SEDAP: Research Paper Abstracts (2005)

  1. Exploring the Use of a Nonparametrically Generated Instrumental Variable in the Estimation of a Linear Parametric Equation
    Frank T. Denton

  2. The use of a nonparametrically generated instrumental variable in estimating a single-equation linear parametric model is explored, using kernel and other smoothing functions. The method, termed IVOS (Instrumental Variables Obtained by Smoothing), is applied in the estimation of measurement error and endogenous regressor models. Asymptotic and small-sample properties are investigated by simulation, using artificial data sets. IVOS is easy to apply and the simulation results exhibit good statistical properties. It can be used in situations in which standard IV cannot because suitable instruments are not available.

  3. Borrowing Constraints, the Cost of Precautionary Saving, and Unemployment Insurance
    Thomas F. Crossley and Hamish W. Low

  4. Job losers exhibit significant heterogeneity in wealth holdings and in the marginal propensity to consume transitory income. We consider potential sources of this heterogeneity, whether (some of) the unemployed face borrowing constraints, and the implications of this heterogeneity for unemployment insurance. We show theoretically how the optimal benefit can depend significantly on borrowing constraints, and on other (non-precautionary) savings motives. We report empirical evidence that (i) a quarter of job losers cannot borrow for current consumption, (ii) this constraint is binding for a much smaller fraction, and (iii) that "excess sensitivity" is not limited to the constrained.

  5. Entry Costs and Stock Market Participation Over the Life Cycle
    Sule Alan

  6. Several explanations for the observed limited stock market participation have been offered in the literature. One of the most promising one is the presence of market frictions mostly in the form of fixed entry and/or transaction costs. Empirical studies strongly point to a significant structural (state) dependence in the stock market entry decision, which is consistent with costs of these types. However, the magnitude of these costs are not yet known.

    This paper focuses on fixed stock market entry costs. I set up a structural estimation procedure which involves solving and simulating a life cycle intertemporal portfolio choice model augmented with a fixed stock market entry cost. Important features of household portfolio data (from the PSID) are matched to their simulated counterparts. Utilizing a Simulated Minimum Distance estimator, I estimate the coefficient of relative risk aversion, the discount factor and the stock market entry cost. Given the equity premium and the calibrated income process, I estimate a one-time entry cost of approximately 2 percent of (annual) permanent income. My estimated model matches the zero median holding as well as the hump-shaped age-participation profile observed in the data.

  7. Income Inequality and Self-Rated Health Status: Evidence from the European Community Household Panel
    Vincent Hildebrand and Philippe Van Kerm

  8. We examine the effect of income inequality on individual self-rated health status in a pooled sample of 10 member states of the European Union using longitudinal data from the European Community Household Panel (ECHP) survey. Taking advantage of the longitudinal and cross-national nature of our data, and carefully modelling the self-reported health information, we avoid several of the pitfalls suffered by earlier studies on this topic. We calculate income inequality indices measured at two standard levels of geography (NUTS-0 and NUTS-1) and find consistent evidence that income inequality is negatively related to self-rate health status in the European Union for both men and women. However, despite its statistical significance, the magnitude of the impact on inequality on health is small.

  9. Where Have All The Home Care Workers Gone?
    Margaret Denton, Isik Urla Zeytinoglu, Sharon Davies, Danielle Hunter

  10. Because of the on-going need to co-ordinate care and ensure its continuity, issues of retention and recruitment are of major concern to home care agencies. The purpose of this study was to examine the factors affecting turnover decisions among visiting home care workers. In 1996, 620 visiting nurses and personal support workers from three non-profit agencies in a mid-sized Ontario city participated in a survey on their work and health. By the fall of 2001, 320 of these respondents had left the agencies. Analysis of the turnover data showed a temporal association between the implementation of managed competition and turnover.

    We mailed a self-completion questionnaire asking about their reasons for leaving the agency and about their subsequent work experience. One hundred and sixty nine (53%) responded to this survey. Respondents indicated dissatisfaction with the implementation of managed competition, with pay, hours of work, lack of organizational support and work load as well as health reasons, including work-related stress, as reasons for leaving. Less than one-third remained employed in the home care field, one-third worked in other health care workplaces and one-third were no longer working in health care.

    Their responses to our 1996 survey were used to predict turnover. Results show that nurses were more likely to leave if they had unpredictable hours of work, if they worked shifts or weekends and had higher levels of education. They were more likely to stay with the agency if they reported working with difficult clients, had predictable hours, good benefits, had children under 12 years of age in the home, and were younger. Personal support workers were more likely to leave if they reported higher symptoms of stress, and had difficult clients. They were more likely to stay if they worked weekends and perceived their benefits to be good.

