http://lists.repec.org/mailman/listinfo/nep-dev Development 2009-11-14 Mark Lee http://d.repec.org/n?u=RePEc:diw:diwwpp:dp938&r=dev In this paper, we make multi-step forecasts of the annual growth rates of the real GRP for each of the 31 Chinese provinces simultaneously. Beside the usual panel data models, we use panel models that explicitly account for spatial dependence between the GRP growth rates. In addition, the possibility of spatial effects being different for different groups of provinces (Interior and Coast) is allowed. We find that both pooling and accounting for spatial effects helps substantially improve the forecast performance compared to the benchmark models estimated for each of the provinces separately. It was also shown that effect of accounting for spatial dependence is even more pronounced at longer forecasting horizons (the forecast accuracy gain as measured by the root mean squared forecast error is about 8% at 1-year horizon and exceeds 25% at 13- and 14-year horizon). Eric Girardin, Konstantin A. Kholodilin 2009 Chinese provinces, forecasting, dynamic panel model, spatial autocorrelation, group-specific spatial dependence http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00429732_v1&r=dev Economic literature has introduced large theories on critical role of micro and small firms (MSEs) in the economic development. Particularly in developing countries, the development of the sectore has become a channel of poverty reduction by providing job opportunities and creating welfares. Besides, MSEs might be seen as embryonic form of sizable firms in the future, then contribute to the innovation process and economic growth. Consequently, promoting the growth of micro and small firms is in the center of interest of many developing countries, so does the case of Vietnam. By investigating the importance of firm characteristics with regard to the barriers that facing MSE in the growth process, this analysis brings some more light into the sector that unfortunately is still an under researched area. Using firm sample drawing from the Survey on Household's Living Standard in 2004 in Vietnam, we find that firms with different characteristics, among them : firm size, firm age, legal status, industrial sector and location, experiencing different levels of constraints. The level of signification of firm characteristics differs from barriers to barriers. In general, more sizable firms have often to face with higher level of constraints. These results enable policymakers to create more suitable MSEs fostering policies which better account for the different obstacles due to firm heterogeneity. Thi Quynh Trang Do 2009-06 Firm performance, micro-small enterprises, barriers to growth, Vietnam. http://d.repec.org/n?u=RePEc:iza:izadps:dp4527&r=dev We consider the issue of illegal migration from Mexico to the US, and examine whether the lack of legal status causally impacts on outcomes, specifically wages and remitting behavior. These outcomes are of particular interest given the extent of legal and illegal migration, and the resulting financial flows. We formalize this question and highlight the principal empirical problem using a potential outcome framework with endogenous selection. The selection bias is captured by a control function, which is estimated non-parametrically. The framework for remitting is extended to allow for endogenous regressors (e.g. wages). We propose a new re-parametrisation of the control function, which is linear in case of a normal error structure, and test linearity. Using Mexican Migration project data, we find considerable and robust illegality effects on wages, the penalty being about 12% in the 1980s and 22% in the 1990s. For the latter period, the selection bias is not created by a normal error structure; wrongly imposing normality overestimates the illegality effect on wages by 50%, while wrongly ignoring selection leads to a 50% underestimate. In contrast to these wage penalties, legal status appears to have mixed effects on remitting behavior. Schluter, Christian, Wahba, Jackline 2009-10 non-parametric estimation, control functions, selection, counterfactuals, illegality effects, illegal migration, intermediate outcomes, Mexican Migration Project http://d.repec.org/n?u=RePEc:iza:izadps:dp4499&r=dev This paper documents how the structure of extended family networks in rural Mexico relates to the poverty and inequality of the village of residence. Using the Hispanic naming convention, we construct within-village extended family networks in 504 poor rural villages. Family networks are larger (both in the number of members and as a share of the village population) and out-migration is lower the poorer and the less unequal the village of residence. Our results are consistent with the extended family being a source of informal insurance to its members. Angelucci, Manuela, De Giorgi, Giacomo, Rangel, Marcos A., Rasul, Imran 2009-10 extended family network, migration, village inequality, village marginality http://d.repec.org/n?u=RePEc:iza:izadps:dp4516&r=dev The paper describes and evaluates