nep-dev New Economics Papers
on Development
Issue of 2010‒04‒24
fourteen papers chosen by
Mark Lee
Towson University

  1. Breaking the Net: Family Structure and Street Children in Zambia. By Francesco Strobbe; Claudia Olivetti; Mireille Jacobson
  2. The trend of the Gini coefficient of China By Jiandong Chen; Dai Dai; Ming Pu; Wenxuan Hou; Qiaobin Feng
  3. How can asset accumulation strategies be meaningful for adivasis in Southern India? By Shoba Arun; Samuel Annim; Thankom Arun
  4. Trade, tastes and Nutrition in India By David Atkin
  5. Drivers of Poverty Reduction in Lagging Regions: Evidence from Rural Western China By Christiaensen, Luc, Demery, Lionel and Kuhl, Jesper
  6. The Dynamics of Women's Labour Supply in Developing Countries By Bhalotra, Sonia R.; Umana-Aponte, Marcela
  7. Migration and Urban Poverty and Inequality in China By Park, Albert; Wang, Dewen
  8. Land Certification and International Migration: Evidence from Mexico By Valsecchi, Michele
  9. Vulnerability and Coping to Disasters: A Study of Household Behaviour in Flood Prone Region of India By Unmesh Patnaik; Narayanan K
  10. Technologies, Rules, and Progress: The Case for Charter Cities By Paul Romer
  11. Estimating Infrastructural Investment Needs for India By Chandan, Sharma; Bhanumurthy, N R
  12. The Consequences of Corruption: Evidence from China By Bin Dong; Benno Torgler
  13. The Causes of Corruption: Evidence from China By Bin Dong; Benno Torgler
  14. A New Data Set of Educational Attainment in the World, 1950–2010 By Robert J. Barro; Jong-Wha Lee

  1. By: Francesco Strobbe; Claudia Olivetti; Mireille Jacobson
    Abstract: The safety net provided by the African extended family has traditionally been the basis for the assertion that “there is no such thing as an orphan in Africa” (Foster 2000). The assumption is that even families lacking sufficient resources to properly care for existing members are predisposed to take in orphans. Chronic poverty, coupled with an increasing malaria burden and the HIV/AIDS pandemic, has put this safety-net under severe strain, giving rise to an increasing number of orphans and vulnerable children and, in the extreme, to “street children.” Drawing on original fieldwork in the slums of Ndola in Northern Zambia we study the role of family structure in caring for vulnerable children. We try to isolate those features of a child’s nuclear and extended family that put him most at risk of ending up on the streets. We find that older, male children and particularly orphaned children are more likely to wind up on the street. Families with a male household head who is in poor health are more likely to originate street children. The educational level, age and employment status of the male head of household has little impact on the likelihood the family is associated with a child who has taken to the street. In contrast, households with surviving maternal grandparents or with a male head who has many sisters are significantly less likely to originate street children. These findings support the critical role that women play in poor countries, highlighting the importance of policies aimed at empowering women. At the same time, our findings show that policies aimed at improving the health of the male head of household can also yield important benefits. A back-of-the-envelope calculation suggests that moving male heads from poor to good self-rated health status can increase the rate of GDP growth by as much as 0.20 to 0.33 of a percentage point per year.
    Date: 2010
  2. By: Jiandong Chen; Dai Dai; Ming Pu; Wenxuan Hou; Qiaobin Feng
    Abstract: A literature review indicates that the main problem in calculating the Gini coefficient of Chinese residents’ income is the shortcomings of the data sources. Though many studies have tried to overcome these limitations through decomposing the nationwide Gini ratio by urban and rural areas, the final results have been underestimated, due to the overlap term or residual in the decomposition. This paper analyses the effects of the overlap term on calculating the overall Gini coefficient through a statistical approach, and estimates Chinese Gini ratios since economic reform and open door policies were adopted. Based on decomposing the Chinese Gini coefficient from 1978 to 2006, the authors find that the key factor of income inequality comes from income disparity between rural and urban inhabitants. The authors investigate the features of this income inequality between rural and urban areas. Furthermore, statistical approaches are employed to evaluate the effects of the development of urbanisation and rural-to-urban average income on the income inequality of the whole nation. The results show that accelerating the pace of urbanisation is the key issue to improving Chinese income disparity. On the basis of the above analysis, the paper proposes related policies for policy-makers.
    Date: 2010
  3. By: Shoba Arun; Samuel Annim; Thankom Arun
    Abstract: This paper is motivated by the observation that type and combination of assets play a significant role in reducing incidences of shocks by asset-poor households. Asset-based strategies treat assets not just as resources, but also as an agency to transform such resources to improve livelihood choices and tackle risks and shocks. Focusing on the case of adivasi households in the South Indian state of Kerala, we find that the type, number and combinations of specific assets (primarily social and physical capital) yield varied magnitudes of household resilience to both idiosyncratic and covariate shocks. Thus, social policies for specific social groups need to focus on the nature of asset and their combination, rather than welfare-based considerations.
