Portfolio Choices of Parents and Their Children as Young Adults: Asset Accumulation by African-American Families by Ngina S. Chiteji and Frank P. Stafford. Published in volume 89, issue 2, pages 377-380 of American Economic Review, May 1999

alone. Problems may arise, however, if a firm employs more than one factor of production. This is because the firm's productivity derives from its ability to organize the collective behavior of its factors. This collective behavior often requires that the factors perform their tasks either simultaneously or consecutively and that their workdays bear some appropriate relationship to one another. Yet only by coincidence would the workdays preferred by each factor conform to this relationship. The firm would therefore hardly be content to offer each factor its going wage and allow it to choose for itself its hours of work. Yet this is precisely the way firms are assumed to behave in traditional theories of factor markets. We would expect instead that the firm will itself decide both the length of the workday and the rate of compensation for each factor. It must choose these wage-hours combinations not only to maximize its own productivity, but also to lure factors successfully away from competing opportunities elsewhere in the economy. These considerations complicate both the theory of the firm and the theory of the consumer, with results which we will see later in this paper. However, we should first note two alternative methods of reconciling the conflicting interests of firms and factors, methods which could conceivably justify the traditional theories of their behavior. The first method assumes heterogeneous preferences among consumers and heterogeneous technologies among firms. In that case, while the

Empirical evaluation of the effect of school quality, or type and amount of resources per student, on adult earnings requires a conceptual framework. A model of the returns to schooling in a simple human capital growth context is extended to illustrate how factors such as consumption benefits of students, parental concern over equity between siblings, and use of schools to facilitate parental labor supply can alter the apparent return to school quality. The need for microlevel time diary and other data on human capital formation in both classrooms and families is highlighted.

Using a unique set of household level panel data, we estimate the effect of capital gains on saving by asset type, controlling for observable and unobservable household specific fixed effects. The results suggest that the decline in the personal saving rate since 1984 is largely due to the significant capital gains in corporate equities experienced over this period. Over five-year periods, the effect of capital gains in corporate equities on saving is substantially larger than the effect of capital gains in housing or other assets. Failure to differentiate wealth affects across asset types results in a significant understatement or overstatement of the size of their impact, depending on the asset.