Guillaume Vandenbroucke

The Baby Boom and Baby Bust

What caused the baby boom? And, can it be explained within the context of the secular decline in fertility that has occurred over the last 200 years? The hypothesis is that: 1. The secular decline in fertility is due to the relentless rise in real wages that increased the opportunity cost of having children. 2. The baby boom is explained by an atypical burst of technological progress in the household sector that occurred in the middle of the last century. This lowered the cost of having children. A model is developed in an attempt to account, quantitatively, for both the baby boom and bust.

Hours Worked (Long-Run Trends)

For 200 years the average number of hours worked per worker declined, both in the market place and in the home. Technological progress is the engine of such transformation. Three mechanisms are stressed: (i) The rise in real wages and its corresponding wealth effect; (ii) The enhanced value of time off from work, due to the advent of time-using leisure goods; (iii) The reduced need for housework, due to the introduction of time-saving appliances. These mechanisms are incorporated into a model of household production. The notion of Edgeworth-Pareto complementarity/substitutability is key to the analysis. Numerical examples link theory and data.

Whither Chinese Growth? A Sectoral Growth Accounting Approach

We perform a growth-accounting exercise for Chinese economic growth from 1978 to 2003, by decomposing Chinese growth in GDP per labor into the contributions arising from the agricultural, public, and private sectors; and the contribution arising from the reallocations of labor among these three sectors. The greatest contributor to overall labor productivity growth (contributing 30% of the overall) is the growth in total factor productivity in the private nonagricultural sector. The next largest contributor (26% of the overall) is the reallocation of labor from the agricultural sector to the nonagricultural sector.

The American Frontier: Technology versus Immigration

What drove western population growth in the U.S. during the 19th century? The facts are: (i) Natural increase was higher in the West than in the East; and (ii) in the early stages of the settlement process, net migration could account for up to 80% of population growth in some regions. A general equilibrium model is proposed, with three ingredients: endogenous fertility, investment in land, and migration. The relative abundance of land in the West promotes higher fertility. The model is simulated. It accounts well for the time-series decomposition of population growth between migration and fertility.

A Model of the Trends in Hours

During the first half of the 20th century the workweek in the United States declined, and the distribution of hours across wage deciles narrowed. At the same time, the distribution of wages narrowed too. The hypothesis proposed is (i) Households have access to an increasing number of leisure activities which enhance the value of non-market time; (ii) The rise of education accounts for the narrowing of the wage and hours distributions. Such mechanisms, embedded into a neoclassical growth model, quantitatively account for the observations. The rise in wages is the main contributor to the decline in hours. The decline in the price of leisure goods is second in importance, yet its contribution is large

Fertility Shocks and Equilibrium Marriage-Rate Dynamics

Why did the marriage probability of single females in France after World War 1 rise 50% above its pre-war average, despite a 33% drop in the male/female singles ratio? We conjecture that war-time disruption of the marriage market generated an abnormal abundance of men with relatively high marriage propensities. Our model of matching over the lifecycle, when calibrated to pre-war data and two war-time shocks, succeeds in matching the French time path under the additional assumption of a pro-natalist post-war preference shock. We conclude that endogeneity issues make the sex ratio a potentially unreliable indicator of female marriage prospects.

Explaining Cross-Cohort Differences in Life Cycle Earnings

College-educated workers entering the labor market in 1940 experienced a 4-fold increase in their labor earnings between the ages of 25 and 55; in contrast, the increase was 2.6-fold for those entering the market in 1980. For workers without a college education these figures are 3.6-fold and 1.5-fold, respectively. Why are earnings profiles flatter for recent cohorts? We build a parsimonious model of schooling and human capital accumulation on the job, and calibrate it to earnings statistics of workers from the 1940 cohort. The model accounts for 99% of the flattening of earnings profiles for workers with a college education between the 1940 and the 1980 cohorts (52% for workers without a college education). The flattening in our model results from a single exogenous factor: the increasing price of skills. The higher skill price induces (i) higher college enrollment for recent cohorts and thus a change in the educational composition of workers and (ii) higher human capital at the start of work life for college-educated workers in the recent cohorts, which implies lower earnings growth over the life cycle.

Aging and Wealth Inequality in a Neoclassical Growth Model

In this article, the author uses a version of the neoclassical growth model with overlapping generations of individuals to investigate the effect of aging on wealth inequality. When an economy’s population becomes older—that is, when the proportion of individuals 65 years of age and older increases—two effects are at work: a direct effect from the changing age composition of the population and an indirect, equilibrium effect from the change in asset holdings by owner’s age. The main result is that wealth inequality in an aging population may decrease or increase depending on the cause of the aging. An increase in life expectancy tends to increase inequality, whereas a reduction in the population growth rate tends to reduce it.

Measurement Without Theory, Once Again

Bailey and Collins (2011) argue that Greenwood, Seshadri, and Vandenbroucke’s (2005) hypothesis that the baby boom was partly due to a burst of productivity in the household sector is not supported by evidence. This conclusion is based on regression results showing that appliance ownership is negatively correlated with fertility. They also argue that the Amish, who limit the use of modern technology, had a baby boom. First, it is demonstrated that a negative correlation between appliance ownership and fertility can arise naturally in Greenwood, Seshadri, and Vandenbroucke’s model. Second, evidence is presented casting doubt on the presumed technology phobia of the Amish.Bailey and Collins (forth.) argue that Greenwood, Seshadri and Vandenbroucke (2005)s hypothesis that the baby boom was partly due to a burst of productivity in the household sector is not supported by evidence. This conclusion is based upon regression results showing that appliance ownership is negatively correlated with fertility. They also argue that the Amish, who limit the use of modern technology, had a baby boom. First, it is demonstrated that a negative correlation between appliance ownership and fertility can arise naturally in Greenwood et al.s model. Second, evidence is presented casting doubt upon the presumed technological phobia of the Amish.

Married Men Sit Atop the Wage Ladder

Married men earn higher wages than single or married women and single men.