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Economic Demography Economics 175

UC Berkeley, Summer 2013

Economic demography applies economic models the study of human populations and the life cycle. This class will explore the economic theory and evidence on the classic demographic topics of fertility, marriage, migration and aging. Our goal is to connect these long-standing literatures to modern research on public programs for children, families, the disabled and the elderly. The first half of the course will focus on the economics of families and children, bridging topics such as education, marriage and migration. The second half will focus on the economics of health and aging, including the roles of public programs, pension systems, financial markets and family.

Location: 56 Barrows Hall Time: Monday-Thursday 2-3:30pm Course Webpage: access through bpsace.berkeley.edu

Instructor: Mark Borgschulte Email: mark at econ dot berkeley dot edu Office Hours: after lecture and by appointment in 677 Evans

Reader: Lei Cheng Office Hours: Tuesday 10-12, 311 Giannini

Prerequisites

The only strict prerequisite is Economics 1. If you have not taken a first course in statistics, I would suggest you enroll in that instead of this course, as we will be discussing in depth the applications of some basic statistical techniques.

Grading and Exams

Everyone will complete the four problem sets (20%) and take the midterm (40%). For the other half of the grade, you can choose between a final exam (40%), or a research paper (20% first draft, 20% final draft). Please come talk to me if you are unsure which option is best for you. Late work will be penalized one grade step per day.

The final will be held from 12:10-2 on Thursday, August 11, the last day of class. Note the extra half-hour. Please let me know by the end of the first week of class if you have a conflict with one of the exam dates or due dates for the assignments. If an emergency arises, you must contact me before the start of the exam. Documentation of a legitimate medical or family emergency will be required.

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Schedule

You need to read the starred readings. They will be referenced in lecture and appear on the exam. Non-starred will only appear on the exams as referenced in lecture. All articles should be accessible through the Berkeley library proxy, except as noted.

Week 1. Introduction, Demographic Transition and Fertility

Overview *How the World Survived the Population Bomb: Lessons From 50 Years of Extraordinary

Demographic History, David Lam, Demography, November 2011, pp. 1231-1262 Demographic Change, Welfare, and Intergenerational Transfers: A Global Overview, Ronald

Lee, 2002

Demographic Transition *The Demographic Transition: Three Centuries of Fundamental Change, Ronald Lee, Journal

of Economic Perspectives 2003

Fertility and Income *An Economic Analysis of Fertility, Gary Becker, Demographic and Economic Change in De-

veloped Countries, 1960 Are Children Normal?, Dan A. Black, Natalia Kolesnikova, Seth G. Sanders, Lowell J. Taylor,

Review of Economics and Statistics, 2013

Fertility Evidence *Contraception as Development? New Evidence from Family Planning in Colombia, Grant

Miller, The Economic Journal, 2010 Quantity-Quality and the One Child Policy: The Only-Child Disadvantage in School Enroll-

ment in Rural China, Nancy Qian, Unpublished Working Paper 2013

Week 2. Women and Families

PS 1 DUE THURSDAY

Women’s Employment and Education in the US *The Quiet Revolution That Transformed Women’s Employment, Education, and Family, Clau-

dia Goldin, 2006, American Economic Review, 96, 2: 1-21. *The Homecoming of American College Women, Claudia Goldin, Larry Katz, and Ilyana

Kuziemko, Journal of Economic Perspectives, 2006.

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*The Power of the Pill: Oral Contraceptives and Womens Career and Marriage Decisions, Claudia Goldin and Lawrence F. Katz, Journal of Political Economy, 2002

More Power to the Pill, Martha J. Bailey, Quarterly Journal of Economics, 2006 Female Labor Supply: Why is the US Falling Behind?, Francine D. Blau and Lawrence M.

Kahn, NBER working paper, 2013

Marriage, Divorce and Cohabitation *Family Economics, Martin Browning, Pierre-Andre Chiappori, and Yoram Weiss, Chapter 1,

2011 *An Analysis of Out-Of-Wedlock Births in the United States, George Akerlof and Janet Yellen,

Brookings Policy Brief Series, 1996 The Economics of Dowry and Brideprice, Siwan Anderson, Journal of Economic Perspectives,

2007

Household Decision-Making *Grandmothers and Granddaughters: Old-Age Pensions and Intrahousehold Allocation in South

Africa, Esther Duflo, World Bank Economic Review, 2003 Children and Their Parents’ Labor Supply: Evidence from Exogenous Variation in Family Size,

