Stefanie Schurer

Two Economists' Musings on the Stability of Locus of Control

Empirical studies of the role of non-cognitive skills in driving economic behavior often rely heavily on the assumption that these skills are stable over the relevant time frame. We analyze the change in a specific non-cognitive skill, i.e. locus of control, in order to directly assess the validity of this assumption. We find that short- and medium-run changes in locus of control are rather modest on average, are concentrated among the young or very old, do not appear to be related to the demographic, labor market, and health events that individuals experience, and are unlikely to be economically meaningful. Still, there is no evidence that locus of control is truly time-invariant implying that the use of lagged measures results in an errors-in-variables problem that could downward bias the estimated wage return to locus of control by as much as 50 percent. Those researchers wishing to analyze the economic consequences of non-cognitive skills should consider (i) restricting their analysis to the working-age population for whom there is little evidence of systematic change in skill levels and (ii) accounting for error in the skill measures they employ.

THE EFFECTS OF AN INCENTIVE PROGRAM ON QUALITY OF CARE IN DIABETES MANAGEMENT

An incentive program for general practitioners to encourage systematic and igh-quality care in chronic disease management was introduced in Australia in 1999. There is little empirical evidence and ambiguous theoretical guidance on which effects to expect. This paper evaluates the impact of the incentive program on quality of care in diabetes, as measured by the probability of ordering an HbA1c test. The empirical analysis is conducted with a unique data set and a bivariate probit model to control for the self-selection process of practices into the program. The study finds that the incentive program increased the probability of an HbA1c test being ordered by 20 percentage points and that participation in the program is facilitated by the support of Divisions of General Practice.

Exploring the intergenerational persistence of mental health: Evidence from three generations

This paper uses data from the 1970 British Cohort Study to quantify the intergenerational persistence of mental health, and the long-run economic costs associated with poor parental mental health. We find a strong and significant intergenerational correlation that is robust to different covariate sets, sample restrictions, model specifications and potential endogeneity. Importantly, the intergenerational persistence is economically relevant, with maternal mental health associated with lasting effects on the childs educational attainment, future household income and the probability of having criminal convictions. These results do not disappear after controlling for childrens own childhood and adulthood mental health.

Earnings Assimilation of Immigrants in Germany: The Importance of Heterogeneity and Attrition Bias

Heterogeneity in the ethnic composition of Germanys immigrant population renders general conclusions on the degree of economic integration difficult. Using a rich longitudinal data-set, this paper tests for differences in economic assimilation profiles of four entry cohorts of foreign-born immigrants and ethnic Germans. The importance of time-invariant individual unobserved heterogeneity and panel attrition in determining the speed of assimilation is analysed. We find evidence for heterogeneity in the assimilation profiles and for robust assimilation profiles for two entry cohorts only. Omitted variables, systematic sample attrition and the presence of second generation immigrants in the sample influence the speed of assimilation, but do not change the overall picture.

Is the relationship between inflation and its uncertainty linear

We use parametric power ARCH models of the conditional variance of inflation to model the relationship between inflation and its uncertainty using monthly data for Germany, the Netherlands and Sweden over a period ranging from 1962 to 2004. For all three countries inflation significantly raises inflation uncertainty as predicted by Friedman. Increased uncertainty affects inflation in all countries but not in the same manner. For Sweden we find a negative impact in accordance with the Holland hypothesis, whereas for Germany and the Netherlands we find the opposite in support of the Cukierman-Meltzer hypothesis. In a sensitivity analysis we show that an arbitrary choice of the heteroskedasticity parameter influences this relationship significantly.

Getting Stuck in the Blues: Persistence of Mental Health Problems in Australia

Do episodes of mental health (MH) problems cause future MH problems, and if yes, how strong are these dynamics? We quantify the degree of persistence in MH problems using nationally representative, longitudinal data from Australia and system generalized method of moments (GMM), and correlated random effects approaches are applied to separate true from spurious state dependence. Our results suggest only a moderate degree of persistence in MH problems when assuming that persistence is constant across the MH distribution once individual-specific heterogeneity is accounted for. However, individuals who fell once below a threshold that indicates an episode of depression are up to five times more likely to experience such a low score again a year later, indicating a strong element of state dependence in depression. Low income is a strong risk factor in state dependence for both men and women, which has important policy implications.

Lifecycle Patterns in the Socioeconomic Gradient of Risk Preferences

Who is most likely to change their risk preferences over the lifecourse? Using German nationally representative survey data and methods to separate age from cohort effects, we estimate the lifecycle patterns in the socioeconomic gradient of self-reported risk preferences. Tolerance to risk drops by 0.5 SD across all groups from late adolescence to age 40. From mid to old age, risk tolerance continues to drop for the most disadvantaged, while it stabilizes for all other groups. By age 65, the socioeconomic gradient reaches a maximum of 0.5 SD. Extreme risk aversion among the elderly poor has important policy implications.

Origins of Adulthood Personality: The Role of Adverse Childhood Experiences

Abstract We test whether adverse childhood experiences – exposure to parental maltreatment and its indirect effect on health – are associated with age 30 personality traits. We use rich longitudinal data from a large, representative cohort of young US Americans and exploit the differences across siblings to control for the confounding influences of shared environmental and genetic factors. We find that maltreatment experiences are significantly and robustly associated with neuroticism, conscientiousness, and openness to experience, but not with agreeableness and extraversion. High levels of neuroticism are linked to sexual abuse and neglect; low levels of conscientiousness and openness to experience are linked to parental neglect. The estimated associations are significantly reduced in magnitude when controlling for physical or mental health, suggesting that adolescent health could be one important pathway via which maltreatment affects adulthood personality. Maltreatment experiences, in combination with their health effects, explain a significant fraction of the relationship between adulthood conscientiousness and earnings or human capital. Our findings provide a possible explanation for why personality traits are important predictors of adulthood labor market outcomes.

A Man's Blessing or a Woman's Curse? The Family Earnings Gap of Doctors

We examine the size and determinants of the family earnings gap for Australian general practitioners (GPs). Female GPs with children earn more than

One Man's Blessing, Another Woman's Curse? Family Factors and the Gender-Earnings Gap of Doctors

30,000 less than comparable female GPs without children, while male GPs with children earn more than