nep-dev New Economics Papers
on Development
Issue of 2011‒06‒18
thirteen papers chosen by
Mark Lee
Towson University

  1. Labor Complementarities and Health in the Agricultural Household By Achyuta Adhvaryu; Anant Nyshadham
  2. Endowments and Investment within the Household: Evidence from Iodine Supplementation in Tanzania By Achyuta Adhvaryu; Anant Nyshadham
  3. Healthcare Choices, Information and Health Outcomes By Achyuta Adhvaryu; Anant Nyshadham
  4. Labor Supply, Schooling and the Returns to Healthcare in Tanzania By Achyuta Adhvaryu; Anant Nyshadham
  5. Does Family Planning Help The Employment of Women? The Case of India By Francesca Francavilla,; Gianna Claudia Giannelli
  6. Tenure Insecurity, Adverse Selection, and Liquidity in Rural Land Markets By Derek Stacey
  7. Assessing the Long-term Effects of Conditional Cash Transfers on Human Capital: Evidence from Colombia By Baez, Javier E.; Camacho, Adriana
  8. China’s New Demographic Challenge: From Unlimited Supply of Labour to Structural Lack of Labour Supply. Labour market and demographic scenarios: 2008-2048 By Michele Bruni
  9. Trade Policy Determinants and Trade Reform in a Developing Country By Baybars Karacaovali
  10. Essays on Labor and Development Economics. By [no author]
  11. The Global Financial Crisis: Countercyclical Fiscal Policy Issues and Challenges in Malaysia, Indonesia, the Philippines, and Singapore By Doraisami, Anita
  12. Do Religious Factors Impact Armed Conflict? Empirical Evidence from Sub-Saharan Africa By Matthias Basedau; Georg Strüver; Johannes Vüllers; Tim Wegenast
  13. Household Credit to the Poor and its Impact on Child Schooling in Peri-urban Areas, Vietnam By Tinh Doan; John Gibson; Mark Holmes

  1. By: Achyuta Adhvaryu (MEPH Health Policy and Administration, Yale University); Anant Nyshadham (Department of Economics, Yale University)
    Abstract: Models of the agricultural household have traditionally relied on assumptions regarding the complementarity or substitutability of family labor inputs. We show how data on time allocations, health shocks and corresponding treatment choices can be used to test these assumptions. Data from Tanzania provide evidence that complementarities exist and can explain the pattern of labor supply adjustments across household members and productive activities following acute sickness. In particular, we find that sick and healthy household members both shift labor away from self-employment and into farming when the sick recover more quickly. Infra-marginal adjustments within farming activity types provide further evidence of farm-specific complementarities.
    Keywords: intra-household allocation, health shocks, complementarity
    JEL: I10 J22 J43 O12
    Date: 2011–03
  2. By: Achyuta Adhvaryu (MEPH Health Policy and Administration, Yale University); Anant Nyshadham (Department of Economics, Yale University)
    Abstract: Standard theories of resource allocation within the household posit that parents’ investments in their children reflect a combination of children’s endowments and parents’ preferences for child quality. We study how changes in children’s cognitive endowments affect the distribution of parental investments amongst siblings, using data from a large-scale iodine supplementation program in Tanzania. We find that parents strongly reinforce the higher cognitive endowments of children who received in utero iodine supplementation, by investing more in vaccinations and early life nutrition. The effect of siblings’ endowments on own investments depends on the extent to which quality across children is substitutable in parents’ utility functions. Neonatal investments, made before cognitive endowments become apparent to parents, are unaffected. Fertility is unaffected as well, suggesting that inframarginal quality improvements can spur investment responses even when the quantity-quality tradeoff is not readily observable.
    Keywords: endowments, intra-household, child health, Tanzania
    JEL: I18 O12
    Date: 2011–06
  3. By: Achyuta Adhvaryu (MEPH Health Policy and Administration, Yale University); Anant Nyshadham (Department of Economics, Yale University)
    Abstract: Self-selection into healthcare options on the basis of severity likely biases estimates of the effects of healthcare choice on health outcomes. Using an instrumental variables strategy which exploits exogenous variation in the cost of formal-sector care, we show that using such care to treat acute sickness decreases the incidence of fever and malaria in young children in Tanzania. Compared to the instrumental variables estimates, ordinary least squares estimates significantly understate the effects of formal-sector healthcare use on health outcomes. Improved information and more timely treatment, rather than greater access to medicines, seem to be the primary mechanisms for this effect.
