effects of economic shocks on children s employment and schooling in brazil abstract this paper uses longitudinal employment survey data to analyze the impact of household economic shocks on the schooling and employment transitions of young people in metropolitan brazil the paper uses data on over 100 000 children ages 10 16 from brazil s monthly employment survey pme from 1982 to 1999 taking advantage of the rotating panels in the pme we compare households in which the male household head becomes unemployed during a four month period with households in which the head is continuously employed probit regressions indicate that an unemployment shock significantly increases the probability that a child enters the labor force drops out of school and fails to advance in school the effects can be large implying increases of as much as 50 in the probability of entering employment for 16 year old girls in contrast shocks occurring after the school year do not have significant effects suggesting that these results are not due to unobserved characteristics of households that experience unemployment shocks the results suggest that some households are not able to absorb short run economic shocks with negative consequences for children

changes in human capital and earnings inequality recent evidence from brazil 1 abstract this paper estimates changes in the rates of return to human capital across the earnings distribution using data from over a 10 year period for brazil it uses these estimates to simulate the separate impacts of changes in returns to skills and changes in the supply of skills on earnings inequality evidence points strongly to growing inequality in rates of return to education in brazil this finding suggests that recent macroeconomic and trade reforms have been of most benefit to the skilled rather than the unskilled supporting evidence points to an improved competitiveness in the labour market with workers increasingly rewarded for productivity however although increases in returns to education are more pronounced at the top of the earnings distribution this did not in practice led to increased inequality this is because levels of education and other labour market rewarded endowments have increased and offset the rate of return effect appropriate education policy is therefore an essentia

bequest receipt and family size effects i introduction the seminal economic models of intergenerational human capital investment demonstrate the potential importance of credit market failure in determining child achievement becker and barro 1988 becker and lewis 1973 becker and tomes 1986 willis 1973 1 without the ability to borrow against future child earnings additional children raise the cost of providing a given level of child quality alternatively the greater the level of child quality the higher the cost of having an additional child 2 the resulting negative relationship between family size and child outcomes is termed a quality quantity trade off early empirical studies found large negative family size effects consistent with significant credit market failure kessler 1991 includes a brief survey of this literature however kessler points out that this early literature often ignored the possible effects of birth order because birth order is inherently correlated with family size this omitted variable might account for observed family size effects if first or early born children are advantaged due to preferential parental investments or innate advantages see behrman and taubman 1986 for a discussion of biological psychological and economic reasons for such birth order effects studies that include both family size and birth order controls report conflicting results 3 using data from the national longitudinal survey of youth kessler 1991 finds that neither birth order nor family size affect the level or growth rate of wages he does find a family size effect in the hours worked by women though the direction of the effect depends on age using a sample from norway black devereux and salvanes 2005 find significant family size effects with ordinary least squares even with birth order controls however when family size is instrumented with twinning the effect becomes statistically indistinguishable from zero though the standard errors are large and the results are also consistent with very large family size effects in britain grawe 2008 finds sizable family size effects even after controlling for birth order of course the presence or absence of family size effects in the population as a whole is weak evidence for or against the importance of credit constraints both reason and theory suggest that some families will be free from such hurdles two existing studies have compared family size effects between groups that are more and less likely to be constrained the norwegian study of black devereux and salvanes 2005 divides the sample according to mother s education greater than or equal to 12 or 12 yr their estimates based on instrumental variables using twinning as the instrument do not clearly show greater family size effects among the presumably more constraint prone low mother s education group however the coefficients are imprecisely estimated and so the test has low power grawe 2008 examines the family size effect in britain dividing the sample by father s earnings those with fathers in the top 20 of the income distribution are presumably financially unconstrained yet strong family size effects are found in educational performance among children in these families these articles suggest that financial constraints do not explain family size effects in norway and britain but the experiences in these countries may say little about access to credit markets in the united states in particular both norway and britain provide free access to higher education within the past few years british universities have been allowed to charge as much as 3 000 pounds sterling for tuition but the individuals studied by grawe born in 1958 completed their educations long ago the present article explores the relevance of credit to family size effects in the united states dividing families based on bequest receipt of the children theory suggests that only those unconstrained by credit access would receive a financial bequest

economic mobility and poverty dynamics in developing countries this study provides an introduction to this special issue of the journal of development studies on economic mobility and poverty dynamics in developing countries in addition to providing a conceptual framework it outlines how the contributions fit into the extant literature a series of regularities emerge across these studies the poor consist of those who are always poor poor at all dates and those who move in and out of poverty with the latter group tending to be strikingly large such movements in and out of poverty are apparent when looking at poverty in either absolute or relative terms changes in returns to endowments can be a potent source of increased incomes finally seemingly transitory shocks can have long term consequences the study concludes by drawing out the policy implications of these regularities

