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on Development |
| By: | Creina Day |
| Abstract: | While high fertility persists in the poorest countries and fertility declines with per capita income in developing countries, fertility and per capita income are now positively associated across most developed countries. This paper presents a model where a Ushaped relationship between overall fertility and per capita income reflects within country differences in workforce skill composition and household choice of occupation, fertility and childrearing. The fraction of skilled workers rises with economic growth. By allowing for both differences in the fertility of skilled and unskilled workers and purchased childrearing inputs, we explain a poverty trap with high fertility, fertility decline with economic development and the possible reversal of fertility decline in a developed economy where most workers are skilled. |
| Keywords: | fertility; economic growth; education; childrearing |
| JEL: | J13 J24 O40 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2013-47&r=dev |
| By: | Rod Tyers |
| Abstract: | Export led growth has been very effective in modernising China’s economy and establishing a large high-saving middle class. Notwithstanding political opposition from trading partners, this growth strategy has also offered the rest of the world improved terms of trade in both product and financial markets, in the form of cheaper light manufactures and cheaper credit. Yet slowing demand in export destinations has forced a transition to inward-sourced growth. This paper uses a numerical model of the Chinese economy with oligopoly behaviour to examine the available “inward†sources of transformative growth along with the policies needed to exploit them. The potential for considerable further “transformative†growth is shown to be considerable though it will require accelerated skilled labour supply growth and the politically difficult extension of industry policy reform to heavy manufacturing and services. |
| Keywords: | China, growth, fiscal policy, oligopoly, price caps, privatisation |
| JEL: | D43 D58 E62 L13 L43 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2013-48&r=dev |
| By: | Raymundo M. Campos-Vazquez (El Colegio de Mexico); Roberto Velez-Grajales (Centro de Estudios Espinosa Yglesias) |
| Abstract: | Using a national representative sample for Mexico, we analyse the effect of a husband having a working mother on the probability that he has a working wife. Our results show that labour force participation by a husband’s mother increases the probability of the labour force participation of his wife by 15 percentage points. The effect is mainly driven by males with less than a high school education. One possible confounding factor is the effect of labour force participation of the wife’s mother on the wife’s labour participation decision. However, in a different sample, we do not find any effect of work force participation of wives’ mothers on wives’ decisions to join the labour force. Finally, we test the effect of the work force participation of a husband’s mother on the husband’s preferences regarding child-rearing practices. We find that having a working mother strongly reduces the probability that daughters will be tasked to care for siblings and fosters preferences for a more egalitarian allocation of educational resources among children. Hence, promoting female labour force participation can have important dynamic implications, especially for developing countries. |
| Keywords: | female labour supply; family; preferences; social norms; role models |
| JEL: | D10 J12 J16 J22 O54 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:emx:ceedoc:2013-06&r=dev |
| By: | Aida Caldera Sánchez |
| Abstract: | Mexico has achieved a high degree of decentralisation in public services, but the Mexican fiscal federal system has important shortcomings. States and municipalities have become heavily dependent on federal transfers to finance a growing share of public spending. This leaves the burden of raising tax revenues falling almost exclusively on the federal government and reduces incentives for efficient spending and active tax collection at the subnational level. It can also lead to moral hazard and fiscal slippages. The federal government should harden the budget constraint on sub-national governments by limiting further increases in transfers and avoiding extraordinary transfers. Promoting the implementation of stronger fiscal rules, such as rules on deficits and debt ceilings, could also help to harden budget constraints and to ensure greater fiscal discipline. States should be given more taxing powers, if they are to collect a larger share of total revenues. Greater accountability and clarification of spending responsibilities could also contribute to improve the efficiency of spending among states and municipalities.<P>Améliorer les relations budgétaires fédérales pour renforcer l'économie Mexicaine<BR>Le Mexique a poussé très loin la décentralisation des services publics, mais le système budgétaire fédéral présente des déficiences importantes. Les États et les communes sont désormais très tributaires des transferts fédéraux pour financer une part croissante des dépenses publiques. De ce fait, c’est sur l’État fédéral que repose presque exclusivement la tâche de lever l'impôt et l'échelon infranational est peu incité à dépenser efficacement et à recouvrer activement des recettes fiscales. Cette situation peut aussi générer un aléa moral et des dérapages budgétaires. L'État fédéral devrait exercer une plus forte pression budgétaire sur les entités infranationales en limitant les nouvelles hausses des transferts et en s'abstenant de consentir des transferts exceptionnels. L'application de règles budgétaires plus strictes, comme des règles en matière de déficits et le plafonnement de la dette, pourrait aussi accentuer les contraintes et assurer une plus grande discipline dans ce domaine. Pour être en mesure de recouvrer une plus grande partie des recettes publiques totales, les États doivent se voir accorder plus de pouvoirs en matière fiscale. Davantage de responsabilisation et une clarification des attributions sur le plan des dépenses seraient aussi de nature à améliorer l'efficience de ces dernières au niveau des États et des communes. |
