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on Central and Western Asia |
| By: | Petia Topalova; Eric V. Edmonds; Nina Pavcnik |
| Abstract: | Do the short and medium term adjustment costs associated with trade liberalization influence schooling and child labor decisions? We examine this question in the context of India's 1991 tariff reforms. Overall, in the 1990s, rural India experienced a dramatic increase in schooling and decline in child labor. However, communities that relied heavily on employment in protected industries before liberalization do not experience as large an increase in schooling or decline in child labor. The data suggest that this failure to follow the national trend of increasing schooling and diminishing work is associated with a failure to follow the national trend in poverty reduction. Schooling costs appear to play a large role in this relationship between poverty, schooling, and child labor. Extrapolating from our results, our estimates imply that roughly half of India's rise in schooling and a third of the fall in child labor during the 1990s can be explained by falling poverty and therefore improved capacity to afford schooling. |
| Keywords: | Child labor , literacy , trade liberalization , India , |
| Date: | 2007–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/94&r=cwa |
| By: | Ajitava Raychaudhuri; Sudip Kumar Sinha; Poulomi Roy |
| Abstract: | The Value Added Tax (VAT) was introduced in India in place of Sales Tax, taking effect in April 1, 2005. These taxes are in the domain of different state governments within the country's federal set up. Although VAT is widely acclaimed to be a better system than the sales tax on grounds of efficiency in tax collection, no study has been undertaken to assess the impact of this reform measure on social equity. This paper addresses this need with the use of concentration curves and consumption dominance curves of various orders. The simulations were done on two major states in India, namely Maharashtra and West Bengal, using National Sample Survey Unit Level data for the 55th round. The results show that the reform is largely pro-poor, although there are ways to improve it with respect to some items predominantly consumed by the relatively poorer groups. |
| Keywords: | Value added tax, Marginal tax reform, public distribution system, concentration curve, Lorenz curve, marginal efficiency cost of funds, consumption dominance |
| JEL: | D12 D63 H21 H22 H71 I32 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:pmmacr:2007-18&r=cwa |
| By: | Hélène Poirson |
| Abstract: | India's planned pension reform will set up a proper regulatory framework for the pension industry and open up the sector to private fund managers. Drawing on international experiences, the paper highlights pre-conditions for the reform to kick-start financial development, including: (i) the buildup of critical mass; (ii) sufficiently flexible investment guidelines and regulations, including on investments abroad; and (iii) concurrent reforms in capital markets. Given the limited scale of the planned reform, the key challenge for India is to achieve sufficient critical mass early on. Options to address this challenge include granting permission for existing workers to switch to the new system or outsourcing all or part of the reserves of private sector provident funds to the new pension fund managers. |
| Keywords: | Asset prices , emerging markets , pension reforms , |
| Date: | 2007–04–09 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/85&r=cwa |
| By: | Issouf Samake; Evan Tanner |
| Abstract: | This paper examines the sustainability of fiscal policy under uncertainty in three emerging market countries, Brazil, Mexico, and Turkey. For each country, we estimate a vector autoregression (VAR) that includes fiscal and macroeconomic variables. Retrospectively, a historical decomposition shows by how much debt accumulation reflects unsustainable policy, adverse shocks, or both. Prospectively, Monte Carlo techniques reveal the primary surplus that is required to keep the debt/GDP ratio from rising in all but the worst 50 percent, 25 percent, and 10 percent of circumstances. Such a value-at-risk approach presents a clearer menu of policy options than currently used frameworks. |
| Keywords: | Tax smoothing , sustainability , vector autoregression , historical decomposition , primary surplus , Fiscal policy , Brazil , Mexico , Turkey , Emerging markets , Public debt , Economic models , |
| Date: | 2007–01–08 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:06/295&r=cwa |
| By: | Coulibaly, Souleymane |
| Abstract: | Many recent papers have pointed to ambiguous trade effects of developing regional trade agreements (RTAs), calling for a reassessment of their economic merits. The author focuses on seven such agreements currently in force in Sub-Saharan Africa (ECOWAS and SADC), Asia (AFTA and SAPTA) and Latin America (CACM, CAN, and MERCOSUR), estimating their impacts on their members ' trade flows. Instead of the usual dummy variables for RTAs, he proposes a variable taking into account the number of years of membership. He then combines a gravity model with kernel estimation techniques to capture the non-monotonic trade effects while imposing minimal structure on the model. The results indicate that except for SAPTA, these RTAs have had a positive impact on their members ' intra-trade over the estimation period (1960-99). AFTA seems to be the most successful among them, with an estimated positive impact on its members ' imports from the rest of the world (hence no trade diversion), but its impact on their exports to the rest of the world is rather limited. During its first 10 years of existence, ECOWAS appears to have had a positive impact on its members ' imports from the rest of the world (hence no trade diversion), but this positive impact vanished over time. SAPTA ' s negative impact on its members ' intra-trade is probably an implicit effect of the India-Pakistan tensions over the estimation period. |
| Keywords: | Free Trade,Trade Law,Trade Policy,Economic Theory & Research,Trade and Regional Integration |
| Date: | 2007–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4220&r=cwa |