Joshua D. Angrist and William N. Evans, American Economic Review, 1998

Week 3. Children

PAPER PROPOSAL DUE TUESDAY

Intergenerational Transfers *Cross-Country Differences in Intergenerational Earnings Mobility, Gary Solon, Journal of Eco-

nomic Perspectives, 2002 Intergenerational Mobility in the Labor Market, Gary Solon, Handbook of Labor Economics,

1999 Eugenics and Economics: Progressive Era, TC Leonard, Journal of Economic Perspectives, 2005

Early Childhood and Parental Investment *Multiple Inference and Gender Differences in the Effects of Early Intervention: A Reevaluation

of the Abecedarian, Perry Preschool, and Early Training Projects ,Michael Anderson, Journal of the American Statistical Association, 2008

Education *Does Compulsory School Attendance Affect Schooling and Earnings?, Joshua D. Angrist and

Alan B. Keueger, Quarterly Journal of Economics, 1991

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The Intergenerational Effects of Compulsory Schooling, Philip Oreopoulos and Marianne E. Page, Journal of Labor Economics, 2006

The Causal Effect of Education on Earnings, David Card, Handbook of Labor Economics, 1999

Neighborhoods *Moving to Opportunity in Boston: Early Results of a Randomized Mobility Experiment,

Lawrence F. Katz, Jeffrey R. Kling and Jeffrey B. Liebman, Quarterly Journal of Economics, 2001

Week 4. Migration

PROBLEM SET 2 DUE WEDNESDAY

Migration Decision *Family Migration Decisions, Jacob Mincer, Journal of Political Economy, 1978 *Explaining Why Minority Births Now Outnumber White Births, Jeffrey Passel, Gretchen

Livingston and DVera Cohn, Pew Research Center: Social and Demographic Trends, 2012. The Roy Model: A Simple Case, V. Joseph Hotz, unpublished course notes Gains to Migration, John Kennan, NBER Working Paper No. 18307, August 2012 Split Decisions: Family Finance When a Policy Discontinuity Allocates Overseas Work, Michael

A. Clemens; Erwin R. Tiongson, World Bank Policy Research Working Paper 6287, December 2012 Fertility, Migration and Altruism, Eli Berman and Zaur Rzakhanov, Working Paper 7545,

February 2000

Immigration: Impacts on Wages of Native Workers *Jeffrey S. Passel and DVera Cohn U.S. Population Projections: 2005-2050 Pew Research Cen-

ter: Social and Demographic Trends, Feb 11, 2008, pp. 126, 31-32. *Card, Mariel Boat Lift *Increasing the Supply of Labor Through Immigration Measuring the Impact on Native-born

Workers, George J. Borjas Card, Is the New Immigration So Bad?

Immigration: Impacts on Fiscal Budgets *New York Times, “Room for Debate: The Economics of Immigration” *Fiscal Impacts of Immigration on the Receiving Population, Ronald Lee and Timothy Miller,

American Economic Review, 2000 *Economics and Emigration: Trillion-Dollar Bills on the Sidewalk, Michael A. Clemens, Journal

of Economic Perspectives, 2011 Read only pp.83-89.

Midterm Review

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Week 5. Aging and Mortality

MIDTERM, MONDAY JULY 22

(Tuesday and Wednesday: Guest Lectures TBA)

Mortality Transition *The Role of Public Health Improvements in Health Advances: The Twentieth-Century United

States, Grant Miller and David Cutler, Demography, 2005 The Determinants of Mortality, David Cutler, Angus Deaton, and Adriana Lleras-Muney, Jour-

nal of Economic Perspectives, 2006.

Week 6. Retirement

PROBLEM SET 3 DUE THURSDAY

Demographic Dividends, Population Aging and Fiscal Budgets *Population aging and the generational economy: A global perspective, Part 1, Chapter1,

Andrew Mason and Ronald Lee, 2007 *What Is the Average Retirement Age?, Alicia Munnell, Center for Retirement Research, Boston

College, 2011 *Labor Force Projections Through 2021, Congressional Budget Office, 2011 Technical Panel on Assumptions and Methods, Report to the Social Security Advisory Board,

2007 Population Aging, Intergenerational Transfers, and Economic Growth: Asia in a Global Con-

text, Ronald Lee and Andrew Mason, Aging in Asia: Findings from New and Emerging Data Initiatives, 2012

Pensions, Savings, Bequests *The Liabilities and Risks of State-Sponsored Pension Plans, Robert Novy-Marx and Joshua

