nep-dev New Economics Papers
on Development
Issue of 2009‒07‒17
thirty-one papers chosen by
Jeong-Joon Lee
Towson University

  1. Virtuous interactions in removing exclusion: the link between foreign market access and access to education By Leonardo Becchetti; Pierluigi Conzo; Fabio Pisani
  2. Leaving Mogadishu: The War on Terror and Displacement Dynamics in the Somali Regions By Anna Lindley
  4. Institutional Development and Colonial Heritage within Brazil By Naritomi, Joana; Soares, Rodrigo R.; Assunção, Juliano J.
  5. Pakistan: Provincial Government Taxation By Roy Bahl; Sally Wallace; Musharraf Cyan
  6. Pakistan – A Globalized Tax World: An Analysis of Its International Tax Practice By Geerten M. M. Michielse
  7. Tax Assignment Revisited By Richard M. Bird
  8. Tax Policy in Pakistan: An Assessment of Major Taxes and Options for Reform By Wayne Thirsk
  9. Food Consumption in Jamaica: A Household and Social Behavior By Shiyuan Chen; Sally Wallace
  10. Pakistan: Comprehensive Individual Tax Reform: Round 2 By Sally Wallace; Harini Kannan
  11. South Africa’s Provincial Equitable Share: An Assessment of Issues and Proposals for Reform By James Alm; Jorge Martinez-Vazquez
  12. Assessing Enterprise Taxation and the Investment Climate in Pakistan By James Alm; Mir Ahmad Khan
  13. Pakistan’s Tax Gap: Estimates By Tax Calculation and Methodology By Robina Ather Ahmed; Mark Rider
  14. Determinants of Education Duration in Jamaica By Shiyuan Chen; Sally Wallace
  15. Do institutions matter? Estimating the effect of institutions on economic performance in China By Ying , Fang; Yang , Zhao
  16. Methods used for Assessments in the Rachna Program By Rachna Program
  17. The Employment Potential of Labor Intensive Industries in India's Organized Manufacturing By Deb Kusum Das
  18. Labour and Trade Unions in the Financial Sector: Challenges and Perspectives in Contemporary Brazil By Jose Ricrado Goncalves
  19. Human Development Index for Andhra Pradesh By Jatinder S Bedi
  20. China’s evolving external wealth and rising creditor position By Guonan Ma; Zhou Haiwen
  21. "Promoting Gender Equality through Stimulus Packages and Public Job Creation-- Lessons Learned from South Africa’s Expanded Public Works Programme" By Rania Antonopoulos
  22. ENVIRONMENTAL SURROUNDINGS AND PERSONAL WELL-BEING IN URBAN CHINA By Russell Smyth; Ingrid Nielsen; Qingguo Zhai; Tiemin Liu; Yin Liu; C.Y. Tang; Zhihong Wang; Zuxiang Wang; Juyong Zhang
  29. Labor Market and Immigration Behavior of Middle-Aged and Elderly Mexicans By Emma Aguila; Julie Zissimopoulos
  30. Education and Economic Growth: A Review of Literature By Akram, Naeem; Pada, Itsham ul Haq
  31. DYNAMICS OF MARKET SHARE IN THE MICROFINANCE INDUSTRY IN BANGLADESH By Mahmoud, Chowdhury Shameem; Khalily, M. A. Baqui; Wadood, Syed Naimul

  1. By: Leonardo Becchetti (University of Rome Tor Vergata); Pierluigi Conzo (University of Rome Tor Vergata); Fabio Pisani (University of Rome Tor Vergata)
    Abstract: We devise a retrospective panel data approach to evaluate the effects of fair trade affiliation on the schooling decisions of a sample of Thai organic rice producers across the past 20 years. We find that the probability of school enrolment in families with more than two children is significantly affected by affiliation years. The finding is robust when dealing with endogeneity and heterogeneity issues in the estimate. The nonpositive preaffiliation performance documents that our result is not affected by selection bias and that fair trade affiliation generates a significant break in the schooling decisions of affiliated households.
