June 24–25, 2011
Conference Summary
Conference co-organizer Gary S. Becker opened the Friday session with a paper addressing a universal issue: how do parents get children to support them in old age when children cannot commit early in life to providing that support later? A related question is, how can children repay parents for the investment in the child’s human capital?
In either case, during childhood the child is unable to commit to returning resources to parents later in life. Becker presented work that makes the novel assumption that parents may try to manipulate children to “hard-wire” the preferences of children to provide elder care. “This may be Pareto-improving. Spending resources to improve the preferences of children may take away resources from other activities, but may leave parents better off.”
Later in the program, Xiaoyan Lei of Beijing University presented data that showed an increase in elderly Chinese living alone or with a spouse does not necessarily indicate a lack of support from children. Rather, this support is taking new forms, with children living close to aging parents, reducing the conflict between privacy and independence on one hand and family support on the other.
Researchers turned to recent surveys and census data to explore important questions about marriage patterns. Loren Brandt of the University of Toronto described the mixed effects of how a demographic shock—in this case, the famine linked to the Great Leap Forward that resulted in the death of millions and sharply reduced the birth rate—influenced marriage rates 30 years later. The overall marriage rate for individuals born during the famine showed only a small effect, because their scarcity value was offset by long-term effects on health and education that made them less attractive in the marriage market.
L. Colin Xu of the World Bank and colleagues took advantage of new survey data that asks respondents how they met their spouse to compare marriage outcomes. They found that in rural areas, traditional parental match-making resulted in less marital harmony and household income than when individuals found their own spouse.
Albert Park of Oxford University presented one of the first studies to examine the contribution of noncognitive skills to employment and wages in developing countries. He found strong evidence that these skills along with cognitive skills influence years of schooling, which has a large impact on labor outcomes in China.
Wei Chi of Tshinghua University and Richard Freeman of Harvard gave an overview of “a goldmine of data” available in the transactions of Taobao.com, the eBay of China, highlighting both the potential and the problems in the available data.
Conference co-organizer Dali Yang presented work with Xi Lu, Fubing Su, and Ran Tao that used an instrument variable approach to tease out the determinants of social trust and its relationship to political trust. Yang reported significant regional differences, with less social trust in the coastal provinces of Jiangsu and Fujian and highest levels in Hebei and Shaanxi. Levels of political trust in the central government are the highest in the world and probably not all that useful. Trust in the the local government is much lower, reflecting that criticism of local officials is allowed.
Yang concluded that superior economic performance and the improved living standards increase political trust and indirectly the levels of social trust. Yet this is a bit of a Faustian bargain, since modernization leads to higher education and cognitive abiliites, which are associated with declining political trust. And while improving incomes can help increase political trust and by extension social trust, higher incomes are the most important determinant of lower levels of trust.
Lively discussion of methodology throughout the conference reached a peak in a final paper on labor market mobility. Junfu Zhang of Clark University presented joint work with Zhong Zhao that estimated a large marginal increase in wages required to induce workers to move to a job away from home.
