In the last fifteen years, our understanding of the behavior of households in both highand low-income countries has increased significantly. Econometric studies contributing to this body of knowledge, concerned with the determinants of such behavior as labor supply, fertility, health and food consumption, however, have generally taken the structure of the household as exogenously given. While some progress has been made concerning how changes in the legal structure alter patterns of family formation and breakup, the wide variety of family organizations observed across countries of the world or the evolution of family structure within countries cannot be readily explained by existing models. While some economists have suggested that organizations based on kinship can be understood in terms of transaction economies (Yoram Ben-Porath, 1980; Robert Pollak, 1985), there are now few precise implications of this approach, and little or no evidence of its usefulness for predicting or explaining the existence of any particular family structure in specific settings characterized by their natural endowments and/or legal structure. In this paper I discuss some recent studies of family and household organization in one specific context, rural India, that have sought to formulate a model of household structure based on the need for individuals in lowincome, private information settings to protect themselves against intertemporal fluctuations in resources arising from the natural vagaries of water supply. I also present some new evidence on the relationship between family arrangements and measured risk characteristics of the agricultural environment in these settings. While many economists have highlighted risk and information consideration in the study of such formal rural institutions as sharecropping, permanent servitude, and contractual interlinking, studies of these individual contractural arrangements have ignored the family itself as a risk-mitigating institution. Moreover, much of this literature has been solely concerned with ex ante measures to reduce risk-contractual instruments or production factors that reduce the effects of variability in the exogenous production input rainfall on income. Mechanisms serving to preserve consumption stability ex post in the face of variability in realized income have been neglected.

Payoffs from Panels in Low-Income Countries: Economic Development and Economic Mobility by Mark R. Rosenzweig. Published in volume 93, issue 2, pages 112-117 of American Economic Review, May 2003

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

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.