nep-dev New Economics Papers
on Development
Issue of 2008‒05‒17
34 papers chosen by
Jeong-Joon Lee
Towson University

  1. International Job Search: Mexicans in and out of the U.S. By Silvio Rendon; Alfredo Cuecuecha
  2. Business Ownership and Self-Employment in Developing Economies: The Colombian Case By Ximena Peña Parga; Camilo Mondragón-Vélez
  3. Human Genetic Diversity and Comparative Economic Development By Ashraf, Quamrul; Galor, Oded
  4. Return Migration as Channel of Brain Gain By Karin Mayr; Giovanni Peri
  5. The Effect of Corruption on Investment Growth: Evidence from Firms in Latin America, Sub-Saharan Africa and Transition Countries. By Elizabeth Asiedu; James Freeman
  6. Was It Prices, Productivity or Policy? The Timing and Pace of Latin American Industrialization after 1870 By Aurora Gómez Galvarriato; Jeffrey G. Williamson
  7. Superpower Interventions and their Consequences for Democracy: An Empirical Inquiry By William Easterly; Shanker Satyanath; Daniel Berger
  8. Specific Capital and Technological Variety By Boyan Jovanovic; Peter L. Rousseau
  9. When Should Firms Invest in Old Capital? By Boyan Jovanovic
  10. India's Lagging Sector: Indian Agriculture in a Globalising Economy By Desh Gupta
  11. "Industrial Development, Firm Dynamics and Patterns of Productivity Growth: The Case of the Cotton Spinning Industry in Prewar Japan, 1894-1924" By Tetsuji Okazaki
  12. "Industrial Policy Cuts Two Ways: Evidence from Cotton Spinning Firms in Japan, 1953-1979" By Kozo Kiyota; Tetsuji Okazaki
  13. The Latin American Development Problem By Diego Restuccia
  14. Poverty in South Africa:A profile based on recent household surveys By Paula Armstrong; Bongisa Lekezwa; Krige Siebrits
  15. The South African labour market: 1995 – 2006 By Derek Yu
  16. Structural Stability: On the Prerequisites of Nonviolent Conflict Management By Andreas Mehler; Ulf Engel; Lena Giesbert; Jenny Kuhlmann; Christian von Soest
  17. Do Qualitative Data Help in Addressing Central American Violence? Research Note on Data Collection By Anika Oettler
  18. Gain versus pain from status and ambition: Effects on growth and inequality By Tournemaine, Frederic; Tsoukis, Christopher
  19. How does FDI inflow affect productivity of domestic firms? The role of horizontal and vertical spillovers, absorptive capacity and competition By Kolasa, Marcin
  20. Status, fertility, growth and the great transition By Tournemaine, Frederic; Tsoukis, Christopher
  21. Impact of Microfinance on Rural Households in the Philippines By Kondo, Toshio; Orbeta, Aniceto C.; Dingcong, Clarence G.; Infantado, Christine
  22. CARP Institutional Assessment in a Post-2008 Transition Scenario: Toward a New Rural Development Architecture By Adriano, Fermin D.
  23. CARP Institutional Assessment in a Post-2008 Transition Scenario: Implications for Land Administration and Management (LAM) By Ballesteros, Marife Magno; Cortez, Felino
  24. Benefit Incidence of Public Spending on Education in the Philippines By Manasan, Rosario G.; Cuenca, Janet S.; Villanueva, Eden C.
  25. Benefit Incidence Analysis of Public Spending on Education in the Philippines: A Methodological Note By Cuenca, Janet S.
  26. Have Lifecycle Consumption and Income Patterns in the Philippines Changed between 1994 and 2002? By Racelis, Rachel; Salas, J.M. Ian S.
  27. Consumption, Income, and Intergenerational Reallocation of Resources: Application of NTA in the Philippines, 1999 By Salas, J.M. Ian S.; Racelis, Rachel
  28. Industrial Agglomeration and Industrial Policies: The Philippine Experience By Philippine Institute for Development Studies
  29. Industrial Agglomeration in the Philippines By Macasaquit, Mari-Len R.
  30. Socio-metabolic Transitions in Developing Asia By Heinz Schandl; Marina Fischer-Kowalski; Clemens Grunbuhel; Fridolin Krausmann
  31. The Impact of Retirement Benefits on Consumption and Saving in South Africa By Vasco C Nhabinde; Niek J Schoeman
  32. Banking Reform in China: An Assessment in Macroeconomic Perspective By Beoy Kui Ng
  33. The Role of Families in Shaping Youth Social Participation: Evidence from Singapore By Irene Y.H. Ng; Kong Weng Ho; K.C. Ho
  34. Intergenerational Earnings Mobility in Singapore and the United States By Irene YH Ng; Xiaoyi Shen; Kong Weng Ho

  1. By: Silvio Rendon (Centro de Investigacion Economica (CIE), Instituto Tecnologico Autonomo de Mexico (ITAM)); Alfredo Cuecuecha (Centro de Investigacion Economica (CIE), Instituto Tecnologico Autonomo de Mexico (ITAM))
    Abstract: It is argued that migration from Mexico to the US and return migration are determined by international wage differentials and preferences for origin. We use a model of job search, savings and migration to show that job turnover is a crucial determinant of the migration process. We estimate this model by Simulated Method of Moments (SMM) and find that migration practically disappears if Mexico has American arrival rates while employed. Doubling migration costs reduces migration rates in half, while subsidizing return migration in $300 reduces migration rates of older migrants but increases migration rates of younger migrants.
