Volume 18, Issue 4 -

This study provides evidence of the importance of cognitive and noncognitive skills to completion of three types of vocational training (VET): education and health, technical, and business. Math and language exam scores constitute the key measures of cognitive skills; teacher-assigned grades the key measure of noncognitive skills. The data consist of two 9-year panels of youth completing compulsory education in Denmark. Estimation of completion proceeds separately by gender and VET type, controlling for selection and right censoring. The authors find that all skills are inversely related to VET enrollment, even controlling for family-specific effects. Estimates for completion vary considerably by program type, demonstrating the methodological importance of distinguishing among different VET courses. Math scores are positively related to certification for all VET tracks, though with very different magnitudes; language skills are inversely related for the nonbusiness tracks; and noncognitive skills appear important primarily for the business track.

Recent studies have shown that even highly skilled women suffer a motherhood wage penalty, resulting in reduced pay relative to childless women. We use a unique dataset of all Israeli women who graduated college or university during the period 1995–2008 and their husbands to investigate whether the motherhood penalty is the result of a household decision. Thus, we investigate whether the wage gap between husband and wife before they have children affects the decision of which spouse will be the main provider and which will have the main responsibility for childrearing. We find that the couple’s initial wage ratio does not affect this decision, since a woman almost always bears the opportunity cost of childrearing even if she has a much higher starting wage than her husband.

We estimate the marginal cost of public funds (MCF) as an overall indicator of the efficiency of tax-benefit systems and their reforms. The novelty of our work is the calculation of a MCF indicator fully based on empirical micro-data representative of the Italian population. This indicator combines the incentives embodied in the tax-benefit system at the intensive and extensive margins with the respective elasticities of labour supply at both margins. Our results first show the importance of taking into account the heterogeneity of the population with women (both single and in couples) facing a more inefficient system than men. Second, our micro-data based indicator shows the potential bias of MCF indicators based on stylized and hypothetical measures of work incentives.

Given an oligopoly of firms that produce and sell a durable good that causes pollution at production, during use or at disposal, the effects of present and future emission taxes on quantities, emissions, consumer surplus, producer surplus and the sum of consumer and producer surpluses and the revenue from emission taxes for each type of emission are analyzed. Among other results, it is proved that producers may support an increase in the emission tax in the future or in the present, that emissions in the present may be increasing in the emission tax in the future and that the timing of emissions may affect the directions of some effects of a change in an emission tax on welfare variables. The results obtained are based on the interaction between present and future emission taxes, the intertemporal effects of such taxes, imperfect competition, the strategic behavior of each firm in stealing sales from its rivals in the present and in the future, the type of emission and the producers’ commitment problem. The analysis is extended to the cases of monopoly and perfect competition.

In literature, there is limited direct evidence regarding the effect of health insurance coverage on firm performance and worker productivity. We study the impacts of health insurance on medium- and large-scale domestic private firms’ performance and productivity in Vietnam, using a large firm level census dataset. We find statistically, but suggestive, positive health insurance effects on both aggregate profit and profit per worker for both complying and non-complying firms when using the full sample. We further restrict the sample to specific industries. The positive health insurance effects could exist for both complying and non-complying firms in the heavy manufacturing and construction sector, while such positive effects could be only significant for complying firms in the wholesale/retail sectors. We could not find any evidence of positive health insurance effects in the light manufacturing sector. These results imply that the impacts of health insurance could be industry specific.

I examine the impact of language skills on immigrants’ labor market performance by applying a new approach, which allows to estimate wage benefits attributed to initial language skills at arrival. By exploiting unique data, I isolate the endogenous part of current German skills and instrument current command by German proficiency measured retrospectively at the point in time of migration. This approach tackles the problem that labor market effects from current language skills are at risk to reflect merely the sum of a successful residence in Germany and only display growth effects. I find that a good command of German increases labor market income by 47.0% for males, while no significant language effects are detected for females. Further analyses illustrate that differences in language effects by gender can be attributed to selection into different occupations and part-time employments and that language operates complementary and enables cross-border transferability of human capital.

