Educational Attainment and Family Background

This paper analyses the effect of aspects of family background, such as family income and parental education, on the educational attainment of persons born from 1967 to 1972. Family income is measured at different periods of a child’s life to separate longterm versus short-term effects of family income on educational choices. We find that permanent income matters to a certain degree, and that family income when the child is 0-6 years old is an important explanatory variable for educational attainment later in a child’s life. We find that short-term credit constraints have only a small effect on educational attainment. Long term factors, such as permanent family income and parental education are much more important for educational attainment than are shortterm credit constraints. Public interventions to alleviate the effects of family background should thus also be targeted at a child's early years, the shaping period for the cognitive and non-cognitive skills important later in life.credit constraints; education; Norway; family background

Public Transfers and Marital Dissolution

In this paper we analyse determinants of marital dissolution. The focus is on the alleged influence from public transfers, including governmental transfers directed towards divorced families, child allowance, and child support awards. We use a Norwegian panel of 2.800 couples who were married in 1989, together with a broad range of socio-economic variables, including (expected) public and private transfers in case of divorce. The sample is observed over a six-year period, with the purpose of registering marital dissolution. Our findings are consistent with matching models where divorce is explained according to assortative mating hypothesis. We find that the level of transfers has a significantly positive effect on the divorce probability, and that the distribution of transfers in favour of the wife increases the same probability. The fact that internal re-distribution between spouses affects the divorce propensity is consistent with non-unitary family models, but at odds with the predictions from unitary and/or common wealth models.divorce; marital dissolution; empirical modelling

Has Job Stability Decreased in Norway?

A widespread belief in the popular press is that job stability has declined across Western economies over the last 15 years. However, little support for this is found in the empirical literature. We use an extensive employer–employee data set for Norway to analyse changes in job stability in Norway by first presenting descriptive measures of job stability for manufacturing, the public sector and private services. Both descriptive analyses of tenure, hire and separation rates as well as regression-adjusted measures controlling for changes in demographics and the business cycle, indicate a slight decrease in job stability in Norway driven by increased job separation rates. These changes are not equally distributed across sectors or sub-groups of workers. However, we do not find that this tendency towards less stable jobs led to an increase in job-to-unemployment/out of the labour force; rather it was characterized by more job-to-job changes.Job stability; employer-employee data.

Measuring Heterogeneity in the Returns to Education in Norway Using Educational Reforms

The decision to take more education is complex, and is influenced by individual ability, financial constraints, family background, preferences, etc. Such factors, normally unobserved by the researcher, introduce endogeneity and heterogeneity problems into estimating the returns to education. In this paper, these problems are addressed by estimating a comparative advantage model for schooling, in which the returns to education vary at different levels of education. The model requires that instruments must be specified at each level of education, and we suggest that different school reforms in Norway can serve as suitable instruments. In particular, we exploit the staged implementation of a major reform in the comprehensive school system in the 1960s. We find that the returns to education are strongly nonlinear. In particular, we find that the returns to upper secondary school and shorter programs at regional colleges, together with master’s programs at universities, have high returns as measured by wages. Also, we find that the average treatment effect is surprisingly high for medium-length educations (up to two years of college education). This means that increasing the general level of education, which was the intention of the comprehensive school reform of the 1960s and of other school reforms, has the potential to generate a high return in wages, although we do not consider the cost to society. We also find that there is a substantial difference between the average treatment effect and the effect of treatment on the treated for bachelor’s and master’s degrees at universities.Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models (Updated); Analysis of Education

Late careers and career exits in Norway

We used matched employer-employee data for the period 1992-1997 to analyse the transition from work to early retirement in Norway. We focus on the effect of a new early retirement scheme ("AFP") of which some 60 percent of the population is eligible. We thus observe individuals in two different incentive systems and estimate the reallocation effect between employment and different early retirement, notably AFP and disability pension. There is a substantial drop in employment for the group entitled to AFP. However, while AFP has an increasingly negative effect on the labour supply, there seem to be almost no corresponding reduction in the incidence of disability pension during the period of investigation. Our data includes a broad range of individual, workplace and industry characteristics. We report a relatively high degree of heterogeneity in the retirement behaviour, notably between genders, but also between industries and sectors. Push as well as pull factors are identified. The former appears to be more relevant for the disability pathway, while the latter turns out to be significant when retiring to AFP.early retirement; social security

