Research

Macroeconomics, Family Economics, Consumer Credit, Growth, Development and Demography

Research Summary

For a summary of my research, check out my ERC grant Gender Differences: A Macroeconomic Perspective, as well as my NSF grant Macro Models of Household Formation and Fertility,
my slides at the Yrjö Jahnsson Award lecture and my NSF CAREER grant Macroeconomic Implications of Gender Roles and Consumer Credit Markets .
See also this research agenda published in the Economic Dynamics Newsletter, my current CRC project, my Google Scholar Profile and this audio slideshow (German).
Here you can find a recent discussion on the role of gender, household behaviour and family economics.

Working Papers/ Work in Progress

What is the Aggregate Impact of Pandemic Education Disruptions in Low-Income Countries?, with Titan Alon, Matthias Doepke and Kristina Manysheva, work in progress.

Status Externalities in Education and Low Birth Rates in Korea, with Seongeun Kim and Minchul Yum, October 2021.

Consumer Credit with Over-Optimistic Borrowers, with Florian Exler, Jim MacGee and Igor Livshits, CEPR DP No. 15570, December 2020.

This Time It's Different: The Role of Women's Employment in a Pandemic Recession, with Titan Alon, Matthias Doepke and Jane Olmstead-Rumsey, CEPR DP No. 15149, August 2020.

The Short-Run Macro Implications of School and Child-Care Closures, with Nicola Fuchs-Schündeln and Moritz Kuhn, IZA DP No. 13353, May 2020.

An economic model of the Covid-19 pandemic with young and old agents: Behavior, testing and policies, with Luiz Brotherhood, Philipp Kircher and Cezar Santos,
Discussion Paper Series – CRC TR 224: Discussion Paper No. 175, August 2020.

Asymmetric Information in Couples, with Matthias Doepke, work in progress.

Parental Control and Fertility History, with Alice Schoonbroodt, work in progress.

Domestic Violence over the Business Cycle, SLIDES, VIDEO, with Gerard van den Berg, work in progress, December 2012.

Published and Forthcoming Papers

From Mancession to Shecession: Women's Employment in Regular and Pandemic Recessions, with Titan Alon, Sena Coskun, Matthias Doepke and David Koll,
NBER Macroeconomics Annual 2021, forthcoming.

Consumer Debt and Default: A Macro Perspective, with Florian Exler,
Oxford Research Encyclopedia of Economics and Finance, October 2020.

The Impact of COVID-19 on Gender Equality, with Titan Alon, Matthias Doepke and Jane Olmstead-Rumsey,
Covid Economics: Vetted and Real-Time Papers, Issue 4, 62-85, April 2020.

Does Female Empowerment Promote Economic Development?, with Matthias Doepke,
Journal of Economic Growth, Vol.24(4), 309-343, December 2019.

An Equilibrium Model of the African HIV/AIDS Epidemic, with Jeremy Greenwood, Philipp Kircher and Cezar Santos,
Econometrica, Vol. 87, No. 4, 1081–1113, July 2019.

Women's Empowerment, the Gender Gap in Desired Fertility,and Fertility Outcomes in Developing Countries, with Matthias Doepke,
The American Economic Review, Papers and Proceedings, May 2018.

The Role of Marriage in Fighting HIV: A Quantitative Illustration for Malawi, with Jeremy Greenwood, Philipp Kircher and Cezar Santos,
The American Economic Review, Papers and Proceedings, 2017.

Families in Macroeconomics, with Matthias Doepke,
chapter in Handbook of Macroeconomics, Volume 2, 1-2693, edited by John B. Taylor and Harald Uhlig, Elsevier B.V., December 2016.

The Democratization of Credit and the Rise in Consumer Bankruptcies, with Igor Livshits and James MacGee,
Review of Economic Studies, Vol. 83 (4), 1673-1710, 2016.

Gender Gaps in Completed Fertility, with Erica Field, Vera Molitor and Alice Schoonbroodt,
Journal of Demographic Economics, Vol. 82(02), 167-206. June 2016.

The Association Between Own Unemployment and Female Victimization Among Female Youths, with Gerard van den Berg,
Journal of Economics and Statistics, Special Issue, JBNST - Vol. 235/4+5, 499-513, 2015.

Property Rights and Efficiency in OLG Models with Endogenous Fertility, with Alice Schoonbroodt,
Journal of Economic Theory, Vol. 150, 551–582, March 2014.

The Economics and Politics of Women's Rights, with Matthias Doepke and Alessandra Voena,
Annual Review of Economics, Vol. 4, 339-372, July 2012.

Families as Roommates: Changes in U.S. Household Size, with Todd Schoellman and Alejandrina Salcedo,
Quantitative Economics, 2012, Vol. 3, 122-175, March 2012.

Accounting for the Rise in Consumer Bankruptcies, with Igor Livshits and Jim MacGee,
American Economic Journal: Macro, Vol. 2, No. 2, 165-193, April 2010.

Fertility Theories: Can they explain the Negative Fertility-Income Relationship?, with Larry E. Jones and Alice Schoonbroodt,
chapter in Demography and the Economy, 43-100, edited by John Shoven, University of Chicago Press, November 2010. (Also available as NBER Working Paper # 14266.)

