Prime-age Men Research Articles

Unemployment: Structural vs. Cyclical – and Globalization's Adverse Impact

The U.S. economy continues to be characterized by a persistently-high rate of unemployment, with at least another three years before attainment of the pre-recession unemployment rate. Six significant structural trends are identified and their impacts discerned. The pernicious impact of globalization on U.S. employees, as manifested by the post-2000 business practices of America’s multinational corporations (MNCs), has seen multinationals shifting and growing their workforces overseas. Between 1999 and 2008, U.S. non-bank MNCs cut their domestic employment by 1.9 million while increasing their foreign-based employment by 2.4 million. After a decade, it is apparent globalization has yet to come full circle and bestow its gains to American workers. Offshoring by U.S. companies is also having a deleterious effect on the level of domestic employment, particularly in manufacturing and data processing. Advances in technology are serving to replace domestic employees with software or lower-paid foreign-based workers. In 2000-08, domestic spending on capital expenditures by U.S. MNCs grew at an annual rate of 1.1 percent while their foreign-based affiliates invested at an annual rate of 6.2 percent. A need for more highly-educated employees has manifested itself by consistently-favorable wage patterns. The low levels of monthly job creation and a declining labor force participation rates, particularly for prime-age men, since the turn of the century left workers vulnerable to the harshest post-World War II recession. The decreasing participation rate after 2000 may also reflect harmful impacts of globalization, with discouraged laid-off U.S. workers no longer looking for jobs. Over 23 million people – 50 percent of the increase in the U.S. population between 2000 and 2009 – were classified by the Bureau of Labor Statistics as “not in the labor force”. And the detrimental effect of long-term unemployment is a structural impediment to becoming well-positioned to compete for available jobs. The six structural factors – globalization, technological advances, the need for a highly-educated and skilled workforce, declines in the labor force participation rates, particularly for prime-age men, the relatively-low levels of job creation and the effects of long-term unemployment – seem to be currently dominated by cyclical causes. However, if unemployment rates remain elevated for an extended period, structural causes of unemployment will likely predominate.

Inequality in prime-age adult deaths in a high AIDS mortality setting: does the measure of economic status matter?

We analyze deaths among prime-aged men and women during a 13-year period in a high AIDS mortality setting and examine the distribution of deaths by the economic status of these individuals at baseline using the 1991-2004 Kagera Health and Development Survey (KHDS). We investigate whether the distribution of subsequent prime-age adult deaths as measured by concentration indices depends on the measure of living standards used. We compare the performance of three measures: (1) per capita expenditure; (2) a modern wealth asset index replicating the asset index included in the 2004 Tanzanian AIDS Indicator Survey data file; and (3) a traditional wealth asset index, which includes only measures of traditional wealth. We find no evidence that economic status is linked to prime-age adult deaths, for both men and women, regardless of the measure of economic status used. This finding suggests both that more generally the measure of economic status used does not appear to be crucial, and specifically that relationships using traditional measures of wealth do not seem to differ from those using conventional measures.

Early-life Malaria Exposure and Adult Outcomes: Evidence from Malaria Eradication in India

We examine the effects of exposure to malaria in early childhood on educational attainment and economic status in adulthood by exploiting geographic variation in malaria prevalence in India prior to a nationwide eradication program in the 1950s. We find that the program led to modest increases in household per capita consumption for prime age men, and the effects for men are larger than those for women in most specifications. We find no evidence of increased educational attainment for men and mixed evidence for women. (JEL I12, I18, I21, 015, 018)

Relationship of psychological factors with physical activity stage of change in prime-and middle-aged Japanese.

The present study aimed to investigate the status of physical activity and the differences in psychological factors associated with physical activity from the perspective of transtheoretical model stages between prime- and middle-aged Japanese. The study involved 375 prime-aged volunteers (175 men, 200 women) and 557 middle-aged volunteers (247 men, 310 women) living in Kuse, a town in Okayama Prefecture, Japan. We found that the prime-aged men at the preparation stage had significantly higher self-efficacy scores than at the contemplation stage (p<0.01). Middle-aged men had significantly higher self-efficacy scores at the contemplation stage than at the precontemplation stage (p<0.001). Middle-aged women, meanwhile, had significantly higher self-efficacy scores at the maintenance stage than at the action stage (p<0.01), and at the contemplation stage than at the precontemplation stage (p<0.001). The present findings provide valuable information about the differences in psychological factors affecting physical activity between prime-aged and middle-aged community-dwelling Japanese. This information may be useful to health professionals as they develop effective community-based intervention programs for target populations.

