White Names vs. Black Names: Roland Fryer
08 Dec 2014 Leave a comment
in discrimination, economics of media and culture, human capital, labour economics, poverty and inequality
Which countries attract the most immigrants who are graduates?
05 Dec 2014 Leave a comment
in human capital, labour economics Tags: economics of immigration
Claudia Goldin and the power of the pill
04 Dec 2014 1 Comment
in economics of education, economics of love and marriage, gender, human capital, labour economics, labour supply Tags: Claudia Goldin, engines of liberation, gender wage gap, sex discrimination, single parenthood
Claudia Goldin has documented well that the availability of reliable contraception in the late 1960s led to an explosion in female investment in higher education, and in particular, long duration professional educations.
Although rapidly disseminated among married women once it came on the market in 1960, the pill at first was almost inaccessible to single females, due to the prevailing state laws on prescriptions of drugs.
Liberalisation of availability for single females was on a state-by-state basis and was staggered over a few years. This allowed Claudia Goldin to study what happened to investment in professional education by young women in each of those states as they reformed their laws on the dispensing of contraception to single females.
As contraception was made lawful for single women on a state-by-state basis in the USA in the late 60s and 1970s, young women started investing in long duration professional educations at an explosive rate. They stayed in high school the longer, more young women went on to college, and more of these college female students majored in long duration professional degrees.
In the 1960s, it was common to get engaged and even marry while at college in the USA. As Claudia Goldin, and her co-author Larry Katz explain:
It was a stark choice, you could be celibate, get your career started, and potentially face a very thin marriage market once you were done.
Or, you could have fun, get married earlier, and not necessarily have a career.
The availability of the pill allowed college-age women to have certainty in their career investments and therefore the payoff of investing in professional educations was much greater.
By decoupling sex for marriage, women could afford to defer marriage and shop around looking for better partners. Postponing marriage for at least a few years didn’t mean all the “good guys” would be taken. In addition, with higher career incomes for female college graduates, as Goldin explained:
You might think of it as the decline of the trophy wife, as women with careers who might not be as intrinsically good-looking became more highly valued than—or at least as equally valued as—women for whom appearance was a primary asset.
But as Goldin’s co-author Larry Katz explained:
Potential losers in this equation, in addition to trophy wives, are women with poor career prospects.
The clear winners are women with careers and, of course, the men they marry… Guys have more money, more sex, and less responsibility.
One side effect of the availability of contraception to better educated women was that young women with poor career prospects were also left with a pool of more unattractive men to marry.
Many of these young women who wanted to have baby chose just to have the child, and perhaps marry the father later if the responsibilities of fatherhood turned him into marriage material.
This reversal in order of parenthood and marriage among less well educated young women was one of the surprising social developments in the mid to late 20th century.
The Economic Case Against Majoring in Fun Things – The Atlantic
03 Dec 2014 Leave a comment
in economics of education, human capital, occupational choice, politics - USA Tags: human capital, Returns to education
A favourite line from Seinfeld
03 Dec 2014 Leave a comment
in economics of love and marriage, gender, human capital, labour economics, TV shows, unemployment Tags: Seinfeld
I told you so – The Psychology Behind Messy Rooms: Why The Most Creative People Flourish In Clutter
01 Dec 2014 1 Comment
in human capital, labour economics Tags: age of human capital, human capital
Benjamin Powell, In Defense of “Sweatshops”
29 Nov 2014 1 Comment
in applied welfare economics, development economics, growth disasters, growth miracles, human capital, labour economics, labour supply, occupational regulation Tags: Ben Powell, development economics, do gooders, sweatshops
Environmental and Urban Economics: Do Demographers Really Predict Future Population Trends Without Incorporating Women’s Economic Incentives?
26 Nov 2014 Leave a comment
in discrimination, economics of love and marriage, gender, health economics, human capital, labour economics
To my amazement, this work does not discuss how women’s potential earnings in the labor market correlates with fertility decisions.
At least in the Demography paper linked to above, the word “incentives” does not appear in the paper and nobody makes a choice based on the costs and benefits of fertility.
