nep-dev New Economics Papers
on Development
Issue of 2008‒11‒04
24 papers chosen by
Jeong-Joon Lee
Towson University

  1. Growth Diagnostics in Pakistan By Abdul Qayyum; Idrees Khawaja
  2. FDI and the labor share in developing countries: A theory andsome evidence By Bruno Decreuse; Paul Maarek
  3. Biological versus Foster Children Education : the Old-Age Support Motive as a Catch-up Determinant ? Some Evidence from Indonesia By Karine Marazyan
  4. Land tenure in Ethiopia: Continuity and change, shifting rulers, and the quest for state control By Crewett, Wibke; Bogale, Ayalneh; Korf, Benedikt
  5. Gender, caste, and public goods provision in Indian village governments: By Gajwani, Kiran; Zhang, Xiaobo
  6. Integrating survey and ethnographic methods to evaluate conditional cash transfer programs: By Adato, Michelle
  7. Reaching middle-income status in Ghana by 2015: Public expenditures and agricultural growth By Benin, Samuel; Mogues, Tewodaj; Cudjoe, Godsway; Randriamamonjy, Josee
  8. Bt Cotton and farmer suicides in India: Reviewing the evidence By Gruere, Guillaume; Mehta-Bhatt, Purvi; Sengupta, Debdatta
  9. Spatial Disadvantages or Spatial Poverty Traps: Household Evidence from Rural Kenya. By W.J. Burke; T.S. Jayne
  11. School-to-work-transitions in Mongolia By Francesco Pastore
  12. Is there a Link between Quality of Employment and Indebtedness? The Case of Urban Low-income Households in Ecuador By Maria Floro; John Messier
  13. The Gender Dimensions of Social Networks, Unemployment and Underemployment: What Time Use Data Reveal By Maria Sagrario Floro; Imraan Valodia; Hitomi Komatsu
  14. Effect of Microfinance on Vulnerability, Poverty and Risk in Low Income Households By Ranjula Bali Swain; Maria Floro
  15. External Shocks, Structural Change, and Economic Growth in Mexico 1979–2006 By Robert A. Blecker
  16. Understanding the Southern African‘Anomaly’Poverty, Endemic Disease, and HIV By Larry Sawers; Eileen Stillwaggon
  17. Resource Conflict in Vulnerable Environments: Three Models Applied to Darfur By Olsson, Ola
  18. Child Labor: A Review of Recent Theory and Evidence with Policy Implications By Congdon Fors, Heather
  19. The Wealth Paradox Revisited: Credit Market Imperfections and Child Labor By Congdon Fors, Heather
  20. Growth and convergence in a model with renewable and nonrenewable resources By Manh Hung NGUYEN; Phu Nguyen-Van
  21. Corruption Epidemics By Seidel, Tobias; Egger, Peter H.; Becker, Sascha O.
  22. International reserves, growth and effective demand By Peter Kriesler; Moritz Cruz
  23. Land Tenure Arrangements and Rural-Urban Migration in China By Katrina Mullan; Pauline Grosjean; Andreas Kontoleon

  1. By: Abdul Qayyum (Pakistan Institute of Development Economics, Islamabad); Idrees Khawaja (Pakistan Institute of Development Economics, Islamabad)
    Abstract: Following the Hausmann, et al. (2005) methodology, we attempt to identify the constraints to growth in Pakistan. We argue that governance failure and institutional shortcomings are the heart of the matter: corruption is rampant, judicial independence is low, educational institutions do not furnish the right kind of labour force, legal institutions do not protect the lenders against loan defaults, ambiguous land titles constrain mortgage financing and construction activity, labour market institutions restrict hiring/firing, State Bank of Pakistan (SBP) has not done its duty to contain the rising interest spread, and SECP/stock market has not played its due role in the transfer of funds from savers to investors. We identify three binding constraints to growth in Pakistan. These are (i) poor state of governance, (ii) poor state of institutions, and (iii) lack of competitive environment (that restricts innovation and hence growth). Without improving the state of governance and that of institutions, sustainable growth cannot occur even if other factors, like a reasonable savings rate, are put in place.