    Keywords: child schooling, market access, fair trade
    JEL: O19 O22 D64
    Date: 2009–07
  2. By: Anna Lindley (Refugee Studies Centre, University of Oxford)
    Abstract: This paper goes beyond commonly invoked macro-political explanations for conflict-related migration, offering a micro-analysis of the causes and processes of flight from Mogadishu in the last two years. It explores how particular interactions between people, their resources, and their structural contexts produce migration, and shape the process of migration. Based on qualitative research with people from Mogadishu seeking refuge in self-declared Somaliland, the paper illuminates some of the micro-level, human consequences of the ‘war on terror’ in the Somali regions.
    Keywords: Forced Migration, Somalia, Somaliland, Violence, War on Terror
    Date: 2009
  3. By: Angus Deaton (Research Program in Development Studies Center for Health and Wellbeing Princeton University); Jean Drèze (Department of Economics, Delhi School of Economics, Delhi, India)
    Abstract: The Indian economy has recently grown at historically unprecedented rates and is now one of the fastest-growing economies in the world. Real GDP per head grew at 3.95 percent a year from 1980 to 2005, and at 5.4 percent a year from 2000 to 2005. Measured at international prices, real per capita income in India, which was two-thirds of Kenya’s in 1950, and about the same as Nigeria’s, is now two and a half times as large as per capita income in both countries. Real per capita consumption has also grown rapidly, at 2.2 percent a year in the 1980s, at 2.5 percent a year in the 1990s, and at 3.9 percent a year from 2000 to 2005. Although the household survey data show much slower rates of per capita consumption growth than do these national accounts estimates, even these slower growth rates are associated with a substantial decrease in poverty since the early 1980s, Deaton and Drèze (2002), Himanshu (2007). Yet, per capita calorie intake is declining, as is the intake of many other nutrients; indeed fats are the only major nutrient group whose per capita consumption is unambiguously increasing. Today, more than three quarters of the population live in households whose per capita calorie consumption is less than 2,100 in urban areas and 2,400 in rural areas – numbers that are often cited as “minimum requirements” in India. A related concern is that anthropometric indicators of nutrition in India, for both adults and children, are among the worst in the world. Furthermore, the improvement of these measures of nutrition appears to be slow relative to what might be expected in the light of international experience and of India’s recent high rates of economic growth. Indeed, according to the National Family Health Survey, the proportion of underweight children remained virtually unchanged between 1998-99 and 2005-06 (from 47 to 46 percent for the age group of 0-3 years). 2 Undernutrition levels in India remain higher even than for most countries of sub-Saharan Africa, even though those countries are currently much poorer than India, have grown much more slowly, and have much higher levels of infant and child mortality. In this paper, we do not attempt to provide a complete and fully documented story of poverty, nutrition and growth in India. In fact, we doubt that such an account is currently possible. Instead, our aim is to present the most important facts, to point to a number of unresolved puzzles, and to present an outline of a coherent story that is consistent with the facts. As far as the decline in per capita calorie consumption is concerned, our leading hypothesis, on which much work remains to be done, is that while real incomes and real wages have increased (leading to some nutritional improvement), there has been an offsetting reduction in calorie requirements, due to declining levels of physical activity and possibly also to various improvements in the health environment. The net effect has been a slow reduction in per capita calorie consumption. Whatever the explanation, there is historical evidence of related episodes in other countries, for example in Britain from 1775 to 1850, where in spite of rising real wages, there was no apparent increase in the real consumption of food, Clark et al (1995). Per capita calorie consumption also appears to have declined in contemporary China in the 1980s and 1990s (a period of rapid improvement in nutrition indicators such as height and weight), see Du, Lu, Zhai and Popkin (2002). One of our main points is that, just as there is no tight link between incomes and calorie consumption, there is no tight link between the numbers of calories consumed and nutritional or health status. Although the number of calories is important, so are other factors, such as a balanced diet containing a reasonable proportion of fruits, vegetables, and fats, not just calories from cereals, as are factors that affect the need for and retention of calories, such as activity 3 levels, clean water, sanitation, good hygiene practices, and vaccinations. Because of changes in these other factors, the fact that people are increasingly choosing away from a diet that is heavy in cereals does not imply that nutritional status will automatically get worse. Nor should a reduction in calories associated with lower activity levels be taken to mean that Indians are currently adequately nourished; nothing could be further from the truth. We start by documenting the decline in per capita calorie consumption (Section 2.1), as well as the state of malnutrition (Section 2.2). We then look at possible reasons for the reduction in calories (Section 3.1), and try to tease out how it fits into the general picture of economic growth and malnutrition in India (Section 3.2). Section 4 concludes. We emphasize at the outset that our analysis covers the period up to 2006, so that we do not discuss what has happened to calorie consumption or to nutritional status in the subsequent two years, during which there has been a marked increase in the price of food, both in India and around the world.
