nep-dev New Economics Papers
on Development
Issue of 2011‒01‒16
29 papers chosen by
Mark Lee
Towson University

  1. The effect of social programs and exposure to professionals on the educational aspirations of the poor By Carlos Chiapa; José Luis Garrido; Silvia Prina
  2. Why did wage inequality decrease in Mexico after NAFTA? By Raymundo M. Campos-Vázquez
  3. Did population well-being improve during Porfirian Mexico? An approximation using a Quasi-Index of human development By Raymundo M. Campos-Vázquez; Roberto Vélez-Grajales
  4. Labor supply of married women in Mexico: 1990-2000 By Eva O. Arceo Gómez; Raymundo M. Campos-Vázquez
  5. Inequality and teenagers’ educational aspirations in urban Mexico By Aniel Altamirano; Luis Felipe López-Calva; Isidro Soloaga
  6. Labor force participation by the elderly in Mexico By Edwin van Gameren
  7. The trade-offs of social assistance programs in the labor market: The case of the “Seguro Popular” program in Mexico By Mariano Bosch; Raymundo M. Campos-Vázquez
  8. Social protection programs and employment: The case of Mexico’s “Seguro Popular” program By Raymundo M. Campos-Vázquez; Melissa A. Knox
  9. The dynamics of income inequality in Mexico since NAFTA By Gerardo Esquivel
  10. Foreign Aid and Enlightened Leaders By Roland Hodler; Paul A. Raschky
  11. Poverty and survival By Sonia Bhalotra
  12. The Impact of a Food For Education Program on Schooling in Cambodia By Cheung, Maria; Perotta, Maria
  13. Negative investment in China: financing constraints and restructuring versus growth By Sai Ding; Alessandra Guariglia; John Knight
  14. Investment and financing constraints in China: does working capital management make a difference? By Sai Ding; Alessandra Guariglia; John Knight
  15. Ethnic Minority Poverty in Vietnam By Bob Baulch; Hoa Thi Minh Nguyen; Hung Thai Pham
  16. Food crisis, household welfare and HIV/AIDS treatment : evidence from Mozambique By de Walque, Damien; Kazianga, Harounan; Over, Mead; Vaillant, Julia
  17. Youth employment transitions in Latin America By Cunningham, Wendy; Salvagno, Javier Bustos
  18. The lion’s share. An experimental analysis of polygamy in Northern Nigeria. By Alistair Munro; Bereket Kebede; Marcela Tarazona-Gomez; Arjan Verschoor
  19. After the Reforms: Determinants of Wage Growth and Change in Wage Inequality in Vietnam - 1998 -2008 By FANG Zheng; Chris SAKELLARIOU
  20. Deadly Cities? A Note on Spatial Inequalities in Mortality in Sub-Saharan Africa By Isabel Günther; Kenneth Harttgen
  21. Fifteen Years On: Household Incomes in South Africa By Murray Leibbrandt; James Levinsohn
  22. Methods of household consumption measurement through surveys : experimental results from Tanzania By Beegle, Kathleen; De Weerdt, Joachim; Friedman, Jed; Gibson, John
  23. Spatial Decentralization and Program Evaluation: Theory and an Example from Indonesia By Nidhiya Menon; Mark M. Pitt
  24. Fertility Choice and Financial Development By Valerio Filoso; Erasmo Papagni
  25. Can China's rural elderly count on support from adult children ? implications of rural-to-urban migration By Giles, John; Wang, Dewen; Zhao, Changbao
  26. Gender Differences in Socioeconomic Status and Health: Evidence from the 2008 Vietnam Household Living Standard Survey By Nidhiya Menon; Yana van der Meulen Rodgers
  27. Barriers to household risk management : evidence from India By Cole, Shawn; Gine, Xavier; Tobacman, Jeremy; Topalova, Petia; Townsend, Robert; Vickery, James
  28. War and Women’s Work: Evidence from the Conflict in Nepal By Nidhiya Menon; Yana van der Meulen Rodgers
  29. Is there a metropolitan bias ? the inverse relationship between poverty and city size in selected developing countries By Ferre, Celine; Ferreira, Francisco H.G.; Lanjouw, Peter

  1. By: Carlos Chiapa (El Colegio de México); José Luis Garrido (El Colegio de México); Silvia Prina (Case Western Reserve University)
    Abstract: Investment in human capital is an important tool for reducing poverty. However, the poor may lack the capacity to aspire, which often results in underinvestment in their children’s education. This paper studies the effect of a social program on the educational aspirations of the poor, and explores the role of exposure to educated professionals as a possible channel for increasing aspirations. First, using differences-in-differences, we show that beneficiary parents of the Mexican antipoverty program PROGRESA have higher educational aspirations for their children of a third of a school year than do non-beneficiary parents. This effect corresponds to a 15% increase in the proportion of parents who aspire for their children to finish college. Then, we exploit the design of the program whose requirements cause its target population to have different levels of mandated exposure to doctors and nurses. Our triple difference estimate shows that, educational aspirations for children from high-exposure households (relative to low- exposure households) in treatment villages (relative to control villages) were a third of a school year higher six months after the start of the program (relative to before its introduction). These results suggest that the change in aspirations is driven by exposure to highly educated professionals.
