nep-dev New Economics Papers
on Development
Issue of 2011‒02‒12
24 papers chosen by
Mark Lee
Towson University

  1. Mother's Autonomy and Child Welfare By Tanika Chakraborty
  2. How Effective are Cash Transfer Programs at Improving Nutritional Status? By Seth R. Gitter; James Manley; Vanya Slavchevska
  3. Good and Bad Institutions: Is the Debate Over? Cross-Country Firm-Level Evidence from the Textile Industry By Bhaumik, Sumon K.; Dimova, Ralitza
  4. Motivations for Remittances: Evidence from Moldova By Piracha, Matloob; Saraogi, Amrita
  5. Why Are Saving Rates So High in China? By Yang, Dennis Tao; Zhang, Junsen; Zhou, Shaojie
  6. International capital flows to emerging and developing countries: national and global determinants By Joseph P. Byrne; Norbert Fiess
  7. Channels Through Which Human Capital Inequality Influences Economic Growth By Amparo Castelló-Climent
  8. A Generalized Fact and Model of Long-Run Economic Growth: Kaldor Fact as a Special Case By Daniel Danxia Xie
  9. Relative Concerns of Rural-to-Urban Migrants in China By AKAY Alpaslan; BARGAIN Olivier; ZIMMERMANN Klaus F.
  10. Services liberalization in preferential trade arrangements : the case of Kenya By Balistreri , Edward J.; Tarr, David G.
  11. The impacts of climate variability on welfare in rural Mexico By Skoufias, Emmanuel; Vinha, Katja; Conroy, Hector V.
  12. Drought and Civil War in Sub-Saharan Africa By Mathieu Couttenier; Raphael Soubeyran
  13. Corruption and Social Interaction: Evidence from China By Bin Dong; Benno Torgler
  14. Democracy, Property Rights, Income Equality, and Corruption By Bin Dong; Benno Torgler
  15. Foreign direct investment, aid, and terrorism: an analysis of developing countries By Subhayu Bandyopadhyay; Todd Sandler; Javed Younas
  16. Does Openness Lead to More or Less Development? The Case of Health Deterioration By Paris Cleanthous
  17. The Effects of Childhood Health on Adult Health and SES in China By James P. Smith; Yan Shen; John Strauss; Zhe Yang; Yaohui Zhao
  18. The Role of Passionate Individuals in Economic Development By Zakharenko, Roman
  19. The myth of post-reform income stagnation: Evidence from Brazil and Mexico By de Carvalho Filho, Irineu; Chamon, Marcos
  20. Determinants of Poverty in Elderly-Headed Households in the Philippines By Mapa, Dennis S.; Bersales , Lisa Grace S.; Albis, Manuel Leonard F.; Daquis , John Carlo P.
  21. Gender, Time Use, and Labor Income in Guinea: Micro and Macro Analyses By Parra Osorio, Juan Carlos; Wodon, Quentin
  22. Experimentally-validated survey evidence on individual risk attitudes in rural Thailand By Hardeweg, Bernd; Menkhoff, Lukas; Waibel, Hermann
  23. Relative Concerns of Rural-to-Urban Migrants in China By Alpaslan Akay; Olivier Bargain; Klaus F. Zimmermann
  24. Accounting for China's Growth in 1952-2008: China's growth performance debate revisited with a newly constructed data set By Harry X. WU

  1. By: Tanika Chakraborty
    Abstract: We construct a new, direct measure of female autonomy in household decision-making by creating an index from the principal components of a variety of household variables on which mother of a child takes decision. We then examine its impacts on her child's secondary education in Mexico and find that the children of Mexican mothers with greater autonomy in domestic decision making have higher enrolment in and lower probability of dropping out of secondary school. We use the relative proximity of spousal parents as instruments for relative autonomy to ameliorate the potential endogeneity between autonomy and welfare outcomes. We argue that omitted variables that may drive education and autonomy are likely to be uncorrelated with the ones driving location choice of families given the migration patterns in Mexico. However, the positive autonomy effect is weaker and non-existent for older children and for girls suggesting that gender-directed conditional cash transfer policies may not necessarily hasten educational and gender transition in the process of development.