Women's Liberation: What's in it for Men?, with Matthias Doepke,
Quarterly Journal of Economics, Vol. 124, No. 4, 1541-1591, November 2009.

A Note on Marriage Market Clearing, with Urvi Neelakantan,
Economic Letters, 2008, Vol 101, pp. 103-105, June 2008.

An Economic History of Fertility in the U.S.: 1826-1960, with Larry E. Jones,
chapter in book Frontiers of Family Economics, Vol. 1 edited by Peter Rupert, Emerald Press, 2008. (Also available as NBER Working Paper No. 12796.)

Efficiency with Endogenous Population Growth, with Mikhail Golosov and Larry E. Jones ,
Econometrica, July 2007, Vol 75 (4), 1039-1071, July 2007.

Consumer Bankruptcy - A Fresh Start, with Igor Livshits and Jim MacGee,
The American Economic Review, Vol. 97 (1), 402-418, March 2007.

Polygyny, Women's Rights, and Development
Journal of the European Economic Association, Vol. 4(2-3), 523-530, May 2006.

Marriage Laws and Growth in Sub-Saharan Africa, with Todd Schoellman,
The American Economic Review, Papers and Proceedings, Vol. 96(2), 295-298, May 2006.

Polygyny, Fertility, and Savings, Journal of Political Economy, Vol.113 (6), 1341-1371, December 2005.

IPUMS - CPS , An Integrated Version of the March Current Population Survey, 1962-2002, with Miriam L. King,
Historical Methods, Vol. 36, 35-40, Winter 2003.


What is the Aggregate Impact of Pandemic Education Disruptions in Low-Income Countries?

with Titan Alon, Matthias Doepke and Kristina Manysheva

Work in progress

Abstract: The Covid-19 pandemic has led to prolonged school closures in most countries around the world. In this paper, we aim to quantify the potential impact of pandemic learning losses in developing countries, with a specific focus on sub-Saharan Africa. We argue that there are both micro and macro channels that imply that the repercussions of pandemic education disruptions are more severe in poorer compared to richer economies. First, the evidence suggests that children in poor countries suffer larger learning losses. This obtains in part because of a lower availability and efficiency of alternative learning channels such as virtual instruction, and in part because of a higher impact on dropout rates, which are amplified by income losses during the pandemic. Second, a given learning loss has a larger medium-run impact on the economy, because recent school graduates make up a larger fraction of the total labor force in low-income economies, and because older cohorts have relatively little formal education. We quantify these channels using a model of macro-development that is matched to household-level and aggregate data from Nigeria.

Keywords: Covid-19, School Closures, Developing Countries, Macro-Development

The paper: [ Draft available soon ]


Status Externalities in Education and Low Birth Rates in Korea

with Seongeun Kim and Minchul Yum

October 2021

Abstract: East Asians, especially South Koreans, appear to be preoccupied with their offspring’s education—most children spend time in expensive private institutes and in cram schools in the evenings and on weekends. At the same time, South Korea currently has the lowest total fertility rate in the world. In this paper, we propose a theory with status externalities and endogenous fertility that connects these two facts. Using a quantitative heterogeneous-agent model calibrated to Korea, we find that fertility would be 16% higher in the absence of the status externality. Furthermore, childlessness in the poorest quintile would fall from five to less than one percent. We then explore the effects of various government policies. A pro-natal transfer increases fertility and reduces education while an education tax reduces both education and fertility, with heterogeneous effects across the income distribution. The policy mix that maximizes the current generation’s welfare consists of an education tax of 12% and moderate pro-natal transfers—a monthly child allowance of 3% of average income for 18 years. This would raise average fertility by about 5% and decrease education spending by 16%. Although this policy increases the welfare of the current generation, it may not do the same for future generations as it lowers their human capital.

Keywords: Fertility, Status, Externality, Education, Childlessness, Korea

The paper: New Version October 2021: [ PDF ]
Previous version from June 2021 (CEPR Discussion Paper No. 16271): [ PDF ]

Slides: [ PDF ]


From Mancession to Shecession: Women's Employment in Regular and Pandemic Recessions

with Titan Alon, Sena Coskun, Matthias Doepke and David Koll

NBER Macroeconomics Annual 2021, volume 36, forthcoming

Abstract: We examine the impact of the global recession triggered by the Covid-19 pandemic on women's versus men's employment. Whereas recent recessions in advanced economies usually had a disproportionate impact on men's employment, giving rise to the moniker "mancessions," we show that the pandemic recession of 2020 was a "shecession" in most countries with larger employment declines among women. We examine the causes behind this pattern using micro data from several national labor force surveys, and show that both the composition of women's employment across industries and occupations as well as increased childcare needs during closures of schools and daycare centers made important contributions. While many countries exhibit similar patterns, we also emphasize how policy choices such as furloughing policies and the extent of school closures shape the pandemic's impact on the labor market. Another notable finding is the central role of telecommuting: gender gaps in the employment impact of the pandemic arise almost entirely among workers who are unable to work from home. Nevertheless, among telecommuters a different kind of gender gap arises: women working from home during the pandemic spent more work time also doing childcare and experienced greater productivity reductions than men. We discuss what our findings imply for gender equality in a post-pandemic labor market that will likely continue to be characterized by pervasive telecommuting.

