offer training to married as compared to unmarried men previous analysis has focused on labor market experience or years married as proxies for both informal and formal job training we significantly improve upon this by using direct information on formal job training to see if wage changes at or following the time of marriage are driven by training induced productivity differentials third we explore the nature of the selection effect or the possibility that it is more productive men who marry the nlsy79 has an extensive array of information on personal characteristics that might be associated with both marriage and earnings if certain personal characteristics are associated with both marriage and earnings but not typically included in wage analyses then the marital controls in standard wage equations may simply be proxying for these characteristics controlling for such characteristics directly should identify the nature of the selection effect and reduce the significance of the marital indicators in cross section estimates the attributes we examine include cognitive skills parental background and personality traits our final contribution is to estimate panel models to eliminate all observable and unobservable individual specific time invariant factors and to reconcile these results with those obtained from cross section models specifically we exploit the different identification conditions between panel and cross section models examining the role of respondents who are always married never married or always separated divorced technically such individuals contribute to the identification of the cross section but not the panel estimates of the marital wage differential thus these individuals may explain the substantial differences often observed between panel and cross section estimates of the white male marital wage differential ii literature review evidence of the marital wage differential for white men in the united states is extensive see ribar 2004 for a review some of this differential has been attributed to a selection effect to the fact that men who marry earn more throughout their lives than men who do not marry

reconsidering the labeling effect for child benefits evidence from a transition economy i consider expenditure on food alcohol and tobacco and clothing in households with children in slovenia at the start of its transition to a market economy i exploit the unique structure of its child benefit program in order to look for evidence that labeling a cash transfer a child benefit influences how that cash transfer is spent contrary to much of the recent literature on the non fungibility of income i do not find evidence supporting a labeling effect

urban biased policies and rising income inequality in china since the start of economic reforms in 1978 china has experienced the largest increase in income inequality of all countries for which comparable data are available according to the world bank 1997 china s gini coefficient increased from 28 2 in 1981 to 38 8 in 1995 based on official survey data another study that used internationally standard definitions for incomes estimated china s gini ratio at 38 2 in 1988 and 45 2 in 1995 a level that already surpassed many developing economies in asia azizur khan and carl riskin 1998 are these income inequality changes the consequence of institutional reforms that replaced egalitarian rewards with work incentives employment contracts and labor mobility this paper uses household survey data collected by china s state statistical bureau ssb to investigate the sources and causes of this rising inequality by analyzing gini ratios and generalized entropy measures i decompose the overall inequality into three sectoral components i inequality within rural areas ii inequality within urban areas and iii sectoral disparity the data indicate that increases in rural urban income differentials have been the driving factor behind the rising overall inequality in china i argue that urbanbiased policies and institutions including labor mobility restrictions welfare systems and financial policies of inflation subsidies and investment credits to the urban sector are responsible for the long term rural urban divide and the recent increases in disparity

household saving micro theories and micro facts in this survey we review the recent theoretical and empirical literature on household saving and consumption the discussion is structured around a list of motives for saving and how well the standard theory captures these motives we show that almost all of the motives for saving that have been suggested in the informal saving literature can be captured in the standard optimizing model particular attention is given to recent work on the precautionary motive and its implications for saving and consumption behavior we also discuss the behavioral or psychological approach that eschews the use of standard optimization techniques and focuses instead on direct consideration on saving we provide a section on facts who save and how much we then discuss informally the recent decline in the u s saving rate and whether the theory is of much use in understanding this and other changes in aggregate saving rates over time we do not find any convincing explanation for the change in saving rates we also discuss some analyses of saving behavior over the life cycle addressing such questions as whether households save enough for retirement and whether the consumption patterns of older households can be rationalized within a simple life cycle model we also review a great number of studies of the consumption euler equations based on our analysis of the studies cited we conclude that there is still mixed evidence that consumption is excessively sensitive to income we also examine in depth the recent empirical literature on the precautionary motive we conclude that although some households do seem to have a significant precautionary motive at some points in their life cycle this motive is not so strong empirically as some investigators suggest