    Keywords: International Migration, Job Search, Job Turnover, Savings, Structural Estimation
    JEL: F22 J64 E20
    Date: 2007–12
  2. By: Ximena Peña Parga; Camilo Mondragón-Vélez
    Abstract: We characterize entrepreneurship in developing economies through a case study for Colombia. We document self-employment and business ownership since the 1980s; while the relative size of these groups within the labor force is stable across time, they differ significantly in important observable dimensions such as education and business sector. We then study the motivations to become an entrepreneur. First, we analyze the transition into and out of potential forms of entrepreneurship by measuring the flows across occupations, and study the determinants of entry and exit into and out of self-employment and business ownership; there is surprisingly little transition between self-employment and business ownership. Second, we focus on the financial motivations by measuring the differences in earnings of self-employment and business ownership relative to salaried work, at the mean and along the distribution. There is a substantial earnings premium to become a business owner, but it is not financially attractive to become self-employed. The results of this paper suggest that while business ownership is what the literature associates with entrepreneurship, self-employment is basically a subsistence activity.
    Date: 2008–02–03
  3. By: Ashraf, Quamrul; Galor, Oded
    Abstract: This research contributes to the understanding of human genetic diversity within a society as a significant determinant of its economic development. The hypothesis advanced and empirically examined in this paper suggests that there are socioeconomic trade-offs associated with genetic diversity within a given society. The investigation exploits an exogenous source of cross-country variation in genetic diversity by appealing to the "out of Africa" hypothesis of human origins to empirically establish a highly statistically significant and robust non-monotonic effect of genetic diversity on development outcomes in the pre-colonial era. Contrary to theories that reject a possible role for human genetics in influencing economic development, this study demonstrates the economic significance of diversity in genetic traits, while abstaining entirely from conceptual frameworks that posit a hierarchy of such traits in terms of their conduciveness to the process of economic development.
    Keywords: Comparative development; Human genetic diversity; Land productivity; Malthusian stagnation; Neolithic Revolution; Population density
    JEL: N10 N30 N50 O10 O50 Z10
    Date: 2008–05
  4. By: Karin Mayr (Johannes Kepler University, Linz); Giovanni Peri (UC Davis and NBER)
    Abstract: Recent theoretical and empirical studies have emphasized the fact that the prospect of international migration increases the expected returns to skills in poor countries, linking the possibility of migrating (brain drain) with incentives to higher education (brain gain). If emigration is uncertain and some of the highly educated remain, such a channel may, at least in part, counterbalance the negative effects of brain drain. Moreover, recent empirical evidence seems to show that temporary migration is widespread among highly skilled migrants (such as Eastern Europeans inWestern Europe and Asians in the U.S.). This paper develops a simple tractable overlapping generations model that provides an economic rationale for return migration and which predicts who will migrate and who will return among agents with heterogeneous abilities. We use parameter values from the literature and the data on return migration to calibrate our model and simulate and quantify the effects of increased openness on human capital and wages of the sending countries. We find that, for plausible values of the parameters, the return migration channel is very important and combined with the incentive channel reverses the brain drain into significant brain gain for the sending country.
    Keywords: Skilled Migration, Return Migration, Returns to Education.
    JEL: F22 J61 O15
    Date: 2008–04
  5. By: Elizabeth Asiedu (Department of Economics, The University of Kansas); James Freeman (Department of Economics, Wheaton College)
    Abstract: Many of the empirical studies that analyze the impact of corruption on investment have three common features: they employ aggregate (country-level) data on investment, corruption is measured at the country-level, and data for countries from several regions are pooled together. This paper uses firm-level data on investment and measures corruption at the firm and country-level, and allows the effect of corruption to vary by region. Our dependent variable is firms’ investment growth and we employ six measures of corruption from four different sources: two firm-level measures and four country-level measures. We find that the effect of corruption on investments varies significantly across regions: corruption has a negative and significant effect on investment growth for firms in Transition countries but has no significant impact for firms in Latin America and Sub-Saharan Africa. Furthermore, among the variables included in the regressions (firm size, firm ownership, trade orientation, industry, GDP growth, inflation and openness to trade) corruption is the most important determinant of investment growth for Transition countries.
    Keywords: Bribery, Corruption, Firm, Investment, Latin America and Caribbean, Sub-Saharan Africa, Transition Countries.