    Keywords: Female Empowerment, Principal Component, Education, Instrumental Variable
    JEL: D1 I2 J1
    Date: 2011
  2. By: Seth R. Gitter (Department of Economics, Towson University); James Manley (Department of Economics, Towson University); Vanya Slavchevska (American University)
    Abstract: Conditional cash transfer programmes are a widely applied social protection scheme that has achieved successes in fighting poverty worldwide. In spite of hundreds of papers and thousands of references having been written about these programmes, two questions remain. First, what is behind the failure of conditional cash transfer programmes to consistently improve nutritional status? Second, conditionalities are expensive. To what extent is the conditional character of cash transfer programmes the reason for their success? To answer these questions, we reviewed the literature linking nutritional status to interventions involving cash transfers in developing countries. After surveying 40,000 articles we identified 17 such studies of 14 social assistance programmes and verified that the weighted average impact of all estimates was very close to zero. To investigate the pathways behind success and failure we assembled data on a variety of study, programme, recipient, and country characteristics, and used statistical meta-analysis to investigate correlations between these and estimated impacts. Our key findings include reifying the importance of targeting young children, use of nutritional supplements, and providing transfers large enough to be of use. The setting of conditions on transfers can work to the benefit or detriment of child nutritional status depending on the type of condition and whether the condition is enforced. We also find higher marginal effects in countries with poorer health care systems and more dangerous disease environments. Because of the ambiguity and potential for both help and harm, we conclude that program evaluation must be integrated into such interventions. One important outcome of our search is a list of evaluated programmes which can now be used as a starting point for future research qualitatively investigating causal pathways behind the broad correlations we have identified.
    Keywords: Latin America, Cash Transfer Programs.
    Date: 2010–11
  3. By: Bhaumik, Sumon K. (Aston University); Dimova, Ralitza (University of Manchester)
    Abstract: Using firm-level data from nine developing countries we demonstrate that (a) certain institutions like restrictive labour market regulations that are considered to be bad for economic growth might be beneficial for production efficiency, whereas (b) good business environment which is considered to be beneficial for economic growth might have an adverse impact on production efficiency. We argue that our results suggest that the debate about the implications of institutional quality is far from being over, and classification of institutions into "good" and "bad" might be premature.
    Keywords: institutional quality, production efficiency, stochastic frontier model
    JEL: D02 D23 D24
    Date: 2011–01
  4. By: Piracha, Matloob (University of Kent); Saraogi, Amrita (University of Kent)
    Abstract: This paper explores the factors that account for the receipt of remittances across households in Moldova who have migrants abroad. Unlike most of the existing literature, we approach our research question from the perspective of the recipient household and use it to interpret the determinants/motivations of remittances. Our results show that a combination of household and migrant characteristics and some community level variables are the key elements in explaining the remittance behaviour in Moldova. Drawing from these estimates, we conclude that altruism and investment (proxied by the level of economic development at the regional level) are the two main motives behind remittance flows to Moldova.
    Keywords: remittances, migration, Moldova
    JEL: F22 F24
    Date: 2011–01
  5. By: Yang, Dennis Tao (Chinese University of Hong Kong); Zhang, Junsen (Chinese University of Hong Kong); Zhou, Shaojie (Tsinghua University)
    Abstract: In this paper, we define "The Chinese Saving Puzzle" as the persistently high national saving rate at 34-53 percent of gross domestic product (GDP) in the past three decades and a surge in the saving rate by 11 percentage points from 2000-2008. Using data from the Flow of Funds Accounts (FFA) and Urban Household Surveys (UHS) supplemented by the findings from existing studies, we analyze the sources and causes of China's high and rising saving rates in the government, corporate, and household sectors. Although the causes of China's high saving are complex, we suggest that the evolving economic, demographic, and policy trends in the internal and external environments of the Chinese economy will likely lead to a decline in national saving in the foreseeable future.
