nep-dev New Economics Papers
on Development
Issue of 2009‒01‒31
forty-one papers chosen by
Jeong-Joon Lee
Towson University

  1. Market access, organic farming and productivity: the determinants of creation of economic value on a sample of Fair Trade affiliated Thai farmers By Leonardo Becchetti; Pierluigi Conzo; Giuseppina Gianfreda
  2. Flexigemony and Force in China's Economic Strategy in Africa: Sudan and Zambia Compared By Pádraig Carmody and Ian Taylor
  3. Decomposition of Economic and Productivity Growth in Post-reform China. By Kui-Wai Li; Tung Liu; Lihong Yun
  4. Explaining Differences in Education between Foster Children and Biological Children: a Sibling Rivalry Approach. Some Evidence from Indonesia By Karine Marazyan
  5. Do Countries Exporting More Manufactured Products Grow Faster? By Takuji Kinkyo
  6. The effect of livestock theft on household poverty in developing countries: The case of Lesotho By Selloane Khoabane; Philip Black
  7. Multidimensional Human Capital, Wages and Endogenous Employment Status in Ghana By Blunch, Niels-Hugo
  8. Testing the Inverseness of Fertility and Labor Supply: The Case of Ethiopia By Solomon, Blen; Kimmel, Jean
  9. International Migration, Transfers of Norms and Home Country Fertility By Beine, Michel; Docquier, Frédéric; Schiff, Maurice
  10. Low-Skilled Immigration and the Expansion of Private Schools By Dottori, Davide; Shen, I-Ling
  11. Gradualism and the evolution of the financial structure in China By Sau Lino
  12. Realising South Africa’s employment potential By Geoff Barnard
  13. Pensions in Africa By Fiona Stewart; Juan Yermo
  14. Do institutions matter for economic fluctuations? Weak property rights in a business cycle model for Mexico By Konstantinos Angelopoulos; George Economides; Vangelis Vassilatos
  15. Emigration Intentions: Mere Words or True Plans? Explaining International Migration Intentions and Behavior By Dalen, H.P. van; Henkens, K.
  16. On the Sum of Laplacian Eigenvalues of Graphs By Haemers, W.H.; Mohammadian, A.; Tayfeh-Rezaie, B.
  17. Child Labor and Household Wealth : Theory and Empirical Evidence of an Inverted-U By Basu, Kaushik; Das, Sanghamitra; Dutta, Bhaskar
  18. Inflation Pressures and Monetary Policy Options in Emerging and Developing Countries-A Cross Regional Perspective By Luis Ignacio Jácome; Inci Ötker; Turgut Kisinbay; Francisco F. Vázquez; Alessandro Giustiniani; David Vávra; Kotaro Ishi; Karl Friedrich Habermeier
  19. Explaining Episodes of Growth Accelerations, Decelerations, and Collapses in Western Africa By Gonzalo Salinas; Patrick A. Imam
  20. China’s Energy Situation and Its Implications in the New Millennium By Hengyun Ma; Les Oxley; John Gibson
  21. Fiscal Federalism, State Lobbying and Discretionary Finance in India By Rongili Biswas
  22. Fertility in the absence of self-control. By Bertrand Wigniolle
  23. Gender inequality, endogenous cultural norms and economic development. By Victor Hiller
  24. Surviving Slavery. Mortality at Mesopotamia, a Jamaican sugar estate, 1762 - 1832 By Martin Forster; Simon D. Smith
  25. Commodity Prices and Monetary Policy in Emerging East Asia By Tang, Hsiao Chink
  26. India's Bond Market-Developments and Challenges Ahead By Schou-Zibell, Lotte; Wells, Stephen
  27. A Moving Target: Universal Access to Healthcare Services in Latin America and the Caribbean By William Savedoff
  28. Part-Time Work, Gender and Job Satisfaction: Evidence from a Developing Country By Carmen Pages; Lucia Madrigal; Florencia Lopez Boo
  29. Do Welfare Programs Damage Interpersonal Trust? Experimental Evidence from Representative Samples for Four Latin American Cities By Alberto Chong; Hugo Nopo; Vanessa Rios
  30. Immigration and Inequality By David Card
  31. Migration and Trade: Theory with an Application to the Eastern-Western European Integration By Susana Iranzo; Giovanni Peri
  32. Innovation, human capital and earning distribution: towards a dynamic life-cycle approach By Vona, Francesco; Consoli, Davide
  33. Economic Development, Technological Change and Growth By Attia, Sayed Moawad
  34. China's Current Account and Exchange Rate By Yin-Wong Cheung; Menzie D. Chinn; Eiji Fujii
  35. Some New Perspectives on India's Approach to Capital Account Liberalization By Eswar S. Prasad
  36. Savings Constraints and Microenterprise Development: Evidence from a Field Experiment in Kenya By Pascaline Dupas; Jonathan Robinson
  37. International Finance and Growth in Developing Countries: What Have We Learned? By Maurice Obstfeld
  38. Instruments of development: Randomization in the tropics, and the search for the elusive keys to economic development By Angus S. Deaton
  39. Gender and Modern Supply Chains in Developing Countries By Miet Maaertens; Johan F.M. Swinnen
  40. Which Households Are Most Distant from Health Centers in Rural China? Evidence from a GIS Network Analysis By John Gibson; Xiangzheng Deng; Geua Boe-Gibson; Scott Rozelle; Jikun Huang
  41. Preliminary Impacts of a New Seasonal Work Program on Rural Household Incomes in the Pacific By John Gibson; David McKenzie

  1. By: Leonardo Becchetti (University of Rome Tor Vergata); Pierluigi Conzo (University of Rome Tor Vergata); Giuseppina Gianfreda (University of Tuscia)
    Abstract: We analyse the impact of Fair Trade and organic farming on a sample of Fair Trade organic rice producers in Thailand. We find that per capita income from agriculture is positively and significantly affected by organic certification and FT affiliation years. Such effect does not translate into higher productivity due to a concurring increase in worked hours. FT and organic certification contributions are however downward biased if we do not take into account the relatively higher share of self- consumption of affiliated farmers. Our main findings are robust when we control for selection bias and endogeneity with instrumental variables, propensity score matching and by restricting the sample to affiliated producers only. We also test which of the two (organic and FT) effects is stronger and find that the latter prevails.
