George H. Jakubson

The connection between public transfers and private interfamily transfers

Abstract This paper investigates the anti-poverty effectiveness of public transfers taking private-transfer responses into account. Widespread, altruistically motivated private transfers would neutralize the distributional impact of public transfers. But exchange-motivated transfers can reinforce the effects of public transfers on the distribution of economic well-being. The common technique for gauging anti-poverty effectiveness (subtracting public transfers from other income and measuring the poverty-rate counterfactual) yields results that are close to a more complex procedure that takes private-transfer responses into account. And some of the empirical findings suggest an exchange, rather than altruistic, motive for private transfers, indicating that the effects of public transfers can be magnified by private behavior. This is an exact reversal of the prediction that public transfers merely supplant private ones.

Estimation and Testing of the Union Wage Effect Using Panel Data

We present estimates of the union wage effect controlling for unmeasured individual effects, and subject the conventional fixed-effects model to specification tests. For PSID men the union wage effect is 5-8% after controlling for person effects, as opposed to 20% in cross-section. Omnibus tests based on an unrestricted reduced form and instrumental variables tests based on differencing are consistent with conventional models. Tests based on comparing those who enter and leave union coverage provide evidence against the usual model. We find evidence for interactions between union status and other variables even after controlling for person effects.

AFDC and the Formation of Subfamilies

This paper analyzes the relationship between AFDC benefits and a single mothers propensity to reside in a subfamily-i.e., within another family rather than in her own independent household. We find that some states pay lower benefits to mothers living in subfamilies. In those states, a single mother may forego a substantial amount of AFDC benefits if she chooses to reside in a subfamily rather than establish her own household. Using data from the 1984 Current Population Survey, we address the question of whether differences in AFDC benefits affect the probability that a mother will reside in a subfamily. We find that the lower benefits paid to subfamilies have discernible but small effects, and that the overall level of AFDC benefits has no effect.

Inside the Black Box of Doctoral Education: What Program Characteristics Influence Doctoral Students' Attrition and Graduation Probabilities?

The Andrew W. Mellon Foundation’s Graduate Education Initiative (GEI) provided funding to 54 departments in the humanities and related social sciences during the 1990s to improve their PhD programs. This article estimates the aspects of PhD programs the GEI influenced and how these aspects influenced attrition and graduation probabilities. It uses survey data on entrants to PhD programs at 44 of the “treatment” departments and 41 “control” departments during a 15-year period that spanned the start of the GEI. Factor analysis is used to group more than 100 program characteristics into a smaller number of factors, and the impact of the GEI on each and the impact of each on attrition and graduation probabilities are estimated. The article estimates the routes via which the GEI influenced attrition and graduation rates and indicates which aspects of PhD programs departments should concentrate on to improve their programs’ performance.

New Results from Structural Modeling of Collusion and Efficiency

The Old Empirical Industrial Organization (OEIO) used OLS to analyze the correlation between concentration and industry profits. There are two competing hypotheses--collusion (Bain 1951) or superior competitors (Demsetz 1973). The New Empirical IO (NEIO) undertakes industry specific structural analyses. Like NEIO, we apply a structural model; like OEIO, we address the collusion versus competition question. We first apply our model to 54 Korean industries separately and then pool the data finding support for both the collusive and superior firm hypotheses. Going beyond this we also find the collusive effect dominates.

Cross‐Sectional Versus Panel Income Approaches: Analyzing Income Distribution Changes for the Case of Mexico

In this paper we reconcile, both theoretically and empirically, changes in cross‐sectional inequality with patterns of panel income changes during periods of economic growth and decline. Using panel earnings data from Mexico, we find that the panel changes are convergent in almost every period, the reason being that a large number of individuals experience small convergent earnings changes while a small number of individuals experience large and convergent earnings changes. We examine what accounts for the inequality of log‐earnings at a point in time and for the inequality of the log of earnings averaged over five quarters. We find that the equalization brought about by panel earnings changes is mainly associated with changes in employment status and in sector of employment and not by personal characteristics such as schooling, age, and gender.

Korean dumping and domestic market power

We model “dumping” as price discrimination assuming profit maximization by Korean firms prior to OECD and WTO membership. We show that the ratio of domestic prices, PD, to export prices, PX, can be derived from domestic and export price-cost margins. Accounting mismeasurements of costs cancel out in this dependent variable. Our structural model captures differential efficiencies in market shares and demand elasticities as non-linear fixed effects. PD/PX is a strongly positive function of Concentration.