global educational expansion and socio economic development an assessment of findings from the social sciences summary among development agencies conventional wisdom holds that educational expansion improves economic welfare and health reduces inequalities and encourages democratic political systems we investigate the empirical foundations for these expectations in recent social science research consistent evidence indicates that health and demographic benefits result from educational expansion and suggests that education enhances but does not ensure individuals economic security however the impact of educational expansion on growth remains debated and decades of sociological studies offer evidence that educational expansion does not necessarily narrow social inequalities finally considerable controversy surrounds the implications of educational expansion for democratization reasonable forecasts of the consequences of further educational expansions need to consider the diverse social contexts in which these expansions will occur

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

effects of family background on earnings and returns to schooling evidence from brazil we investigate whether omitted family background variables are responsible for high returns to schooling estimated in brazil returns to schooling fall by about one third when parental schooling is added to wage equations surprisingly the schooling of fathers in law has larger effects on wages than the schooling of fathers on the basis of a model of assortative mating we interpret this as evidence that parental characteristics represent unobservable worker attributes rather than nepotism in the labor market we conclude that the family background bias in returns to schooling is modest and need not imply returns to family connections

the quality of schooling comment a recent article in this review by jere behrman and nancy birdsall 1983 raises an important issue for makers of educational policy in developing countries behrmanbirdsall break ground both in specifying a model that treats schooling quantity and quality simultaneously and systematically and in developing practical methods for evaluating social rates of return to schooling quantity and quality in the absence of externalities their model is estimated using data from brazil a country with an impressive recent record in expanding primary schooling this comment has two objectives the first is to point out methodological errors made by behrman and birdsall in the derivation of the social rate of return to schooling quantity the second is to test the robustness of this corrected finding with a data set that differs from that used by behrman and birdsall the principal finding of the behrmanbirdsall analysis is that the estimated social rate of return to schooling quantity in brazil is much lower than that to schooling quality 6 8 vs 10 4 percent if this is generally the case in developing countries the possibility of a conflict between productivity and equity goals becomes an issue to be taken into account by educational policymakers for example with the conclusions reached by behrman birdsall if only one third of the students were to attend school and the resources saved by schooling only one third of the students could be used to increase both quality and quantity by 50 percent the estimates imply an overall income gain of 32 percent p 941 the analysis that follows demonstrates that correct procedure yields an estimated social rate of return to schooling quantity which is only slightly lower than that to schooling quality 9 8 vs 10 4 percent indicating no substantial inefficiency in the allocation of educational resources between schooling quantity and quality to test the robustness of this result a model of the behrmanbirdsall type is estimated using a 1979 set of micro data from one city in the brazilian northeast using theoretically and empirically preferred variable definitions very similar estimation results are obtained with respect to relative social rates of return to quantity and quality section i contains a correction of the errors made in deriving the social rate of return to schooling quantity section ii is empirical and contains a summary of potential sources of bias a description of the data set used to estimate a behrman birdsall type model and estimation results section iii contains a discussion of some remaining problems

the impact of permanent residency delays for stem phds who leaves and why abstract this paper assesses whether delays in obtaining permanent residency status can explain recent declines in the share of chinese and indian phd graduates from us stem programs who remain in the us after their studies we find that newly binding limits on permanent visas for those from china and india with advanced degrees are significantly associated with declines in stay rates the stay rate of chinese graduates declines by 2 1 percentage points for each year of delay while indian graduates facing delays of at least 5 years have a stay rate that is 10 6 percentage points lower the per country permanent visa cap affects a large share of stem phds who are disproportionately found in fields of study that have been crucial in stimulating us economic growth yet enroll relatively few natives finally results suggest that the growth of science in countries of origin has an important influence on stay rates while macroeconomic factors such as gdp per capita affect stay rates only via their impact on science funding we conclude that per country limits play a significant role in constraining the supply of highly skilled stem workers in the us economy

