an empirical analysis of life cycle fertility and female labor supply this paper examines us household fertility and female labor supply over the life cycle using data from the panel study of income dynamics the authors investigate how maternal time inputs and market expenditures on offspring as well as the benefits they yield their parents vary with ages of offspring and influence female labor supply and contraceptive behavior the econometric framework combines a female labor supply model and a contraceptive choice index function it also accounts for the fact that conceptions are not perfectly controllable events using longitudinal data on married couples the authors estimate these equations and test alternative specifications of the technologies governing child care the findings suggest that while parents cannot perfectly control conceptions variations in child care costs do affect life cycle spacing of births furthermore the results demonstrate the gains of modeling the linkages between female labor supply and fertility behavior at the household level authors modified

marriage cohabitation and women s response to changes in the male wage structure using microdata and grouped data that cover the period 1996 to 2006 we assess the extent to which cohabiting women adjust their labour supply to a lesser extent if any than married women in response to changes in male wages both microdata regressions and grouping estimators unambiguously indicate that cohabiting women respond less to variation in male wages than married women however the magnitude of the difference is not sizeable we also assess the magnitude of married men s and cohabiting men s own wage elasticities and find that they do not differ much combined with the fact that male earnings account for roughly two thirds of family earnings these two findings explain why the impact of changes in male wages on family earnings is very similar for married couples and cohabiting couples in both cases a 10 decline in male wages appears to induce roughly a 6 drop in family earnings

inflation and welfare in a monetary economy it is in everyone s private interest to try to get someone else to hold non interest bearing cash and reserves but someone has to hold it all so these efforts must simply cancel out all of us spend several hours per year in this effort and employ thousands of talented and highly trained people to help us these person hours are simply thrown away wasted on a task that should not have to be performed at all

growth and the effects of inflation abstract in this paper we study the relationship between the rate of increase of the money supply and the rate of growth of output in an economy we show that in some models of endogenous growth inflation has direct effects on the growth rate of the economy despite this the estimated welfare cost of inflation from calibrated examples is similar to that found in exogenous growth models

labor supply and fertility of married women an analysis with grouped and individual data from the 1970 u s census 1970 us census data were used to examine how much studies with grouped data can be reconciled with models that apply to individual families in contrast to its 1960 predecessor the 1970 census public use sample pbus identifies households in standard metropolitan statistical areas smsa and offers the opportunity to estimate a model of labor supply and fertility using both individual and grouped data from a common sample 3 data sets from the 1970 census are available the 5 sample smsa averages published by the us bureau of the census which are similar to the data used in previous studies grouped by smsa observations from the 1 100 pbus which are superior to the published averages in several respects and which are detailed here and individual observations from the 1 1000 pbus if these 1970 estimates are found to be stable with regard to aggregation and similar to those found with non census data confidence in the grouped data results from the 3 previous censuses would be strengthened estimates derived from the individual pbus observations generally agreed with findings from alternative and arguably superior microdata sets the labor force participation and hours of white wives were sensitive to wage and income variations both wages and hours of work among workers appeared to be subject to selection bias economic factors had little impact on the hours of black workers but wage offers influenced the participation decision wage selectivity was particularly strong among black women the samples for both black and white women indicated that the wifes wage played a major role in determining the number of children ever born the published smsa data provided labor supply estimates similar to those found with individual observations wage elasticities for both black and white women and the white income elasticities were similar in sign and magnitude to the total marginal effects of these variables upon hours of work among individuals wages effects upon fertility persisted only among blacks grouping of the pbus data by smsa led to very different labor supply results labor force participation rates showed little association with mean hourly wages and income effects were weak fertility responses resembled those found with the published data realizing theoretical expectations only in the case of the black sample further analysis showed that a probable source of the dissimilar labor supply estimates was the positive bias induced by the unavoidable inclusion of unmarried women in the sample used to calculate mean weekly wages from the published data in sum it has been shown that estimates such as those made are highly sensitive to the level of aggregation and that grouped data results may be seriously misleading

a revised tobin effect from inflation relative input price and capital ratio realignments usa and uk 1959 1999 the paper studies the realignments induced by inflation within an endogenous growth monetary economy accelerating inflation raises the ratio of the real wage to the real interest rate and so raises the use of physical capital relative to human capital across all sectors we find cointegration evidence for the us and uk economies consistent with a general equilibrium tobin type effect of inflation on input prices and capital intensity even while the growth rate of output is reduced by inflation

