Dmitri Romanov

Do Financial Incentives Affect Fertility

This paper investigates how fertility responds to changes in the price of a marginal child and in household income. We construct a large, individual-level panel data set of married Israeli women during the period 1999-2005 that contains fertility histories and detailed controls. We exploit variation in Israels child subsidy program to identify changes in the price of a marginal child (using changes in the subsidy for a marginal child) and to instrument for household income (using changes in the subsidy for infra-marginal children). We find a significant and positive price effect on fertility: the mean level of marginal child subsidy produces a 7.8 percent increase in fertility. There is a positive effect within all religious and ethnic subgroups, including the ultra-Orthodox Jewish population, whose social and religious norms discourage family planning. There is also a significant price effect on fertility among women who are close to the end of their lifetime fertility, suggesting that at least part of the price effect is due to a reduction in total fertility. As expected, the child subsidy has no effect in the upper range of the income distribution. Finally, consistent with the predictions of Becker (1960) and Becker and Tomes (1976), we find that the income effect is small in magnitude and is negative at low income levels and positive at high levels.

Does Terrorism Demoralize? Evidence from Israel

Terrorism is a form of warfare that is specifically designed to have far‐reaching psychological effects beyond the immediate victims. We study the effect of terrorism on the happiness of Israelis during a recent period of severe violence with the Palestinians (the second Intifada). The identification strategy is based on variation in the intensity of terrorism over time and location. Using individual level happiness equations augmented with daily fatality figures, we show that terrorism had practically no immediate or delayed effect on the happiness of Jewish Israelis, but adversely affected the happiness of Arab citizens of Israel.

The true effect of students’ employment on the duration of studies

ABSTRACT We examine the effect of the first-degree students’ employment on the prolongation of their studies. When employing a popular instrumental variable, the regional unemployment rate, we find a negative impact of students’ employment on duration of studies. Then, adding a predetermined IV – the individual’s employment prior to the beginning of academic studies – turns the estimate positive. Furthermore, we find that the relationship between the extent of students’ employment and duration of their studies depends on their age: among the younger students (aged 22–26), the extent of employment has no effect on the duration of studies, while among the older students, the effect is positive and statistically significant.

The effect of terror on job stability among security guards

Palestinian uprising, ‘intifada’, aggravated the recession of 2001–2004 in Israel which dampened demand for labor in all industries except security services. We use this exogenous shock to study whether a cohort of young men who were attached to temporary jobs as security guards for unusually long periods of time during the intifada landed on an inferior career path, as compared to security guards from a pre-intifada cohort. We find that the intifada cohort had less employment mobility, were ultimately less connected with the labor market, and earned less on jobs after the security services, relatively to the pre-intifada cohort.

Overeducation, job mobility and earnings mobility among holders of first degrees

ABSTRACT Overeducation has been researched extensively for nearly three decades, but some major issues in regard to it are still topics of ongoing debate. By using a panel data, that combines a survey of two cohorts of Israeli first-degree holders and data from administrative sources on jobs and wages, we examine the contribution of job turnover, cognitive abilities and continuing graduate studies to the likelihood of overeducation and wage dynamics. The study produces four main findings. First, rapid job-switching makes a negative contribution to the increase in employee’s wage and there is a negative correlation between two variables – an employee’s tenure and the number of past employers in the years after the completion of degree studies – and the probability of being overeducated. Second, the contribution of the individual’s cognitive abilities and quantitative reasoning skills to the likelihood of becoming overeducated is negative. Third, the wages of overeducated employees are some 11% lower and rise more slowly than the wages of those whose level of schooling corresponds to their jobs; this outcome may be interpreted as indicating that the ‘scars’ of being overeducated tend to be long-lasting. Fourth, the overeducated workers have lower propensity to continue to advanced academic studies.