The Effects of Cooperation: A Structural Model of Siblings' Caregiving Interactions

This paper analyzes the decision making process of adult children to provide informal care to their parents. First, we develop a structural model to explain the amount of time that only children (without siblings) spend on providing care, taking into account opportunity costs in terms of time and money. The model is estimated using two datasets from 12 European countries and reveals the preferences of adult children for consumption, leisure and informal care. Although we assume that differences in behavior between children with and without siblings are due to dissimilar constraints only, by using only children we do not have to make assumptions about interactions between siblings in the structural model. In the presence of siblings, their choices also play a role in the caregiving decision. A central question is whether siblings make cooperative or noncooperative decisions. The second part of this paper aims to establish whether interactions between siblings are cooperative or noncooperative, by comparing predicted cooperative and noncooperative outcomes with observed outcomes. We use the structural parameter estimates from the first part of the paper and model the noncooperative outcomes using a Quantal Response Equilibrium. The results suggest that the nature of the interactions between siblings has a strong effect on the division of informal care between siblings. For almost three quarters of the families the noncooperative model has a better fit than the cooperative model. When the noncooperative families can be pushed into their cooperative outcome, their parents would on average receive 50% more informal care per week from their children, but this would reduce full-time labor supply by 5.7%-points and increase part-time labor supply by 6.7%.time allocation, (non)cooperation, structural modelling

The age-period cohort problem: set identification and point identification

"Only entropy comes easily" - Anton Chekhov Various methods have been used to overcome the point identification problem inherent in the linear age-period-cohort model. This paper presents a set-identification result for the model and then considers the use of the maximum-entropy principle as a vehicle for achieving point identification. We present two substantive applications (US female mortality data and UK female labor force participation) and compare the results from our approach to some of the solutions in the literature.

The trend in female labour force participation; what can be expected for the future?

During the 1980s and 1990s, the Netherlands experienced a strong increase in the labour force participation of women. This study investigates the increase of participation over the successive generations of women, and produces an educated guess for future participation. For this purpose, we estimate a binary age-period-cohort model for the generations born between 1925 and 1986, using data from the Dutch Labour Force Survey 1992-2004. The results indicate that the increasing level of education, the diminishing negative effect of children, and unobserved cohort effects have played an important role. According to our estimates, the increase in unobserved cohort effects has stopped since the generation born in 1955. This result is in line with results of studies on social norms and attitudes towards the combination of female employment and family responsibilities, which show a similar pattern over the successive generations. We conclude that the growth of female participation is likely to slow down in the near future.

How to stimulate single mothers on welfare to find a job: evidence from a policy experiment

We present the results from a policy experiment in which single mothers on welfare were stimulated to enter the labor market and increase their work experience. The aim of the policy was not per se for single mothers to leave welfare completely but to encourage them to find a job if only a part-time job. Two policy instruments were introduced: an earnings disregard and job creation. The experiment was performed at the municipality level in the Netherlands, a country with relatively high benefits and low incentives for single mothers to leave welfare for work. In our analysis, we make a distinction between native and immigrant welfare recipients. For immigrant single mothers, we find a positive employment effect of an earnings disregard. Job creation in addition to the earnings disregard increased working hours for some groups of single mothers. Although the outflow from welfare was not affected, welfare expenditures were reduced

How to Stimulate Single Mothers on Welfare to Find a Job:Evidence from a Natural Experiment

We present the results from a natural experiment in which single mothers on welfare were stimulated to find a job. Two policy instruments were introduced: an earnings disregard and job creation. The experiment was performed at the level of municipalities in The Netherlands, a country with relatively high benefits and low incentives for single mothers to leave welfare for work. In our analysis, we make a distinction between native and immigrant welfare recipients. For immigrant single mothers and some groups of native single mothers we find a positive employment effect of an earnings disregard. Job creation in addition to the earnings disregard increased working hours for some groups of single mothers. Although the outflow from welfare was not affected, welfare expenditures were reduced

Heterogeneous Default Effects on Retirement Saving:Sledgehammers or Precision Instruments

This paper uses a randomized experiment in a representative sample from the Dutch population to investigate the effect of various defaults on retirement saving. In light of the Dutch pension system, with high contributions that afford generous income replace- ment but no flexibility other than the timing of retirement, we consider defaults that encourage less saving as well as more. The aggregate effects of defaults at deviations from the status quo are symmetric and large: they increase the fraction that either suspends or doubles premium payments for three years by 22 percentage points (pp) on a base of less than 10%. The status quo default is less powerful, raising the fraction by 6–13pp from a baseline around 60%. Rich survey data on demographics and prefer- ences matched with administrative records of wealth and forecasted pensions indicate that the different default effects are driven by different groups. A default of increased saving disproportionately affects those with self-control issues, but has a smaller effect on individuals prone to procrastination. Moreover, this is the only default that inter- acts with variables related to preparedness for retirement, with a larger effect on those with high housing wealth and high adequate expenditure goals. The saving reduction default affects women more strongly and has a weaker effect on university graduates

Heterogeneous Default Effects on Retirement Saving:Sledgehammers or Precision Instruments

This paper uses a randomized experiment in a representative sample from the Dutch population to investigate the effect of various defaults on retirement saving. In light of the Dutch pension system, with high contributions that afford generous income replace- ment but no flexibility other than the timing of retirement, we consider defaults that encourage less saving as well as more. The aggregate effects of defaults at deviations from the status quo are symmetric and large: they increase the fraction that either suspends or doubles premium payments for three years by 22 percentage points (pp) on a base of less than 10%. The status quo default is less powerful, raising the fraction by 6–13pp from a baseline around 60%. Rich survey data on demographics and prefer- ences matched with administrative records of wealth and forecasted pensions indicate that the different default effects are driven by different groups. A default of increased saving disproportionately affects those with self-control issues, but has a smaller effect on individuals prone to procrastination. Moreover, this is the only default that inter- acts with variables related to preparedness for retirement, with a larger effect on those with high housing wealth and high adequate expenditure goals. The saving reduction default affects women more strongly and has a weaker effect on university graduates