statistical discrimination and the early career evolution of the black white wage gap this article develops and tests a simple dynamic model of statistical discrimination the model improves on earlier static models both by allowing ex ante uncertainty about worker productivity to be resolved as on the job performance is observed and by generating several testable empirical implications these predictions are tested using a sample of young men from the national longitudinal survey of youth producing mixed evidence for the model the main empirical result is that no black white wage gap exists at labor force entry but that one develops as experience accumulates mainly because blacks reap smaller gains from job mobility

does there exist a relation between inflation and relative price change variability the effect of the aggregation level abstract the actual magnitude of relative price change variability is dependent on the level of aggregation this note demonstrates the effect of this dependence when we try to estimate a relation between inflation and relative price change variability and when we perform a decomposition analysis of this variability

the use of quantile regressions in estimating gender wage differentials a case study of the philippines quantile regressions are used to analyse the size components and nature of the gender earnings differentials as well as the returns to education by gender in the philippines over the entire conditional distribution of earnings using data from the 1999 apis survey this approach allows more focused conclusions about the nature of gender earnings differentials incorporating the quantile regression approach to the oaxaca blinder decomposition allows the localization of gender discrimination to particular quantiles of the earnings distribution and permits more targeted policy intervention

the perceived returns to education and the demand for schooling economists emphasize the link between market returns to education and investments in schooling though many studies estimate these returns with earnings data it is the perceived returns that affect schooling decisions and these perceptions may be inaccurate using survey data for eighth grade boys in the dominican republic we find that the perceived returns to secondary school are extremely low despite high measured returns students at randomly selected schools given information on the higher measured returns completed on average 0 20 0 35 more years of school over the next four years than those who were not

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 intergenerational earnings and income mobility of canadian men evidence from longitudinal income tax data our objective is to obtain an accurate estimate of the degree of intergenerational income mobility in canada we use income tax information on about 400 000 father son pairs and find intergenerational earnings elasticities to be about 0 2 earnings mobility tends to be slightly greater than income mobility but nonparametric techniques uncover significant nonlinearities in both of these relationships intergenerational earnings mobility is greater at the lower end of the income distribution than at the upper end and displays an inverted v shape elsewhere intergenerational income mobility follows roughly the same pattern but is much lower at the very top of the income distribution

the evolution of the racial wage hierarchy in post apartheid south africa this article develops a multilateral decomposition procedure for the analysis of wage differentials and applies this to the evolution of the racial wage hierarchy in south africa over the period 1993 2001 we find evidence that the wage position of the majority african workforce improved relative to all other racial groups immediately following the transition to democratic rule in 1994 but that these gains have been largely eroded in the ensuing years of the post apartheid era we review the range of policy initiatives that have been taken by the government since 1994 in the light of our empirical findings

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

intergenerational transfers in philippine rice villages gender differences in traditional inheritance customs abstract this paper examines education land and nonland asset transfers from parents to children in five rice villages in the philippines a model with family fixed effects explains transfers better than either individual heterogeneity or observed parent and child characteristics without family fixed effects families facing different land constraints exhibit significantly different patterns of educational investment in children in a subsample with completed inheritance daughters receive less education land and total inheritance but are compensated with nonland assets parents also exhibit preferential behavior towards children of the same gender daughters of better educated mothers receive more land nonland assets and total inheritance better educated fathers give land preferentially to sons but favor daughters in education

racial and ethnic economic inequality the international record international racial and ethnic economic inequality is examined the international record shows disparity across nations and regions between racial and ethnic groups within countries and within groups in the same country subalternate racial and ethnic populations whether in the majority or minority suffer remarkably similar economic outcomes across the globe institutional racism and cultural discrimination affect subcultures and different classes in multiple ways in every country those who get the short stick continue to face poor prospects for economic inclusion and justice

the origins of intergenerational associations lessons from swedish adoption data we use unique swedish data with information on adopted children s biological and adoptive parents to estimate intergenerational mobility associations in earnings and education we argue that the impact from biological parents captures broad prebirth factors including genes and prenatal environment and the impact from adoptive parents represents broad postbirth factors such as childhood environment we find that both pre and postbirth factors contribute to intergenerational earnings and education transmissions and that prebirth factors are more important for mother s education and less important for father s income we also find some evidence for a positive interaction effect between postbirth environment and prebirth factors