precautionary behavior migrant networks and household consumption decisions an empirical analysis using household panel data from rural china abstract we develop a test of precautionary behavior in the consumption decisions of rural agricultural households among surveyed households facing a median level of consumption risk 10 of savings can be attributed to a precautionary motive and this increases to 15 for households with consumption per capita below the poverty line we next use distant lags of local rainfall shocks uncorrelated with current consumption growth to identify the size of migrant networks outside the village and then present evidence that both poor and nonpoor households engage in less precautionary saving as the size of the village migrant network increases

against the wind bargaining recentralisation and wage inequality in norway 1987 91 in the late 1980s norway s labour market experienced similar supply and demand shifts for skills to other countries but unlike other oecd nations norway s wage setting system became more centralised the pay distribution in norway became more compressed at the bottom from 1987 to 1991 while low wage workers in other countries lost ground relatively using norwegian microdata for 1987 and 1991 i found that changing labour market prices helped cause this wage compression further the less educated had declining relative overall employment but increasing relative public sector employment both possible labour market responses to the wage compression

marketplaces markets and market design marketplaces are often small parts of large markets and both markets and marketplaces come in many varieties market design seeks to understand what marketplaces must accomplish to enable different kinds of markets marketplaces can have varying degrees of success and there can be marketplace failures i ll discuss labor markets like the market for new economists and also markets for new lawyers and doctors that have suffered from the unraveling of appointment dates to well before employment begins markets work best if they enjoy social support but some markets are repugnant in the sense that some people think they should be banned even though others want to participate in them laws banning such markets often contribute to the design of illegal black markets and this raises new issues for market designers i ll briefly discuss markets and black markets for narcotics marijuana sex and surrogacy and the design of markets for kidney transplants in the face of widespread laws against and broader repugnance for compensating organ donors i conclude with open questions and engineering challenges

the effect of school choice on participants evidence from randomized lotteries school choice has become an increasingly prominent strategy for enhancing academic achievement to evaluate the impact on participants we exploit randomized lotteries that determine high school admission in the chicago public schools compared to those students who lose lotteries students who win attend high schools that are better in a number of dimensions including peer achievement and attainment levels nonetheless we find little evidence that winning a lottery provides any systematic benefit across a wide variety of traditional academic measures lottery winners do however experience improvements on a subset of nontraditional outcome measures such as self reported disciplinary incidents and arrest rates

migrants savings the probability of return migration and migrants performance this paper highlights a difference between migrants and the native born namely a positive probability of return migration the analysis demonstrates that this probability results in migrants saving more than comparable native born this differential may explain why even if all workers are perfectly homogeneous in skills migrants often outperform the native born in the receiving economy excerpt

leveraging lotteries for school value added testing and estimation conventional value added models vams compare average test scores across schools after regression adjusting for students demographic characteristics and previous scores this article tests for vam bias using a procedure that asks whether vam estimates accurately predict the achievement consequences of random assignment to specific schools test results from admissions lotteries in boston suggest conventional vam estimates are biased a finding that motivates the development of a hierarchical model describing the joint distribution of school value added bias and lottery compliance we use this model to assess the substantive importance of bias in conventional vam estimates and to construct hybrid value added estimates that optimally combine ordinary least squares and lottery based estimates of vam parameters the hybrid estimation strategy provides a general recipe for combining nonexperimental and quasi experimental estimates while still biased hybrid school value added estimates have lower mean squared error than conventional vam estimates simulations calibrated to the boston data show that bias notwithstanding policy decisions based on conventional vams that control for lagged achievement are likely to generate substantial achievement gains hybrid estimates that incorporate lotteries yield further gains

on the evidence of a working spouse penalty in the managerial labor market this analysis of march 1993 current population survey data suggests that managers with working wives earn lower wages than their counterparts with non working wives the labor supply decisions of managers wives appear to be unaffected by that is exogenous with respect to their husbands wages in contrast there is evidence that the labor supply decisions of non managers wives are affected by their husbands wages and when the analysis takes account of that endogeneity it is found that non managers do not suffer a working spouse penalty the analysis also highlights some important issues related to the use of instrumental variables