    Keywords: Economic Growth, Institutions and Growth
    JEL: O40 O43 O11 O12
    Date: 2008
  2. By: Bruno Decreuse (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales - CNRS : UMR6579); Paul Maarek (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales - CNRS : UMR6579)
    Abstract: This paper addresses the impact of FDI on the factor distribution of income in developing countries. We propose a theory that relies on the impacts of FDI on productive heterogeneity between firms in a frictional labor market. We argue that FDI have two opposite effects on the labor share: a negative force originated by market power and technological advance, and a positive force due to increased labor market competition between firms. Then, we test this theory on aggregate panel data through fixed effects and system-GMM estimations. We find a quantitatively meaningful U-shaped relationship between the labor share in the manufacturing sector and the ratio of FDI stock to GDP. However, most of the countries are stuck in the decreasing part of the curve,which we relate to multinationals’ location choices.
    Keywords: FDI; Matching frictions; Firm heterogeneity; Technological advance
    Date: 2008–10–23
  3. By: Karine Marazyan (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I)
    Abstract: This paper aims at explaining differences in education among foster-children and between foster and biological children in developing countries. Foster-children whose biological parents are alive may provide old-age support for both their host and biological parents. Therefore foster-children have lower returns to education than biological children and should receive less human capital investment in household where both types of children live together. However, in households where foster-children are alone, host parents will over-invest in their education to ensure that the expected old-age support will equal a minimum amount to survive. Using data from Indonesia, we provide some evidence supporting our hypothesis.
    Keywords: Household structure, child fostering, sibling rivalry.
    Date: 2008–07
  4. By: Crewett, Wibke; Bogale, Ayalneh; Korf, Benedikt
    Abstract: "Ethiopia experiences a fierce political debate about the appropriate land tenure policy. After the fall of the socialist derg regime in 1991, land property rights have remained vested in the state and only usufruct rights have been alienated to farmers – to the disappointment of international donor agencies. This has nurtured an antagonistic debate between advocates of the privatization of land property rights to individual plot holders and those supporting the government's position. This debate, however, fails to account for the diversity and continuities in Ethiopian land tenure systems. This paper reviews the changing bundles of rights farmers have held during various political regimes in Ethiopia, the imperial, the derg and the current one, at different times and places. Our analysis indicates the marked differences in tenure arrangements after the fall of the empire, but identifies some commonalities in land tenure regimes as well, in particular between the traditional rist system and the current tenure system." authors' abstract
    Keywords: Land tenure, Property rights regime, Bundles of rights, Legal pluralism, Devolution,
    Date: 2008
  5. By: Gajwani, Kiran; Zhang, Xiaobo
    Abstract: "This paper seeks to contribute to the literature on village governance and local public goods provision. Using data from 144 village-level governments in India's Tamil Nadu state, we examine whether the gender and caste of village government leaders influence village public goods provision. In particular, we examine: 1) whether public goods are provided in accordance with gender or caste preferences; and 2) whether public goods provision differs based on the knowledge level of the village government leader. We find evidence of different preferences for public goods between men and women, and between Scheduled Caste (SC) and non-SC persons. Additionally, a test of knowledge regarding the village government reveals that female and SC presidents receive lower scores relative to male and non-SC presidents, with women scoring lowest overall. We find that preferences and knowledge have little effect on public goods provision by female presidents, and hypothesize that this may be due to the influence of their male spouses. In the context of SC presidents, we find evidence that SC presidents provide more drinking water access—a location-specific public good—to SC-inhabited village areas." from authors' abstract
    Keywords: Local governance, public goods provision, Gender, Caste,
    Date: 2008
  6. By: Adato, Michelle
    Abstract: "Survey and ethnographic methods have been combined in the evaluations of conditional cash transfer (CCT) programs for the governments of Nicaragua and Turkey. This paper describes the quantitative and qualitative research designs for these evaluations, discusses the relative benefits of quantitative and qualitative approaches for studying CCTs, and provides examples of how findings of these different approaches complemented, explained, illuminated, or contradicted each other. While the surveys provided reliable measures of program impacts on human capital, the qualitative research provided explanations of why we do or do not find these impacts, and explored how social processes and social relations were affected by, and in turn shaped responses to, the programs. While many official evaluations now require mixed methods, and these have demonstrated policy relevance and impacts, there is still considerable progress to be made with respect to how methods are integrated in practice and how mixed approaches are appreciated in social program evaluation." from authors' abstract
