New survey-based data on siblings are used to assess potential roles of bequests in redistributing income among siblings as implied by prominent models. The data are not focused on the upper tail of the wealth distribution and include both own and sib reports on own and sib's bequests, enabling use of a measurement model. Results indicate that bequests are received by almost two-thirds of children, average bequests are significant fractions of annual earnings, and there are significant differences between sibs' schooling and earnings. However, there are not significant sib differences in bequests once measurement error is incorporated into the analysis.

In this paper, we examine empirically whether risk pooling is more advantageous among altruistic compared to selfish agents in a framework where individuals cannot make binding commitments. In particular, we incorporate altuism into a model of risk sharing under imperfect commitment and use simulation methods to establish tests of the roles of both altruism and commitment problems in determining the extent of insurance and the intertemporal movements in interhousehold transfers. The tests are carried out using three panel data sets from two countries of rural South Asia that provide detailed information on transfers and enable the measurement of income shocks. The estimates provide strong support for the notion that imperfect commitment substantially constrains informal transfer arrangements, whether kin-based or not, but also provide evidence that altruism plays an important role in ameliorating commitment constraints and thus in increasing the gains from income pooling.

Andrew D. Foster, Mark R. Rosenzweig, A Test for Moral Hazard in the Labor Market: Contractual Arrangements, Effort, and Health, The Review of Economics and Statistics, Vol. 76, No. 2 (May, 1994), pp. 213-227

We look at the effects of rainfall forecasts and realized rainfall on equilibrium agricultural wages over the course of the agricultural production cycle. We show theoretically that a forecast of good weather can lower wages in the planting stage, by lowering ex ante out-migration, and can exacerbate the negative impact of adverse weather on harvest-stage wages. Using Indian household panel data describing early-season migration and district-level planting- and harvest-stage wages over the period 2005-2010, we find results consistent with the model, indicating that rainfall forecasts improve labor allocations on average but exacerbate wage volatility because they are imperfect.

We use a model of human capital investment and activity choice to explain facts describing gender differentials in the levels and returns to human capital investments. These include the higher return to and level of schooling, the small effect of healthiness on wages, and the large effect of healthiness on schooling for females relative to males. The model incorporates gender differences in the level and responsiveness of brawn to nutrition in a Roy-economy setting in which activities reward skill and brawn differentially. Empirical evidence from rural Bangladesh provides support for the model and the importance of the distribution of brawn.

Panel and time-series data describing the green-revolution period in India are used to assess the effects of exogenous technical change on the returns to schooling, the effects of schooling on the profitability of technical change, and the effects of technical change and school availability on household schooling investment. The results indicate that the returns to (primary) schooling increased during a period of rapid technical progress, particularly in areas with the highest growth rates. Such increases induced private investment in schooling, net of changes in wealth, wages, and the availability of schools, and school expansion importantly increased levels of schooling.

In a recent article in this Review (Borias, 1987), George Borjas uses a standard model of self-selection to demonstrate that immigrants in the United States may not necessarily be positively selected, as is commonly assumed. Borjas' empirical results, based on U.S. Census micro data merged with country-of-origin characteristics for 41 sending countries, however, do not provide clear or consistent results with respect to the immigration selection issue, although they do confirm earlier findings that the characteristics of the countries of origin of U.S. immigrants explain a substantial proportion of the differences in their economic status (Jasso and Rosenzweig, 1986b).' The purpose of this note is to show that Borjas' results are themselves subject to biases due to additional processes of self-selection. In particular, his inconclusive findings with respect to immigration selectivity arise from the use of a choice-based sample; enlargement of his highly selective sample of countries, based on the number of foreign-born in the United States, yields results that appear to conform much more closely and consistently to conventional wisdom, namely that the United States appears to attract those persons with above-average skills. We also provide evidence that changes in the earnings of aggregate immigrant entry cohorts, used by Borjas to measure the assimilation of immigrants, reflect another evidently important selection process, namely selective emigration. The effects of country characteristics on the wages of the foreign-born at entry (immigration selectivity) are thus not comparable to the effects of such variables on the changes in the characteristics of an immigrant cohort over time (emigration selectivity). The effects via immigration self-selection of country-of-origin characteristics on the Q of immigrants who migrate to a destination country is neatly summarized by Borjas in his equation (12). With unobservables determining earnings normally distributed, the expected quality of immigrants in the United States is given by

A significant proportion of migration in low-income countries, particularly in rural areas, is composed of moves by women for the purpose of marriage. The authors seek to explain these mobility patterns based on a framework in which the marriage of daughters to locationally distant, dispersed yet kinship-related households is a manifestation of implicit interhousehold contractual arrangements aimed at mitigating income risks and facilitating consumption smoothing in an environment characterized by information costs and spatially covariant risks. Analyses of longitudinal data on consumption patterns, income, and marital arrangements in South Indian households lend support to the theory.

Preliminary findings are presented from a research project which examined the interactions between informal risk sharing, index insurance and risk-taking. Rainfall insurance contracts were randomly offered to cultivating and landless households in a set of Indian villages where preexisting census data on caste networks allowed the characterization of the nature and extent of informal risk sharing. We study how informal risk sharing mediates the demand for index insurance, whether index insurance or informal indemnification allows farmers to invest in risky technologies, and the general equilibrium effects of offering insurance contracts to cultivators and agricultural laborers.

We reassess the empirical robustness of the empirical findings in Jere R. Berhman and Mark R. Rosenzweig (2002) using new information on schooling which was collected and coded independently of codings carried out by both Kate Antonovics and Arthur Goldberger, and Berhmamn and Rosenzweig. We conclude that the independently coded data and the codings by Antonovics and Goldberger provide additional support for Behrman and Rosenzweig's original results showing that the positive cross-sectional relationship between a mother's schooling and her child's schooling is not robust to controls for unmeasured, intergenerationally correlated endowments, while the positive effect of paternal schooling is robust.