nep-dev New Economics Papers
on Development
Issue of 2013‒07‒15
33 papers chosen by
Mark Lee
Towson University

  1. Working Paper 177 - A Macroeconometric Model for Rwanda By AfDB
  2. Multinomial and Mixed Logit Modeling in the Presence of Heterogeneity: A Two-Period Comparison of Healthcare Provider Choice in Rural China By Martine AUDIBERT; Yong HE; Jacky MATHONNAT
  3. Two-Period Comparison of Healthcare Demand with Income Growth and Population Aging in Rural China: Implications for Adjustment of the Healthcare Supply and Development By Martine AUDIBERT; Yong HE; Jacky MATHONNAT
  4. Patterns of Specialization and (Un)conditional Convergence: The Cases of Brazil, China and India By Marine Hadengue; Thierry Warin
  5. Land governance of suburban areas of Vietnam: Dynamics and contestations of planning, housing and the environment By Wit, J.W. de
  6. Long-Run Price Elasticities of Demand for Credit: Evidence from a Countrywide Field Experiment in Mexico By Karlan, Dean; Zinman, Jonathan
  7. Win Some Lose Some? Evidence from a Randomized Microcredit Program Placement Experiment by Compartamos Banco By Angelucci, Manuela; Karlan, Dean; Zinman, Jonathan
  8. Long-run Economic Impacts of Thai Flooding: Geographical Simulation Analysis By Ikumo Isono; Satoru Kumagai
  9. A Theory of Disasters and Long-run Growth By AKAO Ken-Ichi; SAKAMOTO Hiroaki
  10. Quid pro quo: Technology capital transfers for market access in China By Thomas J. Holmes; Ellen R. McGrattan; Edward C. Prescott
  11. Technical appendix for quid pro quo: Technology capital transfers for market access in China By Thomas J. Holmes; Ellen R. McGrattan; Edward C. Prescott
  12. Patent data appendix for quid pro quo: Technology capital transfers for market access in China By Thomas J. Holmes; Ellen R. McGrattan; Edward C. Prescott
  13. Learning and Earning: Evidence from a Randomized Evaluation in India By Pushkar Maitra; Subha Mani
  14. Household's willingness to pay for health microinsurance and its impact on actual take-up: results from a field experiment in Senegal By BONAN Jacopo; LEMAY-BOUCHER Philippe; TENIKUE Michel
  15. Access to Schooling and Staying in School in Sub-Saharan Africa By KUEPIE Mathias; SHAPIRO David; TENIKUE Michel
  16. Trust, Growth and Well-being: New Evidence and Policy Implications By Algan, Yann; Cahuc, Pierre
  17. Migration and Young Child Nutrition: Evidence from Rural China By Mu, Ren; de Brauw, Alan
  18. Religion, Politician Identity and Development Outcomes: Evidence from India By Bhalotra, Sonia R.; Clots-Figueras, Irma; Cassan, Guilhem; Iyer, Lakshmi
  19. Labor Market Returns to Early Childhood Stimulation: a 20-year Followup to an Experimental Intervention in Jamaica By Paul Gertler; James Heckman; Rodrigo Pinto; Arianna Zanolini; Christel Vermeersch; Susan Walker; Susan M. Chang; Sally Grantham-McGregor
  20. Bridging vs. Bonding Social Capital and the Management of Common Pool Resources By Kathy Baylis; Yazhen Gong; Shun Wang
  21. The Caloric Costs of Culture: Evidence from Indian Migrants By David Atkin
  22. Networks, Commitment, and Competence: Caste in Indian Local Politics By Kaivan Munshi; Mark Rosenzweig
  23. Regional Integration, Inclusive Growth, and Poverty: Enhancing Employment Opportunities for the Poor By Tabuga, Aubrey D.; Mina, Christian D.; Reyes, Celia M.; Asis, Ronina D.
  24. Policy Awareness and Participation by Persons with Disability in the Philippines By Tabuga, Aubrey D.
  25. Impact of Trade Liberalization on Wage Skill Premium in Philippine Manufacturing By Aldaba, Rafaelita M.
  26. Managing International Labor Migration in ASEAN: Themes from a Six-Country Study By Orbeta, Aniceto Jr. C.; Gonzales, Kathrina G.