stock market crashes as social phase transitions abstract stock market crashes are traumatic events that affect the lives of millions of people around the globe and have tremendous economic implications crashes are not only dramatic but often completely unexpected the 1987 crash for example was not induced by any obvious trigger even after the fact it is hard to find the reason for the crash why did the market crash in october rather than in september or december why did it crash at all to this day we lack satisfactory answers this paper shows that spontaneous market crashes can be explained by a social phase transition mechanism similar to statistical mechanics phase transitions investors heterogeneity plays the role of temperature and is key in determining the possibility and magnitude of the crash the analysis suggests that dramatic crashes are a robust and inevitable property of financial markets it also implies that market crashes should be preceded by an increase in price volatility as empirically observed thus market crashes like earthquakes are a fundamental and unavoidable part of our world however we can develop early warning systems that may help minimize the damage

do migrants really save more understanding the impact of remittances on savings in rural china abstract this article studies the impact of remittances on the savings behaviour of rural households in china using a primary survey undertaken by the authors in 2006 allowing for endogeneity and left censoring of remittances we find that the marginal propensity to save out of remittances is well below half of that out of other sources of incomes moreover we find no evidence of any direct effect of remittances on either capital input or gross output of farm production these findings are robust with respect to alternative definition of savings and are in line with recent studies which conclude that remittances are largely used for consumption purposes by rural chinese households

the danger of assuming homogeneous expectations the capital asset pricing model the black scholes option valuation model and many other economic models rely on the assumption of homogeneous expectations what are the effects of heterogeneous expectations on price determination are the homogeneous expectations models approximately correct we compare stock price dynamics in models with homogeneous and heterogeneous expectations heterogeneous expectations appear to play a crucial role in risky asset price determination when homogeneous expectations are assumed unacceptable market inefficiencies are observed the introduction of even a small degree of diversity of expectations changes the dynamics dramatically and the result is a much more realistic market these findings make one wonder how far the equilibrium prices of the capm and black scholes model are from the true values in markets with heterogeneous expectations

property rights labour markets and efficiency in a transition economy the case of rural china we investigate the consequences of imperfect factor market development for farm efficiency in north china we estimate the extent to which an inverse relationship in farm productivity can be attributed to the administrative as opposed to market allocation of land combined with unevenly developed off farm opportunities using a new household survey we find considerable inefficiency in the use of labour this inefficiency is alleviated by external labour markets and to a limited degree by administrative reallocations the reallocations do not go far enough however which raises important questions about con straints on rental activity and property rights formation more generally jel classification q15 012

where did all the remittances go understanding the impact of remittances on consumption patterns in rural china we focus on the impact of migrants remittances on consumption patterns in china using a large homogenous sample of rural households surveyed in 2001 and 2004 we find that remittances are spent on nonhousing consumption expenditures at the margin virtually dollar for dollar when we instrument remittances and local employed earnings using proxies of social networks our findings are robust to intra household division of labour and to fixed effect for the county in which the respondents are registered these results imply that rural households largely take remittances as permanent income and are consistent with the prevalence of circular and repeat migration in china

risk pooling precautionary saving and consumption growth in this paper we model the evolution of income risk and consumption growth we decompose the time series innovation of the income process into its common and cohort specific components from these we compute conditional variances which are used as separate risk terms in a consumption growth equation using a long series of british household data we exploit the time series variation to identify precautionary saving effects and find strong evidence of their importance specifically after allowing for demographic and labour market status there is an independent role for income risk in explaining consumption growth rather than the component that is common across cohorts however it is the cohort specific element that is important in determining changes in consumption growth this result points to a failure of between cohort insurance mechanisms

the optimal migration duration and activity choice after re migration if migrants return to their origin countries two questions arise which are of immediate economic interest for both immigration and emigration country what determines their optimal migration duration and what are the activities migrants choose after a return little research has been devoted to these two issues this paper utilises a unique survey data set which records activities of returned migrants we first illustrate the activities of immigrants after returning we show that more than half of the returning migrants are economically active after return and most of them engage in entrepreneurial activities we then develop a model where migrants decide simultaneously about the optimal migration duration and their after return activities guided by this model we specify and estimate an empirical model where the after return activity and the optimal migration duration are simultaneously chosen