    JEL: G31 O16
    Date: 2008–05
  6. By: Aurora Gómez Galvarriato; Jeffrey G. Williamson
    Abstract: Brazil, Mexico and a few other Latin American republics enjoyed faster industrialization after 1870 than did the rest of Latin America and even faster than the rest of the poor periphery (except East Asia). How much of this economic performance was due to more accommodating institutions and greater political stability, changes that would have facilitated greater technology transfer and accumulation? That is, how much to changing fundamentals? How much instead to a cessation in the secular rise in the net barter terms of trade which reversed de-industrialization forces, thus favoring manufacturing? How much instead to cheaper foodstuffs coming from more open commercial policies ('grain invasions'), and from railroad-induced integration of domestic grain markets, serving to keep urban grain prices and thus nominal wages in industry low, helping to maintain competitiveness? How much instead to more pro-industrial real exchange rate and tariff policy? Which of these forces contributed most to industrialization among the Latin American leaders, long before their mid 20th century adoption of ISI policies? Changing fundamentals, changing market conditions, or changing policies?
    JEL: F1 N7 O2
    Date: 2008–05
  7. By: William Easterly; Shanker Satyanath; Daniel Berger
    Abstract: Do superpower interventions to install and prop up political leaders in other countries subsequently result in more or less democracy, and does this effect vary depending on whether the intervening superpower is democratic or authoritarian? While democracy may be expected to decline contemporaneously with superpower interference, the effect on democracy after a few years is far from obvious. The absence of reliable information on covert interventions has hitherto served as an obstacle to seriously addressing these questions. The recent declassification of Cold War CIA and KGB documents now makes it possible to systematically address these questions in the Cold War context. We thus develop a new panel dataset of superpower interventions during the Cold War. We find that superpower interventions are followed by significant declines in democracy, and that the substantive effects are large. Perhaps surprisingly, once endogeneity is addressed, US and Soviet interventions have equally detrimental effects on the subsequent level of democracy; both decrease democracy by about 33%. Our findings thus suggest that one should not expect significant differences in the adverse institutional consequences of superpower interventions based on whether the intervening superpower is a democracy or a dictatorship.
    JEL: O1
    Date: 2008–05
  8. By: Boyan Jovanovic; Peter L. Rousseau
    Abstract: Growth of technological variety offers more scope for the division of labor. And when a division of labor requires some specific training, the technological specificity of human capital grows and, with it, probably the firm specificity of that capital. We build a simple model that captures this observation. The model implies that a rising specialization of human and physical capital raises the rents in the average match between a firm and its human and physical capital. We document that in the last 40 years the firm’s share of those rents has also grown, and we use the model to explain why this shift may have taken place.
    JEL: O0 O4
    Date: 2008–05
  9. By: Boyan Jovanovic
    Abstract: This paper studies optimal investment policies when the production function depends on capital of various vintages. In such an environment it is natural to ask whether the firm will invest in old-vintage capital at all. In this paper I derive such a condition. Predictably, investment in old capital takes place if the elasticity of substitution between old and new capital is low, and when the depreciation of capital is high. But other parameters such as the rates of technological progress and depreciation matter as well.
    JEL: D21
    Date: 2008–05
  10. By: Desh Gupta
    Date: 2008
  11. By: Tetsuji Okazaki (Faculty of Economics, University of Tokyo)
    Abstract: This paper explores the relationship between patterns of productivity growth and the development stage of an industry, using firm-level data on the cotton spinning industry in Japan in the late nineteenth century. It is found that patterns of productivity growth depend on the development stage of the industry. In the earlier stage of industrial development, productivity growth of each firm, namely the within effect, was the sole major source of aggregate productivity growth. On the other hand, once the industry had matured, resource reallocation across firms became a major source of aggregate productivity growth, along with the within effect. This relationship between patterns of productivity growth and the development stage of an industry is considered to reflect the stage-dependent patterns of innovation and competition.
    Date: 2008–05
  12. By: Kozo Kiyota (Faculty of Business Administration, Yokohama National University and Gerald R. Ford School of Public Policy, University of Michigan); Tetsuji Okazaki (Faculty of Economics, University of Tokyo)
    Abstract: A number of studies have revealed that the effect of industrial policy on productivity growth is negative. Is this because industrial policy fails to control the activities of firms, or because it can effectively control them? This paper attempts to answer this question, using firm-level data from the cotton spinning industry in Japan for the period 1953-79. We find that industrial policy cut two ways during this period. Industrial policy effectively controlled the output of cotton spinning firms, which contributed to the establishment of a stable market structure both during and after the regulation of the industry. On the flip side, such policy constrained the reallocation of resources from less productive large firms to more productive small firms. Combined with the negative growth of large firms during this period, industrial policy resulted in negative sectoral productivity growth.