    Keywords: aggregate saving, international comparison, household behavior, demographic structure, China
    JEL: D91 E21 J10
    Date: 2011–01
  6. By: Joseph P. Byrne; Norbert Fiess
    Abstract: This paper examines international capital flows to emerging and developing countries. We assess whether commonalities exist, the permanence of shocks to commonalities and their determinants. Also, we consider individual country coherence with global capital flows and we measure the extent of co-movements in the volatility of capital flows. Our results suggest there are commonalities in capital inflows, although aggregate or disaggregate capital flows respond differently to shocks. We find that the US long run real interest rate is an important determinant of global capital flows, and real commodity prices are relevant but to a lesser extent. We also find a role for human capital in explaining why some countries can successfully ride the wave of financial globalisation.
    Keywords: Capital Flows; Emerging Markets; Developing Countries; Global Factors
    JEL: F32 F34
    Date: 2011–01
  7. By: Amparo Castelló-Climent (Institute of International Economics, University of Valencia)
    Abstract: This paper empirically investigates the theoretical predictions of some of the channels through which human capital inequality may discourage investment and growth. In a cross-section of countries over the period 1960-2000, findings reveal that, all other things being equal, a greater degree of human capital inequality increases fertility rates and reduces life expectancy, which in turn hampers the accumulation rates of human capital. This effect is reinforced in the countries where individuals find it difficult to access credit. Extensive sensitivity analyses show the results are robust across specifications and are not driven by atypical observations, endogenous regressors or unobservable heterogeneity.
    Keywords: Human capital inequality, structural form, investment rates, economic growth
    JEL: O1 O4
    Date: 2011–01
  8. By: Daniel Danxia Xie (Peterson Institute for International Economics)
    Abstract: This paper provides new evidence on the long-run relationship between economic growth and labor's share in national income, based on a comprehensive panel data set for 123 countries from 1950 to 2004. Xie's primary finding is that labor's share follows a cubic relationship with real GDP per capita over the long process of development. At the beginning of the modern economic growth process, the share of labor in national income first decreases until an initial threshold is reached. After that, labor's share keeps increasing until the country's GDP per capita reaches a second threshold before falling again. Xie argues that these dynamics apply not only to the less developed countries in the postwar years, but also to the advanced countries like the United States and the United Kingdom during their early economic take-offs, starting in the late 18th and 19th century, respectively. Finally, he proposes a two-sector constant elasticity of substitution (CES)-type growth model and simulate the model to replicate and explain the possible mechanism behind such a nonlinear pattern of movements in labor's share.
    Keywords: Constant elasticity of substitution, Kaldor fact, Kuznets curve, Labor's share, Structural change
    JEL: O41 P21 E32
    Date: 2011–01
  9. By: AKAY Alpaslan; BARGAIN Olivier; ZIMMERMANN Klaus F.
    Abstract: How the income of "relevant others" a¤ects well-being has received renewed interest in the recent literature using subjective data. Migrants constitutes a particularly interesting group to study this question: as they changed environment, they are likely to be concerned by several potential reference groups including the people "left behind", other migrants and "natives". We focus here on the huge population of rural-to-urban migrants in China. We exploit a novel dataset that comprises samples of migrants and urban people living in the same cities, as well as rural households mostly surveyed in the provinces where migrants are coming from. After establishing these links, we ?nd that the well-being of migrants is largely affected by relative concerns: results point to negative relative concerns toward other migrants and workers of home regions ?this status e¤ect is particularly strong for migrants who wish to settle permanently in cities. We ?nd in contrast a positive relative income e¤ect vis-à-vis the urban reference group, interpreted as a signal e¤ect: larger urban incomes indicate higher income prospects for the migrants. A richer pattern is obtained when sorting migrants according to the duration of stay, expectations to return to home countries and characteristics related to family circumstances, work conditions and community ties.
