Work in Progress
​The Nature versus Nurture Debate and the Direct Effect of Parental Influence: Evidence from the Israeli Kibbutz
(with Avraham Ebenstein, Eric Gould, and Avi Simhon).
Working Papers
We study how shifting intra-household control over resources affects fertility, exploiting a quasi-natural experiment in Israel where some Holocaust survivors began receiving substantial and unexpected reparations in 1957 and others decades later. Using a triple-difference design with heterogeneity by age, we compare fertility outcomes by timing of reparations, gender of the recipient, and age. Households where only the young female partner received reparations early had 0.25–0.4 fewer children than comparable households where only the male was treated. An event study shows that this effect is driven entirely by post-1957 fertility, suggesting a causal link to increased female resource control.
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U.S. states gave legal and economic rights to married women between 1850 and 1920. Prior to this "women’s liberation," married women were subject to the laws of coverture, which granted virtually unlimited power to their husbands. Using data from the full count U.S. census and contiguous county-border pairs bordering states that gave rights at different times, we use an event-study analysis to show that rights causally reduced fertility. Thus, women’s rights can help explain the demographic transition, itself one of the most profound societal changes experienced by industrializing countries. Interestingly, women’s rights were not granted retroactively, allowing us to compare people married before and after the reforms. This alternative empirical strategy confirms our findings and illuminates mechanisms. Shifting bargaining power from husband to wife with women’s rights accounts for our results, with the underlying spousal disagreement relating to maternal mortality risk. Women’s empowerment can account for about 20% of the decline in fertility during the demographic transition, and may have relevant implications for policy in today’s developing countries.
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Summary in VoxEU
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Journal Articles
Recent years have seen a surge of interest in gender diversity in corporate America. Simultaneously, CEOs' political preferences have been shown to affect a wide range of corporate decisions. Evidence suggests that an individual's views on gender equality are more associated with their political preferences than with that individual's own gender. Accordingly, we ask whether the political preferences of CEOs are associated with the representation and compensation of women in the executive suite. We find that Democratic CEOs (those who contribute more to Democratic candidates) are associated with higher representation of women in the executive suite. To explore causality, we use an event-study approach and find that replacing a Republican with a Democratic CEO is associated with a 20%-50% increase in the fraction of women in the executive suite. Finally, we find that Democratic CEOs are associated with a significant reduction (or even disappearance) of the gender gap in the level and performance-sensitivity of executive pay.
Summary in VoxEU
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Baudin et al, (2015) document that childlessness rates in the U.S. in 1990 exhibited a U-shaped relationship with women's education, with highly educated women much more likely to be childless than other women. We show that this is no longer true: the childlessness rate of highly educated women has converged to that of other women. We argue that highly educated women are now able to marketize the time cost of child rearing, allowing them to have both a family and a career.
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In one of the greatest extensions of property rights in human history, common law countries began giving rights to married women in the 1850s. Before this "women's liberation," the doctrine of coverture strongly incentivized women to hold real estate, rather than financial assets such as money, stocks, or bonds. We exploit the staggered nature of coverture's demise across US states to show that women's rights led to shifts in household portfolios; a positive shock to the supply of credit; and a reallocation of labor towards non-agriculture and capital intensive industries. Expansion of investor protection deepened financial markets and aided industrialization.
Summary in VoxEU​
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This paper studies the political preferences of CEOs of public companies. We use Federal Election Commission records to compile a comprehensive database of the political contributions made by more than 3,800 individuals who served as CEOs of S&P 1500 companies between 2000 and 2017. We find a substantial preference for Republican candidates. We identify how this pattern is related to the company’s industry, region, and CEO gender. In addition, we show that companies led by Republican CEOs tend to be less transparent to investors with respect to their political spending. Finally, we discuss the policy implications of our analysis.
Coverage:
​The New York Times​ (Translated into Hebrew for TheMarker), CNN, WSJ, AXIOS, Marginal Revolution, Quartz
Summary in VoxEU
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A negative relationship between income and fertility has persisted for so long that its existence is often taken for granted. One economic theory builds on this relationship and argues that rising inequality leads to greater differential fertility between rich and poor. We show that the relationship between income and fertility has flattened between 1980 and 2010 in the US, a time of increasing inequality, as high income families increased their fertility. These facts challenge the standard theory. We propose that marketization of parental time costs can explain the changing relationship between income and fertility. We show this result both theoretically and quantitatively, after disciplining the model on US data. We explore implications of changing differential fertility for aggregate human capital. Additionally, policies, such as the minimum wage, that affect the cost of marketization, have a negative effect on the fertility and labor supply of high income women. We end by discussing the insights of this theory to the economics of marital sorting.
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Prior to 1996, Israelis in collective communities (kibbutzim) shared the costs of raising children equally. This paper examines the impact of privatizing costs of children on the behavior of young couples using universal microdata on kibbutz members. Exploiting variation in the increase in cost sharing across kibbutzim, we estimate that lifetime fertility declined by 0.59 children in the cohorts of affected parents. We also examine the exit decisions of members, and find that couples were most likely to leave the kibbutz if they were either higher income or lower fertility. This pattern is also observed among Israeli emigrants, in which higher educated and lower fertility couples are more likely to leave Israel.