infant health and the labor supply of mothers this study examines the association between maternal employment and infant feeding and the health of children and the role of prices wages and other exogenous factors in influencing the association in the philippines data were obtained from the 1983 86 cebu longitudinal health and nutrition survey of 2868 women who were permanent residents of the sample areas and had given birth to a single live child in metro cebu during 1983 84 analysis is based on the conceptual framework in which infant feeding and labor supply are jointly chosen to maximize the utility subject to time budget and health production function constraints findings indicate that the labor supply of the mother had little direct effect on infant health when prices wages and other exogenous factors are taken into account maternal wage rates and prices of key foods affected labor supply and infant feeding and care women with better wage offers were more likely to work and to have healthier infants maternal labor supply only had statistically significant effects on infant health when occupation was accounted for it is suggested that women in developing countries should not be discouraged from working womens earnings increase their ability to pay for food and breast milk substitutes that contribute to healthy infants the authors suggest that other health outcomes such as infant morbidity and mortality could be examined or substitutions for other feeding patterns and child care options

a general class of adaptive strategies abstract we exhibit and characterize an entire class of simple adaptive strategies in the repeated play of a game having the hannan consistency property in the long run the player is guaranteed an average payoff as large as the best reply payoff to the empirical distribution of play of the other players i e there is no regret smooth fictitious play fudenberg and levine 1995 j econ dynam control19 1065 1090 and regret matching hart and mas colell 2000 econometrica68 1127 1150 are particular cases the motivation and application of the current paper come from the study of procedures whose empirical distribution of play is in the long run almost a correlated equilibrium for the analysis we first develop a generalization of blackwell s 1956 pacific j math 6 1 8 approachability strategy for games with vector payoffs journal of economic literature classification numbers c7 d7 c6

rich dad smart dad decomposing the intergenerational transmission of income we construct a simple model consistent with becker and tomes that decomposes the intergenerational income elasticity into the causal effect of financial resources the mechanistic transmission of human capital and the role that human capital plays in the determination of fathers permanent incomes we show how a particular set of instrumental variables could separately identify the money and human capital transmission effects using data from a 35 percent sample of swedish sons and their fathers we show that only a minority of the intergenerational income elasticity can be plausibly attributed to the causal effect of fathers financial resources

primary schooling cognitive skills and wages in south africa using a fairly rich data set from south africa the paper finds that despite the sobriquet gutter education the african schooling systems help to create cognitive skills and these skills are a determinant of wage levels various robust estimators are used but the influential outlier problem does not turn out to be serious computational skills appear to be more important than comprehension skills in influencing wages the african primary schooling system was an extremely poor generator of computational skill the seven year course raising the computational test score by 13 if that a policy implication is that productivity could be raised by certain near costless reallocations of resources in favour of mathematical learning

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

the creation and capture of rents wages and innovation in a panel of u k companies this paper examines the impact of technological innovation on wages using a panel of british firms a head count measure of major innovations between 1945 and 1983 is combined with share price and accounting information innovating firms are found to have higher average wages but rival innovation tends to depress own wages this appears consistent with a model where wages are partly determined by a sharing in the rents generated by innovation in other words innovation may be a good instrument for proxies for rents such as profitability quasi rents or tobin s average q instrumental variable estimates of the elasticity between wages and quasi rents are about 0 29

learning and risk aversion we study how learning shapes behavior towards risk when individuals are not assumed to know or to have beliefs about probability distributions in any period the behavior change induced by learning is assumed to depend on the action chosen and the payoff obtained we characterize learning processes that in expected value increase the probability of choosing the safest actions and provide sufficient conditions for them to converge to the choices of risk averse expected utility maximizers we provide a learning theoretic motivation for long run risk choices such as those in expected utility theory with known payoff distributions

child labor and schooling responses to anticipated income in south africa abstract forward looking unconstrained households make child labor and schooling decisions considering their permanent income and weighing the relative returns to child time in various potential activities the timing of anticipated changes in income should have no effect on child labor and schooling in a setting where households can borrow against permanent income however this study documents large increases in schooling attendance and declines in total hours worked when black south african families become eligible for fully anticipatable social pension income as an explanation the data are most consistent with liquidity constraints for black elder males forcing rural families into less schooling for boys than they would choose absent the constraint perhaps because of schooling costs

on the convergence of reinforcement learning abstract this paper examines the convergence of payoffs and strategies in erev and roth s model of reinforcement learning when all players use this rule it eliminates iteratively dominated strategies and in two person constant sum games average payoffs converge to the value of the game strategies converge in constant sum games with unique equilibria if they are pure or if they are mixed and the game is 2 2 the long run behaviour of the learning rule is governed by equations related to maynard smith s version of the replicator dynamic properties of the learning rule against general opponents are also studied

the relationship between relative prices and the general price level it is very nearly a truismi amaong neoclassical economists that the public is wont to confuse changes in the general price level with relative price changes correspondingl y one might speak of the independence between the two as one of the central postulates of the neoclassical tradition william stanley jevons was aml ong the first to identify this basic dichotomin economic life as well as to attempt to explain the ordinary citizen s seenming incapacity to understand it

