nep-afr New Economics Papers
on Africa
Issue of 2005‒06‒05
four papers chosen by
Suzanne McCoskey
US Naval Academy

  1. Debt and Economic Growth in Developing and Industrial Countries By Schclarek, Alfredo
  2. Student Flows and Migration: An Empirical Analysis By Axel Dreher; Panu Poutvaara
  3. Incomes in South Africa Since the Fall of Apartheid By Murray Leibbrandt; James Levinsohn; Justin McCrary
  4. Shadow Economies Around the World: What Do We Know? By Friedrich Schneider; Robert Klinglmair

  1. By: Schclarek, Alfredo (Department of Economics, Lund University)
    Abstract: This paper empirically explores the relationship between debt and growth for a number of developing and industrial economies. For developing countries, we find that lower total external debt levels are associated with higher growth rates, and that this negative relationship is driven by the incidence of public external debt, and not by private external debt. Regarding the channels through which debt accumulation affects growth, we find that this is mainly driven by the capital accumulation growth. There is only limited evidence on the relationship between external debt and total factor productivity growth. In addition, for private savings rates there are mixed results. We do not find any support for an inverted-U shape relationship between external debt and growth. For industrial countries, we do not find any significant relationship between gross government debt and economic growth.
    Keywords: External Debt; Public debt; Economic Growth; Capital Accumulation; Productivity Growth; Private Savings
    JEL: F34 H63 O10 O40
    Date: 2004–12–04
  2. By: Axel Dreher (Thurgau Institute of Economics and University of Konstanz); Panu Poutvaara (CEBR, Copenhagen Business School, CESifo and IZA Bonn)
    Abstract: Using panel data for 78 countries of origin we examine the impact of student flows to the United States on subsequent migration there over the period 1971-2001. What we find is that the stock of foreign students is an important predictor of subsequent migration. This holds true whether or not the lagged endogenous variable is included. The relationship is robust to the inclusion of time and country dummies, and remains when we account for outliers. The basic results also hold for a cross section of 36 countries of origin and 9 host countries. Our results have important policy implications which we discuss in the last section.
    Keywords: migration, education, student flows, brain drain
    JEL: F22 I2 J61 O15
    Date: 2005–05
  3. By: Murray Leibbrandt; James Levinsohn; Justin McCrary
    Abstract: This paper examines changes in individual real incomes in South Africa between 1995 and 2000. We document substantial declines--on the order of 40%--in real incomes for both men and women. The brunt of the income decline appears to have been shouldered by the young and the non-white. We argue that changes in respondent attributes are insufficient to explain this decline. For most groups, a (conservative) correction for selection into income recipiency explains some, but not all, of the income decline. For other groups, selection is a potential explanation for the income decline. Perhaps the most persuasive explanation of the evidence is substantial economic restructuring of the South African economy in which wages are not bid up to keep pace with price changes due to a differentially slack labor market.
    JEL: F0 O1 O5
    Date: 2005–05
  4. By: Friedrich Schneider; Robert Klinglmair
    Abstract: Using various statistical procedures, estimates about the size of the shadow economy in 110 developing, transition and OECD countries are presented. The average size of the shadow economy (in percent of official GDP) over 1999-2000 in developing countries is 41%, in transition countries 38% and in OECD countries 18.0%. An increasing burden of taxation and social security contributions combined with rising state regulatory activities are the driving forces for the growth and size of the shadow economy. If the shadow economy increases by one percent the annual growth rate of the “official” GDP of a developing country (of a industrialized and/or transition country) decreases by 0.6% (increases by 0.8 and 1.0 respectively).
    Keywords: shadow economy; interaction of the shadow economy with the official one; tax burden
    JEL: O17 O5 D78 H2 H11 H26
    Date: 2004–01

This nep-afr issue is ©2005 by Suzanne McCoskey. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.