    Keywords: qualitative research, ethnography, survey research, mixed-method research, evaluation, conditional cash transfers, heath, nutrition and education programs, Social protection, Targeting, Gender relations,
    Date: 2008
  7. By: Benin, Samuel; Mogues, Tewodaj; Cudjoe, Godsway; Randriamamonjy, Josee
    Abstract: "Using district-level data on public expenditures from 2000 to 2006, and household-level production data from the 2005/06 Ghana Living Standards Survey, this paper estimates the returns to different types of public investments across four agro-ecological zones of Ghana. We then assess the amount of public agricultural expenditures required to raise agricultural growth to 6.9 percent per year until 2015, as this is the target growth needed for Ghana to achieve its goal of middle-income status. The results reveal that provision of various public goods and services has substantial impact on agricultural productivity. A one percent increase in public spending on agriculture is associated with a 0.15 percent increase in agricultural labor productivity, with a benefit-cost ratio of 16.8. Spending on feeder roads ranks second (with a benefit-cost ratio of 8.8), followed by health (1.3). Formal education was negatively associated with agricultural productivity. The estimated marginal effects and returns differ across the four agro-ecological zones. For Ghana to achieve middle income status by 2015, agricultural public spending should grow at an estimated rate of 19.6 percent per year, or by a total amount of GH¢264 million (or US$478 million) per year in 2000 prices over the 2005–2015 period. These requirements are lower if the government is able to achieve a higher efficiency in its public spending than the estimated elasticity of 0.15; this could potentially be achieved by reforming public institutions to improve the provision of agriculture-related public goods and services." from authors' abstract
    Keywords: Agricultural development, Public spending, Investments,
    Date: 2008
  8. By: Gruere, Guillaume; Mehta-Bhatt, Purvi; Sengupta, Debdatta
    Abstract: "Suicides in general, including farmers' suicides, are a sad and complex phenomenon. Hence, their underlying causes need to be addressed within an equally complex societal framework. Here, we provide a specific case study on the potential link between technological choices and farmer suicides in India. Although officially recognized for having increased production and farmers' income, Bt cotton, genetically-modified, insect-resistant cotton, remains highly controversial in India. Among other allegations, it is accused of being the main reason for a resurgence of farmer suicides in India. In this paper, we provide a comprehensive review of evidence on Bt cotton and farmer suicides, taking into account information from published official and unofficial reports, peer-reviewed journal articles, published studies, media news clips, magazine articles, and radio broadcasts from India, Asia, and international sources from 2002 to 2007. The review is used to evaluate a set of hypotheses on whether or not there has been a resurgence of farmer suicides, and the potential relationship suicide may have with the use of Bt cotton. We first show that there is no evidence in available data of a “resurgence” of farmer suicides in India in the last five years. Second, we find that Bt cotton technology has been very effective overall in India. However, the context in which Bt cotton was introduced has generated disappointing results in some particular districts and seasons. Third, our analysis clearly shows that Bt cotton is neither a necessary nor a sufficient condition for the occurrence of farmer suicides. In contrast, many other factors have likely played a prominent role. Nevertheless, in specific regions and years, where Bt cotton may have indirectly contributed to farmer indebtedness, leading to suicides, its failure was mainly the result of the context or environment in which it was planted. We close the paper by proposing a conceptual framework for empirical applications linking the different agricultural and institutional factors that could have contributed to farmer suicides in recent years in certain districts of Central and Southern India." from authors' abstract
    Keywords: Cotton, Genetically modified crops, farmer suicides,
    Date: 2008
  9. By: W.J. Burke (Department of Agricultural, Food and Resource Economics, Michigan State University); T.S. Jayne (Department of Agricultural, Food and Resource Economics, Michigan State University)
