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on Development |
| By: | Cervellati, Matteo; Sunde, Uwe |
| Abstract: | This paper provides a unified theory of the economic and demographic transition. Individuals make optimal decisions about fertility, education of their children and the type and intensity of the investments in their own education. These decisions are affected by different dimensions of mortality and technological progress which change endogenously during the process of development. The model generates an endogenous transition from a regime characterized by limited human capital formation, little longevity, high child mortality, large fertility and a sluggish income and productivity growth to a modern growth regime in which lower net fertility is associated with the acquisition of human capital and improved living standards. Unlike previous models, the framework emphasizes the education composition of the population in terms of the equilibrium share of educated individuals, and differential fertility related to education. The framework explores the roles of different dimensions of mortality, wages and schooling in triggering the transition. The dynamics of the model are consistent with empirical observations and stylized facts that have been difficult to reconcile so far. For illustration we simulate the model and discuss the novel predictions using historical and cross-country data. |
| Keywords: | child mortality; demographic transition; endogenous life expectancy; heterogeneous human capital; Long-term development |
| JEL: | E10 J10 O10 O40 O41 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6384&r=dev |
| By: | Greenwood, Jeremy; Guner, Nezih |
| Abstract: | Since World War II there has been: (i) a rise in the fraction of time that married households allocate to market work, (ii) an increase in the rate of divorce, and (iii) a decline in the rate of marriage. What can explain this? It is argued here that technological progress in the household sector has saved on the need for labour at home. This makes it more feasible for singles to maintain their own home, and for married women to work. To address this question, a search model of marriage and divorce is developed. Household production benefits from labour-saving technological progress. |
| Keywords: | Divorce; Hours Worked; Household Production; Marriage; Technological Progress |
| JEL: | E13 J12 J22 O11 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6391&r=dev |
| By: | Thomas Masterson |
| Abstract: | Previous work has shown a pattern of lower household incomes for those Paraguayan farms with female landowners in the household. The study of agricultural production reveals that Paraguayan women specialize in livestock and dairy production, while men specialize in crop production. An analysis of crop specialization and crop yields finds no significant differences in yields among households along gender lines, although women appear to specialize in food crops. Finally, households with female land rights have markedly lower rates of return on agricultural production. |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_504&r=dev |
| By: | Pinaki Chakraborty |
| Abstract: | Since its enactment in 2005, the National Rural Employment Guarantee Act (NREGA) has been implemented in 200 districts in India. Based on state-by-state employment demand-supply data and the use of funds released under NREGA, it is found that, although it is a demand-driven scheme, there are significant interstate differences in the supply of employment. The supply falls far short of demand, particularly in low-income states, where the organizational capacity to implement the scheme is limited. It is also noted that the NREGA-induced fiscal expansion has not contributed to higher fiscal imbalances. The consolidation of other public employment programs into NREGA has actually kept the total allocation of funds by the central government at a level no higher than those reached in the fiscal years 2002-03 to 2005-06. The NREGA fund utilization ratio varies widely across states and is abysmally low in the poorer states. Since the flow of resources to individual states is based on approved plans outlining employment demand, it may turn out to be regressive for the poorer states with low organizational capacity in terms of planning and management of the schemes, especially labor demand forecasting. |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_505&r=dev |
| By: | Andrew K. Rose; Saktiandi Supaat |
| Abstract: | We use a quinquennial data set covering 87 countries between 1975 and 2005 to investigate the relationship between fertility and the real effective exchange rate. Theoretically a country experiencing a decline in its fertility rate can be expected to have higher savings, lower investment, a current account surplus, and accordingly a real depreciation. We test and confirm this hypothesis, controlling for a host of potential determinants such as PPP deviations and the Balassa-Samuelson effect. We find a statistically significant and robust link between fertility and the exchange rate. Our point-estimate is that a decline in the fertility rate of one child per woman is associated with a depreciation of approximately .15% in the real effective exchange rate. |
| JEL: | F32 J13 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13263&r=dev |
| By: | Jayanthakumaran, Kankesu and Lee, Shao-Wei (University of Wollongong) |