    Keywords: healthcare, information, child health, Tanzania
    JEL: I10 I18 O10 O12
    Date: 2011–03
  4. By: Achyuta Adhvaryu (MEPH Health Policy and Administration, Yale University); Anant Nyshadham (Department of Economics, Yale University)
    Abstract: We estimate the effects of higher quality healthcare usage on health, labor supply and schooling outcomes for sick individuals in Tanzania. Using exogenous variation in the cost of formal sector healthcare to predict treatment choice, we show that using better quality care improves health outcomes and changes the allocation of time amongst productive activities. In particular, sick adults who receive better quality care reallocate time from non-farm to farm labor, leaving total labor hours unchanged. Among sick children, school attendance significantly increases as a result of receiving higher quality healthcare, but labor allocations are unaffected. We interpret these results as evidence that healthcare has heterogeneous effects on marginal productivity across productive activities and household members.
    Keywords: labor supply, health shocks, schooling, Tanzania
    JEL: I10 J22 J43 O12
    Date: 2011–03
  5. By: Francesca Francavilla, (Policy Studies Institute at University of Westminster); Gianna Claudia Giannelli (Università degli Studi di Firenze, Dipartimento di Scienze Economiche)
    Abstract: This paper gives some insight into the existence of a positive effect of family planning programmes on women’s employment in developing countries. We study married women aged 15 to 49 living throughout India using a sample drawn from the National Health Family Survey (NFHS-2) for 1998-1999. We focus on a programme of doorstep services delivered by health or family planning (FP) workers who are sent to visit women in their assigned areas. Results derived from the estimation of fixed effect linear probability and conditional logit models show a positive and significant correlation of the share of women living in a local area (village, town or city) that has been visited by FP workers with the probability of women’s employment. A multinomial analysis also shows that the largest positive effect of FP in rural India is to be found on paid work, as opposed to unpaid work, suggesting a potential empowering feedback of demographic measures through labour earnings.
    Keywords: India, women’s employment, family planning, urban and rural development.
    JEL: J13 J16 J18 J22 O18
    Date: 2011
  6. By: Derek Stacey (Queen's University)
    Abstract: A theory of land market activity is developed for settings where there is uncertainty and private information about the security of land tenure. Land sellers match with buyers in a competitive search environment, and an illiquid land market emerges as a screening mechanism. As a consequence, adverse selection and an insecure system of property rights stifle land market transactions. The implications of the theory are tested using household level data from Indonesia. As predicted, formally titled land is more liquid than untitled land in the sense that ownership rights are more readily transferable. Additional implications of the theory are verified empirically by constructing a proxy variable for land tenure security and studying the differences between markets for unregistered land across Indonesian provinces. Regional land market activity is appropriately linked to the distribution of the proxy variable.
    Keywords: Competitive Search, Land Markets, Tenure Security, Liquidity
    JEL: D83 Q15 D23 R23
    Date: 2011–04
  7. By: Baez, Javier E. (World Bank); Camacho, Adriana (Universidad de los Andes)
    Abstract: Conditional Cash Transfers (CCT) are programs under which poor families get a stipend provided they keep their children in school and take them for health checks. While there is significant evidence showing that they have positive impacts on school participation, little is known about their long-term impacts on human capital. In this paper we investigate whether cohorts of children from poor households that benefited up to nine years from Familias en Acción, a CCT in Colombia, attained more school and performed better in academic tests at the end of high school. Identification of program impacts is derived from two different strategies using matching techniques with household surveys, and regression discontinuity design using census of the poor and administrative records of the program. We show that, on average, participant children are 4 to 8 percentage points more likely than nonparticipant children to finish high school, particularly girls and beneficiaries in rural areas. Regarding long-term impact on tests scores, the analysis shows that program recipients who graduate from high school seem to perform at the same level as equally poor non-recipient graduates, even after correcting for possible selection bias when low-performing students enter school in the treatment group. Even though the positive impacts on high school graduation may improve the employment and earning prospects of participants, the lack of positive effects on the test scores raises the need to further explore policy actions to couple CCT's objective of increasing human capital with enhanced learning.