    Abstract: The goals of this study are: 1) to determine the relative importance of spatial factors in explaining household wealth; 2) to identify the spatial characteristics of the chronically poorest, the consistently well off, and households escaping from poverty as well as descending into poverty; 3) to determine effects of compound disadvantages on the likelihood of chronic poverty; and 4) to assess the evidence of spatial poverty traps (SPTs). Quantitative analysis is conducted using panel data collected from 1275 households, each surveyed four times with a structured questionnaire over an 11 year period from 1997 to 2007. We identified four distinct groups. The chronically poor are defined as households remaining consistently in the bottom third (tercile) of households ranked by wealth in each of the four survey years. Roughly 12.9% of the nationwide sample was found to be chronically poor. The consistently non-poor are defined as households consistently in the upper tercile of households ranked by wealth, and this group formed 16.2% of the total sample. The third and fourth groups were those households found to have risen from poverty (starting in the bottom tercile and ending in the top tercile, the ascending) and those who were in the top asset tercile in 1997 and fell to the bottom tercile by 2007 (the declining). Relatively few households in the sample were in either the upwardly mobile category (3.8%) or the downwardly mobile category (3.6%).
    Keywords: Africa, food security, kenya, poverty, spatial
    JEL: Q18
    Date: 2008
  10. By: Arne Bigsten (Department of Economics, University of Gothenburg, Gothenburg, Sweden.); Sven Tengstam (Department of Economics, University of Gothenburg, Gothenburg, Sweden.)
    Abstract: This paper investigates the relationship between income diversification and income change within Zambian smallholder households, and investigates what the constraints of income diversification are in this group. A panel data set of roughly 7000 smallholder farmer households interviewed in 2001 and 2004 is used. Different combinations of the four main income generating activities – farm income, agricultural wage work, non-agricultural wagework, and own-business income – are analyzed.
    Keywords: food security, policy, Zambia, Africa, smallholder, income
    JEL: Q18
    Date: 2008
  11. By: Francesco Pastore (Seconda Università di Napoli, Italy)
    Abstract: Relatively little is known about the youth labour market in Mongolia. This report addresses the issue by taking advantage of a recent ad hoc School To Work Survey (SWTS) on young people aged 15-29 years carried out in 2006 by the National Statistical Office of Mongolia (NSO) with the International Labour Office’s (ILO) financial and technical assistance. Chapter 1 studies the macroeconomic conditions of the country: economic transition from a planned to a market economy has caused the emergence of unprecedented problems, such as macroeconomic instability, the emergence of the private sector and the ensuing need for new and higher skills. Chapter 2 focuses on the youth labour market by looking at the determinants at an individual and family level of educational attainment, employment, unemployment and inactivity. Educational attainment is relatively high and increasing, as compared to other countries in the area, which mirrors the perceived need for new and higher skills, confirmed by the declared aspirations of young people. Nonetheless, important constraints seem to affect the supply of education, especially in rural areas. In addition, the country is unable to provide young people with a sufficient number of decent jobs. This translates into high youth unemployment in urban areas and very low productivity jobs in rural areas, especially in the livestock sector. Chapter 3 applies the ILO school-to-work classification disentangling young people: a) with completed transition; b) “in transition”; and c) whose transition has not yet started. Only 0.9 per cent of the sample has completed their transition into decent jobs. The “in transition” group has about three times the unemployment rate, due to the very high portion of young workers wishing to change their job or experiencing important work deficits. Four types of work deficit have been identified: a) about 60 per cent of young employed workers work informally; b) about 74 per cent have a fixed-term contract; c) 12 per cent do not pay income tax; and, d) about 40 per cent work more than 50 hours per week. Chapter 4 studies the size and composition of the demand for skills. It is based on answers to the specific employers and managers’ module of the Mongolian SWTS. The evidence confirms firms’ needs for higher skills and work experience than those actually possessed by young people. There also seems to be a mismatch between job search methods preferred by employers and by young people. This report concludes with a number of policy suggestions for policy-makers and practitioners at all levels, such as: a) the need to increase the quantity and quality of the supply of skills, especially in rural areas; b) a more active role of the Public Employment Service (PES) in providing information, counselling and training not only to the unemployed, but also the discouraged workers and jobseekers who are still at school; c) a closer integration between the educational system, governmental institutions at all levels and social partners to reduce imperfect and asymmetric information on job vacancies, as well as to increase and diversify the supply of on-the-job and off-the-job training for young people.