twins family size and female labour force participation in iran abstractdespite the remarkable increase in women s education levels and the rapid fall of their fertility rate in iran female labour force participation flfp has remained low using the instrumental variable method this article estimates the causal impact of number of children on mothers participation in the labour market it finds that having an extra unplanned child would only reduce female participation rate for low educated mothers and mothers with young children thus having no causal impact on most mothers participation this result explains why the rapid decline in fertility rates did not increase female participation rather other factors should be at play it hence moves us a step forward in explaining the puzzle of flfp in iran policy implications are discussed abbreviation flfp female labour force participation lfp labour force participation

the impact of children on married women s labor supply black white differentials revisited previous studies have documented that the depressing effect of children on labor supply is greater for white wives than for their black counterparts the present paper examines the hypothesis that this difference by race is less pronounced in the highly educated segments of the population multinomial logit estimates of a labor supply model using data from the 1982 national survey of family growth are consistent with the hypothesis

voters as fiscal conservatives voters penalize federal and state spending growth this is the central result of my analysis of voting behavior in presidential senatorial and gubernatorial elections from 1950 1988 the composition of federal spending growth seems irrelevant the vote loss to the president s party from an extra dollar of defense or nondefense spending is the same however in gubernatorial elections expansion of state welfare spending exacts a disproportionate political price deficit financing of federal or state spending does not appear to matter politically i conclude by discussing the obvious question of why government budgets have grown in the face of this voter hostility

money and growth an alternative approach this paper takes an alternative approach to the topic of money and growth by developing a model in which the effects of sustained capital accumulation on an evolving system of payments in addition to the conventional effects of sustained inflation on growth are examined while the effects of inflation on growth are small the effects of growth on the monetary system are substantial the results are consistent with ideas about money and growth contained in work that predates that of james tobin and miguel sidrauski as well as with evidence that money and asset demands vary systematically within economies as they develop copyright 1994 by american economic association

monetary policy banking and growth i introduction fischer and modigliani 1978 exhaustively list the costs associated with inflation in recent years a growing body of evidence is consistent with the notion that slower output growth may be added to the fischer modigliani list specifically analyses by kormendi and meguire 1985 fisher 1991 degregario 1992 gomme 1993 wynne 1993 barro 1996 and others find a negative correlation between the inflation rate and output growth both across countries and over time 1 moreover the studies consistently find that the growth rate response to a change in the inflation rate is quite large the different studies produce a range of correlation coefficients a country in which the inflation rate is 10 will grow between 1 4 and 3 4 percentage points slower than a country in which the inflation rate is 0 the purpose of this paper is to determine whether a reasonably calibrated model economy can account for the size of the regression coefficients the model economy is a modified version of a member of the ak class in which bank deposits are used to finance capital accumulation in this model economy fiat money is valued because the bank is required to hold reserves against its deposits throughout this paper bank deposits is used in a narrow sense to include only those deposits against which a reserve requirement applies because monetary policy has two tools at its disposal it is possible to conduct two separate policy experiments the results from these experiments particularly the inflation rate experiment sheds light on the potential importance on the share of investment financed through bank deposits researchers have long been interested in the interaction between financing and growth schumpeter 1911 argued that the financial sector more specifically its stage of development affected a country s growth rate 2 cameron 1967 described financial development in scotland england and france in the late 18th and early 19th centuries cameron concluded that scotland and england entered the industrial revolution ahead of france because it had the financial infrastructure capable of financing capital accumulation on the needed scale king and levine 1993 find that countries with more developed financial sectors tend to grow faster than countries with less developed financial sectors it seems natural therefore to investigate whether the means of financing can yield any insights into the inflation growth relationship other researchers have also quantified the effect that movements in the inflation rate has on the growth rate in particular jones and manuelli 1995 use several variants of economies in which people hold fiat money to satisfy a cash in advance constraint they demonstrate that large growth rate effects cannot be accounted for in these model economies in these models inflation does not materially alter capital accumulation rates affecting instead the allocation between the credit good and cash good purchases jones and manuelli find small growth rate effects in an economy in which the tax code has nominally denominated depreciation rates in two papers that focus on inflation and growth chari jones and manuelli 1995 1996 consider economies in which capital accumulation can be financed through either bank deposits or directly as in the economy specified in this paper reserve requirements are applied against bank deposits agents can avoid the inflation tax by using the direct financing means more intensively consequently the growth rate effects are muted in the chari jones manuelli model economies and are too small to account for the size of the regression coefficients reported in kormendi and mcguire fischer and barro in this paper i assume that all investment is financed through bank deposits with this extreme assumption the model economy can account for the size of the growth rate effects observed in the data 3 thus there is a potentially useful lesson learned from the quantitative results in the all bank financing economy and those reported in chari jones manuelli