    Date: 2008–08
  4. By: Naritomi, Joana (Harvard University); Soares, Rodrigo R. (Pontifical Catholic University of Rio de Janeiro (PUC-Rio)); Assunção, Juliano J. (Pontifical Catholic University of Rio de Janeiro (PUC-Rio))
    Abstract: This paper analyzes the determinants of local institutions and distribution of political power within a constant 'macro-institutional' setting. We show that characteristics of Brazilian municipalities related to institutional quality and distribution of political power are partly inherited from the colonial histories experienced by different areas of the country. Municipalities with origins tracing back to the sugar-cane colonial cycle – characterized by a polarized and oligarchic socioeconomic structure – display today more inequality in the distribution of endowments (land). Municipalities with origins tracing back to the gold colonial cycle – characterized by a heavily inefficient presence of the Portuguese state – display today worse governance practices and less access to justice. The colonial rent-seeking episodes are also correlated with lower provision of public goods and lower income per capita.
    Keywords: institutions, colonial heritage, rent-seeking, geography, Brazil
    JEL: N26 O17 O40
    Date: 2009–07
  5. By: Roy Bahl (Andrew Young School of Policy Studies, Georgia State University); Sally Wallace (Andrew Young School of Policy Studies, Georgia State University); Musharraf Cyan (International Studies Program. Andrew Young School of Policy Studies, Georgia State University)
    Abstract: The purpose of this study is to review the status of revenue mobilization by sub-national Governments in Pakistan, and to identify reform options that might lead to a higher level of revenues and a better functioning fiscal decentralization. This analysis is based on case studies of Punjab and NWFP provinces, and on data gathered in the course of field work in the two provinces.
    Keywords: Pakistan, Provincial Government, Pakistan Taxation, fiscal decentralization, revenue mobolization
    Date: 2008–12–01
  6. By: Geerten M. M. Michielse
    Abstract: The Government of Pakistan is considering an extensive tax and administrative reform by 2009 and asked the World Bank to provide a discussion paper on several technical issues. This report is dealing with the international aspects of the tax system: (a) the double tax agreements, and (b) the trade agreements.
    Keywords: Pakistan, Pakistan Taxation, tax agreements, trade agreements
    Date: 2008–12–01
  7. By: Richard M. Bird (International Studies Program. Andrew Young School of Policy Studies, Georgia State University)
    Abstract: This paper first restates the lessons to be learned from Richard Musgrave’s pioneering discussion of the tax assignment issue. Next, it considers subsequent developments in the theory of fiscal federalism related to the issue of tax assignment. Surprisingly little clear guidance is offered by the theoretical discussion when it comes to the practical policy issues facing any country with respect to tax assignment: what countries do seems to bear little relation to what theory suggests they should do. This point is illustrated this point by a brief review of tax assignments observed around the world in large emerging countries. The tax assignment issue in such countries as India and China is both important and unduly neglected: for the most part, these are still countries in search (whether they know it or not) for a sustainable solution to this problem. The paper concludes with some reflections about what seem to be future possible -- or, perhaps better, needed -- developments with respect to both the theory and practice of tax assignment, again with special reference to large emerging countries.
    Keywords: tax assignment; fiscal federalism; Richard Musgrave; Brazil, India, China, Nigeria, Russia
    Date: 2008–12–01
  8. By: Wayne Thirsk (Andrew Young School of Policy Studies, Georgia State University)
    Abstract: This paper undertakes a critical evaluation of the strengths and weaknesses of all of Pakistan’s major sources of tax revenue: the individual income tax, the corporate income tax, the sales tax, excise taxes and trade taxes on imports. For each major tax it describes the nature of the current tax base and the rate or rate structure that is applied to that base. After that exercise the paper identifies certain features of each tax that raise significant concerns for tax policy and constitute the beginning of an agenda for future tax reform. In each case the tax policy issues that have been flagged are discussed within a policy framework that appeals to the broadly accepted norms of “good” taxation and international experience in grappling with these issues. The concluding section of this paper sets forth for consideration an array of tax reform proposals that attempt to address the most important flaws and problems that have been detected in Pakistan’s tax system.
