China and Latin America: A Match Made in Trade Heaven or Dependency Reloaded?

China’s economy is expanding rapidly, and the emerging powerhouse is searching for energy resources, raw materials, and markets to maintain its economic growth. China has shown an insatiable appetite for Latin American natural resources, commodities, and agricultural products, from oil to lumber to copper to soybeans. Trade values between the two regions increased greatly from $1.3 billion in 1980 to about$13 billion in 2000 to over $50 billion in 2005. Latin America has the raw materials that China needs to fuel its economic expansion and offers a large market for cheap Chinese manufactured goods. Many analysts claim that Sino-Latin American trade is a “match made in trade heaven,” contending that China’s demand for raw materials is primarily a positive demand shock. China’s imports of resources and raw materials have pushed up prices in the world market, benefiting the Latin American countries exporting these goods. Chile, Venezuela, and Peru registered record trade surpluses in 2004 and 2005 due to the surge in exports to China. Others have noted that with a population of 1.3 billion, China offers a huge market for Latin American exports. On the other hand, many of the issues addressed by the Latin American dependency theorists of the 1960’s and 1970’s are relevant to current Sino-Latin American trade patterns. Dependency theory is best understood as a framework that seeks to explain underdevelopment in Latin America in terms of external causes. According to dependency theorists, the world is divided into “core” and “periphery.” The core is composed of the advanced countries, and the periphery is made up of the underdeveloped poor countries. The periphery is confined to exporting primary products and natural resources to the core, while the core exports manufactured goods to the periphery. Dependency theorists argued that this reliance on primary product exports is not conducive to economic growth since the periphery will suffer from deteriorating terms of trade. In other words, the poorer countries would be able to import less and less for a given level of exports. In my research I adopt these trade-related aspects of dependency theory and focus less on the political and social aspects. In some ways Sino-Latin American trade resembles the dependent relationship that Latin America long had with Europe and North America. Latin America sells natural resources, and China buys them and sells back value-added goods such as textiles, shoes, toys, and electronics. The import of cheap Chinese products competes with and undercuts local Latin American industries. Latin America may be falling into the trap of being a Chinese colony or economic dependency. Similar arguments have been made about Chinese economic relations with Africa. In my paper, I analyze Sino-Latin American trade data and patterns and then evaluate the extent to which Sino-Latin American trade resembles a dependent relationship. If the trade patterns resemble a dependent relationship, Latin American countries may need to make changes similar to those called for by Latin American populists with regard to the United States. On the other hand, if trade is mutually beneficial then such policy changes make little sense. Preliminary results suggest that some countries in Latin America are being backed into a raw materials corner

Essays on Informal Care, Labor Supply and Wages

Thesis advisor: Andrew BeauchampThesis advisor: Peter GottschalkThis dissertation examines how caregiving for an elderly parent affects an adult child's labor supply and wages. In the first chapter (co-authored with Courtney H. Van Houtven and Norma B. Coe) we identify the relationship between informal care and labor force participation in the United States, both on the intensive and extensive margins, and examine wage effects. We control for time-invariant individual heterogeneity; rule out or control for endogeneity; examine effects for men and women separately; and analyze heterogeneous effects by task and intensity. We find modest decreases--1.4-2.4 percentage points--in the likelihood of working for caregivers providing personal care. Male and female chore caregivers, meanwhile, are more likely to retire. For female care providers who remain working, we find evidence that they decrease work by 3-10 hours per week and face a 2.3-2.6 percent wage penalty. We find little effect of caregiving on working men's hours or wages except for a wage premium for male intensive caregivers. In the second chapter I formulate and estimate a dynamic discrete choice model of elder parent care and work to analyze how caregiving affects a woman's current and future labor force participation and wages. Intertemporal tradeoffs, such as decreased future earning capacity due to a current reduction in labor market work, are central to the decision to provide care. The existing literature, however, overlooks such long-term considerations. I depart from the previous literature by modeling caregiving and work decisions in an explicitly intertemporal framework. The model incorporates dynamic elements such as the health of the elderly parent, human capital accumulation and job offer availability. I estimate the model on a sample of women from the Health and Retirement Study by efficient method of moments. The estimates indicate that intertemporal tradeoffs matter considerably. In particular, women face low probabilities of returning to work or increasing work hours after a caregiving spell. Using the estimates, I simulate several government sponsored elder care policy experiments: a longer unpaid leave than currently available under the Family and Medical Leave Act of 1993; a paid work leave; and a caregiver allowance. The leaves encourage more work among intensive care providers since they guarantee a woman can return to her job, while the caregiver allowance discourages work. A comparison of the welfare gains generated by the policies shows that half the value of the paid leave can be achieved with the unpaid leave, and the caregiver allowance generates gains comparable to the unpaid leave.Thesis (PhD) — Boston College, 2012.Submitted to: Boston College. Graduate School of Arts and Sciences.Discipline: Economics

The Impact of Paid Maternity Leave on Maternal Health

We examine the impact of the introduction of paid maternity leave in Norway in 1977 on maternal health in the medium and long term. Using administrative data combined with survey data on the health of women around age 40, we find the reform improved a range of maternal health outcomes, including BMI, blood pressure, pain, and mental health. The reform also increased health-promoting behaviors, such as exercise and not smoking. The effects were larger for first-time and low-resource mothers and women who would have taken little unpaid leave in the absence of the reform.publishedVersio

A Comprehensive Measure of the Costs of Caring For a Parent: Differences According to Functional Status

Providing unpaid care for an older parent has costs that go well beyond a caregiver’s lost wages. A new estimate suggests that the median direct and indirect costs of caregiving are $180,000 over two years, about the same as full-time institutional care. This estimate accounts for lost earnings as well as non-tangible factors, such as lost leisure time and changes to the caregiver’s well-being. It suggests that informal care cost caregivers at least$277 billion in 2011, which is 20 percent higher than estimates that only consider lost wages

Long-Term Care Insurance: Does Experience Matter?