who benefits from child benefit governments over much of the developed world make significant financial transfers to parents with dependent children for example in the united states the recently introduced child tax credit ctc which goes to almost all children costs almost 1 billion each week or about 0 4 of gnp the united kingdom has even more generous transfers and spends an average of about 30 a week on each of about 8 million children about 1 of gnp the typical rationale given for these transfers is that they are good for our children and here we investigate the effect of such transfers on household spending patterns in the united kingdom such transfers known as child benefit cb have been simple lump sum universal payments for a continuous period of more than 20 years we do indeed find that cb is spent differently from other income paradoxically it appears to be spent disproportionately on adult assignable goods in fact we estimate that as much as half of a marginal dollar of cb is spent on alcohol we resolve this puzzle by showing that the effect is confined to unanticipated variation in cb so we infer that parents are sufficiently altruistic toward their children that they completely insure them against shocks

work contracts and earnings inequality the case of chile great social inequality has been one of the worrisome features of economic development in latin america this study focuses on chile one of latin america s fastest growing economies with one of the highest levels of income inequality during the 1990s using micro level data from the 1994 and 2000 encuestas de caracterizacion socio economica this article examines the role of work contracts in explaining male and female earnings and earnings inequality among wage and salary workers over the second half of the 1990s the analysis distinguishes between wage and salary work without a work contract referred to as informal work and wage and salary work with a work contract within the latter group the study further differentiates by the type of work contract held such as permanent and a variety of contingent work contracts the findings reveal that the majority of employees in informal and contingent wage and salary work arrangements earned significantly less than their permanent counterparts additiona

do marital status and computer usage really change the wage structure this analysis uses several identification strategies and data sources to control for individual ability and determine the causal effect of marital status and computer usage on wages although data from the cps nlsy and a data set of identical twins show that there are large cross sectional effects of these variables new econometric specifications are applied to these data which indicate that marital status and computer usage are not important causal determinants of earnings even after adjustments are made for measurement error and within twin differences in ability

why do married men earn more productivity or marriage selection injae lee using data from the current population survey march supplement 1999 this study examines why married men earn more than men who have never married we find that the marriage wage premium cannot be attributed to the unobservable higher earnings capability of married men instead wage gains from marriage are explained by the degree of specialization within the household our findings cast doubt on the argument that the selection of high ability men into marriage is the cause of the marriage wage premium jel j12 j31 i introduction labor economists have devoted considerable effort to explaining why married men earn higher wages than men who have never married a number of theoretical hypotheses have been advanced to explore the nature of this marriage wage premium the dominant theory is the productivity hypothesis which argues that marriage makes men more productive becker 1991 married men have greater opportunities to specialize in labor market activities when their wives specialize in home production the marriage wage premium reflects a productivity gap between married and never married men stemming from different conditions for human capital accumulation in market work a competing argument is the selection hypothesis nakosteen and zimmer 1987 1997 this reverses the direction of causality proposing that men with a higher earnings capability are valued more in the marriage market and are thus more likely to marry the marriage premium mirrors the marriage selection pattern married men are more productive not because they become more productive after marriage but because they were more productive before marriage 1 while there is compelling evidence that married men have higher earnings than never married men hill 1979 the relative merits of the productivity and selection arguments in explaining the existence of the marriage premium remain to be established nakosteen and zimmer 1987 argue that the marriage premium is a statistical artifact arising from a sorting process in which high wage males tend to be selected into marriage when selection effects are accounted for in their wage regression the marriage premium remains numerically large but becomes statistically insignificant however korenman and neumark 1991 show that the selection hypothesis is an incomplete explanation of the marriage premium they find that less than one half of the marriage premium vanishes when unobservable individual factors affecting both wages and marriage are removed the remaining premium is interpreted as the productivity enhancing effects of marriage later studies examine the validity of the productivity explanation using measures for the household division of labor such as a wife s labor market hours and the number of children in the household the studies investigate the effects of household specialization on a husband s earnings according to the productivity hypothesis men whose wives specialize in home production should have a larger premium than men whose wives work in the labor market the evidence for this is mixed daniel 1992 and gray 1997 find that the marriage premium is negatively associated with the wife s labor market hours whereas loh 1996 and jacobsen and rayack 1996 find little evidence that the marriage premium is explained by productivity differences past work tries to clarify the relationship between marriage household specialization and a husband s earnings but it does not allow us to reach an empirical consensus about the cause of the marriage premium in this article we present a new empirical framework to test the relative merits of two competing but not mutually exclusive hypotheses first we develop a switching regression model with endogenous marriage selection the selection hypothesis is founded on the premise that a man s attractiveness as a potential mate depends upon his observed earnings as well as unobservable individual traits that are positively related to his earnings potential