    Keywords: Pakistan, Pakistan Taxation, fiscal decentralization, revenue mobolization, sources of tax revenue
    Date: 2008–12–01
  9. By: Shiyuan Chen; Sally Wallace (Andrew Young School of Policy Studies)
    Abstract: This paper explores household food consumption in Jamaica and estimates the effects of related variables on the intensity of consumption. Use of data from the 2001 Jamaica Survey of Living Conditions permits estimation of an Engel curve that reflects the relationship between household food consumption and related variables. As a means to investigate a possible neighborhood effect on food consumption, spatial correlations pertaining to neighborhood food consumption were tested and estimated. The estimated results can be used to help formulate policies that may produce more effective food support distribution programs.
    Keywords: Food Consumption, Jamaica, food, consumption, Engel, spatial, poverty
    Date: 2009–02–01
  10. By: Sally Wallace (Andrew Young School of Policy Studies, Georgia State University); Harini Kannan
    Abstract: The fundamental proposal for comprehensive individual income tax reform in Pakistan is to provide an integrated income tax structure that pertains to income of all individuals (including non-incorporated businesses) and which otherwise dramatically simplifies the taxation of individual income in Pakistan. An integrated individual income tax would treat individuals (salaried employees, self-employed businesses, and other non-corporate entities) in a similar way by applying a given tax rate structure to taxable income.
    Keywords: Pakistan, Pakistan taxation, individual income tax, income tax
    Date: 2008–12–01
  11. By: James Alm (Andrew Young School of Policy Studies, Georgia State University); Jorge Martinez-Vazquez (International Studies Program. Andrew Young School of Policy Studies, Georgia State University)
    Abstract: The design of any system of transfers is a complex matter, and in practice very few countries are able to get it right, especially at the start of a process of decentralized system of finance. It is quite obvious that South Africa has made great strides in the design of its transfer system, primarily comprised of: an unconditional grant distributed by formula, the “Provincial Equitable Share” (PES); a system of conditional grants; and several other non-conditional transfers. In this report we focus exclusively on the analysis of the existing PES transfer and also on possible options for its reform. Our report consists of three main parts. We first summarize the main features of the PES. We then focus on what may be lacking with the current system. We finish with options for reform.
    Keywords: South Africa, provincial government, fiscal decentralziation, grants, Provincial Equitable Share (PES)
    Date: 2009–03–01
  12. By: James Alm (Andrew Young School of Policy Studies, Georgia State University); Mir Ahmad Khan
    Abstract: The Pakistan system of taxing enterprises has undergone some major changes in recent years. Nevertheless, the corporate tax system remains plagued by a number of problems. The existence of numerous exemption programs has significantly reduced tax revenues, and has greatly distorted the allocation of investment across sectors and asset types. There also seems to exist significant amounts of tax evasion, evasion that also distorts resource allocation, reduces tax revenues, and compromises the distributional objectives of the system. In part as a result of tax avoidance and tax evasion, the tax base has shrunk over time, further reducing revenues and leaving the more visible taxpayers still out of the tax net. The extensive use of tax incentives is seldom tracked, quantified, and evaluated, and the intended effects on economic growth are uncertain. The incentives are only one feature of the tax system that contributes to an overly complicated system, complications that illustrate the limitations of the tax administration. The tax system was designed for times and circumstances that are long past, and the system has evolved over time in a piecemeal, ad hoc manner with little apparent thought given to the ways in which the pieces of the system need to fit together.
    Keywords: Pakistan, Pakistan Taxation, Pakistan system of taxing enterprises, tax avoidance, tax evasion
    Date: 2008–12–01
  13. By: Robina Ather Ahmed; Mark Rider (Andrew Young School of Policy Studies, Georgia State University)
    Abstract: This report provides estimates of Pakistan’s tax gap by type of tax and describes the methodologies and data used to produce these estimates. A country’s tax gap is the amount of tax that goes uncollected due to non-compliance with the tax law. For estimation purposes, the operational definition of the tax gap is the difference between potential and actual federal tax revenue, where potential revenue is the amount of tax that the government would collect if everyone fully complied with the tax law. It is a simple matter to get actual tax collections by type of tax, so the trick to estimating a country’s tax gap is to obtain a reasonably accurate measure of potential tax revenue. Our basic strategy is to use micro-simulation models to estimate the potential revenues from Pakistan’s federal taxes of which there are only a hand full. Such modeling requires micro-economic data with information about the relevant tax bases and a tax calculator to simulate tax liabilities by type of tax. The advantage of this approach is the detailed information that it provides on the rate of compliance by type of tax which should be helpful in targeting scarce tax enforcement resources and in evaluating tax policy reforms.
