nep-dev New Economics Papers
on Development
Issue of 2012‒07‒23
sixteen papers chosen by
Mark Lee
Towson University

  1. Trade and productivity : self-selection or learning-by-exporting in India By Jamal Ibrahim Haidar
  2. The impact of Business Regulatory Reforms on Economic Growth By Jamal Ibrahim Haidar
  3. Birth Order and Human Capital Development: Evidence from Ecuador By de Haan, Monique; Plug, Erik; Rosero, José
  4. The Effects of 'Girl-Friendly' Schools: Evidence from the BRIGHT School Construction Program in Burkina Faso. Cambridge, MA: National Bureau of Economic Research By Harounan Kazianga; Dan Levy; Leigh L. Linden; Matt Sloan
  5. Child Care Provision: Semiparametric Evidence from a Randomized Experiment in Mexico. By Dubois, Pierre; Rubio-Codina, Marta
  6. Poverty Dynamics and Vulnerability: Empirical Evidence from Smallholders in Northern Highlands of Ethiopia By Tsehay, Abrham Seyoum; Bauer, Siegfried
  7. Dual Burden Households and Nutritional Inequality in Indonesia By Roemling, Cornelia; Qaim, Matin
  8. The Role of Infrastructure Capital in China’s Regional Economic Growth By Shi, Yingying
  9. The impact of parental migration on children’s school performance in rural China By Zhao, Qiran; Yu, Xiaohua; Wang, Xiaobing; Glauben, Thomas
  10. Exchange rate policy and sovereign bond spreads in developing countries By Samir Jahjah; Bin Wei; Vivian Zhanwei Yue
  11. Determinants of Labor-intensive exports by the Developing Countries : A Cross Country Analysis By Mottaleb Khondoker; Kaliappa Kalirajan
  12. Schooling, Marriage, and Childbearing in Madagascar By David SAHN; Christopher HANDY; Peter GLICK
  13. The role of education and family background in marriage, childbearing and labor market participation in Senegal By David SAHN; Francesca MARCHETTA
  14. Household Shocks and Education Investment in Madagascar By David SAHN; Peter GLICK; Thomas F. WALKER
  15. Learning-by-Doing and Its Implications for Economic Growth and International Trade By Mao, Zi-Ying
  16. Prevention of Mother-to-Child Transmission of HIV and Reproductive Behavior in Zambia By Nicholas Wilson

  1. By: Jamal Ibrahim Haidar (World Bank - Washington District of Columbia (United States), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne)
    Abstract: Recent literature tried to explain the Indian growth miracle in different ways, ranging from trade liberalization to industrial reforms. Using data on Indian manufacturing firms, this paper analyzes the relationship between firm's productivity and export market participation during 1991-2004. While it provide evidence of the self-selection hypothesis by showing that more productive firms become exporters, the results do not show that entry into export markets enhances productivity. The paper examines the explanation of self selection hypothesis for total factor productivity differences across 33,510 exporting and non-exporting firms. It uses propensity score matching to test the learning-by-exporting hypothesis. In line with the prediction of recent heterogeneous firm models of international trade, the main finding of the paper is : more productive firms become exporters but it is not the case that learning by exporting is a channel fuelling growth in Indian manufacturing.
    Keywords: Trade, learning-by-exporting hypothesis, self-selection hypothesis, total factor productivity, causality, heterogeneous firm model.
    Date: 2012–05
  2. By: Jamal Ibrahim Haidar (World Bank - Washington District of Columbia (United States), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne)
    Abstract: I investigate the link between business regulatory reforms and economic growth in 172 countries. I create a five year dataset on business regulatory reforms from the World Bank's Doing Business reports. Then, I test the hypothesis that business regulatory reforms increase economic growth, using data on micro-economic reforms. These data do not suffer the endogeneity issues associated with other datasets on changes in economic institutions. The results provide a robust support for the claim that business regulatory reforms are good for economic growth. The paper establishes that, on average, each business regulatory reform is associated with a 0.15 percent increase in growth rate of GDP.
    Keywords: Growth, reform, development, regulations, Doing Business, Institutions.