    Keywords: Economic Transition; School-To-Work Transitions; Youth Labour Supply and Demand; Earnings; Gender Pay Gap; Urban/Rural Divide; Mongolia
    Date: 2008
  12. By: Maria Floro; John Messier
    Abstract: In recent decades, there has been a marked increase in the informalization of employment in developing countries. The risk and insecurity associated with a growing number of informal sector jobs have important consequences in inducing or maintaining vulnerability. This paper explores the incidence of high indebtedness or financial stress among urban, low-income households in Ecuador and demonstrates its interconnectedness with the quality of employment. The implications are non-trivial in the sense that high debt service burden, as with the lack of credit access, can undermine investment and maintain low productivity and earnings. It can also lead to higher probability of loan default and to increase in interest rates or termination of credit line. There are also longer term welfare consequences in terms of households’ ability to cope with future shocks such as illness. The analysis is based on a 2002 sample of men and women in urban, poor households in Ecuador. By means of tobit and regression analyses, the paper demonstrates that labor market informalization has led to higher incidence of indebtedness. Moreover, there are differentiated patterns of debt servicing among women and men in urban, poor households. The results provide a more nuanced yet illuminating picture of the interconnectedness of employment, financial stress and vulnerability. We argue that informalization of employment has consequences in other dimensions of vulnerability of households such as high debt servicing, and therefore requires rethinking of current economic and social policies in order to effectively reduce poverty.
    Date: 2008–07
  13. By: Maria Sagrario Floro; Imraan Valodia; Hitomi Komatsu
    Abstract: Utilizing time use data for exploring the issue of employment (or lack thereof) – a critical pathway for increased incomes for the poor - has received little attention in economic analysis. Using data from the 2000 South African national time use survey, this paper examines the value of time use data in policy discussions related to understanding people’s employment status and job search. In particular, we argue that an understanding of how individuals organize their daily life can help identify productive work and workers in a more comprehensive way than conventional labor force surveys and can provide an useful assessment of the effects of employment conditions on coping strategies like job search. We assess whether labor force surveys provide a good estimation of participation in productive activities by exploring the time use patterns of 10, 465 women and men aged 16-64 years, particularly the unemployed, underemployed and employed respondents. The results show that 26.7 and 17.5 percent of unemployed men and women respectively actually engaged in SNA productive activities, spending more time than underemployed men and women. We also examine individuals’ responses to jobless growth that affect their labor force participation and time use. Building and developing social networks serves as an important coping strategy not only for enhancing social insurance but also for improving job prospects. Using an instrumental variable tobit model, we examine whether or not an unemployed person is likely to spend more time in social networking compared to other respondents. The findings, which are found to be robust, confirm the hypothesis. The results also show significant gender differences, with women spending less time in social networking than men. Women carry the burden of housework, which limits their time in developing social networks and in improving their employment prospects.
    Keywords: South Africa, time allocation, gender, unemployment, underemployment, social network
    JEL: J22 J64
    Date: 2008–05
  14. By: Ranjula Bali Swain; Maria Floro
    Abstract: Uncertainty and unpredictability faced by low-income households increase their vulnerability making poverty even more unbearable. India’s National Bank for Agriculture and Rural Development (NABARD)-initiated Self-Help Group (SHG) program, which is currently the largest and fastest growing microfinance program in the developing world, has been aggressively promoted as a way of combating poverty. This paper investigates whether or not SHG participation results in reducing poverty and vulnerability. A theoretical framework is developed to examine the mechanisms through which the pecuniary and non-pecuniary effects of the SHG program on the beneficiaries’ earnings and empowerment, influence their households’ ability to manage risk. Going beyond the traditional poverty estimates, we use a vulnerability measure which quantifies the welfare loss associated with poverty as well as different types of risks like aggregate and idiosyncratic risks. Applying this measure to an Indian panel survey data for 2000 and 2003, we find that SHG members have lower vulnerability as compared to a group of non-SHG (control) members. Furthermore, we find that the poverty contributes to about 80 percent of the vulnerability faced by the household followed by aggregate risk.
