Cox-McFadden Partial and Marginal Likelihoods for the Proportional Hazard Model with Random Effects

In survival analysis, Cox\u27s name is associated with the partial likelihood technique that allows consistent estimation of proportional hazard scale parameters without specifying a duration dependence baseline. In discrete choice analysis, McFadden\u27s name is associated with the generalized extreme-value (GEV) class of logistic choice models that relax the independence of irrelevant alternatives assumption. This paper shows that the mixed class of proportional hazard specifications allowing consistent estimation of scale and mixing parameters using partial likelihood is isomorphic to the GEV class. Independent censoring is allowed and I discuss approximations to the partial likelihood in the presence of ties. Finally, the partial likelihood score vector can be used to construct log-rank tests that do not require the independence of observations involved

The Effect of Maternity Leave on Women's Pay in Germany 1984-1994

In 1986 German federal parental leave and benefit policy was expanded in several ways, extending the potential duration of leave from six to ten months and paying child-rearing benefits to all new mothers regardless of their employment status before childbirth. The potential duration has increased four times since 1986 and stood at 18 months in 1991 and three years starting in 1992. This study uses log-wage difference regressions to examine the effect of leave taken by the mother on wage growth for two 5-year periods, 1984-1989 and 1989-1994. In each of the fiveyear periods, taking maternity leave was found to have a significant negative effect on wage growth. Point estimates imply that each month of maternity leave reduced wage growth by 1.5 percent over five years. In addition, for the second five-year period only, mothers experienced lower wage growth if they chose to stay at home rather than return to work when the allowable leave period expired: from 1989 to 1994, a half-year out of the labor force after the end of the leave period lowered wage growth by an additional 15 percent over five years.

Foreign Direct Investment in the United States: Issues, Magnitudes, and Location Choice of New Manufacturing Plants

What effect does foreign direct investment (FDI) have on job creation, wages, and productivity in the U.S.? How does FDI impact the budget deficit? How do changes in states\u27 fiscal policy affect plant location choices? Ondrych and Wasylenko address these and other politically-charged questions concerning FDI. Provided is empirical evidence drawn from a pooled cross-section and time-series data set that identifies the criteria foreigners use to make location decisions. The authors also develop a model, against which they compare their findings, and review policy options available at the state and federal levels. Information provided will help states shape, focus, and refine their recruitment strategies for attracting foreign plants.https://research.upjohn.org/up_press/1082/thumbnail.jp

Now You See It, Now You Don\u27t: Why Do Real Estate Agents Withhold Available Houses from Black Customers?

This paper develops a new approach to testing hypotheses about the causes of discrimination in housing sales. We follow previous research by using data from fair housing audits, a matched-pair technique for comparing the treatment of equally qualified black and white home buyers. Our contribution is to shift the focus from differences in the treatment of teammates during an audit to agent decisions concerning an individual housing unit. Our sample consists of all units seen by either a black of a white auditor in the 1989 national Housing Discrimination Study. We estimate a multinomial logit model to explain a real estate agent\u27s joint decisions concerning whether to show each unit to a white auditor and to a black auditor. We find evidence that real estate agents make and act upon inferences about a customer\u27s preferences on the basis of the customer\u27s initial inequity and that agents practice redlining, defined as the withholding of units in integrated neighborhoods. We find little evidence to support the conclusion that agents discriminate because of their own prejudice, but some evidence that they discriminate because of the prejudice of their white customers. More importantly, we find strong evidence of statistical discrimination; agents withhold houses from blacks when the probability of a successful transaction is perceived to be low

Discrimination in Qualitative Actions by Real Estate Brokers

Discrimination occurs when people in a particular class are systematically treated less favorably than other equally qualified people. This study focuses on racial and ethnic discrimination in qualitative actions by real estate brokers, such as showing a customer a housing unit that was advertised in the newspaper. The data come from the Housing Discrimination Study, which conducted over 2,000 fair housing audits of real estate brokers in 25 metropolitan areas in 1989. Each audit consists of a visit to a real estate agency by a white person and either a black or Hispanic person with similar socio-economic characteristics. Using Chamberlain’s fixed-effects logit estimation, we develop a nationally representative measure of the incidence of discrimination in broker behavior and conduct hypothesis tests on the incidence and causes of discrimination. The results indicate widespread discrimination and support the hypotheses that brokers discriminate both out of personal prejudice and in response to the prejudice of present and future white clients