    Date: 2012–05
  3. By: de Haan, Monique (University of Amsterdam); Plug, Erik (University of Amsterdam); Rosero, José (University of Amsterdam)
    Abstract: In this paper we examine the effect of birth order on human capital development in Ecuador using a large national database together with self-collected survey data. Using family fixed effects models we find significant positive birth order effects; earlier born children stay behind in their human capital development from early childhood to adolescence. Turning to potential mechanisms we find that earlier born children receive less quality time from their mothers than later born children. In addition, they are breastfed shorter. The estimated birth order effects are largest for children in their teens growing up in poor, low educated families.
    Keywords: birth order, human capital development, parental time allocation, Ecuador
    JEL: D1 I2 J1
    Date: 2012–07
  4. By: Harounan Kazianga; Dan Levy; Leigh L. Linden; Matt Sloan
    Abstract: This working paper found a program that constructed high quality “girl-friendly†primary schools in Burkina Faso increased enrollment of all children between 5 and 12 years old by 20 percentage points and increased girls’ enrollment 5 percentage points more than boys’.
    Keywords: BRIGHT Program, Burkina Faso, International, Education
    JEL: F Z
    Date: 2012–05–30
  5. By: Dubois, Pierre; Rubio-Codina, Marta
    Abstract: We estimate semiparametrically the impact of the Mexican conditional cash transfer program Oportunidades on the time mothers and older sisters spend taking care of children aged under 3, using the randomization of a program placement and the methodology in Lewbel (2000). Results support the existence of substitution effects: mothers in treatment households are more likely to substitute for their older daughters’ time to child care. As a result, daughters devote more time to schooling and less taking care of their younger siblings. Overall, total household time allocated to child care increases. These findings indicate that Oportunidades not only fosters human capital accumulation through keeping teenage girls in school but also through more and arguably better (mother provided) child care.
    JEL: D10 J13 J22 I00
    Date: 2012–06
  6. By: Tsehay, Abrham Seyoum; Bauer, Siegfried
    Abstract: This study is primarily intended to examine the dynamics and determinants of rural household poverty and vulnerability in Northern Highlands of Ethiopia. The data for this research is mainly based on the Ethiopian Household Survey (ERHS). Results from disaggregation of the poor indicate that ultra poverty is predominant in the area. Similarly, using a three steps feasible generalized least squares (FGLS) we found that many of the households in the region are vulnerable to poverty. However, the trend has been found to vary across villages for both poverty and vulnerability measures. Besides, poverty decomposition of sample households showed that chronic poverty is dominant while transient poverty is secondary. An implication of this is that programs targeting on poverty should primarily focus on factors causing persistence deprivation without undermining risk factors that drag households in to poverty. Finally, some of the important determining factors of observed poverty appear to impact on vulnerability to poverty differently. Therefore, strategies aimed at reducing poverty should critically consider factors that make households vulnerable to poverty.
    Keywords: Poverty Dynamics, Vulnerability, Rural Ethiopia, Consumer/Household Economics, Food Security and Poverty, I32,
    Date: 2012
  7. By: Roemling, Cornelia; Qaim, Matin
    Abstract: Overweight is an increasing problem in many developing countries, coexisting with underweight and contributing to a dual burden of malnutrition, sometimes in the same households. We analyze the dual burden phenomenon in Indonesia, using panel data that span a time period of 15 years. Today, 17 percent of the Indonesian households are classified as dual burden. In these households, children are often underweight, whereas adults are overweight. The nutrition transition seems to have differential impacts on the body mass index of different age cohorts. Dual burden is a transitory phenomenon. It started in the richer population segments, but today the highest prevalence is observed in the lowest expenditure quintile. Most households that moved out of the dual burden category end up as overweight. We also develop a continuous Theil index of intra-household nutritional inequality. While the prevalence of dual burden households has hardly changed over the last 10 years, the Theil index increased steadily. The reason is that intra-household inequality is also rising within household categories. Such inequality makes policy design more complex; food and nutrition interventions need to be targeted more specifically at subgroups within households. Further socioeconomic determinants are analyzed econometrically. Female decision-making reduces intra-household nutritional inequality.