    Keywords: organic production, Fair Trade, productivity
    JEL: O18 O19 O22
    Date: 2009–01
  2. By: Pádraig Carmody and Ian Taylor
    Abstract: The Chinese government and its companies have dramatically increased their presence in Africa in the last decade. There has been much media interest and commentary on the impacts of China on governance in Africa, as it is often seen to be strengthening authoritarian states such Sudan and Zimbabwe (Arrighi 2007). However, China is also engaging with more democratic states and spaces, such as Zambia. This paper seeks to explore the impacts of China’s increased engagement with Africa on governance through a comparative case study of two contrasting cases: Sudan and Zambia, using the concept of flexigemony. Contrary to popular perception, China has sometimes been a moderating force in Sudan, while provoking violence in Zambia.
    Date: 2008–01–16
  3. By: Kui-Wai Li (City University of Hong Kong, Hong Kong SAR); Tung Liu (Department of Economics, Ball State University); Lihong Yun (City University of Hong Kong, Hong Kong SAR)
    Abstract: This paper examines and applies the theoretical foundation of the decomposition of economic and productivity growth to the thirty provinces in China’s post-reform economy. The four attributes of economic growth are input growth, adjusted economies of scale effect, technical progress, and efficiency growth. A stochastic frontier model is used to estimates the growth attributes, and a human capital variable is incorporated in the translog production function. The empirical results show that input growth is the major contributor to economic growth and human capital is inadequate even though it has a positive and significant effect on growth. Technical progress is the main contributor to productivity growth and the scale economies has become important in recent years, but technical efficiency has edged downwards in the sample period. The relevant policy implication for a sustainable post-reform China economy is the need to promote human capital accumulation and improvement in technical efficiency.
    Keywords: technical progress, technical efficiency, economies of scale, human capital, China economy
    JEL: C2 D24 O4 O53
    Date: 2008–12
  4. 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 between foster-children and the biological children of their new household by differences in return to education as suggested by the human capital investment model. Defining this return by the amount of the old-age support the care-givers expect to receive, we assume that foster-children have a lower return to education than biological children, as the former might provide old-age support for both their host and biological parents while the latter to their biological parents only. Given this assumption and if the credit constraints are binding, the model suggests that foster-children will receive less human capital investment if there are in presence of host children than if they are not.In contrast, if parents have aversion against inequality, the prediction reverses: foster-children will receive more human capital investment if there are in presence of host children than if they are not.Using data from Indonesia, we provide some evidence in favor of the credit constraints hypothesis.This suggests that financial support to families who care for both biological and foster-children will enhance the latter education as it would reduce the credit constraints and thus, the induced sibling rivalry.
    Keywords: Foster-Children, Sibling Rivalry, Asia, Indonesia
    Date: 2008–06–25
  5. By: Takuji Kinkyo (Graduate School of Economics, Kobe University)
    Abstract: This paper empirically examines the hypothesis that countries exporting a larger share of manufactured products in total exports grows faster. Both cross-country and panel data analyses find evidence in support of the hypothesis for developing countries. The results are robust to the inclusion of a range of growth determinants. It is also shown that Asiafs superior performance up to the mid-1990s can be explained largely by a rise in manufacturing export share, as well as human capital accumulation and lower inflation rates. The paperfs findings support the view that not only trade openness but also export composite matters for growth.
    Date: 2008–11
  6. By: Selloane Khoabane (Department of Economics, University of Stellenbosch); Philip Black (Department of Economics, University of Stellenbosch)
    Abstract: While livestock theft in Lesotho is primarily caused by increased poverty among unemployed workers and drought stricken crop farmers, its effect on stock farmers can be devastating. It reduces the affected households’ own consumption of both the “returns” on their wealth, e.g. milk and wool, and of wealth itself, e.g. meat and hides. In addition, it restricts their ability to sell their returns and wealth in the market place and use the proceeds to acquire other food and non-food products. Some policy implications are also highlighted.
    Keywords: Livestock theft, Lesotho, own consumption, animal products, diversified farming, nutritional status, human capital, HIV/AIDS
    JEL: D11 O12 Q12
    Date: 2009
  7. By: Blunch, Niels-Hugo (Washington and Lee University)
    Abstract: Previous studies of labor market outcomes such as employment and wages have mostly been limited to investigating the impact of formal schooling only and, as a consequence, have seldom considered skills or alternative routes to acquiring skills, such as adult literacy programs, or other types of education. This paper examines these issues for Ghana, by estimating the joint effects of formal schooling, literacy and numeracy skills, and adult literacy programs on employment and wage outcomes. Wage and employment status equations are estimated jointly, allowing employment status to be endogenous. Substantial returns to basic cognitive skills are established, while the education system – especially the lower levels of formal education – is found to be relatively successful in creating these skills. At the same time the results hint at there being substantial returns to skills other than basic literacy and numeracy. These skills appear to be produced mostly from technical and vocational education and training and at higher levels of formal education. Adult literacy participants are less likely to be economically inactive and more likely to be self-employed, hinting at the income-generating activities component of these programs having indirect effects on wages through its effect on labor market participation, especially for females, individuals with no formal education, and in urban areas.
