Education and wealth are positively correlated for individuals approaching retirement, but the direction of the causal relationship is ambiguous in theory and has not been identified in practice. We combine administrative data on individual total wealth with a reform expanding access to lower secondary school in Denmark in the 1950s, finding that schooling increases pension annuity claims but reduces the non-pension wealth of men in their 50’s. These effects grow stronger as normal retirement age approaches. Labour market mechanisms are key, with schooling increasing job mobility, reducing housing equity, increasing leverage, and improving occupational pension benefits.
Room: WST-C.02.11, Weststadttürme Berliner Platz 6-8, Essen
We estimate the effects of college education on female fertility – a so far understudied margin of education, which we instrument by arguably exogenous variation induced through college expansions. While college education reduces the probability of becoming a mother, college-educated mothers have slightly more children than mothers without a college education. Unfolding the effects by the timing of birth reveals a postponement that goes beyond the time in college – indicating a negative early-career effect on fertility. Coupled with higher labor-supply and wage returns for non-mothers as compared to mothers the timing effects moreover suggest that career and family are not fully compatible.
The performance of markets with hidden information is of central importance in microeconomic theory. We present the results of a comprehensive experiment that distinguishes between the two fundamental forms of hidden information, private and common values, in different contracting environments. Contracting environments vary in terms of the market power that the screening market side has over the trades of its privately informed customers, ranging from monopoly to nonexclusive competition. Nonexclusivity of contracts is a reality in many important markets with information problems such as life insurance and health insurance markets. The degree of equilibrium play we find is striking, particularly in the complex cases of common values. Under private values, competition ensures efficient trades. Under common values, low-type buyers are to a large extent excluded under nonexclusive competition, whereas such types’ trades are only distorted under exclusive competition. This leads to a significantly higher market surplus under exclusive competition in comparison to nonexclusive competition under common values.
Room: WST-C.02.11, Weststadttürme Berliner Platz 6-8, Essen
