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Ewa Björling, Andreas Hatzigeorgiou, Magnus Lodefalk & Fredrik Sjöholm on ‘COVID-19 and the Consequences for Free Trade’. GLO Policy Brief No. 3.

GLO Policy Brief No. 3 – Special theme: COVID-19 and policy implications

COVID-19 and the Consequences for Free Trade

by
Ewa Björling, Andreas Hatzigeorgiou, Magnus Lodefalk & Fredrik Sjöholm

The response to the COVID-19 pandemic has disrupted global trade, investment and value chains. There is a risk that newly imposed barriers to international trade and mobility will become permanent. Research shows that veiled protectionism in the wake of the COVID-19 pandemic would be associated with greater risks and impede the economic recovery needed to avoid a new economic depression. We argue that failing to reboot free trade and to restore global value chains could aggravate an already difficult and delicate situation in regard to global economic development and poverty reduction. In order to reboot globalization, however, there needs to be a new approach. Simply going over old ground would be insufficient.
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  • Ewa Björling, MD, Associate Professor of Virology, Sweden’s Minister for Trade 2007-2014.
  • Andreas Hatzigeorgiou, PhD, CEO of the Stockholm Chamber of Commerce.
  • Magnus Lodefalk, PhD, Associate Professor of Economics, Örebro University; Ratio Institute, Sweden; and Fellow of the Global Labor Organization.
  • Fredrik Sjöholm, PhD, Professor of International Economics, Lund University, and the Research Institute of Industrial Economics, Sweden.

What we should know

  • Restrictions and lockdowns to address the COVID-19 pandemic have disrupted international markets and global value chains. The travel and trade restrictions imposed by many countries are extreme and unusual both in nature and their implementation, wreaking havoc on global trade and investment flows. These restrictions have been adopted despite lack of evidence of their effectiveness. Some measures go against the guidance by the World Health Organization (WHO) and the World Trade Organization (WTO).
  • Protectionism and anti-globalization tides have been rising already before the COVID-19 pandemic, with Brexit and the China-U.S. trade war, as two examples. The policy response to the pandemic now risks to make the situation worse and constitutes a major disruption to global trade, investment and value chains. Early economic indicators suggest that this disruption is severely hurting growth and employment (Gopinath 2020).
  • Global poverty and inequality are grounds for justifiable concerns. Research suggests that failing to ensure free and predictable markets would be associated with significant risks to poverty and inequality.
  • Many policies to combat the coronavirus pandemic are actually causing both short-term problems for fighting the pandemic, as well as risks in regard to economic recovery, employment, development and poverty reduction over the medium and long term (Evenett 2020, Hoekman et al 2020, Zimmermann et al. 2020).
  • Difficulties in getting supplies of medical equipment have triggered an increased interest in de-globalizing value chains (Miroudot 2020). Already before the pandemic, companies and countries were considering a regionalization or even a nationalization of global value chains. This due to a more adverse trade policy environment, rising wages in manufacturing strongholds and technological advances, e.g., in automation.

The state of free trade in the wake of COVID-19

  • Unilaterally imposing high travel and trade barriers creates uncertainty for exporters and importers of goods and services, as well as for foreign investors. Research indicates that uncertainty about the stability of the rules of the game has a major negative impact on trade and investment, beyond the barriers imposed by the rules themselves (see, e.g., Handley and Limao 2013).
  • Temporary policies risk becoming permanent. They could become precedents for trade barriers and unilateralism in the future.
  • Asymmetric timing for when countries reopen and assymetric epidemiological strategies, pose real risks of triggering protectionism (Bown 2020). For example, when one country is back to full production and shipping, countries that still have not reopened their economies will likely face rising pressure to ‘protect’ domestic businesses.
  • Less-developed countries are more exposed to the risks associated with a failure to reboot and revitalize international trade, investment and value chains. They often face additional difficulties in handling the pandemic itself because of their relatively weaker health care systems. Existing and new trade barriers, such as export restrictions on medical products and food, will exacerbate this situation (Hoekman et al. 2020). Moreover, capital is now fleeing from poor to richer countries. The poorest and most debt-ridden countries can thus be hit twice in the form of the pandemic, and globalization in reverse.

A reboot and a new approach to globalization is needed

  • In the short term, a coordinated approach among the major economies on measures to address both the pandemic and its economic consequences are needed. A first step should be to tear down the border and trade barriers put up in the wake of the pandemic (Stellinger et al 2020).
  • In the short to medium term, it is necessary to formulate a strategy to reduce the risks from asymmetric timing in reopening and from differences in the fight against the pandemic.
  • A head-on measure would be to introduce a new free trade and investment agreement that abolish all tariffs and other barriers to trade and investment in pharmaceuticals, medical devices, and other equipment used to prevent or combat pandemics (Bown 2020b, Stellinger et al 2020).
  • Business leaders should act to encourage more resilient and sustainable global value chains, for example by having more suppliers, warehouses and using modern technology to monitor the chains and their resilience in real time (Miroudot 2020). This would be a win-win for the climate and for economic growth.
  • Governments must refrain from top-down attempts to address current and future difficulties of getting supplies by reshoring production of various goods and services (Stellinger et al. 2020). There is ample research on the harmfulness of import-substitution policies.
  • In the longer term, countries need to safeguard both global health and prosperity through common strategies and commitments, concrete measures for future crises and mechanisms for consultations. New and even more serious pandemics cannot be excluded. Countries will have to be able to act quickly, in a coordinated fashion and in a transparent way.
  • A new approach is needed to reboot and revitalize globalization, with the aim to design a system which reduces the risk of both pandemics and protectionism.
  • Mechanisms for applying and enforcing stringent requirements on countries to live up to standards and obligations put in place to minimize the risk of pandemics should be evaluated.
  • The concept of sustainability within the global trading system could be extended to encompass not only environmental and social aspects, but also aspects that more clearly impact public health and epidemiological risks. Increased cross-institutional links between bodies such as the WHO and the WTO should also be created to promote knowledge exchange and technical assistance.

The policy response to the COVID-19 pandemic has disrupted international markets. However, simply restoring free trade would mean ignoring massive human suffering caused by the COVID-19 pandemic. A new approach is needed to reboot and revitalize globalization, with the aim to design a system which reduces the risk of both pandemics and protectionism. Leaders and policymakers must make concerted efforts to: carefully lift restrictions on travel and trade while protecting health; commit to liberalize essential trade  for fighting pandemics; address how to deal with calls for protecting domestic industries in the presence of asymmetric economic reopening; and sustain international yet resilient value chains. The aim should be to develop the international trading system to both reduce the risks of pandemics and protectionism.
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References

Bown, C. (2020a). “COVID-19 could bring down the trading system: How to stop protectionism from running amok.”, Foreign Affairs, May/June 2020.

Bown, C. (2020b). “How the G20 can strengthen access to vital medical supplies in the fight against COVID-19.”, Trade and Investment Policy Watch, Peterson Institute for International Economics.

Evenett, S. (2020). “Sickening your neighbor: Export restraints on medical supplies during a pandemic.”, VoxEU, CEPR.

Gopinath, G (2020). “The Great Lockdown: Worst economic downturn since the Great Depression.”, IMF.

Handley, K. and N Limao (2013). “Does policy uncertainty reduce economic activity? Insights and evidence from large trade reforms.”, VoxEU, CEPR.

Hoekman, B.M., Fiorini, M. and A. Yildirim (2020). “Export restrictions: a negative-sum policy response to the COVID-19 crisis.”, EUI RSCAS Working Paper 2020/23.

Miroudot, S. (2020). “Resilience versus robustness in global value chains: Some policy implications.” in Baldwin, R.E. and S.J. Evenett (eds.) (2020). COVID-19 and trade policy: Why turning inward won’t work. VoxEU.org eBook, CEPR Press.

Stellinger, A., Berglund, I. and H. Isakson (2020). “How trade can fight the pandemic and contribute to global health.” in Baldwin, R.E. and S.J. Evenett (eds.) (2020). COVID-19 and trade policy: Why turning inward won’t work. VoxEU.org eBook, CEPR Press.

Zimmermann, K.F., Karabulut, G., Bilgin, M.H. and A.C. Doker (2020). “Inter-country distancing, globalization and the coronavirus pandemic“, The World Economy, OPEN ACCESS, forthcoming. PREPUBLICATION VERSION

NOTE: The opinions expressed here are those of the author and not of the GLO, which has no institutional position.

More from the GLO Coronavirus Cluster

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Don DeVoretz: In Memoriam

May 28, 2020: Don DeVoretz (*May 28, 1942; + March 14, 2020), a prominent migration researcher, GLO Fellow and long-term collaborator of the GLO President, Klaus F. Zimmermann, would have been 78 today. We bemoan and remember a great scientist and friend.

Don DeVoretz obtained his doctorate in Economics from the University of Wisconsin (Madison) in 1968. He was the co-director of the Centre of Excellence for the Study of Immigration (1996-2007) and Professor of Economics at Simon Fraser University (since 1968) and Professor Emeritus (since 2010).

Don DeVoretz has held visiting positions at Duke University, University of Ibadan (Nigeria), University of the Philippines, University of Wisconsin, and the Norwegian School of Economics.

Don DeVoretz was named the Willy Brandt Professor in 2004 at IMER, Malmö University.

Don DeVoretz, a friend of the late Julian Simon, gave the first Julian Simon Lecture at IZA in 2004.

Selective Publications

  • Don DeVoretz, Nahikari Irastorza. Economic Theories of Citizenship Ascension. In: Ayelet Shachar, Rainer Bauböck, Irene Bloemraad, Maarten Vink (Eds.), The Oxford Handbook of Citizenship. Oxford 2017.
  • Don J. DeVoretz. The Economics of Immigrant Citizenship Ascension. In: Amelie Constant, Klaus F. Zimmermann, International Handbook on the Economics of Migration, Edward Elgar 2013.
  • Klaus F. Zimmermann, Martin Kahanec, Amelie F. Constant, Don J. DeVoretz, Liliya Gataullina, Anzelika Zaiceva. Study on the Social and Labour Market Integration of Ethnic Minorities. Report for the High Level Advisory Group on Social and Labour Market Integration of Ethnic Minorities and the European Commission, Bonn 2008, IZA Research Report No. 16.
  • Don J. DeVoretz. Immigration Policy: Methods of Economic Assessment. International Migration Review, 2006, 40 (2), 390-418. (Based on the Julian Simon Lecture 2004.)
  • Don J. DeVoretz, Samuel A. Laryea. Canadian Immigration Experience: Any Lessons for Europe? In: : K.F. Zimmermann (ed.), European Migration – What Do We Know? Oxford University Press, 2005.
  • Don J. DeVoretz (Ed.). Diminishing Returns: The Economics of Canada’s Recent Immigration Policy. C. D. Howe Institute 1995.
  • Ather Akbari, Don J. DeVoretz. The Substitutability of Foreign Born Labour in Canadian Production: Circa 1980. Canadian Journal of Economics, 25(3): 604-614. 1992.

Interviews with Associates

Below are two interviews with close associates of Don DeVoretz:

  • GLO Fellow Ather Akbari is Professor of Economics at Saint Mary’s University in Canada and Chair of the Atlantic Research Group on Economics of Immigration, Aging and Diversity. He is a former PhD student of Devoretz.
  • GLO Fellow Pieter Bevelander is a Professor at Malmö University and Director of the Malmö Institute for Studies of Migration, Diversity and Welfare. He is a former research partner of Devoretz.

Interview with Ather Akbari

GLO: How was Don as a teacher and PhD supervisor?

Ather Akbari: I wrote my doctoral thesis, entitled “Some Economic Impacts of Immigrant Population in Canada” under Don’s supervision. At that time (1980s), there was a paucity of  empirical research on Canadian immigration, but interest in impact of immigration was growing in public policy circles, as well as in general public. Under Don’s supervision, I really learned to communicate results of an academic research for both academic and nonacademic audience.  Results of my thesis attracted a lot of attention in news media and in public policy circles and I owe it a lot to my training under Don.

GLO: What was your joint prominent paper in the Canadian Journal of Economics about?

Ather Akbari: This paper entitled “Substitutability of Immigrants in Canadian Production Circa 1980” (not a part of my thesis) was the first in Canada to assess if immigrants displaced Canadian born workers in Canadian industries. Using data from Canadian census, we estimated a translog production function and found that although there was displacement in some industrial sectors, overall there was no displacement effect.   

GLO: Migration research was his focus, can you outline an example from his work?

Ather Akbari: I think Don’s most important contribution to migration research are his many contributions to the economics of citizenship. He has published conceptual and empirical research in this area. He also co-edited a book on the issue with Pieter Bevelander (Malmö University) with a preface written by Irene Bloemraad (Berkley University). This volume had contributions from Europe and North America. Main focus of the book was to present evidence on the impact of citizenship status on economic performance and contributions of immigrants in the host country. Very important policy implications as rights for citizenship ascension vary much across countries.

GLO: What was his contribution to policy advice, in particular to Canadian migration policy?

Ather Akbari: In the late 1980s, the Canadian government undertook a demographic review of Canadian population. All forecasts based on the demographics of the time indicated that Canada was moving towards a population distribution which will be more heavily skewed towards the elderly. This could could cause economic and labor market challenges. Don was very passionate in recommending to the Canadian government that it should liberalize its immigration policy as one important tool to meet these challenges. He was also in favor of attracting international students and for liberalizing rules for their permanent residency. Over time, Canadian immigration policy became more liberal. He was also very much in favor of immigration policy based on evidence-based research. He promoted an increased availability of data for researchers and was among the proponents of the use of administrative data in connection with survey data (especially the Longitudinal Immigration Database, IMDB).

GLO: Don was increasingly worried about the future of migration, what do you think are the major challenges ahead?

Ather Akbari: Globalization has resulted in greater movement of goods and people around the world and has resulted in great benefits. However, many have also been hurt, economically and politically, by unequal distribution of these benefits. In the West, this has led to the current wave of nationalism which threatens free movements of goods and of people. World leaders, academic researchers and news media need to address this seriously.  

Interview with Pieter Bevelander

GLO: How did you get connected with Don?

Pieter Bevelander: I met Don DeVoretz in Spring 2004. He had just taken up the Willy Brandt Guest Professorship at the Department of International Migration and Ethnic Relations at Malmö University. He felt a bit lost among all non-economists that were working there. I was myself just on a post doc visit at the Erasmus University in Rotterdam, and met him when I was on a visit. During his first weeks in Malmö he had read my dissertation on the employment integration of immigrants in Sweden and showed especially large interest into the citizenship analysis. Further that Spring, he organized in Malmö a multidisciplinary workshop on the consequences of citizenship ascension in different countries and from different disciplinary angles.