    Keywords: Dual burden, Intra-household inequality, Nutrition transition, Asia, Indonesia, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Health Economics and Policy, International Development, I10, O12,
    Date: 2012–07
  8. By: Shi, Yingying
    Abstract: This paper investigates the role of infrastructure capital in China’s regional economic development during 1990 to 2009 in a neoclassical economic growth model. Four types of infrastructure capital are discussed; electricity, road, rail, and land-line telephone. The results support a positive role of infrastructure in improving economic wellbeing in China. It shows that infrastructure has contributed to the convergence among China’s provinces. However, declining growth momentum from rapid increase of road infrastructure, in particular for the Western region, suggests that road development in the region has been growing too fast. The results counter the conventional wisdom of “road leads to prosperity” widely accepted among national and local governments in China. Thus, the seemingly productive infrastructure capital, when invested beyond a proper level or speed, will become unproductive. The results resonate with the theoretical literature on the inverse U shaped growth impact of infrastructure capital and the dominant “crowding out” of private capital if there is too much infrastructure. They also address the puzzle in the current literature debates as to the direction and magnitude of the growth impact of infrastructure capital.
    Keywords: infrastructure, economic growth, regional inequality, China, International Development, Production Economics, Public Economics, H54, O18, R11,
    Date: 2012–06–20
  9. By: Zhao, Qiran; Yu, Xiaohua; Wang, Xiaobing; Glauben, Thomas
    Abstract: A substantial amount of China’s rapid economic growth in has been attributed to its large proportion of rural-urban migrants, but more than 80% of these migrants’ children are still left in rural areas mainly due to China’s household registration system. Identification of the impact of parental migration on children’s school performance may encounter the problem of endogeneity. Using unique survey data collected from Qinghai Province and the Ningxia Autonomous Region in Northwestern China where more than 7,100 Grade 4 & 5 students from 74 rural elementary schools participated and by the instrumental-variable estimation, our results indicate that parents’ decisions to migrate are exogenous to their children’s schooling performance, and one more migratory parent can marginally reduce their child’s math score by 1.73 percent in percentile rank, which implies that the current economic growth in China partially jeopardizes the future of the next rural generation. In addition, we find a causal relationship between the poor performance of ethnic minorities and both geographical and social disadvantages.
    Keywords: instrumental variables, migration, rural China, school performance, Labor and Human Capital,
    Date: 2012
  10. By: Samir Jahjah; Bin Wei; Vivian Zhanwei Yue
    Abstract: This paper empirically analyzes how exchange rate policy affects the issuance and pricing of international bonds for developing countries. We find that countries with less flexible exchange rate regimes pay higher sovereign bond spreads and are less likely to issue bonds. Quantitatively, changing a free-floating regime to a fixed regime decreases the likelihood of bond issuance by 4.6% and increases the bond spread by 1.3% on average. Furthermore, countries with real exchange rate overvaluation have higher bond spreads and higher bond issuance probabilities. Moreover, such positive effects of real exchange rate overvaluation tend to be magnified for countries with fixed exchange rate regimes. Our results suggest that choosing a less flexible exchange rate regime in general leads to higher borrowing costs for developing countries, especially when their currencies are overvalued.
    Date: 2012
  11. By: Mottaleb Khondoker (International Rice Research Institute); Kaliappa Kalirajan (Manila and Crawford School of Public Policy)
    Abstract: While it is widely recognized that industrial development is imperative in developing countries to reduce poverty and to attain sustainable economic growth, there is no consensus on how to develop industries and where to start. Generally, the literature argues that developing countries should concentrate on promoting labour intensive industries and exports first due to their low capital stock and relatively abundant labor force. Though many developing countries are attempting to follow this path, the interesting observation is that not all developing countries are reaping the benefits of promoting labor intensive industries in terms of employment generation and sustaining economic growth. This raises an important question as to how it is possible for some developing countries to enjoy more benefits from labor intensive industries, while others are not able to do so. Using cross-country panel data in explaining heterogeneous performance in exporting labor intensive products by the developing countries, an attempt has been made in this paper to identify the important factors over and above the conventional factors such as low labor wages that contribute to the sustained growth of labor intensive exports from developing countries. The empirical findings of this paper emphasizes that even to initiate and sustain the growth of the low value added industries, such as garments, the developing countries should develop basic infrastructure and maintain a friendly business environment.
    Keywords: Developing country, Garment and textile export, Infrastructure, Business Environment, Asia, Sub-Saharan Africa.