  11. Survey Results of the New Health Care Worker Study: Implications of Changing Employment Patterns
    Isik Urla Zeytinoglu, Margaret Denton, Sharon Davies, Andrea Baumann, Jennifer Blythe, Ann Higgins

  12. This report examines the effects of contemporary employment arrangements on the quality of nursing work life, and the implications of these employment arrangements for individual nurses, the hospitals, and also for the organization. First we look at nurse work status (full-time, part-time or casual job), contract status (permanent or temporary), and employment preference as factors affecting commitment to the hospital and profession, job satisfaction, retention in the organization, and absenteeism from work. Second, we examine stress, burnout, and physical occupational health problems (in particular, musculoskeletal disorders), as affecting nurse and hospital outcomes.

    This project investigated how the quality of nursing worklife and career choices differ for nurses in full-time, part-time and casual employment, and whether nurses who have the employment arrangements they prefer enjoy a standard of worklife that encourages retention. We collected data for the study from 1,396 nurses employed at three large teaching hospitals in Southern Ontario (Hamilton Health Sciences, Kingston General Hospital, and St. Michael's Hospital in Toronto) using the New Health Care Worker Questionnaire. Results indicate that although a substantial majority of the nurses were employed in the type of job that they preferred, problems of stress, burnout and physical health problems were reported. Further, these problems affected the nurses' job satisfaction, commitment, and propensity to leave the hospitals.

  13. Does One Size Fit All? The CPI and Canadian Seniors
    Matthew Brzozowski

  14. This paper examines the effectiveness of the CPI as a measure of inflation faced by Canadian seniors. I construct a democratic price index and show that the average inflation rate (average when measured by the CPI) is often a very poor measure of inflation rates relevant to individual households. The proportion of individual, household specific price indexes falling more then one percentage point above or more then one percentage point below the CPI often remains high regardless of how closely the mean democratic index approximates the CPI. Further, I demonstrate that the CPI has considerably overstated the inflation faced by Canadian seniors during 1970s and 1980s while more or less accurately capturing inflation during the 1990s. I show that the limitations of the CPI apply to both the senior and the non-senior Canadians in a nearly equal manner. The proportion of individual inflation rates falling significantly above or below the CPI is similar for both segments of the society and so is the time pattern of overstating the average inflation rate.

  15. Unexploited Connections Between Intra- and Inter-temporal Allocation
    Thomas F. Crossley, Hamish W. Low

  16. This paper shows that a power utility specification of preferences over total expenditure (ie. CRRA preferences) implies that intratemporal demands are in the PIGL/PIGLOG class. This class generates (at most) rank two demand systems and we can test the validity of power utility on cross-section data. Further, if we maintain the assumption of power utility, and within period preferences are not homothetic, then the intertemporal preference parameter is identified by the curvature of Engel curves. Under the power utility assumption, neither Euler equation estimation nor structural consumption function estimation is necessary to identify the power parameter. In our empirical work, we use demand data to estimate the power utility parameter and to test the assumption of the power utility representation. We find estimates of the power parameter larger than obtained from Euler equation estimation, but we reject the power specification of within period utility.

  17. Grandparents Raising Grandchildren in Canada: A Profile of Skipped Generation Families
    Esme Fuller-Thomson

  18. Only recently has the topic of Canadian grandparents raising grandchildren begun to receive attention from the media, politicians and researchers. Between 1991 and 2001 there was a 20% increase in the number of Canadian children under 18 who were living with grandparents with no parent present in the home. Using custom tabulation data from the 1996 Canadian Census, this paper presents a profile of grandparents raising grandchildren in skipped generation households (households which only include grandparents and grandchildren) and their household characteristics.

    There were almost 27,000 Canadian grandparents raising grandchildren in skipped generation families in 1996. These grandparents were disproportionately female (59%), of First Nations Heritage (17%) and out of the labour force (57%). One in three households of grandparent caregivers included a grandparent with a disability and a similar proportion had a household income less than $15,000 per annum. Marked differences were apparent when grandmothers and grandfathers in skipped generation households were compared. Grandmother caregivers were poorer, less likely to be married, more likely to be out of the labour force and more than twice as likely to provide 60 or more hours per week of unpaid childcare than were grandfathers. Implications for further research, policy and practice are discussed.