unemployment insurance savings accounts (UISAs) – a relatively new and not well-known way of providing unemployment benefits. The UISAs reduce work disincentives by allowing recipients to keep their own unused unemployment contributions, and offer the possibility to extend coverage to informal sector workers. In addition, if integrated with mandatory pension systems (and even social pensions), UISAs can be rapidly deployed and at a low cost, thus becoming a realistic tool to protect workers from the effects of the financial crisis. Even during normal times, the integration with the pension system – and social security in general – would give more flexibility to individuals in the management of short and long term savings (i.e., pension wealth) while avoiding unnecessary administrative costs. The paper discusses issues related to incentives, redistribution, and viability, and outlines a policy framework for design and implementation. It argues that the UISAs system is especially attractive for developing countries, where the "self-policing" nature of the system is particularly important given a much larger informal sector and weaker administrative capacity in comparison to developed countries. Robalino, David, Vodopivec, Milan, Bodor, András 2009-10 unemployment insurance, unemployment insurance savings accounts, unemployment http://d.repec.org/n?u=RePEc:iza:izadps:dp4498&r=dev We provide descriptive evidence on the characteristics of a household’s extended family network using data from the Progresa social assistance program in rural Mexico. We exploit information on the paternal and maternal surnames of household heads and their spouses and the patronymic naming convention to identify the inter and intra generational family links of each household to others in the village. This provides an almost complete mapping of extended family networks structures across 506 Mexican villages, covering 22,000 households and over 130,000 individuals. We then provide evidence on – (i) whether husbands and wives differ in the extent to which members of their extended family are located in geographic proximity; (ii) the characteristics that predict the existence of extended family links; (iii) the similarity of households within the same family network in terms of their poverty, and how this differs within and between generations of the extended family. Angelucci, Manuela, De Giorgi, Giacomo, Rangel, Marcos A., Rasul, Imran 2009-10 extended family network, Progresa http://d.repec.org/n?u=RePEc:iza:izadps:dp4534&r=dev Two of the most salient trends surrounding the issue of migration and development over the last two decades are the large rise in remittances, and an increased flow of skilled migration. However, recent literature based on cross-country regressions has claimed that more educated migrants remit less, leading to concerns that further increases in skilled migration will hamper remittance growth. We revisit the relationship between education and remitting behavior using microdata from surveys of immigrants in eleven major destination countries. The data show a mixed pattern between education and the likelihood of remitting, and a strong positive relationship between education and the amount remitted conditional on remitting. Combining these intensive and extensive margins gives an overall positive effect of education on the amount remitted. The microdata then allow investigation as to why the more educated remit more. We find the higher income earned by migrants, rather than characteristics of their family situations explains much of the higher remittances. Bollard, Albert, McKenzie, David, Morten, Melanie, Rapoport, Hillel 2009-10 remittances, migration, brain drain, education http://d.repec.org/n?u=RePEc:iza:izadps:dp4522&r=dev We compare a set of econometric studies that measure the effect of net internal migration in neoclassical models of long-run real income convergence and derive 67 comparable effect sizes. The precision-weighted estimate of beta convergence is about 2.7%. An increase in the net migration rate of a region by one percentage point in increases the per capita income growth rate in that region on average by about 0.1 percentage points, thus suggesting an impact of net migration that is more consistent with endogenous self-reinforcing growth than with neoclassical convergence. Introducing a net migration variable in a growth regression increases the estimate of beta convergence slightly. Studies that use panel models or IV estimation methods yield smaller coefficients of net migration in growth regressions, while the opposite holds for regressions controlling for high-skilled migration. Ozgen, Ceren, Nijkamp, Peter, Poot, Jacques 2009-10 internal migration, economic growth, convergence, meta-analysis, neoclassical model, regional disparities http://d.repec.org/n?u=RePEc:iza:izadps:dp4511&r=dev This paper proposes a methodology for testing for whether tax reforms are pro-poor. This is done by extending stochastic dominance techniques to help identify tax reforms that will necessarily be deemed absolutely or relatively pro-poor