    Keywords: China; relative concerns; well-being
    JEL: C90 D63
    Date: 2011–01
  10. By: Balistreri , Edward J.; Tarr, David G.
    Abstract: Given the growing importance of commitments to foreign investors in services in regional trade agreements, it is important to develop applied general equilibrium models to assess the impacts of liberalization of barriers to multinational service providers. This paper develops a 55 sector applied general equilibrium model of Kenya with foreign direct investment and Dixit-Stiglitz productivity effects from additional varieties of imperfectly competitive goods or services, and uses the model to assess its regional and multilateral trade options, focusing on commitments to foreign investors in services. To assess the sensitivity of the results to parameter values, the model is executed 30,000 times, and results are reported as confidence intervals of the sample distributions. The analysis reveals that a 50 percent preferential reduction in the ad valorem equivalents of barriers in all business services by Kenya with its African partners would be somewhat beneficial for Kenya. If a preferential agreement with African partners is combined with an agreement with the European Union, the gains would more than triple the gains of an Africa only agreement. Multilateral reduction of services barriers, however, would yield gains about 12 times the gains of an agreement with the Africa region alone. These results suggest that preferential liberalization in the region is a valuable first step, but wider liberalization, with larger partners and liberal rules of origin or multilaterally, will yield much larger gains due to providing access to a much wider set of services providers. The largest gains would come from domestic regulatory reform in services, as this would almost triple the gains of multilateral liberalization.
    Keywords: Economic Theory&Research,Emerging Markets,Public Sector Corruption&Anticorruption Measures,Transport Economics Policy&Planning,Free Trade
    Date: 2011–01–01
  11. By: Skoufias, Emmanuel; Vinha, Katja; Conroy, Hector V.
    Abstract: This paper examines the impacts of weather shocks, defined as rainfall or growing degree days more than a standard deviation from their respective long-run means, on household consumption per capita and child height-for-age. The results reveal that the current risk-coping mechanisms are not effective in protecting these two dimensions of welfare from erratic weather patterns. These findings imply that the change in the patterns of climatic variability associated with climate change is likely to reduce the effectiveness of the current coping mechanisms even more and thus increase household vulnerability further. The results reveal that weather shocks have substantial (negative as well as positive) effects on welfare that vary across regions (North vs. Center and South) and socio-economic characteristics (education and gender). The heterogeneous impacts of climatic variability suggest that a"tailored"approach to designing programs aimed at decreasing the sensitivity and increasing the capacity of rural households to adapt to climate change in Mexico is likely to be more effective.
    Keywords: Health Monitoring&Evaluation,Science of Climate Change,Regional Economic Development,Global Environment Facility,Climate Change Mitigation and Green House Gases
    Date: 2011–02–01
  12. By: Mathieu Couttenier (University of Paris 1 Panthéon-Sorbonne, CES and Sciences-Po); Raphael Soubeyran (INRA-LAMETA and IDEP Montpellier)
    Abstract: In this paper, we show that drought has a positive effect on the incidence of civil war over the 1945-2005 period in Sub-Saharan Africa. We use the Palmer Drought Severity Index which is a richer measurement of drought than the measures used in the literature (rainfall and temperature) as it measures the accumulation of water in the soil in taking into account the temperature and the geological characteristics of the soil. We show that the risk of civil war increases by more than 42% from a “normal” climate to an “extremely drought” climate. Surprisingly, only 2.5% of this effect is channeled through economic growth.
    Keywords: Climate Change, Drought, Civil War
    Date: 2010–11
  13. By: Bin Dong (The School of Economics and Finance, Queensland University of Technology); Benno Torgler (The School of Economics and Finance, Queensland University of Technology, CREMA – Centre for Research in Economics, Management and the Arts and CESifo)
    Abstract: We explore theoretically and empirically whether social interaction, including local and global interaction, influences the incidence of corruption. We first present an interaction-based model on corruption that predicts that the level of corruption is positively associated with social interaction. Then we empirically verify the theoretical prediction using within-country evidence at the province-level in China during 1998 to 2007. Panel data evidence clearly indicates that social interaction has a statistically significantly positive effect on the corruption rate in China. Our findings, therefore, underscore the relevance of social interaction in understanding corruption.
