No abstract

We investigate whether TV watching at ages 6-7 and 8-9 affects cognitive development measured by math and reading scores at ages 8-9 using a rich childhood longitudinal sample from NLSY79. Dynamic panel data models are estimated to handle the unobserved child-specific factor, endogeneity of TV watching, and dynamic nature of the causal relation. A special emphasis is put on the last aspect where TV watching affects cognitive development which in turn affects the future TV watching. When this feedback occurs, it is not straightforward to identify and estimate the TV effect. We adopt estimation methods available in the biostatistics literature which can deal with the feedback feature; we also apply the "standard" econometric panel data IV approaches. Overall, for math score at ages 8-9, we find that watching TV for more than two hours per day during ages 6-9 has a negative total effect mostly due to a large negative effect of TV watching at the younger ages 6-7. For reading score, there are evidences that TV watching between 2-4 hours per day has a positive effect whereas the effect is negative outside this range. In both cases, however, the effect magnitudes are economically small.

Parental involvement in marriage matchmaking may distort the optimal spouse choice because parents are willing to substitute love for money. The rationale is that the joint income of married children can be shared among extended family members more easily than mutual attraction felt by the couple themselves, and as a result, the best spouse candidate in the parents' eyes can differ from what is optimal to the individual, even though parents are altruistic and care dearly about their children's welfare. We find supporting evidence for this prediction using a unique sample of urban couples in China in the early 1990s.

Much evidence suggests individuals di¤er in their predisposition to cooperate, which is essentially a component of human capital. This paper examines the role of individual cooperative tendencies and their interactions with institutions in generating social trust; it also endogenizes cooperative tendencies using a human capital investment model. Multiple equilibria and ine¢ ciencies exist due to positive externalities. An innovative …nding is that, when institutions are more e¤ective in punishing defecting behaviors, more people invest in cooperative tendencies and hence the endogenous social trust is higher, though the equilibrium cooperative tendencies are lower. This paper provides a plausible explanation for many empirical and experimental results. (JEL: Z13, J24)

, and participants at the Chicago-Renmin symposium on family and labor economics at the University of Chicago, the symposium of the 80th birthday of Steven Cheung at Shenzhen, U. of Maryland workshop, the AEA meetings, the PAA conference, and the Asian Conference on Applied Micro-Economics/Econometrics at Tokyo for constructive comment and suggestions. We are especially grateful to the late Gary Becker for his detailed comments at the Chicago-Remin symposium in which we presented an earlier version of a related paper. He encouragedųs to consider the issues from the perspective of parents and old age support. This paper would not exist without his encouragement and comments. We also thank the excellent research assistance from Lixin Tang. Huang gratefully acknowledges the financial support of SMU Research Grant 10-C244-SMU-002. The views expressed here do not implicate the World Bank or the countries that it represents. Part of the paper was revised when Jin visits the Federal Trade Commission. Any view expressed here does not represent the view of the Commission, any of its commissioners, or the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

This paper establishes a uni…ed political economy model to analyze the democratization process from monarchy to oligarchy and then to democracy with full su¤rage in the context of dynamic economic development. As the predominant source of wealth evolves from land to physical capital and …nally to human capital, the relative economic and hence coercive power of land owners, capitalists, and workers shifts accordingly, inducing the transition of the political system where political power is expanded from the owners of land to the owners of capital and then to the owners of labor. A smooth transition through political compromise facilitates e¢ cient allocation of savings in physical capital followed by e¢ cient investment in human capital. Failure to expand political power to support expanding investment would lead to the retarding of economic development. These results are broadly consistent with historical evidence in Western Europe.JEL: O10, O40, P16, N10.

Arguably the fundamental problem faced by employers is how to elicit effort from employees. Most models suggest that employers meet this challenge by monitoring employees carefully to prevent shirking. But there is another option that relies on heterogeneity across employees, and that is to screen job candidates to find workers with a stronger work ethic who require less monitoring. This should be especially useful in work systems where monitoring by supervisors is more difficult, such as teamwork systems. We analyze the relationship between screening and monitoring in the context of a principal-agent model and test the theoretical results using a national sample of U.S. establishments, which includes information on employee selection. We find that employers screen applicants more intensively for work ethic where they make greater use of systems such as teamwork where monitoring is more difficult. This screening is also associated with higher productivity and higher wages and benefits, as predicted by the theory: The synergies between reduced monitoring costs and high performance work systems enable the firm to pay higher wages to attract and retain such workers. Screening for other attributes, such as cognitive ability, does not produce these results. ABSTRACTArguably the fundamental problem faced by employers is how to elicit effort from employees. Most models suggest that employers meet this challenge by monitoring employees carefully to prevent shirking. But there is another option that relies on heterogeneity across employees, and that is to screen job candidates to find workers with a stronger work ethic who require less monitoring. This should be especially useful in work systems where monitoring by supervisors is more difficult, such as teamwork systems. We analyze the relationship between screening and monitoring in the context of a principal-agent model and test the theoretical results using a national sample of U.S. establishments, which includes information on employee selection. We find that employers screen applicants more intensively for work ethic where they make greater use of systems such as teamwork where monitoring is more difficult. This screening is also associated with higher productivity and higher wages and benefits, as predicted by the theory: The synergies between reduced monitoring costs and high performance work systems enable the firm to pay higher wages to attract and retain such workers. Screening for other attributes, such as cognitive ability, does not produce these results.

In an effort to understand why the relative usage of relational and legal contracts differs across societies, this article builds a political economy model of legal development where legal quality of contract enforcement is a costly public good. It finds that legal investment tends to be too small under elite rule but too large under majority rule in comparison with the socially optimal level. Furthermore, elite rule, low legal quality, and high-income inequality may form a self-perpetuating circle that hinders economic development. In contrast to the conventional view, this article suggests that the often-observed association between heavy reliance on relational contracts and under development is most likely caused by the presence of elite rule rather than by a more collective-oriented culture per se because it is optimal for societies better at using relational contracts to start legal investment relatively late and to have lower quality of legal enforcement. (JEL O1, K49, H40, C72)