Search Results

Source: Department of Economics, University of Western Ontario
Resulting in 2 citations.
1. Belley, Philippe
Lochner, Lance John
The Changing Role of Family Income and Ability in Determining Educational Achievement
Working Paper No. 2008-2, Department of Economics, Social Science Centre, University of Western Ontario, December 2008.
Also: http://economics.uwo.ca/faculty/lochner/papers/thechangingrole.pdf
Cohort(s): NLSY79, NLSY97
Publisher: Department of Economics, University of Western Ontario
Keyword(s): College Enrollment; Debt/Borrowing; Educational Attainment; Family Income; High School Diploma; Modeling

Permission to reprint the abstract has not been received from the publisher.

This paper uses data from the 1979 and 1997 National Longitudinal Survey of Youth cohorts (NLSY79 and NLSY97) to estimate changes in the effects of ability and family income on educational attainment for youth in their late teens during the early 1980s and early 2000s. Cognitive ability plays an important role in determining educational outcomes for both NLSY cohorts, while family income plays little role in determining high school completion in either cohort. Most interestingly, we document a dramatic increase in the effects of family income on college attendance (particularly among the least able) from the NLSY79 to the NLSY97. Family income has also become a much more important determinant of college 'quality' and hours/weeks worked during the academic year (the latter among the most able) in the NLSY97. Family income has little effect on college delay in either sample. To interpret our empirical findings on college attendance, we develop an educational choice model that incorporates both borrowing constraints and a 'consumption' value of schooling--two of the most commonly invoked explanations for a positive family income--schooling relationship. Without borrowing constraints, the model cannot explain the rising effects of family income on college attendance in response to the sharply rising costs and returns to college experienced from the early 1980s to early 2000s: the incentives created by a 'consumption' value of schooling imply that income should have become less important over time (or even negatively related to attendance). Instead, the data are more broadly consistent with the hypothesis that more youth are borrowing constrained today than were in the early 1980s.
Bibliography Citation
Belley, Philippe and Lance John Lochner. "The Changing Role of Family Income and Ability in Determining Educational Achievement." Working Paper No. 2008-2, Department of Economics, Social Science Centre, University of Western Ontario, December 2008.
2. Carliner, Geoffrey
Permanent and Transitory Wage Effects in a Multi-Period Family Labor Supply Model
Working Paper, Department of Economics, University of Western Ontario, London ON, 1980
Cohort(s): Older Men
Publisher: Department of Economics, University of Western Ontario
Keyword(s): Dual-Career Families; Earnings, Wives; Family Income; Health/Health Status/SF-12 Scale; Labor Supply; Wages; Wives, Work

Permission to reprint the abstract has not been received from the publisher.

Using a subset of 680 married white men, this paper develops a model in which the household's utility depends on the level of the composite goods produced in each period with inputs of husband's and wife's home time and market goods. Given the full wealth budget constraint, two wage elasticities are derived. The elasticity of an individual's labor supply with respect to a one period change in his own wage includes substitution in consumption across periods, substitution of his home time for other inputs to household production within the period, and small wealth effect. The labor supply elasticity with respect to a permanent change in the wage in all periods includes only within period substitution and a large wealth effect. Thus the temporary elasticity is predicted to be more positive that the permanent wage elasticity, and presumably larger than zero. The other findings of this paper are a significantly negative permanent cross wage elasticity of wife's wage on husband's weekly hours, but small and insignificant effects on other measures of husband's labor supply. Health, age, and education affect labor supply directly, as well as indirectly through their effect on wage rates. Finally, persistent differences among individuals account for over one fifth of the unexplained variance in the log of weekly hours, while temporary fluctuations or measurement error account for the remaining four fifths.
Bibliography Citation
Carliner, Geoffrey. "Permanent and Transitory Wage Effects in a Multi-Period Family Labor Supply Model." Working Paper, Department of Economics, University of Western Ontario, London ON, 1980.