Malene C. Fuglsang Laczek defends her PhD thesis at the Department of Economics

Candidate:

Malene Callesøe Fuglsang Laczek, Department of Economics, University of Copenhagen

Title:

Essays on Labor and Family Economics: Childhood Environment, Parental Retirement, and Household Commitment

Supervisors:

• Thomas Høgsholm Jørgensen,  Associate Professor, Department of Economics, University of Copenhagen
• Claus Thustrup Kreiner, Professor, Department of Economics, University of Copenhagen

Assessment Committee:

• Mette Ejrnæs, Professor, Department of Economics, University of Copenhagen
• Andreas Steinhauer, Senior Lecturer, University of Edinburgh
• Ainoa Aparicio Fenoll, Associate Professor, University of Turin

Summary:

This PhD dissertation consists of three self-contained chapters, each investigating different ways in which family and environment impact labor supply decisions.

In the first chapter (joint with Antonio Coran and Francesca Miserocchi), we explore the impact of childhood environment on the earnings penalties that mothers face at the birth of their first child. Using administrative data from Denmark, we classify municipalities based on the motherhood penalties experienced by permanent residents. High-penalty places offer fewer human capital development opportunities and have a lower labor supply of women in the previous generation. We use a movers' design to distinguish the causal effect of childhood environment from the sorting of families. Our findings indicate that women who spent a longer period of their childhood in a high-penalty area experience lower earnings after childbirth, even though they have similar earnings the years before the birth of their first child. Next, we find that policies that impact the childhood environment can influence motherhood penalties; increases in childcare availability during childhood lower motherhood penalties decades later. We show suggestive evidence that higher childhood exposure to working women can act as a mechanism.

In the second chapter, I explore how the labor supply of one generation affects the next. Utilizing longitudinal Danish register data and a large retirement reform, I document that parents' retirement significantly affects the labor supply of their adult children. This inter-generational link is driven solely by mothers. Concretely, mothers’ retirement permanently increases their adult children’s income rank by 7 income rank points, driven by increased hours worked, participation in the labor force, improved occupational rank, and wage increases. I find that the inter-generational link is strongest among mothers who have grandchildren, and that the child penalty for adult daughters is 17% lower for those whose mothers can retire earlier, suggesting an important role of informal childcare as a driving mechanism. Survey data confirm that retirement affects informal childcare provision, even in a country with universal access to highly subsidized formal childcare.

In the final chapter (joint with Thomas Høghsholm Jørgensen), we assess the performance of a recent test for commitment. The degree of commitment that individuals have to their partners can have significant implications for decision making within households. Generally, models of household behavior can be categorized into three alternative models of commitment: No commitment, Limited Commitment, and Full Commitment. Recent empirical tests have been proposed to shed light on the degree of commitment within couples using realized behavior. Nothing is known, however, about the performance of these tests. We provide two contributions in this regard. First, we assess the performance of a recent test in a controlled environment where the true type of commitment is known. Second, we provide a modified test that performs better in our Monte Carlo simulations.

An electronic copy of the dissertation can be requested here: lema@econ.ku.dk