Time Spent in Home Production in the Twentieth-Century United States: New Estimates from Old Data

This article presents new estimates of time spent in home production in the United States during the twentieth century. Historical time-diary studies for various segments of the population are linked to estimates from recent time use surveys. The new estimates suggest that time spent in home production by prime-age women fell by around six hours from 1900 to 1965 and by another 12 hours from 1965 to 2005. Time spent by prime-age men rose by 13 hours from 1900 to 2005. Average across the entire population, per capita time spent in home production increased slightly over the century.

Who benefits more from higher household consumption? The intra-household allocation of nutrients in China

Previous studies find that human capital investments in boys are less income elastic than investments in girls, attributing this result to favoritism toward boys. I show theoretically that it is plausible for more productive or favored household members to have higher income elasticities. I then investigate this question empirically, utilizing panel data on individual nutrient intake from the China Health and Nutrition Survey (CHNS) to analyze how changes in household per-capita nutrient intake affect the intra-household allocation of nutrients. To deal with potential biases due to omitted variables and simultaneity, I use measures of rainfall variation as instruments. I find that nutritional intakes are more elastic for males (especially prime-age men) than for females, and significantly less elastic for the elderly.

Labor market institutions and demographic employment patterns

We study collective bargaining’s effect on relative employment for youth, women, and older individuals. Our model of collective wage setting predicts that unionization reduces employment more for groups with relatively elastic labor supply: youth, older individuals, and women. We test this implication using data from 17 Organization for Economic Cooperation and Development (OECD) countries over the 1960–1996 period. We find that time-varying indicators of unionization decrease the employment–population ratio of young and older individuals relative to the prime-aged, and of prime-aged women relative to prime-aged men, and unionization raises the unemployment rate of prime-aged women and, possibly, young men compared to prime-aged men.

Tax Incentives as a Solution to the Uninsured: Evidence from the Self-Employed

Between the years 1996 and 2003, a series of amendments were made to the Tax Reform Act of 1986 (TRA86) that gradually increased the tax credit for health insurance purchases by the self-employed from 25 to 100 percent. We study how these changes in the tax code have influenced the likelihood that a self-employed person has health insurance coverage as the policy holder of the plan. The Current Population Survey (CPS) is used to construct a data set corresponding to 1995-2005. The empirical analysis is performed for prime-age men and women, and accounts for differences in family structure and potential eligibility. The difference-in-difference estimates suggest that the series of tax credits did not provide sufficient incentives for the self-employed to obtain health insurance coverage. Estimates of the price elasticity of demand confirm the limited response to changes in the after-tax health insurance premium. The effect was largest, however, among the single men and women in our sample, suggesting that a 10 percent decrease in the after-tax price increases the likelihood of coverage by 0.68 and 1.02 percentage points, respectively.

The impact of unemployment insurance taxes on wages

This paper examines the incidence of state unemployment insurance taxes on wages paid to workers in various demographic groups. The empirical work matches state level measures of unemployment insurance tax and benefit variables to data aggregated from the Current Population Survey on worker earnings for the period 1992 to 2002. Econometric evidence presented in the paper supports the paper's main hypothesis that UI tax rate structure has its greatest adverse impact on less mobile workers (prime age married women and young workers) and little impact on more mobile workers (prime age men).

Not Working: Demographic Changes, Policy Changes, and the Distribution of Weeks (Not) Worked

From 1978 to 2000 the fraction of adult men in full-year non-employment increased from 17.1 to 21.6 percent. Previous research focused on the role of disability insurance policy and wage structure changes to this increase. Using Current Population Surveys from 1979 to 2003 we assess how much of the changes in full-year non-employment can be explained by demographic changes, possibly linked to health. Our empirical strategy allows us to examine how 1978 to 2000 changes in demographic characteristics would have changed the distribution of weeks worked if policies and macroeconomic conditions remained as they were in 1978. For prime-aged men, we find changes in age, race, and ethnicity can explain 14 to 33 percent of the increase in fullyear non-employment, without any change in policy or wage structure. For prime-aged women, changes in demographics also would have predicted increases in full-year nonemployment, when in fact we saw dramatic decreases.

