Becker Friedman Institute
for Research in Economics
The University of Chicago

Research. Insights. Impact. Advancing the Legacy of Chicago Economics.

J24: Human Capital; Skills; Occupational Choice; Labor Productivity

Educational Investment Responses to Economic Opportunity: Evidence from Indian Road Construction

Anjali Adukia, Sam Asher, Paul Novosad

The rural poor in developing countries, once economically isolated, are increasingly being connected to regional markets. Whether these new connections crowd out or encourage educational investment is a central question. We examine the impacts on educational choices of 115,000 new roads built under India’s flagship road construction program. We find that children stay in school longer and perform better on standardized exams.

Interactions between Financial Incentives and Health in the Early Retirement Decision

Pilar García-Goméz, Titus Galama, Eddy van Doorslaer, Ángel López-Nicholás

We present a theory of the relation between health and retirement that generates testable predictions regarding the interaction of health, wealth and financial incentives in retirement decisions. The theory predicts (i) that wealthier individuals (compared to poorer individuals) are more likely to retire for health reasons (affordability proposition), and (ii) that health problems make older workers more responsive to nancial incentives encouraging retirement (reinforcement proposition).

Early and Late Human Capital Investments, Borrowing Constraints, and the Family

Elizabeth Caucutt, Lance Lochner

We develop a dynastic human capital investment framework to study the importance of potential market failures--family borrowing constraints and uninsured labor market risk--as well as the process of intergenerational ability transmission in determining human capital investments in children at different ages. We explore the extent to which policies targeted to different ages can address these market failures, potentially improving economic efficiency and equity.

The Evolution of Awareness and Belief Ambiguity in the Process of High School Track Choice

Pamela Giustinelli, Nicola Pavoni

In this article, we provide novel survey evidence on middle schoolers' knowledge and on how such knowledge evolves in the process of high school track choice. Children in our study display only partial awareness of the set of available tracks, and they report low confidence regarding their beliefs (i.e., substantial belief ambiguity) about their likelihood of a regular high school path. This is especially the case for lower-ranked tracks.

Earnings over the Life Course: General versus Vocational Education

Bart Golsteyn, Anders Stenberg

Two common hypotheses regarding the relative benefits of vocational versus general education are (1) that vocational skills enhance relative short-term earnings and (2) that general skills enhance relative long-term earnings. Empirical evidence for these hypotheses has remained limited. Based on Swedish registry data of individuals in short (2-year) upper secondary school programs, this study provides a first exploration of individuals’ earnings across nearly complete careers. The descriptive earnings patterns indicate support for both hypotheses (1) and (2).

Toothless Reforms? The Remarkable Stability of Female Labor Force Participation in a Top-Reforming Country

Norberto Pignatti, Karine Torosyan, Maka Chitanava

Low Female Labor Force Participation (FLFP) constitutes a foregone opportunity at both the macro and at the micro levels, potentially increasing the vulnerability of households and lowering the long-run development perspectives of a country. Most international organizations and national policy makers see low FLFP as a serious issue that needs to be addressed by adopting appropriate policies. We investigate the possible reasons of the remarkable stability of FLFP in a top-reforming upper-middle income country.

Toothless reforms: The remarkable stability of female labor force participation in a top-reforming country

Norberto Pignatti, Karine Torosyan, Maka Chitanava

Low Female Labor Force Participation (FLFP) constitutes a foregone opportunity at both the macro and at the micro levels, potentially increasing the vulnerability of households and lowering the long-run development perspectives of a country. Most international organizations and national policy makers see low FLFP as a serious issue that needs to be addressed by adopting appropriate policies. We investigate the possible reasons of the remarkable stability of FLFP in a top-reforming upper-middle income country.

Does Birth Spacing Affect Personality?

Bart Golsteyn, Cécile A. J. Magnée

This paper studies the causal effect of birth spacing (i.e., the age difference between siblings) on personality traits. We use longitudinal data from a large British cohort which has been followed from birth until age 42. Following earlier studies, we employ miscarriages between the first and second child as an instrument for birth spacing. The results show that a larger age gap between siblings negatively affects personality traits of the youngest child in two-child households. This result sheds a first light on the causal effects of birth spacing on personality traits.

Origins of adulthood personality: The role of adverse childhood experiences

Jason M. Fletcher, Stefanie Schurer

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 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.

Health, Human Capital and Domestic Violence

Nicholas W. Papageorge, Gwyn C. Pauley, Mardge Cohen, Tracey E. Wilson, Barton H. Hamilton, Robert A. Pollak

We study the impact of health shocks on domestic violence and illicit drug use. We argue that health is a form of human capital that shifts incentives for risky behaviors, such as drug use, and also changes options outside of violent relationships. To estimate causal effects, we examine chronically ill women before and after a medical breakthrough and exploit differences in these women’s health prior to the breakthrough. We show evidence that health improvements induced by the breakthrough reduced domestic violence and illicit drug use.