unforeseen contingencies and incomplete contracts we scrutinize the conceptual framework commonly used in the incomplete contract literature this literature usually assumes that contractual incompleteness is due to the transaction costs of describing or of even foreseeing the possible states of nature in advance we argue however that such transaction costs need not interfere with optimal contracting i e transaction costs need not be relevant provided that agents can probabilistically forecast their possible future payoffs even if other aspects of the state of the nature cannot be forecast in other words all that is required for optimality is that agents be able to perform dynamic programming an assumption always invoked by the incomplete contract literature the foregoing optimality result holds very generally provided that parties can commit themselves not to renegotiate moreover we point out that renegotiation may be hard to reconcile with a framework that otherwise presumes perfect rationality however even if renegotiation is allowed the result still remains valid provided that parties are risk averse

marriage markets labor markets and unobserved human capital an empirical exploration for south central india some aspects of the linkage between dimensions of unobserved human capital that are rewarded in the marriage market and in the wage market are explored it is postulated that in rural south central india the schooling age and dowry of a mans wife are determined by the mans observed characteristics schooling caste and those of his parents parental wealth parental occupation and dimensions of his unobserved by the researcher human capital the theoretical model consisted of two sets of equations the first describing the determination of the wifes characteristics through the marriage market and the second the determination of the mans wage and wage growth and his participation in the wage market the data were part of the village level studies vls conducted in rural semiarid south india a total of 120 households from 3 villages were surveyed continuously over the period 1975 76 to 1984 85 detailed information was obtained on farm management income consumption time allocation and asset ownership the mans schooling had a significant effect on his wifes schooling and on her age the characteristics of the mans parental household had a significant effect on each of the 3 observed characteristics of his wife the year of marriage significantly increased the wifes schooling by 0 08 year per year the net dowry 1 2 per year and the wifes age at marriage by 0 24 years per year schooling had a significant impact on a mans participation in the wage market and on wage growth a mans unobserved human capital generally had a significant and positive effect on his wage rate and wage growth though a negative effect on participation in the wage market some important dimensions of human capital beyond schooling had important effects in both marriage and labor markets potential brides and parents presumably value such characteristics because they increase the expected earning power of potential husbands

why do schooling returns differ screening private schools and labor markets in the philippines and thailand abstract this article examines returns to schooling in the philippines and thailand using recent employee surveys in manufacturing industries empirical results show that i schooling returns steadily increase as education attainment increases in thailand but the returns increase only at university level in the philippines and that ii private school premiums are higher in the philippines than thailand the latter finding is consistent with the dominance of private institutions in the philippine education system the premiums from private schooling investments in the philippines are however found to be spurious in the sense that private schools screen high ability students which augments wage therefore the productivity gain from private schooling is small

decomposing intergenerational income elasticity the gender differentiated contribution of capital transmission in rural philippines summary using longitudinal data from rural philippines we decompose intergenerational income elasticity ige into five distinct pathways intergenerational transmissions of health education land and spouse education capital plus residual correlation in productivity intergenerational human capital transmissions from mothers are stronger than those from fathers maternal education is the parental capital most strongly associated with ige while naive ige estimates are indistinguishable for sons and daughters the pathways that generate these results differ strikingly for sons ige is entirely explained by parent to child capital transmission by contrast strong income correlation exists between daughters and parents even after controlling for parent and child capital endowments

assessing the stability of the inter industry wage structure in the face of radical economic reforms we assess the stability of the wage structure in an economy experiencing substantial economic changes we find that the structure of inter industry wage differentials remained remarkably stable in brazil in the face of major shocks

does sample selection bias affect the effect of family background on the returns to schooling evidence from korea this article examines the effect of family background on the returns to schooling in korea in doing so sample selection bias is controlled as the probability of being employed is affected by the schooling of family members the results of this study are different from previous studies which did not consider sample selection bias while the effect of family background on the returns to schooling was obvious in previous studies it is weakened with the control of sample selection bias this phenomenon is particularly strong for the wife moreover controlling sample selection bias increases the downward bias due to measurement error thus it is concluded from these findings that sample selection bias should be controlled to accurately estimate the effect of family background on the returns to schooling

taxation and the international mobility of inventors we study the eect of top tax rates on superstar inventors international mobility since 1977 using panel data on inventors from the u s and european patent oces we exploit the dierential impact of changes in top tax rates on inventors of dierent qualities superstar inventors location choices are signicantly aected by top tax rates in our preferred specication the elasticity to the net of tax rate of the number of domestic superstar inventors is around 0 03 while that of foreign superstar inventors is around 1 these elasticities are larger for inventors in multinational companies an inventor is less sensitive to taxes in a country if his company performs a higher share of its research there