Keywords: Recessions, Pandemics, Labor Suppy, Gender Equality

The paper (July 2021): [ PDF ]

Replication Files: [ zip file ]

Podcast (DE): Rolle rückwärts? Gleichberechtigung in der Krise

Video: Unemployment and working hours of women and men during the pandemic

Media Coverage: The Academic Times, The Economist, The New York Times, Santa Fe Public Radio, The 19th, Newsweek, Bloomberg, Welt, ntv, Süddeutsche Zeitung


Consumer Credit with Over-Optimistic Borrowers

with Florian Exler, Jim MacGee and Igor Livshits

CEPR DP No. 15570, December 2020

Abstract: We quantitatively analyze consumer credit markets with behavioral consumers and default. Our model incorporates over-optimistic and rational borrower types into a standard incomplete markets model with consumer bankruptcy. Lenders price credit endogenously, forming beliefs – type scores – about borrowers’ types. Since over-optimistic borrowers incorrectly believe they have rational beliefs, lenders do not need to take strategic behavior into account when updating type scores. We find that the partial pooling of over-optimistic with rational borrowers results in spill-overs across types via interest rates, with over-optimists being cross-subsidized by rational consumers who have lower default rates. Due to overestimating their ability to repay, over-optimists make mistakes – they borrow too much and file too late. We evaluate several policies to address these frictions: reducing the cost of default, increasing borrowing cost, and financial literacy education. While several policies do lower debt and filings, they are not successful at reducing financial mistakes and thus are not welfare improving. Financial literacy education backfires in that it hurts over-optimists by removing cross-subsidization. Score-dependent policies are not faring much better.

Keywords: Consumer Credit, Credit Card Debt, Endogenous Financial Contracts, Overoptimism, Bankruptcy, Financial Literacy, Financial Regulation, Type Scoring, Cross-Subsidization

The paper (July 2021): [ PDF ]

Slides: [ PDF ]


This Time It's Different: The Role of Women's Employment in a Pandemic Recession

with Titan Alon, Matthias Doepke and Jane Olmstead-Rumsey

CEPR DP No. 15149, August 2020

Abstract: In recent US recessions, employment losses have been much larger for men than for women. Yet, in the current recession caused by the Covid-19 pandemic, the opposite is true: unemployment is higher among women. In this paper, we analyze the causes and consequences of this phenomenon. We argue that women have experienced sharp employment losses both because their employment is concentrated in heavily affected sectors such as restaurants, and due to increased childcare needs caused by school and daycare closures, preventing many women from working. We analyze the repercussions of this trend using a quantitative macroeconomic model featuring heterogeneity in gender, marital status, childcare needs, and human capital. Our quantitative analysis suggests that a pandemic recession will i) feature a strong transmission from employment to aggregate demand due to diminished within-household insurance; ii) result in a widening of the gender wage gap throughout the recovery; and iii) contribute to a weakening of the gender norms that currently produce a lopsided distribution of the division of labor in home work and childcare.

Keywords: COVID-19, pandemics, recessions, business cycle, gender equality, school closures, childcare, gender wage gap

The paper (November 2020): [ PDF ]

Non-technical summaries:
Impact of the Covid-19 Crisis on Women’s Employment (published on Econofact)
The Shecession of 2020: Causes and Consequences (published on VoxEU) | German Version: Die „She-cession“ von 2020: Ursachen und Folgen (Ökonomenstimme)
This Time It's Different: The Role of Women's Employment in a Pandemic Recession (featured as research highlight by the European Economic Association)

Presentation Slides: [ PDF ]

Podcast (DE): Corona und Familienökonomik

Interview: The Differential Impacts of the Pandemic Recession on Women and Men's Employment and Roles

Video: The Impact of COVID-19 on Gender Equality

Media Coverage:
Die Wochenzeitung, National Public Radio, China Daily, Christian Science Monitor, Deseret News, Market Watch, The Daily Chronicle, WBEZ, Vox, Vox Ukraine, Yahoo Money, Nada es Gratis.


The Short-Run Macro Implications of School and Child-Care Closures

with Nicola Fuchs-Schündeln and Moritz Kuhn

IZA DP No. 13353, May 2020

Abstract: The COVID19 crisis has hit labor markets. School and child-care closures have put families with children in challenging situations. We look at Germany and quantify the macroeconomic importance of working parents. We document that 26 percent of the German workforce have children aged 14 or younger and estimate that 11 percent of workers and 8 percent of all working hours are affected if schools and child-care centers remain closed. In most European countries, the share of affected working hours is even higher. Policies to restart the economy have to accommodate the concerns of these families.