| Abstract: | This paper examines the association between government policy interventions, Foreign Direct Investment (FDI) and exports in Taiwan and China by applying the LP (Lumsdaine and Papell, 1997), approach allowing two endogenous structural breaks. This paper further explores the cointegrating relationship between FDI and exports in Taiwan by using the Johansen and Juselius (1990) approach and causal relationships between FDI and exports in both Taiwan and China by using the Granger causality tests respectively. We found that significant trend breaks in the FDI and export time series detected in both countries coincided with extensive government interventions, mainly in the form of Export Processing Zones (EPZ), encouraging FDI during a transition period from import substitution to export orientation. The results emerging from our research indicate no long-run cointegrating relationship in Taiwan and one-way causal relationship flows from exports to FDI in China and FDI to exports in Taiwan. The growing fear is that the World Trade OrganisationâÃÂÃÂs (WTO) involvement in deregulating EPZs may narrow the differences between the zones and the rest of the economy and prevent new firms from entering the zones. The EPZs may no longer be the transitional strategy for poor/developing countries. |
| Keywords: | FDI, Exports, EPZ, structural breaks, causality, East Asia |
| JEL: | C22 F21 R58 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:uow:depec1:wp07-03&r=dev |
| By: | McKenzie, David; Sasin, Marcin J. |
| Abstract: | This paper reviews common challenges faced by researchers interested in measuring the impact of migration and remittances on income, poverty, inequality, and human capital (or, in general, " welfare " ) as well as difficulties confronting development practitioners in converting this research into policy advice. On the analytical side, the paper discusses the proper formulation of a research question, the choice of the analytical tools, as well as the interpretation of the results in the presence of pervasive endogeneity in all decisions surrounding migration. Particular attention is given to the use of instrumental variables in migration research. On the policy side, the paper argues that the private nature of migration and remittances implies a need to carefully spell out the rationale for interventions. It also notices the lack of good migration data and proper evaluations of migration-related government policies. The paper focuses mainly on microeconomic evidence about international migration, but much of the discussion extends to other settings as well. |
| Keywords: | Population Policies,Health Monitoring & Evaluation,Banks & Banking Reform,Anthropology,Voluntary and Involuntary Resettlement |
| Date: | 2007–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4272&r=dev |
| By: | Amin, Mohammad |
| Abstract: | A recent survey of 1,948 retail stores in India conducted by the World Bank ' s Enterprise Surveys shows that 19 percent of the stores use computers for their business. In some states like Kerala, computer use is as high as 40 percent. Using this data the author finds labor regulation as an important determinant of computer use. His estimates suggest that when faced with burdensome labor regulations, the probability of using a computer rises by over 36 percentage points for an average store. These findings formally confirm a commonly held but untested view that labor regulation may be responsible for the spread of labor saving modern technology. |
| Keywords: | Labor Markets,Regulatory Regimes,Public Sector Regulation,Urban Economics,Public & Municipal Finance |
| Date: | 2007–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4274&r=dev |
| By: | Gawande, Kishore; Maloney, William; Rojas, Gabriel V. Montes |
| Abstract: | There exist legal channels for informational lobbying of U.S. policymakers by foreign principals. Foreign governments and private sector principals frequently and intensively use this institutional channel to lobby on trade and tourism issues. The authors empirically study whether such lobbying effectively achieves its goal of trade promotion in the context of Caribbean tourism and it is the first paper to examine the potential for using foreign lobbying as a vehicle for development. They use panel data to explore and quantify the association between foreign lobbying by Caribbean principals and U.S. tourist arrivals to Caribbean destinations. A variety of sensitivity analyses support the finding of a strong association. The policy implications are obvious and potentially important for developing countries. |
| Keywords: | Tourism and Ecotourism,Economic Theory & Research,Accommodation & Tourism Industry,Political Systems and Analysis,Politics and Government |
| Date: | 2007–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4275&r=dev |
| By: | Krebs, Tom; Krishna, Pravin; Maloney, William |