GLO: You published together the edited volume The Economics of Citizenship. How did this project evolve?

Pieter Bevelander: Since the workshop in 2004 and his time in Malmö we slowly started to have conversations on a volume on the economic effects of citizenship in different countries. Don was a Research Fellow at IZA and met often its Director in Bonn. Through this network it was possible to meet either in Bonn or on his way into Europe in Malmö. We presented our ideas and papers at conferences and started to screen possible researchers for being part of the volume. We published then the book in 2008.

GLO: How has this project affected your both careers and the profession?

Pieter Bevelander: For us both, Don and me, this volume has been very valuable.
It was followed by subsequent articles, handbook chapters, policy papers for think tanks and government institutions, all analyzing why immigrants take up the citizenship of another country and whether this leads to increased economic integration in new environment. Don, for instance, was involved in policy recommendations through the think tank Center for American Progress in 2014 about how to find a way for allowing undocumented migrants to become full citizens in the US. Today, I am an advisor for the Swedish government’s investigation about changing citizenship regulations.

NOTE
***********
With Ather Akbari & Pieter Bevelander spoke Klaus F. Zimmermann, GLO President.

Klaus F. Zimmermann: Don DeVoretz has been a academic companion for most parts of my life as a migration researcher.

  • We met 1992 when we both participated at the famous migration workshop, Herbert Giersch organized in Vancouver for the Egon-Sohmen-Foundation. (Herbert Giersch, Ed., Economic Aspects of International Migration, Springer Berlin. Heidelberg, 1994.)
  • He visited me during my tenure as Professor of Economics at the University of Munich and was part of the migration network I had created at the time as Programme Director Migration for the Centre of Economic Policy Research (CEPR) in London. A CEPR conference on “European Migration – What Do We Know?”, which I organized 1997 at the University of Munich mobilized the network which enabled the publication of K.F. Zimmermann (ed.), European Migration – What Do We Know? Oxford University Press, 2005.
  • After I created IZA, the Institute for the Study of Labor, as the Founding Director in 1998 in Bonn, Don DeVoretz and the migration network moved with me, and I appreciated his experienced support for two decades. Within this period, he was instrumental in large research projects for the Volkswagen Foundation (“The Economics and Persistence of Migrant Ethnicity”, 2005 – 2008) and the European Commission (“Study on Social and Labour Market Integration of Ethnic Minorities”, 2006 – 2007). He helped building up and developing the IZA migration network together with Amelie Constant and Barry Chiswick. He started the prominent IZA Julian Simon Lecture series in 2004, and was a regular visitor throughout the period.
  • Don DeVoretz stayed in contact with email exchange and ambitious research projects until earlier this year. We all miss his friendship, sharp thinking and helpful advice.

Julia & Don DeVoretz

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The effect of educational technology on college students’ labor market performance. New article published in the Journal of Population Economics.

A new paper published in the Journal of Population Economics finds that information and communications technology (ICT) significantly increases students’ likelihood of obtaining a job offer in the labor market and higher wages. The positive effect comes from students’ increased use of computers and the internet for job search.

Read more in:

The effect of educational technology on college students’ labor market performance

Yi Lu, Hong Song

Journal of Population Economics (2020) 33, Issue 3: 1101-1126
FREE READ LINK

Author Abstract: This paper presents some of the first evidence on the effect of information and communications technology (ICT) on college students’ labor market performance. Using a large, representative survey of college students in China, we examine outcomes before and after students were exposed to technology-aided instruction, compared with students who were not exposed to such instruction. The results indicate that the ICT program significantly increased students’ likelihood of obtaining a job offer in the labor market and the wage they were offered. The positive effect comes from students’ increased use of computers and the internet for job search. While most previous studies of the use of technology in education focus only on students’ academic achievement and find zero or negative effects, our study demonstrates that technology may be an effective tool for improving college students’ labor market performance, and that the potential benefits of technology might be underestimated if we focus only on test scores and ignore students’ career development.

Access to the newly published complete Volume 33, Issue 3, July 2020.

LEAD ARTICLE OF ISSUE 3:
Blau, F.D., Kahn, L.M., Brummund, P. et al., Is there still son preference in the United States?.
Journal of Population Economics 33, 709–750 (2020). READ LINK FREE.
https://doi.org/10.1007/s00148-019-00760-7

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Endogenous education and the reversal in the relationship between fertility and economic growth. New article published in the Journal of Population Economics.

A new paper published in the Journal of Population Economics provides a model that can account for the possibly negative correlation between population growth and productivity growth.

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Endogenous education and the reversal in the relationship between fertility and economic growth

Alberto Bucci, Klaus Prettner

Journal of Population Economics (2020) 33, Issue 3: 1025-1068
FREE READ LINK

GLO Fellow Klaus Prettner

Author Abstract: To reconcile the predictions of research and development (R&D)-based growth theory regarding the impact of population growth on productivity growth with the available empirical evidence, we propose a tractable, continuous-time, multisector, R&D-based growth model with endogenous education and endogenous fertility. As long as the human capital dilution effect is sufficiently weak, faster population growth may lead to faster aggregate human capital accumulation, to faster technological progress, and, thus, to a higher growth rate of productivity. By contrast, when the human capital dilution effect becomes sufficiently strong, faster population growth slows down aggregate human capital accumulation, dampens the rate of technical change, and, thus, reduces productivity growth. Therefore, the model can account for the possibly negative correlation between population growth and productivity growth in R&D-based growth models depending on the strength of the human capital dilution effect.

Access to the newly published complete Volume 33, Issue 3, July 2020.

LEAD ARTICLE OF ISSUE 3:
Blau, F.D., Kahn, L.M., Brummund, P. et al., Is there still son preference in the United States?.
Journal of Population Economics 33, 709–750 (2020). READ LINK FREE.
https://doi.org/10.1007/s00148-019-00760-7

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Males’ housing wealth and their marriage market advantage. A new paper published in the Journal of Population Economics.

A new paper published in the Journal of Population Economics finds that housing or real estate improves the man’s status in the marriage market of Taiwan.

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Males’ housing wealth and their marriage market advantage

C. Y. Cyrus Chu, Jou-Chun Lin, Wen-Jen Tsay

Journal of Population Economics (2020) 33, Issue 3: 1005-1023
FREE READ LINK

Author Abstract: In theory, people who own real estate should have advantage finding a partner in the marriage market. Empirical analyses along this line, however, face three issues. First, it is difficult to identify any causality for whether housing facilitates marriage or expected marriage facilitates a housing purchase. Second, survey samples usually do not cover very wealthy people, and so the observations are top coding in the wealth dimension. Third, getting married is a dynamic life cycle decision, and rich life-history data are rarely available. This paper uses registry data from Taiwan to estimate the impact of males’ housing wealth on their first-marriage duration, taking into account all three issues mentioned above. We find that a 10% increase in real estate wealth increases probability of a man getting married in any particular year by 3.92%. Our finding suggests that housing or real estate is a status good in the marriage market.

Access to the newly published complete Volume 33, Issue 3, July 2020.

LEAD ARTICLE OF ISSUE 3:
Blau, F.D., Kahn, L.M., Brummund, P. et al., Is there still son preference in the United States?.
Journal of Population Economics 33, 709–750 (2020). READ LINK FREE.
https://doi.org/10.1007/s00148-019-00760-7

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Exploring the role of parental engagement in non-cognitive skill development over the lifecourse. Just published in the Journal of Population Economics.

A new paper published in the Journal of Population Economics highlights that fathers in Australia play a pivotal role in the skill production process of their kids over the lifecourse.

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Exploring the role of parental engagement in non-cognitive skill development over the lifecourse

Rosemary Elkins & Stefanie Schurer

Journal of Population Economics (2020) 33, Issue 3: 957-1004
FREE READ LINK

Author Abstract: We examine the role that parental engagement with child’s education plays in the lifecourse dynamics of locus of control (LOC), one of the most widely studied non-cognitive skills related to economic decision-making. We focus on parental engagement as previous studies have shown that it is malleable, easy to measure, and often available for fathers, whose inputs are notably understudied in the received literature. We estimate a standard skill production function using rich British cohort data. Parental engagement is measured with information provided at age 10 by the teacher on whether the father or the mother is very interested in the child’s education. We deal with the potential endogeneity in parental engagement by employing an added-value model, using lagged measures of LOC as a proxy for innate endowments and unmeasured inputs. We find that fathers’, but not mothers’, engagement leads to internality, a belief associated with positive lifetime outcomes, in both young adulthood and middle age for female and socioeconomically disadvantaged cohort members. Fathers’ engagement also increases the probability of lifelong internality and fully protects against lifelong externality. Our findings highlight that fathers play a pivotal role in the skill production process over the lifecourse.

Access to the newly published complete Volume 33, Issue 3, July 2020.

LEAD ARTICLE OF ISSUE 3:
Blau, F.D., Kahn, L.M., Brummund, P. et al., Is there still son preference in the United States?.
Journal of Population Economics 33, 709–750 (2020). READ LINK FREE.
https://doi.org/10.1007/s00148-019-00760-7

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Assessing equity and efficiency in a prenatal health program. New article in the Journal of Population Economics.

A new paper published in the Journal of Population Economics finds that an early-life social safety net program has a sizeable impact on child health outcomes at birth.

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Growing together: assessing equity and efficiency in a prenatal health program

Damian Clarke, Gustavo Cortés Méndez

Journal of Population Economics (2020) 33, Issue 3: 883-956
FREE READ LINK

Author Abstract: We study the acting mechanism of an early-life social safety net program and quantify its impact on child health outcomes at birth. We consider both the equity and efficiency implications of program impacts and provide a metric to compare such programs around the world. In particular, we estimate the impact of participation in Chile Crece Contigo (ChCC), Chile’s flagship early-life health and social welfare program, using a difference-in-differences style model based on variation in program intensity and administrative birth data matched to social benefits usage. We find that this targeted social program had significant effects on birth weight (approximately 10 grams) and other early-life human capital measures. These benefits are largest among the most socially vulnerable groups but shift outcomes toward the middle of the distribution of health at birth. We show that the program is efficient when compared to other successful neonatal health programs around the world and find some evidence to suggest that maternal nutrition components and increased links to the social safety net are important action mechanisms.

Access to the newly published complete Volume 33, Issue 3, July 2020.

LEAD ARTICLE OF ISSUE 3:
Blau, F.D., Kahn, L.M., Brummund, P. et al., Is there still son preference in the United States?.
Journal of Population Economics 33, 709–750 (2020). READ LINK FREE.
https://doi.org/10.1007/s00148-019-00760-7

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Quasi-experimental evidence for the causal link between fertility and subjective well-being. New article in the Journal of Population Economics.

A new paper published in the Journal of Population Economics provides causal evidence that children increase mothers’ life satisfaction and happiness in a large sample of women from 35 developing countries.

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Quasi-experimental evidence for the causal link between fertility and subjective well-being

Jan Priebe

Journal of Population Economics (2020) 33, Issue 3: 839-882
FREE READ LINK

Author Abstract: This article presents causal evidence on the impact of fertility on women’s subjective well-being using quasi-experimental variation due to preferences for a mixed sibling sex composition (having at least one child of each sex). Based on a large sample of women from 35 developing countries, I find that having children increases mothers’ life satisfaction and happiness. I further establish that the positive impact of fertility on subjective well-being can be explained by related increases in mothers’ satisfaction with family life, friendship, and treatment by others.

Access to the newly published complete Volume 33, Issue 3, July 2020.

LEAD ARTICLE OF ISSUE 3:
Blau, F.D., Kahn, L.M., Brummund, P. et al., Is there still son preference in the United States?.
Journal of Population Economics 33, 709–750 (2020). READ LINK FREE.
https://doi.org/10.1007/s00148-019-00760-7

Ends;

Effects of Vietnam’s two-child policy on fertility, son preference, and female labor supply. New article in the Journal of Population Economics.

A new paper published in the Journal of Population Economics shows that Vietnam’s two-child policy decreased the average number of living children per woman, decreased also the proportion of sons in each family and increased maternal employment.

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Effects of Vietnam’s two-child policy on fertility, son preference, and female labor supply

Anh P. Ngo

Journal of Population Economics (2020) 33, Issue 3: 751-794
FREE READ LINK

Author Abstract: In 1988, facing a total fertility rate of over four births per woman, the Vietnamese government introduced a new policy that required parents to have no more than two children. Using data from the Vietnam Population and Housing Censuses from 1989, 1999, and 2009, I apply a differences-in-differences framework to assess the effects of this policy on family size, son preference, and maternal employment. I find that the policy decreased the probability that a woman has more than two children by 15 percentage points for younger women and by 7 percentage points for middle-aged women. The policy reduced the average number of living children by 0.2 births per woman. Low-education women and women in rural areas were more affected by the policy. The policy had no effects on mothers’ age at first birth and gender of mothers’ last birth. The reduction in fertility caused by the policy was associated with a 1.2 percentage point decrease in the proportion of sons in each family. The policy increased maternal employment by 1.3 percentage points. Instrumental variables estimates of the effects of fertility on maternal employment and child education suggest a negative relationship between the number of children and female labor supply and a trade-off between child quantity and child quality in Vietnam.

Access to the newly published complete Volume 33, Issue 3, July 2020.

LEAD ARTICLE OF ISSUE 3:
Blau, F.D., Kahn, L.M., Brummund, P. et al., Is there still son preference in the United States?.
Journal of Population Economics 33, 709–750 (2020). READ LINK FREE.
https://doi.org/10.1007/s00148-019-00760-7

Ends;

Birth order and educational outcomes in Mexico. New paper published in the Journal of Population Economics.

A new paper published in the Journal of Population Economics shows that the effect of birth order on educational outcomes in Mexico is negative.

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The importance of being earliest: birth order and educational outcomes along the socioeconomic ladder in Mexico

by Lucio Esposito, Sunil Mitra Kumar, Adrián Villaseñor

Journal of Population Economics (2020) 33, Issue 3:1069–1099
PDF of the article OPEN ACCESS

Author Abstract: We study the effect of birth order on educational outcomes in Mexico using 2 million observations from the 2010 Census. We find that the effect of birth order is negative, and a variety of endogeneity and robustness checks suggest a causal interpretation of this finding. We then examine whether these effects vary across households’ economic status, and we find significant heterogeneity across absolute as well as relative standards of living, operationalized as household wealth and relative deprivation. Finally, we find that firstborns’ advantage is amplified when they are male, and in particular when other siblings are female.