    Keywords: wage equations, employment status, human capital, literacy and numeracy, cognitive and non-cognitive skills, formal education, adult literacy programs, Ghana
    JEL: I31 J24 O15
    Date: 2008–12
  8. By: Solomon, Blen (Grand Valley State University); Kimmel, Jean (Western Michigan University)
    Abstract: We test the inverseness of fertility and labor supply for married women in Ethiopia to determine if previous research (focusing on developed countries) that has found an inverse relationship between fertility and labor supply is applicable to least developed countries. The research into fertility and labor supply has relied on a variety of methodologies for addressing the endogeneity of fertility. Using data from the Demographic Health Survey (DHS) of Ethiopia, we use the husband's desire for children to instrument for fertility. Our empirical results fail to support an inverse relationship between fertility and labor supply in Ethiopia, perhaps because the persistence of traditional family structures in the face of rising national female employment facilitates maternal employment. This finding has implications for other LDCs as well.
    Keywords: labor supply, fertililty
    JEL: J13 J22
    Date: 2009–01
  9. By: Beine, Michel (University of Luxembourg); Docquier, Frédéric (Catholic University of Louvain); Schiff, Maurice (World Bank)
    Abstract: This paper examines the relationship between international migration and source country fertility. The impact of international migration on source country fertility may have a number of causes, including a transfer of destination countries' fertility norms and an incentive to acquire more education. We provide a rigorous test of the diffusion of fertility norms using original and detailed data on migration. Our results provide evidence of a strong transfer of fertility norms from migrants to their country of origin.
    Keywords: international migration, endogenous fertility, human capital, social norms
    JEL: J13 J61 O11
    Date: 2008–12
  10. By: Dottori, Davide (Catholic University of Louvain); Shen, I-Ling (University of Geneva)
    Abstract: This paper provides a political-economic model to study the impact of low-skilled immigration on the host country's education system, which is characterized by sources of school funding, the average expenditure per pupil, and the type of parents who are more likely to send their children to publicly or privately funded schools. Four main effects of immigration are considered: (1) greater congestion in public schools; (2) a lower average tax base for education funding; (3) reduced wages for low-skilled workers and so more dependence by low-skilled locals on public education; (4) a greater skill premium, which makes it easier for high-skilled locals to afford private education for their children, and hence weakens their support for financing public school. It is found that when the size of low-skilled immigrants is large, the education regime tends to become more segregated with wealthier locals more likely to opt out of the public system into private schools. The fertility differential between high and low-skilled locals increases due to a quantity/quality trade-off. The theoretical predictions are consistent with empirical evidence from both the U.S. census data and the OECD Programme for International Student Assessment (2003).
    Keywords: voting, taxes and subsidies, education, fertility, migration
    JEL: H42 H52 I21 D72 O15
    Date: 2009–01
  11. By: Sau Lino (University of Turin)
    Abstract: In this paper we set out to show that China has certain significant specificities in terms of the gradual (i.e. “step by step”) approach it has followed in implementing reforms affecting its financial system. This is in contrast with the traditional shock or “big bang” therapy adopted by other emerging or transition countries, on the basis of what is known as the Washington Consensus, which notoriously prescribes the immediate, wholesale introduction of market-oriented systems through large-scale liberalisations and privatizations. Nevertheless, as we will endeavour to demonstrate the process of reform of China’s financial system has not prevented problems of financial fragility from arising in the banking sector, and of corporate governance for firms, such as to threaten the very sustainability of growth in the future.
    Date: 2009–01
  12. By: Geoff Barnard
    Abstract: Unemployment in South Africa is extremely high and unevenly distributed, being concentrated among young less-skilled blacks. The legacies of apartheid can explain part of the increase in labour supply and inability of the economy to absorb it which produced the extreme levels of unemployment, but more could have been done to unwind those legacies and other policies and institutions have contributed to the dysfunction of the labour market. Notably, improvements in product market regulation to strengthen competition could help expand formal sector employment. Changes in municipal laws and regulations to ease migration and facilitate informal employment are also likely to be particularly important. Improving the implementation of employment protection legislation could also help reduce unemployment. Efforts to tackle crime could help reduce the brain drain and attract skilled immigrants, which would likely boost demand for less-skilled workers via complementarities. Over the longer term, improvements in basic education will be key to reducing the excess supply of less-skilled workers.<P>Concrétiser le potentiel de l’Afrique du Sud en matière d’emploi<BR>Le chômage en Afrique du Sud est extrêmement élevé et très inégalement réparti, étant concentré parmi les jeunes Noirs moins qualifiés. L’héritage de l’apartheid peut expliquer une partie de la hausse de l’offre de travail et l’incapacité de l’économie à l’absorber, ce qui a produit les niveaux extrêmes du chômage, mais on aurait pu faire plus pour contrer cet héritage, et d’autres politiques et institutions ont contribué au mauvais fonctionnement du marché du travail. Notamment, des améliorations de la réglementation du marché des produits afin de renforcer la concurrence pourraient aider à augmenter l’emploi dans le secteur formel. Des amendements des lois et règlements municipaux afin de faciliter la migration et l’emploi informel pourraient eux aussi aider à réduire le taux de chômage. L’amélioration de la mise en place de la législation de la protection de l’emploi pourrait également aider à réduire le chômage. Des efforts pour combattre la criminalité pourrait aider à diminuer la « fuite des cerveaux » et attirer des immigrants qualifiés, ce qui augmenterait probablement la demande des travailleurs moins qualifiés par le biais des complémentarités. À plus long terme, une amélioration de l’éducation de base sera déterminante pour la réduction de l’excédant des travailleurs moins qualifiés.