Without incorporating such factors, how can a statistical model yield a credible prediction?
Milton Friedman on Reducing the Income Gap through School Vouchers
26 Nov 2014 Leave a comment
in economics of education, human capital, Milton Friedman, poverty and inequality, Rawls and Nozick Tags: Milton Friedman, School choice, vouchers
Deirdre McCloskey on Piketty’s definition of wealth in the Age of Human Capital
23 Nov 2014 Leave a comment
Deirdre McCloskey has a 55-page review essay on Piketty
21 Nov 2014 Leave a comment
in applied price theory, applied welfare economics, entrepreneurship, history of economic thought, human capital, labour economics, liberalism, poverty and inequality Tags: Deirdre McCloskey, Piketty
You will find it here (pdf), forthcoming in the Erasmus Journal of Philosophy and Economics.
via Deirdre McCloskey has a 55-page review essay on Piketty.
Why Economists and Parents Need to Discover Behavioral Genetics | Bryan Caplan
21 Nov 2014 Leave a comment
in economics of education, human capital, labour economics Tags: behavioural genetics, Bryan Caplan, nature versus nurture
Intergenerational mobility in 1 chart
20 Nov 2014 Leave a comment
in applied welfare economics, human capital, labour economics, occupational choice, politics - USA, Rawls and Nozick Tags: intergenerational mobility
Women graduates increasingly put their partner’s career first after they graduate | Daily Mail Online
19 Nov 2014 Leave a comment
in discrimination, economics of love and marriage, gender, human capital, labour economics, labour supply, occupational choice Tags: asymmetric marriage premium, Claudia Goldin, gender wage gap, motherhood penalty, power couples
Women are increasingly putting their husband’s career before their own, a controversial new study of Harvard Business School graduates has found.
It canvassed over 25,000 male and female students, and found 40 percent of Gen X and boomer women said their spouses’ careers took priority over theirs.
The researchers also said only about 20 percent of them had planned on their careers taking a back seat when they graduated.
This gender gap found by Robin Ely, Colleen Ammerman and Pamela Stone can be better explained by the marriage market combined with assortative mating.
1. Harvard business graduates are likely to marry each other and form power couples.
2. There tends to be an age gap between men and women in long-term relationships and marriages of say two years.
This two year age gap means that the husband as two additional years of work experience and career advancement. This is highly likely to translate into higher pay and more immediate promotional prospects.
Maximising household income would imply that the member of the household with a higher income, and greater immediate promotional prospects stay in the workforce.
It is entirely possible that women to anticipate this situation both in their subject choices and career ambitions.
Claudia Goldin found that the wage gap between male and female Harvard graduates disappears in the presence of one confounding factor.
That confounding factor is obvious: the male in the relationship earns less. When this is so, Goldin found that the female in the relationship earns pretty much as do similar male Harvard graduates, except for the fact that they work less hours per week:
We identify three proximate factors that can explain the large and rising gender gap in earnings: a modest male advantage in training prior to MBA graduation combined with rising labour market returns to such training with post-MBA experience; gender differences in career interruptions combined with large earnings losses associated with any career interruption (of six or more months); and growing gender differences in weekly hours worked with years since MBA.
Differential changes by sex in labour market activity in the period surrounding a first birth play a key role in this process. The presence of children is associated with less accumulated job experience, more career interruptions, shorter work hours, and substantial earnings declines for female but not for male MBAs.
The one exception is that an adverse impact of children on employment and earnings is not found for female MBAs with lower-earning husbands.
This sociological evidence reported in the Daily Mail is entirely consistent with the choice hypothesis and equalising differentials as the explanation for the gender wage gap. As Solomon Polachek explains:
At least in the past, getting married and having children meant one thing for men and another thing for women. Because women typically bear the brunt of child-rearing, married men with children work more over their lives than married women.
This division of labour is exacerbated by the extent to which married women are, on average, younger and less educated than their husbands.
This pattern of earnings behaviour and human capital and career investment will persist until women start pairing off with men who are the same age or younger than them.
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