Robert Haveman

Schooling and Economic Well-Being: The Role of Nonmarket Effects.

Standard estimates of the economic value of additional schooling, based on earnings differences associated with differences in the level of schooling attained, cover only a portion of the total effects of education that are valued by citizens. We first identify a catalog of nonmarketed effects, many of which have been recently studied by economists, and then propose a procedure for estimating a willingness-to-pay value for these effects. Using empirical estimates of the magnitude of a selection of these effects found in the literature, we calculate willingness-to-pay values using our proposed procedure. These illustrative calculations suggest that standard estimates of the benefit of incremental schooling substantially understate the full value of such investments.

Childhood events and circumstances influencing high school completion

This paper is an empirical exploration of the effects of a variety of family and economic circumstances experienced during childhood on one indicator of success in young adulthood-high school completion. The estimates suggest that parental education and mother’s work are positive and significant determinants of high school completion, whereas growing up in a family with more children (who compete for resources), being persistently poor and on welfare, and moving one’s residence as a child have significant negative impacts on high school completion. The effects of some family stress and economic events differ depending on the age of the child when they occur. The results support the economic model of investment in children, as well as the welfare culture and socialization models.

Neighborhood Attributes as Determinants of Children's Outcomes: How Robust Are the Relationships?

Estimates of neighborhood effects on childrens outcomes vary widely among the studies that seek to identify their existence and magnitude, reflecting substantial variation in data and model specification. Here, we review that literature, and ask if the disparity in estimates of neighborhood effects may reflect the differences among studies in the specification of family characteristics, and hence omitted variables bias. We report a systematic set of robustness results for three youth outcomes (high school graduation, the number of years of completed schooling, and teen nonmarital childbearing) using data on about 2,600 children from the Panel Study of Income Dynamics. We observe these children over a period of at least 21 years and have included an extensive set of neighborhood variables for these individuals measured over the entire school-age period. We measure the relationship of these neighborhood variables to the three outcomes, moving from basic models containing no individual and family characteristic variables to models containing an extensive set of individual and family statistical controls. We conclude that the reliability of estimates of these impacts may be an artifact of the degree to which family background is characterized in model specification. Confidence that reported neighborhood effects reveal true relationships requires statistical controls for the full range of family and individual background that may also influence childrens attainments; not all variables with coefficients showing asterisks have significant effects.

Teen Out-of-Wedlock Births and Welfare Receipt: The Role of Childhood Events and Economic Circumstances

Using 20 years of longitudinal data on nearly 900 girls aged 0 to 6 in 1968 (19 to 25 in 1987) from the University of Michigans Panel Study of Income Dynamics the authors measure the influence of family background individual characteristics economic resources (or the lack thereof) and the experience of particular disruptive family events on the probability that a teenager will give birth out of wedlock and subsequently apply for and receive welfare....Among the many findings of the investigators is that teenage daughters whose mothers have more education are less likely to give birth out of wedlock that teens whose mothers received welfare are more likely to give birth out of wedlock and receive welfare themselves and that teens who grew up in a home experiencing stressful events (e.g. parental separation geographic moves) are more likely to give birth out of wedlock. (EXCERPT)

Before and After TANF: The Economic Well‐Being of Women Leaving Welfare

We use administrative data from Wisconsin to compare employment, earnings, and income outcomes for welfare leavers under early reforms and under the later, more stringent Temporary Assistance for Needy Families program. We find substantially higher rates of exit in the later period. Later leavers are somewhat more likely to work, but their earnings are lower. We also make a pre‐post comparison of individual employment and income experiences, examining a leaver’s outcomes during a calendar quarter of welfare receipt with these outcomes a year after leaving welfare. On average, substantial earnings growth is outweighed by declines in benefits, resulting in reduced total measured net income.