the flypaper effect what happens to a state s spending when it receives an unconditional grant from the federal government the standard theoretical analysis predicts that the increase in spending will be the same as that generated by an equivalent increase in local incomes or roughly 5 10 percent for most states in contrast numerous empirical analyses have found that spending increases by much more with some estimates near 100 percent this result is known as the flypaper effect since the money appears to stick where it hits the authors review this evidence as well as other studies that find similar behavior in firms

migration and income redistribution responsibilities this study examines whether afdc benefits determine or discourage state to state migration flows in the united states a pooled cross section time series model is developed to estimate afdc benefits in a state and recipients and whether benefits in one state affect benefits in other states a second model using data from the 1980 census and the panel study of income dynamics estimates migration of afdc recipients and the level of benefits in in migration and out migration states both models indicate that small but statistically significant amounts of migration occur which may be quite important but only in the long run movers although small in number are much more likely to move to a state with higher benefits states perceive this migration as important indicating that states should have less control and the federal government more control over income redistribution

trading off positive and negative service changes in childcare a choice experiment using a latent class modelling approach theoretically the choice of childcare mode should be influenced by the quality of the childcare attributes however such preference relations have been difficult to identify in past studies one

transaction services inflation and welfare this paper is motivated by empirical observations on the comovements of currency velocity inflation and the relative size of the credit services sector we document these comovements and incorporate into a monetary growth model a credit services sector that provides services that help people economize on money our model makes two new contributions first we show that direct evidence on the appropriately defined credit service sector for the united states is consistent with the welfare cost measured using an estimated money demand schedule second we provide estimates of the welfare cost of inflation that have some new features

a banking explanation of the us velocity of money 1919 2004 the paper shows that us gdp velocity of m1 money has exhibited long cycles around a 1 25 per year upward trend during the 1919 2004 period it explains the velocity cycles through shocks constructed from a dsge model and annual time series data ingram et al 1994 model velocity is stable along the balanced growth path which features endogenous growth and decentralized banking hat produces exchange credit positive shocks to credit productivity and money supply increase velocity as money demand falls while positive goods productivity shock raises temporary output and velocity the paper explains such velocity volatility at both business cycle and long run frequencies with filtered velocity turning negative starting during the 1930s and the 1987 crashes and again around 2003 results suggest that the money and credit shocks appear to be more important for velocity during less stable times and the goods productivity shock more important during stable times

bank intermediation over the business cycle a model is developed in which banks engage in valued asset transformation by converting illiquid assets working capital loans into highly liquid demand deposit accounts that households use for transactions purposes consumption smoothing behavior induces countercyclicality in the degree to which firms rely on bank borrowings to finance their working capital expenses which is consistent with u s data the importance of financial markets that provide alternative sources of short term funds to firms is also illustrated absent these markets nominal interest rates become nearly perfectly positively correlated with output which is counterfactual and monetary shocks induce perhaps artificially large aggregate employment responses

endogenous financial innovation and the demand for money this paper embeds two key ideas about the nature of financial innovation taken from the empirical literature into a familiar equilibrium monetary model it provides formal support for several alternative econometric specifications for money demand that attempt to capture the effects of financial innovation and demonstrates that a popular theoretical model of money demand when suitably modified can account for some unusual monetary dynamics found in the data thus it helps to establish both the theoretical relevance of recent empirical work and the empirical relevance of recent theoretical work on the demand for money copyright 1995 by ohio state university press