Education and Changes in Brazilian Wage Inequality, 1976-2001

In countries with high levels of inequality, progress in education has often been placed high in the list of policy proposals designed to change the unequal state of affairs. This study uses Brazilian annual data to chart the trends in wage inequality and a decomposition procedure to ascertain how wage distribution was affected by advances in education that doubled the median schooling level of prime-age men during the sample period. The results show that while falling returns to education were an equalizing factor across the wage distribution, changes in the educational composition of the work force exerted a disequalizing influence that was strongest at the top of the distribution. The net result was a fall in wage dispersion that was not as dramatic as might have been hoped.

Education and Changes in Brazilian Wage Inequality, 1976–2001

In countries with high levels of inequality, progress in education has often been placed high in the list of policy proposals designed to change the unequal state of affairs. This study uses Brazilian annual data to chart the trends in wage inequality and a decomposition procedure to ascertain how wage distribution was affected by advances in education that doubled the median schooling level of prime-age men during the sample period. The results show that while falling returns to education were an equalizing factor across the wage distribution, changes in the educational composition of the work force exerted a disequalizing influence that was strongest at the top of the distribution. The net result was a fall in wage dispersion that was not as dramatic as might have been hoped.

Measuring State Dependence in Individual Poverty Status: Are There Feedback Effects to Employment Decisions and Household Composition?

Using a sample of prime-aged men from the German Socio-Economic Panel (GSOEP), this paper examines the effects of past poverty experience on future poverty status, future employment status and household composition. The empirical results suggest that even after controlling for observed and unobserved characteristics, past poverty experience increases the poverty risk of future periods. Moreover, there is evidence that experiencing poverty has a negative effect on future employment behaviour and on household cohesion. Apart from its economic significance, the existence of such feedback effects is interesting from an econometric point of view, as they represent a violation of the strict exogeneity assumption, which is usually invoked in estimating dynamic qualitative response models with unobserved heterogeneity.

The Rising Price of Nonmarket Goods

Nonmarket goods such as unpaid household labor, leisure, health and longevity, and the environment are important components of the standard of living. They represent a large fraction of all activities. Prime-aged men and women spend 17 percent of their day in leisure activities, and 5 and 13 percent of their time, respectively, in unpaid housework compared to 23 and 13 percent of their time, respectively, in paid work. The quantity of nonmarket goods is rising over time. In the United States, life expectancy at birth is now 77 years, having risen by 29 years since 1900. In Los Angeles County between 1980 and 1998, average annual daily exceedences of the national smog standard declined by 60 days from 71 to 11. Falling big-city murder rates merit national news headlines. Studies of living standards have focused on the tremendous change in the quantity of nonmarket goods but have assumed that the value of nonmarket goods, except for unpaid labor, has remained constant. This assumption underlies most health studies (e.g., David Cutler and Elizabeth Richardson, 1997; Kevin M. Murphy and Robert H. Topel, 2003; William T. Nordhaus, 2003). Nordhaus (2003) valued declines in mortality since 1900 using a constant value of life. Even the Boskin CPI Commission (Michael J. Boskin et al., 1998) discussed trends in the quantity of nonmarket goods (i.e., pollution and crime progress) without mentioning incorporating such goods’ implicit prices into a broader CPI measure. There is no reason to think that implicit prices or the willingness to pay for nonmarket goods has remained constant. Rising real and shadow wages have made both leisure and unpaid household labor more expensive. Rising incomes have also made such normal goods as safety, health, a temperate climate, and the environment more valuable. We document the price dynamics of nonmarket goods by estimating repeat cross-sectional hedonic regressions. We focus on two important and measurable nonmarket goods: job fatality risk and climate. In both cases we find that both price and quantity have been rising. This evidence is consistent with rising valuation. We use our estimates of job-risk compensating differentials to construct new evidence on long-run trends in value of life. Accounting for price changes affects how we view the retrospective and prospective benefits of medical innovations. A rising value of life implies that marginal improvements in safety and in longevity are becoming more valuable. We report evidence that the price of living in a temperate winter and summer climate has significantly increased over time.