by a wide spectrum of poverty analysts. The statistical properties of the various estimators are also derived in order to make the method implementable using survey data. The methodology is used to assess the pro-poorness of possible reforms to Mexico’s indirect tax system. This leads to the identification of several possible pro-poor tax reforms in that country. It also shows how the pro-poorness of a tax reform depends on one’s conception of poverty as well as on the revenue and efficiency impact of the reform. Duclos, Jean-Yves, Makdissi, Paul, Araar, Abdelkrim 2009-10 stochastic dominance, pro-poor changes, tax reforms, Mexico http://d.repec.org/n?u=RePEc:hbs:wpaper:10-035&r=dev This note accompanies the Cross?country Historical Adoption of Technology (CHAT) dataset. CHAT is an unbalanced panel dataset with information on the adoption of over 100 technologies in more than 150 countries since 1800. The data is available for download at: http://www.nber.org/data/chat. We discuss the main aim of CHAT, its scope and limitations, as well as several ways in which we have used the data so far and ways to potentially use the data for other research. Suggested acknowledgment: If you use the CHAT dataset for your research, please include the following citation: "Our technology measures come from the CHAT data set which is an extension of the data set described in Comin and Hobijn (2004)" Diego A. Comin, Bart Hobijn 2009-11 http://d.repec.org/n?u=RePEc:oec:ecoaaa:732-en&r=dev Despite progress over the past two decades Mexico?s health and education indicators remain well below the average of the OECD and some of its Latin American emerging market peers. Health insurance coverage is incomplete, especially for low-income families, and access to health services is highly uneven. There are several separate vertically integrated insurance networks, which increases administrative costs and results in an inefficient use of facilities. In education, lower secondary schools enroll only two thirds of the relevant age group and the quality of education is low, as indicated by poor PISA scores. This reflects poor teaching quality, a consequence of non-transparent teacher selection processes until recently, and limited school autonomy in budgeting, instruction and personnel decisions. Accountability to the government and parents is also low as there is no national exit exam after secondary education and the existing evaluation schemes are fragmented. Recent health and education reforms have started to address these issues, but more needs to be done to increase the efficiency of spending by increasing the coverage of health insurance, reducing the fragmentation of the health system, increasing enrolment in lower secondary education, and improving the quality of teaching.<P>Améliorer les performances : renforcer l’efficience des dépenses de santé et d’éducation au Mexique<BR>Malgré les progrès réalisés ces vingt dernières années, les indicateurs du Mexique dans les domaines de l’éducation et de la santé restent nettement inférieurs à la moyenne OCDE et aux indicateurs de certains pays émergents d’Amérique latine. La couverture par l’assurance-maladie est incomplète, en particulier pour les familles à bas revenu, et l’accès aux services de santé est très inégalitaire. Plusieurs systèmes d’assurance verticalement intégrés coexistent, ce qui accroît les coûts administratifs et empêche une utilisation efficiente des services. Dans le domaine de l’éducation, seuls deux tiers des enfants en âge d’être scolarisés dans le premier cycle de l’enseignement secondaire le sont effectivement et la qualité du système éducatif laisse à désirer, comme en témoignent les mauvais résultats obtenus dans le cadre de l’enquête PISA. Cette situation résulte d’une mauvaise qualité de l?enseignement, qui s’explique par le manque de transparence qui, jusqu’à une période récente, caractérisait les procédures de sélection des enseignants et par le manque d’autonomie des établissements scolaires sur les plans du budget, de l’enseignement et des décisions relatives au personnel. La responsabilité du système éducatif vis-à-vis du gouvernement et des parents est également limitée du fait qu’il n’y a pas d’examen de fin d’études au terme de la scolarité secondaire et que les systèmes d’évaluation existants sont fragmentés. Les réformes engagées récemment dans les domaines de la santé et de l’éducation ont commencé à remédier à ces faiblesses, mais des efforts supplémentaires s’imposent pour améliorer l’efficience des dépenses en étendant la couverture par l’assurance-maladie, en réduisant la fragmentation du système de santé, en augmentant le taux de scolarisation dans le premier cycle du secondaire et en améliorant la qualité de l’enseignement. Cyrille Schwellnus 2009-11-03 Mexico, Mexique, education policy, politique d'éducation, data envelopment analysis, health policy, politique de santé, analyse d'enveloppement des données http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp09-033&r=dev Informal payments are a frequently overlooked source of local public finance in developing