private monetary transfers in rural china are families altruistic monetary transfers between relatives may be motivated by altruism or they may represent payments for services rendered data from a large 1988 household survey are used to test these hypotheses and to study the size and direction of transfers in rural china the analysis suggests that altruism alone cannot explain the observed transfers and that exchange may be involved most of the money flows appear to be transfers from adult children to elderly parents and remittances from migrants child care is likely to be one of the main services that parents render to adult children in exchange for money

marital status and productivity evidence from personnel data although a robust wage premium for married men has been documented extensively in the labor economics literature prior studies have been hampered in testing competing explanations of the premium by a lack of data on worker productivity this study exploits a unique data set that contains job performance measures for employees of a large hierarchical organization the quasi longitudinal data track the marital status and job productivity including performance reviews and promotions of male naval officers in technical and managerial jobs compared with single men married men receive significantly higher performance ratings and are more likely to be promoted in estimates that control for selection arising from quit decisions the size of the marriage productivity effect falls but in most cases remains robust also based on supplementary tests selectivity arising from the decision to marry appears to explain only a small portion of the unadjusted marriage premium for navy officers although the existence of a wage premium for married men has been documented extensively in the labor economics literature the source of the premium has remained controversial one hypothesis attributes the wage differential to economies of scale and specialization within the household which provides incentives for additional investment in specific human capital by married men becker 1981 alternative hypotheses are that the marriage premium stems from employer favoritism or that more productive or higher earning men are selected into marriage the extensive empirical literature that has attempted to test the competing explanations has produced conflicting conclusions however one research approach to assess the effect of marital status that seldom has been implemented in the prior literature is to use data on the realized productivity of employees of a single firm this study uses administrative data on male employees of a large hierarchical organization to explore the effect of marital status on selected job performance measures the personnel database covers male u s naval officers and contains relatively detailed information on career performance including promotion outcomes and annual performance reviews the article seeks to shed light on the existence and magnitude of job productivity differentials between married and single males and to assess competing explanations for marriage related performance differentials navy personnel data are especially fertile for analyzing the effect of marital status on employee job productivity several performance measures are available for each individual and the indicators capture performance throughout an employee s tenure rather than at a single career point the design

do men whose wives work really earn less it is common knowledge among empirical labor economists that household status variables can enter significantly in wage equations in particular a substantial marital wage premium for men has been noted recently a series of articles in the management literature has argued that an even larger premium accrues to those married men whose wives do not work for pay single earner husbands our current study arises in response to perceived deficiencies in the conceptual framework and statistical methods used in these studies

why do popular mechanisms lack efficiency in random environments we consider the problem of randomly assigning n indivisible objects to n agents recent research introduced a promising mechanism the probabilistic serial that has superior e ciency properties than the most common real life mechanism random priority on the other hand mechanisms based on gale s celebrated top trading cycles method have long dominated the indivisible goods literature with the exception of the present context thanks to their outstanding e ciency features we present an equivalence

precautionary savings by natives and immigrants in germany this paper analyses the savings behaviour of natives and immigrants in germany it is argued that uncertainty about future income and legal status in case of immigrants is a key component in the determination of the level of precautionary savings using the german socio economic panel data it is shown that although immigrants have lower levels of savings and are less likely to have regular savings than natives the gap is significantly narrowed once we take loan repayments and remittances into account moreover we find that marginal propensity to save for immigrants is about 40 higher than that for natives we then exploit a natural experiment arising from a change in nationality law in germany in 2000 to estimate the importance of precautionary savings using a difference in differences approach we find that the easing of the requirements for naturalization has caused significant reductions of savings and remittances for immigrants as a whole in the magnitude of 13 and 29 respectively comparing to the pre reform period our parametric specification shows that the introduction of the new nationality law reduces the gap between natives and immigrants in marginal propensity to save by 40 to 65 depending on the measure of savings used these findings suggest that much of the differences in terms of the savings behaviour between natives and immigrants are driven by the precautionary savings arising from the uncertainties about future income and legal status rather than cultural differences

