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IZA – Institute of Labor Economics

Early retirement increases mortality risk among men

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Demographic changes put governments under increasing pressure to reform old-age social security systems. Attempts to increase the effective retirement age, however, are often met with political opposition. A common argument is that, after having worked all their lives in physically demanding jobs, workers should have the option to retire early and thus avoid emerging health problems.

While leaving an unhealthy work environment is generally conducive to good health, the health effects of permanently exiting the labor force may go in the opposite direction, according to a recent IZA discussion paper by Andreas Kuhn, Stefan Staubli, Jean-Philippe Wuellrich and Josef Zweimüller. The paper shows that among men, a reduction in the retirement age causes a significant increase in the risk of dying before age 73 and a significant reduction in the age at death.

To overcome the problem of reverse causality (poor health leading to early retirement), the researchers analyzed the effects of an early retirement scheme that was introduced in some regions in Austria in 1988. The reform allowed older workers in eligible regions to withdraw three years earlier from employment than comparable workers in non-eligible regions. By comparing the health data between regions, the researchers were able to isolate the effects of the reform.

Results driven by men in lower income groups

The results show that an additional year in early retirement increases the risk of men dying before age 73 by 6.8 percent. For women, early retirement is not associated with worse health outcomes. The results among men are mainly driven by lower income groups. Men in blue-collar occupations, men with low-work experience, and men who have some pre-existing health impairment display higher mortality effects.

The authors suggest that retirement-related lifestyle changes may drive the increase in mortality. Retirement is not only associated with lower income and fewer resources to invest in one’s health, but also with less cognitive and physical activity as well as with changes in daily routines and lifestyles which are potentially associated with unhealthy behavior.

This may also explain why the mortality effect is only found among men. The researchers suggest that women may be better able to cope with major life events, have less unhealthy retirement-related lifestyle changes, and suffer less from a loss of social status than men.

New education models for the workforce of the future

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Industry 4.0 is still ongoing, but we can already see some of the most important effects, such as the almost complete robotization of almost all manufacturing production and digitalization of an increasing part of consumption. After the disappearance of the working class, now also white-collar jobs are put under threat together with the middle class of shopkeepers, which was the backbone of retail trade.

A number of more or less worrisome predictions have been made regarding the number of jobs that will disappear, starting from the seminal paper of Frey and Osborne. Their prediction was that 47% of the current jobs will be lost, which is not such a big share if we look retrospectively at the labor market impact of past industrial revolutions. Other scholars have predicted a lower share of job loss. It is clear that most tasks, especially the routine-based ones, within a large number of jobs will disappear. What remains still unclear is whether this will also make the jobs disappear altogether, or whether jobs will dramatically change from the way they are done today.

Rising importance of work-related skills

At the same time, new products, new consumption patterns and therefore new jobs are going to be created. At the moment, it is impossible to predict the exact number and even the field in which they will be created. Looking at the skills that are most under threat today, our educated guess is that the jobs which will survive and even develop further will be those that require a big deal of creativity. Such jobs will need to embody an ever higher level of human capital. And human capital in this case does not only mean general education (especially in the STEM fields) but especially work-related skills and competences.

General work-related competences (adapting to the hierarchical and functional division of labor, teamwork, dealing with customers) can more easily be learned through any kind of work experience, even of relatively short length. In contrast, job-specific competences can be learned only through long periods of on-the-job training. These refer to specific tasks that are done only in a given type of job, such as designing a building or doing the accounting for a company.

Extending the principle of dual education

How should educational systems and school-to-work transition (SWT) regimes be modeled to better serve the needs of Industry 4.0? Although a high level of general education will be important for its training content to develop adaptability, it is not the only component to develop. What will be increasingly important are the work-related skills.

This will require important educational reforms to favor an ever-better integration of educational institutions and the world of work, especially in the countries whose SWT regime is sequential (training after education) rather than dual (education together with training). Educational systems should learn to work with the world of business and thus collaborate with it. School and university rooms need no longer be the only places where human capital is generated. Firms should also become learning and training places again, as they used to be before the first industrial revolution.

The duality principle is the basis for a strong diversification of the supply of education. It should cross through the entire educational system, from high secondary school (work-related learning, vocational education and training, and apprenticeship) to bachelor degrees (professional universities for those who received vocational training, and high-level training or apprenticeships for university students) and post-graduate programs (master programs with on-the-job training, business incubators and training for self-employed and entrepreneurs, and industrial doctorates). In addition, life-long learning should be offered to help those who lose their job or wish to start a new occupation.