    Keywords: Corruption, Social Interaction, China
    JEL: K42 D72 D64 O17 J24
    Date: 2011–01
  14. By: Bin Dong (The School of Economics and Finance, Queensland University of Technology); Benno Torgler (The School of Economics and Finance, Queensland University of Technology, CREMA – Centre for Research in Economics, Management and the Arts and CESifo)
    Abstract: This paper presents theoretical and empirical evidence on the nexus between corruption and democracy. We establish a political economy model where the effect of democracy on corruption is conditional on income distribution and property rights protection. Our empirical analysis with cross-national panel data provides evidence that is consistent with the theoretical prediction. Moreover, the effect of democratization on corruption depends on the protection of property rights and income equality which shows that corruption is a nonlinear function of these variables. The results indicate that democracy will work better as a control of corruption if the property rights system works and there is a low level of income inequality. On the other hand if property rights are not secured and there is strong income inequality, democracy may even lead to an increase of corruption. In addition, property rights protection and the mitigation of income inequality contribute in a strong manner to the reduction of corruption.
    Keywords: Corruption, Democracy, Income inequality, Property rights
    JEL: D73 H11 P16
    Date: 2011–01
  15. By: Subhayu Bandyopadhyay; Todd Sandler; Javed Younas
    Abstract: Using a dynamic panel data framework, we investigate the relationship between the two major forms of terrorism and foreign direct investment (FDI). We then analyze how these relationships are affected by foreign aid flows. The analysis focuses on 78 developing countries for 1984- 2008. Our findings suggest that all types of terrorism depress FDI. In addition, aid mitigates the negative effects of total and domestic terrorism on FDI; however, this is not the case for transnational terrorism. This finding highlights that different forms of terrorism call for tailoring mitigating strategies. Foreign aid apparently cannot address the causes and supply lines of transnational terrorism. Aid’s ability to curb the risk to FDI for total and domestic terrorism is extremely important because (i) domestic terrorism is an overwhelming fraction of the total terrorism for many developing nations, and (ii) FDI is an important engine of development for these nations.>
    Keywords: Investments, Foreign ; Terrorism ; Foreign aid program
    Date: 2011
  16. By: Paris Cleanthous
    Abstract: This paper is an attempt to test country claims on the social costs of openness especially in the case of poor developing countries. The intent of this paper is to extend the research on the costs and benefits of economic openness by trying to look at one dimension in particular, health, and to answer two distinct but linked questions. How does openness affect government spending? What are the true determinants behind public health spending? The paper finds a positive relationship between openness and government size for poor, less developed countries, and negative in the case of rich, developed economies. The paper also finds that poor, less developed countries rank healthcare spending lower than defense but higher than education in government spending allocation and are, therefore, spending more than proportionately on healthcare than they are spending on defense and less than proportionately than on education.
    Keywords: Health, Public Health Expenditure, Government Expenditure, Openness
    Date: 2011–01
  17. By: James P. Smith; Yan Shen; John Strauss; Zhe Yang; Yaohui Zhao
    Abstract: In this paper, the authors model the consequences of childhood health on adult health and socioeconomic status outcomes in China using a new sample of middle aged and older Chinese respondents. Modeled after the American Health and Retirement Survey (HRS), the CHARLS Pilot survey respondents are forty-five years and older in two quite distinct provinces- Zhejiang, a high growth industrialized province on the East Coast and Gansu, a largely agricultural and poor province in the West. Childhood health in CHARLS relies on two measures that proxy for different dimensions of health during the childhood years. The first is a retrospective self-evaluation using a standard five-point scale (excellent, very good, good, fair, or poor) of general state of one's health when one was less than 16 years old. The second is adult height often thought to be a good measure of levels of nutrition during early childhood and the prenatal period. They relate both these childhood health measures to adult health and SES outcomes during the adult years. They find strong effects of childhood health on adult health outcomes particularly among Chinese women and strong effects on adult BMI particularly for Chinese men.