An extensive literature shows that reduced labor earnings lead to an increase in criminality, while another literature suggests that diminished economic conditions via changes in public assistance programs may alter criminal behavior. This study considers electronic benefit transfer (EBT) reforms that may have altered households’ real income, black market activity, and criminality. A natural experiment that relies on plausibly exogenous variation in the timing of EBT reforms across California counties is exploited within an event study design to identify the effect of EBT adoption on arrests. A significant, though transitory, increase in criminal arrests is revealed. Following conversion to EBT delivery, the average county experiences an additional 108 arrests per month, or equivalently an increase of 5 . This increase in arrests lasts up to 6 months before fading out. The increase is most pronounced for crimes motivated by income shortfalls, such as burglary, larceny, prostitution, and robbery. In the average county, income-motivated criminal arrests rise by about 25 arrests, or 10 . Estimates are practically and statistically significant, as well as robust to changes in controls and specification. Findings suggest that income shocks can substantially change criminal behavior and that declining economic conditions can alter criminal behavior through channels other than labor earnings.

As populations age dramatically in developed economies, understanding the dynamics of employment in long-term care will help to ensure an adequate workforce and increase quality of care. Although downturns in the business cycle are associated with decreases in employment at the aggregate level and across most sectors of the economy, there are several reasons to believe that employment in the health and long-term care sectors increases during recessions. This is the first study of the relationship between changes in macroeconomic conditions and employment duration of direct care workers based upon analysis of detailed, monthly individual-level data. The results suggest that direct care workers have longer employment spells during recessionary periods, a countercyclical effect, but one that is confined to nursing home settings. However, the length of job spells in hospitals appears to be procyclical.

In many developing countries, the annual number of births has reached a peak in recent years and has declined since that time. We investigate how the schooling that individuals complete responds to the changes in the number of potential labor market competitors implied by changes in the annual number of births. We use census data from Vietnam, Thailand, Iran and Cambodia and document a similar pattern in all of them: holding other characteristics constant, individuals born during the upswing of the demographic cycle complete less schooling than individuals born during the downswing of the demographic cycle. Our estimates suggest that individuals' schooling choices mitigate the possibly adverse economic effects of the demographic cycle. For developing countries that are at earlier phases of the demographic transition, our study lets us predict schooling levels as the demographic transition moves forward.

Using official regional price parities (RPPs) recently released by the U.S. Bureau of Economic Analysis, we investigate how RPP adjustments affect the entire distribution of U.S. family incomes, poverty, inequality, tax progressivity, and metro-size agglomeration premiums. We find that higher-income families tend to live in higher-price areas, so regional mean incomes converge as real incomes fall in richer, higher-cost regions and rise in poorer, lower-cost regions. Further, the differences in poverty rates for the metro and non-metro areas vanish and we find re-rankings in poverty rates among the 9 Census Divisions. RPP adjustments also influence income inequality and effective U.S. tax progressivity. They increase effective federal tax progressivity by more than 25 %, equivalent to a $2,500 cash transfer. When we control for local prices and the characteristics of the family head, income (agglomeration) premiums for major metropolitan areas largely, but not completely, disappear.

This paper examines the causal effect of education on long-run physical health, using survey data on matched siblings. By adopting a sibling-differences strategy, we are able to obtain estimates that are not biased by unobserved genetic factors and family background which affect both education and health. To address the potential endogenous shocks that affect siblings differently within the family, we further employ an instrumental variable approach by exploiting a profound disturbance in the education system during the Cultural Revolution in China. The within-sibling estimates suggest that an additional year of schooling is found to be positively related to health status later in life (better self-reported health, lower probability of feeling uncomfortable, getting chronic diseases, and being underweight). We also unravel the potential roles of income and cognition in the effects of education on health.