The economics of environmental policy

Knowledge and analyses are drawn from a broad range of experts to depict the problem of environmental quality as an economic problem whose resolution requires major changes in economic, political, and legal institutions. The model emphasizes the principle of materials balance in developing public policy which uses these interconnections as a framework. Viewed as an economic problem, environmental degradation is the result of the failure of the market system to efficiently allocate environmental resources among their alternative uses. The governments primary concern is to preserve competition and assure that the distribution of income meets the societys ethical standards, but the market system fails to work for common property resources. The problem of designing institutions for collective action that can efficiently manage common property environmental resources is analyzed. The need to bring environmental resources back into the economic system so that their use can be subject to the same sorts of constraints influencing the use of other resources (land, labor, and capital) is emphasized.

The contribution of environmental regulations to the slowdown in productivity growth

Abstract The radical slowdown in productivity growth since 1965 is often attributed to environmental regulations. Several studies, varying widely in method, have attempted to assess this contribution. Here, these analyses are reviewed and critiqued, and a summary appraisal of the likely contribution of environmental regulations to the observed decrease in productivity growth is offered.

Economics of water resources: a survey

Publisher Summary This chapter reviews the application of economic concepts to study the consumption, supply, and allocation of water resources. Water management poses a wide array of issues for economists because few commodities are so pervasively involved in human economic activities. To an important degree, the location and intensity of economic activities depend on the availability of water for drinking, for agricultural and industrial production, for sanitation and waste assimilation, for transportation, and for aesthetic and recreational benefits. Water is said to be the only substance that exists in all three physical states—solid, liquid, and gas—within the normal temperature range found on the earths surface. Through the process known as the hydrologic cycle, the earths water inventory is continually being transformed among the three states. No form of life on the earth can exist without water. Water is a universal solvent. The chapter reviews those characteristics of water resource systems that serve to set them apart from other resources, with particular reference to the attributes that serve as the basis for public intervention. It also describes the nature of interventions that have been made and emphasizes the need for evaluating them in terms of their objectives.

Disability Transfers and the Work Decision of Older Men

The potential causal relationship between the availability and generosity of disability transfers and the nonparticipation rates of older men is often asserted and much studied [Parsons, 1980; Haveman and Wolfe, 1984; Leonard, 1986]. However, estimates of the magnitude of this linkage vary widely: the growth in transfer availability and generosity has been credited with from 30 to 100 percent of the significant post-1960 fall in older male participation rates. The disparity in these research results stems primarily from (1) alternative sources of data that differentially constrain estimation of relevant expected wage and transfer incomes, (2) specifications that are unable to distinguish income transfer from labor market effects, and (3) reliance on measures of health status that are endogenous to the work-leisure decision. This study seeks to narrow the range of estimates by addressing each of these issues. Our utility maximization model of work status choice assumes that workers who differ in health status choose between the mutually exclusive options of working at the wage offered for their characteristics and accepting public or private disability transfers. Because the income flows in the two options are censored, they are estimated using switching regression techniques as expectations conditional on exogenous individual characteristics, hence accounting for the potentially endogenous process that separates wage earners from transfer recipients. The marginal utilities of income from the two sources are allowed to differ because of stigma effects. In the estimation we adjust the choice-based nature of our sample, employ longitudinal earnings data to measure expected changes in (as distinct from the expected level of) income in the two options, and use a separately estimated latent health status measure largely purged of its endogeneity with the participation decision.

Disability transfers and early retirement: a casual relationship?

During the decade 1968-1978, the labor force participation rate of older male workers decreased substantially. Simultaneously, the number of recipients of disability transfers grew rapidly. The simultaneous movement of these time series has prompted assertions of causality. We empirically test this assertion, employing a utility maximization choice framework and a two-stage empirical model involving modified least squares and probit maximum likelihood. We conclude that an increase in generosity and/or eligibility leniency of disability transfer programs has been a statistically significant, but quantitatively small, determinant of the decrease in labor force participation--no more than 25-30 percent. And, because the response is concentrated among older, more severely disabled men, we conclude that the impact of more generous and lenient disability transfer programs on national output is relatively small. Finally, since these findings run counter to earlier results, we attempt to identify the sources of the difference in estimated responses. Disability Transfers and Early Retirement: A Causal Relationship?