Keywords: COVID-19, labor market, children, child-care, parents, workforce

The paper (June 2020): [ PDF ]

A non-technical summary: The short-run macro implications of school and childcare closures (published on VoxEU)


An economic model of the Covid-19 pandemic with young and old agents: Behavior, testing and policies

with Luiz Brotherhood, Philipp Kircher and Cezar Santos

Discussion Paper Series – CRC TR 224: Discussion Paper No. 175, August 2020

Abstract: This paper investigates the importance of the age composition in the Covid-19 pandemic. We augment a standard SIR epidemiological model with individual choices on work and non-work social distancing. Infected individuals are initially uncertain unless they are tested. We find that older individuals socially distance themselves substantially in equilibrium. Confining the old even more reduces their welfare. Confining the young ex-tends the duration of the epidemic, with negative consequences on the old if the epidemic cannot be controlled after confinement. Testing and quarantines save lives, even if conducted just on the young, as does separation of activities by age. Combining policies can increase the welfare of both the young and the old.

Keywords: Covid-19, testing, social distancing, age, age-specific policies

The paper: New Version April 2021: [ PDF ]
Previous version from May 2020 (CEPR Discussion Paper No. 14695): [ PDF ]

Replication Files: New Version April 2021: [ zip file ]
Previous version from May 2020 (CEPR Discussion Paper No. 14695 ): [ zip file ]

A non-technical summary: The importance of testing and age-specific policies during the COVID-19 pandemic (published on VoxEU)

Presentation Slides (New Slides with new Results, February 2021): [ PDF ]


Consumer Debt and Default: A Macro Perspective

with Florian Exler

Oxford Research Encyclopedia of Economics and Finance, October 2020

Abstract: In this survey, we review the quantitative macroeconomic literature analyzing consumer debt and default. We start by providing an overview of consumer bankruptcy law in the US and document the relevant institutional changes over time. We proceed with a comprehensive empirical section, describing key facts about consumer debt, defaults and delinquencies, as well as charge-off and interest rates for the United States. In addition to the evolution of these variables over time, we construct life-cycle profiles using data from the Survey of Consumer Finances and show that debt and defaults display a clear hump-shaped profile by age. Third, we show how credit card debt has evolved along the income distribution. Finally, we document a large amount of heterogeneity in credit card interest rates across consumers. In the second part of the survey, we describe what has by now become the workhorse model of consumer credit and default. We discuss a quantitative version of the model and use it to decompose the main reasons for default. We also use the model to illustrate how the details of default costs matter. The remainder of the survey then discusses the literature centered around two questions. First, what are the welfare implications of various bankruptcy laws? And second, what caused the rise in filings over time? We end with a discussion of open questions and fruitful avenues for future research.

Keywords: Consumer Debt, Default, Bankruptcy, Chapter 7, Bankruptcy Law, Delinquency, Credit Cards, Unsecured Debt, Charge-Offs, Interest Rates

The paper: [ LINK ]

Working Paper Version: [ PDF ]


The Impact of COVID-19 on Gender Equality

with Titan Alon, Matthias Doepke and Jane Olmstead-Rumsey

Covid Economics: Vetted and Real-Time Papers, Issue 4, 62-85, April 2020

Abstract: The economic downturn caused by the current Covid-19 outbreak has substantial implications for gender equality, both during the downturn and the subsequent recovery. Compared to 'regular' recessions, which affect men’s employment more severely than women’s employment, the employment drop related to social distancing measures has a large impact on sectors with high female employment shares. In addition, closures of schools and daycare centers have massively increased child care needs, which has a particularly large impact on working mothers. The effects of the crisis on working mothers are likely to be persistent, due to high returns to experience in the labour market. Beyond the immediate crisis, there are opposing forces which may ultimately promote gender equality in the labour market. First, businesses are rapidly adopting flexible work arrangements, which are likely to persist. Second, there are also many fathers who now have to take primary responsibility for child care, which may erode social norms that currently lead to a lopsided distribution of the division of labour in house work and child care.

Keywords: COVID-19, Division of Labor, Business Cycle, Gender Equality

The paper: [ PDF ]
Working paper version: [ PDF ]

Podcasts:
Corona und Familienökonomik
Gender equality in 2023 with Titan Alon

Media Coverage:
CNN, New York Times, Behavioural scientist, BBC future, Quartz, VoxEU, Wharton School, The Sydney Morning Herald, The Daily Northwestern, PBS: To the Contrary,
Der Standard, Mannheimer Morgen , Süddeutsche Zeitung , Bayerischer Rundfunk , Spiegel online, Rhein-Neckar-Zeitung, Le Monde.


Does Female Empowerment Promote Economic Development?

with Matthias Doepke

Journal of Economic Growth, Vol.24(4), 309-343, December 2019

Abstract: Empirical evidence suggests that money in the hands of mothers (as opposed to fathers) increases expenditures on children. Does this imply that targeting transfers to women promotes economic development? Not necessarily. We consider a non-cooperative model of the household where a gender wage gap leads to endogenous household specialization. As a result, women indeed spend more on children and invest more in human capital. Yet, depending on the nature of the production function, targeting transfers to women may be beneficial or harmful to growth. Transfers to women are more likely to be beneficial when human capital, rather than physical capital or land, is the most important factor of production.We provide empirical evidence supportive of our mechanism: In Mexican PROGRESA data, transfers to women lead to an increase in spending on children, but a decline in the savings rate.

