nep-dem New Economics Papers
on Demographic Economics
Issue of 2013‒03‒09
24 papers chosen by
Clarence Nkengne Tsimpo
University of Montreal and World Bank Group

  1. The Rise in Female Participation in Colombia: Fertility, Marital Status or Education? By Diego Amador; Raquel Bernal; Ximena Peña
  2. Paid parental leave to immigrants: An obstacle to labor market entrance? By Vikman, Ulrika
  3. On the Relationship Between Fertility and Wealth: Evidence from Widow Suicides (Satis) in Early Colonial India By Sanghamitra Bandyopadhyay and Elliott Green
  4. Employment protection and parental child care By Olsson, Martin
  5. Examination behavior – Gender differences in preferences? By Nekby, Lena; Skogman Thoursie, Peter; Vahtrik, Lars
  6. Child Labor, Intra-Household Bargaining and Economic Growth By Pierre-Richard Agénor; Baris Alpaslan
  7. Immigrant Women and Entrepreneurship: A Study of the Health Care Sector in Sweden, 2002-2006 By Korpi, Martin; Hedberg, Charlotta; Pettersson, Katarina
  8. Generosity and social distance in dictator game field experiments with and without a face By Bezu, Sosina; Holden, Stein T.
  9. Is the persistent gender gap in income and wages due to unequal family responsibilities? By Angelov, Nikolay; Johansson, Per; Lindahl, Erica
  10. Age Dependency and Labor Productivity Divergence By Misbah Tanveer Choudhry
  11. An Equilibrium Search Model of the Labor Market Entry of Second-Generation Immigrants and Ethnic Danes By Nabanita Datta Gupta; Lene Kromann
  12. Author-Name: Social Security and Integration By Lionel Artige; Antoine Dedry; Pierre Pestieau
  13. School Starting Age and Crime By Rasmus Landersø; Helena Skyt Nielsen; Marianne Simonsen
  14. Estimating Nonlinear Intergenerational Income Mobility with Correlation Curves By William Nilsson
  15. New Alternatives in a Plural Society: Care to Dependents and Foreign Care By García Navarro, Esperanza Begoña
  16. Second-to-Fourth Digit Ratio has a Non-Monotonic Impact on Altruism By Pablo Branas-Garza; Jaromir Kovarik; Levent Neyse
  17. Post schooling human capital investments and the life cycle variance of earnings By Magnac, Thierry; Pistolesi, Nicolas; Roux, Sébastien
  18. Ethnic Diversity and Preferences for Redistribution: Reply By Dahlberg, Matz; Edmark, Karin; Lundqvist, Heléne
  19. Financial Risk Aversion and Personal Life History By Alessandro Bucciol; Luca Zarri
  20. Group Violence, Ethnic Diversity and Citizen Participation - Evidence from Indonesia By Christophe Muller; Marc Vothknecht
  21. How reliable and consistent are subjective measures of welfare in Europe and Central Asia ? evidence from the second life in transition survey By Cojocaru, Alexandru; Diagne, Mame Fatou
  22. Competition and Antibiotics Prescription By Fogelberg, Sara; Karlsson, Jonas
  23. Some Fallacies in Econometric Modelling of Climate Change By David Hendry; Felix Pretis
  24. The unfairness of (poverty) targets By Allwine, Melanie; Rigolini, Jamele; Lopez-Calva, Luis F.

  1. By: Diego Amador; Raquel Bernal; Ximena Peña
    Abstract: Colombia has experienced a secular increase in the labor participation of urban women, going from nearly 47% in 1984 to 65% in 2006. We decompose the evolution of participation into changes in the composition of the population and changes in the participation rates by groups (defined according to the variables that appear most relevant: educational attainment, fertility and marital status). The increase in participation is driven by the increase in the participation rate of married or cohabiting women and women with low educational attainment. Fertility status appears to be less important. Changes in the population composition by educational attainment are also relevant in explaining the increase in participation. However, changes in composition by marital status or fertility are second order effects.