    Keywords: unemployment, chômage, education, marché du travail, employment, emploi, éducation, employment protection, labour force participation rates, taux d'activité, training, formation professionnelle, South Africa, working age population, union wage differentials, Afrique du Sud, primes syndicales
    JEL: J11 J3 J5 J7
    Date: 2009–01–26
  13. By: Fiona Stewart; Juan Yermo
    Abstract: This paper discusses why the development of pension systems is important for the African region. It also looks at the current pension arrangements in selected African countries. The paper was designed as an overview/background document to provide context and assist discussion at the OECD/IOPS Global Forum on Private Pensions, which was held in Mombasa, Kenya on the 30th/31st October, 2008. The OECD and IOPS acknowledge the leadership of other organizations in terms of development and African specific issues – notably the World Bank, International Labor Organistaion (ILO) and IMF.<P>Les retraites en Afrique<BR>Le présent document examine les raisons pour lesquelles le développement des systèmes de retraite est important pour la région de l'Afrique. Il décrit également les dispositifs de retraite en vigueur dans un certain nombre de pays africains. Il s'agit d'un document de synthèse/d'information destiné à situer et à faciliter les débats du Forum mondial OCDE/OICP sur les pensions privées qui s'est tenu à Mombasa (Kenya) les 30 et 31 octobre 2008. L'OCDE et l'OICP tiennent à souligner le rôle prépondérant d'autres organisations dans le domaine du développement et en ce qui concerne les questions liées à l‘Afrique – notamment la Banque mondiale, l'Organisation internationale du travail (OIT) et le FMI.
    Keywords: pensions, retraites, demographic trends and forecasts, financement, funding, Africa, Afrique, politique sociale et du travail, poverty alleviation, réduction de la pauvreté
    JEL: G15 G18 G23 J26
    Date: 2009–01
  14. By: Konstantinos Angelopoulos; George Economides; Vangelis Vassilatos
    Abstract: This paper shows that introducing weak property rights in the standard real business cycle (RBC) model can help to explain economic fluctuations. This is motivated by the empirical observation that changes in institutions in emerging markets are related to the evolution of the main macroeconomic variables. In particular, in Mexico, the movements in productivity in the data are associated with changes in institutions, so that we can explain productivity shocks to a large extent as shocks to the quality of institutions. We find that the model with shocks to the degree of protection of property rights only - without technology shocks - can match the second moments in the data for Mexico well. In particular, the fit is better than that of the standard neoclassical model with full protection of property rights regarding the auto-correlations and cross-correlations in the data, especially those related to labor. Viewing productivity shocks as shocks to institutions is also consistent with the stylized fact of falling productivity and non-decreasing labor hours in Mexico over 1980-1994, which is a feature that the neoclassical model cannot match.
    Keywords: Economic fluctuations, institutions, property rights.
    JEL: E32 E62 D7
    Date: 2008–12
  15. By: Dalen, H.P. van; Henkens, K. (Tilburg University, Center for Economic Research)
    Abstract: Do people follow up on their intentions? In this paper we confront the emigration intentions formed by inhabitants of the Netherlands during the year 2004-2005 and the emigration steps they took in the subsequent two years. Three results stand out. First, it appears that intentions are good predictors of future emigration: 24 percent of those who had stated an intention to emigrate have actually emigrated within two years time. Second, within the group of potential emigrants, those who have emigrated and those who have not yet emigrated, do not differ much from each other. The potential emigrants who have not yet emigrated are in poorer health. Third, the forces that trigger emigration intentions are also the same forces that make people actually move.
    Keywords: emigration;intentions;behavior;public domain
    JEL: J61 F22 D84
    Date: 2008
  16. By: Haemers, W.H.; Mohammadian, A.; Tayfeh-Rezaie, B. (Tilburg University, Center for Economic Research)
    Abstract: AMS Subject Classification: 05C50, 15A42.
    Keywords: Laplacian eigenvalues of a graph;Sum of eigenvalues;Largest eigenvalue.
    JEL: C0
    Date: 2008
  17. By: Basu, Kaushik (Department of Economics, Cornell University and Indian Statistical Institute, New Delhi); Das, Sanghamitra (Indian Statistical Institute); Dutta, Bhaskar (Department of Economics, Warwick University)
    Abstract: Some studies on child labor have shown that, at the level of the household, greater land wealth leads to higher child labor, thereby casting doubt on the hypothesis that child labor is caused by poverty. This paper argues that the missing ingredient may be an explicit modeling of the labor market. We develop a simple model which suggests the possibility of an inverted-U relationship between land holdings and child labor. Using a unique data set that has child labor hours it is found that, controlling for child, household and village characteristics, the turning point beyond which more land leads to a decline in child labor occurs around 4 acres of land per household.
    Keywords: child labor ; land-holding ; labor markets
    JEL: D13 J20 O12
    Date: 2009
  18. By: Luis Ignacio Jácome; Inci Ötker; Turgut Kisinbay; Francisco F. Vázquez; Alessandro Giustiniani; David Vávra; Kotaro Ishi; Karl Friedrich Habermeier
    Abstract: This paper analyzes the monetary policy response to rising inflation in emerging and developing countries associated with the food and oil price shocks in 2007 and the first half of 2008. It reviews inflation developments in a sample of countries covering all regions and a broad range of monetary and exchange rate policy regimes; discusses the underlying causes of inflation; provides a synthesis of policy responses taken against the background of the conflicting objectives and trade-offs, the uncertainties regarding the nature of the shocks, and the additional challenges brought on by the global financial turmoil; and presents considerations for policy.
