102 CHAPTER 5


Although it is not possible in this data to identify whether a transition out of school is temporary, most adolescent transitions are a one-way process in our empirical setting. Though those who were recorded as participating in labor-force activities do not move back to school after the six-year interval covered by our panel data, the fact that I ignore the heterogeneity in the initial state causes a selectivity bias in the estimates. Therefore, I do not restrict the sample to those who were enrolled in school but also incorporate those already in the labor market in 1998. I also investigate how future mor- tality affects the initial state. If household members anticipate the death, in the future, of a household member, they may adjust their behavior ex ante to accommodate for the negative shocks that arise ex post.8 Finally, in the analysis of adult labor supply, I focus on women’s time allocation between in-house and labor-market activities.


Activity Transitions


The KIDS surveys provide information about the activities of household mem- bers by employment status; labor force status consists of three categories of employment (regular employment, casual or temporary employment, self- employment) as well as unemployment. The KIDS data also specify whether an individual is unemployed, a “housewife / involved with child care,” in school (including at a university), at a crèche or preprimary school, retired, or “other.” The specifications are obtained from the respondents themselves. Although it is not possible to verify in the dataset whether the respondents are actively seeking employment, school enrollment and unemployment are mutu- ally exclusive among the questionnaire options. Combining the two survey rounds, it is possible to establish the transitions in activity from 1998 to 2004, although details of activities within the intervening period are not available. Table 5.3 shows the activity transitions from 1998 to 2004 among adoles- cents, that is, for those aged 14–19 in 1998.9 Two main trends emerge from the data. First, it is interesting to find that among those who transitioned to the labor market, the majority were unemployed in 2004. As discussed in


8 Given the survey interval of three years (1998–2004), my measurement of ex ante actions is not perfect in the sense that the 1998 data probably only captured ex ante actions for events that were occurring a few years ahead (say, 1998–2001). Similarly, ex post actions must have occurred before 2004 if events occurred immediately after 1998. However, the 2004 data are


likely to capture these ex ante actions if they were not reversible. 9 In my empirical analysis, I target adolescents aged 14–19 in the initial period. Thus my results on schooling can be qualitatively different from those of other studies. In particular, I do not find that a mother’s death has a larger adverse impact on child schooling than a father’s death. I find that the death of working males has a large impact on adolescents’ schooling (labor sup- ply) decisions.


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