    Date: 2013–02–06
  2. By: Vikman, Ulrika (IFAU - Institute for Evaluation of Labour Market and Education Policy)
    Abstract: This paper evaluates how access to paid parental leave affects labor market entrance for immigrating mothers with small children. Paid parental leave together with job protection may increase labor force participation among women but if it is too generous it may create incentives to stay out of the labor force. This incentive effect may be especially true for mothers immigrating to a country where having small children automatically makes the mothers eligible for the benefit. To evaluate the differences in the assimilation process for those who have access to the parental leave benefit and those who do not, Swedish administration data is used in a difference-in-differences specification to control for both time in the country and the age of the youngest child. The results show that labor market entrance is delayed for mothers and that they are less likely to be a part of the labor force for up to seven years after theír residence permit if they had access to parental leave benefits when they came to Sweden. This reduction in the labor force participation is to some extent driven by unemployment since the effect on employment is smaller. But there is still an effect on employment of 3 percentage points lower participation rates 2-6 years after immigration.
    Keywords: Immigrant assimilation; labor market entrance; paid parental leave benefit
    JEL: J13 J15 J21
    Date: 2013–02–01
  3. By: Sanghamitra Bandyopadhyay and Elliott Green
    Abstract: Evidence on the pre-modern relationship between wealth and fertility has so far almost entirely relied upon data from Europe. We use British colonial records from early 19th-century India on widow suicides (satis) to show that there is a robust positive relationship between income and fertility.
    Keywords: fertility, wealth, early colonial India
    JEL: J45 H11 J23
    Date: 2013–02
  4. By: Olsson, Martin (Research Institute of Industrial Economics (IFN))
    Abstract: I examine if employment protection affects parental childcare. I find that a softer employment protection has a substantial effect on how parents use and divide paid childcare between them. The identification relies on a reform that made it easier for employers in Sweden to dismiss workers in small firms. I estimate that a softer employment protection reduces the total days of parental childcare in targeted firms, measured as total days of parental leave or temporary parental leave. Both a sorting effect and a behavioral effect can explain the reduced childcare. I also find evidence of a redistribution effect of paid parental childcare within households if only one partner was affected by the reform. I interpret the redistribution effect as a way of evading an external cost on the child.
    Keywords: Employment protection; parental childcare; within family distribution
    JEL: J13 K13
    Date: 2013–01–14
  5. By: Nekby, Lena (Department of Economics, Stockholm University); Skogman Thoursie, Peter (IFAU - Institute for Evaluation of Labour Market and Education Policy); Vahtrik, Lars (Department of Economics, Stockholm University)
    Abstract: A unique examination strategy in first year microeconomics courses is used to test for gender differences in preferences in examination behavior. Students have the possibility of attaining a seminar bonus on the final exam for near-perfect seminar attendance and are given two voluntary initial quizzes during the semester. At the final exam, the scores received on initial quizzes can either be accepted as is, or students can attempt to improve their marks by answering similar quiz questions on the exam. Results suggest that female students are more likely to take initial quizzes and receive a seminar bonus but are less likely to re-take quiz-questions on the final exam. These results suggest higher risk aversion among female students relative to male students, behavioral differences with tangible implications in terms of final grades on the course.
    Keywords: Gender; preferences; risk aversion; overconfidence
    JEL: A12 A14 J16
    Date: 2013–01–10
  6. By: Pierre-Richard Agénor; Baris Alpaslan
    Abstract: This paper develops a three-period, gender-based overlapping generations model of endogenous growth with endogenous intra-household bargaining and child labor in home production by girls. Improved access to infrastructure reduces the amount of time parents find optimal for their daughters to spend on household chores, thereby allowing them to allocate more time to studying at home. The model is calibrated for a low-income country and various quantitative experiments are conducted, including an increase in the share of public spending on infrastructure, an increase in time allocated by mothers to their daughters, and a decrease in fathers' preference for girls' education. Our analysis shows that poor access by families to infrastructure may provide an endogenous explanation for the persistence in child labor at home and gender inequality in low-income countries.
    Date: 2013
  7. By: Korpi, Martin (Institute for Economic and Business History Research, Stockholm School of Economics); Hedberg, Charlotta (Stockholm University Linnaeus Center for Integration Studies - SULCIS); Pettersson, Katarina (Nordic Centre for Spatial Development)
    Abstract: Using unique Swedish longitudinal full-population data and logistic regression, this paper explores whether start-ups of foreign born female heath care workers are structurally (i.e. comparatively higher unemployment and lower wages) or culturally (defined as country of birth) motivated. While structural factors are significantly related to female entrepreneurship regardless of origin, no additional effect is found whether for foreign born more broadly defined, or when adding specific country of birth. Thus, we conclude that structural disadvantage motives, based on gender rather than ethnicity, dominate over possible cultural motives for entrepreneurship.