    Keywords: social programs, educational aspirations, poverty, educational aspirations
    JEL: I32 I21 I22 I38 H53
    Date: 2010–12
  2. By: Raymundo M. Campos-Vázquez (El Colegio de México)
    Abstract: Contrary to what happened before NAFTA, wage inequality in Mexico decreased after 1994. This paper investigates the forces behind the post NAFTA decrease in wage inequality. Using a quantile decomposition, I show that the decline in wage inequality is driven by a decline in the returns to education and potential experience, especially at the top of the wage distribution. Supply and demand are the main contributors for this change. On the supply side, there were substantial increases in college enrollment rates after 1994, which translated into an increase in the proportion of workers with a college degree. However, this increase in supply was not met by an increase in demand for the highly educated: the proportion of the workforce in top qualified occupations and close to the top occupations did not increase as much as the increase in supply. As a result, college educated workers put wage pressures in top and less than top qualified occupations. A Bound and Johnson (1992) decomposition confirms that changes in relative supply are the main determinant behind the decrease in wage inequality.
    Keywords: wage inequality, Mexico, education, employment
    JEL: J20 J31 O15 O54
    Date: 2010–10
  3. By: Raymundo M. Campos-Vázquez (El Colegio de México); Roberto Vélez-Grajales (Centro de Estudios Espinosa Yglesias)
    Abstract: It is argued that economic growth during the Porfiriato did not improve the well-being of Mexican population. One explanation for such result is that economic growth pattern was skewed and benefited more the northern states and less the southern ones. Following the estimation method of the Human Development Index (HDI), we calculate a Human Development Quasi-Index for the Mexican states during the period 1895-1910. Results show that starting the period (1895) the northern states were already the most developed. During the next 15 year this pattern was maintained and the dispersion in human development increased marginally. Finally, it is shown that the true losers of Porfiriato were the states surrounding Mexico City and not the southern ones.
    Keywords: human development, well-being, Mexico, Porfiriato
    JEL: I30 N36 O10
    Date: 2010–12
  4. By: Eva O. Arceo Gómez (CIDE); Raymundo M. Campos-Vázquez (El Colegio de México)
    Abstract: In the last couple of decades, and in particular during the last couple of administrations, the Mexican government has implemented various social programs targeted specifically to women, such as PROGRESA/Oportunidades, a child care program, and a gender equality program (PROIGUALDAD). The impact that those programs may have on the work behavior of women largely depends on the form that the female labor supply takes, and in particular, on the labor supply elasticities with respect to own wages, and the husband’s wages. Despite this fact, the literature on female labor supply in Mexico is very scarce. To our knowledge, there is no estimate of the female labor supply elasticities at the national level. This paper fills in this gap in the literature. Using data from the 1990 and 2000 Mexican Census of Population, we estimate a structural model of labor supply through an application of Wooldridge’s (2002) threestep procedure. We …nd that the female labor supply elasticities had a rather sharp decrease between 1990 and 2000, which suggests that women are getting increasingly attached to the labor market. We also find evidence of heterogenous effects for women with young children and women of different cohorts. Even though female are now less responsive to changes in wages, the elasticities that we …nd are still large enough so that social programs aimed at modifying females´ work behavior through incentives might still be very successful.