    Date: 2010
  4. By: David Atkin (Economic Growth Center, Yale University)
    Abstract: This paper introduces habit formation into an otherwise standard model of international trade. Household tastes evolve over time to favor foods consumed as a child. The opening of trade causes preferred goods to rise in price, as these were relatively inexpensive in autarky. Neglecting the correlation between tastes and agro-climatic endowments overstates the short-run nutritional gains from agricultural trade liberalization and masks potential caloric losses for laborers. I examine the predictions of this model of trade with habit formation using household survey data from India, both by looking across Indian regions and by examining the consumption patterns of inter-state migrants.
    Keywords: international trade, habit formation, India, Tastes, nutrition
    JEL: O10 O12 Q17 F10
    Date: 2010–04
  5. By: Christiaensen, Luc, Demery, Lionel and Kuhl, Jesper
    Abstract: Using 2000-04 panel data this study analyses the pathways rural households followed out of poverty in two lagging provinces of China, Inner Mongolia and Gansu. Rising labour productivity in agriculture has been key, and still holds much promise. Labour mobility has also been important in Gansu. So far, rural diversification has not proven to contribute much to poverty reduction. Income transfers and agricultural tax abolishment have helped at the margin. Overall, the findings highlight that the scope for reducing poverty in lagging rural regions is often substantial in agriculture, also in countries where non-agriculture drives overall growth.
    Keywords: agriculture, migration, rural nonfarm employment, lagging region, poverty
    Date: 2010
  6. By: Bhalotra, Sonia R. (University of Bristol); Umana-Aponte, Marcela (University of Bristol)
    Abstract: This paper investigates cyclicality in women's labour supply motivated by the hypothesis that it contributes to smoothing household consumption in environments characterized by income volatility. We use comparable individual data on about 1.1 million women in 63 developing and transition countries merged with country-level panel data on GDP during 1986-2006. The scope of these data is unprecedented in the small but growing literature on labour markets in developing countries. We find that the within-country relationship of women's employment and income is, on average, negative in Asia and Latin America but positive in Africa. We suggest that amongst reasons why African women behave differently are that the conventional family structure with income pooling is less the norm, there are fewer opportunities for paid employment, and aggregate income shocks are more closely tied to rainfall variation. The findings are robust to controls for country-specific trends and potentially correlated shocks. In Asia and Latin America, characteristics that strengthen counter-cyclical responses include low education, being married, being married to men with low education, low wealth, no landownings, rural residence and fertility. These findings suggest that insurance motives underpin the dynamics of women's work participation. Examination of cyclicality in the distribution of employment across types suggests that recessions in every region are associated with a rise in self-employment amongst women. In Asia and Latin America, there is a parallel rise in paid employment and a sharp drop in non-employment. In Africa, there is a decline in paid employment which overwhelms the rise in self-employment and this is how total employment comes to decline. The results have potentially important implications for understanding labour markets, fertility timing and child outcomes.
    Keywords: insurance, women's labour supply, added worker effect, business cycles, dynamics, Africa, Asia, Latin America
    JEL: J22 J13
    Date: 2010–04
  7. By: Park, Albert (University of Oxford); Wang, Dewen (Chinese Academy of Social Sciences)
    Abstract: Using data from recent surveys of migrants and local residents in 10 cities in 2005, this paper examines how migration influences measurements of urban poverty and inequality in China, and also compares how other indicators of well-being differ for migrants and local residents. Contrary to previous studies that report that the income poverty rate of migrant households is 1.5 times that of local resident households, we find relatively small differences in the poverty rates of migrants and local residents. Although the hourly wages of migrants are much lower than those of local residents, migrant workers work longer hours and have lower dependency ratios and higher labor force participation rates. Including migrants increases somewhat measures of urban income inequality. Significant differences between migrants and local residents are found for non-income welfare indicators such as housing conditions and access to social insurance programs.
    Keywords: migration, urban, poverty, inequality, social protection, China
    JEL: J61 O15
    Date: 2010–04
  8. By: Valsecchi, Michele (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: In this paper we ask whether there is a relationship between property rights and international migration. In order to identify the impact of property rights, we consider a country-wide land certification program, which took place in Mexico throughout the 1990s, and complemented the 1992 Agrarian Law. Our identifica- tion strategy exploits the timing of the program and the heterogeneity in farmers’ eligibility into the program. We find that the change in de facto property rights is associated with a 9-16 percent increase in the likelihood of having a member abroad. The program explains a small but relevant share of the increase in migration to the United States which Mexico experienced throughout the 1990s. In this respect, we add to the current debate on the causes of Mexican migration (Hanson 2006, Hanson and McIntosh 2009, Hanson and McIntosh forthcoming).<p>
    Keywords: International migration; property rights; land titling; land reform
    JEL: D23 F22 Q15
    Date: 2010–04–19
  9. By: Unmesh Patnaik; Narayanan K
    Abstract: This paper attempts to understand the various risks faced by households living in disaster prone regions of rural India and specifically examine the effectiveness of coping mechanisms adopted by households living in these areas to hedge against the risks. The study area (districts of eastern Uttar Pradesh, India) is highly susceptible to floods with a major flood occurring every ten years and smaller ones happening every one-two years. The data is drawn from primary household surveys undertaken in the study area for flood affected households. The analysis is carried out using a risk sharing and self insurance framework and econometric modeling is carried out using binary outcomes and multivariate probit estimation through GHK (Geweke- Hajivassiliou- Keane) estimator.
