New Page for Econ 448

I have set up the web site for Econ 448 - Population Economics, so it now has its own blog for announcements and discussion. If you are a student in that class please stop by on a regular basis.

China's population passes 1.3bn

According to BBC World China's population passed 1.3bn early Thursday with, very fittingly, the birth of a boy. The main interesting statistics in the article is that among registered births boys outnumer girls 120 to 100 (the expected numbers are 105 boys to every 100 girls). The numbers are obviously higher than in India, which is the topic of some of my current research (see this post), but given that India does not have a one-child policy the difference is not a large as one might expect.

Funding from UW Royalty Research Fund!

Great news! I just received funding from the UW Royalty Research Fund to work on "Causes and Consequences of Sex Selective Abortion in India". The award will be used to cover costs of data, research assistance and travel. I have also been designated a Royalty Research Fund Scholar, which means that I get a quarter of release time from teaching to work on the project. As the work progresses, I will make sure to post more information about it here.

Did I Hear Anybody Say "Sample Selection"? -- Why Colleges Think They're Better Than AP (washingtonpost.com)

Tuesday Washington Post's Jay Mathews had an interesting article: Why Colleges Think They're Better Than AP (washingtonpost.com). He discussed whether advance placement classes (for non-US residents that is college-level courses that you can take in high school and get credit for when you enroll in college) were good enough and whether the requirements for getting credit for the course should be thighter. The basic question is whether it is better, in terms of how much you learn, to take an introductory course in, say, calculus in high school instead of when you enroll in college. I do not have a strong opinion either way, but what was interesting was how he defended the AP courses:

I found another selective college has done another small study that reaches a different conclusion. At Claremont McKenna College in Claremont, Calif., students who skipped introductory calculus by getting a grade of 4 or 5 in AP calculus AB or BC had an average grade of 11 out of 12 points in its follow-up calculus course. This was better than the average grade of 9.51 for all students in that follow-up course. The same thing happened in Spanish. Students who skipped the equivalent course at Claremont McKenna by scoring 4 or 5 in AP Spanish had an average grade of 11.29 in the college's follow-up course, which was higher than the average grade of 10.68 for all students in that course.

The problem with this arguments is, of course, that it completely ignores any potential selection bias. There are two parts to this. First, the high school students who are more likely to take AP courses are also likely to be "higher ability students" than those who do not. This means that the college students who have take AP courses before entering are also likely to be better or at least more interested in the topic than those who did not. Second, since the average grade is only given for those who scored a 4 or a 5 in their AP, those who got a lower grade are presumably counted with the other students. Hence, it is impossible to tell whether the AP courses were in some sense better or whether they simply attracted better students. What I would argue that Mathews should really be interested in is whether the improvement in students' knowledge is greater from taking a AP course instead of an equivalent college course.

Another study that he mentioned found that:

[those] who got credit for scores of less than 5 did not do as well in follow-up courses as students who had taken the college's introductory courses.

This seems more relevant for the direct question of whether to allow a student to opt out of a introductory course by taking AP courses. Other than for that reason, taking an AP course is simply a signal to the college admission that you are a serious (and bright) student. If that is the case, the question then becomes why do you need an outside company to teach those courses?

On a more general note. Anything that increase what high school students are taught before going to college has my sympathy. I continue to be dismayed about how little students know when they enter college (especially math). Instead of arguing who is best at teaching introductory calculus it makes sense to increase the required level of math in high school and then do the same for the introductory courses at college level (but then again, I am probably biased by the Danish high school system).

Becker-Posner blog

Okay, I know everybody else has already discovered this, but Gary Becker and Richard Posner have set up a new blog: The Becker-Posner Blog. You can read their introduction here. They have this to say about their blog:

We have decided to start a blog that will explore current issues of economics, law, and policy in a dialogic format. Initially we will be posting just once a week, on Mondays. In time we may post more frequently. The first postings will be tomorrow, December 6.

So far they have discussed preventive war and pharmaceutical patents and as you might expect they are all for it :-). Actually, I was a little disappointed about the level of arguments used. I am not quite sure what I expected, but maybe I was hoping to see something which had some evidence of research behind it. More on this blog when they begin writing about things I care a little more about (research wise).

Robert Willis seminar - Friday 19 Dec

Robert Willis, University of Michigan, will be presenting his paper "Estimating Knightian Uncertainty from Survival Probability Questions on the HRS" on Friday at 2.00 PM in Savery 302. Willis is a UW PhD from 1971. After his seminar presentation there will be a reception from 3:30-5 PM in Savery 207 (the Sociology Commons). More information about Willis can be found at here.