    Date: 2010–11
  18. By: Zakharenko, Roman
    Abstract: In this paper, I merge two theories -- theory of "passionate individuals" by Gumilev(1989) and Memetics by Dawkins(1976) - to develop a formal growth theory that states that societies become more developed when their members have more intrinsic motivation to solve problems of social importance (i.e. make "cultural contributions"). Individuals derive utility from genetic fitness (i.e. the number of surviving children) as well as from cultural fitness, defined as the amount of appreciation ("honor") of one's cultural contribution by future generations. To make a cultural contribution, one must study/honor cultural contributions of the past, which leads to multiple steady states. In the survival steady state, individuals expect that no one in the future will be interested in their cultural contribution, which makes them allocate all energy onto maximization of genetic fitness and care little about cultural contributions of the past. In the passionate steady state, individuals expect high appreciation of their cultural contribution and thus spend a lot of energy onto making such a contribution, which makes them highly appreciate cultural contributions of the past. Empirical implications of theory are also discussed.
    Keywords: passionate individuals; human values; poverty traps; memetics; economic growth
    JEL: O11 O49 Z13
    Date: 2011–02–01
  19. By: de Carvalho Filho, Irineu; Chamon, Marcos
    Abstract: Economic policies are often judged by a handful of statistics, some of which may be biased during periods of change. We estimate the income growth implied by the evolution of food demand and durable good ownership in post-reform Brazil and Mexico, and find that changes in consumption patterns are inconsistent with official estimates of near stagnant incomes. That is attributed to biases in the price deflator. The estimated unmeasured income gains are higher for poorer households, implying marked reductions in “real” inequality. These findings challenge the conventional wisdom that post-reform income growth was low and did not benefit the poor.
    Keywords: Household consumption; Measurement Error; CPI Bias; Economic reform; Trade liberalization; Inflation stabilization.
    JEL: D12 O10 E01 I32
    Date: 2011–01
  20. By: Mapa, Dennis S.; Bersales , Lisa Grace S.; Albis, Manuel Leonard F.; Daquis , John Carlo P.
    Abstract: This paper looks at the impact of population dynamics on poverty in elderly-headed households in the Philippines using data from the Family Income and Expenditure Survey (FIES) from 2000 to 2006. The population of the elderly, or those 60 years and above, has increased from 3.2 million in 1990 to 4.6 million in 2000. This group is growing at a rate of 3.6% per annum and estimated to reach 7 million in 2010. Data from the FIES shows that the percentage of the elderly who are poor is increasing since 2003. Moreover, the percentage of elderly-headed household belonging to the poorest 10% of all households has been on the rise since 1997. An econometric model based on the logistic regression shows that the presence of a young dependent (aged 14 years old or below) increases the probability that the elderly-headed household will become poor by about 9 percentage points, controlling for other factors such as income of the household, education, age and gender of the household head, income transfer from abroad and regional-specific characteristics. The results of the econometric model suggest that the high proportion of young dependents create negative effects on the welfare of the elderly-headed household by increasing the probability of that household being poor. From the point of view of policy, addressing the alarming poverty incidence in the country must include measures that will manage the country’s bourgeoning population and bring down the fertility rate to a level that is conducive to higher income growth.
    Keywords: elderly; population dynamics; poverty
    JEL: J13 J14 I32
    Date: 2011–02
  21. By: Parra Osorio, Juan Carlos; Wodon, Quentin
    Abstract: Higher incomes for women can have significant beneficial impacts for poverty reduction both in the short run by providing more resources to households and in the long run by increasing investments in the human capital of children. Substantial research has been done using microeconomic household survey data on gender disparities in labor incomes in developing countries in recent years. The first contribution of this paper is to summarize some of that research as applied to Guinea. However, microeconomic studies may not necessarily provide insights on how broad structural shifts in an economy could affect differently opportunities for work and income generation for men and women. In the second part of the paper, we use a recent Social Accounting Matrix (SAM) for Guinea to assess how growth in various sectors of the economy could affect the incomes of women and men both directly and indirectly through multiplier effects. We find that an expansion of sectors oriented primarily towards domestic consumption could have a larger positive impact on the labor income share of women than an expansion of export-oriented sectors.