    Keywords: Immigration; Gender; Entrepreneurship
    JEL: I11 J15 J16 L26
    Date: 2013–02–14
  8. By: Bezu, Sosina (School of Economics and Business Norwegian University of Life Sciences); Holden, Stein T. (School of Economics and Business Norwegian University of Life Sciences)
    Abstract: Field experiments combining dictator games with stated preference questions are used to elicit within subject and between subject sharing behavior with known family members and anonymous villager. A simple theoretical model incorporating social preferences, social distance and inter-dependent preferences is developed. The results show that generosity in form of probability of giving and amounts given are much lower towards anonymous villagers than to known family members. The probability of giving to the spouse is positively correlated with probability of giving to anonymous villager. Husbands and wives receiving positive amounts from their spouses (without knowing), were also more likely to give positive amounts to their spouses than those that received nothing from their spouses. Receiving positive amounts from spouse was uncorrelated with giving behavior towards anonymous villager. How sharing behavior is correlated with marriage type (parental arrangement, parental and bride agreement, love marriage, and kidnapping marriage), and other socioeconomic characteristics was assessed separately for husbands and wives to explore the sensitivity of responses to such socio-economic characteristics.
    Keywords: Generosity; social distance; within-family generosity
    JEL: C93 D03 O12
    Date: 2013–01–15
  9. By: Angelov, Nikolay (IFAU - Institute for Evaluation of Labour Market and Education Policy); Johansson, Per (IFAU - Institute for Evaluation of Labour Market and Education Policy); Lindahl, Erica (IFAU - Institute for Evaluation of Labour Market and Education Policy)
    Abstract: We compare the income and wage trajectories of women in relation to their male partners before and after parenthood. Focusing on the within-couple gap allows us to control for both observed and unobserved attributes of the spouse and to estimate both short-and long-term effects of entering parenthood. Our main finding is that 15 years after the first child was born, the male-female gender gaps in income and wages have increased with 35 and 10 percentage points, respectively. In line with a collective labor supply model, the magnitude of these effects depends on relative incomes or wages within the family.
    Keywords: Gender gap; quantile regression; wages
    JEL: C21 D13 J21
    Date: 2013–01–30
  10. By: Misbah Tanveer Choudhry
    Abstract: This study finds strong empirical evidence in favor of the hypothesis that age composition of population matters for labor productivity growth. We applied the fixed effects panel model using data of large number of countries over the period 1980-2005. Our results suggest that higher age dependency impacts the labor productivity negatively not only directly but also modifies the impact of other determinants of labor productivity. Child dependency has more adverse effect on labor productivity as compared to old age dependency. We specifically find that marginal effect of gross capital formation, labor market reforms and information and communication technology investment on labor productivity is high and significant at lower level of age dependency. However, the marginal effect of financial development on labor productivity increases at high level of age dependency in developing economies. Diversity in size and nature of age dependency across regions and different income groups helps to explain labor productivity differential across them.
    Keywords: labour productivity growth, Age dependency, panel fixed effects
    JEL: C22 C23 O47
    Date: 2013–01–02
  11. By: Nabanita Datta Gupta (Department of Economics and Business, Aarhus University); Lene Kromann (CBS, Copenhagen, Denmark)
    Abstract: Using a search model for Danish labor market entrants, we are one of the first studies to test whether second-generation immigrants have the same job-offer arrival and layoff rates as ethnic Danes have. We contribute to the search literature by incorporating matching as a way to ensure sub-sample homogeneity. Thus, we match second-generation immigrants to their ethnic Danish twins on the basis of parental characteristics and informal network quality. There are big differences before matching, but after matching, second-generation immigrants perform as well or better than their ethnic Dane counterparts do on the labor market, though not with respect to layoffs. This result is mainly driven by the group of high school graduates and those with a primary school education only. Second generation immigrants with vocational education, males in particular, face both significantly lower arrival rates when unemployed and significantly higher layoff rates than those of their ethnic Danish twins.
    Keywords: J15, J61, J71
    Date: 2013–02–28
  12. By: Lionel Artige; Antoine Dedry; Pierre Pestieau
    Abstract: The purpose of this letter is to analyze the impact of economic integration when countries differ in their social security systems, more specifically in the degree of funding of their pensions, and in the regulation of the retirement age. Funding and mandatory early retirement are two features which foster capital accumulation relative to pay-as-you-go pensions with exible retirement. In case of economic integration they both imply some capital outow and may lead to some utility losses.