Siwan Anderson seminar on Friday 5 November

Siwan Anderson from UBC will be presenting her paper, "Dowry and Property Rights", on Friday at 2.00 PM in Savery 302. Anybody interested in meeting with her during her visit here please let me know. The abstract for the paper is:

Dowries traditionally serve as a pre-mortem bequest to daughters. In segregated societies, where men have economic value but women do not, dowry as a bequest is consistent with assortative matching in the marriage market. During the early stages of modernisation, increased income inequality across men leads dowries as bequests to no longer be consistent with desired marriage matching patterns. It is demonstrated here that, instead, modernisation necessarily leads to the emergence of dowry as a direct transfer to the groom ("groom-price"). It is then shown that the historical instances of dowry can be classified according to the schema implied by the model. The implications of the model are also tested using current data from Pakistan; a country of some relevance because dowry legislation is currently an active policy debate. The results suggest that the transformation of dowry from bequest to groom-price appears to be underway in some areas.

Labour/Development Brown Bag Today

I am presenting at the Labour/Development Brown Bag today (14 October) at 12.30 in Savery Hall 302. The title of the paper is "Adult Literacy Programs In Ghana: An Evaluation" (joint with Niels-Hugo Blunch). This is very much work in progress and both the title and the content is likely to change, but that is after all what brown bags are for. I hope to have a working paper version of this paper ready by the end of the month. See below for the abstract.

This paper examines the effect of adult literacy program participation on household consumption in Ghana. We find that in most cases there is no significant effect on consumption from participation after allowing for self-selection into the program. For households where no adults have completed any formal education there is, however, a substantial positive and statistically significant effect on household consumption, pointing towards the potential importance of adult literacy programs for the parts of the population which have not participated in the formal education system. Possible explanations for why adult literacy program participation does not seem to significantly affect households where some formal education has been attained are explored, as well.

Graduate Research Assistant Needed

I am looking for a graduate research assistant to help me on my projects. An interest in development economics and/or household economics would be an advantage and the same would a good working knowledge of Stata. The expected hours requirement will be between 10 and 20 hours a week, although this is flexible and depends on the RA's exam schedule, etc. I am currently working on the following projects:

• "Risk and Household Structure: Another Look at the Determinants of Fertility." This paper examines whether parents choose higher fertility in areas where there is higher risks of natural diasters. The hypothesis is that children can serve as incomplete substitute of formal insurance mechanism. I am using data from Guatemala for this study.
• "Inefficient Household Decisions? Evidence from Participation in Adult Literacy Programs." The aim of this project, which has not begun yet, is to examine why a large share of the participants in adult literacy programs in Ghana are from households where I found no significant positive effect of participation. The hypothesis is that participation is a way of improving one's standing within the household, even though there is no impact on the total consumption of the household.
• "The Demand for Sex Selective Abortion." Since direct information on the use of sex selective abortion in not available in India, I am developing two methods for indirectly estimating what drives the demand for sex selective abortion. The data I am using are from the two rounds of the Indian National Family and Health Survey, which are large scale DHS type surveys.

If you are interested, you are more than welcome to send me an email or come by my office (Savery Hall M237).

Nobel Prize to Kydland and Prescott

Kydland and Prescott will receive the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel 2004"for their contributions to dynamic macroeconomics: the time consistency of economic policy and the driving forces behind business cycles". You can find more information on the Nobel web site. For those of us who can remember having read about business cycles in our macro economics courses but are in need a quick recap, there is a nice review of Kydland and Prescott's contributions to the literature.

Kaivan Munshi Seminar on Monday 11 October

Kaivan Munshi from Brown University will be giving a seminar on Monday 11 October at 3.30 PM in Savery Hall 302. The title of his talk is "Women as Agents of Change: Female Incomes and Household Decisions in South India." The paper is joint work with Nancy Luke. Anybody wishing to talk to Munshi while he is here should contact Elaina Rose. The abstract of the paper is

This paper exploits a unique setting - tea estates in the south Indian High Range - to provide empirical support for the view that sustained economic empowerment can lead to social and economic change in even the most disadvantaged segments of society. Female workers earn substantially more than male workers on the tea estates, and these unusual gender patterns have been in place for multiple generations. In addition, low caste and high caste workers have the same incomes and access to the same facilities on the estates. We find that the low castes have higher schooling and are less likely to marry in the traditional fashion than the high castes, reversing the usual pattern that is found in the rest of South India. Looking within the household to better understand the detminants of these choices, we find that a relative increase in female income increases children's schooling and moves the family away from the traditional social patterns, most significantly among the low castes. Low caste women emerge as independent agents of change in this research setting, shifting their households from the traditional social patterns, most significantly among the low castes. Low caste women emerge as independent agents of change in this research setting, shifting their households from the traditional economy into the modern market economy.