on inflation as a regressive consumption tax abstract evidence on the portfolio holdings and transaction patterns of households suggests that the burden of inflation is not evenly distributed we build a monetary growth model consistent with key features of cross sectional household data and use this framework to study the distributional impact of inflation at the aggregate level our model economy behaves similar to standard monetary growth models within the representative agent abstraction inflation has however important distributional effects since it is effectively a regressive consumption tax thus neglecting the distributional consequences of inflation may prove misleading in assessing the effects of inflation in our economy

wage offers and full time and part time employment by british women strong evidence in support of the hypothesis that women receive lower wage offers in part time jobs than in full time jobs is provided by estimation of wage offer functions for british women which control for self selection into these two types of jobs analysis of married women s employment decisions indicates that the difference in a woman s expected wage offers between full time and part time employment is an important determinant of whether she works full time while husband s income mainly affects the decision of whether to work in addition it appears that women who work despite having observed characteristics that discourage employment are much more likely to work part time

children and female labour supply behaviour using the generalized residual method this paper investigates the assumption that children are exogenous in the labour supply equations of married women via alternative regression specifications for the children variables the empirical results of this paper suggest that children are endogenous to the participation decision and likely to be exogenous to the hours of work decision for married women children under age six have a dramatic negative impact on the labour force participation of married women these findings support the implication of the literature relating fixed costs of employment including child care costs to female labour supply

an empirical study of matching grants the cap on cap abstract funding mechanisms for social expenditures are currently being reformed in many countries while the theoretical implications of these changes are often easily identified their empirical magnitude is not always as clear for example in federal systems social expenditure is often funded by matching grants and estimates of the effect of varying matching rates on expenditures by sub national governments vary widely the ambiguity is due in part to inherent difficulties identifying price and income effects of federal grants given the structure of the funding mechanisms in most countries in this paper we examine a recent reform in canada in which federal grants for welfare expenditures were capped converted from an open ended to a closed ended matching grant importantly the cap applied to only three of 10 provincial governments our empirical strategy exploits the time series cross section variation in the funding mechanism provided by the differential application of the reform this approach potentially surmounts some of the difficulties which have beset earlier studies we find that the affected provinces did respond to the reform by reducing the growth rate of expenditures it was 8 to 9 percentage points lower than predicted in the absence of the cap over the medium term

the sensitivity of an empirical model of married women s hours of work to economic and statistical assumptions this study undertakes a systematic analysis of several theoretic and statistical assumption s used in many empirical models of female labor supply using a singl e data set psid 1975 labor supply data the author is able to replic ate most of the range of estimated income and substitution effects fo und in previous studies in this field he undertakes extensive specif ication tests and finds that most of this range should be rejected du e to statistical and model misspecifications the two most important assumptions appear to be the tobit assumption used to control for sel f selection into the labor force and exogeneity assumptions on the wi fe s wage rate and her labor market experience copyright 1987 by the econometric society

european women why do n t they work 1 to increase labour market participation is a major challenge currently faced by the eu and attracting women into the labour force appears as a promising avenue to do so therefore a clear understanding of what the factors influencing the evolution of female participation rates are in europe is essential for a successful design of policy measures aiming at increasing participation rates this article provides empirical evidence on the role that institutions have played in determining participation rates of women in the european labour markets our findings discard any doubt on the influence of institutions on women s participation in europe the strictness of labour market institutions negatively affects female participation rates we also find that institutional features aimed at reconciling motherhood with professional life such as maternity leave schemes and part time work favour participation rates of prime age women additionally fertility rates and education enrolment have been relevant for the ev

the welfare cost of inflation in a cash in advance economy with costly credit the paper presents a modification of the lucas stokey 1983 cash in advance economy in which the representative consumer decides based on relative prices which goods to buy with cash and which with costly credit an explicit baumol 1952 condition emerges that guides this consumer choice deriving and estimating a closed form welfare cost function in an example economy the paper shows that the welfare cost of inflation depends on the margins of substitution the consumer avoids inflation through costly credit and faces higher welfare costs of inflation than in standard cash in advance economies