    Keywords: wage inequality, Mexico, labor supply, employment, married women
    JEL: J20 J31 O15 O54
    Date: 2010–12
  5. By: Aniel Altamirano (LAC-UNDP); Luis Felipe López-Calva (Regional Bureau for Latin America and the Caribbean-UNDP); Isidro Soloaga (El Colegio de México)
    Abstract: The goal of this paper is to assess in which way socioeconomic and other family characteristics affect youth’s aspirations for education in urban Mexico. The theoretical approach, grounded in Sen´s capabilities approach, incorporates recent developments in two strands of the literature: a) one that assesses the impact of economic mobility on individuals´ aspirations and on the impact of aspirations on individuals behavior; and b) one that stresses the importance of agency, both, as a goal itself for human development and because its instrumental value for people to achieve whatever goals or values they regard as important. What follows presents the theoretical approach and an empirical application to Mexico DF. The paper elaborates on the plausible impact of the findings for the intergenerational transmission of inequality in LAC countries.
    Keywords: inequality, education, economic mobility
    JEL: D63 H52 I21 I22
    Date: 2010–07
  6. By: Edwin van Gameren (El Colegio de México)
    Abstract: A brief review of the aging of the Mexican population, the high labor force participation of elderly, and the lack of retirement pensions, is followed by a causal empirical analysis using a panel data set (Mexican Health and Aging Study, MHAS) of Mexicans aged 50 and more. We find that the labor force participation of elderly men is affected by their economic situation; in particular the availability of a retirement pension (after contributions to a pension plan earlier in their life) reduces participation. A better health raises male participation rates, while the health effect is absent for women. The opposite effect, from labor force participation on health status, is negligible for both genders. Access to health services, which is obtained if the partner or a child is working, reduces participation rates. Additional analysis indicates that the same variables influence the choice for a job in the formal or the informal sector, and whether a job is held in addition to a pension. The results suggest that a redesign of the social security including retirement pensions and health care services has implications for the individuals’ participation decisions, and therefore for future contributions to the insurance and pension plans.
    Keywords: labor force participation, pension, health, insurance
    JEL: J14 J22 C35 D13
    Date: 2010–12
  7. By: Mariano Bosch (Universidad de Alicante); Raymundo M. Campos-Vázquez (El Colegio de México)
    Abstract: In 2002, the Mexican government began a tremendous financial effort to provide health insurance, Seguro Popular (SP), to the 50 million uninsured in Mexico. In doing so, the states and municipalities offered virtually free health insurance to uncovered self-employed and informal salaried workers substantially altering the incentives for workers and firms to operate in the formal economy. We take advantage of the staggered implementation of the program across municipalities to estimate the effects of the SP in the labor market. We find that the SP had a negative effect in the creation of formal jobs, especially in small and medium sized firms. According to our estimates, had the program not been in place, 31.000 more employers and 300.000 new formal jobs should have been registered with Mexican social security. These represent 3.8% and 2.4% of the stock of registered employers and employees in 2002 when the program started.
    Keywords: social assistance program, informality, labor market, Mexico
    JEL: O12 I18 O15 I38 O17
    Date: 2010–10
  8. By: Raymundo M. Campos-Vázquez (El Colegio de México); Melissa A. Knox (University of Washington)
    Abstract: Mexico created Seguro Popular in 2002 with the goal of providing free or subsidized health insurance coverage to 47 million uninsured people by the year 2013. Only individuals lacking the social security protections granted to all formal sector workers and their families are eligible. Hence, one unintended consequence of the program could be an increase in the size of the informal sector. The introduction of the Seguro Popular program was conducted in stages, across municipalities and time. We exploit this variation and implement a differences-in-differences approach in order to identify the causal effect of the program in formal employment outcomes. We analyze the effect of Seguro Popular using 33 large and relatively rich cities from labor force surveys conducted from 2001 to 2004. In order to measure the effect for poorer municipalities, we also use the individual-level Oportunidades dataset that covers 136 municipalities from 2002 to 2004. We find little evidence of any correlation between Seguro Popular and the decision of workers to be employed in the formal or informal sector. One possible explanation of our findings is the low enrollment of the Seguro Popular program during the period we study. We provide suggestive evidence from the 33 cities that the result holds for the 2005 to 2006 period as well. We conclude that the recent increase in informal employment in Mexico is due to other causes.