  19. Measurement Errors in Recall Food Expenditure Data
    Naeem Ahmed, Matthew Brzozowski, Thomas F. Crossley

  20. Household expenditure data is an important input into the study of consumption and savings behaviour and of living standards and inequality. Because it is collected in many surveys, food expenditure data has formed the basis of much work in these areas. Recently, there has been considerable interest in properties of different ways of collecting expenditure information. It has also been suggested that measurement error in expenditure data seriously affects empirical work based on such data.

    The Canadian Food Expenditure Survey asks respondents to first estimate their household's food expenditures and then record food expenditures in a diary for two weeks. This unique experiment allows us to compare recall and diary based expenditure data collected from the same individuals. Under the assumption that the diary measures are "true" food consumption, this allows us to observe errors in measures of recall food consumption directly, and to study the properties of those errors. Under this assumption, measurement errors in recall food consumption data appear to be substantial, and they do not have many of the properties of classical measurement error. In particular, they are neither uncorrelated with true consumption nor conditionally homoscedastic. In addition, they are not well approximated by either a normal or log normal distribution.

    We also show evidence that diary measures are themselves imperfect, suffering for example, from "diary exhaustion". This suggests alternative interpretations for the differences between recall and diary consumption measures.

    Finally, we compare estimates of income and household size elasticities of per capita food consumption based on the two kinds of expenditure data and, in contrast to some previous work, find little difference between the two.

  21. The Effect of Health Changes and Long-term Health on the Work Activity of Older Canadians
    Doreen Wing Han Au, Thomas F. Crossley, Martin Schellhorn

  22. Using longitudinal data from the Canadian National Population Health Survey (NPHS), we study the relationship between health and employment among older Canadians. We focus on two issues: (1) the possible problems with self-reported health, including endogeneity and measurement error, and (2) the relative importance of health changes and long-term health in the decision to work. We contrast estimates of the impact of health on employment using self- assessed health, an objective health index contained in the NPHS - the HUI3, and a "purged" health stock measure. Our results suggest that health has an economically significant effect on employment probabilities for Canadian men and women aged 50 to 64, and that this effect is underestimated by simple estimates based on self- assessed health. We also corroborate recent U.S. and U.K. findings that changes in health are important in the work decision.

  23. Population Aging and the Macroeconomy: Explorations in the Use of Immigration as an Instrument of Control
    Frank T. Denton, Byron G. Spencer

  24. Simulation methods are employed to explore the effects of immigration as a control instrument to offset the economic and demographic consequences of low fertility rates and aging population distribution. A neoclassical economic growth model is coupled with a demographic projection model. The combined model is calibrated and used in a series of experiments. The experiments are designed to generate the time paths of a hypothetical but realistic economic-demographic system under alternative assumptions about immigration policy. The government seeks to optimize policy results in the model, according to a specified criterion function. The model is calibrated with Canadian data but some experiments are carried out using initial populations and fertility rates of other countries.

  25. Users and Suppliers of Physician Services: A Tale of Two Populations
    Frank T. Denton, Amiram Gafni, Byron G. Spencer

  26. Physician shortages and their implications for required increases in the physician population are matters of considerable interest in many health care systems, in light especially of the widespread phenomenon of population ageing. To determine the extent to which shortages exist one needs to study the population of users of physician services as well as that of the physicians themselves. In this paper we study both, using the province of Ontario, Canada, as an example. The user population is projected and the implications for requirements calculated, conditional on given utilization rates. On the supplier side, the age and other characteristics of the (active) physician population are examined and patterns of withdrawal investigated. The necessary future growth of supply is calculated, assuming alternative levels of present shortages. The effects of population change on requirements are found to be smaller in the future than in the decade 1981- 1991, in the aggregate, not far from the effects in 1991-2001, but highly variable among different categories of physicians.

  27. MEDS-D Users' Manual
    Frank T. Denton, Christine H. Feaver, Byron G. Spencer

  28. This report is the Users' Manual that accompanies MEDS-D, the demographic component of a new Windows-based version of the MEDS (Models of the Economic-Demographic System) software. MEDS-D is designed for projecting the population, labour force, and number of households for Canada as a whole, for each of the provinces, and for the territories. The projections are made year-by-year, and extend as far as 2051.

    The time path of projections is determined by assumptions about fertility, mortality, international and interprovincial migration, household formation, labour force participation and unemployment. "Standard", "high growth", and "slow growth" projections are provided. It is easy to explore the implications of alternative assumptions and to input newly available data.

  29. MEDS-E Users' Manual
    Frank T. Denton, Christine H. Feaver, Byron G. Spencer

  30. This report is the Users' Manual that accompanies MEDS-E, the economic component of a new Windows-based version of the MEDS (Models of the Economic-Demographic System) software. MEDS-E is designed to make use of the all-Canada population and labour force projections from MEDS-D in projecting various Canadian macro-economic aggregates. The projections, which are made year-to-year, extend as far as 2051.