Race-blind school admissions policy increases racial segregation

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In the United States, federal mandates over the past two decades preclude the explicit use of race in school admissions decisions. Do race-blind admissions impact school racial segregation? How do students and teachers respond to any resulting changes in the racial composition of the student body?

To answer these questions in a new IZA discussion paper, Jason Cook studies a unique policy change where a large, urban school district was forced to adopt a race-blind lottery system to fill seats in its oversubscribed magnet schools. Because black students were more likely to apply to magnet schools than other students, the district had previously integrated its magnets by conducting separate admissions lotteries for black and non-black students.

As a result, the requirement to use race-blind lotteries dramatically segregated subsequent magnet school cohorts. The size of the increase in segregation that each school experienced is predictable based on how intensely the school protected its seats for non-black students before the policy change. By leveraging this idea, the researcher can isolate the effect of the increase in racial segregation on teacher and student behavior.

Segregation causes “white flight”

The study finds that white students who attend more racially segregated magnet schools (i.e., schools with higher black enrollment shares) are more likely to later transfer to a different school district outside of the city. As a result, the segregation caused by race-blind admissions is self-perpetuating. Because magnet schools began as a way to integrate schools and prevent “white flight,” finding that race-neutral admissions undermine this original purpose is striking.

Segregation causes good teachers to leave

The author also finds that magnet schools that become segregated struggle to retain their better teachers. Measures of teacher quality steadily decline over time after schools racially segregate.

Segregation harms student outcomes

The analysis shows that the racial segregation stemming from race-blind admissions harms standardized test scores for both black and non-black students. The negative effects are persistent. Black students who attend more segregated magnet schools are less likely to go on to attend college. Taken together, Jason Cook interprets these results as evidence that, in this district, by increasing racial segregation the race-blind admissions policy harmed student outcomes.

Shrinking gender pay gap has made boys more ambitious

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Girls born in 2000 are aspiring to do jobs that are paid 31 percent lower than males, according to a new IZA discussion paper by LSE researchers Warn N. Lekfuangfu and Grace Lordan. Boys born in 2000, on the other hand, have higher aspirations than previous male generations in terms of income, to the point where the gender pay gap could actually become larger than it is at present if these aspirations are fulfilled.

The study concludes that a persistent lack of women in highly paid jobs in areas such as science, technology, engineering, finance and politics is due to girls internalizing social norms, rather than a result of their innate preferences. This conclusion emerges from the researchers finding that time, rather than childhood factors, is what has altered the tendency for males and females to choose different types of jobs. Social movements or campaigns are essential to encourage girls to aim higher, it suggests.

The researchers’ analysis of occupational sorting for children born in 1958, 1970 and 2000 found that over time increasing numbers of women pursue traditional male jobs, such as law, accountancy and pharmacy, but that in jobs with the highest share of males (over 80 percent), there has been no change in the 60 years (see figure). These jobs are often the “golden pathway” to powerful “C suite positions”, the paper says.

The asymmetric gender revolution

Boys’ current aspirations, from those born in 2000, are increasingly geared towards jobs with “significantly higher levels of competitiveness and larger incomes” compared to previous generations and their current female peers, resulting in the possibility that the gender pay gap could actually become larger than it is at present. The paper acknowledges, however, that not all boys will achieve their ambitions. This raises a big question of why males are failing to opt in increasing numbers for traditionally female occupations such as social work, nursing and primary school teaching.

IZA Fellow Grace Lordan of LSE’s Psychological and Behavioural Science Department said: “More and more we actively encourage our girls to pursue occupations that are currently dominated by males. However, boys are rarely encouraged to pursue occupations where females have had higher shares. The asymmetry of the gender revolution needs to be considered. This becomes more important given that we expect jobs that are traditionally female to expand over the next decades – for example, the nursing and caring professions.”

Read more comments from the authors on the LSE news page.

Ten years after the financial crisis

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The impact of the financial crisis and the Great Recession on post-transition and emerging economies has varied tremendously. Some economies experienced very large recessionary shocks with long-lasting effects for the labor market, human capital formation and growth, while others benefited from policy efforts and an economic structure that alleviated negative labor market effects.