  27. Does economic empowerment protect women against domestic violence? Evidence from the Philippines By S. Quimbo; X. Javier
  28. The impacts of the global food and financial crises on household food security and economic well-being: evidence from Bangladesh By Sonia, Akter; Syed Abul, Basher
  29. African brain drain and its impact on source countries: What do we know and what do we need to know? By Capuano, Stella; Marfouk, Abdeslam
  30. Race and Marriage in the Labor Market: A Discrimination Correspondence Study in a Developing Country By Arceo-Gomez, Eva O.; Campos-Vázquez, Raymundo M.
  31. Growth and Structure of Workforce in India : An Analysis of Census 2011 Data By Motkuri, Venkatanarayana; Veslawatha, Suresh Naik
  32. The Credit-worthiness of a borrower and the selection process in Micro-finance: A case study from the urban slums of India By Paul, Sohini
  33. How Important are Exports and Foreign Direct Investment for Economic Growth in the People’s Republic of China? By Xing, Yuqing; Pradhananga, Manisha

  1. By: AfDB
    Date: 2013–07–09
  2. By: Martine AUDIBERT; Yong HE; Jacky MATHONNAT (Centre d'Etudes et de Recherches sur le Développement International)
    Abstract: This study aims at testing the theoretical issue according to which multinomial logit (MNL) would give lower performance than a mixed multinomial logit (MMNL) in the presence of heterogeneity. To do so, we construct two samples of patients surveyed within the same regions in rural China, but of an interval of 18 years, with a difference in preference heterogeneity due to income growth and population aging. With the 1989-1993 sample, both models have predicted price effects; however with the 2004-2006 sample, unlike MMNL, MNL failed to predict price effect. The explanation is that the impact of price on choice became more heterogeneous in the later than the former sample, thus heterogeneity makes a difference between MNL and MMNL. The absence of meaningful divergences of distance effects between the two models can also be explained by the evolution of heterogeneity in distance preferences over the period. The coefficients of price and distances with MMNL are higher than with MNL, indicating stronger price and distance effects in MMNL estimations. Another advantage of MMNL is the possibility to measure the extent of heterogeneity. The findings suggest caution when interpreting estimation results with MNL if heterogeneity is deemed important.
    Keywords: multinomial and mixed logit model, preference heterogeneity, healthcare choice, Chinese rural households
    JEL: D1 C5 I1
    Date: 2013
  3. By: Martine AUDIBERT; Yong HE; Jacky MATHONNAT (Centre d'Etudes et de Recherches sur le Développement International)
    Abstract: We estimate the evolution of healthcare demand under the influence of income growth and population aging with two samples of patients surveyed in the same regions, but with an interval of 18 years in rural China and with mixed logit to deal with heterogeneity. In accordance with theoretical and inductive inferences, it is found that healthcare price effects decreased and became more heterogeneous. Aging impact overweighed income growth impact, resulting in increasing distance effect and patients' preference to proximity. In the face of this demand change, the adjustment of governmental supply should be to promote small and middle-sized healthcare providers. However during this period to cope with urbanization, the Chinese policy consisted of privileging large hospitals. This has led to a higher share of patients, especially the aging patients, to choose self-care and a higher share of poorer patients to suffer from catastrophic health expenditures. This finding carries broad implications for rural health policy-making on, along with income growth, population aging and urbanization, how to provide better coverage of rural areas by enough qualified and multifunctional small and middle-sized healthcare providers in the developing world.
    Keywords: Two-period healthcare demand comparison, mixed logit model, price and distance effects, heterogeneity, insurance, rural China
    JEL: I1 C5 D1
    Date: 2013
  4. By: Marine Hadengue; Thierry Warin
    Abstract: The purpose of this paper is to highlight a version of the Balassa-Samuelson effect for emerging countries with a new dataset. More than the catching-up effect, we will measure the convergence for three emerging countries: Brazil/China/India. We will compare the convergence between these countries and the productivity frontier represented by the U.S. over the past 10 years. A first contribution is that as the distance between the level of labor productivity in Brazil (China, India) and the United States decreases, the growth rate of labor productivity within the country decreases. In other words, the higher the level of productivity in an industry, the lower its growth rate, showing a convergence to the productivity frontier. A second contribution is that there is unconditional convergence as measured at the industry level. <P>
    Keywords: economic convergence, endogenous growth, Brazil, China, India, labor productivity,
    JEL: O40 O41 O43 O47 O53
    Date: 2013–06–01
  5. By: Wit, J.W. de
    Abstract: After the Doi Moi (‘renovation’) reforms in Vietnam from 1986, land ownership rules were adjusted, effectively terminating former land collectivisation efforts. While land ownership remained fully under the control of the state, a 1993 land law conferred 20-year leaseholds to most farmers. They could now utilize farm land individually, and sell, swap and mortgage the land in a situation similar to private ownership. These leaseholds are now expiring and a new 2013 land law is in the making. This paper was initially written for UNDP Vietnam which supports Vietnam to help formulate a strong new land law, and brings out the complexities of land governance in the suburban areas of fast expanding Vietnamese cities. It first considers the present and changing land use of suburban areas and the key stakeholders involved here – powerful State Owned Enterprises, farmers, bureaucrats and communist party leaders. Planning practices are then assessed – and seen to be both rigid and complex, with different departments at various levels working at cross purposes under conditions of conflicting rules, laws and weak capacities. This is one reason for the dominance of informal arrangements and widespread corruption, where powerful actors benefit hugely and illegally from conditions of opacity and informal networks. Overall outcomes are that cities expand in a haphazard (‘leapfrog’) and inefficient manner, with insufficient attention for timely and adequate infrastructure, the environment and for people’s welfare as in social amenities and parks. As a result of lopsided incentive systems, it is the state which foregoes huge incomes and faces more costly investments, while many suburban farmers are affected through (arbitrary) land acquisition and inadequate compensation.