Transitions Between Child Care Arrangements for German Pre-Schoolers

This study uses a descriptive statistical approach to analyze the dynamics of child care for German pre-schoolers of all ages. Age-specific and duration-specific hazard rates for leaving informal care and for leaving formal care are calculated for various risk groups. Differences in the hazard rates across risk groups indicate the presence of important factors affecting transitions. The factors that we examine relate to household characteristics, the employment status of the mother, and regional supply. We find strong support for the hypotheses that households with fewer pre-schoolers and working mothers have greater demand for pre-school formal care. This demand also appears to be supply driven. The hazard rates of subsequent children does not differ significantly from those of the first child

Why Do Real Estate Brokers Continue to Discriminate? Evidence from the 2000 Housing Discrimination Study

This paper studies racial and ethnic discrimination in discrete choices by real estate brokers using national audit data from the 2000 Housing Discrimination Study. It uses a fixed effects logit model to estimate the probability that discrimination occurs and to study the causes of discrimination. The data set makes it possible to control for auditors\u27 actual demographic and socioeconomic characteristics, along with the characteristics assigned for the purposes of the audit. The study finds that discrimination continues to be strong but also documents a downward trend in both the scope and incidence of discrimination since 1989. The estimations also identify both brokers\u27 prejudice and white customers\u27 prejudice as causes of discrimination

Ruthless Prepayment? Evidence From Multifamily Mortgages

Estimates of a prepayment function for multifamily mortgages are reported in this paper. These are among the first attempts to estimate such a function; most previous work along these lines focuses on single family mortgages. A further distinguishing aspect of the paper is its attempt to incorporate the impact of unobservable factors on the mortgage refinancing decision. A variant of the maximum likelihood procedure first developed by Meyer (1987) is employed. The results indicate an overall positive duration dependence for the conditional prepayment rate. The estimated response of prepayments to a change in the market rate of interest is significant with the expected sign; it is also larger once the effect of unobserved heterogeneity is taken into account. Nonetheless, the magnitude of the response is substantially less than that predicted by the ruthless option pricing model

Using Recurrence Probabilities to Estimate the Volume of Multifamily Mortgage Originations

This study uses recurrence probabilities to generate forecasts of the volume of multifamily mortgage originations for the period 1992-2002. The approach concentrates on predicting the volume of property sales using the baseline of a multifamily prepayment hazard estimation to generate the predicted cohort-specific proportion of calendar sales in a given year. The forecast for the volume of originations depends strongly on the definition of the relevant mortgage population. A definition that excludes assumptions but otherwise includes all properties selling between 1971 and 1991 in which a first mortgage was used in its acquisition yields a forecast of $47.2 billion for 1997. A more restrictive definition that approximates the pool of loans covered by HMDA leads to a forecast of$23.5 billion for 1997

A Model for Simulating Life Histories of the Elderly: Model Design and Implementation Plans

This paper provides a strategy for the development of a model of life-cycle change in functional status, economic well-being, and family composition, with particular attention to persons aged 65 and older. The overall goal is to use the model as the basis for individual-level projections of the later life cycle, that is, microsimulation. Specifically, the scope of the project includes: 1. Specification and estimation of equations for the dynamics of functional status, nursing home occupancy, income and death among those aged 65+, using data from the 1982, 1984, and 1989 National Long-Term Care Survey (NLTCS) linked to Medicare data for 1982-1993, based on extensions of the Grade of Membership (GoM) framework; 2. Developing equations for year-to-year income streams, determined jointly with changes of marital status, for all ages represented in the cohorts to be simulated; 3. Estimating parameters governing the dynamics of family composition (existence and characteristics of spouse, parent[s] and child[ren]); 4. Integrating the results of the above modeling efforts in a microsimulation computer program with the capacity to dynamically simulate life histories, focussing on the elderly population; 5. Validating the model by comparing its results to actual data where possible, analyzing uncertainty attached to the output from the microsimulation model, and conducting sensitivity analyses using alternative assumptions regarding trends in model parameters; and 6. Using microsimulation, producing disaggregated projections of the elderly population and its characteristics, for example cohort profiles of active life expectancy, or comparisons over time in the health, family structure and economic well-being of the oldest-old