Zvi Eckstein

Why Youths Drop Out of High School: The Impact of Preferences, Opportunities, and Abilities

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The Specification and Estimation of Dynamic Stochastic Discrete Choice Models: A Survey

Our main goal is to quantify the returns to a career in the United States Congress. We specify a dynamic model of career decisions of a member of Congress and estimate this model using a newly collected dataset. Given estimates of the structural model, we ...

Dynamic Labour Force Participation of Married Women and Endogenous Work Experience

This paper presents and estimates a dynamic model of married womens labour force participation and fertility in which the effect of work experience on wages is explicitly taken into account. Because current participation alters future potential earnings, the investment return to work will be an important factor in the current work decision in any forward-looking behavioural model. The model is estimated using the National Longitudinal Surveys mature womens cohort. We use the estimates of our model to predict changes in the lifecycle patterns of employment due to changes in schooling, fertility, husbands income, and the magnitude of the experience effect on wages. We find that although work experience increases the disutility of further work, the effect is overwhelmed by the positive effect of experience on wages, leading to persistence in the employment patterns of these women. In addition we find that an increase in young children and in husbands income substantially reduces participation while increased schooling has a powerful positive impact on participation.

The effects of compulsory schooling on growth, income distribution and welfare

Abstract In this paper we consider an OLG model with productive capital and human capital affecting the quality of labor. In each generation parents invest in their childrens education but disregard its external effect on the aggregate production function. Government intervention in providing compulsory schooling increases economic growth (along the equilibrium path), while the intragenerational income distribution becomes more equal. Also, in the long run, the majority of individuals in each generation are better off due to compulsory schooling.

ESTIMATING A MARKET EQUILIBRIUM SEARCH MODEL FROM PANEL DATA ON INDIVIDUALS

In this paper, the feasibility of estimating a Nash labor market equilibrium model using only information on workers is demonstrated. The equilibrium model, adapted from Albrecht and Axell (1984), is based on workers who are homogenous in terms of market productivity and heterogeneous in terms of nonmarket productivity, and on firms that are heterogeneous in terms of productive efficiency. The equilibrium model is contrasted with an unrestricted version of the model in terms of its fit to the data. Copyright 1990 by The Econometric Society.

Endogenous fertility and optimal population size

Pareto optimality which is the standard criterion of efficiency in general equilibrium models takes population size as given and therefore cannot be directly applied to analyze the question of optimal population size. The criterion then for optimal population size must be based on a more restrictive definition of optimality. This paper extends Peter Diamonds (1965) Golden-Golden Rule growth model by assuming that individuals derive utility from their own consumptionand from their own children; offspring are assumed to consume resources before reaching adulthood. The authors show that the optimal steady state utility yields a higher population growth rate when it converges to the Golden Rule allocation. They then demonstrate that a voluntary social security program in which the size of the transfer to a particular agent is directly tied to his own fertility leads the competitive allocation to be identical to the allocation corresponding to the maximum of the steady state utility of the representative individual.

Jewish Occupational Selection: Education, Restrictions, or Minorities?

This paper documents the major features of Jewish economic history in the first millennium to explain the distinctive occupational selection of the Jewish people into urban, skilled occupations. We show that many Jews entered urban occupations in the eighth-ninth centuries in the Muslim Empire when there were no restrictions on their economic activities, most of them were farmers, and they were a minority in all locations. Therefore, arguments based on restrictions or minority status cannot explain the occupational transition of the Jews at that time. Our thesis is that the occupational selection of the Jews was the outcome of the widespread literacy prompted by a religious and educational reform in the first century ce, which was implemented in the third to the eighth century. We present detailed information on the implementation of this religious and educational reform in Judaism based on the Talmud, archeological evidence on synagogues, the Cairo Geniza documents, and the Responsa literature. We also provide evidence of the economic returns to Jewish religious literacy.

Uncertain lifetimes and the welfare enhancing properties of annuity markets and social security

This paper explores the implications of social security programs and annuity markets through which agents, who are characterized by different distributions of length of lifetime, share deathrelated risks. When annuity markets operate, a non-discriminatory social security program affects only the intragenerational allocation of resources. In the absence of private information regarding individual survival probabilities, such a program will lead to a non-optimal intragenerational allocation of resources. However, the presence of adverse selection considerations gives rise to a Pareto improving role for a mandatory non-discriminatory social security program.

Transaction Services, Inflation, and Welfare

This paper is motivated by empirical observations on the comovements of currency velocity, inflation, and the relative size of the credit services sector. We document these comovements and incorporate into a monetary growth model a credit services sector that provides services that help people economize on money. Our model makes two new contributions. First, we show that direct evidence on the appropriately defined credit service sector for the United States is consistent with the welfare cost measured using an estimated money demand schedule. Second, we provide estimates of the welfare cost of inflation that have some new features.

Duration to First Job and the Return to Schooling: Estimates from a Search-Matching Model

This paper investigates the properties of the joint distribution of the duration to the first post-schooling full-time job and of the accepted wage for that job within a search-matching-bargaining theoretic model. The model provides an interpretation of the observations on duration to first job and accepted wages that differentiates between behavioural influences and market fundamentals in determining the accepted wage-schooling relationship. The return to schooling is appropriately measured by differences in the wage offer distribution, which depends only on market fundamentals. We use data from the 1979 youth cohort of the National Longitudinal Surveys of Labor Market Experience to follow several school-leaving cohorts of young males. A model which allows for five types of heterogeneous workers within schooling/race groups fits the duration and wage data well for all such groups. Offer probabilities for all groups are estimated to be close to one. Mean offered wages are about