Labor/Development Brown Bag Thursday 7 Oct

Arif Mamun, who is a graduate student at the department, will be presenting his current work Thursday at the Labor/Development brown bag. The title of the paper is "The White Picket Fence Dream": Effects of Assets on the Choice of Family Union. The abstract for the paper is:

Marriage is perceived as a family status to be chosen after certain economic and relational preconditions are fulfilled - after the couple have achieved the so-called "white picket fence dream". In this paper, using data from the National Longitudinal Survey of Youth 1979, we examine whether there is any direct relationship between the individual's financial and housing assets and his/her transition into cohabitation or marriage. Results from proportional hazard and instrumental variables estimation will be presented in the brown bag seminar.

Center for Research on Families -- Fall Newsletter

The Center for Research on Families has just sent out their fall newsletter. I am a new faculty affiliate of the center, which has Shelly Lundberg as its director, so there is a bit about me and my research in the newsletter. You can learn more about the center and its activities by following the link in the menu (under Links!).

NEUDC 2004 in Montreal

The 2004 Northeast Universities Development Consortium Conference was held in Montreal 1-3 October. It has become the place to go for development economics research and provides a good overview of what is going on, especially among the junior researchers in the field. It is nice to see that micro-economics of development is still attracting a lot of attention and that interesting research is being done in the field. There is nothing like a conference like this to motivate me to go back and do research. I presented my paper, "Risk and Household Structure: Another Look at the Determinants of Fertility," in the session on Informal Social Protection. The paper's hypothesis is that children can act as imperfect substitutes for insurance and is based on the theory in my paper, "Children as Insurance," published in Journal of Population Economics, Vol. 14(1): 119-136, 2001. I use the ENCOVI 2000 survey from Guatemala combined with secondary data on the risk of hurricanes and earthquakes to estimate the effects of the risks natural disasters on fertility and education. The results show that increased risk of disasters that requires command of manpower to handle increase fertility and lower the education of children, while disasters where a larger family is of little use have a negative effect on fertility. Furthermore, actual shocks has a negative effect on both fertility and children's education, although there is some "catch-up" later. The paper still needs some work on the theoretical model, but the empirical part is converging (hopefully it is a stable path ;-) ) towards its final form. If you would like a copy of forthcoming versions please let me know or check this space.

I also discussed Sonia Laszlo's paper, "Education, Labour Supply and Market Development in Rural Peru," in the Economics of Schooling session. Its aim is very worthwhile: To estimate the return to education in a situation where most people either are self-employed or work on the family farm. Hence, contrary to standard returns to education papers it is not possible to use individual wages to access the return. Laszlo uses a combination of reduced form estimations combined with a structural model to back out the returns parameters. The main problem with the paper is that it is not clear that identification has been achieved, especially since the theoretical model, which is necessary for the structural parameters to be believable, is not convincing.

Birth Order and Intrahousehold Allocation

My paper, "Birth Order and the Intrahousehold Allocation of Time and Education," (with Mette Ejrnæs) has been accepted for publication by the Review of Economics and Statistics. The latest version can be found under Papers. It is forthcoming in the November issue of this year. One shortcoming of the previous literature on intrahousehold allocation is that the decision on how to distribute resources between children (food, education, health etc.) was examined separately from the decision on how many children to have. Hence, the paper develops a model of intrahousehold allocation with endogenous fertility, which captures the relationship between birth order and investment in children. It shows that a birth order effect in intrahousehold allocation can arise even without assumptions about parental preferences for specific birth order children or genetic endowments varying by birth order. The important contribution is that fertility is treated as endogenous, something which other models of intrahousehold allocation have ignored. The implications of the model are that children with higher birth orders, i.e. are born later, have an advantage over siblings with lower birth orders, who are born earlier, and that parents who are inequality averse will not have more than one child. The model furthermore shows that not taking account of the endogeneity of fertility when analysing intrahousehold allocation may seriously bias the results. The effects of a child's birth order on its human capital accumulation are analysed using a longitudinal data set from the Philippines that covers a very long period. We examine the effects of birth order on both number of hours in school during education and completed education. The results for both are consistent with the predictions of the model.