money velocity in an endogenous growth business cycle with credit shocks the explanation of velocity has been based in substitution and income effects since keynes s 1923 interest rate explanation and friedman s 1956 application of the permanent income hypothesis to money demand modern real business cycle theory relies on a goods productivity shocks to mimic the data s procyclic velocity feature as in friedman s explanation while finding money shocks unimportant and not integrating financial innovation explanations this paper sets the model within endogenous growth and adds credit shocks it models velocity more closely with significant roles for money shocks and credit shocks along with the goods productivity shocks endogenous growth is key to the construction of the money and credit shocks since they have similar effects on velocity through substitution effects from changes in the nominal interest rate and in the cost of financial intermediation but opposite effects upon growth through permanent income effects that are absent with exogenous growth

money and interest in a cash in advance economy the authors analyze an aggregative general equilibrium model in which the use of money is motivated by a cash in advance constraint applied to purchases of a subset of consumption goods the system is subject to both real and monetary shocks which are economy wide and observed by all they develop methods for verifying the existence of characterizing and explicitly calculating equilibria copyright 1987 by the econometric society

anticipated inflation and the capital stock in a cash in advance economy abstract an economy is constructed in which the steady state capital stock is inversely related to the rate of inflation as a result that is directly opposite the usual conclusion

a simultaneous equation model of labor supply fertility and earnings of married women the case of registered nurses a simultaneous equation model of labor supply fertility and earnings is developed and estimated for an important subset of the female population married registered nurses rns measures of variables specific to married nurses age 21 64 are developed by aggregating observations on individual nurses or their families into standard metropolitan statistical area smsa averages from the 1 in 100 public use sample of the 1970 census of population in the u s the sample was restricted in certain ways the grouped observations apply only to white rns who are married with husband present and live in smsas of over 250000 population in 1970 except honolulu the sample is further restricted so that each included observation representing an smsa average is based upon an underlying pool of at least 15 individual nurses this last restriction reduces the sample of smsas to 88 from 124 the coefficient on the nurse wage variable is positive and statistically significant with an implied wage elasticity of 40 at the means these estimates are consistent with those observed using the analogous microcensus data on rns rn fertility has the predicted negative effect on nurse labor supply but is statistically insignificant but the magnitude of the fertility coefficient is plausible a 10 increase in nurse fertility within an smsa number of children ever born 1000 nurses ever married within an smsa is associated with a reduction in the smsa nurse labor supply the estimated coefficients of the husband earnings and nonlabor income variables are negative but only the former is statistically significant at the 90 level or above the estimated effect of the nurses earnings opportunities on her fertility are statistically insignificant but the wage coefficient is negative as expected and implies an elasticity of nurse fertility with respect to the nurse wage rate of approximately 2 the coefficient on the labor supply variable is negative and statistically significant confirming the hypothesis that increased labor market activity increases the opportunity costs of children husbands earnings are not a significant determinant of rn fertility the estimates suggest that nurse labor supply and fertility decisions are relatively unimportant factors in determining the nurses market earnings

money and growth revisited abstract conventional wisdom is that if public policy can affect the growth rate of the economy the welfare implications of alternative policies will be large in this paper a stochastic dynamic general equilibrium model with endogenous growth and money is examined in this setting inflation lowers growth through its effect on the return to work however the welfare costs of higher inflation are modest the endogenous labor supply is important in producing this result

children and household economic behavior this paper looks at some of the methodological issues that arise in modeling the effects of children on household behavior and presents some estimates for selected areas for our purposes household behavior will be taken to refer to household decisions on labor supply the allocation of expenditure to different periods and the decision as to what to do with the difference between income and expenditure i shall be concerned mainly with the effects of dependent children and i restrict attention largely to western societies excerpt

inflation and balanced path growth with alternative payment mechanisms the paper shows that contrary to conventional wisdom an endogenous growth economy with human capital and alternative payment mechanisms can robustly explain major facets of the long run inflation experience a negative inflation growth relation is explained including a striking nonlinearity found re peatedly in empirical studies a set of tobin 1965 effects are also explained and further linked in magnitude to the growth effects through the interest elasticity of money demand undis closed previously this link helps fill out the intuition of how the inflation experience can be plausibly explained in a robust fashion with a model extended to include credit as a payment mechanism

the effects of grants in aid on state and local expenditures abstract this paper develops econometric methods to estimate the effect of the piecewise linear budget constraints created by grant formulas in which the subsidy rate is not constant over expenditures e g closed end grants the methods are applied to the afdc program the results show that because of the kinked nature of the grant formula 1 the present federal formula actually increases cross state inequality in afdc benefits 2 several subsidy rates in the formula actually reduce benefits and 3 the so called flypaper effect disappears

