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Source: Center for Urban Affairs and Policy Research, Northwestern University
Resulting in 2 citations.
1. Altonji, Joseph G.
Dunn, Thomas Albert
An Intergenerational Model of Earnings, Hours and Wages
Working Paper, Center for Urban Affairs and Policy Research, Northwestern University, 1990
Cohort(s): Mature Women, Older Men, Young Men, Young Women
Publisher: Center for Urban Affairs and Policy Research, Northwestern University, now Institute for Policy Research
Keyword(s): Earnings; Family Influences; Fathers; Intergenerational Patterns/Transmission; Labor Market Outcomes; Mothers; Pairs (also see Siblings); Parental Influences; Sons; Wages

Permission to reprint the abstract has not been received from the publisher.

In this paper, the authors measure the extent to which the parental and family characteristics that drive wage rates and work hours independently of wage rates are responsible for similarities among family members in labor market outcomes. A factor model is developed for the earnings, hours and wages of young men and young women which then dictates the linkages among the covariances of these variables and those of their parents and their siblings. In the model, a young man's or woman's wage depends on the permanent component of father's wage, the permanent component of mother's wage, a sibling component which captures background characteristics that are common to siblings and are independent of the parents, and an idiosyncratic component. The young man's annual hours depend on his wages and his preferences which are composed of four independent elements--his father's preference factor, his mother's preference factor, and sibling and idiosyncratic factors. Lastly, his earnings are determined by his wages and his hours choice. The authors fit the model using auto- and covariances of earnings, hours and wages estimated from data on matched sibling and parent-child pairs from the NLS. The results indicate that the wages of young men and young women are quite responsive to the wage components of their fathers and mothers, and that there are important family links among the labor supply preferences as well. It was also found that wages play a small role in labor supply determination for young men, young women, and older men, and a larger role for mature women. Detailed decompositions of the variance of earnings, hours, and wages are provided.
Bibliography Citation
Altonji, Joseph G. and Thomas Albert Dunn. "An Intergenerational Model of Earnings, Hours and Wages." Working Paper, Center for Urban Affairs and Policy Research, Northwestern University, 1990.
2. Altonji, Joseph G.
Dunn, Thomas Albert
Effects of Parental Characteristics on the Returns to Education and Labor Market Experience
Working Paper, Center for Urban Affairs and Policy Research, Northwestern University, 1990
Cohort(s): Young Men, Young Women
Publisher: Center for Urban Affairs and Policy Research, Northwestern University, now Institute for Policy Research
Keyword(s): Educational Attainment; Educational Returns; Family Background; I.Q.; Modeling, Fixed Effects; Pairs (also see Siblings); Parental Influences; School Characteristics/Rating/Safety; Sons; Wages; Work Experience

Permission to reprint the abstract has not been received from the publisher.

Many studies have found strong influences of parental characteristics and family on the educational attainment of children. Few, however, have looked at the influence of these factors on the rate of return to education or rate of return to experience. The authors measure the extent to which the education profile of wages and the experience profile of wages are influenced by the child's IQ, parents' educations, and the index of family background variables, school characteristics, and personal characteristics that predict years of schooling completed. The presence of sibling pairs in the NLS is exploited in estimating the effects of parental characteristics and background variables on the education slope of wages and the experience slope of wages. The authors use ordinary least squares regression procedures and include a family fixed effect to capture omitted family variables that might otherwise bias the slope estimates. It was found that the child's IQ, parents' educations, and the index of personal, family and school characteristics that predict the child's educational attainment have only a weak influence on the relationships between education and wages and labor market experience and wages. It seems unlikely that the effect of family background on the education slope of wages is responsible for more than a small fraction of the powerful effect of family background on the years of schooling completed.
Bibliography Citation
Altonji, Joseph G. and Thomas Albert Dunn. "Effects of Parental Characteristics on the Returns to Education and Labor Market Experience." Working Paper, Center for Urban Affairs and Policy Research, Northwestern University, 1990.