    Keywords: planning;Vietnam;environment;urban housing;land governance;suburban land
    Date: 2013–06–28
  6. By: Karlan, Dean (Yale University); Zinman, Jonathan (Dartmouth College)
    Date: 2013–05
  7. By: Angelucci, Manuela (University of Michigan); Karlan, Dean (Yale University); Zinman, Jonathan (Dartmouth College)
    Abstract: Theory and evidence have raised concerns that microcredit does more harm than good, particularly when offered at high interest rates. We use a clustered randomized trial, and household surveys of eligible borrowers and their businesses, to estimate impacts from an expansion of group lending at 110% APR by the largest microlender in Mexico. Average effects on a rich set of outcomes measured 18-34 months post-expansion suggest some good and little harm. Other estimators identify heterogeneous treatment effects and effects on outcome distributions, but again yield little support for the hypothesis that microcredit causes harm.
    Date: 2013–05
  8. By: Ikumo Isono (Economic Research Institute for ASEAN and East Asia); Satoru Kumagai (Institute of Developing Economies, Japan External Trade Organization (IDEJETRO))
    Abstract: We discuss the long-run economic impact of natural disasters on the countries concerned by examining the case of Thai flooding in 2011. If the damage caused by disasters is really serious, industries will move out from the countries in question, and this outflow leads to a negative impact on the national economies in the long run. By using IDE/ERIA-GSM and utilizing short-run forecast for the basic setting, we estimate the seriousness of the flooding in terms of the long-term economic performance. Simulation results show that negative long-run impacts of the flood will be moderate, because many companies’ first reaction to the flood was to seek possible relocation of their production sites within Thailand
    Keywords: Thailand, flood, new economic geography, computable general equilibrium models, disaster management
    JEL: O53 Q54 R13
    Date: 2013–07
  9. By: AKAO Ken-Ichi; SAKAMOTO Hiroaki
    Abstract: We examine the long-term consequences to economic growth of disasters using a discrete-time endogenous growth model. We consider two types of hypothetical disasters: historical disasters, which follow a Bernoulli process, and periodic disasters, which are taken as a regular event by assuming that one period is a sufficient time period. We show that the effects of historical disasters on the steady state growth rate depend on the intertemporal elasticity of substitution for consumption. Specifically, when it is less than one, more destructive disasters or more frequent occurrence of historical disasters foster investment in human capital, which results in a higher economic growth rate. This conditionally supports the empirical finding: disasters may positively affect long-run economic growth. We also show the effects of historical and periodic disasters on resource allocation and industrial composition at the steady state and on the convergence speed.
    Date: 2013–07
  10. By: Thomas J. Holmes; Ellen R. McGrattan; Edward C. Prescott
    Abstract: Despite the recent rapid development and greater openness of China’s economy, FDI flows between China and technologically advanced countries are relatively small in both directions. We assess global capital flows in light of China’s quid pro quo policy of exchanging market access for transfers of technology capital—accumulated know-how such as research and development (R&D) that can be used in multiple production locations. We first provide empirical evidence of this policy and then incorporate it into a multicountry dynamic general equilibrium model. This extension leads to a significantly better fit of the model to data. We also find large welfare gains for China—and welfare losses for its FDI partners—from quid pro quo.