    Date: 2013
  13. By: Rasmus Landersø (Department of Economics and Business, Aarhus University); Helena Skyt Nielsen (Department of Economics and Business, Aarhus University); Marianne Simonsen (Department of Economics and Business, Aarhus University)
    Abstract: This paper investigates the effects of school starting age on crime while relying on variation in school starting age induced by administrative rules; we exploit that Danish children typically start first grade in the calendar year they turn seven, which gives rise to a discontinuity in children’s school starting age. Analyses are carried out using register-based Danish data. We find that higher age at school start lowers the propensity to commit crime, but that this reduction is caused by incapacitation while human capital accumulation is unaffected. Importantly, we also find that the individuals who benefit most from being old-for-grade are those with high latent abilities whereas those with low latent ability seem to be unaffected by being old-for-grade in school.
    Keywords: old-for-grade, school start, criminal charges, violence, property crime
    JEL: I21 K42
    Date: 2013–02–25
  14. By: William Nilsson (Universitat de les Illes Balears)
    Abstract: A correlation curve is proposed as an alternative measure to study the degree of intergenerational income mobility, i.e. how income status is related between parents and adult child. The method overcomes the shortcomings of the elasticity of children’s income with respect to fathers’ income (i.e. its sensitiveness to different dispersion among the generations) and the correlation coefficient (i.e. its inability to capture nonlinearities). The method is particularly suitable for comparative studies and in this study is applied to labour income in comparison to disposable income. Nonlinear correlation curves are found, which in some cases substantially differ from corresponding nonlinear elasticities.
    Keywords: Intergenerational mobility, nonlinear, nonparametric, correlation curve
    JEL: C14 D63 J62
    Date: 2013
  15. By: García Navarro, Esperanza Begoña (University of Huelva)
    Abstract: Taking care of a dependent person means to supply those needs that this person cannot satisfy by himself due to his lack of independence or autonomy (Henderson). Care is transmitted from one generation to another as a social practice and as a cultural heritage. It is taught through culture and social practices, and it is learnt through personal experience. At the same time, care does not happen in an empty context but in the context of systems and health and social structures, among other things, that finish its shape. When caring, the culture and social practices of a carer from one country (country of origin) are different in comparison with those of the country of destination. The concept of transcultural care of Leinnenger echoes the cultural diversity that this difference or opposition involves, and recommends incorporating it in the professional practice, developing care practice which she defines as culturally competent. Other theoreticians in the field of nursing incorporate additional dimensions such as prejudice, developing approaches in which it is argued that care should be accompanied by an intercultural sensitivity (Campinha-Bacote). This article presents a study on female migrant carers and their care strategies in key areas in the province of Huelva and the city itself, southwest of Spain, where they provide elderly care in different areas of expertise: specialised care in hospitals and care for the family unit at home. After an initial description of the demographic profile of the carers interviewed in our study area, our objective is to know the strategies they develop when caring for people from different backgrounds and how they are integrated into the social, cultural and institutional context of taking care to dependents of the host society.
    Keywords: Transcultural care; Social practices; Female migrant; Dependent person
    JEL: I11
    Date: 2013–02–13
  16. By: Pablo Branas-Garza (Business School, Middlesex University London, London, UK and Economic Science Institute, Chapman University); Jaromir Kovarik (Dpto. Fundamentos Analisis Economico I & BRiDGE, University of the Basque Country, Bilbao, Spain); Levent Neyse (GLOBE: Department of Economics, Universidad de Granada, Granada, Spain)
    Abstract: Gene-culture co-evolution emphasizes the joint role of culture and genes for the emergence of altruistic and cooperative behaviors and behavioral genetics provides estimates of their relative importance. However, these approaches cannot assess which biological traits determine altruism or how. We analyze the association between altruism in adults and the exposure to prenatal sex hormones, using the second-to-fourth digit ratio. We find an inverted U-shaped relation for left and right hands, which is very consistent for men and less systematic for women. Subjects with both high and low digit ratios give less than individuals with intermediate digit ratios. We repeat the exercise with the same subjects seven months later and find a similar association, even though subjects' behavior differs the second time they play the game. We then construct proxies of the median digit ratio in the population (using more than 1000 different subjects), show that subjects' altruism decreases with the distance of their ratio to these proxies. These results provide direct evidence that prenatal events contribute to the variation of altruistic behavior and that the exposure to fetal hormones is one of the relevant biological factors. In addition, the findings suggest that there might be an optimal level of exposure to these hormones from social perspective.