    Date: 2008–05
  13. By: Diego Restuccia
    Abstract: By international standards, gross domestic product (GDP) per capita in Latin America is low -- around one fifth of that of the United States. Moreover, in the last five decades, Latin America has failed to catch-up in wealth to the level of the United States while other countries at similar or even lower stages of development have been successful. The failure to attain higher levels of relative income represents what I call the development problem of Latin America. Using a variety of data, I find that the bulk of the difference in GDP per capita between Latin America and the United States is explained by low GDP per worker and, in particular, low total factor productivity (TFP) in Latin America. I calculate that to explain the difference in GDP per worker, TFP in Latin America must be around 60 percent of the level in the United States. I consider a model with heterogeneous production units where institutions and policy distortions lead to a 60 percent productivity ratio between Latin America and the United States. Removing the barriers to productivity can increase long-run relative GDP per worker in Latin America by a factor of 4. This increase is equivalent to 70-years worth of U.S. post WW-II development.
    Keywords: labor productivity, capital, schooling, plant heterogeneity, policy distortions
    JEL: O1
    Date: 2008–05–14
  14. By: Paula Armstrong (Department of Economics, Stellenbosch University); Bongisa Lekezwa (Department of Economics, Stellenbosch University); Krige Siebrits (Department of Economics, Stellenbosch University)
    Abstract: This paper provides a non-technical, snapshot-like profile of poverty in South Africa based on two surveys recently conducted by Statistics South Africa: the Income and expenditure survey of households 2005/06 (IES2005) and the General household survey 2006 (GHS2006). It uses various “poverty markers” (including geographical location, population group, gender, household structure, the age of the head of the household, and employment status) to identify key characteristics of poverty groups, and also highlights other important dimensions of poverty (deficient access to infrastructure services, high transport cost burdens, limited education attainments, and exposure to hunger). The paper further emphasises that the expansion of social grants since 1999 has significantly reduced extreme poverty.
    Keywords: Poverty, Poverty markers, Burden of poverty, Social grants, South Africa
    JEL: D31 I32
    Date: 2008
  15. By: Derek Yu (Department of Economics, Stellenbosch University)
    Abstract: Given the importance of the labour market to economic activity in any country, it is important to correctly infer trends from the available labour data. In South Africa, several researchers have compared selected household surveys with each other and then drew conclusions about the ‘trends’ in the labour market for the entire period between surveys. It is argued that such a methodology is imperfect and could give misleading results. A better methodology would entail looking at all the available surveys to ascertain the real trends over time. Therefore, this paper seeks to examine the trends of the labour force (LF), labour force participation rate (LFPR) and employment, as well as the working conditions of the employed, and the personal and household characteristics of the unemployed from 1995 to 2006, using the October Household Survey (OHS) data from 1995 to 1999, and the Labour Force Survey (LFS) data from 2000 to 2006. The paper finds that, with the exception of an unusual slight decrease between 1995 and 1996, the LF and LFPR in both narrow and broad terms experienced a rapid increase during the OHSs, followed by an abrupt increase during the changeover from OHS to LFS. The narrow LF and LFPR have since increased slightly, while the broad LF and LFPR have stabilized. The trends over the LFS period do not suggest any further “feminization of the LF” (Casale 2004; Casale, Muller & Posel 2005), and the abrupt break in this trend between the LFS and OHS periods may suggest that the observed trend over the former period could perhaps have been the result of improved capturing of participation rather than a real shift in LFPR. In addition, the number of employed clearly shows enormous fluctuations, and it is only since LFS2004b that employment growth enjoyed a stable and continuous increase. Therefore, it is possible to obtain contrasting conclusions on whether job creation or jobless growth has taken place in the South African economy, if different reference points are used for comparison. Finally, both the narrow and broad unemployment rates increased continuously from OHS1995 to LFS2003a, before this was replaced by a continuous downward trend since LFS2003b. Such a decline needs to be more rapid before the ASGISA goal of reducing the narrow unemployment rate to below 15% in 2014 could be achieved.
    Keywords: South Africa, Household survey, Labour market trends
    JEL: J00
    Date: 2008
  16. By: Andreas Mehler (GIGA Institute of African Affairs); Ulf Engel (Institute of African Studies and Centre for Advanced Study, University of Leipzig); Lena Giesbert (GIGA Institute of African Affairs); Jenny Kuhlmann (University of Leipzig); Christian von Soest (GIGA Institute of African Affairs)
    Abstract: The concept of “structural stability” has been gaining prominence in development policy circles. In the EU’s and the OECD Development Assistance Committee’s (OECD DAC) understanding, it describes the ability of societies to handle intra-societal conflict without resorting to violence. This study investigates the preconditions of structural stability and tests their mutual interconnections. Seven dimensions are analyzed: (1) long-term economic growth, (2) environmental security, (3) social equality, (4) governmental effectiveness, (5) democracy, (6) rule of law, and (7) inclusion of identity groups. The postulated mutual enhancement of the seven dimensions is plausible but cannot be proven. The most significant positive relationship appears between “democracy” and “rule of law,” respectively, on the one hand and the dependent variable “violence/ human security” on the other hand. This points to the usefulness of the political concept of structural stability to promote development policy agendas in this area at least. Applications that reach beyond these initial findings will, however, require further research.