    Keywords: China
    Date: 2013
  11. By: Thomas J. Holmes; Ellen R. McGrattan; Edward C. Prescott
    Abstract: Despite the recent rapid development and greater openness of China’s economy, FDI flows between China and technologically advanced countries are relatively small in both directions. We assess global capital flows in light of China’s quid pro quo policy of exchanging market access for transfers of technology capital—accumulated know-how such as research and development (R&D) that can be used in multiple production locations. We first provide empirical evidence of this policy and then incorporate it into a multicountry dynamic general equilibrium model. This extension leads to a significantly better fit of the model to data. We also find large welfare gains for China—and welfare losses for its FDI partners—from quid pro quo.
    Keywords: China
    Date: 2013
  12. By: Thomas J. Holmes; Ellen R. McGrattan; Edward C. Prescott
    Abstract: Despite the recent rapid development and greater openness of China’s economy, FDI flows between China and technologically advanced countries are relatively small in both directions. We assess global capital flows in light of China’s quid pro quo policy of exchanging market access for transfers of technology capital—accumulated know-how such as research and development (R&D) that can be used in multiple production locations. We first provide empirical evidence of this policy and then incorporate it into a multicountry dynamic general equilibrium model. This extension leads to a significantly better fit of the model to data. We also find large welfare gains for China—and welfare losses for its FDI partners—from quid pro quo.
    Keywords: China
    Date: 2013
  13. By: Pushkar Maitra (Monash University); Subha Mani (Fordham University)
    Abstract: This paper estimates the short-and-medium-run effects of participating in a subsidized vocational training program aimed at improving labor market outcomes of women residing in low-income households in a developing country. We combine pre-intervention data with two rounds of post-intervention data from a field experiment to quantify the short-and-medium-run effects of the program. In the short-run, we find that program participants are significantly more likely to be employed, work additional hours, and earn more. These short-run impact estimates are all sustained in the medium-run. We also identify credit constraints, local access, and lack of proper child care support as important barriers to program participation and completion. We are able to rule out two alternative mechanisms -- signalling and change in behavior that can drive these findings. Finally, a simple cost-benefit analysis suggests that the program is highly cost effective.
    Keywords: Vocational training, Field Experiment, Panel data, India
    JEL: I21 J19 J24 O15
    Date: 2013
  14. By: BONAN Jacopo; LEMAY-BOUCHER Philippe; TENIKUE Michel
    Abstract: In the region of Thies in Senegal community-based health insurance schemes(CBHI)have been present for years. And yet despite the benefits they offer, there remain low take-up rates. Our paper measures the willingness to pay (WTP) for CBHI premiums in such context. Our results highlight the role of income, wealth and risk preferences as determinants of WTP. We also provide an analysis of the predictive power of WTP on the actual take-up of insurance following our offering of membership to a sample of 360 households. WTP has a positive and significant impact on actual take-up.
    Keywords: Community-based health insurance; Willingness to pay; Africa; Senegal
    JEL: D10
    Date: 2013–07
  15. By: KUEPIE Mathias; SHAPIRO David; TENIKUE Michel
    Abstract: This study jointly investigates factors driving the processes of accessing and staying in school in sub-Saharan Africa. We explicitly account for the fact that staying in school or its converse, dropping out, is observed only among children who ever attend school. We use data from Demographic and Health Surveys from 12 countries. We find that access to school is typically lower for females, rural youth, and those from poorer households. Conditional on having ever attended school, these factors, as well as age in grade ? an indicator of performance in school ? typically help account for staying in school. We also find that, keeping girls at school is very sensitive to school performance: girls with comparatively weak performance in school are more likely than their male counterparts to drop out of school, while girls who do relatively well in school are more likely to remain in school than boys, other things equal.
    Keywords: Access to education; ; school dropout; ; sub-Saharan Africa; ; school delay
    JEL: I20 I21 O15
    Date: 2013–07
  16. By: Algan, Yann (Sciences Po, Paris); Cahuc, Pierre (Ecole Polytechnique, Paris)
    Abstract: This survey reviews the recent research on trust, institutions and growth. It discusses the various measures of trust and documents the substantial heterogeneity of trust across space and time. The conceptual mechanisms and the methods employed to identify the causal impact of trust on economic performance are reviewed. We document the mechanisms of interactions between trust and economic development in the realms of finance, innovation, the organization of firms, the labor market and the product market. The last part reviews recent progress to identify how institutions and policies can affect trust and well-being.