intergroup disparity economic theory and social science evidence consider a hypothetical community where two groups are distinguished by an ascriptive characteristic or a set of ascriptive characteristics that are understood as separating markers by the members of each of the groups indeed the distinguishing characteristics may be recognized by others external to the two groups or external to the community furthermore these separating markers are associated with the social categories of race or ethnicity credible surveys taken by researchers reveal that on average the members of the two groups experience widely distinct economic outcomes members of group a are found to have significantly lower earnings a higher incidence of unemployment less prestigious occupations lower levels of total income and substantially lower levels of wealth than members of group b conventional economics offers two major explanations for the observed disparity between groups a and b first average productivity linked endowments or a human capital gap correlate strongly with membership in each of these ascriptively bounded groups producing the differences in outcome the origins of these background differences have been attributed to a variety of causes the four most prominent reasons offered for the wedge in human capital acquisition have been i an unequal allocation of social resources across the two groups ii the intergenerational transmission of past disadvantage or advantage across the groups iii somewhat invidiously cultural differences between the groups and iv most invidiously genetic differences between the groups that generate not only the ascriptive distinctions but also differences in intelligence and motivation second at any moment members of each group with given productivity linked characteristics can be confronted with differential treatment of those characteristics in markets especially labor markets in short conventional theory suggests that the observed gap in outcomes could be due to discrimination against group a and nepotism on behalf of group b

endogenous coresidence and program incidence south africa s old age pension we investigate whether living arrangements respond to an arguably exogenous shift in the distribution of power in family economic decision making in the early 1990s the south african old age pension was expanded to cover most black south africans above a sex specific age cut off resulting in a substantial increase in the income of older south africans and potentially their say in the economic decisions of their families beneficiaries of the program are more likely to coreside with adults who have less human capital as measured by height and education since height and education are fixed for adults this cannot be an effect of the pension income but reflects selective changes in living arrangements resulting from the pension the findings highlight the endogeneity of living arrangements and illustrate the potential value of moving beyond theory and data that are confined to a spatially determined definition of the household

cross country differences in intergenerational earnings mobility international studies of the extent to which economic status is passed from one generation to the next are important for at least two reasons first each study of a particular country characterizes an important feature of that country s income inequality second comparisons of intergenerational mobility across countries may yield valuable clues about how income status is transmitted across generations and why the strength of that intergenerational transmission varies across countries the e rst section of this paper explains a benchmark measure of intergenerational mobility commonly used in u s studies the second section summarizes comparable empirical e ndings that have accumulated so far for countries other than the united states the third section sketches a theoretical framework for interpreting cross country differences in intergenerational mobility

extended families and child well being studies of household behavior have established the distribution of resources among household members predicts spending and savings patterns however there is a paucity of evidence on the relationship between the well being of individual family members and the distribution of resources within an extended family including non co resident family members given the central role the family plays in many models of economic behavior this is an important gap in the literature using rich longitudinal survey data from the indonesia family life survey ifls evidence is presented on the relationship between three measures of health and education related human capital of children and the distribution of resources among extended family members ifls is ideally suited for this research since the survey collects detailed information about income and wealth from both coresident and non co resident family members the empirical model is founded on a natural extension of the collective model of household decision making chiappori 1988 1992 to the extended family the model is particularly appealing in this context because it places few restrictions on preferences of individual family members and does not specify a specific bargaining mechanism that underlies negotiations the collective model yields empirical tests of whether the behavior of family members is pareto efficient a special case of the model allows all family members to be completely altruistic which is observationally equivalent to a unitary model of family behavior that special case is rejected by the data however the restrictions of the efficient model are not rejected indicating that non co resident family members are able to co ordinate allocation decisions with respect to child human capital investments in such a way as to make no family member better off without another member being worse off

a note on the variability of inflation and the dispersion of relative price changes abstract the relationship between the variance of inflation and the variability of relative price changes is analyzed empirically a strong positive association is found for 1948 1969 and 1948 1975 application of chow s test indicates structural instability and granger s test suggests a feedback effect between these variables