    Keywords: Structural stability, violence, human security, development aid, conflict management, prerequisites of nonviolence
    JEL: F35 O10 O22
    Date: 2008–04
  17. By: Anika Oettler (GIGA Institute of Latin American Studies)
    Abstract: Taking as its point of departure debates on the value of criminal statistics and victimization surveys, this article explores the methodological challenge of an alternative approach to Central American violence(s). How can we collect qualitative data that help address the social construction of (in)security? The research project “Public Spaces and Violence in Central America” used multiple data sources, including guided interviews and pupils’ essays. Drawing on research experience in Nicaragua, this paper asks, How can we collect data that reveal lifeworld experiences as well as hegemonic and counter-discourses on violence? Why is it crucial to keep a research diary? What is a “failed” or a “good” interview? This article argues for a research design based on theoretical considerations, impulsiveness and, most notably, constant self-reflection.
    Keywords: Central America, violence, insecurity, qualitative research, methodological problems, discourse analysis
    Date: 2008–05
  18. By: Tournemaine, Frederic; Tsoukis, Christopher
    Abstract: To shed lights on growth, distribution and the relationships between the two, we develop a growth model with heterogeneous individuals who care about social status. Individuals' heterogeneity stems from two sources: their innate skills and their degree of ambition. While the willingness of individuals to accumulate wealth depends whether they experience gain or pain from loss of status, we show that ambition of individuals plays an important role regarding growth and distribution: ambition can inhibit or foster accumulation of wealth, then in turn growth. In such a context, we show that growth can be positively or negatively correlated with inequalities.
    Keywords: social aspirations; ambition; inequality; growth.
    JEL: O41
    Date: 2008–02
  19. By: Kolasa, Marcin
    Abstract: This paper examines the existence of externalities associated with FDI in a host country by exploiting firm-level panel data covering the Polish corporate sector. The main findings are as follows. Local firms benefit from foreign presence in the same industry and in downstream industries. Absorptive capacity of domestic firms is highly relevant to the size of spillovers. Competitive pressure facilitates backward spillovers, while market power increases the extent of forward spillovers. Host country equity participation in foreign firms is consistent with higher unconditional productivity spillovers to domestic firms.
    Keywords: foreign investment; spillovers; productivity; firm-level data
    JEL: F23 O33
    Date: 2007–03
  20. By: Tournemaine, Frederic; Tsoukis, Christopher
    Abstract: We develop an overlapping generation model to examine how the relationship between status concerns, fertility and education affect growth performances. Results are threefold. First, we show that stronger status motives heighten the desire of parents to have fewer but better educated children, which may foster economic development. Second, government should sometimes postpone the introduction of an economic policy in order to maintain the process of economic development, although such a policy aims to implement the social optimum. Third, status can alter the dynamic path of the economy and help to explain the facts about fertility during the "great transition".
    Keywords: social status; fertility; education; economic policy.
    JEL: O41
    Date: 2008–02–08
  21. By: Kondo, Toshio; Orbeta, Aniceto C.; Dingcong, Clarence G.; Infantado, Christine
    Abstract: <p>This paper reports on the impact evaluation study of the Rural Microenterprise Finance Project (RMFP) in the Philippines. RMFP aimed to support efforts of the Government of the Philippines to strengthen rural financial institutions by assisting organizations that employed the Grameen Bank Approach (GBA) in providing credit to the poor. The project was implemented by the People’s Credit and Finance Corporation (PCFC) and funded by the Asian Development Bank.</p> <p>The evaluation uses a quasi-experimental design with incoming clients of randomly selected participating microfinance institutions as the comparison group. An important innovation in the study is the inclusion of the appropriate number of former clients among the treatment group. Qualified nonparticipating households provide the control for area effects. The impact estimation uses the difference-in-difference estimation technique which effectively controls for the known sources of biases namely: nonrandom program participation (sample selection), nonrandom program placement, and nonrandom drop-out.</p> <p>The results led the authors to recommend that for microfinance programs to be effective as a poverty-alleviation tool there is a need to review and constantly monitor the effectiveness of the targeting procedures. In addition, it was pointed out that there may be a need to assist the poor in selecting appropriate projects that not only ensure loan repayment but also generate ample profit as well.</p>
    Keywords: microfinance, Philippines, impact evaluation, quasi-experimental design