    Keywords: trust, growth, institutions, well-being
    JEL: O11 O43 Z13
    Date: 2013–06
  17. By: Mu, Ren (Texas A&M University); de Brauw, Alan (International Food Policy Research Institute)
    Abstract: The unprecedented large scale rural-to-urban migration in China has left many rural children living apart from their parents. In this study, we examine the impact of parental migration on the nutritional status of young children in rural areas. We use the interaction terms between wage growth in provincial capital cities and initial village migrant networks as instrumental variables to account for migration selection. Our results show that parental migration has no significant impact on the height of children, but it improves their weight. We provide suggestive evidence that the improvement in weight may be achieved through increased access to tap water in migrant households. Concerns about the sustainability of the impact on weight are raised in the conclusions.
    Keywords: migration, children, nutrition, rural China, child nutrition
    JEL: I1 J6 O1
    Date: 2013–06
  18. By: Bhalotra, Sonia R. (University of Bristol); Clots-Figueras, Irma (Universidad Carlos III de Madrid); Cassan, Guilhem (University of Namur); Iyer, Lakshmi (Harvard Business School)
    Abstract: This paper investigates whether the religious identity of state legislators in India influences development outcomes, both for citizens of their religious group and for the population as a whole. To control for politician identity to be correlated with constituency level voter preferences or characteristics that make religion salient, we use quasi-random variation in legislator identity generated by close elections between Muslim and non-Muslim candidates. We find that increasing the political representation of Muslims improves health and education outcomes in the district from which the legislator is elected. We find no evidence of religious favoritism: Muslim children do not benefit more from Muslim political representation than children from other religious groups.
    Keywords: religion, politician identity, infant mortality, primary education, India, Muslim
    JEL: I15 J13 H41 P16
    Date: 2013–06
  19. By: Paul Gertler; James Heckman; Rodrigo Pinto; Arianna Zanolini; Christel Vermeersch; Susan Walker; Susan M. Chang; Sally Grantham-McGregor
    Abstract: We find large effects on the earnings of participants from a randomized intervention that gave psychosocial stimulation to stunted Jamaican toddlers living in poverty. The intervention consisted of one-hour weekly visits from community Jamaican health workers over a 2-year period that taught parenting skills and encouraged mothers to interact and play with their children in ways that would develop their children's cognitive and personality skills. We re-interviewed the study participants 20 years after the intervention. Stimulation increased the average earnings of participants by 42 percent. Treatment group earnings caught up to the earnings of a matched non-stunted comparison group. These findings show that psychosocial stimulation early in childhood in disadvantaged settings can have substantial effects on labor market outcomes and reduce later life inequality.
    JEL: I10 I20 I25 J20 O15
    Date: 2013–06
  20. By: Kathy Baylis; Yazhen Gong; Shun Wang
    Abstract: Social capital can facilitate community governance, but not all social capital is alike. We distinguish bonding social capital (within a village) from bridging social capital (between villages), and we compare their effects on the management of a common pool resource. We develop a theoretical model and show that bonding social capital can improve common pool resource management, while the effect of bridging social capital is mixed. We test these findings using primary data from Yunnan, China on social capital and firewood collection on communal lands. We find that bonding social capital decreases the consumption of the common pool resource, and bridging social capital erodes the effect of bonding. Bridging social capital also decreases the use of the common pool resource by villagers who are near subsistence levels of consumption. Our results are robust to alternative measures of social capital and to treating social capital as endogenous.
    JEL: O13 Q2 Q23 Q56
    Date: 2013–07
  21. By: David Atkin
    Abstract: Anthropologists have long documented substantial and persistent differences across social groups in the preferences and taboos for particular foods. One natural question to ask is whether such food cultures matter in an economic sense. In particular, can culture constrain caloric intake and contribute to malnutrition? To answer this question, I first document that inter-state migrants within India consume fewer calories per Rupee of food expenditure compared to their non-migrant neighbors, even for households with very low caloric intake. I then form a chain of evidence in support of an explanation based on culture: that migrants make nutritionally-suboptimal food choices due to cultural preferences for the traditional foods of their origin states. First, I focus on the preferences themselves and document that migrants bring their origin-state food preferences with them when they migrate. Second, I link together the findings on caloric intake and preferences by showing that the gap in caloric intake between locals and migrants is related to the suitability and intensity of the migrants' origin-state food preferences: the most adversely affected migrants (households in which both husband and wife migrated to a village where their origin-state preferences are unsuited to the local price vector) would consume 7 percent more calories if they possessed the same preferences as their neighbors.