    Keywords: Monetary policy , Inflation , Emerging markets , Developing countries , Exchange rate regimes , External shocks , Oil prices , Inflation targeting , Central banks ,
    Date: 2009–01–07
  19. By: Gonzalo Salinas; Patrick A. Imam
    Abstract: The growth literature has had problems explaining the "sub-Saharan African growth dummy" in cross-country regressions. Instead of taking the usual approach of focusing on long-run growth and assuming that sub-Saharan countries have homogenous parameters in growth regressions, we concentrate our analysis on episodes of growth turnarounds (identifying growth accelerations, decelerations, and collapses) and use only West African countries in our sample. The driving force of growth turnarounds are estimated by analyzing external shocks, political and institutional changes, economic reforms, and indicators particularly relevant to the region. Using probits for a group of 22 Western African economies for the period 1960-2006, we find that growth accelerations are most clearly associated with external shocks, economic liberalization, political stability, and closeness to the coast; decelerations occurred during short-lived regimes and when corruption indices weakened; and collapses are linked to external shocks, falling domestic credit, and proximity to the coast. We then identify policy implications.
    Keywords: Economic growth , West Africa , Economic reforms , External shocks , Terms of trade , Transfers of foreigners income , Economic models ,
    Date: 2008–12–17
  20. By: Hengyun Ma; Les Oxley (University of Canterbury); John Gibson
    Abstract: Many are interested in China’s energy situation, however, numerous energy related issues in China still remain unanswered, for example, what are the potential forces driving energy demand and supply? Previous reviews focused only on fossil fuel based energy and ignored other important elements including renewable and ‘clean’ energy sources. The work presented here is intended to fill this gap by bringing the research on fossil-based and renewable energy economic studies together and identifying the potential drivers behind both energy demand and supply to provide a complete picture of China’s energy situation in the new millennium. This will be of interest to anyone concerned with the development of China’s economy in general and the energy economy, in particular.
    Keywords: China; Energy; Fossil fuels; Renewable Energy
    JEL: D24 O33 Q41
    Date: 2009–01–15
  21. By: Rongili Biswas
    Abstract: The paper attempts to construct political influence variables and explain discrepancies in fund disbursement through proper econometric specification in the Indian context.
    Keywords: political, fund, discretionary, fiscal, federalism, central, state, centre, disbursement, econometric, Indian, economists, politics, finance,
    Date: 2009
  22. By: Bertrand Wigniolle (Paris School of Economics - Centre d'Economie de la Sorbonne)
    Abstract: This paper studies the quantity-quality trade-off model of fertility, under the assumption of hyperbolic discounting. It shows that the lack of self-control may play a different role in a developed economy and in a developing one. In the first case characterized by a positive investment in quality, the lack of self control tends to reduce fertility. In the second case, it is possible that the lack of self-control leads both to no investment in quality and to a higher fertility rate. It is also proved that if parents cannot commit on their investment in quality, a small change of parameters may lead to a jump in fertility.
    Keywords: Endogenous fertility, quasi-hyperbolic preferences.
    JEL: D91 J13 O12
    Date: 2008–03
  23. By: Victor Hiller (Centre d'Economie de la Sorbonne)
    Abstract: This research focuses on the role played by cultural norms in the long run persistence of gender inequalities. Cultural norms about gender roles are considered to be endogenous and can generate gender inequality and low development traps. Indeed, when the gender gap is internalized, it leads to inegalitarian views about gender roles. Due to these inegalitarian beliefs, boys receive more education and the initial gender gap is reinforced. The existence of gender inequality traps is pointed out by the World Bank as a major obstacle for economic development (WDR 2006). The present article allows for a better understanding of the persistence of such traps and the means to escape.
    Keywords: Gender equality, endogenous cultural norms, economics development, inequality traps.
    JEL: J16 O15 Z10
    Date: 2008–11
  24. By: Martin Forster; Simon D. Smith
    Abstract: We use survival analysis to study the mortality experience of 1111 slaves living on the British West Indian sugar plantation of Mesopotamia for seven decades prior to the Emancipation Act of 1833. Using three different concepts of analysis time and employing non-parametric and semi-parametric models, our results suggest that female slaves first observed under Joseph Foster Barham II's period of ownership (1789-1832) faced an increased hazard of death compared with those first observed during his predecessor's tenure. We find no such relationship for males. We cite as a possible explanation the employment regime operated by Foster Barham II, which allocated increasing numbers of females to gang labour in the cane fields. A G-estimation model used to compensate for the 'healthy worker survivor effect' estimates that continuous exposure to such work reduced survival times by between 20 and 40 per cent. Our findings are compared with previous studies of Mesopotamia and related to the wider literature investigating the roles of fertility and mortality in undermining the sustainability of Caribbean slave populations.
    Date: 2009–01
  25. By: Tang, Hsiao Chink (Asian Development Bank)
    Abstract: In the first-half of the global financial turmoil, rising inflation was a major concern for emerging East Asian central banks. Coupled with a slowing US economy, regional central banks faced an inevitable monetary policy choice of either addressing higher inflation or supporting moderate growth. Higher food and fuel prices were the major drivers of headline inflation. Their causes, however, were a confluence of factors--whether cyclical or structural, domestic or global, supply or demand--all reinforcing each other and contributing to widespread price escalations in all classes of commodities. In response, a raft of fiscal and administrative measures of questionable effectiveness was widely implemented. Understandably, different economies faced different balance of risks between price stability and growth, but to attribute the causes of inflation to supply shocks alone was misleading and probably explained why many central banks were reluctant and/or slow to raise interest rates. This was all the more puzzling given that inflation and inflation expectations were on the rise, and central bank credibility was not in abundance. Without much credibility, inflation expectations cannot be well-anchored. To gain credibility, a central bank must "walk-the-talk" and this is only possible if it has the autonomy to do so.