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Summary in VoxEU
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We present evidence that the cross-sectional relationship between fertility and women's education in the U.S. has recently become U-shaped. The number of hours women work has concurrently increased with their education. In our model, raising children and home-making require parents' time, which could be substituted by services such as childcare and housekeeping. By substituting their own time for market services to raise children and run their households, highly educated women are able to have more children and work longer hours. We find that the change in the relative cost of childcare accounts for the emergence of this new pattern.
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Coverage:
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We argue that one major cause of the U.S. postwar baby boom was the rise in female labor supply during World War II. We develop a quantitative dynamic general equilibrium model with endogenous fertility and female labor-force participation decisions. We use the model to assess the impact of the war on female labor supply and fertility in the decades following the war. For the war generation of women, the high demand for female labor brought about by mobilization leads to an increase in labor supply that persists after the war. As a result, younger women who turn adult in the 1950s face increased labor-market competition, which impels them to exit the labor market and start having children earlier. The effect is amplified by the rise in taxes necessary to pay down wartime government debt. In our calibrated model, the war generates a substantial baby boom followed by a baby bust.
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Coverage:
Discussion in Joachim Voth's Blog "VothSpeak"
A summary of the paper on the LSE USAPP blog: How Rosie the Riveter led to the 1950s' Baby Boom.
A non-technical summary with a discussion of policy implications (September 2008)​ Europe's fertility crisis: Lessons from the post-war baby boom (published in Vox).
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This paper provides a new explanation for the narrowing and reversal of the gender education gap. It highlights the indirect effect of returns to human capital on parents' preferences for sons and the resulting demand for children and education. We assume that parents maximize the full income of their children and that males have an additional income, independently of their level of education. This additional income has two effects. First, it biases parental preferences towards sons. Second, it implies that females have relative advantage in producing income through education. We show that when the relative returns to human capital are sufficiently low, the bias in parents' preferences towards sons is relatively high, so that parents who have daughters first have more children. Daughters are born to larger families and hence receive less education. As returns to human capital increase, gender differences in producing income diminish, parents' bias towards sons declines, variation in family size falls and the positive correlation between family size and the number of daughters is weakened. When returns to human capital are sufficiently high, the relative advantage of females in education dominates differences in family size, triggering the reversal in gender education gap.
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I argue that the relationship between life expectancy and schooling crucially depends on which measure of life-expectancy one uses. In particular, I show that while the change in life expectancy at birth between 1960 and 1990 is positively correlated with percentage change in schooling, the change in life expectancy at age 5 is, at best, uncorrelated with percentage change in schooling. This evidence suggests that increasing life horizon beyond the early crucial childhood years for formal acquisition of human capital is not as quantitatively important as previously thought.
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The pattern of joining the labor force only at an advanced stage of the life-cycle was widespread among American women in the 1960s and 1970s, but not since the 1980s. To explain this change we conduct a theoretical analysis of the interrelation between women's lifetime labor supply choices and the dynamic macroeconomic environment. In our model women choose the late-entry pattern only at early stages of the growth process when wages are sufficiently low and grow sufficiently rapidly. As the economy grows, this lifetime labor profile vanishes and women either join the labor force either early in life or not at all.
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Conventional wisdom suggests that increased life expectancy had a key role in causing a rise in investment in human capital. I incorporate the retirement decision into a version of Ben-Porath's (1967) model and find that a necessary condition for that causal relationship to hold is that increased life expectancy will also increase the lifetime labor supply. I then show that this condition does not hold neither for American men born between 1840 and 1970 nor for the American population born between 1890 and 1970. The data suggest similar patterns in Western Europe. I end by discussing the implications of my findings for the debate on the fundamental causes of long-run growth.
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This paper challenges conventional wisdom by arguing that greater longevity may have contributed less than previously thought for the significant accumulation of human capital during the transition from stagnation to growth. This is because when parents make choices over the quantity and quality of their offspring, greater longevity positively affects not only the returns to quality but also the returns to quantity. The theory suggests that in contrast to longevity, improvements in health are more likely to generate quantity-quality tradeoff and hence the paper shows the importance of controlling for fertility when empirically examining the impact of children's health on their education.
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This paper explores the evolution of child labor, fertility, and human capital in the process of development. In early stages of development the economy is in a development trap where child labor is abundant, fertility is high and outÂput per capita is low. Technological progress, however, increases gradually the wage differential between parental and child labor, thereby inducing parents to substitute child education for child labor and reduce fertility. The economy takes-off to a sustained growth steady-state equilibrium where child labor is abolished and fertility is low. Prohibition of child labor expedites the transition process and generates Pareto dominating outcome.
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We present a model in which the social norms regarding labor force participation (LFP) of married women’s differ from the norms concerning men’s. Assuming that these norms depend on past rates of women LFP creates a gradual increase in women LFP.
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Book Chapters
We analyze differences in labor productivity between Israel and a group of small OECD countries. We assume a more general human capital production function and calibrate it using PIAAC surveys, which examine the literacy and numeracy skills of the adult population in the OECD countries. Whereas Israel has more years of schooling, its population has lower measured skills. Using development accounting exercise, we show that once years of schooling and numeracy skills are taken into account, differences in accumulated factors explain more than three-quarters of the gap. This is against a split of 60-40 between accumulated factors and total factor productivity, when these skills are ignored. Additionally, using panel data on 13 OECD countries we show strong positive correlation between physical and human capital per worker at the industry level. A causal interpretation of our estimates implies that closing the gap in skills will indirectly close 18 percent of the gap in physical capital.
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