    JEL: D12 I10 O10 Z10
    Date: 2013–07
  22. By: Kaivan Munshi; Mark Rosenzweig
    Abstract: This paper widens the scope of the emerging literature on economic networks by assessing the role of caste networks in Indian local politics. We test the hypothesis that these networks can discipline their members to overcome political commitment problems, enabling communities to select their most competent representatives, while at the same time ensuring that they honor the public goods preferences of their constituents. Using detailed data on local public goods at the street level and the characteristics of constituents and their elected representatives at the ward level over multiple terms, and exploiting the random system of reserving local council seats for caste groups, we find that caste discipline results in the election of representatives with superior observed characteristics and the provision of a significantly greater level of public goods. This improvement in political competence occurs without apparently diminishing leaders' responsiveness to the preferences of their constituents, although the constituency is narrowly defined by the sub-caste rather than the electorate as a whole.
    JEL: H11 H4 O12 O43
    Date: 2013–07
  23. By: Tabuga, Aubrey D.; Mina, Christian D.; Reyes, Celia M.; Asis, Ronina D.
    Abstract: Regional economic integration in East Asia is characterized initially as a market-driven process of increased trade and foreign direct investment (FDI) inflows, and eventually by formal arrangements to liberalize trade and integrate economic activities through free trade agreements (FTAs) among East and Southeast Asian countries (Balboa and Medalla 2011). This has led to a more intensified regional production networks participated in by East and Southeast Asian countries, including the Philippines. Set against the backdrop of continuing economic integration in the region, it seems that the growth in the Philippines has not been as inclusive as in the other countries as manifested in the increase in the magnitude of poverty. This paper examines how we can improve our record on poverty reduction by looking at how we can generate greater demand for the labor services of the poor. Specifically, this paper looks into the linkage between regional production networks and inclusive growth in the Philippines through employment generation for the poor. The manufacturing sector can provide employment opportunities for the poor and can offer relatively higher wages. However, expected high-productivity employment opportunities from the manufacturing sector were not fully realized due to some bottlenecks in the sector. This partly explains the persistence of poverty in the Philippines. To promote inclusive growth and reduce poverty, the manufacturing sector has to be made more competitive and, at the same time, productivity in the agriculture sector (the major employer of poor) has to be increased.
    Keywords: poverty, Philippines, employment, regional economic integration, agriculture, inclusive growth, chronic poor, manufacturing, less educated, labor force survey (LFS)
    Date: 2013
  24. By: Tabuga, Aubrey D.
    Abstract: The Philippines had laid down the groundwork for improving the welfare of persons with disability (PWDs) two decades ago when it enacted the Magna Carta for Persons with Disability. Several other policies have been formulated since then to ensure that PWDs can have the chance to live the way they so desire. However, recent surveys reveal that despite this, PWDs rarely benefit from these legislations and other programs that have been developed for their advancement. There is a multitude of interplaying factors that constrain them from benefiting from such efforts and these have to be addressed first. This paper discusses the current situation of PWDs in terms of awareness and participation with the objective of identifying the various constraints that they face.
    Keywords: Philippines, disability, persons with disability (PWDs), survey, visual impairment, blind, mobility impairment, deaf persons
    Date: 2013
  25. By: Aldaba, Rafaelita M.
    Abstract: The paper aims to examine how trade liberalization affects wage premium at the firm level. Using effective protection rate as trade proxy, the paper assumes that in the face of increasing competition, an import-substituting firm may decide to remain at the low value-added stage of the production process which requires relatively less skilled workers and suggests a decline in the wage premium. On the other hand, a firm may move away from the product whose protection rate has fallen and shift and expand toward a higher value-added activity. This would require relatively more skilled workers suggesting an increase in the wage premium. The main findings of the paper show that: First, trade liberalization lowers the wage premium. A firm responds to import competition by shifting to the manufacture of products with lower value added and importing intermediate inputs rather than producing these within the plant. Second, using ASEAN tariff rates as trade proxy, the same results are obtained, however, when ASEAN tariff is interacted with skill intensity, the results show that tariff reduction on skill-intensive products is associated with rising wage skill premium. Third, firm characteristics such as skill intensity, firm size, and capital labor ratio matter in assessing the impact of trade reform on the wage premium. Lastly, exports are associated with increasing wage premium at the firm level the higher their skill intensity. In the literature, greater openness is associated with skill-biased technological change with export-oriented and technology-intensive activities as channels.