    Keywords: Pakistan, Pakistan Taxation, tax gap, non-compliance
    Date: 2008–12–01
  14. By: Shiyuan Chen; Sally Wallace (Andrew Young School of Policy Studies, Georgia State University)
    Abstract: In this paper we have applied discrete time survival analysis techniques to analyze education duration in Jamaica. Based on the Jamaica Survey of Living Conditions 2002, we are able to estimate the effects of household, individual, and other related covariates on the risks of students dropping out. We compare the discrete time Cox model and discrete time logit model and determined that the two estimations are consistent. The estimation results measure the effects of the covariates and can be used to predict the dropout risks of particular students in each grade, which could provide useful implications for the formation of policy to improve education in Jamaica.
    Keywords: education; dropout; time; survival analysis; poverty
    Date: 2008–12–01
  15. By: Ying , Fang (BOFIT); Yang , Zhao (BOFIT)
    Abstract: This paper estimates the effect of institutions on economic performance using cross-city data from China. We argue that China's ongoing reforms are part of a long and circuitous historical transition from antiquity to modernity, which started about 150 years ago. Learning from Western countries has been a central aspect of this historical process. The West had a laThis paper estimates the effect of institutions on economic performance using cross-city data from China. We argue that China's ongoing reforms are part of a long and circuitous historical transition from antiquity to modernity, which started about 150 years ago. Learning from Western countries has been a central aspect of this historical process. The West had a large influence on the early stage of this transition, which has persisted to current reforms. This study uses the enrollment in Christian missionary lower primary schools in China in 1919 as an instrument for present institutions. Employing a two-stage least squares method, we find that the effect of institutions on economic performance in China is positive and significant. The results are robust according to various tests including additional controls, such as geographic factors and government policy-related variables.
    Keywords: institutions; christian; geography; policy
    JEL: O11 O53 P16 P51
    Date: 2009–07–06
  16. By: Rachna Program
    Abstract: Over the life of RACHNA, three sets of population based surveys were conducted: 1. Program wide baseline and endline surveys for INHP-II and Chayan to assess program performance; 2.Rapid Assessments Surveys (RAPS) in a sample of one district, referred to as a panel district, in each of the INHP-II program states to study the effect of program processes on outcomes; 3. Two evaluation Research studies with a pre-test, post-test, , quasi-experimental evaluation design in two program states, Uttar Pradesh and Andra Pradesh, respectively, to test the effectiveness. This paper describes the methodology of these surveys, briefly compares the methods used in these surveys with other large scale surveys such as the National Family Health Survey (NFHS), the District Level Household Survey (DLHS)/Reproductive and Child Health Survey (RCH) and the Coverage Evaluation Survey (CES), and discusses methodological issues relevant to the analysis used in this series of working papers.
    Keywords: INHP-II, Chayan; Data Collection; Rapid Assessments (RAPs); Nutrition; Evaluation Research; Newborn Evaluation Research; Coverage Evaluation Services; District Level Household Survey (DLHS); Reproductive and Child Health Survey (RCH)
    Date: 2009
  17. By: Deb Kusum Das
    Abstract: This paper attempts to identify and examine labor intensive industries in the organized manufacturing sector in India in order to understand their employment generation potential. Using the data from the Annual Survey of Industries (Government of India, various issues), the labor intensity for 97 industries at the 4-digit disaggregate level was computed for the period 1990-91 to 2003-04. The study identifies 31 industries as ‘labor intensive industries’ within India’s organized manufacturing sector. The paper briefly highlights the plausible factors that could have had an impact on labor intensity as well as on the performance of the organized manufacturing sector over the study period. [WP No. 236].