Assessing Changes in Intergenerational Earnings Mobility

Previous research on changes in intergenerational mobility suggests that the mobility is decreasing over time. One explanation for this pattern is increased cross-sectional income inequality. In contrast to most other OECD countries, the income inequality in Norway has been remarkably stable through large parts of the 1980s and the 1990s, not the least due to a compression of the earnings distribution during the same period. Using longitudinal data for Norwegian children born 1950, - 55, -60, and -65, we find a relatively high degree of earnings mobility. Furthermore, there is no tendency to increasing inequality along this dimension. This finding supports the hypothesis that intergenerational mobility is positively correlated with a compressed income distribution. Quartile father-child earnings transition matrices, together with nonparametric regressions, indicate quite high mobility in the middle of the distribution and somewhat more persistence at the top and bottom. This approach also reveals increased mobility over time for sons, but a less clear picture for daughters.Job; Occupational; and Intergenerational Mobility; Models with Panel Data; Longitudinal Data; Spatial Time Series.

Intergenerational Mobility: Trends Across the Earnings Distribution

The analysis, based on register data for Norwegian cohorts born 1950, 1955, and 1960, shows that the intergenerational earnings mobility is high. Using quantile regression, mobility is found to be lower at the lower end of the earnings distribution than at the upper end. The findings also indicate that mobility increases over time and that the increase seems to be somewhat higher for lower earnings. Finally, we find that the increase in earnings mobility over time has been larger for women than for men.Intergenerational mobility; time trends; quantile regression

Intergenerational Earnings Mobility and Divorce

This paper examines the potential effect of marital disruption on intergenerational earnings mobility.We observe the earnings of children born in 1960 and 1970 along with their biological fathers and mothers. The earnings mobility between sons and daughters relative to the earnings of their mothers and fathers is estimated. Our results suggest that divorce is associated with increased mobility, except between mothers‘ and daughters‘ earnings. Transition matrices reveal that the direction of the mobility is negative; children of divorced parents tend to move downward in the earnings distribution compared to children from intact families. Finally, we utilize information on the earnings mobility of siblings in dissolved families who grew up when the family was intact. The difference between pre- and postdivorce siblings is in turn compared with sibling differences in intact families.Intergenerational earnings mobility; divorce; gender differences

Gender Differences in Early Retirement Behaviour

In this paper we analyse early retirement for men and women focusing on family characteristics such as marital status, spouse income and wealth, and spouses’ labour market status. The female participation rate is high in Norway, implying that the country is particularly suitable for the study of gender differences in the early retirement behaviour. At our disposal we have administrative data that include information on individuals aged between 55 and 61 years in 1989. The individuals are followed until the end of 1995, with the aim of determining the predictors of different early retirement states. The results of a competing risk model indicate that women are less likely to take early retirement compared to men and that these differences are due to both different characteristics and different behaviour.Early retirement; gender differences; labour force participation.

Sources of Measurement Errors in Earnings Data: New Estimates of Intergenerational Elasticities

Using intergenerational data with a substantial part of the life-cycle earnings of children and almost the entire life-cycle earnings for their fathers, we present new estimates of intergenerational mobility in Norway. Extending the length of the fathers’ earnings windows from 5 to 30 years increases the estimated elasticities. Varying the age of father at observation has the opposite effect. Our findings indicate that intergenerational earnings mobility may have been strongly overstated in many earlier studies with shorter earnings histories. Biases in the estimated elasticities appear to be related to age and/or life-cycle measurement errors more than persistency in the transitory innovations.Intergenerational mobility; measurement error.