Labor Studies.

• Position: Bureau News

The NBER's Program on Labor Studies met in Cambridge on March 17. NBER Research Associates Lawrence F. Katz and Richard B. Freeman, both of Harvard University, organized this program:

Judith K. Hellerstein, University of Maryland and NBER, and Melinda Sandler, University of Maryland, "The Changing Impact of Fathers on Women's Occupational Choices"

James J. Heckman, University of Chicago and NBER, and Jora Stixrud and Sergio Urzua, University of Chicago, "The Effects of Cognitive and Non-Cognitive Abilities on Labor Market Outcomes and Social Behavior"(NBER Working Paper No. 12006)

Hanh Ahee, Stanford University, and Ulrike Malmendier, Stanford University and NBER, "Biases in the Market: the Case of Overbidding in Auctions"

Over the past century, the labor force participation rate of women has increased dramatically. Hellerstein and Sandler examine one potential ramification of this, namely whether the transmission of occupation-specific skills between fathers and daughters has increased. They develop a model of intergenerational human capital investment in which increased labor force participation by women gives fathers more incentives to invest in daughters' skills that are specific to the fathers' occupations. As a result, daughters are more likely to enter the labor market and to take up their fathers' occupations. Testing whether the transmission of occupation-specific skills between fathers and daughters has increased is confounded by the fact that occupational upgrading of women alone will generate an increased probability over time that women work in their fathers' occupations. The authors show that, under basic assumptions of assortative mating, a comparison of the rates of change over time in the probability that a woman enters her father's occupation relative to her father-in-law's occupation can be used to test whether there has been increased transmission of occupation-specific human capital. Using data for the birth cohorts of 1909-77 containing information on womens' occupations and the occupations of their fathers and fathers-in-law, Hellerstein and Sandler demonstrate an increase in occupation-specific transmission between fathers and daughters. They show that this is a phenomenon unique to women, as it should be if it is a response to rising female labor force participation rates. The magnitude of the shift in women working in their fathers' occupations that results from increased transmission is large--about 20 percent of...