    Keywords: labor internsive industries, labour, employment, India, manufacturing, sector, elasticity, growth, productivity, capital, organized
    Date: 2009
  18. By: Jose Ricrado Goncalves
    Abstract: The configuration of the liquid wealth involved a reorganization of society and the financial system with on labour and trade union organization in Brazil. The changes involved the redefinition of the profile of the bank and regulation standards with implications for the collective bargaining. These changes involved the reorganization of work in the financial sector according to the new investment trends organized through financial holding companies that turned out to exceed their operations in the traditional banks branches. Thus, the organization of the workers in the financial system no longer fits within the bank workers category. In this framework, the trade unions developed strategies of adaptation and resistance in order to maintain and expand the ability to represent the workers effectively. As a result, we must rethink the boundaries of the concept of category of workers and the possibilities of the new forms of workers representation in the financial system that could now be articulated in organizations based on their branch of activity.
    Keywords: Labour; trade unions; financial sector; Brazil; banking industry; financial holdings; financialisation; bank employees;collective bargainig;
    Date: 2009
  19. By: Jatinder S Bedi
    Abstract: The method used to measure Human Development are reviewed in order to measure Human Development Index for rural AP by considering indicators such as economic attainment, longevity and education. The estimates are worked out with and without considering inequalities in economic attainment indicator. IAMR survey data for year 2001 is used for this study. However, for making comparison over time, data and analysis of data undertaken in other study is also used. In other words, primarily for the analysis of data for year 2001, inequalities in all indicators were taken into consideration to measure Human Development using both UNDP and Principal Component Analysis. The comparison of results shows that there has been only marginal improvement in Human development during the 1990s in rural AP considering only inequality in economic indicator using UNDP method. However, the results may differ significantly in case inequalities in all the variables are taken into account and depending upon the methodology used as is demonstrated by analysis of data for year 2001.
    Keywords: Human Development; Andhra Pradesh; Rural; Human Development Index; UNDP; education; economic attainment; longevity; indicators; Inequalities Adjusted Indicators; Inequality Adjusted Education Indicator; Inequality Adjusted Health Indicator; inflation
    Date: 2009
  20. By: Guonan Ma; Zhou Haiwen
    Abstract: China’s emergence as a major player in world trade is well known, but its rising role in global finance is perhaps underappreciated. China is the second largest creditor in the world today, with a net creditor position of exceeding 30% of GDP in 2007. In this paper, we test the importance of growth differential, demographics, government debt, financial depth and the exchange rate in shaping China’s net foreign asset position. Our findings highlight the sharp fall in youth dependency as one key driver behind China’s puzzlingly large net lender position and also confirm the neoclassical prediction that faster growth attracts more capital inflows. Looking ahead, our findings also suggest that China is unlikely to turn into a meaningful net debtor nation over the next two decades. Moreover, we project that, as China engages in increased cross-border asset trade, its gross foreign assets and liabilities could triple in 10 years. While adjustments in China’s net foreign asset position are expected to be gradual and may thus facilitate its capital account opening, increasing exposure to external shocks and growing interactions with the rest of the world may present challenges both to China and to the global financial system.
    Keywords: international investment position, external balance sheet, current account balance, financial integration
    Date: 2009–07
  21. By: Rania Antonopoulos
    Abstract: Beyond loss of income, joblessness is associated with greater poverty, marginalization, and social exclusion; the current global crisis is clearly not helping. In this new Public Policy Brief, Research Scholar Rania Antonopoulos explores the impact of both joblessness and employment expansion on poverty, paying particular attention to the gender aspects of poverty and poverty-reducing public employment schemes targeting poor women. The author presents the results of a Levy Institute study that examines the macroeconomic consequences of scaling up South Africa's Expanded Public Works Programme by adding to it a new sector for social service delivery in health and education. She notes that gaps in such services for households that cannot afford to pay for them are mostly filled by long hours of invisible, unpaid work performed by women and children. Her proposed employment creation program addresses several policy objectives: income and job generation, provisioning of communities' unmet needs, skill enhancement for a new cadre of workers, and promotion of gender equality by addressing the overtaxed time of women.