large cash transfers to the elderly in south africa we examine the social pension in south africa where large cash sums about twice the median per capita income of african households are paid to people qualified by age but irrespective of previous contributions we present the history of the scheme and use a 1993 nationally representative survey to investigate the redistributive consequences of the transfers documenting who receive the pensions their levels of living and those of their families we also look at behavioural effects particularly the effects of the cash receipts on the allocation of income to food schooling transfers and savings in south africa a large social pension about twice the median per capita income of african households is paid in cash to people qualified by age irrespective of previous contributions we present the history of the scheme and explain how such large transfers could come about in an economy in which the recipients were not only politically weak but without any political representation whatsoever we then use a 1993 nationally representative survey to investigate the redistributive consequences of the transfers documenting who receive the pensions their levels of living and those of their families we also look at behavioural effects particularly the effects of the cash receipts on the allocation of income to food schooling transfers and savings the pressing policy issue for south africans is whether it makes sense to target seven billion rand nearly 2 billion of social expenditure through the current pension schemes our analysis contributes to the discussion by documenting the redistributive and behavioural effects of the transfers we find that at least as far as immediate incidence is concerned and without allowance for behavioural effects the social pension is an effective tool of redistribution and that the households it reaches are predominantly poor because so many of the elderly among south africa s african population live with children the social pension is also effective in putting money into house

intergenerational income mobility in the united states social scientists and policy analysts have long expressed concern about the extent of intergenerational income mobility in the united states but remarkably little empirical evidence is available the few existing estimates of the intergenerational correlation in income have been biased downward by measurement error unrepresentative samples or both new estimates based on intergenerational data from the panel study of income dynamics imply that the intergenerational correlation in long run income is at least 0 4 indicating dramatically less mobility than suggested by earlier research copyright 1992 by american economic association

education returns across quantiles of the wage function alternative explanations for returns to education by race in south america private wage returns to schooling in south africa in 1993 are twice as high for nonwhites as for whites and substantially higher at advanced levels of schooling for both races to explore how these returns might be expected to change as the proportion of africans with secondary and higher education increases quantile regressions for the wage function are estimated for african males and white males if the residuals based on a standard wage function specification are interpreted as omitted ability and it is assumed that ability increases decreases returns to schooling then we expect quantile returns to increase decrease at higher quantiles this is not observed for africans at the higher and secondary school level but is evident among whites at higher educational levels the opposite pattern of differential returns favoring the least able i e lowest deciles is reported for the lower tail of the educational distribution that is for africans at the level of primary school and for whites at secondary school authors

inequality income growth and mobility the basic facts during the 1950s and 1960s mean wages in the united states grew rapidly and the dispersion around this growing mean changed very litde starting in the 1970s and continuing into the 1980s and 1990s these patterns were reversed mean wages grew slowly and inequality increased rapidly these changes in labor markets were reflected in changes in the distribution of family income the mean of the distribution of family income did increase after 1973 in spite of the near constancy of mean real wages as family members increased the number of hours they worked however the increase in inequality of wages was mirrored by an increase in the dispersion of family income a large descriptive literature has documented the rise in inequality while a smaller behavioral literature has sought to delineate the causes of this rise these changes in the distribution of family income a fected rates of poverty directly during the 1950s and 1960s temporary increases in poverty during recessions were more than offset by declines in poverty during economic expansions as long as the poor gained along with everyone else fi om the secular growth in the mean one could be confident that poverty rates would ratchet down this is exactly what happened as poverty rates fell from 22 4 percent in 1959 to 11 1 percent in 1973

moving forward looking back the impact of migration and remittances on assets consumption and credit constraints in the rural philippines abstract this paper investigates the impact of migration and remittances on asset holdings consumption expenditures and credit constraint status of households in origin communities using a unique longitudinal data set from bukidnon philippines taking into account the endogeneity of the number of migrants and remittances received a larger number of migrant children reduces the values of nonland assets and total expenditures per adult equivalent however remittances have a positive impact on housing consumer durables nonland assets total expenditures per adult equivalent and educational expenditures enabling asset accumulation and investment in human capital neither migration nor remittances affects current credit constraint status

enduring poverty and the conditions of childhood lifecourse and intergenerational poverty transmissions abstract in this paper we explore the conditions of childhood that can lead to poverty throughout the lifecourse and affect transfers of poverty to the next generation the largely inconclusive evidence base surrounding lifecourse and intergenerational poverty transmission is reviewed before a discussion of the key social processes and contexts that impact on childhood lifecourse and intergenerational poverty prioritized issues nutrition childcare and guidance education child work and aspirations and attitudes are explored within the context of unicef s basic framework of survival protection development and participation the paper concludes with an analysis of elements of the wider environment critical to enabling action in childhood to break poverty cycles

fortunate sons new estimates of intergenerational mobility in the united states using social security earnings data previous studies relying on short term averages of fathers earnings have estimated the intergenerational elasticity ige in earnings to be approximately 0 4 due to persistent transitory fluctuations these estimates have been biased down by approximately 30 or more using administrative data containing the earnings histories of parents and children the ige is estimated to be around 0 6 this suggests that the united states is substantially less mobile than previous research indicated estimates of intergenerational mobility are significantly lower for families with little or no wealth offering empirical support for theoretical models that predict differences due to borrowing constraints