An IZA workshop jointly organized with the Higher School of Economics in Moscow took stock of labor market performance and adjustment in post-transition and emerging economies nearly ten years after the Great Recession.

Earnings inequality

In their study  “Winners and Losers After 25 Years of Transition: The Case of Slovenia”, Peter F. Orazem and co-authors review the gains to education, work experience and gender over 25 years of transition from plan to market using data on the universe of all workers in Slovenia over the period 1991–2015. They find that rates of return to education and work experience rose and remained high on average. However, the rapid expansion of tertiary education resulted in declining returns to schooling among the youngest cohorts of college graduates. The resulting decrease in earnings inequality across schooling groups among the young has been sufficient to lower overall wage inequality in Slovenia, unlike the typical rising wage inequality commonly observed in market economies since the 1990s.

Trade liberalization

The paper co-authored by Feicheng Wang on “Labor Market Reform, Firm-level Employment Adjustment and Trade Liberalization” empirically investigates whether the nature of firm-level employment adjustment is affected by the flexibility of the labor market and by an exposure to trade liberalization. It takes advantage of differences in local labor market conditions created by the non-uniform implementation of hukou reform in China to identify the employment effects of the reform. The results show that firms exposed to the hukou reform have higher employment adjustment rates on average than similar firms without reform, indicating that the labor market reform allowed more employment adjustment. Moreover, firms respond to trade shocks by adjusting employment relatively more in the presence of hukou reform. These findings offer important policy implications to the current labor market reform in China and to other developing countries with inflexible labor markets.

Minimum wages

In her paper “Do Minimum Wages Matter for Earnings Inequality? Evidence from Large Increases of Minimum Wage in Russia (2005-2017)”, Anna Lukyanova notes that little empirical work has been done on the effects of minimum wages in transition economies, where labor market institutions experienced rapid changes over the last decades. This paper presents empirical evidence on minimum wage effects for Russia, the largest transition economy. It uses regional variation in the relative level of the federal minimum wage to identify the impact of a large increase in the real value of the minimum wage on the distribution of wages in Russia between 2005 and 2015. The analysis suggests that the minimum wage can account for the bulk of the decline in the lower tail inequality, particularly for females.

The other presentations covered issues from labor supply and wage inequality to political economy aspects of the labor market (papers listed below, presenters named first).

Individuals with criminal records may stay in their jobs longer

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In sales and customer service positions, employees with criminal records may stay in their jobs longer and be less likely to leave, according to a study published in the IZA Journal of Labor Policy.

Researchers at Northwestern University investigated the possible relationship between having a criminal record and job performance by evaluating data from employees in sales or customer service jobs in call centers in the US. They found employees with a criminal record stayed in their roles on average 19 days longer than those who did not have a criminal record.

Deborah Weiss, the corresponding author of the study, said: “In sales and customer service positions, turnover is a major labor cost. Our study found that employees with criminal records had a longer tenure and were less likely to quit their jobs voluntarily than other workers. This finding suggests that individuals with a criminal record represent an untapped productivity pool.”

Fewer job prospects

The authors suggest that employees with a criminal record may stay in their jobs longer because they have fewer job prospects outside of their current role.

Deborah Weiss said: “Job applicants with criminal records are much less likely than others to receive an offer of employment. Six months after release from prison, 50 to 80 percent of the formerly incarcerated remain unemployed. Some of those who are offered employment may stay longer because they have no other options and others may feel a sense of loyalty or gratitude to an employer who has given them a second chance.”

Differences by job type

The researchers also found a 34% increased chance of misconduct in sales jobs for employees with a criminal record but not in customer service jobs, which may suggest that performance and tenure for employees with a criminal record may be better in customer service roles than sales roles. The authors suggest that despite this higher misconduct rate, sales employees with a criminal record may be a good investment for employers. The authors estimated that hiring a worker with a criminal record for a sales job increased expected theft-related costs by about $43, while saving the same employer about $746 in turnover costs on that worker.

Deborah Weiss said: “Finding gainful employment for individuals with a criminal background is an important public priority: without such employment, reoffending is almost inevitable. While our study may not entirely dispel employers’ fears that hiring applicants with a criminal record may carry risks, our findings suggest that there are unexploited opportunities to hiring applicants with a record in a way that makes sense both on efficiency and on moral grounds.”

The researchers used data on 58,977 applicants hired for sales or customer service jobs in call centres in the US, collected by a hiring consultancy from May 2008 to January 2014. The authors evaluated possible associations between having a criminal record or not having a criminal record and job performance, misconduct and time spent in the job.

