Economics of the family

We present a model with pre-marital schooling investment, endogenous marital matching and spousal specialization in homework and market production. Investment in schooling raises ages and generates two kinds of returns in our framework: a labor-market return and a marriage-market return because education can affect the intra-marital share of the surplus one can extract from marriage. When the returns to education and household roles are gender neutral, men and women educate in equal proportions and there is pure positive assortative matching in the marriage market. But if men and women have different market returns or household roles, then there may be mixing in equilibrium where some educated individuals marry uneducated spouses and those who educate less extract a relatively larger share of the marital surplus. The existence of large and frictionless marriage markets creates competition among potential spouses, precludes bargaining and generates premarital investments that are efficient. Given that the gender wage gap narrows with the level of education, women's labor-market return from schooling is higher than that of men. Moreover, women's household time obligations have declined over time, raising their marriage-market return from schooling. Combining these two effects, we explain why women now attain higher schooling levels than men. JEL Classification:

Labor market presence of cancer survivors has been significantly improved as medical technology revolutionized cancer-specific diagnoses and treatments. However, less understood are post-cancer variations in job market outcomes of racial and ethnic minorities in the US. Using a theoretical framework derived from family labor supply decision models and taking advantage of the rich data in the 2008-2014 Medical Expenditure Panel Survey (MEPS), this study employs a double-hurdle empirical model of labor force participation and hours worked to evaluate the employment decisions of Black and Hispanic cancer survivors. Hispanic and Black breast cancer survivors were less likely to be employed by 4% and 7.5%, respectively, when compared with Whites. Black prostate cancer survivors were 8% less likely to work than Whites, with insignificant differences between Hispanic and White prostate cancer survivors. Once employed, Black and Hispanic breast cancer survivors worked an extra 4 and 6 hours than Whites, while Hispanic prostate cancer survivors worked 5 fewer weekly hours than Whites. In addition, our estimates indicate the significance of job types in labor market outcomes post-cancer. Employment of minorities in blue collar or service occupations decreased employment hours of survivors. Labor market disparities for minorities amplifies the socioeconomic and familial burden of cancers. This timely work motivates informed public policy to reduce unexamined consequences of chronic conditions among minorities. JEL code: I1, J15, J22, J71

This paper applies the panel fixed effects with vector decomposition esti-mator to three FDI data sets to estimate the impact of time-invariant variables on FDI while including fixed effects. We find that the omission of fixed effects significantly biases the results, leading to contradictory predictions regarding the effect of trade costs and culture across data sets. After eliminating these biases, the differences across data sets largely disappear and many time-invariant variables consistently indicate the importance of vertical FDI. This suggests that some controversies in the literature may be driven by the extent to which unaccounted fixed effects biases vary across different data sets. JEL no. F14, F23

Economists who study the family acknowledge the importance of altruism and resource allocation that occurs between family members, and have developed a number of novel approaches to modelling this behaviour. This article suggests a new method, based on the moral philosophy of Immanuel Kant, which will highlight several unique features of intrafamily altruism. After summarizing Kant’s ethics and how it can be incorporated into the standard economic model of choice, I show how Kantian concepts of perfect and imperfect duty cast the standard models of intrafamily altruism and resource allocation in a new light. The inclusion of duty into the modelling explains how altruistic behaviour can continue when the affection has left a marriage, and blurs the lines between cooperative and non-cooperative models of resource allocation by highlighting the importance of binding commitment without external enforcement.

I examine charitable giving behaviors by married and permanently cohabiting couples.
  Looking first at differences between married, cohabiting, and single households, I find that married couples are more likely to give and to give more than other groups, especially to religious organizations. I then look at specific couples over time, examining particularly those who transition from cohabitation to marriage, and find that though couples who will eventually get married are predisposed to giving even before their marriage, their giving increases after marriage in a way not explained by changes in income or other relevant independent variables. This change is explained in large part by differences in households' income elasticities of giving across couple groups and over time. I also check the responsiveness of permanently cohabiting couples' giving to changes in the tax-price of both household members, and show that their giving responds only to changes in the higher earner's marginal tax rate.
  The results suggest a connection between the commitment mechanism of marriage and investment in the household public good of charitable giving.