    Keywords: Mexico, informality, employment
    JEL: J4 O1
    Date: 2010–04
  9. By: Gerardo Esquivel (El Colegio de México)
    Abstract: This paper reviews the pattern of income inequality in Mexico since 1994. It shows that in the past few years there has been an important reduction of income inequality in Mexico, which has almost reverted the sharp increase in inequality observed between 1984 and 1994. Using a Gini decomposition exercise we conclude that labor income, transfers and remittances have all played an important role in this process. We also argue that the equalizing effect of labor income and the reduction of wage inequality in Mexico can be explained by a structural change in Mexico‟s workforce composition in terms of education and experience. In general, we conclude that the recent reduction of inequality in Mexico is due to the interaction of both, the market and the State.
    Keywords: income inequality, Mexico, NAFTA, Gini decomposition
    JEL: D33 D31 E01 E24
    Date: 2010–11
  10. By: Roland Hodler (Study Center Gerzensee); Paul A. Raschky (Department of Economics, Monash University)
    Abstract: To study whether foreign aid fuels personal, regional and ethnic favoritism, we use satellite data on nighttime light for any region in any aid-recipient country, and we determine for each year and each country the region in which the current political leader was born. Having a panel with 22,850 regions in 91 aid recipient countries with yearly observations from 1992 to 2005, we compare the effect of foreign aid on nighttime light across regions. We find that in countries with poor political institutions, this effect is significantly higher in the region in which the current political leader was born than in other regions. This finding suggests that a disproportionate share of foreign aid ends up in the leader's birth region, and we argue that it supports the view that foreign aid fuels favoritism, broadly defined. We find no such difference in aid-recipient countries with sound political institutions.
    Date: 2010–12
  11. By: Sonia Bhalotra
    Abstract: A recent literature highlights the uncertainty concerning whether economic growth has any causal protective effect on health and survival. But equal rates of growth often deliver unequal rates of poverty reduction and absolute deprivation is more clearly relevant. Using state‐level panel data for India, we contribute the first estimates of the impact of changes in poverty on infant survival. We identify a significant within-state relationship which persists conditional upon state income, indicating the size of survival gains from redistribution in favour of households below the poverty line. The poverty elasticity declines over time after 1981. It is invariant to controlling for income inequality but diminished upon controlling for education, fertility and state health expenditure, and eliminated once we introduce controls for omitted trends.
    Keywords: poverty, income, inequality, infant mortality, India, economic reform, state health expenditure, panel data.
    JEL: O15 I12
    Date: 2010–12
  12. By: Cheung, Maria (Department of Economics); Perotta, Maria (Institute for International Economic Studies, Stockholm University)
    Abstract: Food for education (FFE) programs, which consist of meals served in school and in some cases take-home rations and deworming programs conditional on school attendance, are considered a powerful tool to improve educational out- comes, particularly in areas where school participation is initially low. Com- pared to other programs, such as conditional cash transfers and scholarships, school meals may provide a stronger incentive to attend school because chil- dren must be in school in order to receive the rations, and have the potential to improve nutritional and general health status as well. In this paper, we nd that the Cambodia FFE, that was implemented in six Cambodian regions be- tween 1999 and 2003, increased enrollment, school attendance and completed education. We also ask who bene ted the most, and how cost-eective such a program is compared to other types of interventions.
