We quantify the importance of endogenous human capital and of selection effects for counterfactual analysis of social security (SS) reforms. The literature typically performs these analyses by using structural models featuring exogenous productivity profiles. However, this approach faces two issues: (i) the estimation of productivity is subject to selection bias, and (ii) productivity is endogenous to the SS reforms. In this paper, we estimate a quantitative overlapping generations model featuring endogenous human capital accumulation using US data. First, we eliminate the SS and find a large positive effect on aggregate effective labor supply (${+}10.31\%$). Next, we build variants of this model to quantify the two issues (i) and (ii). We find that the endogeneity issue (ii) is quantitatively more important than the selection bias issue (i).

One of the challenges of population aging is the rising demand of elder care. Adult children fill a substantial portion of this care need. To understand its implication on their labor market choices and welfare outcomes, we build a simple static model where households can spend time and money producing care. We calibrate the model using data from the American Community Survey, the Health and Retirement Study, and National Health and Aging Trends Study/National Study of Caregiving to match moments in the labor market and caregiving patterns. With the calibrated model, we consider a few government programs under a projected aging population structure. Our results show that care subsidy and Medicaid expansion both cause a shift from informal care to formal care, relieving adult children from care burdens and thus improving their welfare. Caregiver allowance appears to have little effects on caregiving behaviors, which leads to minimal welfare improvement.

In many countries, the structure of wages and the labor law legislation are completely different for public and private sector employees. In this paper, we develop a general equilibrium overlapping generations model to study the effect of such differences on household savings and labor supply. To conduct our analysis, first we use microdata from two Brazilian household surveys to document that civil servants save and work significantly less than their counterparts in the private sector. Second, we use matched employer–employee microdata from Brazil (RAIS) to document differences between the two sectors in terms of wage and unemployment risk. Then, we calibrate the model to be consistent with micro and macro evidence for Brazil. Our counterfactual exercises show that differences in wages characteristics and labor law legislation account for nearly 70% of the gap in savings between civil servants and private sector workers, and 57% of the gap in labor supply. In addition, we find that eliminating those differences can produce sizable increase on aggregate savings, employment, and welfare.

The COVID-19 pandemic triggered a large and immediate drop in employment among U.S. workers, along with major expansions of unemployment insurance (UI) and work from home. We use Current Population Survey and Social Security application data to study employment among older adults and their participation in disability and retirement insurance programs through the second year of the pandemic. We find ongoing improvements in employment outcomes among older workers in the labor force, along with sustained higher levels in the share no longer in the labor force during this period. Applications for Social Security disability benefits remain depressed, particularly for Supplemental Security Income. In models accounting for the expiration of expanded UI, we find some evidence that the loss of these additional financial supports resulted in an increase in disability claiming. Social Security retirement benefit claiming is approximately 3% higher during the second year of the pandemic.

This paper examines how number of siblings affects employment under the relaxation of the One-Child Policy in China. We explore the One-and-A-Half-Child Policy in 1980s and examine its long-term impact on siblings and employment. With the data from 2010–2018 China Family Panel Studies, we find that individuals tend to have a larger number of siblings and have a higher probability of working in the places where the One-and-A-Half-Child Policy was implemented earlier. Using the degree of the impact of this policy as an instrumental variable for number of siblings, we find that one more sibling would increase the likelihood of working by 9.0 percentage points and increase the likelihood of working in the non-agricultural sector by 5.1 percentage points. Females are more affected by the relaxation than males. We also discuss the major mechanisms through which siblings affect employment. We find that the care-sharing effect of siblings increases labor supply and the social network effect of siblings brings more job opportunities and increases employment. The One-and-A-Half-Child Policy improves the labor market outcomes through both the channel of sharing care and the channel of social network.

Tolerance of sexual minorities is presumed to matter, but its effects are under-studied. Because tolerance can affect both experiences at work and division of labor in the household, we study the relationship between tolerance and the time cohabiting gay men and lesbian women spend in paid work across the United States. In the average state, the increase in tolerance between 2003 and 2015 is associated with an increase in paid work of about 1 week per year among cohabiting gay men. Though not robustly statistically significant, the increase in tolerance is associated with a decrease in paid work among cohabiting lesbian women relative to heterosexual women.

Nigeria has experienced bouts of violent conflict in different regions since its independence leading to significant loss of life. In this article, we explore the average effect of exposure to violent conflict generally on labor supply in agriculture. Using a nationally representative panel dataset for Nigeria from 2010 to 2015, in combination with armed conflict data, we estimate the average effect of exposure to violent conflict on a household's farm labor supply. Our findings suggest that on average, exposure to violent conflict significantly reduces total family labor supply hours in agriculture. We also find that the decline in family labor supply is driven by a significant decline in the household head's total number of hours on the farm.