the pricing of short term debt and the miller hypothesis a note in 1977 miller 2 challenged conventional wisdom concerning the gain from corporate leverage introducing an equilibrium model of the municipal and corporate debt markets and arguing that the effective personal tax rate on equity is negligible miller concluded that the relevant marginal tax rate operating across the two markets would be the corporate rate and as a result the marginal value of the tax shield to an individual firm would be zero the purpose of this paper is to present additional evidence regarding implied marginal tax rates on interest income taxable and tax free money market funds are compared making it possible to avoid difficulties in previous studies involving long term bond yields the results support the miller hypothesis when these short term rates are compared when there is little term structure impact and when risk differences are small observed returns on taxable and tax free investments imply a tax rate almost exactly equal to the corporate rate

family background and the estimated return to schooling earnings regressions for married and cohabiting swedish males in 1993 indicate that controlling for family background reduces the measured return to education by about 9 percent net of measurement error bias the swedish evidence is generally consistent with the hypothesis that family background effects are primarily a result of an efficient marital sorting

returns to education a further international update and implications this paper updates evidence on the returns to investment in education by adding estimates for new countries and refining existing estimates to bring the total number of country cases to over 60 the new cross country evidence confirms and reinforces earlier patterns namely that returns are highest for primary education the general curricula the education of women and countries with the lowest per capita income the findings have important implications for directing future investment in education which for efficiency and equity purposes should concentrate on these priority areas

estimating returns to education using twins in urban china abstract this paper empirically estimates the return to education using twins data that the authors collected from urban china our ordinary least squares estimate shows that one year of schooling increases an individual s earnings by 8 4 if we use a within twin fixed effects model the return is reduced to 2 7 but rises to 3 8 after the correction of measurement error these results suggest that a large portion of the estimated returns to education is due to omitted ability or the family effect we further investigate why the true return is low and the omitted ability bias high and find evidence showing that it may be a consequence of china s education system which is highly selective and exam oriented more specifically we find that high school education may mainly serve as a mechanism to select college students but as a human capital investment per se it has low returns in terms of earnings in contrast both vocational school education and college education have a large return that is comparable to that found in the united states

education gender gaps in pakistan is the labor market to blame abstract differential labor market returns to male and female education are one potential explanation for large gender gaps in education in pakistan we empirically test this explanation by estimating private returns to education separately for male and female wage earners this article contributes to the literature by using a variety of methodologies ordinary least squares heckman correction two stage least squares and household fixed effects in order to estimate economic returns to education the latest nationally representative data the pakistan integrated household survey 2002 are used earnings function estimates consistently reveal a sizable gender asymmetry in economic returns to education with returns to women s education being substantially and statistically significantly higher than men s the return to an additional year of schooling ranges between 7 and 11 for men and between 13 and 18 for women there are also large direct returns to women s education at low levels of schooling

economic interpretations of intergenerational correlations science itself for example see galton s 1869 study of the eminence of relatives or his 1889 analysis of the heights of parents and children but extensive use of economic theory to interpret these correlations is much more recent using basic economic concepts such as supply demand investment incentives missing markets and so on theorists hope to explain how and why status is correlated across generations economic theory might provide a unified treatment of a variety of socioeconomic indicators such as earnings income occupation or wealth or it might predict how taxes subsidies and economic regulation affect intergenerational mobility and the operation of markets however while the subject matter earnings consumption wealth occupa tion is clearly interesting to economists it could nonetheless be the case that beyond basic questions of measurement economic theory has not improved our understanding of intergenerational mobility goldberger 1989 is quite explicit in this contention by emphasizing the distinction between genes and environment and by using statistical theory as its main analytical tool the paper by samuel bowles and herbert gintis in this issue implicitly concurs with goldberger we take this challenge very seriously what characterizes an economic approach to mobility while biologists and bowles and gintis distinguish endowments and investments by their source genetic versus environmental factors one focus of economic theorists is motiva

does having a cadre parent pay evidence from the first job offers of chinese college graduates abstract we estimate the wage premium associated with having a cadre parent in china using a recent survey of college graduates carried out by the authors the wage premium of having a cadre parent is 15 and this premium cannot be explained by other observables such as college entrance exam scores quality of colleges and majors a full set of college human capital attributes and job characteristics these results suggest that the remaining premium could be the true wage premium of having a cadre parent

why does spousal education matter for earnings assortative mating and cross productivity spousal education is correlated with earnings for two reasons cross productivity between couples and assortative mating this article empirically disentangles the two effects by using chinese twins data we have two innovations using twins data to control for the unobserved mating effect in our estimations and estimating both current and wedding time earnings equations we find that both crossproductivity and mating are important in explaining the current earnings although the mating effect exists for both husbands and wives the cross productivity effect mainly runs from chinese husbands to wives our findings shed light on the theories of human capital marriage and the family