leveling the playing field sincere and sophisticated players in the boston mechanism empirical and experimental evidence suggests different levels of sophistication among families in the boston public school student assignment plan we analyze the preference revelation game induced by the boston mechanism with sincere players who report their true preferences and sophisticated players who play a best response we characterize the set of nash equilibrium outcomes as the set of stable matchings of a modified economy where sincere students lose priority to sophisticated students any sophisticated student weakly prefers her assignment under the pareto dominant nash equilibrium of the boston mechanism to her assignment under the recently adopted student optimal stable mechanism jel d82 i21

using weather variability to estimate the response of savings to transitory income in thailand this paper measures the extent to which farmers are able to use savings and dissavings to smooth consumption in response to unexpected shocks to income time series information on regional rainfall is used to construct estimates of transitory income due to rainfall shocks the relationship between these measures of transitory income and savings indicates that farm households save a significantly higher fraction of transitory income than nontransitory income jel d91 016 the incomes of farm households in developing countries are notorious for being both low and uncertain policies that increase the incomes of farmers may well be different

leaving the countryside rural to urban migration decisions in china this paper employs a simple theoretical model of labor allocation within rural households given existing land arrangements in an attempt to explain why rural chinese do not fully participate in labor migration it first explores the mechanisms by which individual household and community characteristics affect the migration decision empirical results are then presented to substantiate the derived hypotheses the paper further explores the question of whether the migration decision is permanent by analyzing the responses of household consumption to income from migration excerpt

the combinatorial assignment problem approximate competitive equilibrium from equal incomes this paper proposes a new mechanism for combinatorial assignment for example assigning schedules of courses to students based on an approximation to competitive equilibrium from equal incomes ceei in which incomes are unequal but arbitrarily close together the main technical result is an existence theorem for approximate ceei the mechanism is approximately efficient satisfies two new criteria of outcome fairness and is strategyproof in large markets its performance is explored on real data and it is compared to alternatives from theory and practice all other known mechanisms are either unfair ex post or manipulable even in large markets and most are both manipulable and unfair

incentives in the probabilistic serial mechanism abstract the probabilistic serial mechanism bogomolnaia and moulin 2001 9 is ordinally efficient but not strategy proof we study incentives in the probabilistic serial mechanism for large assignment problems we establish that for a fixed set of object types and an agent with a given expected utility function if there are sufficiently many copies of each object type then reporting ordinal preferences truthfully is a weakly dominant strategy for the agent regardless of the number of other agents and their preferences the non manipulability and the ordinal efficiency of the probabilistic serial mechanism support its implementation instead of random serial dictatorship in large assignment problems

marriage and wages a test of the specialization hypothesis we investigate the relationship between marriage and wages among men in britain using panel data our econometric specifications allow for observed and unobserved heterogeneity and explicitly test the role of intra household specialization in explaining the observed relationship our estimates provide evidence for the existence of large selection effects into marriage based on observable and unobservable characteristics that are positively correlated with wages after accounting for individual specific time invariant effects and a wide range of individual household job and employer related characteristics we find a statistically significant premium that can be attributed to productivity differences largely resulting from intra household specialization

accountability and flexibility in public schools evidence from boston s charters and pilots charter schools are publicly funded but operate outside the regulatory framework and collective bargaining agreements characteristic of traditional public schools in return for this freedom charter schools are subject to heightened accountability this paper estimates the impact of charter school attendance on student achievement using data from boston where charter schools enroll a growing share of students we also evaluate an alternative to the charter model boston s pilot schools these schools have some of the independence of charter schools but operate within the school district face little risk of closure and are covered by many of same collective bargaining provisions as traditional public schools estimates using student assignment lotteries show large and significant test score gains for charter lottery winners in middle and high school in contrast lottery based estimates for pilot schools are small and mostly insignificant the large positive lottery based estimates for charter schools are similar to estimates constructed using statistical controls in the same sample but larger than those using statistical controls in a wider sample of schools the latter are still substantial however the estimates for pilot schools are smaller and more variable than those for charters with some significant negative effects

migration remittances and agricultural productivity in china in our paper we have used the new economics of labor migration framework to trace the complex linkages that exist among migration remittances and agricultural productivity in china constraints in the operation of on farm labor and capital or insurance markets or institutions provide households with a motivation to migrate and distort on farm operations when labor leaves in our household sample the net impact of migration and remittances on maize production is negative excerpt