| Keywords: | Mexico, decentralisation, federalism, local governments, Mexique, gouvernement local, décentralisation, fédéralisme |
| JEL: | H11 H30 H77 O54 |
| Date: | 2013–08–05 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1078-en&r=dev |
| By: | Asghar, Zahid; Muhammad, Ahmed |
| Abstract: | This study investigates the determinants of food insecurity for both general and farmer households. It is based on Pakistan Social and Living standard Measurement (PSLM) 2007-08 survey conducted by the Federal Bureau of Statistics, Pakistan. After having descriptive analysis of the important determinants of food insecurity, we have used logit model to find the probability for being household secure or insecure. The model is initially fitted with 16 (for general) and 19 (for farmer households) variables, selected from factors identified by previous researchers that affect food insecurity. Twelve out of 19 variables for farmer households are found to be significant such as household size, household size square, household income, number of rooms, dependency ratio, electricity connection, irrigation facility, age and age square of household head. To our surprise female education variable is insignificant for general household model. The results obtained are further analyzed to compute partial effects on continuous variables and change in the probabilities on discrete variables for the significant factors in the logistic models. Household size, education of household head, annual income and agricultural income are some of the most important factors influencing the household’s food insecurity status. |
| Keywords: | Food Security, Discrete Choice Model |
| JEL: | C1 C5 Q18 |
| Date: | 2013–08–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:21510&r=dev |
| By: | Mr Sani Ibrahim, Saifullahi |
| Abstract: | Robust economic development is not possible without financial deepening more especially in rural community where vast majority of the populace of Less Developed Countries (LDCs) resides. This paper analyses the impact of rural financial development on economic growth of Nigeria. The study uses time series data covering 1980 to 2011 periods paving the way for the application of Johansen and Juselius model of cointegration to detect the long-run relation among the variables in question. Accordingly, Dynamic Ordinary Least Square (DOLS) method was applied to unveil relationship between rural financial development and economic growth. The cointegration test result reveals the presence of long run relation between rural financial development and economic growth of Nigeria. Moreover, the DOLS results found a significant positive relationship between rural financial development and the growth of Nigerian economy. It has been confirmed in this study that rural finance serves as an engine of growth in the country. It could therefore be concluded that enhancing productive credit especially in rural areas could free the disadvantaged entrepreneur and thus enable them to contribute immensely toward the growth of Nigerian economy. The study therefore recommends among other things, barriers to the productive credit allocation in rural community should be reduced to the barest minimum. |
| Keywords: | Rural development, credit allocation, financial development |
| JEL: | E44 O16 O55 |
| Date: | 2013–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:46885&r=dev |
| By: | Berg, Claudia; Emran, M. Shahe; Shilpi, Forhad |
| Abstract: | Using two surveys from Bangladesh, this paper provides evidence on the effects of microfinance competition on village moneylender interest rates and households’ dependence on informal credit. The views among practitioners diverge sharply: proponents claim that MFI competition reduces both the moneylender interest rate and households’ reliance on informal credit, while the critics argue the opposite. Taking advantage of recent econometric approaches that address selection on unobservables without imposing the standard exclusion restrictions, we find that the MFI competition does not reduce moneylender interest rates, thus partially repudiating the proponents. The effects are heterogeneous; there is no perceptible effect at low levels of MFI coverage, but when MFI coverage is high enough, the moneylender interest rate increases significantly. In contrast, households’ dependence on informal credit tends to go down after becoming MFI member, which contradicts part of the critic’s argument. The evidence is consistent with a model where MFIs draw away better borrowers from the moneylender, and fixed costs are important in informal lending. |
| Keywords: | Microfinance, Moneylenders, Microcredit, Interest Rates, Informal Borrowing, Long-run Effects, Bangladesh, Identification through Heteroskedasticity |
| JEL: | C31 O12 O17 |
| Date: | 2013–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:49040&r=dev |
| By: | Dollar, David; Kleineberg, Tatjana; Kraay, Aart |
| Abstract: | Incomes in the poorest two quintiles on average increase at the same rate as overall average incomes. This is because, in a global dataset spanning 118 countries over the past four decades, changes in the share of income of the poorest quintiles are generally small and uncorrelated with changes in average income. The variation in changes in quintile shares is also small relative to the variation in growth in average incomes, implying that the latter accounts for most of the variation in income growth in the poorest quintiles. These findings hold across most regions and time periods and when conditioning on a variety of country-level factors that may matter for growth and inequality changes. This evidence confirms the central importance of economic growth for poverty reduction and illustrates the difficulty of identifying specific macroeconomic policies that are significantly associated with the relative growth rates of those in the poorest quintiles. |