parental actions and sibling inequality this paper presents a simple model of resource allocation within the family the model is based on two main assumptions there are nonconvexities in human capital investments and parents cannot borrow to finance their children s education the model shows that poor and middle income parents will often find it optimal to channel human capital investments into a few of their children thus creating sizable inequalities among siblings the paper shows that the predictions of the model are consistent with the available evidence for three latin american countries d 2003 elsevier science b v all rights reserved

anarchy and its breakdown anarchy defined as a system in which participants can seize and defend resources without regulation from above is not chaos but rather a spontaneous order however anarchy is fragile and may dissolve either into formless amorphy or into a more organized system such as hierarchy under anarchy each contestant balances between productive exploitation of the current resource base and fighting to acquire or defend resources anarchy is sustainable only when there are strongly diminishing returns to fighting effort the decisiveness parameter is sufficiently low and incomes exceed the viability minimum these considerations explain many features of animal and human conflict

causal pitfalls in the decomposition of wage gaps the decomposition of gender or ethnic wage gaps into explained and unexplained components often with the aim to assess labor market discrimination has been a major research agenda in empirical labor economics this article demonstrates that conventional decompositions no matter whether linear or nonparametric are equivalent to assuming a probably too simple model of mediation aimed at assessing causal mechanisms and may therefore lack causal interpretability the reason is that decompositions typically control for post birth variables that lie on the causal pathway from gender ethnicity which are determined at or even before birth to wage but neglect potential endogeneity that may arise from this approach based on the newer literature on mediation analysis we therefore provide more attractive identifying assumptions and discuss nonparametric identification based on reweighting

relative risk in municipal and corporate debt the yields of municipal bonds and corporate bonds are often compared the ratios of municipal bond yields to corporate bond yields are thought by many to be indicative of the marginal tax bracket of the marginal holder of the bonds if for example the ratio is 60 the implication is that an investor in the fortypercent tax bracket will be indifferent between the fully taxed corporate and the fully tax exempt municipal this assumes that the two bonds are currently selling at par such comparisons have attracted increased attention since the publication of merton miller s seminal debt and taxes in this work miller indirectly suggests that the marginal tax bracket at work across tax exempt and taxable bonds is equal to the corporate tax rate while the ratio of yields seems to indicate that this is true for short term bonds the yields of long term taxexempts seem too high relative to long term taxables to confirm miller s hypothesis implicit in these comparisons and the conclusions drawn from them is the tenuous notion that the compared bonds are identical except for the taxability of the coupon for example some authors have questioned whether municipals and corporates are equally risky see trzcinka 1982 the purpose of this paper is to present preliminary evidence on the relative riskiness of the two classes of bonds

intergenerational occupational mobility in rural economy evidence from nepal and vietnam abstract this paper presents evidence on intergenerational occupational mobility from agriculture to the nonfarm sector using survey data from nepal and vietnam in the absence of credible instruments the degree of selection on observables is used as a guide to the degree of selection on unobservables a la altonji et al 2005 to address the unobserved genetic correlations the results show that intergenerational occupational mobility is lower among women in both countries and is lower in nepal compared with vietnam in the case of nepal strong evidence favors a causal role played by the mother s nonfarm participation in the daughter s occupation choice possibly because of cultural inheritance in a traditional society

the changing role of commercial banks in the municipal securities market the tax treatment of commercial banks as investors in municipal securities changed dramatically with the loss of interest expense deductibility for municipal carrying costs under the tax reform act of 1986 competing theories of relative yield determination suggest that the lost deductions and recent reductions in corporate and personal tax rates should have different effects on the ratio of municipal to taxable yields this study examines the empirical implications of these tax changes using time series for the period 1966 1992 results suggest that the yield ratio varied inversely with relative bank purchases of municipals through mid year 1986 after 1986 however increased bank municipal purchases no longer directly lowered relative municipal yields the yield ratio also varied inversely with changes in personal tax rates throughout the sample period and increased after 1986 when banks lost 100 percent of their interest deduction for municipal carrying costs changes in corporate tax rates apparently play little role in shaping relative yields copyright 1995 by ohio state university press