    Keywords: Commodity prices; inflation; monetary policy; emerging East Asia
    JEL: E31 E52 E58
    Date: 2008–12–01
  26. By: Schou-Zibell, Lotte (Asian Development Bank); Wells, Stephen (ICMA Centre, University of Reading)
    Abstract: While India boasts a world-class equity market and increasingly important bank assets, its bond market has not kept up. The government bond market remains illiquid. The corporate bond market, in addition, remains restrictive to participants and largely arbitrage-driven. Securitization, which once had the jump on other Asian markets, has failed to take off. To meet the needs of its firms and investors, the bond market must therefore evolve. This will mean creating new market sectors such as exchange-traded interest rate and foreign exchange derivatives contracts. It will mean relaxing exchange restrictions, easing investment mandates on contractual savings institutions, reforming the stamp duty tax, and revamping disclosure requirements for corporate public offers. This paper reviews the development and outlook of the Indian bond market. It looks at the market participants-including life insurance, pension funds, mutual funds and foreign investors-and it discusses the importance to development of learning from the innovations and experiences of others.
    Keywords: India; emerging East Asia; bond market; securitization; collateralized borrowing and lending obligations (CBLO)
    JEL: F34 G28 K22 O53
    Date: 2008–12–01
  27. By: William Savedoff
    Abstract: Healthcare services are more widespread in Latin America and the Caribbean today than 50 years ago, yet this availability is not necessarily reflected in popular perceptions. This study documents the expansion of healthcare services in the Region in terms of medically-trained professionals, service utilization, and insurance eligibility. It finds that people in countries with more doctors have a more positive view of access to healthcare and greater confidence in the healthcare system. However, other factors intervene in this relationship between perceptions and objective indicators, such as the strength of local social networks and wealth. As a consequence of rising expectations, differential access and continuing discontent, public policy can be driven by factors that are least likely to improve the population's health.
    Keywords: Health Care, Health Financing, Access, Happiness, Health Policy, Latin America, Caribbean
    JEL: I18 I11 N96
    Date: 2009–01
  28. By: Carmen Pages; Lucia Madrigal; Florencia Lopez Boo
    Abstract: This paper investigates the relationship between part-time work and job satisfaction using a recent household survey from Honduras. In contrast to previous work for developed countries, this paper does not find a preference for part-time work among women. Instead, both women and men tend to prefer fulltime work, although the preference for working longer hours is stronger for men. Consistent with an interpretation of working part-time as luxury consumption, the paper finds that partnered women with children, poor women or women working in the informal sector are more likely to prefer full-time work than single women, partnered women without children, non-poor women or women working in the formal sector. These results have important implications for the design of family and child care policies in low-income countries.
    Keywords: Job Satisfaction, Gender, Part-time work, Job Flexibility.
    JEL: C13 J16 J28
    Date: 2009–01
  29. By: Alberto Chong; Hugo Nopo; Vanessa Rios
    Abstract: This paper argues that welfare programs are linked with the destruction of social capital, as measured by interpersonal trust in laboratory games. The paper employs experimental data for representative samples of individuals in four Latin American capital cities (Bogota, Lima, Montevideo, and San Jose), finding that participation in welfare programs damage trust. This result is robust to the inclusion of individual risk measures and a broad array of controls. The findings also support the notion that low take-up rates may be due to stigma linked with trust and social capital, rather than transaction costs.
    Keywords: Experiments, Surveys, Social Programs, Trust, Stigma, Latin America
    JEL: D01 O12 O10
    Date: 2009–01
  30. By: David Card (University of California Berkeley)
    Abstract: Immigration is often viewed as a proximate cause of the rising wage gap between high- and low-skilled workers. Nevertheless, there is controversy over the appropriate theoretical and empirical framework for measuring the presumed effect, and over the precise magnitudes involved. This paper offers an overview and synthesis of existing knowledge on the relationship between immigration and inequality, focusing on evidence from cross-city comparisons in the U.S. While some researchers have claimed that a cross-city research design is inherently flawed, I argue that the evidence from cross-city comparisons is remarkably consistent with recent findings based on aggregate time series data. In particular, cross-city and aggregate time series comparisons provide support for three key conclusions: (1) workers with below high school education are perfect substitutes for those with a high school education; (2) “high school equivalent” and “college equivalent” workers are imperfect substitutes, with an elasticity of substitution on the order of 2; (3) within education groups, immigrants and natives are imperfect substitutes. Together these results imply that the average impacts of recent immigrant inflows on the relative wages of U.S. natives are small. The effects on overall wage inequality (including natives and immigrants) are larger, reflecting the concentration of immigrants in the tails of the skill distribution and higher residual inequality among immigrants than natives. Even so, immigration accounts for a small share (5%) of the increase in U.S. wage inequality between 1980 and 2000.
    Date: 2009–01
  31. By: Susana Iranzo (Universitat Rovira Virgili); Giovanni Peri (University of California, Davis and NBER)
    Abstract: The remarkable increase in trade flows and in migratory flows of highly educated people are two important features of globalization of the last decades. This paper extends a two-country model of inter- and intra-industry trade to a rich environment featuring technological differences, skill differences and the possibility of international labor mobility. The model is used to explain the patterns of trade and migration as countries remove barriers to trade and to labor mobility. We calibrate the model to match the features of the Western and Eastern European members of the EU and analyze first the effects of the trade liberalization which occurred between 1989 and 2004, and then the gains and losses from migration which would occur if barriers to labor mobility are reduced. The lower barriers to migration result in significant migration of skilled workers from Eastern European countries. Interestingly, this would not only benefit the migrants and most Western European workers but, via trade, it would also benefit the workers remaining in Eastern Europe.