Access to the newly published complete Volume 33, Issue 3, July 2020.

LEAD ARTICLE OF ISSUE 3:
Blau, F.D., Kahn, L.M., Brummund, P. et al., Is there still son preference in the United States?.
Journal of Population Economics 33, 709–750 (2020). READ LINK FREE.
https://doi.org/10.1007/s00148-019-00760-7

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Coronavirus research published in the Journal of Population Economics: Interview with the Editor-in-Chief.

A substantially revised version of a recent GLO Discussion Paper (also the GLO Discussion Paper of the Month March) on the Coronacrisis in China has been accepted after rigorous peer review for publication in the Journal of Population Economics. The responsible Editor (and Editor-in-Chief, E-i-C) of the Journal, GLO President Klaus F. Zimmermann, has given an interview to IESR, the Institute for Economic and Social Research of Jinan University, which has been published online today. It is documented below. Authors Yun Qiu & Wei Shi are Professors at IESR, Xi Chen is Professor at Yale University.

“Impacts of Social and Economic Factors on the Transmission of Coronavirus Disease 2019 (COVID-19) in China” by Qiu, Yun & Chen, Xi & Shi, Wei
Forthcoming: Journal of Population Economics, Issue 4, 2020.
PDF of the prepublication revised draft.

Major Findings

  • Stringent quarantine, city lockdown, and local public health measures imposed since late January significantly decreased the virus transmission rate.
  • Population outflow from the outbreak source region posed a higher risk to the destination regions than other factors including geographic proximity and similarity in economic conditions.
  • Over 1.4 million infections and 56,000 deaths could have been avoided according to the estimates based on the analysis.
  • Most effective was found to be “city lockdown” first followed by “closed management of communities” and “family outdoor restrictions”.

IESR: From your perspective, what is the most important contribution of this paper? And what kind of impact would you like to see this paper to have?

E-i-C: To my knowledge this is the first published paper in an economics journal dealing with the coronavirus challenge. We learn a lot about how it happened and what the reactions of public authorities and Chinese people were. It is indeed the objective of this rigorous study to separate the epidemiological process from those responses and to quantify them in the face of a difficult data situation. On this way, the paper defines methodological standards and provides conclusions that will serve as a reference for may studies to come for China and all parts of the world.

IESR: Why do you think this paper is a good fit with the Journal of Population Economics? How does this paper distinguish itself from other related work appeared on scientific and medical journals?

E-i-C: The virus crucially affects human risky behavior, wellbeing and mortality, which is at the core of population economics. The specific economic focus is the weight the paper gives to the analysis of individual and government behavior and counterfactual investigations.

IESR: The editorial process was exceptionally fast for this paper. Why do you think it is very important to have a fast track for this research? And how did the Journal make this expedited process possible?

E-i-C: It typically takes years to get a paper accepted in a top economics journal as a matter of principle. The standard is slow refereeing and substantial revisions of submitted papers and a tough process to access the highest-ranked possible outlet. The Journal of Population Economics is the leader in its field. Authors and Journal have seen the perfect match for this article early on, but the paper nevertheless went through the standard, high-quality anonymous peer refereeing. Three referees provided detailed reports with substantial requests for revision within a week, while a normal response time would be about six weeks. The authors responded within two weeks convincingly and very detailed to all suggestions to reach the best possible output at this time. We kept all administrative procedures at the minimum. All parties were very supportive due to the particular importance of this research for the current global debate. 

IESR: Different countries have been taking different actions toward fighting COVID-19. We would like to hear your thoughts on the effectiveness of China’s strategies and actions, and if there are lessons can be learned by other countries.

E-i-C: It is well-known from previous pandemics that social distancing and the tracing of networks of infections are crucial for containing the disease. The lockdown measure of the Chinese strategy has been shown as very important. It has been followed by very many countries, although sometimes with some delay. However, since the challenge without proper medicine and with missing herd immunity is long-term, one should be cautious to pretend that the best detailed strategy is already obvious. The fear about a second wave of infections is present world-wide. We indeed hope to learn also from the differentiated strategies across countries to handle the crisis and to search and test for hard empirical evidence.

IESR: Do you have any other thoughts related to this research that you’d like to share with us?

E-i-C: The core of the best policy advice is good data to understand, follow and influence the process of the disease. The data which is world-wide in use has many difficulties, e.g. even when it comes to understand the basis issues who is infected or recovered, and to separate who died with or because of the virus. We need better statistics and instruments for ad hoc-surveys. We further need to study the global institutional flexibility to better react to pandemics.

*********
IESR is the Institute for Economic and Social Research of Jinan University; E-i-C is the Editor-in-Chief of the Journal of Population Economics and GLO President Klaus F. Zimmermann, who was the acting responsible Editor of the paper.

Related interview: #Coronavirus and now? GLO – Interview with Top #Health Economist Xi Chen of Yale University
Other related GLO activities.

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Is there still son preference in the United States? Fran Blau, Larry Kahn & colleagues provide an update. Article online in the Journal of Population Economics.

A new paper published online in the Journal of Population Economics updates research on son preferences in the United States. In contrast to previous research, any apparent son preference in fertility decisions have disappeared among natively born Americans, while some evidence for son preference in fertility persists among immigrants.

Read more in:

Francine D. Blau, Lawrence M. Kahn, Peter Brummund, Jason Cook & Miriam Larson-Koester
Is there still son preference in the United States? See READLINK.
Forthcoming: Journal of Population Economics (2020), Vol. 33, Issue 3. LEAD ARTICLE.
https://doi.org/10.1007/s00148-019-00760-7

VOXEU column: Note that the popularly written introduction into “Declining Son Preference in the United States” is based on the Journal of Population Economics article above.

GLO Fellows Fran Blau & Larry Kahn

Author Abstract: In this paper, we use 2008–2013 American Community Survey data to update and further probe evidence on son preference in the USA. In light of the substantial increase in immigration, we examine this question separately for natives and immigrants. Dahl and Moretti (Review of Economic Studies 75, 1085-1120, 2008) found earlier evidence consistent with son preference in that having a female first child raised fertility and increased the probability that the family was living without a father. We find that for our more recent period, having a female first child still raises the likelihood of living without a father, but is instead associated with lower fertility, particularly for natives. Thus, by the 2008–2013 period, any apparent son preference in fertility decisions appears to have been outweighed by factors such as cost concerns in raising girls or increased female bargaining power. In contrast, some evidence for son preference in fertility persists among immigrants. Immigrant families that have a female first child have significantly higher fertility and are more likely to be living without a father (though not significantly so). Further, gender inequity in source countries is associated with son preference in fertility among immigrants. For both first- and second-generation immigrants, the impact of a female first-born child on fertility is more pronounced for immigrants from source countries with less gender equity. Finally, we find no evidence of sex selection for the general population of natives and immigrants, suggesting that it does not provide an alternative mechanism to account for the disappearance of a positive fertility effect for natives.

Related recent papers from the GLO network on son preferences:

Also forthcoming in (2020), volume 33, issue 3:

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Revealing the Sources of the Chinese Success Story in the Anti-Corona Fight, January-February 2020. Paper forthcoming in the Journal of Population Economics.

A recent GLO Discussion Paper (also the GLO Discussion Paper of the Month March) had documented that the public health measures adopted in China have effectively contained the virus outbreak there already around February 15. Now a substantially revised version of the paper based on rigorous peer review has been accepted for publication in the Journal of Population Economics.

“Impacts of Social and Economic Factors on the Transmission of Coronavirus Disease 2019 (COVID-19) in China” by Qiu, Yun & Chen, Xi & Shi, Wei
Forthcoming: Journal of Population Economics, Issue 4, 2020.
PDF of the prepublication revised draft.
OPEN ACCESS OF ONLINE PUBLISHED VERSION.

Major Findings

  • Stringent quarantine, city lockdown, and local public health measures imposed since late January significantly decreased the virus transmission rate.
  • Population outflow from the outbreak source region posed a higher risk to the destination regions than other factors including geographic proximity and similarity in economic conditions.
  • Over 1.4 million infections and 56,000 deaths could have been avoided according to the estimates based on the analysis.
  • Most effective was found to be “city lockdown” first followed by “closed management of communities” and “family outdoor restrictions”.

GLO Discussion Paper of the Month: March

GLO Discussion Paper No. 494, 2020: GLO Discussion Paper of the Month: March

Impacts of Social and Economic Factors on the Transmission of Coronavirus Disease 2019 (COVID-19) in China
by Qiu, Yun & Chen, Xi & Shi, Wei
PDF of the GLO Discussion Paper

Related interview: #Coronavirus and now? GLO – Interview with Top #Health Economist Xi Chen of Yale University
Other related GLO activities.

GLO Fellows Yun Qiu & Xi Chen & Wei Shi

  • Yun Qiu & Wei Shi are Professors at the Institute for Economic and Social Research (IESR), Jinan University, China
  • Xi Chen is a Professor at Yale University & President of the China Health Policy and Management Society

Revised Abstract: This paper models the local and cross-city transmissions of the novel coronavirus in China between January 19 and February 29 in 2020. We examine the role of various socioeconomic mediating factors, including public health measures that encourage social distancing in local communities. Weather characteristics two weeks ago are used as instrumental variables for causal inference. Stringent quarantine, city lockdown, and local public health measures imposed since late January significantly decreased the virus transmission rate. The virus spread was contained by the middle of February. Population outflow from the outbreak source region posed a higher risk to the destination regions than other factors including geographic proximity and similarity in economic conditions. We quantify the effects of different public health measures in reducing the number of infections through counterfactual analyses. Over 1.4 million infections and 56,000 deaths could have been avoided as a result of the national and provincial public health measures imposed in late January in China.

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The #Coronavirus Crisis and #happiness in real-time. A research program for Australia, New Zealand and South Africa of Talita Greyling and Stephanié Rossouw of GLO.

Will happiness levels return to normal before the end of 2020? Talita Greyling and Stephanié Rossouw of GLO analyze the situation, as it happens – real-time happiness levels and emotions (www.gnh.today) during the evolution of the Coronavirus Crisis. The Gross National Happiness data set used (a real-time Happiness Index) is an ongoing project, the two researchers launched in April 2019 in South-Africa, New-Zealand and Australia. 

The project is presented below and documents the development of real-time happiness in Australia, New Zealand and South Africa in the periods of the outbreak of the Coronacrisis in those countries.

The authors

Talita Greyling: School of Economics, University of Johannesburg, South Africa, and GLO; email: talitag@uj.ac.za
Stephanié Rossouw: Faculty of Business, Economics and Law, Auckland University of Technology, Auckland, New Zealand,and GLO; email: stephanie.rossouw@aut.ac.nz

The analysis

Traditionally, economists measured the well-being of people or a nation by using objective economic indicators such as gross domestic product (GDP). We know that these indicators do not measure well-being per se, but merely specific conditions, which is believed to lead to a good life. What we should be measuring is whether people’s lives are getting better? In general, when people are happy and satisfied with their life, it signals that they have a higher level of well-being.

Gross National Happiness (GNH) refers to the level of happiness for a group of citizens or nations and the best-known surveys that captures cross country data are the Gallup World Poll Survey data and World Value Survey data. In these surveys we find measures of subjective-wellbeing, thus evaluative happiness, which if averaged across a country gives the mean subjective well-being of a specific country. Although these measures of subjective well-being are very useful and informative there are significant time-lags between real-time events and the reporting of this evaluative happiness levels. What is needed is a real-time measure of happiness.

Using social media and the voluntary information sharing structure of Twitter, Greyling and Rossouw (in collaboration with AFSTEREO) have been determining the happiness in real-time (mood) of citizens in Australia, New Zealand and South Africa since April 2019 (http://gnh.today/), and lately also been analyzing the specific emotions of Tweets, distinguishing between eight emotions, anger, anticipation, disgust, fear, joy, sadness, trust and surprise.

They analyze extracted Tweets using sophisticated software to determine the sentiment and the emotions of the Tweets. Sentiment analysis is used to label a ‘live’ stream of tweets of these countries as having either a positive, neutral or negative sentiment after which a sentiment balance algorithm is applied to derive a happiness score. The scale of the happiness scores is between 0 (not happy) and 10 (very happy), with 5 being neutral, thus neither happy nor unhappy. In this manner, they have been tracking the ‘mood’ of these nations and analyzed the impact of various economic (industrial actions), political (national elections), social (death of Kobe Bryant and COVID-19, xenophobia, music concerts) and sport events on happiness levels, as early as one hour after it happened. See Figures 1-3 for a peek into what the happiness index can ascertain.

As can be seen from Figure 1, on 25 January when Australia confirmed its first COVID-19 case, there was very little reaction. Happiness even increased somewhat after the announcement, though the higher levels of happiness were related to sport events. The dip in the happiness on 27 January was due to the death of the American basketball player, Kobe Bryant. On 17 March when Prime Minister Scott Morrison banned gatherings larger than 100 people, we for the first time saw a significant decrease in the happiness levels. The Australians are not on complete lockdown, but it seems that their happiness levels continue to stay below pre-Corona times. We will be tracking these changes in the coming weeks, to see if the happiness levels return to pre-Corona levels as time goes by.


Coincidentally, until the outbreak of COVID-19, the lowest happiness level in New Zealand was on 27 January (6.43), also signalling New Zealanders’ empathy with Kobe Bryant’s death. As can be seen from the Figure 2, on 28 February when New Zealand confirmed its first COVID-19 case, there was very little reaction. On 4 March, New Zealand experienced the ‘Toilet paper apocalypse’, but it wasn’t until 13 March that the lowest level of happiness (6.37) was recorded. People were devastated by all the concert and festival cancellations, because of COVID-19. The first day of complete lockdown was on 26 March.  We will be monitoring whether New Zealanders adjust to their new normal over the coming weeks.

As can be seen from Figure 3, on 6 March when South Africa confirmed its first COVID-19 case, the happiness level was above the average for the period preceding the outbreak, as well as the total average. It wasn’t until 16 March when reality set in for most South Africans after President Cyril Ramaphosa declared a national state of disaster, that we saw a decrease in happiness levels. When the announcement came on 23 March, that a complete lockdown of South Africa will commence on 27 March, the index fell to its lowest level yet (5.35). We will be monitoring whether South Africans adjust to their new normal over the coming weeks.

Technical Support by AFSTEREO

Reference
Greyling T. & Rossouw S. 2020. Gross National Happiness Project. Afstereo (IT partner). University of Johannesburg (funding agency). Pretoria, South Africa.  www.gnh.today.

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Career and life satisfaction: Does it pay to be happy? New research from the GLO network.