    Keywords: trade liberalization, labor market, Philippines, Philippine manufacturing, wage skill premium
    Date: 2013
  26. By: Orbeta, Aniceto Jr. C.; Gonzales, Kathrina G.
    Abstract: The study presents a summary of the six-country study on managing international labor migration in the Association of Southeast Asian Nations (ASEAN). The countries are grouped into sending (Cambodia, Indonesia, Philippines) and receiving (Malaysia, Singapore, Thailand). The objective was to share international migration management issues from the perspective of a sending or a receiving country. The country research teams were asked to identify and study a specific migration management issue that is deemed current and reflective of the primary migration management experience of the country. For sending countries, the Cambodia research team studied the high frequency cross-border crossings into Thailand that is dominated by irregular migrants. The Indonesian research team looked at the role of local governments in migration management as the country embarked into substantial decentralization process. The Philippine research team looked at the management of massive deployment flows spanning thirty years with special attention to the most vulnerable group – the household service workers. For receiving countries, the Malaysian research team looked at their experience in the continuing running battle with irregular migrants. The Singaporean research team looked at the close interaction between the needs of the economy for migrant workers and their desire not to be too dependent on them. The Thai research team described the experience at the crossroad of being both a receiving and still a sending country. The studies have highlighted seven important themes on international labor migration management in ASEAN, namely: (a) the importance of integrating international migration into national and regional development efforts; (b) the importance of both bilateral and multilateral agreements; (c) the importance of recognizing differences in labor market policies in sending and receiving countries in designing protection for migrant workers; (d) the need to consider general administrative capacities in designing migration regulatory efforts; (e) the importance of involving subnational bodies in migration management; (f) the need to broaden cooperation in handling irregular migration; and (g) the recognition that the protection envisioned by the state need not be the one "desired" by the migrant, hence, the need to check often to find out the effectiveness of protection measures.
    Keywords: ASEAN, Philippines, international labor migration
    Date: 2013
  27. By: S. Quimbo; X. Javier (School of Economics, University of the Philippines Diliman)
    Abstract: Using data from the 2008 National Demographic and Health Survey, we ask whether women's economic empowerment -defined alternatively as having the ability to decide on (i) daily needs, (ii) major purchases, and (iii) spending own income - protects women against domestic violence. Using a simple model of choice of conflict resolution technology among spouses, we find evidence that economic empowerment protects women in a non-linear way. Low and high levels of empowerment reduce the likelihood of women experiencing domestic violence, possibly reflecting traditional gender roles in Philippine society.
    Keywords: Economic empowerment; domestic violence; Philippines
    JEL: J12 J16
    Date: 2013–06
  28. By: Sonia, Akter; Syed Abul, Basher
    Abstract: This paper presents the first household-level study to examine the combined impacts of the global food and financial crises on household food security and economic well-being in a developing country. Using longitudinal survey data of 1,800 rural households from 12 districts of Bangladesh over the period 2007–2010, we estimated a three-stage hierarchical logit model to identify the key sources of household food insecurity. A difference-in-difference estimator was then employed to compare pre- and post-crises expenditure for those households who experienced acute food shortages and those who managed to avoid the worst impacts of the crises. On the basis of our results we conclude that: (1) the soaring food prices of 2007–2008 unequivocally aggravated food insecurity in the rural areas of Bangladesh in 2008; (2) there was some weak evidence to suggest that the global economic downturn, which followed the global food crisis, contributed towards worsening food insecurity in 2009; (3) the adverse impacts of these crises appeared to have faded over time due to labor and commodity market adjustments, regional economic growth, and domestic policy responses, leaving no profound, long-lasting impacts on households’ economic well-being; and (4) although the immediate adverse consequences of rising food prices were borne disproportionately by the poor and farming communities, the longer term consequences were distributed more evenly across the rich and poor and, in general, were favorable for the farming community.
    Keywords: Food security; Food price shocks; financial crises; Discrete choice modeling; Household survey data; Economic welfare; Bangladesh
    JEL: C25 I31 Q18
    Date: 2013–06–27
  29. By: Capuano, Stella; Marfouk, Abdeslam
    Abstract: While there appears to be deep and growing concern for the brain drain from Africa, lack of adequate data has so far prevented a comprehensive analysis of its magnitude and its impact on source countries. Using original datasets on international migration, this paper addresses both issues. We show that many African economies lost a consistent part of their highly skilled labor force due to migration to developed countries. We also highlight that significant effort is still needed, in terms of data collection and empirical analysis, before drawing clear conclusions on the effects of the brain drain on Africa.
