The "Window Problem" in Studies of Children's Attainments: A Methodological Exploration

Numerous studies of the determinants of children's attainments rely on observations of circumstances and events at age 14 as proxies for information over the entire childhood period. Using 21 years of panel data from the Michigan PSID on 825 children who were 14-16 years old in 1979, we evaluate the effects of using truncated or "window" (e.g., age 14) information in models of the determinants of attainments (e.g., education, nonmarital fertility) of young adults. Correlations between truncated and full-childhood variables are presented, along with 5 tests of the reliability of estimates based on "window" measurements. The tests are designed to evaluate the differential effects of data accuracy, multiple occurrence of events, duration of circumstances, and the timing of events or circumstances during childhood between "window" and full childhood information. We conclude that most of the standard truncated variables serve as weak proxies for multi-year information in such models, and draw the implications of these findings for future data-collection and research.

Economic Crisis and Intergenerational Economy: Lessons from Korea's 1997~98 Economic Crisis

This paper provides insight into some important features of the intergenerational resource allocation in Korea, before and after the financial crisis in 1997-98. Data sets of three periods before and after the financial crisis (1996, 2000, and 2005) were used to compare the results. This research particularly addresses two related issues: i) the generational effects of economic crisis, and ii) the capacity of age reallocation systems to spread economic risks across generations. The results show tremendous consumption smoothing and resource reallocation by age, during and after the financial crisis. Private education and private health consumption decreased for children between 1996 and 2000. However, the decrease in private education and private health consumption was mitigated by the increase in public consumption. It appears that the public sector did not only mitigate the adverse impact of the economic crisis on consumption, but it also reduced the widening disparity amongst generations. Within transfers, the public transfers for the elderly increased substantially as the private transfers decreased rapidly. Finally, there was a big increase in the asset-based reallocation of the elderly. The increase in asset-based reallocation was mainly due to an increase in asset income between 1996 and 2000, but it was almost entirely due to a decrease in saving (i.e. an increase in dis-saving) between 2000 and 2005. This suggests that Korean elderly seemed to have some degree of supporting system during the crisis, even without sufficient pension benefits. The increased reliance on asset accumulation will be critical in the long-run in Korea, as public pension funds diminish due to population aging

Is low fertility really a problem? Population aging, dependency, and consumption

Longer lives and fertility far below the replacement level of 2.1 births per woman are leading to rapid population aging in many countries. Many observers are concerned that aging will adversely affect public finances and standards of living. Analysis o