was it the economy or reform that precipitated the steep decline in the us welfare caseload objectives of the 1996 overhaul of the us welfare system included reducing dependency raising employment and de incentivizing out of wedlock fertility using public use state level panel data from 1990 to 2005 i analyse how state implementation of welfare reform simultaneously affects the caseload employment and out of wedlock births henceforth temporary assistance for needy families tanf objectives because endogeneity and simultaneity could not be rejected i use three stage least squares 3sls method results indicated that most of the steep decline in the caseload is attributed to welfare reform while the economy s overall effect paled in comparison however lagged and contemporaneous unemployment individually ranked second and third behind the hispanic share of state population the conservative tilt over the period studied ranked forth followed in declining order by full family sanctions earned income tax credit eitc payments time limits lagged by length access to abortion clinics

the value of inside and outside money abstract we study dynamic economies in which agents may have incentives to hold both privately issued a k a inside and publicly issued a k a outside circulating liabilities as part of an equilibrium our analysis emphasizes spatial separation and limited communication as frictions that motivate monetary exchange we isolate conditions under which a combination of inside and outside money does and does not allow the economy to achieve a first best allocation of resources we also study the extent to which the use of private circulating liabilities alone or the use of public circulating liabilities alone can address the frictions that lead to monetary exchange

the demand for bank reserves and other monetary aggregates the paper starts with haslag s 1998 model of the bank s demand for reserves and reformulates it with a cash in advance approach for both financial intermediary and consumer this gives a demand for a base of cash plus reserves that is not sensitive to who gets the inflation tax transfer it extends the model to formulate a demand for demand deposits yielding an m1 type demand and then includes exchange credit yielding an m2 type demand based on the comparative statics of the model it provides an interpretation of the evidence on monetary aggregates this explanation relies on the nominal interest as well as technology factors of the banking sector e31 e13 o42

profiles of fertility labour supply and wages of married women a complete life cycle model of all the major economic and demographic events in the postwar united states period the trends in fertility and female labour supply stand out as among the most dramatic fertility rates after their depression lows rose unexpectedly after world war ii far more than was anticipated as an adjustment to the war and continued to rise until the late 1950 s and early 1960 s when they again took an unexpected turn downward all the way to today s historical lows female labour force participation rates continuing their historical climb grew throughout the postwar period at an increasing pace by 4 percentage points during the 1950 s by 5 percentage points during the 1960 s and by 8 percentage points during the 1970 s these two trends are of course closely related for most married women have traditionally spent at least some minimal time out of the labour force while caring for their own children thus for example the slower growth rate of labour force participation rates in the 1950 s is probably connected with the higher fertility rates in that period in this paper a complete model of female labour supply and fertility choice is constructed and estimated the model is more complete than previous models in several respects first labour supply and fertility decisions are modelled as completely joint in the same sense as the consumption of two goods is joint second both are modelled as life cycle decisions that is as decisions regarding sequences of labour supply and fertility events rather than levels of the same hence the timing of both is important third the life cycle path of wage rates is made endogenous to the model given a wage function showing the effect of work experience on future wages the path of wages is determined automatically by the chosen path of labour supply which in turn is related to fertility decisions that require some period of non work econometrically the three profiles for labour supply fertility and wages are estimated with a full information maximum likelihood technique that solves several econometric problems such as the problem of heterogeneity of tastes the selectivity problem of missing wage rates for non workers and the problem of simultaneous equations bias the value of constructing a complete model is best seen by briefly reviewing past work in this area the modern literature in the area is based upon the work of becker

an exogeneity test for a simultaneous equation tobit model with an application to labor supply a test of weak exogeneity in the simultaneous equation tobit model is proposed and illustrated using a female labour supply model estimated using cross section data the test statistic can be simply output from any standard tobit maximum likelihood package and is asymptotically efficient the procedure provides consistent estimators for the simultaneous tobit model whose asymptotic covariance matrix is a simple extension of the usual tobit formula we also provide the lagrange multiplier test of weak exogeneity this abstract was borrowed from another version of this item