The authors caution that the study only evaluated data from those working in the sales and customer service jobs, which may limit the generalizability of the results outside of these positions. The observational nature of this study does not allow for conclusions about cause and effect.

The Tyranny of the Top Five

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Too often in economics, where you publish can be more important than what you publish.

That’s the theory explored in a new study co-authored by Nobel-winning IZA fellow James J. Heckman and Sidharth Moktan. The University of Chicago scholars found that tenure and prize committees often base decisions on how often candidates publish in “top five” journals in the field. That practice not only concentrates career advancement into the hands of a select set of editors—many of whom are long-serving—but does so at the expense of innovative economic research.

“Relying on publication counts in ‘top-ranked’ journals encourages crass careerism among young economists,” Heckman said. “It diverts their attention away from basic research toward blatant strategizing about lines of research and favored topics of journal editors with long tenures.

“Relying on rankings rather than reading to promote and reward young economists subverts the essential process of assessing and rewarding pathbreaking original research.”

The “top five” refers to the leading economic journals most crucial to the academic and professional success of young scholars: The American Economic Review, Econometrica, the Journal of Political Economy, The Quarterly Journal of Economics and The Review of Economic Studies. These journals are chosen by a process that weighs citation counts to all papers in the journal; in other words, it judges a paper by the company it keeps.

The IZA discussion paper by Heckman and Moktan found that scholars who have written one “top five” article are 90 percent more likely to receive tenure in a given year. Those figures balloon to 260 percent for two such articles and 370 percent for three.

“Both junior and senior scholars often bring up the top five when they’re evaluating somebody,” Moktan said. “Even if it’s in a casual conversation, they’ll say, ‘Oh, how many ‘top fives’ do they have?'”

Gauging the role of bias

Writing for a “top five” journal involves more than just producing the best possible piece of research, according to Heckman and Moktan. Their study argues that to optimize chances for placement, scholars are incentivized to tailor their work for individual editors—who, consciously or not, are guided by their own biases.

In addition to tracking tenure rates, Heckman’s and Moktan’s study tracks the author affiliation in “top five” journals from 2000-16. For example, Heckman sits on the editorial board of the Journal of Political Economy, which is published by the University of Chicago Press. Perhaps unsurprisingly, it drew 14.3 percent of its articles in the aforementioned time period from authors connected to the University of Chicago. The Quarterly Journal of Economics, which is edited at Harvard University’s Department of Economics, drew nearly a quarter of its articles (24.7 percent) from its own affiliates, plus another 13.9 percent of its articles from Massachusetts Institute of Technology affiliates.

In contrast, the Review of Economic Studies, which has a higher rate of turnover on its editorial board, has much weaker ties to individual universities. From 2000-16, the publication was most strongly connected to New York University and Northwestern University affiliates, from whom it drew 7.3 percent and 7.0 percent of articles.

The scope of the problem expands when universities use “top five” journals as a proxy for determining tenure. No longer is this simply an issue of who gets published in certain journals, the authors claim; rather, flaws in the editorial process are amplified into career hurdles—ones that can be difficult for outsiders to surmount without connections to “top five” editors and the referees they select.

The “top five” also don’t hold a monopoly on high-quality work. According to Heckman and Moktan, some of the most influential work in economics is published by other journals. Although the “top five” articles produce more citations on average, those numbers are skewed by outliers. Moreover, the senior scholars who rely on the “top five” to judge their colleagues often do not publish in those journals themselves once they are tenured. Relying on the journals, Heckman said, instills caution rather than creativity in young scholars anxious to gain tenure.

The “top five” journals incentivize scholars to focus on follow-up and replication work—research that is easy to assess for immediate publication, but which does not advance the frontiers of economic science. Often, the sorts of innovative projects that would challenge accepted ideas are too long or data-intensive to fit into the format of “top five” journals.

“Research is inherently risky, because you’re trying to find answers to questions that have not been solved,” Moktan said. “Sometimes the answers aren’t exciting. But serious assessments require senior scholars to read papers and understand them, and why that line of research is important.”

Potential solutions

Heckman and Moktan suggest that tenure committees devote more resources to closely reading published and unpublished papers, rather than relying on journal reputation as a substitute for careful reading. That method could prompt each individual institution to pursue more unconventional research instead of leaning on papers funneled through “top five” publications. Expanding the pool of influential publications beyond five journals could ameliorate the problem too.