robustness of the relationship between price variability and inflation for us manufacturing we study the relationship between relative price variability and inflation in two different ways we first look at product class census unit values for five time periods between 1958 and 1982 and find evidence of a positive relationship between variability and inflation then we directly update the vining and elwertowski 1976 study for the period 1974 91 using individual commodity series from the bureau of labor statistics we conclude by discussing differences across industries in price stickiness

on the perils of stabilizing prices when agents are learning abstract the main advantage of price level stabilization compared with inflation stabilization rests on the central bank s ability to shape expectations we show that stabilizing prices is no longer optimal when the central bank can shape expectations of agents with incomplete knowledge who have to learn about the policy implemented disinflating in the short run more than agents expect generates short term gains without triggering an abrupt loss of confidence because agents update expectations sluggishly following this policy in the long run the central bank loses the ability to shape agents beliefs and the economy converges to a rational expectations equilibrium in which policy does not stabilize prices economic volatility is high and agents suffer the corresponding welfare losses however these losses are outweighed by short term gains from the learning phase

do private transfers displace the benefits of public transfers evidence from south africa abstract this paper investigates whether government transfer programs displace or crowd out private support focusing on a large increase in state old age pensions in south africa using data spanning the period of the expansion we find that each rand of public pension income to the elderly leads to a 0 25 0 30 rand reduction in private transfers from children living away from home however despite the large increase in income there were no significant changes in migration labor supply or household composition we also show that evaluations of the distributional effects of the pension are overstated when crowding out is ignored

a multilateral decomposition of racial wage differentials in the 1994 south african labour market this article develops a new multilateral decomposition procedure for the analysis of wage differentials and applies this to the racial wage hierarchy in the south african labour market using micro data on male workers from the 1994 october household survey it is found that whites received the highest wages followed by asians then coloureds and finally blacks productivity differences are shown to explain approximately two thirds of the white and black wage differentials with the unexplained residuals attributable to discriminatory overpayment of whites and underpayment of blacks and virtually all of the asian and coloured differentials the results provide the basis for a discussion of post apartheid policy initiatives to tackle racial inequalities in the labour market

cross country rankings in intergenerational mobility a comparison of approaches from economics and sociology this paper summarizes research on the relative level of intergenerational mobility whether classified by income education or social class the literatures on education and income mobility reveal a similar ranking with south america other developing nations southern european countries and france tending to have rather limited mobility although the nordic countries exhibit strong mobility estimates of mobility based on social class point to rather different patterns and we demonstrate that these differences are most likely generated by intergenerational earnings persistence within social classes the second part of the paper looks for explanations for the differences in earnings and education persistence and finds that mobility is negatively correlated with inequality and the return to education but positively correlated with a nation s education spending

intergenerational persistence in health in developing countries the penalty of gender inequality this paper is motivated to investigate the often neglected payoff to investments in the health of girls and women in terms of next generation outcomes this paper investigates the intergenerational persistence of health across time and region as well as across the distribution of maternal health it uses comparable microdata on as many as 2 24 million children born of about 0 6 million mothers in 38 developing countries in the 31 year period 1970 2000 mother s health is indicated by her height bmi and anemia status child health is indicated by mortality risk and anthropometric failure we find a positive relationship between maternal and child health across indicators and highlight non linearities in these relationships the results suggest that both contemporary and childhood health of the mother matter and that the benefits to the next generation are likely to be persistent averaging across the sample persistence shows a considerable decline over time disaggregation shows that the decline is only significant in latin america persistence has remained largely constant in asia and has risen in africa the paper provides the first cross country estimates of the intergenerational persistence in health and the first estimates of trends