family ties and labor markets in the united states and brazil we use comparable surveys from brazil and the united states to examine vertical and horizontal connections between families motivated by a model of assortative mating and intergenerational transmission of schooling and earnings we include the schooling of relatives in male wage equations we find that the effect offather in law s schooling is larger than the effect offather s schooling in brazil while the opposite is observed in the united states we interpret these effects as indicators of unobservable worker characteristics with differences in assortative mating and female labor market activity explaining the differences in the apparent effect of fathers and fathers in law in the two countries

the scale and selectivity of foreign born phd recipients in the us abstract we study the scale and selectivity of foreign born phd students in science and engineering we focus on students from china india korea and taiwan which together account for most rough

appropriation violent enforcement and transaction costs a critical survey this paper focuses on the extension of transaction costs to appropriative activity and coercive power in the property rights approach it has been argued that including the costs of appropriation and violent enforcement in transaction costs is based on the assumption that coaseian bargaining can be extended to any institutional scenario i e voluntary as well as coercive exchange however voluntary transactions cannot capture the logic of coercive power this means that the assumption of an efficient political market is not valid and that the political coase theorem lacks the logical consistency to provide a cornerstone for political theory

the informational content of surnames the evolution of intergenerational mobility and assortative mating we propose a new methodology for measuring intergenerational mobility in economic well being our method is based on the joint distribution of surnames and economic outcomes it circumvents the need for intergenerational panel data a long standing stumbling block for understanding mobility it does so by using cross sectional data alongside a calibrated structural model to recover the traditional intergenerational elasticity measures our main idea is simple if inheritance is important for economic outcomes then rare surnames should predict economic outcomes in the cross section this is because rare surnames are indicative of familial linkages if the number of rare surnames is small this approach will not work however rare surnames are abundant in the highly skewed nature of surname distributions from most western societies we develop a model that articulates this idea and shows that the more important is inheritance the more informative will be surnames this result is robust to a variety of different assumptions about fertility and mating we apply our method using the 2001 census from catalonia a large region of spain we use educational attainment as a proxy for overall economic well being a calibration exercise results in an estimate of the intergenerational correlation of educational attainment of 0 60 we also find evidence suggesting that mobility has decreased among the different generations of the 20th century a complementary analysis based on sibling correlations confirms our results and provides a robustness check on our method our model and our data allow us to examine one possible explanation for the observed decrease in mobility we find that the degree of assortative mating has increased over time overall we argue that our method has promise because it can tap the vast mines of census data that are available in a heretofore unexploited manner

banks firms and the relative pricing of tax exempt and taxable bonds abstract the traditional analysis of the relative pricing of tax exempt and taxable debt is a habitat theory of the term structure of interest rates in the traditional analysis the preferences of investors for particular maturities of debt lead to unique pricing relations at every point on the yield curve which are indicative of investor marginal tax brackets recent work by fama 1977 suggests that banks are potential arbitrageurs across tax exempt and taxable bond markets which force a particular equilibrium on the pricing of short term bonds miller 1977 suggests that the choice of debt or equity financing by firms in the aggregate forces a similar equilibrium on the pricing of all tax exempt and taxable bonds this paper exploits the institution of regulation q and its effects on the banking system to bring evidence to bear on the predictions of these three models

attracting talent location choices of foreign born phds in the united states we analyze location choices of foreign born science and engineering students receiving phds from us universities foreign students who stay in the united states are positively selected on observables they tend to stay in the united states during periods of strong us economic growth and during periods of weak home country economic growth foreign students from higher income countries and from recently democratized countries tend not to remain in the united states education and innovation may therefore be part of a virtuous cycle by which education enhances a country s prospects for innovation and innovation makes the country more attractive for scientists and engineers

rates of return on physical and human capital in africa s manufacturing sector in this paper two sets of issues are addressed using panel data from the manufacturing sector of five african countries first how high are the returns to human relative to physical capital second what is the relative importance of technology and endowments of human and physical capital in determining differences in earnings and productivity across the countries evidence from earnings functions shows that the private returns to both experience and education rise with the level of education private returns rise from 3 per cent at the primary level to 10 per cent at the secondary level and 35 per cent for tertiary evidence from the production function gives lower returns on education than from the earnings function rates of return on physical capital exceed 20 per cent and greatly exceed the average return on human capital data is available on the stocks of human and physical capital across the countries productivity and earnings differentials are shown to be large between cameroon and ghana these differences are due almost entirely to differences in physical not human capital endowments this abstract was borrowed from another version of this item

