John W. Graham

Estimating the parameters of a household production function with joint products

By estimating the parameters of a production function whose inputs consist of family time and market goods, the authors offer some new microeconomic estimates of the value of production that takes place in the home and also examine the concept of joint production-that is, the degree to which time devoted to home production simultaneously serves as leisure. They find evidence of substantial jointness between home production time and leisure, the degree of which is greater for wives than for husbands; and that both husband and wife possess human capital skills more productive in market work than in home work.

International differences in saving rates and the life cycle hypothesis

This paper demonstrates that life cycle and demographic variables explain about two-thirds of the observed variation in the saving rates of OECD nations during the 1970s. They explain more of the variation in the household than the national saving rate, and much more when the sample is weighted by population than when it is not. Finally, the study demonstrates that the labor force participation rate of the working age population is an important determinant of the aggregate saving rate.

The Effect of Child Support Payments on the Labor Supply of Female Family Heads: An Econometric Analysis

Recent Census Bureau statistics show that women who receive child support payments have higher earnings and work longer hours than women who do not. Does this suggest that child support-unlike all other nonwage income-does not deter work effort, or are women who receive it simply different? We use 1979/1982 CPS data on divorced or separated women to estimate the determinants of hours worked when AFDC participation and child support are endogenous. We find evidence of unobservable differences between women who receive child support and those who do not. Controlling for these, both child support and other nonwage income appear to reduce hours worked, but the deterrent effect of child support is considerably less.

The effect of child support enforcement on child support payments

This paper examines the effect of state child support enforcement legislation on child support received from absent fathers by ever-married women due support in 1978 or 1981. The analysis is based upon data from the 1979 and 1982 March/April Match files of the Current Population Survey, two nationally-representative surveys of the eligible child support population, combined with a data set assembled by the authors on child support enforcement techniques available in each state. Based upon probit estimates and OLS estimates corrected for sample selection bias, we find that expedited processes and liens (against real and personal property), as well as wage withholding laws in effect for at least three years, increased the amount of child support received in 1981. In general, enforcement is more effective at increasing the amount received than the probability of receiving something, and is more effective for Blacks than for nonBlacks.

Child Support and Remarriage Implications for the Economic Well-Being of Children

This article examines the relationship between two determinants of economic well-being for divorced mothers, child support and remarriage. Using a nationally representative sample of non-Black, ever-divorced mothers eligible for child support from the 1979, 1982, 1984, and 1986 March/April match file of the Current Population Survey, we predict the probability of remarriage using four measures of child support awarded and received while controlling for other variables related to remarriage. We find that, for mothers who remarry within 5 years of divorce, child support payments appear to have no adverse impact on remarriage. However, mothers receiving child support and those with above-average amounts of child support are less likely to remarry 5 or more years after divorce. These findings confirm previous evidence for a mild negative effect of child support on remarriage.

Changes in the Relationship Between Child Support Payments and Educational Attainment of Offspring, 1979-1988*

We examine changes over the 1980s in the effect of child support payments on the educational attainment of children age 16 to 19 in the United States, and why child support has a stronger impact than other sources of income. We use 1979 and 1988 Current Population Survey data, covering a period when improvements in enforcement should have increased the proportion of reluctant fathers paying support. We hypothesize and find that the positive effect of child support on education diminished somewhat over this period, both absolutely and in relation to other income.

A Comment on "Why Did Child Support Award Levels Decline from 1978 to 1985?" by Philip K. Robins

Between 1978 and 1985 the mean real value of child support payments due declined 25 percent. In this journal, Philip Robins argued most of this decline was the result of an increase in the ratio of female to male earnings, but we argue his conclusion is based upon an inappropriate use of decomposition analysis. We show child support due declined largely as a result of a secular decline in the real value of new awards, which have fallen almost three percent per year since 1961, and we investigate why new awards declined. Our findings have implications for reforms contained in the Family Support Act of 1988.

Personal Earnings Variation and Education

Publisher Summary This chapter discusses personal earnings variation and education. Two fundamental propositions appear to hold true across countries and across time: first, personal income is very unequally distributed; second, income and education are positively correlated. Personal income consists of labor income, or earnings, plus interest, rent, and profit income derived from the ownership of nonhuman wealth. Inequality in the income distribution is because of inequality in the distribution of property income than it is to inequality in earnings. However, even in developed nations a great deal of inequality in personal earnings remains. In both competitive labor markets as well as many that are centrally planned, earnings differentials reflect underlying skill differences: labor compensation varies directly with labor productivity. The major key to differences in earnings lies in the differences in the amount of schooling received. Causes of differences in the amount of schooling among individual families can be divided into differences in the supply of opportunities and in differences in the investment-related demands for education. The strongest and most significant effects are found to be those related to the availability of financial resources affecting the supply of educational opportunities available.