child health and household resources in south africa evidence from the old age pension program this paper presents nonparametric evidence on the effects of the expansion of the old age pension program in south africa on child health did this increase in household resources improve child health and nutrition does the gender of the recipient of the pension affect its impact the answers to these questions have very important policy implications there is evidence that inadequate nutrition during childhood and even in utero affects long term physical development as well as the development of cognitive skills this in turn affects productivity later in life see partha dasgupta 1993 john strauss and duncan thomas 1998 t paul schultz 1999 in the united states the evidence suggests that monetary transfers to the poor have very little impact on child welfare janet currie 1995 susan mayer 1997 however the effects of parental income and monetary transfers on child outcomes are likely to be of greater magnitude among poor households in developing countries the south african pension program provides an unusual opportunity to evaluate the possible effects of such a monetary transfer this paper exploits the rapid increase in the coverage and benefits of the old age pension program in south africa which took place in the early 1990 s anne case and angus deaton 1998 at the end of the apartheid era the government committed to achieving parity of benefits and eligibility requirements between whites and africans this was achieved mostly by increasing the benefits received by the africans in 1993 80 percent of african women above age 60 and 77 percent of african men above 65 received the pension the maximum benefit of 370 rands per month aproximately 3 per day was equal to half of the minimum wage and about twice the median income per capita in rural areas due to living arrangements inherited from the apartheid era close to onethird of african children under the age of 5 currently live with a pension recipient children who live with a pension recipient tend to come from relatively disadvantaged backgrounds as a consequence they tend to be smaller than other children their age to estimate the effect of receiving a pension on the anthropometric status of children this paper exploits the fact that height reflects accumulated investments in child nutrition the larger the proportion of her life during which a child is well nourished the taller she will be given her age due to the expansion of the program in the early 1990 s individuals of qualified age became more likely to receive a pension and the benefits became substantially larger thus children born after the expansion of the program are more likely to have spent a larger fraction of their lives wellnourished if they live with a pension recipient to the extent that the pension resulted in improved nutrition in this paper i present nonparametric evidence of the program s effect on nutrition based on this observation

bargaining with grandma the impact of the south african pension on household decision making i examine how an exogenous change in individual income affects decision making in the household using the age discontinuity in eligibility for the south african pension i find that eligible women are 15 percentage points more likely to be the primary decision maker in the household than noneligible women this corresponds with a large increase in their share of household income there are no parallel effects for men due to labor force withdrawal male income does not increase with eligibility suggesting that their status in the household is unchanged

inflation and relative price variability in yugoslavia abstract granger causality tests show that inflation granger causes relative price variability but the feedback relationship cannot be excluded

intergroup economic inequality in south africa the post apartheid era one of the most pressing challenges facing the south african government is how to expand the overall opportunity set for nonwhites who have been historically disadvantaged by apartheid this is perhaps best accomplished by expanding employment opportunities within the economy general employment expansion mnust be accomplished keeping in mind the urgent need to radically expand nonwhite employment employment and unemployment statistics are difficult to interpret but there is a general sense that the unemployment situation especially for nonwhites is extremely bad in dealing with employment issues two concerns must be faced both are legacies of the apartheid era the first is related to differences in educational attainment across racial groups during apartheid the bantu education policy was designed to suppress the educational attainment of africans blacks relative to whites however educational opportunities for coloureds mixed race and asians primarily indian were also depressed relative to whites the second concern is that labor market discrimination could be used either to exclude nonwhites for employment consideration or to limit their wages and opportunities once they are employed for policy reasons it is imperative to understand the extent to which premarket or market factors operate to limit opportunities for nonwhites given the institutionalized nature of apartheid segregation one can imagine three scenarios earnings differences could be the result entirely of premarket factors such as education differences alternatively earnings differences could be the result of labor market practices that limit one group s eamings relative to another s a third scenario a synthesis of the former two would find earnings differences to be the result of a combination of premarket differentials and in market discrimination to address premarket discrimination policy would focus entirely on leveling funding and increasing access to educational opportunities for historically disadvantaged groups however legislative forms such as affirmative action would be required to remedy exclusively labormarket discrimination a combination of these policies would be required to deal with the third scenario understanding the relative importance of these factors is important when resource allocation is considered this paper concerns itself with measuring income losses to nonwhites from labor market discrimination to evaluate the extent of labor market discrimination ordinary least squares ols estimates of earnings equations are evaluated for males in each population group observed wage differentials are decomposed into a component attributable to human capital differences while a residual is attributed to labor markelt discrimination these findings are then contrasted to those of others to give a sense of the trend in market discrimination in south africa

when measure matters coresidency truncation bias and intergenerational mobility in developing countries biases from truncation caused by coresidency restriction have been a challenge for research on intergenerational mobility estimates of intergenerational schooling persistence from two data sets show that the intergenerational regression coefficient the most widely used measure is severely biased downward in coresident samples but the bias in intergenerational correlation is much smaller and is less sensitive to the coresidency rate the paper provides explanations for these results comparison of intergenerational mobility based on the intergenerational regression coefficient across countries gender and over time can be misleading much progress on intergenerational mobility in developing countries can be made with the available data by focusing on intergenerational correlation

rearranging the family income support and elderly living arrangements in a low income country this study examines the link between income and living arrangements our identification comes from exploiting a discontinuity in age in the benefit formula for the social pension in south africa in contrast to previous literature we find no association between pension income and elderly independence we do find that potential beneficiaries alter their household structure when they become pension eligible prime working age women depart and the presence of children younger than five and young women of childbearing age increase these shifts in coresidence patterns are consistent with a setting where prime age women have comparative advantage in work away from extended family relative to younger women the additional income from old age support may induce a change in living arrangements to exploit this advantage