Does life satisfaction affect your career? The results of a new study demonstrate it does. The study, published in Kyklos by GLO Fellow Kelsey J. O’Connor, finds more satisfied people are less likely to lose their jobs and if unemployed, more likely to become reemployed within a year. These benefits can be explained in part through noncognitive skills. For instance, more satisfied people are also more optimistic, conscientious, extraverted, and emotionally stable, factors that are, unsurprisingly, useful in the labor force.  

You may have suspected that happy people perform better at work. Indeed, happier people are healthier and earn higher incomes, based on observational and experimental evidence. Happiness also contributes positively to countries’ production. These represent just a few of the findings. For more evidence, see the chapter dedicated to the benefits of happiness in the United Nations World Happiness Report 2013.

O’Connor (2020) differs by demonstrating greater life satisfaction today reduces the likelihood of being unemployed a year from now. The reverse, that unemployment brings unhappiness, is well known, see in particular the study of GLO Fellows Winkelmann and Winkelmann (1998) with over 2000 Google Scholar cites. Analyses are based on the German Socio-Economic Panel and include separate dynamic and fixed-effects regressions, and two instrumental variable approaches. Regressions include a rich set of controls, especially relevant are unemployment history, and perceptions of both job security and reemployment opportunities.

The impact of life satisfaction on unemployment is not negligible. Increasing life satisfaction from approximately a 7 to an 8 on a scale from 0 to 10, reduces the likelihood of unemployment by approximately five percent.

To be precise, the focus of O’Connor (2020) is self-reported life satisfaction, which is distinct but closely related to happiness. See the OECD Guidelines on Measuring Subjective Well-Being for further details. For responses to recent criticisms of subjective well-being measures like happiness and life satisfaction, see Kaiser and Vendrik or Chen et al. (2019).

As suggested, noncognitive skills help to explain how life satisfaction affects unemployment. O’Connor (2020) offers evidence that noncognitive skills and life satisfaction are positively correlated in fixed effects regressions with complete socio-economic controls. A significant portion of life satisfaction is derived from noncognitive skills, and there are now quite a few studies that show noncognitive skills are important for workplace outcomes. In formal economic theory, they represent capabilities that are important for different outcomes, just like physical ability or intelligence. Similarly, in other work authored by O’Connor and GLO Fellow Carol Graham, the authors demonstrate that optimistic people live longer, based on nearly 50 years of longitudinal data. Indeed, they find an optimistic belief structure is more important for life expectancy than income or cognitive ability.

Happiness is important. Philosophers throughout time and around the world have stated it. Yet many policy makers are reluctant to invest explicitly in happiness. The findings of O’Connor (2020) give them another reason. Policies that target noncognitive skills and life satisfaction, in schools for example, should not only improve life satisfaction, but also labor market performance.

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Papal visits and abortions: Article published open access in the Journal of Population Economics

A new paper published in the Journal of Population Economics shows that papal visits lead to increased church attendance and a decline in abortions that is greater when the Pope mentions abortion in his speeches.

Read more in:

Egidio Farina, & Vikram Pathania:
Papal visits and abortions: evidence from Italy
OPEN ACCESS; published online. Forthcoming Journal of Population Economics (2020), Issue 3.
Download PDF

GLO Fellow Egidio Farina

Author Abstract: We investigate the impact of papal visits to Italian provinces on abortions from 1979 to 2012. Using administrative data, we find a 10–20% decrease in the number of abortions that commences in the 3rd month and persists until the 14th month after the visits. However, we find no significant change in the number of live births. A decline in unintended pregnancies best explains our results. Papal visits generate intense local media coverage, and likely make salient the Catholic Church’s stance against abortions. We show that papal visits lead to increased church attendance, and that the decline in abortions is greater when the Pope mentions abortion in his speeches.

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Risk sharing, siblings, and household equity. Paper published in the April 2020 issue of the Journal of Population Economics.

Journal of Population Economics (2020) 33: 461–482. In China, social networks play an important role in risk sharing. The paper shows that the main channel through which siblings affect household investment is risk sharing.

Risk sharing, siblings, and household equity investment: Evidence from urban China — by Xiaoyu Wu & Jianmei Zhao

New issue publishedLink to all articles

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Leadership delegation in rotten kid families. Paper published in the April 2020 issue of the Journal of Population Economics.

Journal of Population Economics (2020) 33: 441-460. The paper shows that the optimality of authority (leadership) delegation for the sequential-action game played by rotten kids and a parent depends crucially on the degree of heterogeneity in the kids’ preferences. The findings contribute to the debate about the social desirability of the authoritative parenting style.

Leadership delegation in rotten kid families — by João Ricardo Faria, Emilson Caputo & Delfino Silva

New issue publishedLink to all articles

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Birth order and unwanted fertility. Paper published in the April 2020 issue of the Journal of Population Economics.

Journal of Population Economics (2020) 33: 413-440. The paper documents that children higher in the birth order are much more likely to be unwanted, and this is associated with negative life cycle outcomes.

Birth order and unwanted fertility — by Wanchuan Lin, Juan Pantano, Shuqiao Sun

New issue publishedLink to all articles

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Effects of patents on the transition from stagnation to growth. Lead paper in the April 2020 issue of the Journal of Population Economics

Journal of Population Economics (2020) 33: 395–411. The paper provides a growth-theoretic analysis of the effects of intellectual property rights on the take-off of an economy from an era of stagnation to a state of sustained economic growth. Strengthening patent protection leads to an earlier take-off but also reduces economic growth in the long run.

Effects of patents on the transition from stagnation to growth

by Angus C. Chu, Zonglai Kou & Xilin Wang

LINK to OPEN ACCESS

New issue publishedLink to all articles

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2020 Kuznets Prize Awarded to Gautam Hazarika, Chandan Kumar Jha & Sudipta Sarangi. Award Ceremony on January 3, 2020 at the ASSA Meeting in San Diego/USA

2020 Kuznets Prize Awarded to Gautam Hazarika, Chandan Kumar Jha & Sudipta Sarangi

Gautam Hazarika (University of Texas Rio Grande Valley), Chandan Kumar Jha (Le Moyne College, Madden School of Business), and Sudipta Sarangi (Virginia Tech) will receive the 2020 Kuznets Prize for their article (please click title for FREE READ LINK)

Ancestral ecological endowments and missing women

which was published in the Journal of Population Economics (2019), 32(4), pp. 1101-1123. The annual prize honors the best article published in the Journal of Population Economics.

The award will be given to the authors during the ASSA 2020 meeting in San Diego, USA, at a reception on Friday, Jan. 3, 2020, 6:00 PM – 8:00 PM, at the Marriott Marquis San Diego, Coronado Room, hosted by the Institute for Economic and Social Research (IESR) of Jinan University.

Biographical Abstracts

Gautam Hazarika is presently Associate Professor of Economics at The University of Texas Rio Grande Valley, the newest branch of the University of Texas system. He completed his undergraduate education at the University of Delhi’s St. Stephen’s College, and his Ph.D. at the University of Rochester. His research has spanned labor and development economics. He is presently conducting research in economic anthropology. Dr. Hazarika’s research has appeared in such journals as American Journal of Agricultural Economics, Review of Income and Wealth, the Journal of Development Studies, and, recently, the Journal of Population Economics.

Chandan Kumar Jha is an Assistant Professor of Finance at the Madden School of Business, Le Moyne College. He holds a Ph.D. and an M.S. from Louisiana State University. His research interests lie in the areas of economic growth and development, political economy, and finance and development. His current research topics include corruption, gender inequality, financial risk, and economic and financial reforms. He has published several research articles in many reputed journals such as the Journal of Economic Behavior & Organization, the Journal of Population Economics, International Review of Finance, and Information Economics and Policy.

Sudipta Sarangi is currently Department Head and Professor of Economics at Virginia Polytechnic Institute and State University. His research interests range from network theory to development economics. He studies how gender differences affect economic activity, as well as the origins of gender inequality. His work on networks focuses on the strategic formation of social and economic networks and how participation in multiple networks affects social outcomes. He is a research associate of DIW Berlin, GATE, University of Lyon-St. Etienne and the Lima School of Economics. He serves on the editorial boards of Journal of Economic Behavior and Organization, Journal of Public Economic Theory and Studies in Microeconomics.

Abstract of the Winning Paper

“This paper examines the relationship between ecological endowments in antiquity and contemporary female to male sex ratios in the population. It is found that there are proportionately more missing women in countries whose ancestral ecological endowments were poorer. This relationship is shown to be strong even after ancestral plough use, the timing of the Neolithic Transition, and many other potentially confounding factors are controlled for. Similar results are also obtained using district-level data from India.”

About the Kuznets Prize

The Journal of Population Economics awards the ‘Kuznets Prize’ for the best paper published in the Journal of Population Economics in the previous year. Starting from 2014 the Prize has been awarded annually. Papers are judged by the Editors of the Journal.

Simon Kuznets, a pioneer in population economics, Professor Emeritus at Harvard University and the 1971 Nobel Prize laureate in economics, died on July 10, 1985. Professor Kuznets was born 1901 in Pinsk, Belarus, and came to the United States in 1922. He earned his Bachelor of Science in 1923, a Master of Arts degree in 1924 and his doctorate in 1926, all from Columbia University. During World War II he was Associate Director of the Bureau of Planning and Statistics on the War Production Board, and he served on the staff of the National Bureau of Economic Research from 1927 to 1960. Mr. Kuznets was a faculty member at the University of Pennsylvania for 24 years and Professor of Political Economy at Johns Hopkins University from 1954 until he joined Harvard University in 1960. He retired in 1971 and was given the title of George F. Baker Professor Emeritus of Economics. He was a former president of the American Economic Association and the American Statistical Association.

Previous Winners

The Kuznets Prize (please click titles for READ LINKS FOR FREE) has previously been awarded to:

2019: Yoo-Mi Chin (Baylor University) and Nicholas Wilson (Reed College) for their article “Disease risk and fertility: evidence from the HIV/AIDS pandemic,” Journal of Population Economics 31(2): pp. 429-451.

2018: Chunbei Wang and Le Wang (University of Oklahoma) for their article “Knot yet: Minimum marriage age law, marriage delay, and earnings,” Journal of Population Economics 30(3): pp. 771-804.

2017: Binnur Balkan (Stockholm School of Economics) and Semih Tumen (Central Bank of the Republic of Turkey) for their article “Immigration and prices: quasi-experimental evidence from Syrian refugees in Turkey,” Journal of Population Economics 29(3): pp. 657-686.

2016: Loren Brandt (University of Toronto), Aloysius Siow (University of Toronto), and Hui Wang (Peking University) for their article “Compensating for unequal parental investments in schooling,” Journal of Population Economics 28: 423-462.

2015: Haoming Liu (National University of Singapore) for his article “The quality–quantity trade-off: evidence from the relaxation of China’s one-child policy”, Journal of Population Economics 27: 565-602.

2014: Paolo Masella (University of Essex) for his article “National Identity and Ethnic Diversity“, Journal of Population Economics 26: 437-454.

Period 2010-2012: Richard W. Evans (Brigham Young University), Yingyao Hu (Johns Hopkins University) and Zhong Zhao (Renmin University) for their article “The fertility effect of catastrophe: US hurricane births“, Journal of Population Economics 23: 1-36.

Period 2007-2009: Makoto Hirazawa (Nagoya University) and Akira Yakita (Nagoya University) for their article “Fertility, child care outside the home, and pay-as-you-go social security“, Journal of Population Economics 22: 565-583.

Period 2004-2006: Jinyoung Kim (Korea University) received the Kuznets Prize for his article “Sex selection and fertility in a dynamic model of conception and abortion,” Journal of Population Economics 18: 041-067.

Period 2001–2003: Olympia Bover (Bank of Spain) and Manuel Arellano (CEMFI), for their article “Learning about migration decisions from the migrants: Using complementary datasets to model intra-regional migrations in Spain”, Journal of Population Economics 15:357–380.

Period 1998–2000: David C. Ribar (The George Washington University), for his article “The socioeconomic consequences of young women’s childbearing: Reconciling disparate evidence”, Journal of Population Economics 12: 547–565.

Period 1995–1997: James R. Walker (University of Wisconsin-Madison), for his article “The effect of public policies on recent Swedish fertility behavior”, Journal of Population Economics, 8: 223–251.

Political regimes may affect time preferences within the respective societies: Evidence from Germany.

An article in the January 2020 issue of the Journal of Population Economics reveals that former residents of the German Democratic Republic have a smaller present bias than former residents of the Federal Republic of Germany.

Read more in:

Time preferences and political regimes: evidence from reunified Germany
Tim Friehe & Markus Pannenberg

READ LINK: https://rdcu.be/bXokz

Journal of Population Economics 33 (2020), 349–387
GLO Discussion Paper No. 306, 2019.

GLO Fellow Markus Pannenberg

Author Abstract: We use the separation and later reunification of Germany after World War II to show that a political regime shapes time preferences of its residents. Using two identification strategies, we find that former residents of the German Democratic Republic exhibit a significantly less pronounced present bias when compared with former residents of the Federal Republic of Germany, whereas measures of patience are statistically indistinguishable. Interpreting the years spent under the regime as a proxy for treatment intensity yields consistent results. Moreover, we present evidence showing that present bias predicts choices in the domains of health, finance, and education, thereby illustrating lasting repercussions of a regime’s influence on time preferences.

Read also the Lead Article of issue 1 (2020):
Hate at first sight? Dynamic aspects of the electoral impact of migration: the case of Ukip
Eugenio Levi, Rama Dasi Mariani & Fabrizio Patriarca
FREE READ LINK: https://rdcu.be/bXnWI
Journal of Population Economics, Vol. 33 (2020), Issue 1 (January), pp. 1-32.
GLO Fellows Eugenio Levi, Rama Dasi Mariani & Fabrizio Patriarca
Complete issue 1, read access to all articles.

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To what extent can shifts in marital preferences explain inequality trends?

An article published in the January 2020 issue of the Journal of Population Economics finds that assortative mating in education has become stronger in the United States, which has contributed to the observed rise in inequality.

Read more in:

The role of evolving marital preferences in growing income inequality
Edoardo Ciscato & Simon Weber

READ LINK: https://rdcu.be/bXokl

Journal of Population Economics 33 (2020), 307–347

Author Abstract: In this paper, we describe mating patterns in the USA from 1964 to 2017 and measure the impact of changes in marital preferences on between-household income inequality. We rely on the recent literature on the econometrics of matching models to estimate complementarity parameters of the household production function. Our structural approach allows us to measure sorting along multiple dimensions and to effectively disentangle changes in marital preferences and in demographics, addressing concerns that affect results from existing literature. We answer the following questions: Has assortativeness increased over time? Along which dimensions? To what extent can the shifts in marital preferences explain inequality trends? We find that, after controlling for other observables, assortative mating in education has become stronger. Moreover, if mating patterns had not changed since 1971, the 2017 Gini coefficient between married households would be 6% lower. We conclude that about 25% of the increase in between-household inequality is due to changes in marital preferences. Increased assortativeness in education positively contributes to the rise in inequality, but only modestly.