We examine whether long-term care (LTC) experience helps explain the low demand for long-term care insurance (LTCI). We test if expectations about future informal care receipt, expectations about inheritance receipt, and LTCI purchase decisions vary between individuals whose parents or in-laws have used LTC versus those who have not. We find parental use of a nursing home decreases expectations that one\u27s children will provide informal care, consistent with the demonstration effect. Nursing home use by in-laws does not have the same impact, suggesting that individuals are responding to information gained about their own aging trajectory. Nursing home use by either a parent or in-law increases LTCI purchase probability by 0.8 percentage points, with no significant difference in response between parents\u27 and in-laws\u27 use. The estimated increase in purchase probability from experience with LTC is about half the previously estimated increase from tax policy-induced price decreases

Economics conference bingo

We describe a bingo-style game intended to be played at economics conferences. Early results from implementation of the game by economists at conferences suggest that fun increases more than a full standard deviation. Further study of the effects of the game are ongoing

Missing Work is a Pain: The Effect of Cox-2 Inhibitors on Sickness Absence and Disability Pension Receipt

How does medical innovation affect labor supply? We analyze how the availability of Cox-2 inhibitors, pharmaceuticals used for treating pain and inflammation, affected the sickness absence and disability pension receipt of individuals with joint pain. We exploit the market entry of the Cox-2 inhibitor Vioxx and its sudden market withdrawal as exogenous sources of variation in drug use. Using Norwegian administrative data, we find Vioxx’s entry decreased quarterly sickness absence days among individuals with joint pain by 7-11 percent. The withdrawal increased sickness days by 12-21 percent and increased the quarterly probability of receiving disability benefits by 0.4-0.6 percentage points.acceptedVersio

The Impact of Paid Maternity Leave on Maternal Health

We examine the impact of the introduction of paid maternity leave in Norway in 1977 on maternal health. Before the policy reform, mothers were eligible for 12 weeks of unpaid leave. Mothers giving birth after July 1, 1977 were entitled to 4 months of paid leave and 12 months of unpaid leave. We combine Norwegian administrative data with survey data on the health of women around age 40 and estimate the mediumand long-term impacts of the reform using regression discontinuity and difference-inregression discontinuity designs. Our results suggest paid maternity leave benefits are protective of maternal health. The reform improved a range of maternal health outcomes, including BMI, blood pressure, pain, and mental health, and it increased health-promoting behaviors, such as exercise and not smoking. The effects were larger for first-time and low-resource mothers and women who would have taken little unpaid leave in the absence of the reform. We also study the maternal health effects of subsequent expansions in paid maternity leave and find evidence of diminishing returns to leave length

Employment Effects of Healthcare Policy: Evidence from the 2007 FDA Black Box Warning on Antidepressants

Public policies aimed at improving health may have indirect effects on outcomes such as education and employment. We study the labor market effects of a 2007 regulatory action by the US Food and Drug Administration, in which they expanded the black box warning on antidepressants. Using nationally representative data from the National Survey on Drug Use and Health and a difference-in-differences strategy, we find that employment among women aged 35-49 with a history of depression decreased by 6.1 percent (4.4 percentage points) in response to the warning. We explore potential mechanisms generating these employment effects and find that both antidepressant and psychotherapy use among women aged 35-49 decreased after the warning. Our estimates suggest these same women did not substitute towards non-medical alternatives such as marijuana or alcohol. We find no employment or mental health treatment response among men or among women younger than 35. Overall, our analysis suggests that the 2007 expanded black box warning reduced US labor force participation by 0.23 percentage points and led to roughly $13 billion in lost wages

Employment Effects of Healthcare Policy: Evidence from the 2007 FDA Black Box Warning on Antidepressants

Public policies aimed at improving health may have indirect effects on outcomes such as education and employment. We study the labor market effects of a 2007 regulatory action by the US Food and Drug Administration, in which they expanded the black box warning on antidepressants. Using nationally representative data from the National Survey on Drug Use and Health and a difference-in-differences strategy, we find that employment among women aged 35-49 with a history of depression decreased by 6.1 percent (4.4 percentage points) in response to the warning. We explore potential mechanisms generating these employment effects and find that both antidepressant and psychotherapy use among women aged 35-49 decreased after the warning. Our estimates suggest these same women did not substitute towards non-medical alternatives such as marijuana or alcohol. We find no employment or mental health treatment response among men or among women younger than 35. Overall, our analysis suggests that the 2007 expanded black box warning reduced US labor force participation by 0.23 percentage points and led to roughly $13 billion in lost wages