    Keywords: Gender; Labor income; Social Accounting Matrix; Guinea
    JEL: J31 D57 J22
    Date: 2010–08
  22. By: Hardeweg, Bernd; Menkhoff, Lukas; Waibel, Hermann
    Abstract: This study validates a survey-based measure of general risk attitude by an incentive compatible experiment among more than 900 participants in rural Thailand. The survey measure of self-assessed risk attitude provides a useful approximation of the experimentally derived risk attitude. This holds when we add various socio-demographic control variables to the survey-experiment-relation which are available from the representative household survey and which are related to risk attitude in plausible ways. The survey measure also predicts individual behavior towards risk in other cases; the survey measure even outperforms the experimental measure in this respect.
    Keywords: field experiment, socio-economic survey, risk attitude
    JEL: C93 D81 O1
    Date: 2011–01
  23. By: Alpaslan Akay (IZA and Gothenburg University); Olivier Bargain (School of Economics and UCD Geary Institute, University College Dublin and IZA); Klaus F. Zimmermann (IZA, Bonn University and DIW Berlin)
    Abstract: How the income of "relevant others" affects well-being has received renewed interest in the recent literature using subjective data. Migrants constitutes a par- ticularly interesting group to study this question: as they changed environment, they are likely to be concerned by several potential reference groups including the people "left behind", other migrants and "natives". We focus here on the huge population of rural-to-urban migrants in China. We exploit a novel dataset that comprises samples of migrants and urban people living in the same cities, as well as rural households mostly surveyed in the provinces where migrants are coming from. After establishing these links, we fi…nd that the well-being of migrants is largely af- fected by relative concerns: results point to negative relative concerns toward other migrants and workers of home regions - this status effect is particularly strong for migrants who wish to settle permanently in cities. We fi…nd in contrast a positive relative income effect vis-à-vis the urban reference group, interpreted as a signal effect: larger urban incomes indicate higher income prospects for the migrants. A richer pattern is obtained when sorting migrants according to the duration of stay, expectations to return to home countries and characteristics related to family cir- cumstances, work conditions and community ties.
    Keywords: China, relative concerns, well-being.
    JEL: C90 D63
    Date: 2011–01–27
  24. By: Harry X. WU
    Abstract: Using a "data fundamentalist approach," this study revisits the long debate about China's growth performance by seriously tackling the existing data problems that have been the major obstacles to a proper assessment of China's growth performance. First, this study examines and adjusts the serious break in the official employment statistics in 1990. Second, it provides an adjustment for the numbers employed by a human capital effect. Third, it tests the sensitivity of Maddison's (1998a) "zero labor productivity growth" assumption in gauging the real growth of the so-called "non-material (including non-market) services." Fourth, it further improves the author's earlier physical output-based production index for the industrial sector (Wu, 2002a) by using multiple weights and time-variant value added ratios obtained from the Chinese input-output tables. The likely problem of "product quality" in such a physical measure is examined and rejected. Fifth, it provides a new set of estimates of capital stock for the aggregate economy using alternative deflators and depreciation rates, crosschecked by the author's industry-level capital stock estimates (Wu, 2008b). This completely new data set is used in a Solow-type growth accounting exercise with different factor income share assumptions. The new results-under the full adjustment scenario for the post-reform period using input-output table income weights-show that the estimated annual TFP growth rate is 0.3 percent, which is substantially lower than the estimate of 3.1 percent derived from the official data without any major adjustment. A range of TFP estimates is also provided for each sub-period under different assumptions.
    Date: 2011–01

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