Read also the Lead Article of issue 1 (2020):
Hate at first sight? Dynamic aspects of the electoral impact of migration: the case of Ukip
Eugenio Levi, Rama Dasi Mariani & Fabrizio Patriarca
FREE READ LINK: https://rdcu.be/bXnWI
Journal of Population Economics, Vol. 33 (2020), Issue 1 (January), pp. 1-32.
GLO Fellows Eugenio Levi, Rama Dasi Mariani & Fabrizio Patriarca
Complete issue 1, read access to all articles.

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Mortality inequality in France and the United States

Despite a measured strong cross-sectional relationship between income and health, a new article in the January 2020 issue of the Journal of Population Economics finds no necessary connection between changes in income inequality and changes in health inequality.

Read more in:

Pauvreté, Egalité, Mortalité: mortality (in)equality in France and the United States
Janet Currie, Hannes Schwandt & Josselin Thuilliez

READ LINK: https://rdcu.be/bXojg

Journal of Population Economics 33 (2020), 197–231

GLO Fellow Hannes Schwandt

Author Abstract: We develop a method for comparing levels and trends in inequality in mortality in the United States and France between 1990 and 2010 in a similar framework. The comparison shows that while income inequality has increased in both the United States and France, inequality in mortality in France remained remarkably low and stable. In the United States, inequality in mortality increased for older groups (especially women) while it decreased for children and young adults. These patterns highlight the fact that despite the strong cross-sectional relationship between income and health, there is no necessary connection between changes in income inequality and changes in health inequality.

Read also the Lead Article of issue 1 (2020):
Hate at first sight? Dynamic aspects of the electoral impact of migration: the case of Ukip
Eugenio Levi, Rama Dasi Mariani & Fabrizio Patriarca
FREE READ LINK: https://rdcu.be/bXnWI
Journal of Population Economics, Vol. 33 (2020), Issue 1 (January), pp. 1-32.
GLO Fellows Eugenio Levi, Rama Dasi Mariani & Fabrizio Patriarca
Complete issue 1, read access to all articles.

Ends;

Migrant Social Networks Mitigate Mental Health Challenges in China

A new article in the January 2020 issue of the Journal of Population Economics suggests that migrant social networks in host cities mitigate adverse mental health challenges of Chinese rural-urban migrant workers.

Read more in:

Social networks and mental health outcomes: Chinese rural–urban migrant experience
Xin Meng & Sen Xue

READ LINK: https://rdcu.be/bXoi1

Journal of Population Economics 33 (2020), 155–195
GLO Discussion Paper No. 370, 2019.

GLO Fellows Xin Meng & Sen Xue

Author Abstract: Over the past two decades, more than 160 million Chinese rural workers have migrated to cities to work. They are separated from their familiar rural networks to work in an unfamiliar, and often hostile, environment. Many of them thus face significant mental health challenges. This paper is the first to investigate the extent to which migrant social networks in host cities can mitigate these adverse mental health effects. Using unique longitudinal survey data from Rural-to-Urban Migration in China (RUMiC), we find that network size matters significantly for migrant workers. Our preferred instrumental variable estimates suggest that a one standard deviation increase in migrant city networks, on average, reduces the measure of mental health problems by 0.47 to 0.66 of a standard deviation. Similar effects are found among the less educated, those working longer hours, and those without access to social insurance. The main channel of the network effect is through boosting migrants’ confidence and reducing their anxiety.

Read also the Lead Article of issue 1 (2020):
Hate at first sight? Dynamic aspects of the electoral impact of migration: the case of Ukip
Eugenio Levi, Rama Dasi Mariani & Fabrizio Patriarca
FREE READ LINK: https://rdcu.be/bXnWI
Journal of Population Economics, Vol. 33 (2020), Issue 1 (January), pp. 1-32.
GLO Fellows Eugenio Levi, Rama Dasi Mariani & Fabrizio Patriarca
Complete issue 1, read access to all articles.

Ends;

Intergenerational altruism: Evidence from the African American Great Migration

A new article in the January 2020 issue of the Journal of Population Economics suggests that intergenerational altruism explains between 24 and 42% of the African American northward migration.

Read more in:

Intergenerational altruism in the migration decision calculus: evidence from the African American Great Migration
John Gardner

READ LINK: https://rdcu.be/bXohN

Journal of Population Economics 33 (2020), 115–154

GLO Fellow John Gardner

Author Abstract: It is widely believed that many migrations are undertaken at least in part for the benefit of future generations. To provide evidence on the effect of intergenerational altruism on migration, I estimate a dynamic residential location choice model of the African American Great Migration in which individuals take the welfare of future generations into account when deciding to remain in the Southern USA or migrate to the North. I measure the influence of altruism on the migration decision as the implied difference between the migration probabilities of altruistic individuals and myopic ones who consider only current-generation utility when making their location decisions. My preferred estimates suggest that intergenerational altruism explains between 24 and 42% of the Northward migration that took place during the period that I study, depending on the generation.

Read also the Lead Article of issue 1 (2020):
Hate at first sight? Dynamic aspects of the electoral impact of migration: the case of Ukip
Eugenio Levi, Rama Dasi Mariani & Fabrizio Patriarca
FREE READ LINK: https://rdcu.be/bXnWI
Journal of Population Economics, Vol. 33 (2020), Issue 1 (January), pp. 1-32.
GLO Fellows Eugenio Levi, Rama Dasi Mariani & Fabrizio Patriarca
Complete issue 1, read access to all articles.

Ends;

Does foreign aid reduce asylum migration?

A new article in the January 2020 issue of the Journal of Population Economics suggests that foreign aid may reduce asylum inflows from poor countries in the short run, but inflows from less poor economies show a positive but weak relation with aid. Aid is not an effective instrument to avoid migration flows.

Read more in:

Foreign aid, bilateral asylum immigration and development
Marina Murat

READ LINK: https://rdcu.be/bXofD

Journal of Population Economics 33 (2020), 79–114
GLO Discussion Paper No. 378, 2019.

GLO Fellow Marina Murat

Author Abstract: This paper measures the links between aid from 14 rich to 113 developing economies and bilateral asylum applications during the years 1993 to 2013. Results show that asylum applications are related to aid in a U-shaped fashion with respect to the level of development of origin countries, although only the downward segment proves to be robust to all specifications. Asylum inflows from poor countries are significantly and negatively associated with aid in the short run, with mixed evidence of more lasting effects, while inflows from less poor economies show a positive but non-robust relationship to aid. Moreover, aid leads to negative cross-donor spillovers. Applications linearly decrease with humanitarian aid. Voluntary immigration is not related to aid. Overall, the reduction in asylum inflows is stronger when aid disbursements are conditional on economic, institutional and political improvements in the recipient economy.

Read also the Lead Article of issue 1 (2020):
Hate at first sight? Dynamic aspects of the electoral impact of migration: the case of Ukip
Eugenio Levi, Rama Dasi Mariani & Fabrizio Patriarca
FREE READ LINK: https://rdcu.be/bXnWI
Journal of Population Economics, Vol. 33 (2020), Issue 1 (January), pp. 1-32.
GLO Fellows Eugenio Levi, Rama Dasi Mariani & Fabrizio Patriarca
Complete issue 1, read access to all articles.

Ends;

Brexit, UK voting and hate against migrants.

Are new immigrants causing persistent voting effects? The lead article in the January 2020 issue of the Journal of Population Economics suggests that the voting effects are short-term only.

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Read free the Lead Article of issue 1 (2020) of the Journal of Population Economics :

Hate at first sight? Dynamic aspects of the electoral impact of migration: the case of Ukip
Eugenio Levi, Rama Dasi Mariani & Fabrizio Patriarca
Journal of Population Economics, Vol. 33 (2020), Issue 1 (January), pp. 1-32.

FREE READ LINK: https://rdcu.be/bXnWI

GLO Fellows Eugenio Levi, Rama Dasi Mariani & Fabrizio Patriarca

Based on GLO Discussion Paper No. 364, 2019.
Background paper of GLO Research for Policy Note No. 3, 2019.

Complete issue 1, 2020 of the Journal of Population Economics, read access to all articles.

Author Abstract: In this paper, we test the hypothesis that the causal effect of immigrant presence on anti-immigrant votes is a short-run effect. For this purpose, we consider a distributed lag model and adapt the standard instrumental variable approach proposed by Altonji and Card (1991) to a dynamic framework. The evidence from our case study, votes for the UK Independent Party (Ukip) in recent European elections, supports our hypothesis. Furthermore, we find that this effect is robust to differences across areas in terms of population density and socioeconomic characteristics, and it is only partly explained by integration issues.

Ends;

What drives the nativity wealth gap in Europe? OPEN ACCESS published in the Journal of Population Economics.

The paper studies the migrant-native differences in wealth among older households in Europe which is significant and to the advantage of the natives. The importance of origin country, age at migration, and citizenship status in reducing the gap is shown.

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The nativity wealth gap in Europe: a matching approach
Irene Ferrari
» Abstract   » Full text HTML   » Full text PDF      READ LINK: https://rdcu.be/bXofj
OPEN ACCESS: Journal of Population Economics 33 (2020): 33–77
GLO Discussion Paper No. 325, 2019.

GLO Fellow Irene Ferrari

Author Abstract: This study uses a matching method to provide an estimate of the nativity wealth gap among older households in Europe. This approach does not require imposing any functional form on wealth and avoids validity-out-of-the-support assumptions; furthermore, it allows estimation not only of the mean of the wealth gap but also of its distribution for the common-support sub-population. The results show that on average there is a positive and significant wealth gap between natives and migrants. However, the average gap may be misleading as the distribution of the gap reveals that immigrant households in the upper part of the wealth distribution are better off, and those in the lower part of the wealth distribution are worse off, than comparable native households. A heterogeneity analysis shows the importance of origin, age at migration, and citizenship status in reducing the gap. Indeed, households who migrated within Europe, those who moved at younger ages rather than as adults, and those who are citizens of the destination country display a wealth gap that is consistently smaller over the entire distribution.

Read also the Lead Article of issue 1 (2020):
Hate at first sight? Dynamic aspects of the electoral impact of migration: the case of Ukip
Eugenio Levi, Rama Dasi Mariani & Fabrizio Patriarca
» Abstract» Full text HTML» Full text PDF FREE READ LINK: https://rdcu.be/bXnWI
Journal of Population Economics, Vol. 33 (2020), Issue 1 (January), pp. 1-32.
GLO Fellows Eugenio Levi, Rama Dasi Mariani & Fabrizio Patriarca
Complete issue 1, read access to all articles.

Ends;

Parental responses to children’s revealed human capital’: Now published in the Journal of Population Economics.

The article finds that parents compensate disadvantaged children with greater cognitive resources using data from primary school-aged Ethiopian siblings.

Read more in:

Reinforcement or compensation? Parental responses to children’s revealed human capital levels
Wei Fan & Catherine Porter
» Abstract   » Full text HTML   » Full text PDF READ LINK: https://rdcu.be/bXojV
OPEN ACCESS: Journal of Population Economics 33 (2020): 233–270

Author Abstract: A small but increasing body of literature finds that parents invest in their children unequally. However, the evidence is contradictory, and providing convincing causal evidence of the effect of child ability on parental investment in a low-income context is challenging. This paper examines how parents respond to the differing abilities of primary school-aged Ethiopian siblings, using rainfall shocks during the critical developmental period between pregnancy and the first 3 years of a child’s life to isolate exogenous variations in child ability within the household, observed at a later stage than birth. The results show that on average parents attempt to compensate dis-advantaged children through increased cognitive investment. The effect is significant,but small in magnitude: parents provide about 3.9% of a standard deviation more in educational fees to the lower-ability child in the observed pair. We provide suggestive evidence that families with educated mothers, smaller household size and higher wealth compensate with greater cognitive resources for a lower-ability child.

Read also the Lead Article of issue 1 (2020):
Hate at first sight? Dynamic aspects of the electoral impact of migration: the case of Ukip
Eugenio Levi, Rama Dasi Mariani & Fabrizio Patriarca
» Abstract» Full text HTML» Full text PDF FREE READ LINK: https://rdcu.be/bXnWI
Journal of Population Economics, Vol. 33 (2020), Issue 1 (January), pp. 1-32.
GLO Fellows Eugenio Levi, Rama Dasi Mariani & Fabrizio Patriarca
Complete issue 1, read access to all articles.

Ends;

Decomposing the gender pay gap in the USA: Now published in the Journal of Population Economics.

Gender pay gaps are still of much concern, in particular in the United States. A paper published in the Journal of Population Economics adds to our understanding how the gender gap is shaped by multiple different forces such as parenthood, gender segregation, part-time work and unionization.

Read more in:

The gender pay gap in the USA: a matching study
Katie Meara, Francesco Pastore & Allan Webster
» Abstract   » Full text HTML   » Full text PDF         READ LINK: https://rdcu.be/bXokf
OPEN ACCESS: Journal of Population Economics 33 (2020): 271–305

GLO Fellows Francesco Pastore & Allan Webster
The paper is also GLO Discussion Paper No. 363, 2019.

Author Abstract: This study examines the gender wage gap in the USA using two separate cross-sections from the Current Population Survey (CPS). The extensive literature on this subject includes wage decompositions that divide the gender wage gap into “explained” and “unexplained” components. One of the problems with this approach is the heterogeneity of the sample data. In order to address the difficulties of comparing like with like, this study uses a number of different matching techniques to obtain estimates of the gap. By controlling for a wide range of other influences, in effect, we estimate the direct effect of simply being female on wages. However, a number of other factors, such as parenthood, gender segregation, part-time working, and unionization, contribute to the gender wage gap. This means that it is not just the core “like for like” comparison between male and female wages that matters but also how gender wage differences interact with other influences. The literature has noted the existence of these interactions, but precise or systematic estimates of such effects remain scarce. The most innovative contribution of this study is to do that. Our findings imply that the idea of a single uniform gender pay gap is perhaps less useful than an understanding of how gender wages are shaped by multiple different forces.