health nutrition and economic growth today the most remarkable instances of rapid economic growth are in asian and latin american countries which together represent more than half of the population of the world this vast expansion of modern economic growth did not get under way until after world war ii but since then has proceeded with lightning speed these changes first became evident in the improvement in life expectancy in the case of india for example life expectancy at birth increased from 29 years in 1930 to 60 years in 1990 an increase of that magnitude required two and a half centuries in england and france the sharp drop in the death rates of developing nations led to an enormous surge in the growth of population which in turn led to widespread fears that the food supply could not keep up with population growth and that industrialization would be thwarted excerpt

health nutrition and economic development the relationship between health and economic development is explored focusing on nutrition based health indicators the spotlight is placed on the inter related feedbacks between the influence of health on productivity on one hand and the influence of income on health status on the other disentangling causality in these relationships has preoccupied much of the literature we evaluate different empirical strategies that have been adopted and assess the results there is now a body of evidence based on careful empirical studies that demonstrates a causal relationship between health and labor productivity there is also evidence that at least among the very poor additional income is spent on improved nutrition there are two issues that have received little attention although we argue they are likely to be very important first measurement of health is discussed in detail evidence is presented on how taking into account differences in the extent of measurement error is critical for interpreting the impact of health on wages the same theme emerges in studies of the effect of income on health specifically calorie intake the key role of non linearities in these relationships is highlighted and we demonstrate that a good deal of the variation in estimates of income elasticities of demand for calories can be ascribed to the role of measurement and functional form authors

public policy and extended families evidence from pensions in south africa how are resources allocated within extended families in developing economies this question is investigated using a unique social experiment the south african pension program under that program the elderly receive a cash transfer equal to roughly twice the per capita income of africans in south africa the study examines how this transfer affects the labor supply of prime age individuals living with these elderly in extended families it finds a sharp drop in the working hours of prime age individuals in these households when women turn 60 years old or men turn 65 the ages at which they become eligible for pensions it also finds that the drop in labor supply is much larger when the pensioner is a woman suggesting an imperfect pooling of resources the allocation of resources among prime age individuals depends strongly on their absolute age and gender as well as on their relative age the oldest son in the household reduces his working hours more than any other prime age household member

the decline in intergenerational mobility in post socialism evidence from the bulgarian case summary we examine changes in the statistical association between parents and children s schooling in one post socialist country bulgaria we document its near doubling between 1995 and 2001 for children of less educated parents this produced an absolute decline in average attainment these children were educated during a period of economic depression and significant reductions in public spending which led to school closures and shortages of materials along with increases in out of pocket costs we conclude that the economic and fiscal crisis of the 1990s led to a sharp decline in educational mobility this may have relevance for other countries experiencing similar economic shocks

trade unions v statistical discrimination theory and application to post apartheid south africa a simple model of statistical discrimination is analyzed which captures some stylized facts of the south african labor market it shows that this type of discrimination disappears when the wage rates are determined by efficient bargaining between a representative firm and a union with endogenous membership this may explain why the wage gap between black and white workers in post apartheid south africa is smaller among unionized workers than among non unionized ones

migration and economic mobility in tanzania evidence from a tracking survey this study explores the extent to which migration has contributed to improved living standards of individuals in tanzania using longitudinal data on individuals the authors estimate the impact of migration on consumption growth between 1991 and 2004 the analysis addresses concerns about heterogeneity and unobservable factors correlated with both income changes and the decision to migrate the findings show that migration adds 36 percentage points to consumption growth during a period of considerable growth in consumption these results are robust to numerous tests and alternative specifications unpacking the findings the analysis finds that moving out of agriculture is correlated with much higher growth than staying in agriculture although growth is always higher in any sector if one physically moves economic mobility is strongly linked to geographic mobility the puzzle is why more people do not move if returns to geographic mobility are high the evidence is consistent with models in which exit barriers are set by home communities through social and family norms that prevent migration of certain categories of people

descent rules and strategic transfers evidence from matrilineal groups in ghana abstract traditional descent systems can roughly be divided into patrilineal and matrilineal in the latter a man s heir is not his own child but rather his sister s son the paper examines the implications of this social norm for the pattern of inter vivos transfers using household level data from rural ghana where the largest ethnic group is traditionally matrilineal in particular it tests the predictions of a model of strategic behavior according to which children should respond to the threat of disinheritance by increasing transfers to their parents during lifetime to induce a donation of land before the default matrilineal inheritance is enforced i find that the credibility of customary norms enforcement as proxied by the presence of a nephew in the father s household significantly increases the probability of receiving transfers from children for akans but not for the other groups the effect is specific to nephews and not to other co resident boys this pattern of behavior can affect asset accumulation decisions across generations