Keywords: Development, Female empowerment, Gender equality, Growth, Marital bargaining, Theory of the household

The paper: [ PDF ]

Replication Files: [ zip file ]

A non-technical summary: Women’s empowerment and development: The family connection (published on VoxDev)

Presentation Slides: [ PDF ]

Videos:
Are women better for development?
Will money in the hands of women promote economic development?


An Equilibrium Model of the African HIV/AIDS Epidemic

with Jeremy Greenwood, Philipp Kircher and Cezar Santos

Econometrica, Vol. 87, No. 4, 1081–1113, July 2019

Abstract: Twelve percent of the Malawian population is HIV infected. Eighteen percent of sexual encounters are casual. A condom is used a third of the time. To analyze the Malawian epidemic, a choice-theoretic general equilibrium search model is constructed. In the developed framework, people select between different sexual practices while knowing the inherent risk. The calibrated model is used to study several policy interventions, namely, ART, circumcision, better condoms, and the treatment of other STDs. The efficacy of public policy depends upon the induced behavioral changes and equilibrium effects. The framework complements the insights from epidemiological studies and small-scale field experiments.

Keywords: ART, circumcision, condoms, disease transmission, epidemiological studies, HIV/AIDS, knowledge about HIV, Malawi, marriage, policy intervention, search, small field experiments, STDs, sex markets

The paper: [ PDF ]
Older NBER working paper version: [PDF ]

Replication Files: [ zip file ]

Appendix: [ PDF ]

Non-technical summaries:
An equilibrium model of the African HIV/AIDS epidemic (published on VoxEU)
What caused the HIV/AIDS decline in Africa? Anti-retroviral therapy or better information? (published on VoxDev)

Presentation Slides: [ PDF ]

Video: Where do we stand in the fight against HIV?


Women's Empowerment, the Gender Gap in Desired Fertility, and Fertility Outcomes in Developing Countries

with Matthias Doepke

The American Economic Review, Papers and Proceedings, May 2018

Abstract: We document evidence on preferences for childbearing in developing countries. Across countries, men usually desire larger families than women do. Within countries, we find wide dispersion in spouses' desired fertility: there are many couples whose ideal family size differs by five children or more. This disagreement between spouses suggests that the extent to which women are empowered should matter for fertility choices. We point to evidence at both the macro and micro levels that this is indeed the case. We conclude that taking account of household bargaining and women's empowerment in analyses of fertility is an important challenge for research.

Keywords: women's empowerment, desired fertility, marital bargaining

The paper: [ PDF ]

Replication Files: [ zip file ]

Presentation Slides: [ PDF ]


The Role of Marriage in Fighting HIV: A Quantitative Illustration for Malawi

with Jeremy Greenwood, Philipp Kircher and Cezar Santos

The American Economic Review, Papers and Proceedings, 2017

Abstract: How might policies that promote marriage and/or dissuade divorce help in the fight against HIV/AIDS? This question is addressed employing a choice-theoretic general equilibrium search model, using Malawi as a case study. In the framework developed, individuals can choose between married and single life. A single person can select among abstinence and sex with or without a condom. The results suggest that marriage-friendly policies can help to abate HIV/AIDS. The policy predictions that obtain from general equilibrium analysis are compared with those that arise from simulated synthetic field experiments and epidemiological studies.

Keywords: AIDS, circumcision, condoms, general equilibrium modeling, HIV, marriage and divorce, Malawi, sex markets, search

The paper: [ PDF ]


Families in Macroeconomics

with Matthias Doepke

chapter in Handbook of Macroeconomics, Volume 2, 1789-1891, edited by John B. Taylor and Harald Uhlig, Elsevier B.V., December 2016

Abstract: Much of macroeconomics is concerned with the allocation of physical capital, human capital, and labor over time and across people. The decisions on savings, education, and labor supply that generate these variables are made within families. Yet the family (and decision making in families) is typically ignored in macroeconomic models. In this chapter, we argue that family economics should be an integral part of macroeconomics and that accounting for the family leads to new answers to classic macro questions.Our discussion is organized around three themes. We start by focusing on short- and medium-run fluctuations and argue that changes in family structure in recent decades have important repercussions for the determination of aggregate labor supply and savings. Next, we turn to economic growth and describe how accounting for families is central for understanding differences between rich and poor countries and for the determinants of long-run development. We conclude with an analysis of the role of the family as a driver of political and institutional change.

Keywords: Family economics, Macroeconomics, Business cycles, Growth, Households, Fertility, Labor supply, Human capital, Gender

The chapter: [ PDF ]

Replication Files: Codes and Data (zip), Cross-Country Data (xlsx) and Time Series Data (xslm)


The Democratization of Credit and the Rise in Consumer Bankruptcies

with Igor Livshits and James MacGee

Review of Economic Studies, Vol. 83 (4), 1673-1710, 2016

Abstract: Financial innovations are a common explanation for the rise in credit card debt and bankruptcies. To evaluate this story, we develop a simple model that incorporates two key frictions: asymmetric information about borrowers’ risk of default and a fixed cost of developing each contract lenders offer. Innovations that ameliorate asymmetric information or reduce this fixed cost have large extensive margin effects via the entry of new lending contracts targeted at riskier borrowers. This results in more defaults and borrowing,and increased dispersion of interest rates. Using the Survey of Consumer Finances and Federal Reserve Board interest rate data, we find evidence supporting these predictions. Specifically, the dispersion of credit card interest rates nearly tripled while the “new” cardholders of the late 1980s and 1990s had riskier observable characteristics than existing cardholders. Our calculations suggest that these new cardholders accounted for over 20% of the rise in bank credit card debt and delinquencies between 1989 and 1998.

