Knowledge that Transforms

In order to determine the importance of parental time inputs in the intergenerational transmission of socioeconomic status, previous work relies on proxies such as family size, birth order, maternal employment, and retrospective reports of child care time. This paper is unique in finding a connection between more direct measures of mother's child-care time and children's outcomes as adults. It shows that (1) higher home productivity increases, but higher opportunity costs reduce, maternal child-care time and (2) greater child-care time of highly-educated, but not of less well-educated, mothers significantly raises children's years of schooling. Copyright 1988 by MIT Press.

Peter C. Y. Chow, Mitchell Kellman, Anti-LDC Bias in the U.S. Tariff Structure: A Test of Source Versus Product Characteristics, The Review of Economics and Statistics, Vol. 70, No. 4 (Nov., 1988), pp. 648-653

Robert W. Staiger, Alan V. Deardorff, Robert M. Stern, The Effects of Protection on the Factor Content of Japanese and American Foreign Trade, The Review of Economics and Statistics, Vol. 70, No. 3 (Aug., 1988), pp. 475-483

This paper demonstrates how the circumstances of quitting a previous job affect the probability of a later voluntary job change. The theoretical section describes a model of expected-utility-maximizing job search and mobility. Although the inability to observe utilities associated with specific jobs precludes a direct test of the utility maximizing mobility hypothesis, a testable implication is derived in the context of a simple job search model. Utility maximization implies that workers who rely exclusively on employed search to find a new job are less likely to quit again. This theoretical implication is confirmed by the parameter estimates. Copyright 1988 by MIT Press.

Michael T. Belongia, R. W. Hafer, Richard G. Sheehan, On the Temporal Stability of the Interest Rate-Weekly Money Relationship, The Review of Economics and Statistics, Vol. 70, No. 3 (Aug., 1988), pp. 516-520

The authors derive a model of money demand for an optimizing consumer with rational expectations in a discrete time infinte hortizon framework under uncertainty. Mone y demand responds to unanticipated changes in income, one period expe ctations of future bond and money interest rates, unanticipated curre nt interest rates, and past anticipations of current rates. The deriv ed consumption function mirrors money demand behavior. Joint estimati on of the consumption and money demand equations by weighted nonlinea r least squares corroborates the predicted effects, particularly inco me neutrality. This money demand model substantially outperforms a co nventional specification in post-sample simulation over 1975-85. Copyright 1988 by MIT Press.

Negative product-market shocks reduce wage growth and increase the probability of plant closing. There is a U-shaped relation between th is probability and job tenure that proxies the specific human capital that raises a firm's value. Estimates based on Panel Study of Income Dynamics data for 1977-81 generally support the model. They show that wages grow less rapidly among workers who will subsequently be displaced and imply that large wage concessions reduce the risk of pl ant closing only slightly. Copyright 1988 by MIT Press.