    The time paths of the economic projections are determined by the population and labour inputs, type of aggregate production function chosen, rates of depreciation, and investment, consumption, and other parameters. A set of "standard" assumptions is provided, but users can change those assumptions.

  31. Socioeconomic Influences on the Health of Older Canadians: Estimates Based on Two Longitudinal Surveys
    Neil J Buckley, Frank T Denton, A Leslie Robb, Byron G Spencer

  32. It is well established that there is a positive statistical relationship between socioeconomic status (SES) and health but identifying the direction of causation is difficult. This study exploits the longitudinal nature of two Canadian surveys, the Survey of Labour and Income Dynamics and the National Population Health Survey, to study the link from SES to health (as distinguished from the health-to-SES link). For people aged 50 and older who are initially in good health we examine whether changes in health status over the next two to four years are related to prior SES, as represented by income and education. Although the two surveys were designed for different purposes and had different questions for income and health, the evidence they yield with respect to the probability of remaining in good health is similar. Both suggest that SES does play a role and that the differences across SES groups are quantitatively significant, increase with age, and are much the same for men and women.

  33. Developing New Strategies to Support Future Caregivers of the Aged in Canada: Projections of Need and their Policy Implications
    Janice Keefe, Jacques Légaré, Yves Carrière

  34. Projections of future need for Canadian continuing care services typically uses current utilization patterns and population aging. Accurately assessing this need is much more complex since disability patterns among the elderly are changing and availability of caregivers is affected by changes in family structure. This paper projects annual growth rates between 2001-2031 in the need for informal and formal support among elderly Canadians and discusses the policy implications of the increasing demand for informal caregivers. Using Statistics Canada's LifePaths micro-simulation model, these projections incorporate disability rates and the potential availability of informal caregivers. The authors conclude that continued focus on family to meet the needs of elderly Canadians without increased support is not sustainable in the long term. New strategies to support Canadian caregivers are proposed and their economic feasibility in the public and private markets are evaluated.

  35. Les Premiers Baby-Boomers Québécois font-ils une Meilleure Préparation Financière à la Retraite que leurs Parents? Revenu, Patrimoine, Protection en Matière de Pensions et Facteurs Démographiques
    Long Mo, Jacques Légaré

  36. In the forthcoming decades, population aging will generate major challenges in our society. In particular, the financial security of future pensioners constitutes an important issue. This paper will examine the financial planning for retirement of the Quebec first cohorts of baby boomers born in 1946-1955, who will retire in the forthcoming years, by comparing with their parents their situation toward their income, their patrimony and their pension coverage throughout their life cycle. The demographic factors that may interact on the financial suitability in retirement will also be studied. The cohort analysis constitutes an essential approach. The datasets used come from surveys that were taken between 1971 and 2001. Contrary to some popular thoughts, the results reveal that the first cohorts of baby boomers are in a better situation regarding their financial planning for retirement than their parents at the same age. This outcome is valid as well for the condition of their income, their accumulated patrimony or their pension coverage. However, this patent advantage is not applicable to all the first boomers. If current patterns persist, some of them could be exposed to a high risk of financial insecurity after retirement. Moreover, the demographic characteristics of the first boomers, as their extended life expectancy, their smaller families and their propensity to live alone, could contribute to reduce their economic advantage compared to their parents.

  37. Welfare Restructuring without Partisan Cooperation: The Role of Party Collusion in Blame Avoidance
    Martin Hering

  38. This article argues that welfare state restructuring, which is highly unpopular among voters, is politically feasible if government and opposition parties collude informally with each other. Contrary to key arguments made in the literature, restructuring does not require the formation of a formal grand coalition which diffuses blame from voters. Party collusion is a distinctive blame-avoiding strategy that differs not only from other party-oriented strategies such as building a grand coalition, but also from voter-oriented ones. By analyzing the politics of pension reform in Germany from 1995 to 2004, this article shows that party collusion, which emerges through repeated signaling and informal agreements, enables political parties to restructure the welfare state without running the risk of electoral failure. Finally, it suggests that collusion likely explains recent successes of Austrian, French and Italian governments in legislating unpopular welfare cutbacks.

  39. Ethnicity and Health: An Analysis of Physical Health Differences across Twenty-one Ethnocultural Groups in Canada
    Steven Prus and Zhiqiu Lin

  40. The study of health differences across a wide-range of ethnic, racial, and cultural groups has received relatively little attention in the literature. Twenty-one ethnocultural groups are examined in the current study, providing one of the most comprehensive analyses to-date on ethnicity and physical health in Canada.