Keywords: Credit cards, Endogenous financial contracts, Bankruptcy, Financial innovation

The paper: [ PDF ]

Replication Files: [ zip file ]

Appendix: [ PDF ]

Presentation Slides: [ PDF ]

Video: The democratization of credit


Gender Gaps in Completed Fertility

with Erica Field, Vera Molitor and Alice Schoonbroodt

Journal of Demographic Economics, Vol. 82(02), 167-206. June 2016

Abstract: The most common measure of reproductive behavior is the total fertility rate, which measures children born per woman. However, little work exists measuring male fertility behavior. We use survey data from several waves of the Demographic and Health Surveys (DHS) in eight Sub-Saharan African countries. We document several interesting differences in fertility outcomes of men and women. First, comparing completed fertility by birth cohorts, we find that on average men have more children than women in seven out of eight countries we consider. The gaps are large – reaching up to 4.6 children in Burkina Faso. Positive gaps are possible when populations are growing and men father children with younger women. Such a situation often coincides with polygyny. Indeed,we find that the fertility gap is positively related to the degree of polygyny.Second, we find a lower variance in completed fertility rates for women than for men, especially in high polygyny countries. Third, we find that differences in the desire to have children can largely be explained by differences in realized fertility. Finally, we find that for men, the demographic transition started earlier and was steeper than for women. These novel facts are useful when building theories of fertility behavior.

Keywords: fertility, gender, polygyny

The paper: [ PDF ]

Presentation Slides: [ PDF ]


The Association Between Own Unemployment and Female Victimization Among Female Youths

with Gerard van den Berg

Journal of Economics and Statistics, Special Issue, JBNST - Vol. 235/4+5, 499-513, 2015

Abstract: We estimate the association between the unemployment status of young women and the probability that they are subject to violence, using Swedish population register data covering the period 1999-2008. These data contain the highest-level classification of diagnoses made by medical experts at every in-dividual in-patient and out-patient visit to medical care units, including everycontact with a physician. We distinguish between domestic and non-domestic violence. It turns out that unemployed women are significantly more likely to be victimized than employed women with the same individual characteristics. This is mostly reflected in indicators of non-domestic violence and long-run abuse among unemployed female youths.

Keywords: conflict, household, relationships, assaults, abuse, health, crime, ICD codes

The paper: [ PDF ]


Property Rights and Efficiency in OLG Models with Endogenous Fertility

with Alice Schoonbroodt

Journal of Economic Theory, Vol. 150, 551–582, March 2014

Abstract:Is there an economic rationale for pronatalist policies? We propose and analyze a particular market failure that leads to inefficiently low fertility in equilibrium. The friction is caused by the lack of ownership of children: if parents have no claim on their children’s income, the private benefit from producing a child can be smaller than the social benefit. We analyze an overlapping-generations (OLG) model with fertility choice and parental altruism. Ownership is modeled as a minimum constraint on transfers from parents to children. Using the efficiency concepts proposed in Golosov, Jones, and Tertilt[38], we find that whenever the transfer floor is binding, fertility choices are inefficient. Second, we show that the usual conditions for efficiency are not sufficient in this context. Third, in contrast to settings with exogenous fertility, a PAYG social security system cannot be used to implement efficient allocations. To achieve an efficient outcome,government transfers need to be tied to fertility choice.

Keywords: Overlapping generations, Fertility, Efficiency

The paper: [ PDF ]

Supplementary Appendix: [ PDF ]

Technical Appendix: [ PDF ]

Presentation Slides: [ PDF ]


The Economics and Politics of Women's Rights

with Matthias Doepke and Alessandra Voena

Annual Review of Economics, Vol. 4, 339-372, July 2012

Abstract: Women’s rights and economic development are highly correlated.Today, the discrepancy between the legal rights of women and men is much larger in developing compared with developed countries. Historically, even in countries that are now rich, women had few rights before economic development took off. Is development the cause of expanding women’s rights, or conversely, do women’s rights facilitate development? We argue that there is truth to both hypotheses. The literature on the economic consequences of women’s rights documents that more rights for women lead to more spend-ing on health and children, which should benefit development. The political-economy literature on the evolution of women’s rights finds that technological change increased the costs of patriarchy for men and thus contributed to the expansion of women’s rights. Combining these perspectives, we discuss the theory of Doepke and Tertilt(2009), who find that an increase in the return to human capital induces men to vote for women’s rights, which in turn promotes growth in human capital and income per capita.