    Keywords: School meals; Primary education; Program evaluation; Cambodia
    JEL: D61 I20 I38 O22 O53
    Date: 2011–01–07
  13. By: Sai Ding; Alessandra Guariglia; John Knight
    Abstract: This paper attempts to address a puzzle in China’s investment pattern: despite high aggregate investment and remarkable economic growth, negative net investment is commonly found at the microeconomic level. Using a large firm-level dataset, we test three hypotheses to explain the existence and extent of negative investment in each ownership group: what we term the efficiency (or restructuring) hypothesis, the (lack of) financing hypothesis, and the (slow) growth hypothesis. Our panel data probit estimations shows that negative investment by state-owned firms can be explained mainly by inefficiency: owing to over-investment or mis-investment in the past, these firms have had to restructure and to get rid of obsolete capital in the face of increasing competition and hardening budgets. The financing explanation holds for private firms, which have had to divest in order to raise capital. However, rapid economic growth weighs against both effects in all types of firms, with a larger impact for firms in the private and foreign sectors. A tobit model, estimated to examine the determinants of the amount of negative investment, yields similar conclusions.
    Keywords: Negative investment; Divestment; Industrial restructuring; Financial constraints; Economic transition; China
    JEL: G3 O16 O53
    Date: 2010–12
  14. By: Sai Ding; Alessandra Guariglia; John Knight
    Abstract: We use a panel of over 120,000 Chinese firms of different ownership types over the period 2000-2007 to analyze the linkages between investment in fixed and working capital and financing constraints. We find that those firms characterized by high working capital display high sensitivities of investment in working capital to cash flow (WKS) and low sensitivities of investment in fixed capital to cash flow (FKS). We then construct and analyze firm-level FKS and WKS measures and find that, despite severe external financing constraints, those firms with low FKS and high WKS exhibit the highest fixed investment rates. This suggests that good working capital management may help firms to alleviate the effects of financing constraints on fixed investment.
    Keywords: Investment; Cash flow; Financing constraints; Working capital
    JEL: D92 E22
    Date: 2010–12
  15. By: Bob Baulch; Hoa Thi Minh Nguyen; Hung Thai Pham
    Abstract: series of monetary and non-monetary indicators, which show that the living standards of the ethnic minorities are improving but still lag seriously behind those of the majority Kinh-Hoa are reviewed. An analysis of the drivers of the ethnic gap, in terms of both differences in characteristics and differences in returns to those characteristics, is undertaken. [Working Paper No. 169].
    Keywords: ethinic, minorities, vietnam, living standards, monetary, non-mometary indicators, poverty,
    Date: 2011
  16. By: de Walque, Damien; Kazianga, Harounan; Over, Mead; Vaillant, Julia
    Abstract: Using panel data from Mozambique collected in 2007 and 2008, the authors explore the impact of the food crisis on the welfare of households living with HIV/AIDS. The analysis finds that there has been a real deterioration of welfare in terms of income, food consumption, and nutritional status in Mozambique between 2007 and 2008, among both HIV and comparison households. However, HIV households have not suffered more from the crisis than others. Results on the evolution of labor force participation suggest that initiation of treatment and better services in health facilities have counter-balanced the effect of the crisis by improving the health of patients and their labor force participation. In addition, the authors look at the effect of the change in welfare on the frequency of visits to a health facility of patients and on their treatment outcomes. Both variables can proxy for adherence to treatment. This is a particularly crucial issue as it affects both the health of the patient and public health, because sub-optimal adherence leads to the development of resistant forms of the virus. The paper finds no effect of the change in welfare on the frequency of visits, but does find that people who experienced a negative income shock also experienced a reduction or a slower progression in treatment outcomes.
    Keywords: Health Monitoring&Evaluation,Disease Control&Prevention,Food&Beverage Industry,Gender and Health,Food Security
    Date: 2011–01–01
  17. By: Cunningham, Wendy; Salvagno, Javier Bustos
    Abstract: Using panel data from labor force surveys in Argentina, Brazil, and Mexico, the paper maps out young people's paths from the classroom to the work place during the 1980s through the early 2000s. By decomposing transition matrices into propensity to move and rate of separation and estimating duration matrices, the authors follow young people's movements between school and work and between employment sectors to better understand the dynamics of youth employment, including where youth go upon leaving school, how long they spend in each state, and where they go upon leaving various employment states. The main conclusion of the study is that young people across all three countries follow a similar trend over their life cycle: they leave school to spend a short time in the informal sector, move to a formal position for longer spells, and finally become self-employed. The authors find evidence of decreasing segmentation between formal and informal sectors as workers age, a lower propensity for formal sector employees to return to school than workers in the same age cohort who are not in the formal sector, and that entry to self-employment is not subject to income constraints.