They also suggest a more radical solution: Shifting away from conventional journals in favor of open-source formats such as arXIV and PLOS ONE, which are used in hard sciences. Such a change would offer scholars an opportunity to share their ideas earlier and get peer review in real time—an approach that might be more welcoming to out-of-the-box ideas.

“The current system of publication and reward does not encourage creativity,” Heckman said. “It delays the publication and dissemination of new ideas. It centralizes power in the hands of a small group of editors, prevents open discussion and stifles dissent and debate. It needs to be changed.”

Editor’s note: This is a slightly edited version of a post by University of Chicago News.

Education as a source of inequality

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How do we have to organize our educational systems against a rapidly changing labor market environment? Educational decisions of parents and students are taken against changing skill requirements, and new labor market policies have potentially unintended consequences for education decisions. School choice, teachers’ efficiency, and school financing were some of the topics discussed at the 3rd IZA Workshop on the Economics of Education, which brought together 21 international scholars to present their research at IZA in Bonn.

A keynote speech by Susan Dynarski highlighted the current knowledge on how inequality and educational outcomes are interrelated. While much has changed for the better over the past decades, socioeconomic background remains an important determinant of student success – at every stage of education. Informational and financial constraints are only slowly being overcome, although recent research points to promising solutions and interventions.

For example, Andres Barrios Fernandez presented his work in which he demonstrates how older direct neighbors and siblings receiving student loans increase the probability of younger neighbors or siblings to go to university. The effect appears to work through reducing informational disadvantages about loan eligibility and the application process, and this highlights the scope for spillovers of supporting individuals in poor neighborhoods in their college application process.

Timothy N. Bond analyzed how teacher performance pay linking salaries to measurable increases in student performance leads to better longer-term labor market success of those students being exposed to such programs. Cohorts with more students taught by teachers who were paid by performance are more likely to graduate from high school and earn higher wages as adults. The effect appears to be especially driven by primary schools with a higher fraction of disadvantaged students. This provides a direct link of teacher performance pay to inequality.

View the full conference program.

Female leadership raises team performance

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Female leadership in economic and social contexts is a rather rare phenomenon. Could this be because women have weaker abilities or attitudes to lead a team or an organization? Or are women, despite considerable changes in gender roles, still vulnerable to becoming targets of prejudice?

To answer this question, Maria De Paola, Francesca Gioia and Vincenzo Scoppa ran a field experiment with 430 students from an Italian university who volunteered to have a part of their exam evaluated on the basis of teamwork. The students were randomly assigned to teams of three members, one of which was randomly selected as a leader to organize team activities.

Women perform better under female leaders

Controlling for a number of individual characteristics, the researchers find that female-led teams perform significantly better than male-led teams. The effect is mainly driven by the better performance of team members, with female members reacting more to female leadership. Women tend to perform worse individually if they are in a leadership role, which suggests that female leaders altruistically devote more energy to organizing team activities, rather than improving their own performance.

The authors conclude that “stereotypically feminine qualities” like cooperation, mentoring, and collaboration seem important to leadership, certainly in contexts like this and perhaps increasingly in contemporary organizations. Women’s advantage may come from differences along the discretionary dimensions of leadership behavior, for example paying more attention to subordinates, helping others with their work or volunteering for tasks that go beyond their role.

Men give worse evaluations to female leaders

From a post-experiment survey, the authors find that teams led by men and women spend on average the same amount of time together, which implies that female-led teams are more effective. Nonetheless, men tend to give female leaders worse evaluations, which may be the result of male stereotypes against female leadership, especially considering the better performance of female-led teams.

Finally, when analyzing leaders’ evaluation of their role and of the team, the study finds that female leaders are not aware of their effectiveness in coordinating and finalizing the work of their team. But they are aware of the effort they have provided in accomplishing their role, and they evaluate their team members’ effort as less intense compared to male leaders.

Leadership advantage depends on the context

Overall, the findings suggest that women have a leadership advantage in some contexts and should be encouraged to take on leadership roles because they tend to work harder and their team might benefit more from their guidance. The study also confirms that women still face some difficulties in having their merits recognized, especially in male-dominated teams.

The authors stress, however, that their results pertain to a specific domain of leader activity. In other contexts, effective leadership may require more “masculine” qualities, such as the execution of authority, self-confidence, or power.