D. Rauh, Journal of Economic Perspectives, 2009 *Employer Sponsored Pensions: A Primer, Brendan Cushing-Daniels and Richard W. Johnson,

The Retirement Policy Project, Urban Institute, 2008 Behavioral Issues in Pensions, Richard Thaler, 2008

Social Security *Social Security: A Primer, Chapter 2, pp. 13-28, Congressional Budget Office, 2001 *The Social Security Fix-It Book, Center for Retirement Research, 2009 Saving Social Security, Peter A. Diamond and Peter R. Orszag, Journal of Economic Perspec-

tives, 2005

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The Progressivity of Social Security, Jeffrey R. Brown, Julia Lynn Coronado, and Don Fuller- ton,NBER RRC Paper NB06-10, 2006

Retirement Decision *Jonathan Gruber and David Wise (1998) Social Security and Retirement: An International

Comparison, American Economic Review (May) v.88 n.2, pp. 158163. *Effect of Presidential Service on Life Expectancy, Mark Borgschulte Social Security Programs and Retirement Around the World: Introduction and Summary of

Papers, Jonathan Gruber, David Wise, NBER Working Paper No. 6134, August 1997 Future Social Security Entitlements and the Retirement Decision, Courtney C. Coile and

Jonathan Gruber, Review of Economics and Statistics, 2007 The Effect of Health Insurance on Retirement, Brigitte Madrian, Brookings Papers on Eco-

nomic Activity, 1994

Week 7. Health Care

FIRST DRAFT OF PAPER DUE TUESDAY

Health and Aging *Policy Implications Of The Gradient Of Health And Wealth, Angus Deaton, Health Affairs,

2002 Trends in Health of Older Adults in the United States: Past, Present, Future, Linda G. Martin,

Robert F. Schoeni, and Patricia M. Andreski, Demography, 2010

Disability Insurance *Primer on Disability Benefits: Social Security Disability Insurance (SSDI) and Supplemental

Security Income (SSI), Scott Szymendera, CRS Report for Congress. 2010 Does Disability Insurance Receipt Discourage Work? Using Examiner Assignment to Estimate

Causal Effects of SSDI Receipt, Nicole Maestas, Kathleen J. Mullen and Alexander Strand, RAND Working Paper 2011

Medicare *Medicare: A Primer, Kaiser Family Foundation, 2010 *The (Paper)Work of Medicine: Understanding International Medical Costs, Cutler, David

M.; Ly, Dan P., The Journal of Economic Perspectives, Volume 25, Number 2, Spring 2011 , pp. 3-25(23)

Does Medicare Save Lives?, David Card, Carlos Dobkin, Nicole Maestas, Quarterly Journal of Economics, 2009

Medicaid and Long-run Care

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*Long-Term Care: Financing Overview and Issues for Congress,, Julie Stone, Congressional Research Service Report, 2010

*Medicaid and Long-Term Care Services and Supports, Kaiser Family Foundation, 2011 *The Oregon Health Insurance Experiment: Evidence from the First Year, Amy Finkelstein,

Sarah Taubman, Bill Wright, Mira Bernstein, Jonathan Gruber, Joseph P. Newhouse, Heidi Allen, Katherine Baicker and Oregon Health Study Group, Quarterly Journal of Economics, 2012

The Role of Medicare for the People Dually Eligible for Medicare and Medicaid, Kaiser Family Foundation, 2011

Grandpa and the Snapper: the Wellbeing of the Elderly who Live with Children,Angus Deaton, Arthur A. Stone, NBER Working Paper, 2013

Week 8. Macro-Demographic Topics

PROBLEM SET 4 DUE TUESDAY

FINAL DRAFT OF PAPER DUE THURSDAY

Population Growth and Economic Growth *An Essay on the Principle of Population (first edition), Chapters 1 and 2, Thomas Malthus,

1798 *An Exact Consumption-Loan Model of Interest with or without the Social Contrivance of

Money, Paul Samuelson, Journal of Political Economy, 1958 *The Conditions of Agricultural Growth: The Economics of Agrarian Change under Population

Pressure, Introduction and Chapter 1, Ester Boserup, 1965 Population Growth and Technological Change: One Million B.C. to 1990, Michael Kremer, The

Quarterly Journal of Economics, 1993

Overpopulation and the Environment *The Tragedy of the Commons, Garrett Hardin, Science, 1968 *Are More People Necessarily A Problem?, David Malakoff, Science, 2011

Review

***FINAL EXAM, last day of class, 2-4

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