The entire agricultural supply chain, from crop production to food consumption, is expected to suffer significant damages from climate change. This paper empirically investigates the effects of warming on agricultural labor supply through variation in dietary intake in rural Uganda. We examine labor supply, food consumption, and overall social welfare under various climate change scenarios. First, we combine nationally representative longitudinal survey data with high-resolution climatic data using an instrumental variable approach. Controlling for calorie intake, our study shows that warming has a non-linear impact on agricultural labor supply, with the number of hours worked being optimized at an optimal temperature of 21.3°C. Using these econometric estimates to parametrize an overlapping generations model, we find that under RCP8.5, output per adult decreases by 20 per cent by the end of the century due to the combined effect of climate change on food consumption and labor supply.

We have designed and implemented an experimental module in the 2014 Health and Retirement Study to measure older persons' willingness to defer claiming of Social Security benefits. Under the current system’ status quo where delaying claiming boosts eventual benefits, we show that 46% of the respondents would delay claiming and work longer. If respondents were instead offered an actuarially fair lump sum payment instead of higher lifelong benefits, about 56% indicate they would delay claiming. Without a work requirement, the average amount needed to induce delayed claiming is only $60,400, while when part-time work is stipulated, the amount is slightly higher, $66,700. This small difference implies a low utility value of leisure foregone, of under 20% of average household income.

This paper presents results from an online experiment that tested the effect of simple, concise information on respondents' knowledge of the rules of Social Security's Retirement Earnings Test (RET). We find that a straightforward, simple information treatment has a large effect on knowledge of the RET and on prospective choices regarding working and claiming benefits. We tested two additional information treatments that provided more comprehensive information and used illustrative examples. One of the additional treatments used only text, while the other one included a visual tool. Our results suggest that the additional treatments did not further improve knowledge; the simplest intervention yielded the same effect as the more comprehensive ones.

Increasing the minimum retirement age is a widespread option chosen by policy makers to reduce spending in financially constrained public pension systems. Yet, the effectiveness of such a reform strongly depends on the ability of individuals to postpone their withdrawal from the labor force. In this paper, we study the immediate impact of the 2010 reform of the French pension system by carrying out a short-term evaluation on the increase of the statutory eligibility age from 60 to 61. We use a differences-in-differences methodology, comparing the trajectories from work to retirement for succeeding generations facing a different statutory age. Using a detailed social security administrative database, we provide a global assessment of the effects of the reform, accounting for the potential substitution effects from old-age insurance toward unemployment, sickness or disability insurance schemes. Our findings suggest that despite a sizable effect on the employment rate, the reform also strongly increased unemployment and disability rates.

Why hasn’t economic progress lowered work hours more? One of Keynes’s most famous essays is his “Economic Possibilities for Our Grandchildren.” Keynes predicts that within one hundred years — which would bring us to 2030 — most scarcity will have disappeared and most individuals will work no more than fifteen hours a week. My question is a simple one: Why wasn’t Keynes right? Why have working hours remained as long as they have? Why hasn’t progress taken a more leisurely and less material form than what we have observed? Investigating that issue will help us get at the question of just how much progress has occurred. Under one view, Western life has been caught in a kind of rat race, and a lot of the gains of progress are illusory. For instance there is the argument that higher incomes are largely consumed as part of a futile race to win relative status, and living standards aren’t nearly as high as they might appear. Under some alternative scenarios, people haven’t moved to Keynes’s scenario for some good reasons, such as enjoying work more than we might think, or other hypotheses, as I will outline. In that case the observed changes in real income are robust, and measured correctly, or progress may even be greater than income measurements would indicate. I hope that addressing Keynes’s paradox can help us better understand this longstanding debate on the nature of modern progress.

Human fertility can affect agricultural production through its effect on supply of agricultural labor. Using the fact that in traditional, patriarchal societies, sons are generally preferred to daughters, we isolate exogenous variation in the number of children born to a mother and relate it to the agricultural labor supply and production in Uganda, which has a dominant agricultural sector and high fertility. We find that fertility has a sizable negative effect on household labor allocation to subsistence agriculture. Households with lower fertility devote significantly more time to land preparation and weeding; larger households grow less matooke and sweet potatoes. We find no significant effect on agricultural productivity in terms of yield per land area.

This study examined the supply of and demand for married female labor in the southern United States. Special attention was given to differences in labor force participation, labor supply, and quantities of labor supplied and demanded across rural and urban areas. Once state effects were accounted for, decisions to change participation were found not to vary by urban-rural designation. Differences in demand were fully captured by an intercept shifter and the variations in hours supplied by married females between urban and rural areas. Labor supply varied greatly with the effects of key determinants (number of children, work force experience, family income) being strongly different in rural areas. Different policies are needed to promote female labor supply in rural areas as opposed to urban areas.

Aggregate hours worked per working-age person decreased in Austria by 25% from 1970 to 2005. During the same time period, taxes increased, particularly the effective marginal tax rate on labor income. Using a standard general equilibrium growth model with taxes, I quantitatively assess the role played by the evolution of taxes in the evolution of hours worked in Austria. The model accounts for 76% of the observed decrease in hours worked per working-age person. My results are in line with other studies, which find taxes play an important role in explaining aggregate hours worked.