countries. We use microdata from ten countries to establish stylized facts on the magnitude, form, and distributional implications of this "informal taxation." Informal taxation is widespread, particularly in rural areas, with substantial in-kind labor payments. The wealthy pay more, but pay less in percentage terms, and informal taxes are more regressive than formal taxes. Failing to include informal taxation underestimates household tax burdens and revenue decentralization in developing countries. We propose a simple model of information and enforcement constraints that parsimoniously explains the patterns in the data. Olken, Benjamin A., Singhal, Monica 2009-10 http://d.repec.org/n?u=RePEc:frd:wpaper:dp2009-08&r=dev South Africa’s Disability Grant program has been widely criticized for its poor administration and the dependency culture it promotes. This paper attempts to assess the Disability Grant program’s targeting effectiveness and its effects on labor market behaviors. Using disability self reports and standard measures of economic well being, results suggest that the Disability Grant is relatively well targeted. Exclusion and inclusion errors are substantial but are comparable to those found in developed countries’ disability programs. Increased leniency in disability screening in the program in selected provinces does not appear to have altered labor market behaviors between 2001 and 2003. Sophie Mitra 2009 Cash transfers, disability, targeting, labor supply, Africa, South Africa http://d.repec.org/n?u=RePEc:tac:wpaper:1&r=dev Trade protection and tax evasion: evidence from Kenya, Mauritius and Nigeria Antoine BOUET, Devesh ROY 2009-06 http://d.repec.org/n?u=RePEc:pas:papers:2009-17&r=dev This paper examines the impact of the global financial crisis on the Vietnam labour market against the backdrop of economic performance and labour dynamics before the crisis. The impact on labour has been milder compared with several neighbouring countries, than might have been expected for a country with Vietnam’s degree of international exposure. This can attributed to the timely stimulus package of late 2008, the tight labour market before the crisis, the competitive nature of Vietnam’s key exports and the private sector’s capacity to compete globally. Although flexible labour markets have ensured low unemployment, we argue that aspects of the institutional environment have contributed to slower labour market adjustment. Shortages of skilled labour, labour market rigidities and an under-developed industrial relations system could delay recovery and constrain future growth. Chris Manning 2009 global financial crisis, exports, FDI, employment, labour market adjustment, labour institutions, Vietnam http://d.repec.org/n?u=RePEc:pas:asarcc:2009-17&r=dev A key feature of the economic transformation has been the change in the nature of the Indian diet. As the global markets integrate and communication becomes better, diet transitions are unavoidable. There is a move away from inferior to superior foods and a substitution of traditional staples by primary food products that are more prevalent in western diets. These shifts are reflected in higher consumption of proteins, sugars, fats and vegetables. As part of this dietary transition, our analysis focuses on the pervasiveness of eating out. The analysis, based on a rich household survey for 2005, conducted jointly by University of Maryland and National Council of Applied Economic Research, broadly confirms the important role of urbanisation, demographic changes, expansion of middle class and its growing affluence in eating out, or, more generally, consumption of snacks, precooked meals and beverages. To the extent that even more deprived sections-not just in metros but also in rural areas are not immune to these evolving dietary patterns, and, given their limited access to medical care and dietary awareness, the health outcomes may well be grim. Raghav Gaiha, Raghbendra Jha, Vani S. Kulkarni 2009 Urbanisation, affluence, diets, eating out, health, mortality http://d.repec.org/n?u=RePEc:pas:asarcc:2009-18&r=dev Kaliappa Kalirajan, Kanhaiya Singh 2009 http://d.repec.org/n?u=RePEc:idb:wpaper:4640&r=dev This paper surveys gender and ethnic wage gaps in 18 Latin American countries, decomposing differences using matching comparisons as a non-parametric alternative to the Blinder-Oaxaca (BO) decomposition. It is found that men earn 9-27 percent more than women, with high cross-country heterogeneity. The unexplained pay gap is higher among older, informal and self-employed workers and those in small firms. Ethnic wage differences are greater than gender differences, and educational attainment differentials play an important role in explaining the gap. Higher ethnic wage gaps are found among males, singleincome generators of households and full-time workers, and in rural areas. An important share of the ethnic wage gap is due to the scarcity of minorities in highpaid positions. Juan Pablo Atal, Hugo Nopo, Natalia Winder 2009-10 gender, ethnicity, wage gaps, Latin America, matching