    Keywords: Altruism, Prosociality, Prenatal Sex Hormones, Digit Ratio, Genoeconomics
    Date: 2013
  17. By: Magnac, Thierry (TSE); Pistolesi, Nicolas (TSE); Roux, Sébastien (CREST INSEE, Paris)
    Abstract: We propose an original model of human capital investments after leaving school in which individuals di¤er in their initial human capital obtained at school, their rate of return, their costs of human capital investments and their terminal values of human capital at a fixed date in the future. We derive a tractable reduced form Mincerian model of log earnings profiles along the life cycle which is written as a linear factor model in which levels, growth and curvature of earnings profiles are individual-specific. Using panel data from a single cohort of French male wage earners observed over a long span of 30 years, a random effect model is estimated first by pseudo maximum likelihood methods. This step is followed by a simple second step fixed e¤ect method by which individual-specific structural parameters are estimated. This allows us to test restrictions, compute counterfactual profiles and evaluate how earnings inequality over the life-cycle is a¤ected by changes in structural parameters. Under some conditions, even small changes in life expectancy seem to imply large changes in earnings inequality.
    Keywords: human capital investment, earnings dynamics, post-schooling earnings growth, dynamic panel data
    JEL: C33 D91 J24 J31
    Date: 2013–01
  18. By: Dahlberg, Matz (Uppsala Center for Fiscal Studies); Edmark, Karin (Uppsala Center for Fiscal Studies); Lundqvist, Heléne (Uppsala Center for Fiscal Studies)
    Abstract: In a comment to Dahlberg, Edmark and Lundqvist (2012), Nekby and Pettersson-Lidbom (2012) argue (i) that the refugee placement program should be measured with contracted rather than actually placed refugees, and claim that the correlation between the two measures is insignificant and close to zero; (ii) that instead of using the rotating individual panel, we should have used the full cross-sections in combination with municipality fixed effects; and (iii) that immigrants should be de ned based on country of birth rather than citizenship. In this response, we discuss why we (i) do not agree that contracted refugees is the preferred measure, and we show that the correlation be- tween the two measures is highly significant and large; (ii) do not agree that the full cross-sections can be used; and (iii) do agree that defining immigrants according to country of birth is preferred. In a re-analysis, the conclusion from Dahlberg, Edmark and Lundqvist (2012) that ethnic diversity has a statistically and economically significant negative eect on preferences for redistribution is only marginally affected.
    Keywords: Income redistribution; ethnic heterogeneity; immigration
    JEL: D31 D64 Z13
    Date: 2013–02–07
  19. By: Alessandro Bucciol (Department of Economics (University of Verona)); Luca Zarri (Department of Economics (University of Verona))
    Abstract: Though risk attitude is central to economics and finance, relatively little is known about how it is formed and how it changes over time. Based on US data from a dedicated psycho-social module on lifestyle of the 2010 Health and Retirement Study (HRS), we provide new evidence on the correlation between financial risk attitude and life-history negative events out of an individual’s control. Using observed portfolio decisions to proxy for risk aversion, we find correlation with two of such events: having been in a natural disaster and (especially) the loss of a child. These effects survive after controlling for classic socio-demographic determinants of risk aversion.
    Keywords: Risk Aversion; Financial Asset Ownership; Personal Life History; Behavioral Finance
    JEL: D03 D14 D81 G11
    Date: 2013–02
  20. By: Christophe Muller (Aix-Marseille University (Aix-Marseille School of Economics, EHESS & CNRS.); Marc Vothknecht (German Institute for Economic Research (DIW Berlin))
    Abstract: We study the impact of violent conflict on social capital, as measured by citizen participation in community groups, defined by four activity types: governance, social service, infrastructure development and risk-sharing. Combining household panel data from Indonesia with conflict event information, we find an overall decrease in citizen contributions in districts affected by group violence in the early post-Suharto transition period. However, participation in communities with a high degree of ethnic polarization is less affected, and is even stimulated for local governance and risk-sharing activities. Moreover, individual engagement appears to depend on the involvement of other members from the same ethnic group, which points toward building of intra-ethnic social networks in the presence of violence. Finally, our results show the danger of generalization when dealing with citizen participation in community activities. We find a large variety of responses depending on the activity and its economic and social functions. We also find large observed and unobserved individual heterogeneities of the effect of violence on participation. Once an appropriate nomenclature of activities is used and controls for heterogeneity are applied, we find that the ethnic and social configuration of society is central in understanding citizen participation.