    Date: 2008
  22. By: Adriano, Fermin D.
    Abstract: <p>The main objective of the paper is to explore possible institutional arrangements among the Comprehensive Agrarian Reform Program (CARP) implementing agencies in a post-2008 transition scenario for CARP. There were three reasons cited for the implementation of the agrarian reform program, namely: (i) to increase productivity, (ii) to reduce inequality particularly in the countryside, and (iii) to address one of the main causes of the persistent Communist insurgency in the country.</p> <p>After reviewing previous studies on new institutional arrangements, the paper recommends the following based on two scenarios. For scenario 1: (extension of CARP for another 7 to 10 years), the following are proffered: a) shifting manpower and resources toward units in DAR that are engaged in LAD and AJD; b) identification and publication of privately agricultural lands that will be covered by the LAD component; c) retooling of DAR personnel to assist in establishing agricultural enterprises out of a partnership between ARBs and agribusiness firms; d) providing capacity-building training for LGUs in preparation for the closure of the program; and e) exerting efforts to collect amortization payments from the ARBs.</p> <p>For Scenario 2 (closure of CARP is envisioned in the next 3 to 5 years), the following are recommended: a) an attractive retirement package should be given to DAR personnel; b) creation of a Land Tenure Administration; c) conversion of PARC into a Joint Commission on Rural Development (JCRD); d) renaming of the Department of Agriculture (DA) to the Department of Agriculture and Rural Development (DARD); e) capacitating LGUs to provide support services to the ARBs; f) passage of a “Progressive Agricultural Land Tax” for private agricultural lands and “Progressive Rents” for public lands; and g) deregulation of land tenure contracts and land markets.</p>
    Keywords: land reform, rural development, land
    Date: 2008
  23. By: Ballesteros, Marife Magno; Cortez, Felino
    Abstract: <p>The objective of this paper is to present the land administration and management (LAM) issues on CARP and determine the necessary institutional reforms on LAM in view of CARP expiration in 2008. The paper discussed the adverse effects brought about by weak land policy and poor land administration on attaining the objectives of CARP. The poor land records, the lack of information sharing among government land agencies, the tedious land titling and registration process, the unclear land policies have resulted not only in prolonged implementation of the program but also flawed land redistribution and incomplete transfers of property rights. These outcomes evolved second-generation issues as “unperfected” titles are traded despite the restrictions imposed by the land reform law.</p> <p>The current LAM in the country showed that the system cannot handle the land transactions that evolve and continue to evolve from hundreds and thousands of transactions involving CARP-awarded lands. There is a need to restore not only the confidence on Torrens system of titling on agriculture lands but also to restore the functioning of the rural land market. This is a key challenge on LAM since it would require reconciling information from key land agencies and including that of the LandBank. It will also require legislative actions on land market regulations, land use policy, and land administration in the country.</p>
    Keywords: land reform, land, land ownership and tenure
    Date: 2008
  24. By: Manasan, Rosario G.; Cuenca, Janet S.; Villanueva, Eden C.
    Abstract: Government education spending is expected to improve the well-being of beneficiaries and enhance their capability to earn income in the future. In this sense, directing education expenditures to the poor holds a promise for breaking the intergenerational transmission of poverty. Given this perspective, the paper addresses the question: to what extent has the poor benefited from government spending on education? In particular, it uses benefit incidence analysis to evaluate whether expenditures on education had redistributive impact.
    Keywords: targeting, education, poverty reduction, benefit incidence analysis, Gini coefficient, concentration coefficient, concentration curve
    Date: 2008
  25. By: Cuenca, Janet S.
    Abstract: Benefit incidence analysis (BIA) is a tool used to assess how tax policy or government subsidy affects the distribution of welfare in the population. In other words, it evaluates the distribution of government subsidies among different groups in the population, in particular, among different income groups. The methodology involved in benefit incidence approach is straightforward. Nevertheless, defining deciles (or quintiles) is critical as benefit incidence estimates depend heavily on the number of individuals occupying each decile (or quintile) cell. Deciles can be defined over population, i.e., across individuals and across households. The purpose of this methodological note is to briefly illustrate the difference in benefit incidence estimates that are obtained when deciles of population/individuals in lieu of deciles of households are used in the analysis as applied on government spending on education in the Philippines.
    Keywords: targeting, education, benefit incidence analysis, Gini coefficient, concentration coefficient, concentration curve, progressivity