| Abstract: | Using data from Mexico, the authors study empirically the link between trade policy and individual income risk and the extent to which this varies across workers of different human capital (education) levels. They use longitudinal income data on workers to estimate time-varying individual income risk parameters in different manufacturing sectors in Mexico between 1987 and 1998, a period in which t he Mexican economy experienced substantial changes in trade policy. In a second step, they use the variations in trade policy across different sectors and over time to estimate the link between trade policy and income risk for workers of varying education levels. The authors ' findings are as follows. The level of openness of an economy is not found to be related to income risk for workers of any type. Furthermore, changes in trade policy (that is, trade policy reforms) are not found to have any effect on the risk to income faced by workers with either low or high levels of human capital. But workers with intermediate levels of human capital are found to experience a statistically and economically significant increase in income risk immediately following liberalization of trade. The findings thus point to an interesting non-monotonicity in the interaction between human capital, income risk and trade policy changes. |
| Keywords: | Economic Theory & Research,Inequality,Free Trade,Income,Political Economy |
| Date: | 2007–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4276&r=dev |
| By: | Seo, Sungno Niggol; Mendelsohn, Robert |
| Abstract: | This paper uses quantitative methods to examine the way African farmers have adapted livestock management to the range of climates found across the African continent. The authors use logit analysis to estimate whether farmers adopt livestock. They then use three econometric models to examine which species farmers choose: a primary choice multinomial logit, an optimal portfolio multinomial logit, and a demand system multivariate probit. Compar ing the results of the three methods of estimating species selection reveals that the three approaches yield similar results. Using data from over 9,000 African livestock farmers in 10 countries, the analysis finds that farmers are more likely to choose to have livestock as temperatures increase and as precipitation decreases. Across all methods of estimating choice, livestock farmers in warmer locations are less likely to choose beef cattle and chickens and more likely to choose goats and sheep. As precipitation increases, cattle and sheep decrease but goats and chickens increase. The authors simulate the way farmers ' choices might change with a set of uniform climate changes and a set of climate model scenarios. The uniform scenarios predict that warming and drying would increase livestock ownership but that increases in precipitation would decrease it. The climate scenarios predict a decrease in the probability of beef cattle and an increase in the probability of sheep and goats, and they predict that more heat-tolerant animals will dominate the future African landscape. |
| Keywords: | Livestock & Animal Husbandry,Wildlife Resources,Peri-Urban Communities,Rural Urban Linkages,Climate Change |
| Date: | 2007–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4277&r=dev |
| By: | Kurukulasuriya, Pradeep; Mendelsohn, Robert |
| Abstract: | Previous Ricardian analyses of agriculture have either omitted irrigation or treated irrigation as though it is exogenous. In practice, it is a choice by farmers that is sensitive to climate. This paper develops a choice model of irrigation in the context of a Ricardian model of cropland. The authors examine how climate affects the decision to use irrigation and then how climate affects the net revenues of dryland and irrigated land. This Ricardian " selection " model, using a modified Heckman model, is then estimated across 8,400 farmers in Africa. The analysis explicitly models irrigation but controls for the endogeneity of irrigation. The authors find that the choice of irrigation is sensitive to both temperature and precipitation. Simulations of the welfare impacts of several climate scenarios demonstrate that a model which assumes irrigation is exogenous provides a biased estimate of the welfare effects of climate change. If dryland and irrigation are to be estimated separately in the Ricardian model, irrigation must be modeled endogenously. The results also indicate that African agriculture is sensitive to climate change. Many farmers in Africa will experience net revenue losses from warming. Irrigated farms, on the other hand, are more resilient to temperature change and, on the margin, are likely to realize slight gains in productivity. But any reduction in precipitation will be especially deleterious to dryland farmers, generally the po orest segment of the agriculture community. The results indicate that irrigation is an effective adaptation against loss of rainfall and higher temperatures provided there is sufficient water available. This will be an effective remedy in select regions of Africa with water. However, for many regions there is no available surface water, so that warming scenarios with reduced rainfall are particularly deleterious. |
| Keywords: | Climate Change,Environmental Economics & Policies,Water Supply and Systems,Water Resources Assessment,Global Environment Facility |
| Date: | 2007–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4278&r=dev |
| By: | Seo, Sungno Niggol; Mendelsohn, Robert |
