Research on the labor-supply consequences of childbearing is complicated by the endogeneity of fertility. This study uses parental preferences for a mixed sibling-sex composition to construct instrumental variables (IV) estimates of the effect of childbearing on labor supply. IV estimates for women are significant but smaller than ordinary least-squares estimates. The IV are also smaller for more educated women and show no impact of family size on husbands' labor supply. A comparison of estimates using sibling-sex composition and twins instruments implies that the impact of a third child disappears when the child reaches age 13.

Taylor's series and logarithmic estimates of health state-dependent utility functions both imply that job injuries reduce one's utility and marginal utility of income, thus rejecting the monetary loss equivalent formulation. Injury valuations have unitary income elasticity, and the valuation of non-incremental risk changes and effects of base risks follow economic predictions.

This paper tests whether the observed dominance of most city-pair markets and airports in the U.S. domestic airline industry by single carriers confers any pricing power on the dominan t firms. The results of fixed-effects estimation indicate that airport dominance by a carrier does confer upon it substantial pricing power , whereas dominance at the route level seems to confer no such pricing power. Additionally, the authors find a positive, yet small, correlation between both route concentration, and price and airport concentration and price. The quantitative importance of airport dominance reveals that the most promising direction for public polic y aimed at improving the industry's performance is to ensure equal acc ess to sunk airport facilities.

Surveys of individual's risk-dollar trade-offs illuminate not only the local trade-off rates, but also can be used to address more fundamental questions about the structure of utility functions. This largely unexplored empirical area is investigated by developing an econometric technique to estimate utility functions based on survey data on risk-dollar trade-offs for minor health effects. The empirical tests indicate that for all but one of the temporary health effects considered, consumers treat injuries as tantamount to a drop in income, implying that the health impact does not alter the structure of the utility function in a fundamental way.

Between 1971 and 1996 opponents of local funding for public schools successfully challenged the constitutionality of school-finance systems in 16 states. Using the variation across states in the timing of these cases we investigate the impact of reform on the distribution of school resources. Our results suggest that court-ordered finance reform reduced within-state inequality in spending by 19 to 34 percent. Successful litigation reduced inequality by raising spending in the poorest districts while leaving spending in the richest districts unchanged, thereby increasing aggregate spending on education. Reform led states to fund additional spending through higher state taxes.

Individuals or households often have some scope for choice of peer groups, whether through the selection of neighborhood of residence, school, or friends. This study addresses the estimation of peer group effects in cases in which measures of peer group influence are potentially endogenous variables. Using a rich data set on individual behavior, the paper explores teenage pregnancy and school dropout behavior. For both cases, the estimation of a straight-forward single-equation model yields statistically significant peer group effects; however, these effects disappear under simultaneous equation estimation. The results are robust and suggest the need for careful modeling of the choice of peer groups.

Between 1971 and 1996 opponents of local funding for public schools successfully challenged the constitutionality of school-finance systems in sixteen states. Using the variation across states in the timing of these cases the authors investigate the impact of reform on the distribution of school resources. Their results suggest that court-ordered finance reform reduced within-state inequality in spending by 19 to 34 percent. Successful litigation reduced inequality by raising spending in the poorest districts while leaving spending in the richest districts unchanged, thereby increasing aggregate spending on education. Reform led states to fund additional spending through higher state taxes.

This study examines the effects of teen alcohol use and availability on educational attainment. We demonstrate that teens who faced a lower minimum legal drinking age (MLDA) were substantially more likely to drink. However, we find that changes in MLDA had small and statistically insignificant effects on educational attainment. Using matched cohorts from two data sets, we also report two‐sample instrumental variables estimates of the effect of teen drinking on educational attainment. These estimates are smaller than the corresponding ordinary least squares estimates and statistically insignificant, indicating that teen drinking does not have an independent effect on educational attainment.

Differences in test scores of white and black students have narrowed substantially over time, falling by one‐half since 1970s. Some have speculated that this convergence is due to changes in family background or convergence in school quality. In this article we decompose the convergence in test scores into that portion due to changes in parental education, changes in school quality, and a narrowing of the within‐school gap in test scores. Only about 25% of the overall convergence is attributable to changing family and school characteristics. We find that nearly 75% of the convergence is attributable to changes within schools.