    Keywords: multivariate probit estimation, consumption, risk, Vulnerability, livelihoods, developing countries, climate, disasters, rural, Uttar Pradesh, India, floods, households, insurance, econometric modelling,
    Date: 2010
  10. By: Paul Romer
    Abstract: The principal constraint to raising living standards in this century will come neither from scarce resources nor limited technologies. Rather it will come from our limited capacity to discover and implement new rules—new ideas about how to structure interactions among people, such as land titles, patents, and social norms. The central task of reducing global poverty is to find ways for developing countries to adopt new rules that are known to work better than the ones they have. [CGD Essay].
    Keywords: technologoes, social norms, global poverty, Hong Kong, Mexico City, economies, living standards, scarce resources, patents, developing countries,
    Date: 2010
  11. By: Chandan, Sharma; Bhanumurthy, N R
    Abstract: This paper attempts to systemically project the demand and fund requirements of the Indian infrastructure sector up to 2013. In the infrastructure sector transportation (rail, port, air and road), electricity and telecommunication sectors are covered in this study. Our analysis is performed in three stages. In the first stage, long run linkage between infrastructure variables and income are established by applying cointegration method. Subsequently, infrastructure demand functions are estimated by using Dynamic OLS (DOLS) technique. In the second stage, by using the estimated infrastructure elasticity to income of variables and IMF’s projected income data, we project the sector-wise demand and funding requirement. In the final stage, we put forward some suggestions for reforms in infrastructure financing, so the projected demand in the country would be achieved. The results of the analysis indicates that in important sectors like electricity and port, the government(the Planning Commission) has seriously underestimated the future demand, while in air transport sector, the demand seems to be overestimated. Only in telecommunication sector, the projections of this study are at par with their projections. Overall, we find that the government has at least 7% underestimated the infrastructure needs. Based on these results, we propose for initiation of a set of reforms in existing financing pattern of infrastructure in the country
    Keywords: Infrastructure projection; DOLS; India
    JEL: H54 C53
    Date: 2010–03
  12. By: Bin Dong (QUT); Benno Torgler (QUT)
    Abstract: With complementary Chinese data sets and alternative corruption measures, we explore the consequences of corruption. Adopting a novel approach we provide evidence that corruption can have both, positive and negative effects, on economic development. The overall impact of corruption might be the balance of the two simultaneous effects within a specific institutional environment (“grease the wheels†and “sand the wheelsâ€). Corruption is observed to considerably increase income inequality in China. We also find that corruption strongly reduces tax revenue. Looking at things from an expenditure point of view we observe that corruption significantly decreases government spending on education, R&D and public health in China. We also observe that regional corruption significantly reduces inbound foreign direct investment in Chinese regions, which indicates that the pollution haven hypothesis may not hold in China. This finding sheds a new light on the “China puzzle†that China is the largest developing host of FDI while it is appears to be very corrupt. Finally we observe that corruption substantially aggravates pollution probably through loosening environment regulation, and that it modifies the effects of trade openness and FDI on the stringency of environmental policy in a manner opposite to that observed in literature to date.
    Keywords: Corruption; China; Government; Economic Development; Inequality;
    JEL: D72 H11 K42
    Date: 2010–03–25
  13. By: Bin Dong (QUT); Benno Torgler (QUT)
    Abstract: In this study we explore in detail the causes of corruption in China using two different sets of data at the regional level (provinces and cities). We observe that regions with more anti-corruption efforts, histories of British rule, higher openness, more access to media and relatively higher wages of government employees are markedly less corrupt; while social heterogeneity, regulation, abundance of resource and state-owned enterprises substantially breed regional corruption. Moreover, fiscal decentralization is discovered to depress corruption significantly, while administrative decentralization fosters local corruption. We also find that there is currently a positive relationship between corruption and economic development in China that is mainly driven by the transition to a market economy.
    Keywords: Corruption; China; Government; Decentralization; Deterrence; Social Heterogenity
    JEL: D73 H11 K42
    Date: 2010–03–25
  14. By: Robert J. Barro; Jong-Wha Lee
    Abstract: Our panel data set on educational attainment has been updated for 146 countries from 1950 to 2010. The data are disaggregated by sex and by 5-year age intervals. We have improved the accuracy of estimation by using information from consistent census data, disaggregated by age group, along with new estimates of mortality rates and completion rates by age and education level. We use these new data to investigate how output relates to the stock of human capital, measured by overall years of schooling as well as by the composition of educational attainment of workers at various levels of education. We find schooling has a significantly positive effect on output. After controlling for the simultaneous determination of human capital and output, by using the 10-year lag of parents‘ education as an instrument variable (IV) for the current level of education, the estimated rate-of-return to an additional year of schooling ranges from 5% to 12%, close to typical Mincerian return estimates found in the labor literature.
    JEL: F43 I21 O11 O4
    Date: 2010–04

This nep-dev issue is ©2010 by Mark Lee. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.