http://d.repec.org/n?u=RePEc:eth:wpswif:09-120&r=dev We analyze an economy in which sectors are heterogeneous with respect to the intensity of natural resource use. Long-term dynamics are driven by resource prices, sectoral composition, and directed technical change. We study the balanced growth path and determine stability conditions. Technical change is found to be biased towards the resource-intensive sector. Resource taxes have no impact on dynamics except when the tax rate varies over time. Constant research subsidies raise the growth rate while increasing subsidies have the opposite effect. We also find that supporting sectors by providing them with productivity enhancing public goods can raise the growth rate of the economy and additionally provide an effective tool for structural policy. Karen Pittel, Lucas Bretschger 2009-10 sustainable development, sectoral heterogeneity, directed technical change http://d.repec.org/n?u=RePEc:uma:periwp:wp192&r=dev This Working Paper analyzes the extent to which Chinese demand enhanced the performance of Latin American economies in economic boom that took place from the turn of the century until the run up to the financial and economic crisis of 2008-2009. It has been argued that China’s rise was been a blessing for the region, because Chinese demand boosted exports and in part caused a hike in commodities prices worldwide. The author finds that the direct impact on the Latin American exports was much smaller than what was touted. He goes on to address concerns over a Chinese-demand-led 'resource curse' and deindustrialization in Latin America. Kevin Gallagher, Roberto Porzecanski 2009 http://d.repec.org/n?u=RePEc:ude:wpaper:1509&r=dev This paper analyzes and compares socioeconomic inequalities in the use of healthcare services by the elderly in four South-American cities: Buenos Aires, Santiago, Montevideo and San Pablo. We use data from SABE, a survey on Health, Well-being and Aging administered in 2000. After having accounted for socioeconomic inequalities in healthcare needs, we find socioeconomic inequities favoring the rich in the use of preventive services (mammograms, pap tests, breast examinations, and prostate exams) in all of the studied cities. We also find inequities in the likelihood of having a medical visit in Santiago and Montevideo, and in some measures of quality of access in Santiago, Sao Paulo, and Buenos Aires. Santiago depicts the highest inequities in medical visits and Uruguay the worse indicators in mammograms and pap scans tests. For all cities, inequities in preventive services at least double inequities in other services. We do not find evidence of a trade-off between levels of access and equity in access to healthcare services. The decomposition of healthcare inequalities suggests that inequities within each health system are more important than between systems. Ana Balsa, Máximo Rossi, Patricia Triunfo 2009-08 inequalities, healthcare, medical visit, preventive services http://d.repec.org/n?u=RePEc:pra:mprapa:18489&r=dev Recent empirical studies find that the direct effect of corruption on growth is statistically insignificant. However, there exists a discrepancy between these results and the intuition that corruption reduces over-all productivity, because total factor productivity also depends on the quality of institutions and their efficiency. The current paper addresses this issue and offers a new perspective on growth effects of corruption and shows that direct and indirect growth effects of corruption can be statistically significant. Moreover, the empirical results confirm the existence of both negative and positive growth effect of corruption. Dzhumashev, Ratbek 2009-11-09 corruption; growth http://d.repec.org/n?u=RePEc:nbr:nberwo:15478&r=dev This paper examines Argentina’s currency crises from 1970 to 2001, with particular attention to the role of domestic and external factors. Using VAR estimations, we find that deteriorating domestic fundamentals matter. For example, at the core of the late 1980s crises was excessively loose monetary policy while a sharp output contration triggered the collapse of the currency board in January 2002. In contrast, adverse external shocks were at the heart of the 1995 crisis, with spillovers from the Mexican crisis and high world interest rates being key sources of financial distress. Graciela Kaminsky, Amine Mati, Nada Choueiri 2009-11 http://d.repec.org/n?u=RePEc:nbr:nberwo:15481&r=dev In 2005-08, over a dozen put warrants traded in China went so deep out of the money that they were certain to expire worthless. Nonetheless, each warrant was traded nearly three times each day at substantially inflated prices. This bubble is unique, because the underlying stock prices make the zero warrant fundamentals publicly observable. We find evidence supporting the resale option theory of bubbles: investors overpay for a warrant hoping to resell it at an even higher price to a greater fool. Our study confirms key findings of the experimental bubble literature and provides useful implications for market development. Wei Xiong, Jialin Yu 2009-11