Changes in Employment and Hours, and Family Income Inequality in the United.States, 1969–1989

This paper estimates how much changes in employment and hours worked for family heads and spouses contributed to the rise in the family income inequality between 1969 and 1989. Change in labor market activity of family heads accounts for half of the increase in the income gap between the top and bottom 10th families. The effect of change in work effort on the income inequality is considerably weaker where four-fifths of families in the middle of income distribution are considered. This result is robust to changes in the selection of the population. The rise in the inequality of labor market activity occurred largely within families headed by prime-age men. The rise in the percentage of families headed by female and the decline in employment rate for older family heads are relatively minor factors. [J2, E2, N3]

Interview on Postindustrialism and the Future of the Welfare State

In The Social Foundations of Postindustrial Economies (Oxford University Press, 1999) Gosta Esping-Andersen presents a classic example of an empirically grounded historically materialist analysis of welfare capitalism, in the tradition of Polanyi, Marshall and others. He argues that its architecture needs to be re-thought because of the changing nature of postindustrial economies and that this requires us to think in terms of ‘welfare regimes’ comprising the market, the state and the family. When the welfare state finally reached its mature institutional expression, as late as the 1960s and 1970s, it addressed the risks which had typically been faced by families in the ‘Golden Age’ of capitalism in the long post-war boom. This meant protecting prime age men employed in Fordist industries earning family wages from spells of unemployment and older men from decreased earning power. Protecting the male breadwinner was also meant to protect those dependent upon him. The bulk of income transfers were thus focused on old age pensions and unemployment insurance. There was little in the way of service provision: ‘familialism’ left reproductive work such as child or elder care to the unpaid work of women in families.

The gender gap in wages in Russia from 1992 to 1995

This paper examines the gender gap in wages in Russia from 1992 to 1995. It uses data on prime aged men and women from the Russia Longitudinal Monitoring Survey (RLMS) and focuses on those living in urban areas. Differences in hours of work appear to explain about one half of the gender differential, but there is still a large differential in average hourly wages between men and women. Observable differences in characteristics between men and women explain almost none of the differential or the changes through time.

Public Policy and Extended Families: Evidence from South Africa

Tightly knit extended families, in which people often give money to and get money from relatives, characterize many developing countries. These intra-family flows mean that public policies may affect a very different group of people than the one they target. To assess the empirical importance of these effects, we study a cash pension program in South Africa that targets the elderly. Focusing on three-generation households , we use the variation in pension receipt that comes from differences in the age of the elder(s) in the households. We find a sharp drop in the labor force participation of prime-age men in these households when elder women reach 60 years old or elder mean reach 65, the respective ages for pension eligibility. We also find that the drop in labor supply diminishes with family size, as the pension money is split over more people, and with educational attainment, as the pension money becomes less significant relative to outside earnings. Other findings suggest that power within the family might play an important role: (1) labor supply drops less when the pension is received by a man rather than by a woman; (2) middle aged men (those more likely to have control in the family) reduce labor supply more than younger men; and (3) female labor supply is unaffected. These last two findings also respectively suggest that the results are unlikely to be driven by increased human capital investment or by a need to stay home to care for the elderly. As a whole, this public policy seems to have had large effects on a group-prime age men living with the old-quite different from the one it originally targeted-elderly men and women.

Male labor supply estimates and the decision to moonlight

This research improves the manner in which moonlighting is examined by recognizing that workers may moonlight due to primary job hours constraints or because jobs are heterogeneous. Our theoretical model permits both motives for moonlighting and considers moonlighting in tandem with labor supply behavior on the primary job. Both primary and secondary job hours equations are estimated using data from the SIPP for prime-aged men. We conclude that the moonlighting decision is quite responsive to wage changes on both jobs and arises from both motives, and that properly modeling moonlighting produces a relatively high primary job labor supply elasticity.

Drug use, drug abuse, and labour market outcomes.

This paper examines the relationship between illicit drug use and labour market success, and in doing so addresses two shortcomings of the previous literature. First, unlike many previous analyses, ours accounts for differences in intensity of use using clinically based diagnostic measures. Second, while recent studies focus only on young adults, we analyze a prime-age (30-45-year-olds) sample as well. Our results indicate that these differences are important. Similar to previous studies, we find evidence of a positive relationship between drug use and income for young workers. However, we also find some evidence of lower incomes for young workers reporting daily use of illicit drugs. For prime-age men, we find strong evidence that problematic drug use (as indicated by either a diagnosis of pathological use or dependence or by daily use) is negatively related to income. We also find a negative relationship between problematic use and employment among prime-age, but not younger, men.