Read also the Lead Article of issue 1 (2020):
Hate at first sight? Dynamic aspects of the electoral impact of migration: the case of Ukip
Eugenio Levi, Rama Dasi Mariani & Fabrizio Patriarca
» Abstract» Full text HTML» Full text PDF      FREE READ LINK: https://rdcu.be/bXnWI
Journal of Population Economics, Vol. 33 (2020), Issue 1 (January), pp. 1-32.
GLO Fellows Eugenio Levi, Rama Dasi Mariani & Fabrizio Patriarca
Complete issue 1, read access to all articles.

Ends;

Issue January 2020 of the Journal of Population Economics, Volume 33 Number 1, now available online!

The issue is now available online. Three articles are open access. All articles listed below have a READ LINK which allows free reading. These links can be freely used on websites and in the social media. The link enables to READ the article. For the concept behind read more: https://www.springernature.com/gp/researchers/sharedit

Journal of Population Economics, Volume 33 Number 1, January 2020

Hate at first sight? Dynamic aspects of the electoral impact of migration: the case of Ukip
Eugenio Levi, Rama Dasi Mariani & Fabrizio Patriarca
» Abstract» Full text HTML» Full text PDF      READ LINK: https://rdcu.be/bXnWI

The nativity wealth gap in Europe: a matching approach
Irene Ferrari
» Abstract   » Full text HTML   » Full text PDF      READ LINK: https://rdcu.be/bXofj
OPEN ACCESS

Foreign aid, bilateral asylum immigration and development
Marina Murat
» Abstract   » Full text HTML   » Full text PDF READ LINK: https://rdcu.be/bXofD

Intergenerational altruism in the migration decision calculus: evidence from the African American Great Migration
John Gardner
» Abstract   » Full text HTML   » Full text PDF       READ LINK: https://rdcu.be/bXohN

Social networks and mental health outcomes: Chinese rural–urban migrant experience
Xin Meng & Sen Xue
» Abstract   » Full text HTML   » Full text PDF        READ LINK: https://rdcu.be/bXoi1

Pauvreté, Egalité, Mortalité: mortality (in)equality in France and the United States
Janet Currie, Hannes Schwandt & Josselin Thuilliez
» Abstract   » Full text HTML   » Full text PDF         READ LINK: https://rdcu.be/bXojg

Reinforcement or compensation? Parental responses to children’s revealed human capital levels
Wei Fan & Catherine Porter
» Abstract   » Full text HTML   » Full text PDF READ LINK: https://rdcu.be/bXojV
OPEN ACCESS

The gender pay gap in the USA: a matching study
Katie Meara, Francesco Pastore & Allan Webster
» Abstract   » Full text HTML   » Full text PDF         READ LINK: https://rdcu.be/bXokf
OPEN ACCESS

The role of evolving marital preferences in growing income inequality
Edoardo Ciscato & Simon Weber
» Abstract   » Full text HTML   » Full text PDF         READ LINK: https://rdcu.be/bXokl

Time preferences and political regimes: evidence from reunified Germany
Tim Friehe & Markus Pannenberg
» Abstract   » Full text HTML   » Full text PDF        READ LINK: https://rdcu.be/bXokz

Ends;

Azita Berar on ‘Youth Policies: time to change the policy narratives!’. GLO Policy Brief No. 2.

Azita Berar is Director Policy of the Global Labor Organization (GLO), and Senior Fellow, Graduate Institute of International and Development Studies, Geneva.

GLO Policy Brief No. 2 – Theme 4. Youth Employment


Youth Policies: time to change the policy narratives!

by Azita Berar

Recent waves of unrelenting protests, in major cities around the world, express shared grievances and demands for change,  even if each has its specificities. Anger against inequalities, social injustice and corruption, and loss of trust in institutions and their leadership rekindle demands for decent job opportunities, access to quality public services, democratic participation and reform of institutions. For most observers, these protests look like a resurgence of the stalled “Arab spring”  uprisings, of the “indignados” outbursts, or of the “occupy movement” of the early years of the current decade. Then and now, multiple social-economic groups  took part in the protests. But, then and now, youth, who have particularly experienced the downward spiral in economic and social opportunities, are at the forefront of mobilizations demanding systemic changes.
The outbreaks, whatever the immediate reason that sparked each, are a reminder that the predicaments of youth transitions, in work, society and polity, brought to the fore by the 2008 global financial crisis, remain unresolved.
Reviewing the policy responses put in place in this decade, we argue for a change in the  prevailing policy narratives around youth at the national and global levels. In particular,  we advocate for: a) recognizing the structural nature of the crisis that calls for a systemic response, and b) undoing the present compartmentalization of policy responses and c) dissociating the security and development discourses whose merger prevents and disorients the search for effective solutions.
____________________

What we should know

  • The 2008 global financial and economic crisis, and the recession that it triggered, generated an unprecedented  impact on youth in labour markets, characterized then as  the “scarred generation” or “lost generation”.[1] Attention to youth employment heightened again during the Arab uprisings, which started in Tunisia in 2010 and then spread to several countries in the Middle East and North Africa.[2] Emphasis was laid first and foremost on the scale and length of youth unemployment” hitting newcomers to labour markets starting their transition from school to work. More sophisticated diagnoses applying a range of unconventional indicators of quality of jobs, revealed a more profound and pervasive youth employment crisis than that expressed in open unemployment. The lack of “decent work” was brought out. Emphasis was  laid on the millions of young women and men who have  jobs  that are unstable, temporary,  low-paid, do not give access to social protection and most importantly do not  allow for upward social mobility.
  • The latest global indicators show that youth continue to be disproportionately represented  among the informal workers,  the working poor, and the low paid workers.[3] Together with the new SDG indicator for youth who are neither in employment, education nor training (NEET), these trends monitored over a decade bring out a gradual and  steady structural deterioration in the terms and conditions of youth integration in labour markets.
  • This crisis is affecting not only the most disadvantaged or low skilled but also tertiary education graduates. It is no surprise therefore, that the Future of work is looked at with angst, including by the most educated generation of youth that the world has ever had.[4]
  • The global reach of the current youth employment crisis is unprecedented. Hardly any country in the world, across regions and levels of income, is left immune to one manifestation or another  of the predicament. The issue is of concern as much to countries where youth represent more than half of the total population as to those where ageing is advanced (Japan, Italy). It touches post-industrial disaffected cities in the Global North as much as rural and informal economies in the Global South.
  • Policy response to the 2008 crisis, short-lived coordinated macro-economic stimulation measures at the global level,[5] followed by a longer entrenched period of austerity measures, did not address issues at the core of the youth employment crisis. At best, it stabilized the situation in some countries, preventing further aggravation of the crisis and alleviating  some of the burden for the most vulnerable groups. Available studies however show that even the best did not attain the needed scale and impact.
  • Numerous youth initiatives were also launched in the current decade, by governments, including some in partnership with the private sector, and by  regional and international organizations. Reviews show that large gaps persist however, between policy announcements and actions and between  actual investments and the scale of the challenge at hand. Most actions focus on the most vulnerable and at times, on the most vocal. Few systematic and transparent evaluations are carried out of the effectiveness of implemented policies and programmes.

Time to change the policy narratives

  • Aside from the effectiveness of and accountability for different approaches and initiatives, we argue that the predominant policy narratives either misdiagnose the nature of the crises in youth transitions, or are incoherent and compartmentalized.  And sometimes, they  defeat the purpose they want to serve and add to layers of discrimination and polarization of and amongst youth. Three points are made in this regard.
  • First , the crisis has become structural. While low or negative growth episodes affect youth employment, observations since 2008, clearly confirm that the phenomenon is not only conjunctural. Fluctuations in indicators can not be explained by cycles of boom and bust and policy response to the recessions alone. The new waves of disruptive technological transformations associated with Industry 4.0 do not provide the explanation either,  since they did not yet produce a massive impact in developing economies.
  • The crisis is within the global economic model that is not delivering on social and intergenerational upward mobility. Youth are particularly exposed as new and latecomers into the labour market under highly competitive and polarizing forces. At the start of their multiple transitions in society,  youth feel most deeply the widening gap between aspirations and opportunities open to them. Their interface with the labour markets in particular shapes other transitions in the society and their vision of the institutions.
  • Recognizing the structural nature of the crisis, it is clear that anything short of a systemic “new deal”, defined at national and global levels would not measure up to the challenge. Several versions of the new deal have been recently proposed for policy debate.[6] They include green new deals or investments in the care economy that aim to stimulate the innovation and decent job creation potential, on the one hand, and the redistribution of social protections and access to services, on the other.
  • Secondly, we need to reverse the compartmentalization in youth policy narratives. Most surveys and diagnostic studies carried out in very different contexts  have pointed  to the multi-dimensional nature of the youth employment challenge in all local contexts. Yet, there is a marked preference and obstinate inclination by policy makers, public and private, to emphasize and address one factor only in each situation  to the exclusion of others. The “over-bloated” public sector employment in the Middle East and North Africa for example, or the business environment for start-ups, lack of level playing field for small and medium enterprises (SME), skills mismatches, the proliferation of tertiary education at the expense of vocational and apprenticeship schemes or youth behavior and unrealistic expectations, are among factors that are typically singled out. Such single-minded analyses have led to unifocal and distorted policy interventions,  at a time when inter-sectoral, mutually coherent and balanced diagnoses and responses are called for.
  • The third trend is the increasing securitization discourse that has taken shape in national and international contexts. Unlike in the previous narrative, where youth’s potential of creativity and innovation is constrained by the environment and/or their own misguided behavior, in this one, youth, in particular the unemployed, disenfranchised and the migrant among them, are seen as  a threat to security and public order. Hence,  responses that prioritize security, repression and exclusion which can further encroach upon rights and restrain civic and political spaces for  participation.
    Turning the securitization narrative on its head is to give space for the expression of  frustrations and to lay a rights-based platform for dialogue and for seeking positive solutions. It is the multiple insecurities that young women and men experience that should be addressed as a matter of immediate priority. 

Recent waves of mass protests in major cities show that deeply entrenched frustrations will not go away by themselves. Populations no longer accept makeshift and partial solutions. They are not ready to operate within the existing parameters of the exercise of power established by ruling elites and the institutions that serve them.
While  all generations are concerned with the range of existential questions at hand,  youth are clearly leading the civic movements claiming more inclusive and sustainable models of development and governance.
Changing the policy narratives on the role and place of youth in work, society and polity is a necessary first step in the search for real responses to their predicament.
__________________

[1] ILO, Global Employment Trends for Youth- the update, 2011.
[2] UNU-WIDER, Youth unemployment and the Arab Spring, 2011
[3] ILO, Global Employmenment Trends for Youth 2017: Paths to a better working future.
[4] UNESCO, Global Education Monitoring Report 2019.
[5] Except for China which sustained stimuli packages for a longer period.
[6] For example:  Marianna Mazzucatto’s « mission oriented” investment and innovation; UNCTAD, Trade and Development report 2019. Financing a Global Green New Deal; N. Klein, On Fire: The ( Burning) Case for a Green New Deal. 2019; J. Rifkin, The Green New Deal, 2019.

NOTE: The opinions expressed here are those of the author and not of the GLO, which has no institutional position.

Ends;

October 10, 2019. Where are all the good jobs? Hélène Syed Zwick on the new book of David G. Blanchflower.

In his new book, GLO Research Director Danny Blanchflower has explained us why the job market is not as healthy as we think, in particular he promotes to look at underemployment instead of unemployment. glabor.org had announced the book earlier this year and published in the summer an interview with the author. In her book review for the LSE Review of Books website, GLO Fellow Hélène Syed Zwick provides more details and insights, but also formulates questions and challenges.

David G. Blanchflower: Not Working. Where Have All the Good Jobs Gone? Princeton University Press, 2019

GLO Research Director David G. Blanchflower. GLO bio. He is the Bruce V. Rauner Professor of Economics at Dartmouth College, Professor of Economics at the University of Stirling, and a Research Associate at the National Bureau of Economic Research.

GLO Fellow Hélène Syed Zwick. GLO bio. She is Executive Director of the ESLSCA Research Center and Associate Professor in Economics at ESLSCA University (Egypt).

Book review for the LSE Review of Books website:

“In Not Working: Where Have All the Good Jobs Gone?, David Blanchflower contributes to the already substantial stream of scholarship on job quality, happiness and economic downturns. The author, a prominent economist and former external member of the Bank of England’s Monetary Policy Committee (MPC) between 2006 and 2009, offers a praiseworthy, didactic and anticipated analysis ‘on well-paying [or good] jobs and the failure of policymakers to deliver them’ (11).

In the first part of the book, the author skillfully argues that most Western countries, especially the US and the UK, are far away from full employment, despite their respective low unemployment rates. Through a heavy reliance on data, he argues, and brilliantly demonstrates, that the unemployment rate is no longer an accurate signal of labour market slack. He repeats throughout his book that the main signal that confirms this hypothesis is the lack of sustained wage and price growths. Normally, Blanchflower explains, in a situation of full employment, there ‘would be so few people looking for jobs’ (25) that wages would grow rapidly and ‘workers would be able to climb the occupational ladder’ (140). Unfortunately, he writes, this is not happening either in the US or the UK. On the contrary, underemployment  – which relates to ‘unstable, precarious, low-paying, and temporary jobs’ (35) and which expanded after the Great Recession in most rich Western countries – appears as a significant new predictor of wage and inflation growth. Here we reach the central argument of the book: underemployment associated with weak bargaining power on the part of workers leads to contained wage pressure. Blanchflower advises that we therefore rely on underemployment rather than unemployment to analyse the labour market situation, especially within this post-recession period characterised by ‘an extended semi-slump, of subnormal prosperity’ (80).

If such a proposal is quite orthodox, three elements transversal to this first part capture the reader’s attention: the economics of walking about (EWA); the societal consequences; and house-ownership and mobility. Firstly, thanks to Blanchflower’s EWA approach which is ‘fundamental’ to the book (184), he is in contact with what has been happening to ordinary people. As he explains, Blanchflower believes in data from the real world. His thinking has been ‘driven mostly by observing how the world works and attempting to uncover fundamental truths and patterns in the data’ (9). Discussions with London cabbies or looking at jingle mails (the act of mailing the keys back to the mortgage lender) are common ways for Blanchflower to feel what is going on in societies. Secondly, he discusses the links between feelings of insecurity on the labour market, happiness and societal outcomes like obesity, mental disorders, depression and even suicide. Thirdly, he examines the negative impact of house ownership on mobility. He evokes the fall in the homeownership rate, especially in the US and the UK, and explains that an unconstrained housing market leads to more efficient labour markets and to a fall in the equilibrium unemployment rate thanks to higher mobility. These effects have too often been neglected by researchers, he argues.