    Keywords: Labor Markets,Youth and Governance,Adolescent Health,Tertiary Education,Labor Policies
    Date: 2011–01–01
  18. By: Alistair Munro (National Graduate Institute for Policy Studies); Bereket Kebede (School of Development Studies, University of East Anglia); Marcela Tarazona-Gomez (School of Development Studies, University of East Anglia); Arjan Verschoor (School of Development Studies, University of East Anglia)
    Abstract: Using samples of polygamous and non-polygamous households from villages in rural areas south of Kano, Northern Nigeria we test basic theories of household behaviour. Husbands and wives play two variants of a voluntary contributions game in which endowments are private knowledge, but contributions are public. In one variant, the common pool is split equally. In the other treatment the husband allocates the pool (and wives are forewarned of this). Most partners keep back at least half of their endowment from the common pool, but we find no evidence that polygynous households are less efficient than their monogamous counterparts. We also reject a strong form of Bergstrom’s model of polygyny in which all wives receive an equal allocation. In our case, senior wives often receive more from their husbands, no matter what their contribution. Thus the return to contributions is higher for senior wives compared to their junior counterparts. When they control the allocation, polygynous men receive a higher payoff than their monogamous counterparts. We speculate on the implications of this pattern of investment and reward for the sustainability of polygynous institutions.
    Keywords: Polygyny, Polygamy, Experiment, Household, Nigeria
    Date: 2010–12
  19. By: FANG Zheng (Division of Economics, Nanyang Technological University, Singapore, 639798); Chris SAKELLARIOU (Division of Economics, Nanyang Technological University, Singapore, 639798)
    Abstract: The Vietnam “renovation” reforms were implemented during the 1990s, but their full effect was only felt many years later. We present evidence on the developments in real wage growth and inequality in Vietnam from 1998 to 2008. For men, wage growth was underpinned by both increases in endowments of productive characteristics (mainly education) as well as changes in the wage structure (mainly associated with experience) and residual changes. For women, the wage structure effect was the main contributor to wage growth and the most important determinant was the change in the pattern of the returns to experience: younger, less experienced workers enjoyed a premium compared to more experience workers, reversing the previous, opposite pattern. Conventional measures of inequality as well as background analysis show that wage inequality decreased sharply through the 1990s until 2006, but increased subsequently. Over the entire 10-year period, wage inequality increased slightly and more so for women.
    Keywords: Wage inequality, counterfactual decompositions, Asia, Vietnam
    JEL: D33 J31 J42
    Date: 2010–06
  20. By: Isabel Günther (ETH Zürich); Kenneth Harttgen (Georg-August University Göttingen)
    Abstract: In this paper we analyze if an `urban mortality penalty\' exists for today\'s developing countries, repeating the history of industrialized nations during the 19th century. We analyze the Demographic and Health Survey (DHS) of 19 Sub-Saharan African countries for differences in child and adult mortality between rural and urban areas. Our findings indicate that child mortality is higher in rural areas for almost all countries. On average child mortality rates are 13.6 percent in rural areas and `only\' 10.8 percent in urban areas. In contrast, average urban adult mortality rates (on average 14.5 percent) have indeed exceeded rural adult mortality rates (on average 12.8 percent) in many of our sample countries in the 2000s. For many countries high child mortality pockets do, however, exist in slum areas within cities. Child mortality rates in slum areas are on average 1.65 times higher than in the formal settlements of cities, but still lower than in rural areas.