    Keywords: Conditional Cash Transfers, school completion, academic achievement, learning outcomes
    JEL: I28 I38
    Date: 2011–05
  8. By: Michele Bruni
    Abstract: The paper focuses on the demographic and labour market consequences of the dramatic decline in fertility that has characterized China starting at the beginning of the ‘50s. It is shared opinion that a sustained decline in fertility below replacement level will provoke a decline in Total population, an even more pronounced decline in Working age population and very relevant ageing phenomena. I have recently shown that, on the contrary and coherently with empirical evidence, a decline in fertility provokes a structural lack of labour supply that determines positive migration balances and, finally, positive demographic trends. The paper applies the same approach to China with similar results. The decline in fertility, determined by the process of economic development and its impact on education and urbanization, but promoted also trough the one-child policy, will provoke a relevant and growing structural lack of labour supply, even in the hypothesis that Chinese employment growth should sharply decline. The implication is that in order to continue its road to economic growth and social development, China will have to rely on large and growing migration flows that will determine a demographic expansion. In conclusion, the decline in fertility, actively pursued to set a ceiling to population growth, will end up provoking the opposite result. The uncertainty about the age structure of the Chinese population makes it impossible to determine in which year China will start to be affected by serious labour shortages. Our scenarios do however clearly show that China will reach the Lewis turning point in the next few years and before the middle of the century will become the world largest importer of labour. Our analysis does therefore clearly suggest that any legal restriction to fertility and territorial mobility is totally unwarranted, and that China should start to consider educational and labour policies aimed to mitigate labour shortages. It also indicates the necessity to start an in depth discussion of which immigration and social integration policies could better serve the interests of China, on the light both of the experiences of other countries, and of the role that China wants to play in the international arena.
    Keywords: Demography; Labour market; Demographic and labour market scenarios; Migrations; Lewis turning point; China
    JEL: J11 F22 O15 O53
    Date: 2011–02
  9. By: Baybars Karacaovali (Fordham University, Department of Economics)
    Abstract: In this paper, I start out with a standard political economy of trade policy model to measure the determinants of trade policy in a developing country. I carefully test the model empirically with Colombian data from 1983 to 1998 accounting for endogeneity and omitted variable bias concerns and then expand it in several directions.. I show that it is important to control for the impact of a drastic trade reform shock that affects all sectors and disentangle its effect from preferential trade agreements (PTAs). I find that protection is higher in sectors that are important exports for preferential partners which may be seen as a stumbling effect of PTAs for Colombia. I also relax the assumption of fixed political weights that measure the extra importance of producers' welfare relative to consumers in the government objective. I measure the impact of sectoral characteristics on tariffs indirectly through political weights as a novel alternative to nonstructurally estimating them as determinants of protection. Accordingly, I obtain more realistic estimates for the political weights further contributing to the literature.
    Keywords: Political economy of trade policy, trade liberalization, preferential trade agreements, empirical trade
    JEL: F13 F14 F15
    Date: 2011
  10. By: [no author]
    Abstract: This work comprises four essays in two related areas: labor and development economics. On the labor side, two essays study (i) the effects of sizeable policy reforms over labor informality and (ii) the relation between productivity and wages in a context of substantial informality and high turnover rates. On the development side, two essays provide a comparison between developed and developing countries in the following aspects: (iii) the degree of complementarity of production factors and their capacity to translate R&D investments into economic growth and (iv) the effects of fiscal redistribution over income inequality. Within the context of Latin America - the most income-unequal and labor-informal region in the world - this work intends to augment the understanding of the behavior, dynamics, interactions and contributions of productive factors (labor and innovative capital) and the effects that policies aimed at formalizing labor, innovating capital or redistributing factors retributions may have. The study applies recent measurement techniques and exploits rich novel datasets which combined with reformulated models help us to propose alternative appealing explanations. Lessons learnt from these four essays suggest that (i) job dynamics play a fundamental role in the success (or failure) of policies aimed at promoting labor formality. Against the conventional wisdom, we contend that reductions in hiring rather than increases in separation rates are the main determinants of informality increases following protectionist policies. (ii) Job dynamics also play a differentiating role in the determination of wage-productivity elasticities and income risk (with new hires reacting more than incumbents). (iii) Yet, returns of labor and physical capital are constant across countries and periods regardless the stage of development whereas they exhibit an inverted U shape for technological capital (this is, highest returns observed for mid developed cases). (iv) Comparable private returns of productive factors are mirrored in comparable market income inequality measures observed across some developed and developing regions. However, while in Europe fiscal redistribution helps to achieve better distributed disposable income, in Latin America fiscal redistribution has meager or even countervailing effects.