The second part of Not Working is composed of five chapters and aims to study the response to the Great Recession. Blanchflower’s analysis led him to anticipate the crisis in 2007, while most of his colleagues did not. The author calls therefore for a ‘big rethink’ (11, 315), especially among policymakers, central bankers and economists. Scathingly, he denounces their obstinacy in relying on theoretical, mathematical-based models and prescriptions from the 1970s. As he argues, ‘the elites were stuck in the past’ (171) and ‘the experts were looking in the wrong places’ (162). Policymakers decided in 2009-10, under the recommendations of economists, to launch what Blanchflower names a ‘reckless and unnecessary austerity’ (173) ‘attacking the Keynesian school of thought from multiple directions’ (171). The author writes that this was a ‘unique opportunity [for them] to decrease the size of the state’ (173).

In this section of the book, Blanchflower’s efforts may appear overly detailed to the less specialised reader and not especially innovative for the specialists. Yet, he convincingly establishes the socio-economic, demographic and geographic profile of the ‘left-behinds’ in the US, the UK and Eurozone countries after 2010. Unsurprisingly, decreases in expenditure ‘hit the weak, the disabled and vulnerable’ (214). Such fractures between the have-nots and haves were already present before the Great Recession, which only ‘exacerbated them’ (37). He notes that the left-behinds from the US, the UK, France and Austria have been ‘strongly opposed to political and social developments they see as threatening sovereignty, identity and continuity’ (258). He therefore indicates that he was already expecting in 2010 a political ‘backlash’ (265) after all the pain and suffering. Why should politics not therefore suffer? Few can have ignored recent populist movements in the US with Donald Trump’s presidency, in the UK with the Brexit vote and in France with Marine Le Pen. The author establishes a direct relationship between the profile of the left-behinds and those who voted for populist parties.

This inquiry leads us to the third part dedicated to prescriptions and policy recommendations. Whilst the quality of analysis and richness of its scholarly references impresses across two-thirds of the book, here the author fails in making the reader optimistic or confident about the future. Why? First, because the recommendations he formulates are unoriginal and lack ambition, and second, because several dimensions elsewhere detailed in the book, like the decline in unionism and bargaining power, are not even discussed. Strictly speaking, the use of idioms and expressions in the titles and subtitles in this third part appear by far insufficient to convince me. Most of the Keynesian recommendations that he formulates are well-known and have been debated for decades. For instance, he recommends reaching full employment by decreasing the interest rate to boost wages and therefore living standards, investing more in infrastructure to create jobs, subsidising childcare services and providing incentives for low-skilled workers. From my point of view, such advice relies far too much on the intervention of public authorities, which seems quite inconsistent with Blanchflower’s lack of trust in policymakers and politicians that he claims throughout his book: ‘Why believe them?’ he asks several times. ‘Why should we trust any of them now? I don’t,’ he writes (211).

It could certainly be argued that this third part is disappointing as Blanchflower fails to provide sufficient depth in the formulation of his recommendations, which is essential once the analysis has been delivered. However, even with this limitation, this encyclopedic book is highly welcome and will be an unquestionably worthy addition to the bookshelves of a general readership as well as scholars in labour economics, macroeconomics, monetary economics and political science.”

Dr. Hélène Syed Zwick, Executive Director of ESLSCA Research Center, ESLSCA University, Egypt

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

Ends;



September 22, 2019. ‘Parental responses to children’s revealed human capital’: Forthcoming in the Journal of Population Economics.

The article finds that parents compensate disadvantaged children with greater cognitive resources using data from primary school-aged Ethiopian siblings.

Read more in:

Wei Fan & Catherine Porter
Reinforcement or compensation? Parental responses to children’s revealed human capital levels, forthcoming Journal of Population Economics, Vol. 33 (2020), online first. Open Access.

Author Abstract: A small but increasing body of literature finds that parents invest in their children unequally. However, the evidence is contradictory, and providing convincing causal evidence of the effect of child ability on parental investment in a low-income context is challenging. This paper examines how parents respond to the differing abilities of primary school-aged Ethiopian siblings, using rainfall shocks during the critical developmental period between pregnancy and the first 3 years of a child’s life to isolate exogenous variations in child ability within the household, observed at a later stage than birth. The results show that on average parents attempt to compensate disadvantaged children through increased cognitive investment. The effect is significant, but small in magnitude: parents provide about 3.9% of a standard deviation more in educational fees to the lower-ability child in the observed pair. We provide suggestive evidence that families with educated mothers, smaller household size and higher wealth compensate with greater cognitive resources for a lower-ability child.

Read also the Lead Article of issue 4 (2019):
Gautam Hazarika, Chandan Kumar & Sudipta Sarangi:
Ancestral ecological endowments and missing women
Journal of Population Economics, Vol. 32 (2019), Issue 4 (October), pp. 1101-1123
Journal Website, complete issue 4. Paper PDF – OPEN ACCESS.
GLO Fellows Gautam Hazarika, Chandan Kumar Jha & Sudipta Sarangi

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September 6, 2019. ‘Decomposing the gender pay gap in the USA’: Now published online in the Journal of Population Economics.

Gender pay gaps are still of much concern, in particular in the United States. A new GLO Discussion Paper adds to our understanding how the gender gap is shaped by multiple different forces such as parenthood, gender segregation, part-time work and unionization.

Read more in:

Katie Meara, Francesco Pastore & Allan Webster
The gender pay gap in the USA: a matching study
Journal of Population Economics, now FREE PAPER PDF

GLO Fellows Francesco Pastore & Allan Webster
The paper is also GLO Discussion Paper No. 363, 2019.

Author Abstract: This study examines the gender wage gap in the USA using two separate cross-sections from the Current Population Survey (CPS). The extensive literature on this subject includes wage decompositions that divide the gender wage gap into “explained” and “unexplained” components. One of the problems with this approach is the heterogeneity of the sample data. In order to address the difficulties of comparing like with like, this study uses a number of different matching techniques to obtain estimates of the gap. By controlling for a wide range of other influences, in effect, we estimate the direct effect of simply being female on wages. However, a number of other factors, such as parenthood, gender segregation, part-time working, and unionization, contribute to the gender wage gap. This means that it is not just the core “like for like” comparison between male and female wages that matters but also how gender wage differences interact with other influences. The literature has noted the existence of these interactions, but precise or systematic estimates of such effects remain scarce. The most innovative contribution of this study is to do that. Our findings imply that the idea of a single uniform gender pay gap is perhaps less useful than an understanding of how gender wages are shaped by multiple different forces.

Read also the Lead Article of issue 4 (2019):
Gautam Hazarika, Chandan Kumar & Sudipta Sarangi:
Ancestral ecological endowments and missing women
Journal of Population Economics, Vol. 32 (2019), Issue 4 (October), pp. 1101-1123
Journal Website, complete issue 4. Paper PDF – OPEN ACCESS.
GLO Fellows Gautam Hazarika, Chandan Kumar Jha & Sudipta Sarangi

Ends;

Eugenio Levi, Rama Dasi Mariani & Fabrizio Patriarca on ‘Hate at first sight only. The presence of immigrants, electoral outcomes and policy insights.’ GLO Research for Policy Note No. 3.

GLO Research for Policy Note No. 3 – Theme 10. Migration

Hate at first sight only. The presence of immigrants, electoral outcomes and policy insights.

by Eugenio Levi, Rama Dasi Mariani & Fabrizio Patriarca

Most of the studies on how electoral outcomes in Western Europe and in the US are influenced by the presence of immigrants in the neighborhood provide evidence that living in an area with a greater number of immigrants increases the probability of voting for anti-immigrant parties. The immediate policy implication would be that people want to restrict immigration tout court. But is this so?

In a recent GLO Discussion Paper and forthcoming in the Journal of Population Economics, we contribute to the debate on this topic by analyzing the dynamic aspects related to this effect. This is to investigate if policies should be concerned with the time and geographical concentration of new arrivals more than on their number and focus on integration as well as coping ability of local populations. In particular, we formulate the hypothesis that hostility toward immigration is temporary: there is “hate at first sight” only.

We focus on the 2004, 2009 and 2014 European elections in the United Kingdom, a country in which the immigration issue has been central to all of the latest electoral outcomes.  The UK Independent Party (Ukip), a party founded in 1993 by Conservatives who were cross with the EU, became a strongly anti-immigration party under the leadership of Nigel Farage. It boosted its votes from 15.6% in 2004 to 26.8% in 2014 in correspondence with an increase in the number of immigrants from 8% to 11% of the total population.
____________________

What we do.

  • We first test for a short-run effect of the presence of immigrants on votes for Ukip. In our statistical model we add to the share of immigrants the 2-year migration flows, as this is the time lag suggested by time series tests. After having verified that the appropriate statistical conditions for time consistency are satisfied, we proceed to our main analysis. Our models control for unemployment, demographic variables, and population and include specifications with fixed effects for each area and with an instrumental variable approach.
  • Previous studies on Denmark and Italy find that hostility is stronger in rural areas. Immigration to larger urban centers has generally started before immigration to more rural areas, which can explain why previous studies have found a different effect in these two different contexts. Therefore, we test if this difference is completely explained by the time path of immigration or if there is something more, maybe related to political and cultural factors.
  • We explore potential issues related to integration. Do changes in unemployment, welfare expenditures per capita or in the number of crimes explain the short-run effect of the presence of immigrants? These are very common explanations, as individuals may feel that immigrants are to be blamed for increased unemployment, for reduced access to welfare or for an increasing number of crimes.

What we find.

  • The effect of immigration on anti-immigrant votes is indeed a short-run effect. Areas where there has been an acceleration of new arrivals by 1 percentage point see an increase in votes for Ukip by 1.1-1.2 p.p.. In other words, immigration flows boost Ukip votes. In contrast, an increase of 1 p.p. in the share of immigrants corresponds to 1.7-1.9 p.p. fewer votes for Ukip.
  • There is something more to hostility in rural areas than just the time path of immigration. First, we replicate previous evidence that the long-run effect of immigration is declining by population density. Second, if we look at heterogeneity by socioeconomic characteristics, we find that the effect of immigration flows, although positive and significant in all UK, is different in magnitude across areas and reaches a peak of 2.1 p.p. in the “English and Welsh Countryside” (see Figure 1). Only in “London cosmopolitan, Suburban traits and Business and Education centres” and “Mining Heritage and Manufacturing” the share of immigrants has a negative significant effect. This further suggests that political and cultural factors may be more relevant in explaining the difference in votes across areas than the difference between urban and rural areas.
  • Looking more closely at integration issues, in areas that have diminishing welfare benefits per capita immigration flows have a stronger effect on votes for Ukip. Increase in unemployment and in crimes do not seem to matter in relation to hostility to immigration. It is to note that the coefficient of immigration flows always stays significant, suggesting that there is substantially more that is left unexplained.

Figure 1 – UKIP votes by supergroups of area: estimated coefficients and confidence intervals for immigrant share and flows.

————————–

Our findings clearly substantiate that the “hate at first sight” effect , e.g the impact of immigration on the ascent of anti-immigrant parties as the result of the short-term material consequences and/or identity reactions induced by migration flows, is indeed a temporary phenomenon. Two main policy implications follow. First, there is a need to pay closer attention to how flows are distributed over time and space: it is probably better to allow immigrants to arrive in small waves and distribute recent arrivals in a homogeneous manner and based on local political and cultural factors, rather than in large ones and concentrated in certain areas. Second, policies should focus more on integration across its cultural, social and economic dimensions. Clearly, in the long run, social forces can drive toward integration; however, policies can expedite this process. In fact, we find that the electoral impact of immigration is weaker and shortly reverted when more welfare resources become available. Therefore, policies and  resources should aim both at facilitating the integration process of migrants as well as the local population’s ability to cope with the changes.

References

Barone G, D’Ignazio A, De Blasio G, Naticchioni P (2016). Mr. Rossi, Mr. Hu and politics. The role of immigration in shaping natives’ voting behavior. J Public Econ 136: 1–13.

Brunner B, Kuhn A (2018). Immigration, cultural distance and natives’ attitudes Towards immigrants: Evidence from Swiss voting results. Kyklos 71(1): 28-58.

Dustmann C, Vasiljeva K, Damm AP (2018). Refugee migration and electoral outcomes. Rev Econ Stud online.

Halla M, Wagner AF, Zweimüller J (2017). Immigration and voting for the far right. J Eur Econ Assoc 15(6): 1341-1385.

Harmon NA (2018). Immigration, ethnic diversity, and political outcomes: Evidence from Denmark. Scand J Econ 120(4): 1043-1074.

Levi, E, Mariani, RD, Patriarca, F (2019). Hate at first sight? Dynamic aspects of the electoral impact of migration: the case of Ukip. GLO Discussion Paper No. 364. Journal of Population Economics online.

Otto AH, Steinhardt MF (2014). Immigration and election out-comes—evidence from city districts in Hamburg. Reg Sci Urban Econ 45: 67–79.

NOTE: Opinions expressed here are those of the authors and not of the GLO, which has no institutional position.

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12. August 2019. ‘Parenting style as an investment in human development’: Now published in the Journal of Population Economics.

The article explicitly considers the role of parenting style in child rearing relating it to socioeconomic disadvantage. It finds that effective parenting styles are negatively correlated with disadvantage.

Read more in:

Deborah A. Cobb-Clark, Nicolás Salamanca & Anna Zhu:
‘Parenting style as an investment in human development’.
Journal of Population Economics, Vol. 32 (2019), Issue 4 (October), pp. 1315-1352.

Journal Website, complete issue 4. Paper.

Author Abstract: We propose a household production function approach to human development that explicitly considers the role of parenting style in child rearing. Specifically, parenting style is modeled as an investment that depends not only on inputs of time and market goods, but also on attention. Our model relates socioeconomic disadvantage to parenting style and human development through the constraints that disadvantage places on cognitive capacity. We find empirical support for key features of our model. Parenting style is a construct that is distinctive to standard parental investments and is important for young-adult outcomes. Effective parenting styles are negatively correlated with disadvantage.

Read also the Lead Article of issue 4 (2019):
Gautam Hazarika, Chandan Kumar & Sudipta Sarangi:
Ancestral ecological endowments and missing women
Journal of Population Economics, Vol. 32 (2019), Issue 4 (October), pp. 1101-1123
Journal Website, complete issue 4. Paper PDF – OPEN ACCESS.
GLO Fellows Gautam Hazarika, Chandan Kumar Jha & Sudipta Sarangi

Ends;

12 August 2019. ‘Ancestral ecological endowments and missing women’: Now published in the Journal of Population Economics.