    Keywords: Microfinance, Vulnerability, Poverty, Risk Coping
    JEL: D14 G21 I32
    Date: 2008–02
  15. By: Robert A. Blecker
    Abstract: This paper finds that shocks to net financial inflows, world oil prices, the U.S. growth rate, and the lagged real exchange rate explain most of the fluctuations in Mexico’s annual growth since 1979. The paper also estimates how the effects of these external constraints have changed since Mexico’s liberalization policies of the late 1980s and the formation of NAFTA in 1994. Estimates of an investment function and other tests show that growth drives investment but not conversely, in the short run. Inflows of foreign direct investment have positive effects on investment, but the coefficients are small and not always significant.
    Keywords: Latin America, Mexico, external shocks, economic growth, investment, financial inflows
    JEL: O54 O11 E22 F43
    Date: 2008–01
  16. By: Larry Sawers; Eileen Stillwaggon
    Abstract: Background: Adult HIV prevalence in the nine countries of southern Africa averages more than 16 times the prevalence in other low- and middle-income countries. Previous studies argue that the intensity of the HIV epidemic in southern Africa results from regional characteristics, such as apartheid labor regulations and regional mineral wealth, which contributed to circular migration patterns and highly skewed income distribution. The present study also emphasizes the importance of cofactor diseases, which are suspected of raising HIV prevalence by increasing HIV viral load in infected persons or by making uninfected persons more vulnerable to HIV infection through lower immunity or genital lesions and/or inflammation. Method: the study uses multiple regression analysis on country-level data with HIV prevalence as the dependent variable. Regressors are ten socio-economic variables used in most previous cross-national analyses of HIV, two measures of cross-border migration, and measures of six cofactor infections. Results: The 10 socio-economic variables “explain” statistically only 25% of the difference in HIV prevalence between southern Africa and other low- and middle-income countries, but adding the four cofactor infection variables to the model allows us to “explain” 80% of the southern Africa difference in HIV prevalence. Conclusion: The relative affluence of southern Africa and historical migration patterns have tended to mask the vulnerability of the majority of the population who are poor and who have very high prevalence of infectious and parasitic diseases. Those diseases replicate a cycle of poverty that can lead not just to social vulnerability to HIV through risky behaviors but also to biological vulnerability through coinfections. An important implication of this research is that integrating treatment of endemic diseases with other HIVprevention policies may be necessary to slow the spread of HIV. Treatment of cofactor infections is a lowcost, policy-sensitive, high-impact variable.