Keywords: women’s liberation, female suffrage, fertility, human capital, development

The paper: [ PDF ]


Families as Roommates: Changes in U.S. Household Size

with Todd Schoellman and Alejandrina Salcedo

Quantitative Economics, 2012, Vol. 3, 122-175, March 2012

Abstract: Living arrangements have changed enormously over the last two centuries. While the average American today lives in a household of only three people, in 1850household size was twice that figure. Furthermore, both the number of children and the number of adults in a household have fallen dramatically. We develop a simple theory of household size where living with others is beneficial solely because the costs of household public goods can be shared. In other words, we abstract from intra-family relations and focus on households as collections of roommates. The model’s mechanism is that rising income leads to a falling expenditure share on household public goods, which endogenously makes household formation less beneficial and privacy more attractive. To assess the magnitude of this mechanism, we first calibrate the model to match the relationship between household size, consumption patterns, and income in the cross section at the end of the 20th century. We then project the model back to 1850 by changing income.We find that our proposed mechanism can account for 37 percent of the decline in the number of adults in a household between 1850 and 2000, and for 16 percent of the decline in the number of children.

Keywords: Household size, living arrangements, roommates, economies of scale,household public goods, fertility decline

The paper: [ PDF ]

Presentation Slides: [ PDF ]


Accounting for the Rise in Consumer Bankruptcies

with Igor Livshits and Jim MacGee

American Economic Journal: Macro, Vol. 2, No. 2, 165-193, April 2010

Abstract: Personal bankruptcies in the United States have increased dramati-cally, rising from 1.4 per thousand working age adults in 1970 to 8.5 in 2002. We use a heterogeneous agent life-cycle model with competitive lenders to evaluate several commonly offered explanations. We find that increased uncertainty (income shocks, expense uncertainty) cannot account quantitatively for the rise in bankruptcies. Instead, the rise in filings appears mainly to reflect changes in the credit market environment: a decrease in the transaction cost of lending and in the cost of bankruptcy. We also argue that the abolition of usury laws and other legal changes were unimportant.

Keywords: consumer bankruptcy, uncertainty; credit markets, stigma

The paper: [ PDF ]

Replication Files: [ zip file ]

Appendix: [ PDF ]

Presentation Slides: [ PDF ]


Fertility Theories: Can they explain the Negative Fertility-Income Relationship?

with Larry E. Jones and Alice Schoonbroodt

chapter in Demography and the Economy, 43-100, edited by John Shoven, University of Chicago Press, November 2010. (Also available as NBER Working Paper # 14266.)

Abstract: In this chapter we revisit the relationship between income and fertility. There is overwhelming empirical evidence that fertility is negatively related to income in most countries at most times. Several theories have been proposed in the literature to explain this somewhat puzzling fact. The most common one is based on the opportunity cost of time being higher for individuals with higher earnings. Alternatively, people might differ in their desire to procreate and accordingly some people invest more in children and less in market-specific human capital and thus have lower earnings. We revisit these and other possible explanations. We find that these theories are not as robust as is commonly believed. That is, several special assumptions are needed to generate the negative relationship. Not all assumptions are equally plausible. Such findings will be useful to distinguish alternative theories. We conclude that further research along these lines is needed.

The paper: [ PDF ]


Women's Liberation: What's in it for Men?

with Matthias Doepke

Quarterly Journal of Economics, Vol. 124, No. 4, 1541-1591, November 2009

Abstract: The nineteenth century witnessed dramatic improvements in the legal rights of married women. Given that they took place long before women gained the right to vote, these changes amounted to a voluntary renouncement of power by men. In this paper, we investigate men’s incentives for sharing power with women. In our model, women’s legal rights set the marital bargaining power of husbands and wives. We show that men face a tradeoff between the rights they want for their own wives (namely none) and the rights of other women in the economy. Men prefer other men’s wives to have rights because men care about their own daughters and because an expansion of women’s rights increases educational investments in children. We show that men may agree to relinquish some of their power once technological change increases the importance of human capital. We corroborate our argument with historical evidence on the expansion of women’s rights in England and the United States.

Keywords: economic growth, human capital, political economy, return to education, women's rights

The paper: [ PDF ]

Appendix: [ PDF ]

A non-technical summary: Women’s rights: What’s in it for men? (published on VoxEU)

Presentation Slides: [ PDF ]


A Note on Marriage Market Clearing

with Urvi Neelakantan

Economic Letters, 2008, Vol 101, pp. 103-105, June 2008

Abstract: We provide a formula for marriage sex ratios based on birth sex ratios and dynamic factors like the marriageage gap and gender-specific mortality. We show that ignoring dynamic considerations can lead to faultyconclusions about scarcity in marriage markets.

Keywords: marriage market, sex ratio, age gap, polygyny, mortality

The paper: [ PDF ]


An Economic History of Fertility in the U.S.: 1826-1960

with Larry E. Jones

chapter in book Frontiers of Family Economics, Vol. 1 edited by Peter Rupert, Emerald Press, 2008. (Also available as NBER Working Paper No. 12796.)