    Keywords: Violent Conflict, Citizen Participation, Local Public Goods
    JEL: D74 H42 O11
    Date: 2013–02
  21. By: Cojocaru, Alexandru; Diagne, Mame Fatou
    Abstract: This paper analyzes the reliability and consistency of subjective well-being measures. Using the Life in Transition Survey, which was administered in 34 countries of Europe and Central Asia in 2006 and 2010, the paper evaluates subjective well-being measures (satisfaction with life and subjective relative income position) against objective measures of welfare based on consumption and assets. It uses the different formulations of life satisfaction in the survey to test robustness to alternative framing and scaling. It also explores within-household differences in subjective well-being assessments. The analysis finds that subjective relative income is weakly correlated with household relative welfare position as measured by consumption or assets. Life satisfaction, by contrast, is highly correlated with objective and subjective measures of household welfare. It generally reflects cross-country differences in average consumption, assets, or per capita gross domestic product, although Central Asian countries report much higher life satisfaction levels than their incomes would suggest. Two alternative measures of life satisfaction are highly correlated and the correspondence between verbal and numeric scales is strong within a country or groupings of similar countries. Within households, subjective assessments of relative income are roughly consistent but measurement error is correlated with individual characteristics (gender and age of respondents), which could cause systematic biases in the analysis.
    Keywords: Access to Finance,Economic Theory&Research,Rural Poverty Reduction,Investment and Investment Climate,Inequality
    Date: 2013–02–01
  22. By: Fogelberg, Sara (Research Institute of Industrial Economics (IFN)); Karlsson, Jonas (The Institute for Social Research)
    Abstract: The introduction of antibiotics as a medical treatment after World War II helped to dramatically increase life expectancy in the industrialized world. As a consequence of over-prescription the last decades have however seen a sharp increase in prevalence of multi-resistant bacteria, disarming once powerful anti-pathogens. This paper investigates the effect of increased competition between healthcare providers on prescription of antibiotics. We make use of a competition-inducing reform implemented in different counties in Sweden at different points in time during 2007 to 2010. Our dataset contains monthly data on all prescribed antibiotics in Sweden which makes us able to estimate the effects on all antibiotics prescribed, as well as different subcategories of antibiotics. The results indicate that increased competition had a positive and significant effect on antibiotics prescription.
    Keywords: Healthcare; Competition; Competition reform; Antibiotics
    JEL: C23 H30 I11 I18
    Date: 2013–01–08
  23. By: David Hendry; Felix Pretis
    Abstract: We demonstrate major flaws in the statistical analysis of Beenstock, Reingewertz and Paldor (2012), discrediting their initial claims as to the different degrees integrability of CO2 and temperature.
    Keywords: Econometric modelling, location shifts, data measurements, climate change
    JEL: C1 Q5
    Date: 2013–02–08
  24. By: Allwine, Melanie; Rigolini, Jamele; Lopez-Calva, Luis F.
    Abstract: Adopted on September 8, 2000, the United Nations Millennium Declaration stated as its first goal that countries"...[further] resolve to halve, by the year 2015, the proportion of the world's people whose income is less than one dollar a day and the proportion of people who suffer from hunger..."Each country committed to achieve the stated goal, regardless of their initial conditions in terms of poverty and inequality levels. This paper presents a framework to quantify how much initial conditions affect poverty reduction, given a level of"effort"(growth). The framework used in the analysis allows for the growth elasticity of poverty to vary according to changes in the income distribution along the dynamic path of growth and redistribution, unlike previous examples in the literature where this is assumed to be constant. While wealthier countries did perform better in reducing poverty in the last decade and a half (1995-2008), assuming equal initial conditions, the situation reverses: the paper finds a statistically significant negative relation between initial average income and poverty reduction performance, with the poorest countries in the sample going from the worst to the best performers in poverty reduction. The analysis also quantifies how much poorer countries would have scored better, had they had the same level of initial average income as wealthier countries. The results suggest a remarkable change in poverty reduction performance, in addition to the reversal of ranks from worst to best performers. The application of this framework goes beyond poverty targets and the Millennium Development Goals. Given the widespread use of targets to determine resource allocation in education, health, or decentralized social expenditures, it constitutes a helpful tool to measure policy performance toward all kinds of goals. The proposed framework can be useful to evaluate the importance of initial conditions on outcomes, for a wide array of policies.
    Keywords: Achieving Shared Growth,Regional Economic Development,Rural Poverty Reduction,Poverty Monitoring&Analysis,Services&Transfers to Poor
    Date: 2013–02–01

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