    Date: 2008–07
  17. By: Olsson, Ola (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: A recurring argument in the global debate is that climate deterioration is likely to make social conflicts over dwindling natural resources more common in the future. In this paper, we present a modelling framework featuring three potential mechanisms for how the allocation and dynamics of scarce renewable resources like land might cause social conflict in vulnerable environments. The rst model shows how decreasing resources make cooperative trade between two groups collapse. The second mechanism introduces a Malthusian subsistence level below which disenfranchised members of one community start to prey on the resources of another community in an appropriative coflict-setting. The third scenario explores how the long-run dynamics of resources and population levels interact to cause cycles of stagnation and recovery. Predictions from the models are then applied to the ongoing conflict in the Darfur region of Sudan. Our analysis suggests that effective resources per capita in the region appear to have declined by about 5/6 since the 1970s, which at least partially explains the observed disintegration of markets, the recent intensity of conflicts, and the current depopulation of large parts of Darfur.<p>
    Keywords: Market integration; resource conflict; vulnerable environments; appropriative conflict; long-run resource and population dynamics; Darfur
    JEL: O41 P16
    Date: 2008–10–23
  18. By: Congdon Fors, Heather (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: In recent years, a growing number of authors have turned their atten- tion to the question of why children work. The purpose of this paper is to review some of the more recent theoretical and empirical research into the topic of child labor, and to illustrate the fact that no one factor on its own can account for the phenomenon of child labor. Therefore, policies aimed at eradicating child labor will need to address the broad range of underlying factors that contribute to the incidence of child labor, such as poverty, market imperfections and access to education.<p>
    Keywords: child labor; subsistence poverty; market imperfections; policy instruments
    JEL: D13 J13 J22 O12
    Date: 2008–10–23
  19. By: Congdon Fors, Heather (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: We revisit the model of child labor in a peasant household presented in Bhalotra and Heady (2003), and demonstrate that the e¤ect of credit market imperfections on child labor di¤ers between households that save and households that borrow. This in turn is important for the interpretation of empirical results.<p>
    Keywords: Child labor; credit market imperfections; wealth paradox
    JEL: D13 J13 J22 O12
    Date: 2008–10–23
  20. By: Manh Hung NGUYEN; Phu Nguyen-Van
    Date: 2008–10
  21. By: Seidel, Tobias; Egger, Peter H.; Becker, Sascha O.
    Abstract: When estimating the determinants of perceived corruption, economists assumed that there is full independence across countries. In the presence of peer-group or learning effects through cross-border economic activity (such as trade or labor migration), this assumption might be violated. We provide evidence that this is the case. Using a cross-section of 123 economies for the year 2000, we illustrate that corruption in one country spills over to adjacent economies. This finding implies that institutional changes reducing corruption in one country lead to smaller but qualitatively similar effects in neighboring countries.
    Keywords: Spatial econometrics; Institutions; Perceived corruption
    Date: 2008–06
  22. By: Peter Kriesler (School of Economics, The University of New South Wales); Moritz Cruz (Universidad Nacional Autónoma de México)
    Abstract: During the last decade, developing (and some developed) economies have accumulated large amounts of international reserves, mainly for precautionary reasons. This phenomenon has been coupled with moderate economic growth. The resources being amassed largely overwhelm protective needs, there is an excess of resources that is being wasted, and which could be utilised for alternative productive projects, namely to promote growth. If insufficient aggregate demand can largely explain low growth, it is clear that this excess of international reserves can be used to stimulate aggregate demand. This paper argues that the excess of international reserves represents a potential source to boost growth.
    Keywords: international reserves; aggregate demand; economic growth
    JEL: F30 F40 O11 O19
    Date: 2008–10
  23. By: Katrina Mullan (University of Cambridge, Department of Land Economy); Pauline Grosjean (Department of Agricultural and Resource Economics, University of California); Andreas Kontoleon (University of Cambridge, Department of Land Economy)
    Abstract: This paper examines the impacts of the Chinese Household Responsibility System, which governs rural land tenure, on rural-urban migration. Migration in China has traditionally been limited by the hukou system of household registration, under which individuals who wish to change their place of residence must gain approval from government authorities. This system is currently being relaxed in an attempt to reduce inequalities between rural and urban areas. However, migration will not increase if additional constraints remain for potential migrants. Using a model of the relationship between land tenure arrangements and migration of household members, we examine whether those with greater tenure security and formal rental rights for agricultural or forest land are more likely to participate in labour markets outside the village. The finding that greater tenure security increases migration suggests that the current system of property rights, in which land is periodically reallocated, acts as a constraint on migration. This strengthens the case for further tenure reform for agricultural and forest land.
    Keywords: Land tenure security; land rental rights, rural-urban migration, China
    JEL: J61 O15 P32
    Date: 2008
  24. By: Geraint Johnes
    Abstract: This study uses LSMS microdata to evaluate the impact of early years education on subsequent educational participation in the states of Uttar Pradesh and Bihar in Northern India. It is established that, alongside a number of economic and demographic variables, pre-school education has a significantly positive impact on subsequent experience. The result is robust to correction for endogeneity bias and clustering of observations.
    Keywords: education, development
    Date: 2008

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