examining the wage differential for married and cohabiting men leslie s stratton i introduction wage analyses almost universally indicate that married men earn more than do single men even after controlling for observable human capital characteristics the same appears to be true for cohabiting men research has failed as yet to reach a consensus regarding the nature of these differentials the evidence is consistent with a number of alternative explanations first marriage could increase men s market productivity because economies of scale and increased specialization within a multiperson household give them more time and energy to devote to market related activities if this is the mechanism driving the marital wage differential then cohabiting men may also experience a wage boost albeit a smaller one as cohabitation is a less stable relationship and less likely to engender specialization wages could jump at the start of a relationship but an increased focus on market related activities is more likely to cause wages to rise at a faster pace alternatively men who marry or cohabit may be inher ently different from men who do not if men are selected into relationships based on their earnings ability then cross section wage analyses will indicate a wage differential for married and cohabiting men but difference estimation will not the goal of this analysis is to shed light on the nature of the marital and cohabitation wage premiums for men by estimating wage models that permit both differential wage growth and selection effects ii literature review evidence of a marital wage premium for men abounds a thorough literature review is beyond the scope of this article but incorporation of a marital dummy in wage specifications for men is fairly standard hill 1979 provides one much cited work empirical estimates in the range of 10 to 30 are typical a number of researchers have explored the nature of this wage differential one explanation focuses on the marital decision itself the argument being that men who are inherently more productive are more sought after marriage partners and hence more likely to marry this is the selection model attempts such as that by nakosteen and zimmer 1987 to estimate a model in which marital status and wages are endogenously determined have yielded inconclusive results and are sensitive to identification restrictions an alternative approach less subject to specification error is to estimate a fixed effects specification that eliminates all individual specific time invariant characteristics 1 researchers korenman and neumark 1991 bartlett and callahan 1984 daniel 1991 and gray 1997 have employed this technique and continue to observe a significant marital wage differential indicating that selection effects do not explain the entire differential gray 1997 finds some evidence that the premium has declined over time as he does not find a significant marital wage differential using data from the national longitudinal survey of youth nlsy the most recent cohort of data tested however daniel 1991 also uses data from the nlsy and he finds a significant marital wage differential of about the same magnitude as that obtained from older cohorts generally speaking a comparison of cross section and panel results suggests that less than 20 of the marital wage differential is attributable to individual specific components or selectivity if selection alone does not explain the differential then wages must increase following marriage wages could be higher because they jump or because they rise more rapidly following marriage empirical estimates reported by kenny 1983 using the coleman rossi retrospective life histories study and by korenman and neumark 1991 loh 1996 and gray 1997 using the national longitudinal study of young men suggest that the growth rate of wages increases on marriage once again results from the nlsy are mixed with daniel 1991 finding faster wage growth following marriage and gray 1997 finding no marital wage differential

the labeling effect of a child benefit system child benefit systems exist in many countries while they show a lot of differences in terms of eligibility rules amounts involved and implementation tax deduction tax credit or direct benefit the common motivation for their existence is to increase children s welfare in the dutch child benefit system the case i focus on in this paperone of the parents usually the mother is entitled to an untaxed child benefit amount which only depends on the child s age and the number of children in the household thus child support does not depend on household income marital status or labor market status as a result child benefit is exogenous to the household given the presence of children this is in contrast with the situation in many other countries including germany france the united kingdom and the united states where government provided child support is partly means tested see jonathan bradshaw et al 1993 in the netherlands child benefit is generally a nonnegligible addition to the household income the median share of child benefit in the total net income of households with children is 8 percent on the national level expenditures on child benefits amount to 1 2 percent of gnp the use of the child benefit is completely at the discretion of the parent there are no legal requirements that a certain amount be spent on particular goods or services nor does the government provide any guidelines regarding expenditure on children a policy question that arises is to what extent children benefit from child benefits standard microeconomic demand theory allows no role for effects of the composition of income given the fungibility of income sources it is only the sum of income components that is relevant in explaining expenditure patterns thus within that framework the answer would be that the marginal propensity to consume child goods from one guilder of child benefits is no different than from one guilder of any other income source in the more general class of gametheoretic models of household behavior however the composition of household income will generally affect expenditure patterns see e g shelly j lundberg and robert a pollak 1993 and martin browning et al 1994 if fathers and mothers have different preferences and mothers have control over child benefits the effect of child benefits on expenditures will differ from the effect of other income sources lundberg et al 1997 provide empirical evidence showing that a transfer of control over child benefits from fathers to mothers in the united kingdom due to a change in legislation resulted in a significant increase in expenditures on child clothing daniela del boca and christopher j flinn 1994 have analyzed the effect of income composition on expenditure decisions of divorced mothers they find that the coefficients associated with child support and alimony income differ from those for other income in engel curves for expenditures on childspecific goods their results can be explained in terms of a noncooperative nash model in which the child support transfer decisions of the noncustodial father and the expenditure decisions of the mother are determined simultaneously in contrast to del boca and flinn s analysis in which child support is a decision variable the present paper focuses on the possible differential effect of government provided child support which is truly exogenous in this paper i analyze the effects of child benefits on expenditures by running regressions in which child benefit enters as a separate explanatory variable the enipirical analysis is based on a time series of 17 cross section consumer expenditure surveys in the netherlands covering the period 1978 through 1994 it is important to note that in a single cross section it department of economics university of groningen p o b 800 9700 av groningen the netherlands e mail p kooreman eco rug nl i am indebted to two anonymous referees for constructive comments helpful comments were also provided by rob alessie maarten allers chris bojke werner de bondt bert schoonbeek and tom wansbeek i thank vincent linderhof for organizing the data financial support was provided by the dutch organization for scientific research nwo homes project grant