income maximization and the selection and sorting of international migrants abstract two prominent features of international labor movements are that the more educated are more likely to emigrate positive selection and more educated migrants are more likely to settle in destination countries with high rewards to skill positive sorting using data on emigrant stocks by schooling level and source country in oecd destinations we find that a simple model of income maximization can account for both phenomena results on selection show that migrants for a source destination pair are more educated relative to non migrants the larger is the absolute skill related difference in earnings between the destination country and the source results on sorting indicate that the relative stock of more educated migrants in a destination is increasing in the absolute earnings difference between high and low skilled workers we use our framework to compare alternative specifications of international migration estimate the magnitude of migration costs by source destination pair and assess the contribution of wage differences to how migrants sort themselves across destination countries

the race is to the swift socioeconomic origins adult education and wage attainment the winners in today s winner take all labor markets are differentiated by advanced levels of educational attainment especially higher degrees this article applies a sociological model of cumulative dis advantage to the baby boom cohort to examine whether life course timing differences in educational attainment help explain wage differentials by midlife it finds that advantaged social origins lead to early postsecondary completion of degrees which in turn yield higher wages a pathway of cumulative disadvantage is also evident where those least advantaged exit schooling early in life do not return as adults and earn low wages in a middle path advantaged social origins promote adult school attainment primarily for those without degrees but generally without the wage boosts associated with attainment earlier in life

who marries whom in a surging housing market abstract this paper investigates the impact of a surging housing market on marital sorting our empirical analysis shows that there is increasing assortativeness on original family background in response to housing price appreciation that is for husbands when the down payment doubles one more year of paternal schooling predicts a marriage in which the father in law s schooling is 0 057 year greater than in a scenario in which the down payment does not increase the rising assortativeness could exacerbate the already expanding inequality caused by the booming housing market in addition to the benchmark analysis we find that a divorce reform which awards assets proportionate to the shares the spouses paid for the initial down payment rather than awarding equal shares upon divorce alleviates assortativeness the evidence suggests that joint investment in housing is likely to be a significant consideration in marital sorting

contested exchange political economy and modern economic theory university of california berkeley department o f economics berkeley c a l i f o r n i a working paper 8876 contested exchange political economy and modern economic theory samuel bowles and herbert gintis june 8 1988 key words c o n t e s t e d exchange p o l i t i c a l jel c l a s s i f i c a t i o n economy

the effectiveness of private versus public schools the case of indonesia abstract in most developing countries education is largely publicly provided however the scarcity of public funds and recent evidence of public school inefficiency calls for an examination of the dominant role of the state in this paper we use data from indonesia to examine the effectiveness of public versus private schools we use labor market earnings as our measure of effectiveness controlling for observable personal characteristics and school selection we find that graduates of private secondary schools perform better in the labor market this is contrary to the widely held belief in indonesia that public secondary schools are superior our findings coupled with the existing literature on private school cognitive and cost advantages suggest the need for greater private participation in the education sector

the political economy of growth a critical survey of the recent literature this article reviews the recent literature on the political economy of growth focusing on the research that has developed at the intersection of the endogenous growth literature and the new political economy it explores the relationship among four key variables economic growth and capital accumulation political instability political freedom and democratic institutions and income inequality

declining inequality in schooling in brazil and its effects on inequality in earnings abstract household survey data demonstrate that brazilian males born between 1925 and 1963 experienced steady increases in mean schooling and significant declines in schooling inequality the variance in years of schooling increased for cohorts born up until 1950 with steady declines for more recent cohorts decomposition of a standard human capital earnings equation indicates that trends in schooling tended to reduce earnings inequality from 1976 to 1985 due to reductions in both the variance of schooling and in returns to schooling these improvements were more than offset however by increases in other sources of inequality although the net increase in earnings inequality from 1976 to 1985 is disturbing the reduction in schooling inequality represents a fundamental improvement in the determinants of earnings inequality in brazil that will have beneficial effects for decades

marriage markets and assortative mating with household public goods theoretical results and empirical implications this paper analyzes marriage market equilibria when the gains from marriage result from joint consumption of household public goods assuming transferable utility within marriage the paper proves that marriage markets will be characterized by positive assortative mating on wealth when spouses differ only in endowments and the gains to marriage result only from public goods when spouses differ in wages and household public goods are produced at home the results imply offsetting effects with public good economies creating an incentive for positive assortative mating on wages and gains from specialization creating an incentive for negative assortative mating on wages the results help explain the persistent lack of empirical support for becker s prediction of negative assortative mating on wages and have implications for empirical analysis of all joint living arrangement decisions

a theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

an investigation of the labor market earnings of panamanian males evaluating sources of inequality this paper presents empirical evidence on the determinants of labor market earnings and inequality for males in panama using newly available microdata we estimate earnings equations based on the measurement framework of mincer 1974 and compare them with those for other countries at various stages of economic development we present evidence on two aspects of inequality in less developed economies labor market segmentation and social stratification we present tests of the segmentation hypothesis including several of the dual labor market hypotheses and discuss their inherent ambiguity we also present evidence on the importance of family background for earnings determination and educational attainment

intergenerational income mobility among daughters new evidence on daughters intergenerational mobility in a framework that encompasses women not in the labor force using broader measures of economic status than just the women s own earnings is presented and the role of husbands earnings is highlighted a parallel analysis of sons mobility is performed intergenerational transmission of income status may be weaker for daughters than for sons but is still quite substantial assortative mating is an important element in the intergenerational transmission process

intergenerational mobility and marital sorting we use data from the german socio economic panel and the british household panel survey to estimate the extent of intergenerational economic mobility in a framework that highlights the role played by assortative mating we find that assortative mating plays an important role on average about 40 50 of the covariance between parents and own permanent family income can be attributed to the person to whom one is married this effect is driven by strong spouse correlations in human capital which are larger in germany than britain 2006 the authors journal compilation royal economic society 2006

default risk cannot explain the muni puzzle evidence from municipal bonds that are secured by u s treasury obligations fama 1977 and miller 1977 predict that one minus the corporate tax rate will equate after tax yields from comparable taxable and tax exempt bonds empirical evidence shows that long term tax exempt yields are higher than theory predicts two popular explanations for this empirical puzzle are that relative to taxable bonds municipal bonds bear more default risk and include costly call options i study u s government secured municipal bond yields which are effectively default free and nonmalleable these municipal yields display the same tendency to be too high i conclude that differential default risk and call options do not explain the municipal bond puzzle article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

swords or plowshares a theory of the security of claims to property this paper develops a general equilibrium model of the allocation of resources among appropriative and productive activities the model emphasizes the distinction between offensive weapons which are the instruments of predation and fortifications which provide defense against predation the analysis of this model shows how the equilibrium security of claims to property is determined the analysis focuses on the possibility of a nonaggressive equilibrium in which no resources are allocated to offensive weapons and claims to property are fully secure we also analyze the complex relation between economic welfare and the security of claims to property we find for example that a relatively poor agent could be better off in an equilibrium with less secure claims to property

the quality of schooling quantity alone is misleading although much research discusses the quantity of schooling as an effective impact on productivity and earnings most such research leaves out the idea of the quality of schooling which may cause biases in the estimated returns to schooling this paper consequently attempts to extend the standard mincerian approach to incorporate school quality as well as quantity it demonstrates how exclusion of quality in the standard procedure may cause biases in the estimated returns to years of schooling probably in the upward direction the paper explores the implications of this extension of the standard model for the case of young brazilian males it shows that the estimate of the private return to years of schooling using the preferred quality inclusive specification is only one half the estimate using the standard procedure indicating substantial upward bias in the standard estimates it further outlines a method for estimating a social return to quality and finds that it exceeds substantially the social return to quantity the paper then shows why this in turn suggests there may be an equity productivity trade off in schooling investments

integrating social conflict into economic theory the generalisation of coasian theorem to the power relationship amounts to depicting conflict as a bargaining process between conflictual parties that are simultaneously both partners and adversaries this perspective leads to different models of rational conflicts i e a threat of conflict without any real clash an alternative approach is developed by different models inspired by the public choice school which build upon the logic of coercive power within the framework of a self interested behaviour the integration of social conflicts in a narrowly defined individual cost benefit theoretical framework has resulted in reducing social conflict to real private but not social conflict in other words economic theory has considered social protesters either as potential or actual looters but rarely as a group of people struggling for a common cause integration of social conflict into economic theory will require i abandoning the ubiquitous market model when describing conflictual relationships ii accepting the logic of force or coercive power as a starting point and iii expanding the idea of interest to include encompassing including class interest

effects of family and community background on economic status policy oriented discussions of poverty in the united states repeatedly have stressed the large influence of family and community background on income status in this paper we use a simple statistical model to explain how problems of measurement error and unrepresentative samples have caused previous statistical studies to underestimate the magnitude of background effects we then summarize a series of our own studies in which we have corrected for the biases in earlier studies and estimated substantially larger background effects the empirical analysis is based on data from the panel study of income dynamics excerpt