Challenging the use of the twin instrument in the social sciences

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By Sonia Bhalotra and Damian Clarke

Twins have intrigued humankind for more than a century. Twins are not as rare as we may think: 1 in 80 live births and hence 1 in 40 newborns is a twin, and the trend is upward. In behavioral genetics, demography and psychology, monozygotic twins are studied to assess the importance of nurture relative to nature. In the social sciences, twin births are also used to denote an unexpected increase in family size which assists causal identification of the impact of fertility on investments in children and on women’s labor supply. A premise of studies that use twin differences or the twin instrument is that twin births are quasi-random and have no direct impact (except through fertility) on the outcome under study.

Our recent IZA discussion paper (forthcoming in the Review of Economics and Statistics) presents new population-level evidence that challenges this premise. Using almost 17 million births in 72 countries, we show that the likelihood of a twin birth varies systematically with maternal condition. In particular, our estimates establish that mothers of twins are selectively healthy. We document that this association is meaningfully large, and widespread- that it is evident in richer and poorer countries, and that it holds for sixteen different markers of maternal condition including health stocks and health conditions prior to pregnancy (height, obesity, diabetes, hypertension, asthma, kidney disease, smoking), exposure to unexpected stress in pregnancy, and measures of the availability of medical professionals and prenatal care.

We also show that a positive association of the chances of having twins with health-related behaviors in pregnancy (healthy diet, smoking, alcohol, drug consumption), although we do not rely upon this because behaviors in pregnancy may reflect a response to the mother’s knowledge that she is carrying twins.

Differences between mothers of twins and singletons

Previous research has documented that twins have different endowments from singletons, for example, twins are more likely to have low birth weight and congenital anomalies. We focus not on differences between twins and singletons but rather on differences between mothers of twins and singletons, which indicate whether occurrence of twin births is quasi-random. It is known that twin births are not strictly random, occurring more frequently among older mothers, at higher parity and in certain races and ethnicities, but as these variables are typically observable, they can be adjusted for. Similarly, it is well-documented that women using artificial reproductive technologies (ART) are more likely to give birth to twins but ART-use is recorded in many birth registries, and so it can be controlled for and a conditional randomness assumption upheld.

The reason that our finding is potentially a major challenge is that maternal condition is multi-dimensional and almost impossible to fully measure and adjust for. To take a few examples, fetal health is potentially a function of whether pregnant women skip breakfast, whether they suffer bereavement in pregnancy,  or exposure to air pollution.

Our underlying hypothesis is that twins are more demanding of maternal resources than singletons and, as a result, conditions that challenge maternal health are more likely to result in miscarriage of twins than of singletons. We discuss the role of alternative mechanisms including non-random conception and maternal survival selection. We provide evidence in favor of the selective miscarriage mechanism using US Vital Statistics data for 14 to 16 million births.

Selective miscarriage is similarly the mechanism behind the stylized fact that weaker maternal condition is associated with a lower probability of male birth. We confirm this in our data, showing that twin births are more likely to be female.

Controlling for maternal health conditions

Our findings add a novel twist to a recent literature documenting that a mother’s health and her environmental exposure to nutritional or other stresses during pregnancy influence birth outcomes, with many studies documenting lower birth weight. If birth weight is the intensive margin, we may think of miscarriage as an extensive margin response, or the limiting case of low birth weight.

Our findings have implications for research that has exploited the assumed randomness of twin births. No previous study has attempted to control for maternal health conditions or behaviors. Studies using twins to isolate exogenous variation in fertility will tend to under-estimate the impact of fertility on parental investments in children, and on women’s labor supply if selectively healthy mothers invest more in children post-birth, and are more likely to participate in the labor market.

This is pertinent as it could resolve the ambiguity of the available evidence on the impacts of fertility. In particular, recent studies using the twin instrument challenge a long-standing theoretical prior in rejecting the presence of a quantity-quality (QQ) fertility trade-off in developed countries, but our estimates suggest that this rejection could in principle arise from ignoring the positive selection of women into twin birth. Similarly, research using the twin instrument tends to find that additional children have relatively little influence on women’s labor force participation. But, again, these estimates are likely to be downward biased.

The results of studies in Economics, Psychology, Education and Biology that instead exploit the genetic similarity of twins will not be biased but will tend to have more restricted external validity than previously assumed.