Abstract: In this paper, we use data from the US census to document the history of the relationship between fertility choice and key economic indicators at the individual level for women born between 1826 and 1960. We find that this data suggests several new facts that should be useful for researchers trying to model fertility. (1) The reduction in fertility known as the Demographic Transition (or the Fertility Transition) seems to be much sharper based on cohort fertility measures compared to usual measures like Total Fertility Rate; (2) The baby boom was not quite as large as is suggested by some previous work; (3) We find a strong negative relationship between income and fertility for all cohorts and estimate an overall income elasticity of about -0.38 for the period; (4) We also find systematic deviations from a time invariant, isoelastic, relationship between income and fertility. The most interesting of these is an increase in the income elasticity of demand for children for the 1876-1880 to 1906-1910 birth cohorts. This implies an increased spread in fertility by income which was followed by a dramatic compression.

The paper: [ PDF ]


Efficiency with Endogenous Population Growth

with Mikhail Golosov and Larry E. Jones

Econometrica, July 2007, Vol 75 (4), 1039-1071, July 2007

Abstract: In this paper, we generalize the notion of Pareto efficiency to make it applicable to environments with endogenous populations. Two efficiency concepts are proposed: P-efficiency and A-efficiency. The two concepts differ in how they treat potential agents that are not born. We show that these concepts are closely related to the notion of Pareto efficiency when fertility is exogenous. We prove a version of the first welfare theorem for Barro–Becker type fertility choice models and discuss how this result can be generalized. Finally, we study examples of equilibrium settings in which fertility decisions are not efficient, and we classify them into settings where inefficiencies arise inside the family and settings where they arise across families.

Keywords: Pareto optimality, first welfare theorem, fertility, dynasty, altruism

The paper: [ PDF ]

Appendix: [ PDF ]

Presentation Slides: [ PDF ]


Consumer Bankruptcy - A Fresh Start

with Igor Livshits and Jim MacGee

The American Economic Review, Vol. 97 (1), 402-418, March 2007

Abstract: Consumer bankruptcy provides partial insurance against bad luck, but, by driving up interest rates, makes life-cycle smoothing more difficult. We argue that to assess this trade-off one needs a quantitative model of consumer bankruptcy with three key features: life-cycle component, idiosyncratic earnings uncertainty, and expense uncertainty (exogenous negative shocks to household balance sheets). We find that transitory and persistent earnings shocks have very different implications for evaluating bankruptcy rules. More persistent shocks make the bankruptcy option more desirable. Larger transitory shocks have the opposite effect. Our findings suggest the current US bankruptcy system may be desirable for reasonable parameter values.

Keywords: consumer bankruptcy, fresh start, life cycle

The paper: [ PDF ]
An older working paper version that contains more details: [ PDF ]

Replication Files: [ LINK ]


Polygyny, Women's Rights, and Development

Journal of the European Economic Association, Vol. 4(2-3), 523-530, May 2006

Abstract: Many Sub-Saharan African countries are extremely poor. It has been argued that the marriage system—in particular polygyny—is one contributing factor to the lack of development in this region. However, enforcing monogamy has proved to be very difficult. In this paper, I argue that transferring the right of choosing a husband from fathers to daughters might be an alternative policy that could potentially be easier to enforce. I use a calibrated general equilibrium model of polygyny to analyze such a policy. I find that giving daughters more choices has similar economic effects as a ban on polygyny. Both policies decrease the return on wives for men and thereby raise the incentive to invest in alternative assets. This increases the capital stock and hence GDP per capita. Quantitatively, however, I find that enforcing monogamy has much larger effects.

The paper: [ PDF ]


Marriage Laws and Growth in Sub-Saharan Africa

with Todd Schoellman

The American Economic Review, Papers and Proceedings, Vol. 96(2), 295-298, May 2006

The paper: [ PDF ]


Polygyny, Fertility, and Savings

Journal of Political Economy, Vol.113 (6), 1341-1371, December 2005

Abstract: Sub-Saharan Africa has a high incidence of polygyny. It is also the poorest region of the world. In this paper I ask whether banning polygyny could play any role for development. Using a quantitative model of polygyny, I find that enforcing monogamy lowers fertility, shrinks the spousal age gap, and reverses the direction of marriage payments. Polygyny leads to high bride-prices to “ration” women, which makes buying wives and selling daughters a good investment, thus crowding out investment in physical assets. For reasonable parameter values, I find that banning polygyny decreases fertility by 40 percent, increases savings by 70 percent, and increases output per capita by 170 percent.

The paper: [ PDF ]

Data: [ XLS ]

Presentation Slides: [ PDF ]


IPUMS - CPS , An Integrated Version of the March Current Population Survey, 1962-2002

with Miriam L. King

Historical Methods, Vol. 36, 35-40, Winter 2003

Abstract: The Minnesota Population Center (MPC) is creating an integrated version of the March U.S. Current Population Survey (CPS) covering the years 1962-2002. The CPS is one of the few comprehensive data sources available for researching social and economic trends between decennial censuses. The survey also includes useful information - such as employment patterns and participation in social welfare programs - that is not available in the census. The new database will be compatible with the decennial census data available in the Integrated Public Use Microdata Series (IPUMS). For variables found in both sources, the integrated CPS will use IPUMS codes, and the documentation and data access system for the CPS data will be based on IPUMS principles and infrastructure.

Keywords: Current Population Survey (CPS), demography, economics, IPUMS, microdata survey

The paper: [ PDF ]