    Date: 2009–06
  22. By: Russell Smyth; Ingrid Nielsen; Qingguo Zhai; Tiemin Liu; Yin Liu; C.Y. Tang; Zhihong Wang; Zuxiang Wang; Juyong Zhang
    Abstract: We examine the relationship between atmospheric pollution, water pollution, traffic congestion, access to parkland and personal well-being using a survey administered across six Chinese cities in 2007. In contrast to existing studies of the determinants of well-being by economists, which have typically employed single item indicators to measure well-being, we use the Personal Well-Being Index (PWI). We also employ the Job Satisfaction Survey (JSS) to measure job satisfaction, which is one of the variables for which we control when examining the relationship between environmental surroundings and personal well-being. Previous research by psychologists has shown the PWI and JSS to have good psychometric properties in western and Chinese samples. A robust finding is that in cities with higher levels of atmospheric pollution and traffic congestion, respondents report lower levels of personal well-being ceteris paribus. We find that a one standard deviation increase in suspended particles or sulphur dioxide emissions is roughly equivalent to a 12-13 percent reduction in average monthly income in the six cities. This result suggests that the personal well-being of China’s urban population can be enhanced if China were to pursue a more balanced growth path which curtailed atmospheric pollution.
    Keywords: China, Environment, Pollution, Personal Well-Being.
    JEL: A13 D60
    Date: 2009–06
  23. By: James Ang
    Abstract: This paper examines the role of financial sector policies in determining private investment in the economies of India and Malaysia. The results suggest that the presence of significant directed credit programs favoring certain priority sectors in the economies appear to be harmful for private capital formation in both countries. Interest rate controls seem to have a positive impact on investment in the private sector, and the effect is found to be stronger in India. While high reserve and liquidity requirements exert a negative influence on private investment in India, the effect is found to be positive in Malaysia.
    Keywords: Private investment; financial sector policies; India; Malaysia.
    JEL: E22 O16 O53
    Date: 2009–06
  24. By: Asadul Islam; Pushkar Maitra
    Abstract: This paper estimates, using a large panel data set from rural Bangladesh, the effects of health shocks on household consumption and how access to microcredit affects households' response to such shocks. Our results suggest that even though in general consumption remains stable in many cases when households are exposed to health shocks, households that have access to microcredit appear to cope (slightly) better. The most important instrument used by households appear be sales of productive assets (livestock) and there is a significant mitigating effect of microcredit: households that have access to microcredit do not need to sell livestock to the extent households that do not have access to microcredit need to, in order to insure consumption against health shocks. The results suggest that microcredit organizations and microcredit per se have an insurance role to play, an aspect that has not been analyzed previously.
    Keywords: Health Shocks, Microcredit, Consumption Insurance, Bangladesh.
    JEL: O12 I10 C23
    Date: 2009–06
  25. By: Asadul Islam Author-X-Name-Asadul
    Abstract: This paper evaluates the impact of microfinance on household consumption using a new, large and unique cross-section data set from Bangladesh. The richness of the data and program eligibility criterion allow the use of a number of non-experimental impact evaluation techniques, in particular instrumental variable (IV) estimation and propensity score matching (PSM). Estimates from both IV and PSM strategies have been interpreted as average causal effects that are valid for various groups of participants in microfinance. The overall results indicate that the effects of micro loans are not robust across all groups of poor household borrowers. It appears that the poorest of the poor participants are among those who benefit most. The impact estimates are lower, or sometimes even negative, for those households marginal to the participation decision. The effects of participation are, in general, stronger for male borrowers. These results hold across different specifications and methods, including correction for various sources of selection bias (including possible spill-over effects).
    Keywords: Microfinance, treatment effect, Matching, Consumption.
    JEL: C31 H43 I30 L30 O12
    Date: 2009–06
  26. By: James Ang; Kunal Sen
    Abstract: In this paper, we provide a comparative account of the evolution of private saving in India and Malaysia, and analyze how policy changes in the financial sectors and pension systems help explain differences in their saving performance. Using the ARDL bounds estimation procedure, we find a fairly robust long-run relationship between private saving and its determinants in both countries. Consistent with the predictions made in the life cycle model, our results indicate that higher income growth stimulates private saving and an increase in age dependency retards private saving. The results provide some support for the hypothesis that financial liberalization results in lower private saving in both countries. The evidence also indicates that expected pension benefits tend to stimulate private saving in India, but that the reverse is found in Malaysia.
    Keywords: private savings; pension saving; financial liberalization; India; Malaysia.
    JEL: C22 O16 O53
    Date: 2009–06
  27. By: James Ang
    Abstract: Although theory emphasizes the role of financial market frictions in explaining income inequality, there is little empirical research exploring how financial development and financial sector reforms influence the evolution of income inequality. This paper examines how finance impacts on income inequality in India using annual time series data for over half a century. The results indicate that while financial development helps reduce income inequality, financial liberalization seems to have exacerbated income inequality in India. Our results are robust to the use of different measures for financial development and financial liberalization.