    Keywords: mortality; urban; slum; inequality
    JEL: I10 I30 J10 R00
    Date: 2010–12–21
  21. By: Murray Leibbrandt; James Levinsohn
    Abstract: This paper uses national household survey data to examine changes in real per capita incomes in South Africa between 1993 and 2008; the start and the end of the first fifteen years of post-apartheid South Africa. These data show an increase in average per capita real incomes across the distribution. Over this period growth has been shared, albeit unequally, across almost the entire spectrum of incomes. However, kernel density estimations make clear that these real income changes are not dramatic and inequality has increased. We conduct a series of semi-parametric decompositions in order to understand the role of endowments and changes in the returns to these endowments in driving these observed changes in the income distribution. This analysis highlights the positive role played by changes in endowments such as access to education and social services over the period. If these endowment changes were all that changed in South Africa over the post-apartheid period, we would have seen a pervasive rightward shift of the distribution of per capita real incomes. In the rest of the paper we explore why this did not happen.
    JEL: O12
    Date: 2011–01
  22. By: Beegle, Kathleen; De Weerdt, Joachim; Friedman, Jed; Gibson, John
    Abstract: Consumption expenditure has long been the preferred measure of household living standards. However, accurate measurement is a challenge and household expenditure surveys vary widely across many dimensions, including the level of reporting, the length of the reference period, and the degree of commodity detail. These variations occur both across countries and also over time within countries. There is little current understanding of the implications of such changes for spatially and temporally consistent measurement of household consumption and poverty. A field experiment in Tanzania tests eight alternative methods to measure household consumption on a sample of 4,000 households. There are significant differences between consumption reported by the benchmark personal diary and other diary and recall formats. Under-reporting is particularly relevant in illiterate households and for urban respondents completing household diaries; recall modules measure lower consumption than a personal diary, with larger gaps among poorer households and households with more adult members. Variations in reporting accuracy by household characteristics are also discussed and differences in measured poverty as a result of survey design are explored. The study concludes with recommendations for methods of survey based consumption measurement in low-income countries.
    Keywords: Consumption,Regional Economic Development,Rural Poverty Reduction,Poverty Lines
    Date: 2010–12–01
  23. By: Nidhiya Menon (Department of Economics, Brandeis University); Mark M. Pitt (Brown University)
    Abstract: This paper proposes a novel instrumental variable method for program evaluation that only requires a single cross-section of data on the spatial intensity of programs and outcomes. The instruments are derived from a simple theoretical model of government decision-making in which governments are responsive to the attributes of places and their populations, rather than to the attributes of individuals, in making allocation decisions across space, and have a social welfare function that is spatially weakly separable, that is, that the budgeting process is multi-stage with respect to administrative districts and sub-districts. The spatial instrumental variables model is then estimated and tested by GMM with a single cross-section of Indonesian census data. The results offer support to the identification strategy proposed.
    Keywords: Spatial Decentralization, Program Evaluation, Instrumental Variables, Indonesia
    JEL: C21 H44 O12 C50
    Date: 2010–09
  24. By: Valerio Filoso; Erasmo Papagni
    Abstract: We study the consequences of broader access to credit and to capital markets on household's decisions over the number of children. In a life-cycle model of choice with forward and backward caring between parents and children, we analyze the effects of relaxing adults' borrowing constrains and broadening the opportunities for financial investment, and show how the sign of these effects depends on the role of children as a normal or inferior good in parents' preferences. We estimate the quantitative implications of our theoretical model on data from 145 countries over the period 1980-2006. Empirical results indicate that improved access to credit reduces fertility in poor countries and increases fertility in high-income countries. The effect of the development of capital markets on the number of children is negative in low-income countries and positive in the rich. When the analysis includes public pensions the main results remain the same. We also estimate the effect of the real interest rate, which proves significant and negative.
    Keywords: Fertility, Financial Markets Development, Old-Age Security.
    JEL: D1 J13 G1
    Date: 2011–01–02
  25. By: Giles, John; Wang, Dewen; Zhao, Changbao
    Abstract: This paper shows that support from the family continues to be an important source of support for the rural elderly, particularly the rural elderly over 70 years of age. Decline in likelihood of co-residence with, or in close proximity to, adult children raises the possibility that China's rural elderly will receive less support in the forms of both income and in-kind instrumental care. Although descriptive evidence on net financial transfers suggests that the elderly with migrant children will receive similar levels of financial transfers as those without migrant children, the predicted variance associated with these transfers implies a higher risk that elderly with migrant children may fall into poverty. Reducing the risk of low incomes among the elderly is one important motive for new rural pension initiatives supported by China's government, which are scheduled to be expanded to cover all rural counties by the end of the 12th Five Year Plan in 2016.
