Leaving Home: What Economics Has to Say about the Living Arrangements of Young Australians

Like their counterparts elsewhere, more young Australians than ever are delaying the move to establish residential independence from their parents. This paper reviews the developing economics literature surrounding young people’s decisions to continue living in their parents’ homes in order to begin to assess the causes and consequences of this decision. In particular, co-residence with parents appears to be an important form of intergenerational support for young adults. It is important to understand the extent to which young people rely on this form of support as they complete their education, enter the labour market, and establish themselves as independent adults. Specific attention is paid to the ways in which Australian income-support, education, and housing policies may influence these patterns.Economics of the family, Household decision-making

Noncognitive Skills, Occupational Attainment, and Relative Wages

This paper examines whether men's and women's noncognitive skills influence their occupational attainment and, if so, whether this contributes to the disparity in their relative wages. We find that noncognitive skills have a substantial effect on the probability of employment in many, though not all, occupations in ways that differ by gender. Consequently, men and women with similar noncognitive skills enter occupations at very different rates. Women, however, have lower wages on average not because they work in different occupations than men do, but rather because they earn less than their male colleagues employed in the same occupation. On balance, women's noncognitive skills give them a slight wage advantage. Finally, we find that accounting for the endogeneity of occupational attainment more than halves the proportion of the overall gender wage gap that is unexplained.noncognitve skills, personality, occupation, gender wage gap, decomposition

The Sexual Harassment of Female Active-Duty Personnel: Effects on Job Satisfaction and Intentions to Remain in the Military

This paper examines the relationship between sexual harassment and the job satisfaction and intended turnover of active-duty women in the U.S. military using unique data from a survey of the incidence of unwanted gender-related behavior conducted by the U.S. Department of Defense. Overall, 70.9 percent of active-duty women reported experiencing some type of sexually harassing behavior in the 12 months prior to the survey. Using single-equation probit models, we find that experiencing a sexually harassing behavior is associated with reduced job satisfaction and heightened intentions to leave the military. However, bivariate probit results indicate that failing to control for unobserved personality traits causes single-equation estimates of the effect of the sexually harassing behavior to be overstated. Similarly, including women’s views about whether or not they have in fact been sexually harassed directly into the single equation model reduces the estimated effect of the sexually harassing behavior itself on job satisfaction by almost a half while virtually eliminating it for intentions to leave the military. Finally, women who view their experiences as sexual harassment suffer additional negative consequences over and above those associated with the behavior itself.job satisfaction; sexual harassment; military employment

Moral Turbulence and the Infusion of Multimodal Character Education Strategies in American Elementary Schools

Pockets of American society are marked by increase in violent crime with concurrent decline in moral character. This phenomenon is infiltrating the nation’s school system as evidenced by growing numbers of aggressive incidents in the classroom. As a result, there is an increasingly accepted need for effective character education programs in the schools as a means to help change the décolleté trajectory of the behavior of the nation’s school children. While more money and growing numbers of legislation have been put forth to support such an endeavor, research is still lacking as to what activities, skills, goals, and approaches would be best incorporated for optimal outcomes. This article makes a case for assessing the effectiveness of a multimodal approach incorporating cognitive, social, and sociocultural learning elements is than a single approach using cognitive elements alone, and considers the complexity of a Christian perspective on character education in schools

Neighborhood Diversity and the Appreciation of Native- and Immigrant-Owned Homes

This paper examines the effect of neighborhood diversity on the nativity gap in home-value appreciation in Australia. Specifically, immigrant homeowners experienced a 41.7 percent increase in median home values between 2001 and 2006, while the median value of housing owned by the native-born increased by 59.4 percent over the same period. We use a semi-parametric decomposition approach to assess the relative importance of the various determinants of home values in producing this gap. We find that the differential returns to housing wealth are not related to changes in the nature of the houses or the neighborhoods in which immigrants and native-born homeowners live. Rather, the gap stems from the fact that over time there were differential changes across groups in the hedonic prices (i.e., returns) associated with the underlying determinants of home values.international migration, home-ownership, decomposition analysis

The Retirement Expectations of Middle-Aged Individuals

We use the first three waves of the Household Income and Labour Dynamics in Australia (HILDA) Survey to examine the retirement plans of middle-aged workers (aged 45-55). Our results indicate that approximately two-thirds of men and more then half of women appear to be making standard retirement plans. At the same time, more than one in five individuals seem to have delayed their retirement planning and approximately one in ten either do not know when they expect to retire or expect to never retire. Retirement plans are closely related to current labor market position. Specifically, forming expectations about the age at which one will leave the labor market appears to be easier for workers in jobs with well defined pension benefits and standard retirement ages. Moreover, those who report that they do not know when they expect to retire do in fact appear to face greater uncertainty in their retirement planning. Those who anticipate working forever seem to do so out of concerns about the adequacy of their retirement incomes rather than out of increased job satisfaction or a heightened desire to remain employed. Finally, men alter their retirement plans in response to labor market shocks, while women are more sensitive to their own and their partners’ health changes.retirement, expectations, middle-aged workers

Portfolio Allocation in the Face of a Means-Tested Public Pension

Is there evidence that households adjust their asset portfolios just prior to retirement in response to a means-tested public pension? We address this question by estimating a system of asset equations constrained to add up to net worth. We find little evidence that in 2006 healthy households or couples responded to the incentives embedded in the means test determining pension eligibility by reallocating their assets. While there are some significant differences in asset portfolios associated with being near the income threshold, being of pensionable age, and being in poor health these differences are often only marginally significant, are not robust across time, and are not clearly consistent with the incentives inherent in the pension eligibility rules. In 2006, any behavioral response to the means test seems to occur among single pensioners in poor health. Comparison with 2002 results suggests the incentives to reallocate assets may have weakened over time.asset portfolios; means testing; public pension; household wealth

Do Coresidency with and Financial Transfers from Children Reduce the Need for Elderly Parents to Work in Developing Countries?

What drives the labor supply decisions of the elderly in developing countries? To what extent do elderly parents use coresidence with or financial transfers from children to reduce their own labor supply in old age? These questions are increasingly important because populations in many developing countries are rapidly aging. A clear understanding of the relationships between different means of support in old age is crucial to the development of sensible policy responses. This paper is one of only a few studies that seeks to formally model elderly labor supply in the context of a developing country while taking into account coresidency with and financial transfers from children. We find little evidence that support from children – either through transfers or coresidency – substitutes for elderly parents’ need to work. Thus, as in developed countries, there is a role for public policy to enhance the welfare of the elderly population.Intergenerational transfers, Old-age support, Elderly labor supply

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.non-cognitive skills, locus of control, stability, measurement error, endogeneity, life events

The Effect of Community-Level Socio-Economic Conditions on Threatening Racial Encounters

This paper contributes to the emerging literature on racial and ethnic tension by analyzing the relationship between local socio-economic conditions and the propensity for outsiders to have threatening racial encounters with insiders. We use unique data for a sample of active-duty Army personnel that allow us to first, link personnel to the local communities in which they are located and second, to avoid any selectivity bias associated with endogenous community selection. We find at best mixed evidence that racial hostility is related to economic vulnerability within a community and no evidence that racial conflict can be linked the level of public expenditure. Crime rates, however, are closely related to the incidence of threatening racial encounters and while a community’s demographic profile is also clearly linked to racial tension, these relationships cannot be easily generalized across minority groups or type of threatening racial encounter.racial and ethnic tension; U.S. military; economics of minorities