relative price variability and inflation a disaggregated analysis relative price variability has been studied at the cross sectional intermarket level this paper addresses the equally important phenomenon of intramarket variability the dispersion of commodity price movements around the industry average using quarterly price data for 80 disaggregated commodity groups in the united kingdom from 1974 to 1984 the paper investigates the determinants of intramarket price variability and replicates some previous crosssectional tests for the united kingdom intermarket price variability is found to be positively related to inflation which confirms previous results for the united states and other countries intramarket variability is found to be positively related to the average market rate of price change but the strength of this relationship appears to be inversely related to the level of industry concentration these results generally support the propositions and findings reported by stigler and kindahl

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

evidence on intergenerational income transmission using complete dutch population data abstract we estimate the intergenerational elasticity ige of income for the netherlands using complete population data for around 177 000 28 year olds we find that iges are much lower when actual individual income data are used rather than proxies or aggregates for income though low daughters iges are higher than sons indicating lower income mobility for women

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

school tracking and intergenerational income mobility evidence from the finnish comprehensive school reform abstract this paper estimates the effect of a major education reform on intergenerational income mobility the finnish comprehensive school reform of 1972 1977 replaced the old two track school system with a uniform nine year comprehensive school and shifted the selection of students to vocational and academic tracks from age 11 to age 16 we estimate the effect of this reform on the intergenerational income elasticity using a representative sample of males born between 1960 and 1966 the identification strategy relies on a differences in differences approach and exploits the fact that the reform was implemented gradually across the country during a six year period the results indicate that the reform reduced the intergenerational income elasticity by 23 from the pre reform elasticity of 0 30 to post reform elasticity of 0 23

prospective analysis of a wage subsidy for cape town youth abstract persistently high youth unemployment is one of the most pressing problems in south africa we prospectively analyze an employer wage subsidy targeted at youth a policy recently enacted by the south african government to address the issue recognizing that a credible estimate of the policy s impact requires a model of the labor market that itself generates high unemployment in equilibrium we estimate a structural search model that incorporates both observed heterogeneity and measurement error in wages using the model to simulate the policy we find that a r1000 month wage subsidy paid to employers leads to an increase of r596 in mean accepted wages and a decrease of 12 percentage points in the share of youth experiencing long term unemployment

intergenerational wealth mobility in rural bangladesh unique residential history data with retrospective information on parental assets are used to study household wealth mobility in 141 villages in rural bangladesh regression estimates of father son correlations and analyses of intergenerational transition matrices show substantial persistence in wealth even when we correct for measurement errors in parental wealth we do not find wealth mobility to be higher between periods of a person s life than between generations we find that the process of household division plays an important role sons who splinter off from the father s household experience greater albeit downward mobility in wealth despite significant occupational mobility across generations its contribution to wealth mobility net of human capital attainment of individuals appears insignificant low wealth mobility in our data is primarily explained by intergenerational persistence in educational attainment

education across generations in south africa racially segregated education was a central pillar propping up the apartheid system in south africa the 1953 bantu education act centralized control of black education and linked tax receipts from black to public expenditure on their education in 1975 expenditure on the average white was more than 15 times larger than that on the average black student this abstract was borrowed from another version of this item

the inheritance of inequality how level is the intergenerational playing field what are the causal mechanisms that underlie the intergenerational transmission of economic status are these mechanisms amenable to public policies in a way that would make the attainment of economic success more fair these are the questions we will try to answer

gender differences in land inheritance schooling and lifetime income evidence from the rural philippines this article examines the difference in lifetime incomes arising from parental preferences in the allocation of land inheritance and investments in schooling between sons and daughters in the rural philippines sons are preferred with respect to land inheritance receiving 0 15 additional hectares of land while daughters are treated more favourably in schooling investments receiving 1 5 more years of schooling however differences in both current and life cycle incomes between sons and daughters are insignificant this suggests that filipino parents allocate intergenerational transfers to equalise incomes among their children without sacrificing efficiency

family background and economic status in finland the importance of family background for economic outcomes is analyzed using a finnish data set the estimates for intergenerational and sibling correlations in earnings are comparatively low by estimating the magnitude of family influence conditional on parental earnings children with poor parents are found to have lower intergenerational elasticities while the sibling resemblance is higher children with rich parents have higher intergenerational elasticities and the sibling resemblance is also higher except for daughters the results also indicate that the largest share of the intergenerational correlation is transmitted through observed characteristics such as education and in particular occupation jel classification d1 d3 j6