    Date: 2008
  26. By: Racelis, Rachel; Salas, J.M. Ian S.
    Abstract: <p>Have age profiles of consumption and labor income in the Philippines changed from 1994 to 2002? What are the implications of the changes observed in the lifecycle patterns? The National Transfer Accounts (NTA) methodologies are applied to estimate the per capita age profiles of current consumption and labor income for the Philippines for the years 1994, 1999, and 2002. Age profiles estimated include those for public and private consumption for three broad types, i.e., education, health, and other, and two types of labor income, i.e., earnings from paid employment and self employment income.</p> <p>Some of the main findings include: (1) Consumption pattern by age: The age profile for mean per capita current consumption is strongly influenced by the profile of private other consumption being the single largest item of consumption. The pronounced sharp rise in per capita mean consumption observed up to age 18 and the subsequent decline is due to the age pattern of public and private education spending. And the gradual increase in per capita consumption after age 45 may be attributed to the increasing per capita public and private spending for health care as age increases. (2) Consumption age profile over time: The age profiles for current consumption have generally remained unchanged from 1994 to 2002, with mean age of consumption staying at about 27 years. (3) Labor income pattern by age: The age profile of labor income has the expected inverted-U shape, peaking at around age 40. (4) Labor income age profile over time: The overall shape of the age income profiles have generally remained the same, but a gradual shift of the position of the profiles toward the right was observed from 1994 to 2002. The mean age of labor income was 35 in 1994, 38 in 1999, and 39 in 2002. The implications of the consumption and labor income lifecycle patterns and changes observed over time for the Philippines include the following: increase in the deficit age cut-off at older ages; increase in the span of productive or surplus ages; and increase in the lifecycle surplus to deficit ratio.</p>
    Keywords: National Transfer Accounts, economic lifecycle, income age profile, consumption age profile, lifecycle deficit
    Date: 2008
  27. By: Salas, J.M. Ian S.; Racelis, Rachel
    Abstract: <p>A country’s population consists of persons at different ages and stages of their economic lifecycle. Those in the population that are incurring lifecycle deficits would not be able to sufficiently support themselves, while those generating surpluses would have more than they require. Resources then have to be reallocated or transferred from the surplus age groups (working ages) to the deficit age groups (children and elderly) and there are various ways to achieve these across age transfers or intergenerational reallocations. Lifecycle consumption and income patterns, and the systems for age reallocations in the Philippines, are examined in this paper using the 1999 NTA Flow Accounts estimates.</p> <p>This paper finds that: (1) Filipinos incur lifecycle deficits and do not become self-sufficient until after age 25, lifecycle surpluses are generated for the next 35 years, and at age 61 consumption starts to exceed labor earnings and lifecycle deficits are once again incurred; (2) In 1999 the estimated aggregate lifecycle deficits amounted to about PhP1,061 billion in current prices (with the young and elderly accounting for 93 percent and 7 percent, respectively) while surpluses generated by the working age group amounted to PhP461 billion, or an excess of PhP600 billion of deficits over surplus; (3) The mix of systems that support the consumption of Filipinos in the deficit ages differ between the young and the elderly groups, with the mix also changing with age for the elderly deficit group; (4) The financing of consumption of children up to age 14 is primarily by public and private transfers, while for the age group 15-25 about half of consumption is already paid for by own wages but a significant part continues to be supported by private transfers; and (5) Consumption of the elderly is financed by own earnings, asset reallocation, private transfers (starting age 73) and to a very small extent by public transfers (starting age 80).</p>
    Keywords: National Transfer Accounts, economic lifecycle, intergenerational transfer, income age profile, consumption age profile, lifecycle deficit
    Date: 2008
  28. By: Philippine Institute for Development Studies
    Abstract: In the relatively new body of ideas dubbed “new economic geography” and “spatial economics,” we find insights on the potentials of industrial agglomeration for regional and national economic development. This paper looked into the evolution of industrial development in the country as a means of elucidating the centripetal and centrifugal forces leading to agglomeration of firms and investments. A micro perspective was provided with the case study extended into the prime region in the country, Greater Manila Area. It was found that industrial agglomeration in the country takes the form of special economic zones and industry clusters, indicating that the government is taking the route toward regional dispersal of industries and the clustering strategy to spur industrial dynamism and competitiveness and consequently, regional and national economic development.
    Keywords: industrial agglomeration, industry clustering, trade and industry policy, special economic zones
    Date: 2008
  29. By: Macasaquit, Mari-Len R.
    Abstract: <p>The economic reform process in the Philippines was accelerated in the 1980s and 1990s. The reforms were found to have yielded positive results in terms of the nature of industrial agglomeration in the country as this was found to have occurred in the 1990s based on the results of the survey and econometrics analyses. The latter also identified the factors that influenced firms to agglomerate in the country, referring to economic fundamentals and deliberate policy and public action by government.</p> <p>However, industrial upgrading and innovation in the country was found to be weak. Expenditures on R&D are low and linkages between stakeholders are not strong. There are firms that have undergone upgrading in terms of introduction of new goods, upgrading of machineries, and opening of new markets but they tended to rely more on their in-house capabilities probably due to inadequate support from the government’s institutional infrastructure and financial system, which came out from the estimation results. The agglomeration strategies that are currently being pursued in the Philippines--establishment of economic zones and industry clustering--have the potential to address some of the issues and problems identified.</p>
    Keywords: innovation, industrial agglomeration, industrial clusters, industrial upgrading, economic zones
    Date: 2008
  30. By: Heinz Schandl; Marina Fischer-Kowalski; Clemens Grunbuhel; Fridolin Krausmann (CSIRO Sustainable Ecosystems, Australia)
    Abstract: A possible sustainability transition in developing Asia needs to complement the ongoing transition from an agrarian to an industrial socio-ecological regime. As is known from other world regions, an agrarian-industrial transition involves a major increase in material and energy flows (corresponding to a 2-4 fold increase in the demand for raw materials and energy). The socio-metabolic profile of the South-East Asian region still shows relatively low material and energy consumption per capita, suggesting that major growth may follow. Infrastructures that are closely bound-up in bulk material flows (transport, energy and food sectors) will be critical to future developments. The paper illustrates the challenge and potential solutions from a number of case studies.