    Two specific research questions are addressed. First, what is the extent of ethnocultural-based health inequalities in Canada? Second, do ethnocultural differences in health reflect differences in social structural and health-related behavioural environments? These questions are analyzed using the master datafile of the 2000/2001 Canadian Community Health Survey (n=129,588). Three global measures of physical health are used: self-rated health, functional health, and activity restriction.

    The results show that certain ethnic and cultural groups experience higher health status compared to other ethnocultural groups. Social structural (i.e., socio-demographic and SES factors) and behavioural (alcohol and cigarette consumption, diet/nutrition, and exercise) control variables are also introduced to determine if these factors mediate the relationship between ethnicity/race and health. These findings show that health differences between ethnic and racial groups are partly attributable to structural and behavioural factors. They also show that the mediating effects of these variables vary across ethnocultural groups, and that social structural factors are generally more important than behavioural ones in explaining ethnocultural-based differences in health.

    The implications of the study findings for future research on ethnicity and health and for health care policies are discussed.

  41. The Health Behaviors of Immigrants and Native-born People in Canada
    James Ted McDonald

  42. This paper analyzes the incidence of participation in various activities generally expected to have an impact on current and future physical health. Attention is focused on the incidence of these activities among immigrant and minority groups compared to native-born white Canadians. Immigrants generally exhibit significantly lower rates of alcohol consumption, binge drinking, and daily smoking but also lower participation in vigorous physical activity and consumption of fruit and vegetables. Differences are particularly pronounced for immigrants from Asia and Africa, and this is true for both men and women. For most immigrant men, alcohol consumption and smoking both increase with years in Canada, ceteris paribus, and in the case of immigrants from Europe and the USA, reach native-born white levels after between 10-20 years in Canada. For other immigrant men, the incidence of alcohol consumption remains low even for long-term residents of Canada. Interestingly, there is no significant change with years-since-migration in any of the health behaviors for immigrant women. Canadian born members of visible minorities also display significantly lower rates of alcohol consumption, smoking and (for women) vigorous physical activity than native-born whites, although these rates were still higher than for immigrants from Asia and Africa. Finally, native- born white lifestyle choices are found to exert a significant positive influence on the behaviors of immigrants and native-born minorities who are residents of the same province.

  43. Ethnicity, Immigration and Cancer Screening: Evidence for Canadian Women
    James Ted McDonald and Steven Kennedy

  44. Introduction: Canada's annual immigrant intake is increasingly composed of visible minorities, with 59% of immigrants arriving in 1996-01 coming from Asia. However, only a small number of studies have used population health surveys to examine Canadian women's use of cancer screening. We use recent population health surveys to analyze immigrant and native-born women's use of Pap smears, breast exams, breast self-exams, and mammograms.

    Methods: We study women aged 21-65 drawn from the National Population Health Survey and Canadian Community Health Surveys that together yield a sample size of 105,000 observations.

    Results: We find that for most forms of cancer screening, recent immigrants have markedly lower utilization rates, but these rates slowly increase with years in Canada. However, there is wide variation in rates of cancer screening by ethnicity. Screening rates for white immigrants approach Canadian-born women's utilization rates after 15-20 years in Canada, but screening rates for immigrants from Asia remain significantly below native-born Canadian levels.

    Discussion: Health authorities need to tailor their message about the importance of these forms of cancer screening to reflect the perceptions and beliefs of particular minority groups if the objective of universal use of preventative cancer screening is to be achieved.

  45. Population Aging in Canada: Software for Exploring the Implications for the Labour Force and the Productive Capacity of the Economy
    Frank T Denton, Christine H Feaver, and Byron G Spencer

  46. This report has two purposes: (1) to introduce a new version of the MEDS (Models of the Economic Demographic System) software; and (2) to apply it in a series of illustrative projections. The software is designed to illustrate the medium- to longer-term responses of the Canadian population and economy to a wide range of factors on either the demographic side, such as changes in rates of fertility, migration, and mortality, or the economic side, such as changes in the rate of technical progress or the educational attainment of young people or of new immigrants. "Standard" projections are provided, together with nineteen alternative projections. (For some illustrative projections, see QSEP Website.) The range of projections indicates the breadth of applications for which MEDS has been designed. It serves also to provide some quantitative measures of the likely demographic and economic consequences of population aging, and indicates the scope for evaluating policy initiatives by means of simulation.

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Last revised: Oct 15, 2007.