    Keywords: Financial development; financial liberalization, income inequality; India.
    JEL: G28 O16 O53
    Date: 2009–06
  28. By: Russell Smyth; Xiaolei Qian
    Abstract: This paper examines how individual preferences for redistribution depend on beliefs about what determines one’s lot in life and self-assessed prospects for climbing the social ladder in urban China. We find that both beliefs about what determines one’s lot in life and subjective perceptions of future mobility are correlated with the formation of left-wing beliefs and, by extension, preferences for redistribution. We find that the marginal effects of the variables measuring one’s lot in life are larger than self-assessed prospects for climbing the social ladder. These findings are robust to the inclusion of control variables for the personal characteristics of the respondent, including his or her ideology, and the location in which he or she lives.
    Keywords: Equal opportunities, Redistribution, Mobility.
    JEL: D31 D63
    Date: 2009–06
  29. By: Emma Aguila (RAND); Julie Zissimopoulos (RAND)
    Abstract: In this study we analyzed the retirement behavior of Mexicans with migration spells to the United States that returned to Mexico and non-migrants. Our analysis is based on rich panel data from the Mexican Health and Aging Study (MHAS). Approximately 9 percent of MHAS respondents aged 50 and older reported having lived or worked in the United States. These return migrants were more likely to be working at older ages than non-migrants. Consistent with much of the prior research on retirement in the United States and other developed countries, Mexican non-migrants and return migrants were responsive to institutional incentives. Both groups were more likely to retire if they had publicly provided health insurance and pensions. In addition, receipt of U.S. Social Security benefits increased retirement rates among return migrants. Return migrants were more likely to report being in poor health and this also increased the likelihood of retiring. The 2004 draft of an Agreement on Social Security would coordinate benefits across United States and Mexico boundaries to protect the benefits of persons who have worked in foreign countries. The agreement would likely increase the number of authorized and unauthorized Mexican workers and family member eligible for Social Security benefits. The responsiveness of current, older Mexican return migrants to pension benefits, suggests that an Agreement would affect the retirement behavior of Mexican migrants.
    Date: 2008–09
  30. By: Akram, Naeem; Pada, Itsham ul Haq
    Abstract: Human Capital plays pivotal role for economic growth process. The aim of this paper is to present a brief overview of the studies conducted on the relationship between education and economic growth. Most of the studies are cross-sectional, including developing and developed countries and single country studies are very few in numbers. A general consensus emerges from the review of literature is that there exists a positive relationship between education and economic growth. However in cross section of countries it is assumed that data for each country is same but this assumption become void when studies uses data from opposing conditions of countries. So there is a need for a study on Pakistan that will account fall the impacts of traditional and nontraditional educational systems on economic growth.
    Keywords: Education; Growth; Human capital
    JEL: H5 J24 O4
    Date: 2009–07–12
  31. By: Mahmoud, Chowdhury Shameem; Khalily, M. A. Baqui; Wadood, Syed Naimul
    Abstract: We discuss evidence that the microcredit industry in Bangladesh has seen emergence of large variations in the size of the microfinance institutions operating in the market-- on the one hand, there are large national-level MFIs, while on the other hand, small localized MFIs operating only within the confines of a small area. Data from a recent survey of Pathrail union in Tangail district, a seasoned place for microcredit, reveals that within the local market competition is becoming more and more intense over time between established national-level MFIs and newly emerging local-level MFIs for market shares in terms of loan amount as well as borrowed members. Data reveals that there is market segmentation where some borrowers and MFIs opt for a package of low interest rates tied with low amount of loan disbursed and some other borrowers and MFIs settle for a package of high interest rates tied with high amount of loan disbursed. A Tobit regression estimation of member market shares in village micro credit market shows that size of the MFI, years of operation in the village, average loan size, deposit interest rates, loan amount disbursed for unique loan purposes (i.e., housing loan) are key determinants in determining MFI shares of a village microcredit market.
    Keywords: Microcredit; Market Share; Product and Provider Characteristics of Microcredit
    JEL: L11 C34 D02 D4 L1 G21
    Date: 2009–07–10

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