    Keywords: socio-ecological regime, metabolic profile, industrial transformation, developing Asia, sustainability transition
    JEL: Q01 Q56 N50 O11
    Date: 2008–05
  31. By: Vasco C Nhabinde (Department of Economics, University of Pretoria); Niek J Schoeman (Department of Economics, University of Pretoria)
    Abstract: In this paper we empirically analyse the impact of retirement benefits on consumption and personal saving in South Africa using the Feldstein 1974 specification and procedure. By using a basic extended Ando-Modigliani life cycle model we show that the introduction of retirement programs crowds out discretionary household saving and consumption of contributors to such programs. There against, benefits paid by these programs contribute positively to consumption with a concomitant decline in the national pool of savings. However, taxes on retirement benefits affect the discounted value thereof and any change in such tax policy would therefore affect the saving behaviour of contributors in the opposite direction of the tax policy. We use time series data on consumption per capita, disposable labour-income per capita and pension and benefit payments from provident funds both public and privately managed. Using OLS, we find that estimates of retirement benefits are robust when regressed with the per capita government deficit and per capita durable consumption. The estimates are also stable when regressed with the full Barro specification (which includes the per capita government deficit, per capita durable consumption expenditure and the product of unemployment and per capita disposable income).
    Keywords: Social Security, Pension Funds, Retirement, Taxes, Consumption, Saving, South Africa, Gender, Productivity
    JEL: H H5 H55
    Date: 2008–05
  32. By: Beoy Kui Ng (Division of Economics,School of Humanities and Social Sciences, Nanyang Technological University, Singapore)
    Abstract: China has been delaying its adoption of a flexible exchange rate system with free capital flows. The main excuse is that its financial sector is still in its fragile stage and is not able to withstand any external shocks. A big bang approach towards such liberalization will only lead to financial crisis as observed by experiences of many Asia-Pacific countries during the Asian Financial Crisis. With this in mind, this paper attempts to uncover the approach and strategies adopted by China in its banking reform since 1978 and then assess these reform measures in macroeconomic perspective. The paper argues that since China is still lingering on export-oriented strategy in promoting economic growth and monetary independence for demand management is still a long way to go, it is still in China’s best interest not to adopt a flexible exchange rate system at this point of time. As to capital account liberalization, the main focus is to engineer a controlled and systematic capital outflows through outward investment in particular portfolio investment. At the micro level, China should continue its banking reforms until the financial sector is strong enough to withstand the severe pressure of globalization. By then, will China, with its matured financial system be ready to consider the adoption of a flexible exchange system with free capital flows.
    Keywords: China, banking reform, non-performing loans, state-owned enterprises, corporate governance, regulation and supervision, financial liberalization
    JEL: E44 E5 G2 O16 O5
    Date: 2007–07
  33. By: Irene Y.H. Ng (Department of Social Work, National University of Singapore, Singapore); Kong Weng Ho (Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, Singapore); K.C. Ho (Department of Sociology, National University of Singapore, Singapore)
    Abstract: Youth participation in social groups is important in developing skills and experience for successful transition to adulthood. What kinds of families do youth who are active in social groups and who take on leadership positions come from? Using data from the National Youth Survey 2005, this research studies the social participation of Singaporean youth aged 15 -18. Through probit regression analysis, it examines how youth participation in Singapore is associated with two types of family characteristics. First, it examines the role of maternal education. As a proxy for social class, maternal education represents the roles of cultural capital formation and concerted involvement by middle class parents. Second, it studies the role of family challenge and support. Maternal education is found to predict both high participation and leadership. While additional family challenge induces greater participation, family support increases participation only when the level of support is high.
    Keywords: youth participation; family challenge; family support; social class
    Date: 2008–01
  34. By: Irene YH Ng (Department of Social Work, National University of Singapore, Singapore); Xiaoyi Shen (Department of Social Work, National University of Singapore, Singapore); Kong Weng Ho (Division of Economics, Nanyang Technological University, Singapore)
    Abstract: This study compared intergenerational earnings mobility in Singapore and the United States by replicating the limitations in the Singapore National Youth Survey on the U.S. Panel Study of Income Dynamics. The mean estimated earnings elasticities are almost identical: 0.26 in Singapore and 0.27 in the United States. Transformed to 0.45 and 0.47 respectively to reflect permanent status, mobility in the two countries is moderately low compared internationally. The finding of similar mobility is not surprising given that the economic realities, welfare systems, education regimes, and labor structures in the two countries are similar. Policy makers face the daunting challenge of overcoming immobility and inequality while maintaining global competitiveness.
    Keywords: Intergenerational earnings mobility; Singapore; United States
    JEL: J62 C81
    Date: 2008–03

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