    Date: 2011
  11. By: Doraisami, Anita (Asian Development Bank Institute)
    Abstract: Several countries have employed countercyclical fiscal policy to ameliorate the impact of the global financial crisis. This study identifies some of the issues and policy implications associated with this policy response in developing countries. Included are case studies of four developing countries in the Asian region—Malaysia, Indonesia, the Philippines, and Singapore. The findings point to a rich diversity in both the size and composition of fiscal stimulus and the challenges which are confronted. This study suggests several steps that countries might take to improve the impact of expansionary fiscal policy in response to future downturns. These include (i) embedding automatic stabilizing impulses through the provision of social safety nets; (ii) increasing tax revenues collected from personal and corporate taxes, by reducing labor market informality through improvements in the business environment; (iii) safeguarding fiscal sustainability; (iv) rebalancing growth by strengthening other sectors of the economy; (v) reducing expenditures on subsidies; and (vi) ensuring smooth and efficient budget execution.
    Keywords: countercyclical fiscal policy; asia fiscal policy; fiscal policy; global financial crisis
    JEL: E60 E61 E62 E63
    Date: 2011–06–08
  12. By: Matthias Basedau (GIGA German Institute of Global and Area Studies); Georg Strüver (GIGA Institute of Latin American Studies); Johannes Vüllers (GIGA Institute of Latin American Studies); Tim Wegenast (GIGA Institute of African Affairs)
    Abstract: Theoretically, the “mobilization hypothesis” establishes a link between religion and conflict by arguing that religious structures such as overlapping ethnic and religious identities are prone to mobilization; once politicized, escalation to violent conflict becomes likelier. Yet, despite the religious diversity in sub-Saharan Africa and the religious overtones in a number of African armed conflicts, this assumption has not yet been backed by systematic empirical research on the religion–conflict nexus in the region. The following questions thus remain: Do religious factors significantly impact the onset of (religious) armed conflict? If so, do they follow the logic of the mobilization hypothesis and, if yes, in which way? To answer these questions, this paper draws on a unique data inventory of all sub-Saharan countries for the period 1990–2008, particularly including data on mobilization-prone religious structures (e.g. demographic changes, parallel ethno-religious identities) as well as religious factors indicating actual politicization of religion (e.g. inter-religious tensions, religious discrimination, incitement by religious leaders). Based on logit regressions, results suggest that religion indeed plays a significant role in African armed conflicts. The findings are compatible with the mobilization hypothesis: Overlaps of religious and ethnic identities and religious dominance are conflict-prone; religious polarization is conflict-prone only if combined with religious discrimination and religious tensions.
    Keywords: Armed conflict, religion, sub-Saharan Africa, mobilization
    Date: 2011–06
  13. By: Tinh Doan (Ministry of Economic Development); John Gibson (University of Waikato); Mark Holmes (University of Waikato)
    Abstract: This paper uses a novelty dataset of poor households in peri-urban areas in Vietnam to estimate impacts of small loans on child schooling. The Probit and Negative Binomial model estimates roughly indicate no strong evidence of the effect, especially of informal credit. Formal credit is likely to have positive impacts on child schooling, but its effect is not strong enough to be conclusive. The paper suggests that to obtain the target of sustainable poverty reduction, easing access to formal credit sources as well as exempting tuition and other school fees are necessary to keep poor children at schools longer.
    Keywords: school enrolment; education gap; probit; negative binomial model;the poor; child schooling; peri-urban; Vietnam
    JEL: C14 C21 H81
    Date: 2011–06–13

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