    JEL: L67 F14 O14
    Date: 2012–07
  12. By: David SAHN (Centre d'Etudes et de Recherches sur le Développement International); Christopher HANDY; Peter GLICK
    Abstract: We jointly model the determinants of educational attainment, marriage age, and age of first birth among females in Madagascar, explicitly accounting for the endogeneities that arise from modeling these related outcomes simultaneously. An additional year of schooling results in a delay of marriage by 1.6 years. Marrying one year later delays childbearing by 0.5 years. Parental education and wealth also have important effects on schooling, marriage, and childbearing ages. For example, the women's first birth is delayed by 0.75 years for four additional years of schooling of her mother.
    Keywords: education, marriage, fertility
    JEL: J13 J12 I21
    Date: 2012
  13. By: David SAHN (Centre d'Etudes et de Recherches sur le Développement International); Francesca MARCHETTA (Centre d'Etudes et de Recherches sur le Développement International)
    Abstract: This paper examines the role of education and family background on age at marriage, age at first birth, and age at labor market entry for young women in Senegal using a rich individual-level survey conducted in 2003. We use a multiple-equation framework that allows us to account for the endogeneity that arises from the simultaneity of the decisions that we model. Differences in the characteristics of the dependent variable informed the choice of the models that are used to estimate each equation: an ordered probit model is used to analyze the number of completed years of schooling, and a generalized hazard model for the other three decisions. Results show the importance of parental education, especially the father, on years of schooling. We find that each additional year of schooling of a woman with average characteristics delays marriage and the age at first birth by 0.5 and 0.4 years, respectively. Parents' education also reduces the hazard of marriage and age of first birth, while the death of parents has just the opposite effect, with the magnitudes of effects being larger for mothers. Delaying marriage also leads to an increase in the hazard of entering the formal labor market, as does the education and death of the women's parents.
    Keywords: Multiple equations; duration models; unobserved heterogeneity; Senegal.
    Date: 2012
  14. By: David SAHN (Centre d'Etudes et de Recherches sur le Développement International); Peter GLICK; Thomas F. WALKER
    Abstract: This paper measures the extent to which households in Madagascar adjust children's school attendance in order to cope with exogenous shocks. We model the household's decisions to enroll children in school, and remove them from school, and measure the impact on these decisions of shocks to household income, assets and labor supply. In order to explore these questions more fully, we use a unique dataset with ten years of recall data on school attendance and household shocks. We estimate hazard models of school entry and exit, and measure the effect of shocks on these decisions. The probability of dropping out of school is significantly increased when a child's household experiences an illness, death or asset shock. The presence of a health and nutrition program in the local school is associated with earlier school entry and reduced probability of dropout among enrolled students.
    Date: 2012
  15. By: Mao, Zi-Ying
    Abstract: This paper extends the learning-by-doing model of Alwyn Young (1991), which assumes bounded learning-by-doing in each industry and knowledge spillovers, from two perspectives. First, it introduces physical capital as another factor of production in addition to labor. Second, it takes into account capital accumulation and population growth. This extended model is then used to study the dynamic effects of learning-by-doing in both autarky and two-country free trade situations. The main findings are: 1. Learning-by-doing is the source of sustainable growth in the long-run; 2. In both autarky and free trade situations, an increase in population growth rate or saving rate expedites both the growth rate of Real GDP per capita and technical progress in the long-run; 3. Compared with the autarky situation, under free trade the LDC experiences slower growth rate of per-capita output and slower technical progress, while the situation in DC is just the opposite. In addition, the effects of free trade on intertemporal welfare as well as the implications of a change in population growth rate or saving rate are also discussed based on the conclusions in Young (1991).
    Keywords: Learning-by-Doing; Human Capital; Technical Progress; Intertemporal Welfare; Sustainable Growth; Free Trade
    JEL: O41 O39 F1 O4 O3 F19
    Date: 2012–06–22
  16. By: Nicholas Wilson
    Abstract: Prevention of mother-to-child transmission of HIV (PMTCT) is the single most effective HIV prevention intervention in practice today. Nonetheless, little reliable empirical evidence exists on the behavioral effects of PMTCT. This paper documents the rapid expansion of access to PMTCT in Zambia during the period 2000-2007 and provides some of the first evidence on the change in reproductive behavior associated with PMTCT scale-up. The results of a primarily descriptive analysis suggest that PMTCT may have generated increases in knowledge about PMTCT and MTCT, large reductions in child mortality and pregnancy rates, and smaller changes in breastfeeding rates. However, additional research is required to address the potential endogeneity of PMTCT availability.
    JEL: I10 J13
    Date: 2012–07

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