    Keywords: Rural Poverty Reduction,Population Policies,Services&Transfers to Poor,Regional Economic Development,Labor Policies
    Date: 2010–12–01
  26. By: Nidhiya Menon (Department of Economics, Brandeis University); Yana van der Meulen Rodgers (Rutgers University)
    Abstract: The study provides new evidence on gender differences in educational attainment, labor market status, health status, and land titling in Vietnam. Up-to-date statistical evidence on household well-being in Vietnam is particularly important given the heavy weight the government has placed on meeting the needs of vulnerable members of the population, reducing overall poverty, and improving societal well-being. Vietnam’s government has placed priority emphasis on achieving gender equality in the 2006 Law on Gender Equality. One of the major themes addressed in this report is Vietnam’s demonstrated progress in achieving social development targets. The study also identifies a few areas where female outcomes lag those of men, and suggests policies that might help to reduce the observed gaps.
    Date: 2010–11
  27. By: Cole, Shawn; Gine, Xavier; Tobacman, Jeremy; Topalova, Petia; Townsend, Robert; Vickery, James
    Abstract: Why do many households remain exposed to large exogenous sources of non-systematic income risk? This paper uses a series of randomized field experiments in rural India to test the importance of price and non-price factors in the adoption of an innovative rainfall insurance product. The analysis finds that demand is significantly price-elastic, but that even if insurance were offered with payout ratios similar to US, widespread coverage would not be achieved. The paper identifies key non-price frictions that limit demand: liquidity constraints, particularly among poor households, lack of trust, and limited salience. The authors suggest potential improvements in contract design to mitigate these frictions.
    Keywords: Financial Literacy,Debt Markets,Access to Finance,Emerging Markets,Labor Policies
    Date: 2010–12–01
  28. By: Nidhiya Menon (Department of Economics, Brandeis University); Yana van der Meulen Rodgers (Rutgers University)
    Abstract: In a study of the effect of war on women’s work, this paper examines how Nepal’s 1996-2006 civil conflict affected women’s decisions to engage in employment. Using three waves of Nepal Demographic and Health Survey, we employ a difference-in-difference approach to identify the impact of war on women’s employment decisions. Results indicate that as a result of the Maoist-led insurgency, women’s employment probabilities were substantially higher in 2001 and 2006 relative to the outbreak of war in 1996. These employment results also hold for self-employment decisions, and they hold for smaller sub-samples that condition on husband’s migration status and women’s status as widows or household heads. Robustness checks of the difference-in-difference estimates based on alternative empirical methods provide substantial evidence that women’s likelihood of employment increased as a consequence of the conflict.
    Date: 2010–11
  29. By: Ferre, Celine; Ferreira, Francisco H.G.; Lanjouw, Peter
    Abstract: This paper provides evidence from eight developing countries of an inverse relationship between poverty and city size. Poverty is both more widespread and deeper in very small and small towns than in large or very large cities. This basic pattern is generally robust to choice of poverty line. The paper shows, further, that for all eight countries, a majority of the urban poor live in medium, small, or very small towns. Moreover, it is shown that the greater incidence and severity of consumption poverty in smaller towns is generally compounded by similarly greater deprivation in terms of access to basic infrastructure services, such as electricity, heating gas, sewerage, and solid waste disposal. The authors illustrate for one country -- Morocco -- that inequality within large cities is not driven by a severe dichotomy between slum dwellers and others. The notion of a single cleavage between slum residents and well-to-do burghers as the driver of urban inequality in the developing world thus appears to be unsubstantiated -- at least in this case. Robustness checks are performed to assess whether the findings in the paper are driven by price variation across city-size categories, by the reliance on an income-based concept of well-being, and by the application of small-area estimation techniques for estimating poverty rates at the town and city level.
    Keywords: Rural Poverty Reduction,Subnational Economic Development,City Development Strategies,Regional Economic Development
    Date: 2010–12–01

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