The Effect of Poverty on the Health of Newborn Children - Evidence from Germany

This paper analyses the association between health outcomes of newborn children and mother?s poverty status during pregnancy.We use a new questionnaire accompanying the GSOEP which collects abundant information on health outcomes. The findings indicate that there is generally no effect from poverty to health, except on the probability of preterm birth. Furthermore,we find some indication of intergenerational transmission of health status

Does Money Buy Higher Schooling? Evidence from Secondary School Track Choice in Germany

The German schooling system selects children into different secondary school tracks already at a very early stage in life. School track choice heavily influences choices and opportunities later in life. It has often been observed that secondary schooling achievements display a strong correlation with parental income.We use sibling fixed effects models and information on a natural experiment in order to analyze whether this correlation is due to a causal effect of income or due to unobservable factors that themselves might be correlated across generations. Our main findings suggest that income has no positive causal effect on school choice and that differences between high- and low-income households are driven by unobserved heterogeneity, e.g. differences in motivation

A New Look at Intergenerational Mobility in Germany Compared to the US

Motivated by contradictory evidence on intergenerational mobility in Germany, I present a cross-country comparison of Germany and the US, reassessing the question of whether intergenerational mobility is higher in Germany than the US. I can reproduce the standard result from the literature, which states that the German intergenerational elasticity estimates are lower than those for the US. However, based on highly comparable data, even a reasonable degree of variation in the sampling rules leads to similar estimates in both countries. I find no evidence for nonlinearities along the fathers' earnings distribution. In contrast, the analysis shows that mobility is higher for the sons at the lowest quartile of the sons' earnings distribution in both countries. In Germany this result is mainly driven by a high downward mobility of sons with fathers in the upper middle part of the earnings distribution. The corresponding pattern is clearly less pronounced in the US

Using Unexpected Recalls to Examine the Long-Term Earnings Effects of Job Displacement

This paper examines the long-term earnings consequences of permanent layoffs initiated during the early 1990s, using a sample of Massachusetts workers who enrolled in Job Training Partnership Act Title III programs, and who remained strongly attached to the state's labor force. The comparison group is formed by workers who were unexpectedly recalled. On average, recalled workers incurred substantial annual earnings reductions upon reemployment. Nevertheless, one decade later, permanently displaced workers were still earning between 11 and 17 percent less per year than recalled workers with comparable pre-layoff skills and experience. Workers with limited education experienced particularly large earnings reductions from permanent job loss

Lives on track? Long-term earnings returns to selective school placement in England and Denmark

We explore the influence of between-school ability placement at lower secondary education on earnings across the life course in England and Denmark. We go beyond the mid-career snapshot provided by previous studies by exploiting the availability of four decades worth of earnings data for individuals born in the mid-1950s. Members of this cohort who were judged to be among the most academically able attended grammar schools in England (19 percent) and advanced secondary schools (Realskole) in Denmark (51 percent) prior to the start of comprehensivisation. This key difference makes England and Denmark interesting cases for comparison, not least since pro-selection policies have re-emerged in England based on the claim that grammar schools lead to better educational and labour market outcomes. Our analysis of the influence of selective school placement on earnings finds little support for this contention. We find that those from socioeconomically disadvantaged backgrounds were strikingly under-represented in schools ear-marked for higher ability pupils in both countries, even after taking into account social class differences in measured ability. Our analysis for England finds only modest earnings returns to attending a grammar school, totalling just £39,000 across the life course, while in Denmark the lifetime earnings returns to attending Realskole are somewhat larger (£194,000). Because those from advantaged backgrounds were substantially over-represented at grammar schools and Realskoles, these returns accrue disproportionately to pupils from more advantaged backgrounds. Lower secondary school placement in Denmark accounts for forty percent of the intergenerational reproduction of socioeconomic advantage and disadvantage, more than half of which is due to selection into school types based on socioeconomic background rather than measured ability. Our findings question the wisdom of expanding grammar schools when they appear to do little to improve individuals’ earnings or increase social mobility

Empirical Strategies to Eliminate Life-Cycle Bias in the Intergenerational Elasticity of Earnings Literature

I argue that the empirical strategies for estimation of the intergenerational elasticity of lifetime earnings that are currently employed in the literature might not eliminate bias arising from lifecycle effects. Specifically, I demonstrate that procedures based on the generalized errors-invariables model suggested by Haider and Solon (2006) or the consideration of differential earnings growth rates across subpopulations may not yield unbiased or consistent estimates. I further argue that instrumental variable estimators will not identify an upper bound for the true population parameter