Labor Supply and Investment in Child Quality: A Study of Jewish and Non- Jewish Women:A ReplyAuthor(s): Barry R. ChiswickSource: The Review of Economics and Statistics, Vol. 74, No. 4 (Nov., 1992), pp. 726-727Published by: The MIT PressStable URL: http://www.jstor.org/stable/2109388 .

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726 THE REVIEW OF ECONOMICS AND STATISTICS

LABOR SUPPLY AND INVESTMENT IN CHILD QUALITY: A STUDY OF JEWISH AND NON-JEWISH WOMEN: A REPLY

Barry R. Chiswick*

The high levels of schooling, occupational attain- ment and earnings among American Jews in compari- son with non-Jewish whites have become a topic of considerable interest. Previous research suggests that these differentials have arisen, in part, from greater Jewish parental investment in their children (see, for example, Chiswick (1988)). Since children are time- intensive, an important aspect of investment is parental time inputs in child care prior to and concurrent with schooling. Parental time inputs are primarily the re- sponsibility of the mother, although perhaps more so in the past than currently. If one views the complement of female labor supply as time devoted to home produc- tion, including child care, then an analysis of Jewish/non-Jewish differences in female labor supply, particularly when there are young children in the household, can be used to test the hypothesis regarding Jewish investment in child quality. The hypothesis was confirmed in this Review (Chiswick, 1986) using data for the United States from the 1970 Census of Popula- tion.

Canadian Analysis

Spencer (1992) challenges the generality of the American findings through a statistical analysis of data from the 1981 Census of Canada. This is an indepen- dent data set, but it is for a different country and some differences in questions prevent a perfect replication of the statistical framework. The number of Jewish women in the household sample from the 1981 Canadian Cen- sus used by Spencer (749 women) is only about one- third of the sample in the analysis for the United States (2,175). This smaller sample generates greater instability in the labor supply equations estimated for Canadian Jews. Spencer incorrectly views his findings as a refutation of the hypothesis that Jewish women are more responsive in their labor supply to the pres- ence of children in the home and to their educational attainment.

In his table 2, Spencer reports the predicted labor supply behavior of Jewish and non-Jewish women for alternative measures of labor supply, different combi- nations of the age and number of children, and various levels of education. The predictions are based on sepa-

rate Jewish and non-Jewish ordinary least squares re- gression equations, with up to 85 dichotomous vari- ables, as reported in his unpublished appendix. The Jewish regression coefficients are used to predict the labor supply for Jewish women.

As indicated in Spencer's table 2, his predicted labor market participation rate in 1980 (i.e., worked at any time in 1980) for a married woman age 40 to 44 who completed only secondary school and who never had children is only 63.8% for Jewish women and 88.8% for non-Jewish women. The value for Jewish women seems surprisingly low.1 Unfortunately, the statistical reliability of the predicted values are not reported. This is of concern as the sample of married Jewish women without children is very small (about 40 obser- vations).

Let us accept at face value that for some reason, as yet unknown, Canadian Jewish women without chil- dren are less likely to work than their non-Jewish counterparts. Presumably the non-workers are engag- ing in home production. What happens to the women who do work when they have children? Among women with two children under 6 years of age, 32.5% of the Jews worked at some time in 1980 and this is 50.9% of the 63.8% working among those without children (Spencer, table 2). Among non-Jewish women the 56.5% who worked with two children at home under 6 was 63.6% of the 88.8% who worked among those without children. Thus, Jewish women with young chil- dren at home have a lower labor supply and the relative incidence of labor force withdrawal is greater among these women.2 A similar pattern exists for the other measures of labor supply.

Now compare the situation when there are two chil- dren under 6 with the situation when all of the chil- dren are over the age of 18. The propensity to have worked in 1980 increased from 32.5% to 50.8% (56% increase) among the Jewish women, and from 56.5% to 84.6% (50% increase) for non-Jewish women (Spencer, table 2). Although Canadian Jewish women with chil- dren over age 18 still have a lower labor supply, the percentage increase is larger.

Received for publication April 5, 1990. Revision accepted for publication August 20, 1991.

* University of Illinois at Chicago.

1 The predicted 63.8% participation rate for the 40 to 45 year old married women who never had children is also in contrast to the observed rate of 68% for Jewish women as a whole.

2 The absolute and relative declines are greater in the United States, with the Jewish women going from a higher to a lower participation rate when they have young children at home (compare Spencer (1992) with Chiswick (1986)).

Copyright C) 1992

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NOTES 727

At all levels of education Spencer's predictions also indicate Canadian Jewish women have a lower labor supply than non-Jewish women. However, the gap in the labor participation rates is smaller the higher the level of schooling. For example, in Spencer's table 2, the propensity to have participated in 1980 increased from 41.7% for those with less than a high school education to 76.1% for university graduates, in com- parison to 61.3% and 89.9%, respectively, for non-Jews. That is, participation rates increase with education more sharply in Canada for the Jewish women.

Although not mentioned in the text, there is an interesting set of findings for the effect of husband's religion on the wife's labor supply, as reported in the detailed regression equations in Spencer's appendix. The husband's characteristics that are held constant include his age, education, earnings, hours of work, mother tongue, nativity and year of immigration, as well as his religion.3 Among Jewish women, those with a Jewish husband worked less on each of the four measures of labor supply than those with a non-Jewish husband, ceteribus paribus. The difference was 6.8% for the participation rate in 1980. Among non-Jewish women, the religion of their husband also mattered. Those with Jewish husbands worked less on three of the four measures, including a 1.3% lower participa- tion rate in 1980. Thus, other things the same, female labor supply is lower for Jewish and non-Jewish women when the spouse is Jewish, controlling for husband's income and other variables. That is, female labor sup- ply is lower the "more Jewish" is the family.4

Conclusions

Spencer's analysis, using the 1981 Census of Canada, is in fact a confirmation, not a contradiction, of the underlying child quality investment model for explain- ing Jewish achievement (Chiswick, 1988). As was shown for their American counterparts using the 1970 Census (Chiswick, 1986), Canadian Jewish women also have lower levels of labor supply than non-Jewish women when they have children at home. They experience larger relative declines in labor supply when children arrive in the household and larger relative increases when the children become independent. They also have a steeper rise in their labor supply with respect to increases in schooling than do other women. And, for both Jewish and non-Jewish women, labor supply is lower if the spouse is Jewish. Thus, the labor supply of Jewish women in North America appears to be more sensitive than the labor supply of other white women, other variables the same, to both their educational attainment and the presence of children in the home.

3Husband's hours of work may be determined endogenously with the wife's labor supply, but Spencer treats it as exoge- nous.

4 This is consistent with the Ritterband (1990) finding that among Jewish women in the United States labor supply is lower for those raised in a traditional or religious home and for those engaged in more current ritual practice or Jewish communal activity.

REFERENCES

Chiswick, Barry R., "Labor Supply and Investment in Child Quality: A Study of Jewish and Non-Jewish Women," this REVIEW 68 (Nov. 1986), 700-703. ,"Differences in Education and Earnings Across Racial and Ethnic Groups: Tastes, Discrimination and Invest- ment in Child Quality," Quarterly Journal of Economics 103 (Aug. 1988), 571-597.

Ritterband, Paul, "Jewish Women in the Labor Force," Re- port prepared for the American Jewish Committee, Mar. 1990, mimeo.

Spencer, Byron G., "Labor Supply and Investment in Child Quality: A Study of Jewish and Non-Jewish Women: A Comment," this REVIEW 74 (Nov. 1992).

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