simulating security markets in dynamic and equilibrium modes an asynchronous discrete time model run in dynamic mode can model the effects on market prices of changes in strategies leverage and regulations or the effects of different return estimation procedures and different trading rules run in equilibrium mode it can be used to arrive at equilibrium expected returns

how well do theories of job matching explain variations in job satisfaction across education levels evidence for uk graduates using ordered probit estimation technique this paper examines the job satisfaction of recent uk graduates focussing primarily on explaining job satisfaction in terms of individuals matching to jobs with the match depending on reservation returns information sets and job offer rates only limited support can be found for the argument that job matching explains higher job satisfaction in addition stylizing graduates as a peer group who form satisfaction levels based on their rankings relative to each other we examine whether or not education quality which raises peer group status and increases the job offer rate is systematically related to job satisfaction the results broadly support the hypothesis that job satisfaction is neutral across graduates of different education qualities however our specification tests indicate that ordered probit estimation may not be fully appropriate for identifying the characteristics of those with high job satisfaction

are remittances insurance evidence from rainfall shocks in the philippines several facts motivate this study first life in developing countries is prone to many kinds of risk such as crop and income loss due to natural disasters weather insect infestations and fire and civil conflict second international migration and remittance flows are substantial and growing between 1965 and 2000 individuals living outside their country of birth grew from 2 2 to 2 9 percent of the world population totaling 175 million people in 2000 the remittances that these migrants send to their countries of origin are an important but poorly understood type of international financial flow this article examines a mechanism for coping with shocks ex post on which previous micro level studies have not focused remittances from family members overseas at the international level it is commonly posited that remittance flows from overseas buffer economic shocks in migrants home countries but there have been relatively few empirical tests of this claim with micro level household data related research on the role of domestic migration in pooling risk within extended families includes lucas and stark 1985 rosenzweig and stark 1989 and paulson 2000

demand analysis using strategic reports an application to a school choice mechanism several school districts use assignment systems that give students an incentive to misrepresent their preferences we find evidence consistent with strategic behavior in cambridge such strategizing can complicate preference analysis this paper develops empirical methods for studying random utility models in a new and large class of school choice mechanisms we show that preferences are non parametrically identified under either sufficient variation in choice environments or a preference shifter we then develop a tractable estimation procedure and apply it to cambridge estimates suggest that while 82 of students are assigned to their stated first choice only 72 are assigned to their true first choice because students avoid ranking competitive schools assuming that students behave optimally the immediate acceptance mechanism is preferred by the average student to the deferred acceptance mechanism by an equivalent of 0 08 miles the estimated difference is smaller if beliefs are biased and reversed if students report truthfully

the accumulation of dis advantage the intersection of gender and race in the long term wage effect of marriage a sizable literature examines whether and why marriage affects men s and women s wages this study advances current research in two ways first whereas most prior studies treat the effect of marri