| Abstract: | This paper develops the structural Ricardian method, a new approach to modeling agricultural performance using cross-sectional evidence, and uses the method to study animal husbandry in Africa. The model is intended to estimate the structure beneath Ricardian results in order to understand how farmers change their behavior in response to climate. A survey of over 5,000 livestock farmers in 10 countries reveals that the selection of species, the net income per animal, and the number of animals are all highly dependent on climate. As climate warms, net income across all animals will fall, especially across beef cattle. The fall in net income causes African farmers to reduce the number of animals on their farms. The fall in relative revenues also causes them to shift away from beef cattle and toward sheep and goats. All farmers will lose income but the most vulnerable farms are large African farms that currently specialize in beef cattle. Small livestock and large livestock farms respond to climates differently. Small farms are diversified, relying on dairy cattle, goats, sheep, and chickens. Large farms specialize in dairy and beef cattle. Estimating a separate multinomial logit selection model for small and large farms reveals that the two types of farm choose species differently and specifically have different climate response functions. The regressions of the number of animals also reveal that large farms are more responsive to climate. The results indicate that warming will be harmful to commercial livestock owners, especially cattle owners. Owners of commercial livestock farms have few a lternatives either in crops or other animal species. In contrast, small livestock farms are better able to adapt to warming or precipitation increases by switching to heat tolerant animals or crops. Livestock operations will be a safety valve for small farmers if warming or drought causes their crops to fail. |
| Keywords: | Livestock & Animal Husbandry,Wildlife Resources,Rural Urban Linkages,Peri-Urban Communities,Dairies & Dairying |
| Date: | 2007–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4279&r=dev |
| By: | Kaufmann, Da niel; Kraay, Aart; Mastruzzi, Massimo |
| Abstract: | This paper reports on the latest update of the Worldwide Governance Indicators (WGI) research project covering 212 countries and territories and measuring six dimensions of governance between 1996 and 2006: voice and accountability, political stability and absence of violence, government effectiveness, regulatory quality, rule of law, and control of corruption. This latest set of aggregate indicators are based on hundreds of specific and disaggregated individual variables measuring various dimensions of governance taken from 33 data sources provided by 30 different organizations. The data reflect the views on governance of public sector, private sector, and nongovernmental organization experts, as well as thousands of citizen and firm survey respondents worldwide. The paper also explicitly reports the margins of error accompanying each country estimate. These reflect the inherent difficulties in measuring governance using any kind of data. It finds that even after taking margins of error into account, the WGI permit meaningful cross-country comparisons, as well as monitoring progress over time. In less than a decade, a substantial number of countries exhibit statistically significant improvements in at least one dimension of governance, while other countries exhibit deterioration in some dimensions. The decade-long aggregate indicators, together with the disaggregated individual indicators, are available in a newly-redesigned website at www.govindicators.org. |
| Keywords: | Governance Indicators,Statistical & Mathematical Sciences,National Govern ance,Economic Policy, Institutions and Governance,Science Education |
| Date: | 2007–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4280&r=dev |
| By: | Gabriele, Alberto; Schettino, Francesco |
| Abstract: | In this paper we propose and test an interpretative framework on the social and economic determinants of child malnutrition and child mortality, two key human development indicators. The paper is organized as follows. Section 1 illustrates the main economic and social factors causing child malnutrition and mortality. Section 2 identifies the main clusters of food insecure and vulnerable households and briefly describes their livelihood profiles. Section 3 exposes our cross-country estimation methodology. Section 4 reports and discusses the results. Section 5 concludes. |
| Keywords: | Malnutrition; Mortality; Cross-Country Analysis; Millenium Development Goals; Food Insecurity |
| JEL: | I38 I32 O21 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:3132&r=dev |
| By: | Alberto, Gabriele; Francesco, Schettino |
| Abstract: | This paper analyzes ChinaâÃÂÃÂs and VietnamâÃÂÃÂs performance in reducing under-five child mortality in a comparative perspective. Under the market socialist model, both countries achieved very high rates of GDP growth, but income distribution and the provision of key public services deteriorated. As a result, child mortality reduction in China and Vietnam was only partially satisfactory. However, although the former grew faster and is more economically developed, VietnamâÃÂÃÂs record in this area was markedly better than ChinaâÃÂÃÂs. We show that this apparent paradox is due mainly to two reasons. One is related to the relative status of women, which is better in Vietnam than in China. The other stems from the fact that the perverse side-effects of market-oriented reforms (such as worsening income distribution and degradation of essential public services) have reached a more advanced and alarming stage in China than in Vietnam. |
| Keywords: | Child Mortality; China; Vietnam; Socialist Market; Cross Country analysis |
| JEL: | I12 P21 I38 O21 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:3987&r=dev |