    Date: 2009–01
  32. By: Vona, Francesco; Consoli, Davide
    Abstract: Empirical anomalies in the dynamics of earnings following the emergence of new ICT technologies are not consistent with various re-elaborations of the human capital theory. The first part of the paper reviews critically this literature and highlights an important gap concerning the role of institutional infrastructures for the systematisation and diffusion of new knowledge. The dynamic life-cycle approach elaborated in the second part provides a coherent account of the evidence, and indicates interesting implications for innovation and educational policies.
    Keywords: Innovation; Human Capital; Earning Distribution;
    JEL: J24 D8 O31
    Date: 2009–01–27
  33. By: Attia, Sayed Moawad
    Abstract: The purpose of this paper is to track the development process in Egypt since the early sixties. The paper starts with the broad definition of the development and its goals, then it evolves to the stages of development in Egypt since the first five years plan (1960-1965) passing by the open door policy in the 70s , and the hard times of the economy at the 80s and economic reform program at the early 90s until 2004. Furthermore, the paper gives a deep concern to the issue of poverty in Egypt with an emphasis on the impact of the development at different stages on the poor in Egypt. A brief handling of the policies adopted to reduce the burden on the low income strata of the society and why these policies were not so effective. The paper is looking for changing the narrow definition of the poverty which is commonly referred to only as income poverty. Islamic vision of combating poverty is discussed with the emphasis on the fact that Islamic Religion considers work as the basic and sole way to combat poverty. Other Islamic policies are basically targeting the widows, orphans, elderly, and handicapped people. A reference to some examples from the Qur’an and Hadith were given to show to what extent Islam is giving poverty problem the due concern. The role of the informal sector as an avenue that can participate in eradicating poverty and the efforts needed from the government to make it positively involved in the development process and accordingly get rid of the poverty. A policy recommendation is introduced in order to formulate a set of ideas that the student sees them necessary to reach a comprehensive solution to the poverty problem in Egypt.
    Keywords: Developmnet; poverty; informal sector; inequality
    JEL: O1 O3
    Date: 2008–12–14
  34. By: Yin-Wong Cheung; Menzie D. Chinn; Eiji Fujii
    Abstract: We examine whether the Chinese exchange rate is misaligned and how Chinese trade flows respond to the exchange rate and to economic activity. We find, first, that the Chinese currency, the renminbi (RMB), is substantially below the value predicted by estimates based upon a cross-country sample, when using the 2006 vintage of the World Development Indicators. The economic magnitude of the mis-alignment is substantial -- on the order of 50 percent in log terms. However, the misalignment is typically not statistically significant, in the sense of being more than two standard errors away from the conditional mean. However, this finding disappears completely when using the most recent 2008 vintage of data; then the estimated undervaluation is on the order of 10 percent. Second, we find that Chinese multilateral trade flows respond to relative prices -- as represented by a trade weighted exchange rate -- but the relationship is not always precisely estimated. In addition, the direction of the effects is sometimes different from what is expected a priori. For instance, Chinese ordinary imports actually rise in response to a RMB depreciation; however, Chinese exports appear to respond to RMB depreciation in the expected manner, as long as a supply variable is included. In that sense, Chinese trade is not exceptional. Furthermore, Chinese trade with the United States appears to behave in a standard manner -- especially after the expansion in the Chinese manufacturing capital stock is accounted for. Thus, the China-US trade balance should respond to real exchange rate and relative income movements in the anticipated manner. However, in neither the case of multilateral nor bilateral trade flows should one expect quantitatively large effects arising from exchange rate changes. And, of course, these results are not informative with regard to the question of how a change in the RMB/USD exchange rate would affect the overall US trade deficit. Finally, we stress the fact that considerable uncertainty surrounds both our estimates of RMB misalignment and the responsiveness of trade flows to movements in exchange rates and output levels. In particular, the results for trade elasticities are sensitive to econometric specification, accounting for supply effects, and for the inclusion of time trends.
    JEL: F3
    Date: 2009–01
  35. By: Eswar S. Prasad
    Abstract: In this paper, I analyze India's approach to capital account liberalization through the lens of the new literature on financial globalization. India's authorities have taken a cautious and calibrated path to capital account opening, which has served the economy well in terms of reducing its vulnerability to crises. By now, the capital account has become quite open and reversing this is not a viable option. Moreover, the remaining capital controls are rapidly becoming ineffective, making the debate about capital controls rather moot. Managing de facto financial integration into international capital markets and aligning domestic macroeconomic policies in a manner that maximizes the indirect benefits and reduces the risks is the key challenge now facing India's policymakers on this front.
    JEL: F3 F4 O2
    Date: 2009–01
  36. By: Pascaline Dupas; Jonathan Robinson
    Abstract: This paper presents results from a field experiment designed to test whether savings constraints prevent the self-employed from increasing the size of their businesses. We opened interest-free savings accounts in a local village bank in rural Kenya for a randomly selected sample of poor daily income earners (such as market vendors), and collected a unique dataset constructed from self-reported logbooks that respondents filled on a daily basis. Despite the fact that the savings accounts paid no interest and featured substantial withdrawal fees, take-up and usage was high among women. In addition, we find that the savings accounts had substantial, positive impacts on productive investment levels and expenditures for women, but had no effect for men. These results imply that a substantial fraction of daily income earners face important savings constraints and have a demand for formal saving devices (even for those that offer negative de facto interest rates). We also find some suggestive evidence that female entrepreneurs draw down their working capital in response to health shocks, and that the accounts enabled the treatment group to cope with these shocks without having to liquidate their inventories.