    Keywords: Education, International Migration, Human Capital, Labor Mobility, African brain drain
    JEL: F22 J11 O15
    Date: 2013–05
  30. By: Arceo-Gomez, Eva O.; Campos-Vázquez, Raymundo M.
    Abstract: In Mexico, as in most Latin American countries with indigenous populations, it is commonly believed that European phenotypes are preferred to mestizo or indigenous phenotypes. However, it is hard to test for such racial biases in the labor market using official statistics since race can only be inferred from native language. Moreover, employers may think that married females have lower productivity, and hence they may be more reluctant to hire them. We are interested in testing both hypotheses through a field experiment in the labor market. The experiment consisted on sending fictitious curriculums (CVs) responding to job advertisements with randomized information of the applicants. The CVs included photographs representing three distinct phenotypes: Caucasian, mestizo and indigenous. We also randomly vary marital status across gender and phenotype. Hence, our test consists on finding whether there are significant differences in the callback rates. We find that females have 40 percent more callbacks than males. We also find that indigenous looking females are discriminated against, but the effect is not present for males. Interestingly, married females are penalized in the labor market and this penalty is higher for indigenous-looking women. We did not find an effect of marital status on males.
    Keywords: Discrimination; Gender; Race; Marriage; Labor market; Mexico; Hiring; Correspondence study.
    JEL: J12 J15 J16 J7 J71 J83 O54
    Date: 2013–06–30
  31. By: Motkuri, Venkatanarayana; Veslawatha, Suresh Naik
    Abstract: Census 2011 brings new dimension to ongoing debate on the decline in the growth of employment from the last two decade. The census 2011 result gives better picture when compared with NSSO estimation of workforce. It is observed that there is a fast decelerating rate of growth in overall workforce, particularly that of females, between 2001 and 2011. But the work participation rate has not declined, if not increase, as the rate of growth in workforce is not less than that of population. Secondly, incremental workforce especially the male is getting reduced to marginal workers category whereas the high concentration of female in the category of marginal workers is slightly reduced. Occupational distribution of workforce shows that cultivators are declining such decline in agriculture is replaced by increasing agricultural labour. Growth of workforce in non-agriculture is higher than that of agriculture. Growth of female workers engaged in non-agriculture is higher than their male counterparts.
    Keywords: Workforce, Growth of Employment, Work Participation, Occupational Distribution and Workforce in Non-Agriculture
    JEL: J6 J62 Q1
    Date: 2013–05–17
  32. By: Paul, Sohini
    Abstract: This paper examines whether urban Micro-Finance Institutions (MFIs) consider proxy/ hidden collateral in the absence of physical as well as social collateral to judge the creditworthiness of a borrower. Micro-finance institutes operating in urban slums adopt an individual lending mechanism in several cases since borrowers are not willing to bear joint liability due to the acute problem of migration. Therefore, such urban MFIs that offer individual loans become extra-cautious to minimise default risk. To be specific, we study whether an MFI considers ownership of a 10ftx10ft room in a slum as a hidden selection criterion in a loan programme. Room ownership, on the one hand, indicates stability in a particular location, but on the other hand, it infers income generation capability of an aspirant borrower. We use a primary survey database collected from an NGO, Navnirman Samaj Vikas Kendra that provides micro credit in four slums of north Mumbai in India. We find that the probability of getting selected in a micro credit programme becomes significantly higher if a loan applicant owns a room in a slum compared to one who lives in a rented room. MFIs appear to be more concerned about shielding themselves from default than fulfilling the broad goal of maximising social welfare by reaching the poorest of the poor. We present our study with the caveat that the results may not be generalizable, since they are based on a case study.
    Keywords: Micro-finance; Credit-worthiness; Financial Sustainability; Urban slums
    JEL: G20 G21
    Date: 2013–05–16
  33. By: Xing, Yuqing (Asian Development Bank Institute); Pradhananga, Manisha (Asian Development Bank Institute)
    Abstract: The global financial crisis and the recent growth slowdown in the People’s Republic of China (PRC) have led to questions about the sustainability of the PRC’s growth. The commonly used argument is that the PRC is too dependent on external demand and that it needs to rebalance its economy toward domestic consumption. However, conventional measures of external demand—share of net exports and exports as a share of gross domestic product (GDP)—are biased and do not accurately measure the contribution of external demand to GDP growth. In this paper, the authors propose two measures that provide a more accurate estimate of the vulnerability of the PRC economy to external shocks, in the form of sudden drops in exports and foreign direct investment (FDI). Based on their findings, the authors conclude that the PRC economy remains highly dependent on external demand in the form of exports and FDI, and rebalancing the economy toward domestic demand has not yet been achieved.
    Keywords: prc economy; growth; external demand; gdp accounting
    JEL: E01 F43
    Date: 2013–07–01

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