The article provides global evidence that there are proportionately more missing women in countries whose ancestral ecological endowments were poorer.

Read more in:

Gautam Hazarika, Chandan Kumar & Sudipta Sarangi:
Ancestral ecological endowments and missing women
Journal of Population Economics, Vol. 32 (2019), Issue 4 (October), pp. 1101-1123 .

Journal Website, complete issue 4. Paper PDF – OPEN ACCESS.

GLO Fellows Gautam Hazarika, Chandan Kumar Jha & Sudipta Sarangi

Author Abstract: This paper examines the relationship between ecological endowments in antiquity and contemporary female to male sex ratios in the population. It is found that there are proportionately more missing women in countries whose ancestral ecological endowments were poorer. This relationship is shown to be strong even after ancestral plough use, the timing of the Neolithic Transition, and many other potentially confounding factors are controlled for. Similar results are also obtained using district-level data from India.

Ends;

Now ONLINE & OPEN ACCESS in the Journal of Population Economics: International migration as a driver of political & social change

Using data for Morocco, the paper provides further evidence that international migration fosters the transfer of political and social norms.

Read more in:


Michele Tuccio, Jackline Wahba and Bachir Hamdouch: “International migration as a driver of political and social change: evidence from Morocco”
Journal of Population Economics, online, issue forthcoming.

Journal Website. Download PDF of article for free – OPEN ACCESS

GLO Fellows Michele Tuccio, Jackline Wahba and Bachir Hamdouch

Author Abstract: This paper focuses on the impact of international migration on the transfer of political and social norms. Exploiting recent and unique data on Morocco, this paper explores whether households with return and current migrants bear different political preferences and behaviors than non-migrant families. Once controlling for the double selection into emigration and return migration, the findings suggest that having a returnee in the household increases the demand for political and social change. This result is driven by returnees mostly from Western European countries, who were exposed to more democratic norms in the destination. However, we find a negative impact of having a current migrant on the willingness of the left-behind households to change. This result is driven by migrants to non-Western countries, where the quality of political and social institutions is lower. Our results are robust to also controlling for destination selectivity.

Ends;

Now Online in the Journal of Population Economics: Mortality inequality in France & the United States

Despite a measured strong cross-sectional relationship between income and health, the study finds no necessary connection between changes in income inequality and changes in health inequality.

Read more in:

Janet Currie, Hannes Schwandt & Josselin Thuilliez: “Pauvreté, Egalité, Mortalité: mortality (in)equality in France and the United States”
Journal of Population Economics, online, in print.

Journal Website. Paper Access.

GLO Fellow Hannes Schwandt

Author Abstract: We develop a method for comparing levels and trends in inequality in mortality in the United States and France between 1990 and 2010 in a similar framework. The comparison shows that while income inequality has increased in both the United States and France, inequality in mortality in France remained remarkably low and stable. In the United States, inequality in mortality increased for older groups (especially women) while it decreased for children and young adults. These patterns highlight the fact that despite the strong cross-sectional relationship between income and health, there is no necessary connection between changes in income inequality and changes in health inequality.

Ends;

Now ONLINE & OPEN ACCESS in the Journal of Population Economics: The nativity wealth gap – what is it & what drives it?

The paper studies the migrant-native differences in wealth among older households in Europe which is significant and to the advantage of the natives. The importance of origin country, age at migration, and citizenship status in reducing the gap is shown.

Read more in:

Irene Ferrari: “The nativity wealth gap in Europe: a matching approach “
Journal of Population Economics, online, issue forthcoming.

Journal Website. Download PDF of article for free – OPEN ACCESS

GLO Fellow Irene Ferrari

Author Abstract: This study uses a matching method to provide an estimate of the nativity wealth gap among older households in Europe. This approach does not require imposing any functional form on wealth and avoids validity-out-of-the-support assumptions; furthermore, it allows estimation not only of the mean of the wealth gap but also of its distribution for the common-support sub-population. The results show that on average there is a positive and significant wealth gap between natives and migrants. However, the average gap may be misleading as the distribution of the gap reveals that immigrant households in the upper part of the wealth distribution are better off, and those in the lower part of the wealth distribution are worse off, than comparable native households. A heterogeneity analysis shows the importance of origin, age at migration, and citizenship status in reducing the gap. Indeed, households who migrated within Europe, those who moved at younger ages rather than as adults, and those who are citizens of the destination country display a wealth gap that is consistently smaller over the entire distribution.

Ends;

How dreams matter for migration: Now Published in the Journal of Population Economics

The article provides evidence that countries with stronger beliefs that hard work leads to a higher social status (the ‘American Dream’) attract a higher proportion of high-skilled immigrants.

Read more in:

Claudia Lumpe: “Public beliefs in social mobility and high-skilled migration”
Journal of Population Economics, Vol. 32 (2019), Issue 3, pp. 981–1008.

Journal Website Issue. Paper Access.

GLO Fellow Claudia Lumpe

Author Abstract: This paper investigates how beliefs of the destination country’s population in social mobility may influence the location choice of high-skilled migrants. We pool macro data from the IAB brain-drain dataset with population survey data from the ISSP for the period 1987–2010 to identify the effect of public beliefs in social mobility on the share of high-skilled immigrants (stocks) in the main OECD immigration countries. The empirical results suggest that countries with higher “American Dream” beliefs, i.e., with stronger beliefs that climbing the social ladder can be realized by own hard work, attracted a higher proportion of high-skilled immigrants over time. This pattern even holds against the fact that existing social mobility in these countries is relatively lower.

Ends;

Now ONLINE & OPEN ACCESS in the Journal of Population Economics: Marriage, dowry, and women’s status in rural Punjab

Dowry is a common custom in South Asia with rising use and increasing amounts. The paper shows that a higher dowry amount, especially in terms of furniture, electronics, and kitchenware, is positively associated with women’s status in the marital household.

Read more in:
Momoe Makino: “Marriage, dowry, and women’s status in rural Punjab, Pakistan”
Journal of Population Economics, Vol. 32 (2019), Issue 3, pp. 769-797.

Journal Website. Download PDF of article for free – OPEN ACCESS

GLO Fellow Momoe Makino

Author Abstract: Dowry is a common custom observed in South Asian countries. Despite alleged negative consequences caused by dowry and the legal ban or restrictions on its practice, the custom has been extended, and recently, dowry amounts seem to be increasing. Compared with public interest in and theoretical studies on dowry, empirical studies are relatively scarce mainly due to data unavailability and inadequacy. We conducted a household survey specifically designed to empirically investigate how dowry is associated with women’s status in the marital household in rural Punjab, Pakistan. The dataset is unique because it gathers information on disaggregated marriage expenses, which enables us to examine the relation between each itemized component of dowry and women’s status. Results show that a higher dowry amount, especially in terms of furniture, electronics, and kitchenware, is positively associated with women’s status in the marital household. The positive association of these illiquid items adds suggestive evidence that in rural Punjab, Pakistan, dowry serves as a trousseau that the bride’s parents voluntarily offer to their daughter.

Ends;

Now OUT in the Journal of Population Economics: Internal migration affects the emotional health of elderly parents left-behind in China.

A new study examines how migration of an adult child affects the emotional health of elderly parents left-behind in China. It finds that migration reduces happiness and leads to more loneliness among the elderly.

Read more in:

Juliane Scheffel & Yiwei Zhang: How does internal migration affect the emotional health of elderly parents left-behind? Journal of Population Economics, Vol. 32 (2019), Issue 3, pp. 953-980.

Journal Website. Download PDF of article for free – OPEN ACCESS

GLO Fellow Juliane Scheffel

Author Abstract: The ageing population resulting from the one-child policy and massive flows of internal migration in China pose major challenges to elderly care in rural areas where elderly support is based on a traditional inter-generational family support mechanism. We use data from the China Health and Retirement Longitudinal Study to examine how migration of an adult child affects the emotional health of elderly parents left-behind. We identify the effects using fixed effects and IV approaches which rely on different sources of variation. We find that migration reduces happiness by 6.6 percentage points and leads to a 3.3 percentage points higher probability of loneliness. CES-D scores of elderly parents are severely increased pushing average scores close to the cut-off indicating clinical levels of depressive symptoms. As emotional health is a key determinant of the overall health status, our findings have significant impacts on economic development in China.

Ends;

Now OUT in the Journal of Population Economics: Your spouse is fired! How much do you care?


Unemployment reduces the life satisfaction of the partner! However, while wives’ life satisfaction does not recover even two years after their partners becoming unemployed, husbands only react to their wives’ joblessness during the first year of unemployment.

Read more in:
Milena Nikolova & Sinem H. Ayhan: Your spouse is fired! How much do you care?
Journal of Population Economics, Vol. 32 (2019), Issue 3, pp. 799-844.

Journal Website. Download PDF of article for free – OPEN ACCESS

GLO Fellows Milena Nikolova and Sinem H. Ayhan

Author Abstract: This study is the first to provide a causal estimate of the cross-spouse subjective well-being consequences of unemployment. Using German panel data on married and cohabiting partners for 1991–2015 and information on exogenous unemployment entry due to workplace closure, we show that one spouse’s unemployment experience reduces the life satisfaction of the other partner. The estimated spillover is at least one quarter of the effect of own unemployment and is equally pronounced among female and male partners. In addition, while wives’ life satisfaction does not recover even two years after their partners becoming unemployed, husbands only react to their wives’ joblessness during the first year of unemployment. Our results are insensitive to income controls and the couple’s position in the income distribution, thus reflecting the non-pecuniary costs of unemployment. Although the income loss hardly explains the negative spillover effects of unemployment on spousal life satisfaction, we document large declines in spousal satisfaction with household income and living standards. This finding supports the argument that the costs of unemployment borne by indirectly affected spouses extend beyond the loss of consumption opportunities and might be rather related to social values attached to market work. Being robust to a battery of sensitivity checks, our findings imply that public policy programs aimed at mitigating unemployment’s negative consequences need to target not only those directly affected but also cohabiting spouses.

Ends;

Now Published in the Journal of Population Economics: Migrants Reduce the Work Health Risks of Natives

The value of immigrants for the UK has played an important role in the Brexit debate. A recent GLO Discussion Paper explores the effects of immigration on the allocation of occupational physical burden and work injury risk using data for England and Wales.
Migrants seem to reduce the risks for UK-born workers and they report report lower injury rates than natives. The paper is now published in the Journal of Population Economics and available online. See also below.

GLO Discussion Paper now published in the Journal of Population Economics, July 2019, Volume 32, Issue 3, pp 1009–1042; already 2.4k downloads on July 5, 2019! OPEN ACCESS….

See online on the Journal website.

Download PDF of the Journal of Population Economics article for free.

GLO Discussion Paper No. 215, 2018.

Immigration and the Reallocation of Work Health Risks – Download PDF
by Giuntella, Osea & Mazzonna, Fabrizio & Nicodemo, Catia & Vargas-Silva, Carlos

GLO Fellows Osea Giuntella, Fabrizio Mazzonna, Catia Nicodemo & Carlos Vargas-Silva

Author Abstract: This paper studies the effects of immigration on the allocation of occupational physical burden and work injury risks. Using data for England and Wales from the Labour Force Survey (2003–2013), we find that, on average, immigration leads to a reallocation of UK-born workers towards jobs characterized by lower physical burden and injury risk. The results also show important differences across skill groups. Immigration reduces the average physical burden of UK-born workers with medium levels of education, but has no significant effect on those with low levels. We also find that that immigration led to an improvement self-reported measures of native workers’ health. These findings, together with the evidence that immigrants report lower injury rates than natives, suggest that the reallocation of tasks could reduce overall health care costs and the human and financial costs typically associated with workplace injuries.

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Now online in the Journal of Population Economics: John Gardner on ‘Intergenerational altruism: Evidence from the African American Great Migration’

Intergenerational altruism explains between 24 and 42% of the Northward migration!

Read more in:

John Gardner: Intergenerational altruism in the migration decision calculus: evidence from the African American Great Migration, forthcoming in the Journal of Population Economics.

See Online First on the Journal website.

GLO Fellow John Gardner

Author Abstract: It is widely believed that many migrations are undertaken at least in part for the benefit of future generations. To provide evidence on the effect of intergenerational altruism on migration, I estimate a dynamic residential location choice model of the African American Great Migration in which individuals take the welfare of future generations into account when deciding to remain in the Southern USA or migrate to the North. I measure the influence of altruism on the migration decision as the implied difference between the migration probabilities of altruistic individuals and myopic ones who consider only current-generation utility when making their location decisions. My preferred estimates suggest that intergenerational altruism explains between 24 and 42% of the Northward migration that took place during the period that I study, depending on the generation.

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Now published in the Journal of Population Economics: Return migrants transfer social norms; evidence on female genital mutilation in Mali.

A recent GLO Discussion Paper found that girls living in localities with return migrants in Mali are less likely to be circumcised. This effect is driven mainly by the returnees from Côte d’Ivoire, suggesting that, in addition to punitive action against those who practice Female Genital Mutilation (FGM) or information campaigns, having lived in an African country where FGM practice is not customary is equally influential. This is evidence for the relevance of social remittances through return migration here by improving social norms. The paper is now accepted for publication in the Journal of Population Economics and already available online. See the detailed discussion (in French) in a newsletter.

See also below.

GLO Discussion Paper of the Month of March 2019 now forthcoming in the Journal of Population Economics!

See online on the Journal website.

GLO Discussion Paper No. 329, 2019.

Female genital mutilation and migration in Mali. Do return migrants transfer social norms? Download PDF
by Diabate, Idrissa & Mesplé-Somps, Sandrine

GLO Fellow Sandrine Mesplé-Somps.

Abstract:   In this paper, we investigate the power of migration as a mechanism in the transmission of social norms, taking Mali and Female Genital Mutilation (FGM) as a case study. Mali has a strong FGM culture and a long-standing history of migration. We use an original household-level database coupled with census data to analyze the extent to which girls living in localities with high rates of return migrants are less prone to FGM. Malians migrate predominantly to other African countries where female circumcision is uncommon (e.g. Côte d’Ivoire) and to countries where FGM is totally banned (France and other developed countries) and where anti-FGM information campaigns frequently target African migrants. Taking a two-step instrumental variable approach to control for the endogeneity of migration and return decisions, we show that return migrants have a negative and significant influence on FGM practices. More precisely, we show that this result is primarily driven by the flow of returnees from Cote d’Ivoire. We also show that adults living in localities with return migrants are more informed about FGM and in favor of legislation. The impact of returnees may occur through several channels, including compositional effects, changes in return migrants’ attitudes toward FGM, and return migrants convincing stayers to change their FGM practices.

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