    JEL: G21 L26 O12
    Date: 2009–01
  37. By: Maurice Obstfeld
    Abstract: Despite an abundance of cross-section, panel, and event studies, there is strikingly little convincing documentation of direct positive impacts of financial opening on the economic welfare levels or growth rates of developing countries. The econometric difficulties are similar to those that bedevil the literature on trade openness and growth, though if anything, they are more severe in the context of finance. There is also little systematic evidence that financial opening raises welfare indirectly by promoting collateral reforms of economic institutions or policies. At the same time, opening the financial account does appear to raise the frequency and severity of economic crises. Nonetheless, developing countries have moved over time in the direction of further financial openness. A plausible explanation is that financial development is a concomitant of economic growth, and a growing financial sector in an economy open to trade cannot long be insulated from cross-border financial flows. This survey discusses the policy framework in which financial globalization is most likely to prove beneficial. The reforms developing countries need to institute to make their economies safe for international asset trade are the same ones they need so as to curtail the power of entrenched economic interests and liberate the economy’s productive potential.
    JEL: F36 F43 G15 O24
    Date: 2009–01
  38. By: Angus S. Deaton
    Abstract: There is currently much debate about the effectiveness of foreign aid and about what kind of projects can engender economic development. There is skepticism about the ability of econometric analysis to resolve these issues, or of development agencies to learn from their own experience. In response, there is movement in development economics towards the use of randomized controlled trials (RCTs) to accumulate credible knowledge of what works, without over-reliance on questionable theory or statistical methods. When RCTs are not possible, this movement advocates quasi-randomization through instrumental variable (IV) techniques or natural experiments. I argue that many of these applications are unlikely to recover quantities that are useful for policy or understanding: two key issues are the misunderstanding of exogeneity, and the handling of heterogeneity. I illustrate from the literature on aid and growth. Actual randomization faces similar problems as quasi-randomization, notwithstanding rhetoric to the contrary. I argue that experiments have no special ability to produce more credible knowledge than other methods, and that actual experiments are frequently subject to practical problems that undermine any claims to statistical or epistemic superiority. I illustrate using prominent experiments in development. As with IV methods, RCT-based evaluation of projects is unlikely to lead to scientific progress in the understanding of economic development. I welcome recent trends in development experimentation away from the evaluation of projects and towards the evaluation of theoretical mechanisms.
    JEL: C21 C31 C9 C93 O11 O12 O19 O22
    Date: 2009–01
  39. By: Miet Maaertens; Johan F.M. Swinnen
    Abstract: The rapid spread of modern supply chains in developing countries is profoundly changing the way food is produced and traded. In this paper we examine the gender implications in modern supply chains. We conceptualize the various mechanisms through which women are directly affected, we review existing empirical evidence and add new survey-based evidence. Empirical findings from our own survey suggest that modern supply chains may be associated with reduced gender inequalities in rural areas. We find that women benefit more and more directly from large-scale estate production and agro-industrial processing, and the creation of employment in these modern agro-industries than from smallholder contract-farming.
    Keywords: ender, modern supply chains, vertical coordination, poverty
    JEL: O12 Q17 J16 J43
    Date: 2009
  40. By: John Gibson (University of Waikato); Xiangzheng Deng (Chinese Academy of Sciences); Geua Boe-Gibson (University of Waikato); Scott Rozelle; Jikun Huang
    Abstract: In this paper we have two objectives - one empirical; one methodological. Although China’s leaders are beginning to pay attention to health care in rural China, there are still concerns about access to health services. To examine this issue, we use measures of travel distances to health services to examine the nature of coverage in Shaanxi Province, our case study. The mean distance by road to the nearest health center is still more than 6 kilometers. When we use thresholds for access of 5 and 10 kilometers we find that more than 40 (15) percent of the rural population lives outside of these 5 (10) kilometer service areas for health centers. The nature of the access differs by geographical region and demographic composition of the household. The methodological contribution of our paper originates from a key feature of our analysis in which we use Geographic Information System (GIS) network analysis methods to measure traveling distance along the road network. We compare these measures to straight-line distance measures. Road distances (produced by network analysis) produce measures (using means) that are nearly twice as great as straight-line distances. Moreover, the errors in the measures (that is, the difference between road distances and straight-line distances) are not random. Therefore, traditional econometric methods of ameliorating the effects of measurement errors, such as instrument variables regression, will not produce consistent results when used with straight-line distances.
    Keywords: health access; measurement error; network analysis
    JEL: I12 O15
    Date: 2008–12–31
  41. By: John Gibson (University of Waikato); David McKenzie (World Bank, BREAD and IZA)
    Abstract: Seasonal work programs are increasingly advocated by international aid agencies as a way of enabling both developed and developing countries to benefit from migration. They are argued to provide workers with new skills and allow them to send remittances home, without the receiving country having to worry about long-term assimilation and the source country worrying about permanent loss of skills. However, formal evidence as to the development impact of seasonal worker programs is non-existent. This paper provides the first such evaluation, studying New Zealand's new Recognized Seasonal Employer (RSE) program which allows Pacific Island migrants to work in horticulture and viticulture in New Zealand for up to seven months per year. We use baseline and follow-up waves of surveys we are carrying out in Tonga to form difference-in-difference and propensity score matching estimates of short-term impacts on household income and consumption.
    Keywords: propensity score matching; rural household incomes; seasonal work programs
    JEL: J61 O15
    Date: 2008–12–31

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