Creator: Schulhofer-Wohl, Sam Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 707 Abstract:
A standard approach to estimating structural parameters in life-cycle models imposes sufficient assumptions on the data to identify the "age profile" of outcomes, then chooses model parameters so that the model's age profile matches this empirical age profile. I show that this approach is both incorrect and unnecessary: incorrect, because it generally produces inconsistent estimators of the structural parameters, and unnecessary, because consistent estimators can be obtained under weaker assumptions. I derive an estimation method that avoids the problems of the standard approach. I illustrate the method's benefits analytically in a simple model of consumption inequality and numerically by reestimating the classic life-cycle consumption model of Gourinchas and Parker (2002).
Keyword: Age-time-cohort identification problem and Life-cycle models Subject (JEL): J10 - Demographic Economics: General, D91 - Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making, and C23 - Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models
Creator: Johnson, Janna and Kleiner, Morris Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 561 Abstract:
Occupational licensure, one of the most significant labor market regulations in the United States, may restrict the interstate movement of workers. We analyze the interstate migration of 22 licensed occupations. Using an empirical strategy that controls for unobservable characteristics that drive long-distance moves, we find that the between-state migration rate for individuals in occupations with state-specific licensing exam requirements is 36 percent lower relative to members of other occupations. Members of licensed occupations with national licensing exams show no evidence of limited interstate migration. The size of this effect varies across occupations and appears to be tied to the state specificity of licensing requirements. We also provide evidence that the adoption of reciprocity agreements, which lower re-licensure costs, increases the interstate migration rate of lawyers. Based on our results, we estimate that the rise in occupational licensing can explain part of the documented decline in interstate migration and job transitions in the United States.
Keyword: Labor market regulation, Occupational licensing, and Interstate migration Subject (JEL): J01 - Labor Economics: General, J44 - Professional Labor Markets; Occupational Licensing, L38 - Public Policy, K00 - Law and Economics: General, and J10 - Demographic Economics: General
Creator: Boldrin, Michele, De Nardi, Mariacristina, and Jones, Larry E. Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 359 Abstract:
The data show that an increase in government provided old-age pensions is strongly correlated with a reduction in fertility. What type of model is consistent with this finding? We explore this question using two models of fertility: one by Barro and Becker (1989), and one inspired by Caldwell (1978, 1982) and developed by Boldrin and Jones (2002). In Barro and Becker’s model parents have children because they perceive their children’s lives as a continuation of their own. In Boldrin and Jones’ framework parents procreate because children care about their parents’ utility, and thus provide them with old-age transfers. The effect of increases in government provided pensions on fertility in the Barro and Becker model is very small, whereas the effect on fertility in the Boldrin and Jones model is sizeable and accounts for between 55 and 65% of the observed Europe-U.S. fertility differences both across countries and across time.
Keyword: Fertility, Intra-family transfers, Financial Markets, and Social Security Subject (JEL): O10 - Economic Development: General, J13 - Fertility; Family Planning; Child Care; Children; Youth, J10 - Demographic Economics: General, and E10 - General Aggregative Models: General