| Keywords: | Achieving Shared Growth,Inequality,Emerging Markets,Economic Theory&Research,Economic Growth |
| Date: | 2013–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6568&r=dev |
| By: | Fox, Louise; Sohnesen, Thomas Pave |
| Abstract: | Household enterprises -- usually one-person-operated tiny informal enterprises -- are a rapidly growing source of employment in Sub-Saharan Africa, especially in lower-income countries. Household enterprises tend to operate with limited interest or support from governments. This is the case in Mozambique, where neither the poverty reduction strategy nor small and medium enterprise development policies include household enterprises. Using multiple household surveys, including a recent panel data set, this paper identifies the characteristics of the sector and its development during the period in which Mozambique experienced rapid economic growth. The analysis finds that household enterprises in Mozambique are associated with higher household consumption, lower rural poverty, as well as upward mobility, particularly for rural and poorly educated households. But if the Mozambican government wants to tap this potential, it will need a different strategy than one designed to support small and medium enterprises, because creation and survival in this sector seems to depend on a set of factors related to the human capital in the household and development in the location, not the soft business environment constraints, such as licensing and permitting and corruption, which are cited by larger business. |
| Keywords: | Access to Finance,Rural Poverty Reduction,Housing&Human Habitats,Regional Economic Development |
| Date: | 2013–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6570&r=dev |
| By: | Khandker, Shahidur R.; Faruqee, Rashid; Samad, Hussain A. |
| Abstract: | Microcredit programs in Bangladesh have experienced spectacular growth in recent years, with a growing number of borrowers availing credit from multiple microcredit agencies. There is a growing concern that if there are not sufficient returns to borrowing from microfinance institutions (MFIS), some borrowers might be taking loans that they will not be able to repay. A household may be considered over-indebted, for example, if its debt liability exceeds 40 percent of its income or assets. Using a long panel of household survey data from Bangladesh, the paper finds that some 26 percent of microcredit borrowers are over-indebted on this measure versus 22 percent of non-microcredit borrowers. Econometric analysis suggests that both MFI competition and multiple borrowing raise indebtedness. However, repeated borrowing, while it affects short-term liability adversely, does affect the long-term debt-asset ratio favorably. That is, repeated borrowing helps increase assets more than debt over time. Microcredit borrowers in Bangladesh are thus not necessarily over-indebted. But when borrowing is seen as protection against shocks such as floods even at the cost of being indebted, MFIs may offer micro-insurance schemes to safeguard borrowers against economic shocks. |
| Keywords: | Debt Markets,Bankruptcy and Resolution of Financial Distress,Currencies and Exchange Rates,Banks&Banking Reform,Emerging Markets |
| Date: | 2013–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6574&r=dev |
| By: | Mthuli Ncube; Zuzana Brixiová |
| Abstract: | The heightened interest of African countries to access international capital markets has put public debt sustainability once again high on the continent’s policy agenda. Applying the ‘stabilizing primary balance approach’ to sustainability shows that the primary balances exceeded those required to keep public debt at the 2007 level in about half of the countries studied. In several cases with higher debt burdens, the balances were also above those needed to reduce public debt-to-GDP to sustainable thresholds. However, in most countries the main driver of sustainability has been the interest rate – growth differential (IRGD), underscoring the importance of maintaining and even accelerating growth as well as utilizing the borrowing space for growth-enhancing outlays. Fiscal policies will need to play a greater role in maintaining debt sustainability in the future, especially since the IRGDs are likely to narrow over the longer term. |
| Keywords: | public debt, sovereign bonds, interest-growth differential, primary balance, Africa |
| JEL: | H6 E6 O23 |
| Date: | 2013–07–15 |
| URL: | http://d.repec.org/n?u=RePEc:wdi:papers:2013-1053&r=dev |
| By: | Neil Foster-McGregor (The Vienna Institute for International Economic Studies, wiiw); Anders Isaksson; Florian Kaulich |
| Abstract: | This paper adds to the small but growing literature that considers a relationship between the way a firm serves foreign markets and its subsequent performance. The current paper is the first to consider this issue for a sample of sub-Saharan African countries and includes data on both manufacturing and services firms. Results from a number of parametric and non-parametric tests for manufacturing industries indicate that there is a clear productivity ordering with firms undertaking outward FDI performing best, followed by exporters with domestically oriented firms performing least well. The results for services firms are more nuanced and indicate that while exporters and firms undertaking outward FDI are more productive than domestically oriented firms, there is no significant difference in productivity between these two types of firms. Despite this, average productivity and point estimates from the regression analysis on services firms suggest that the productivity of exporting firms is larger than that for firms undertaking outward FDI. |
| Keywords: | exports, foreign direct investment, productivity, services firms |
| JEL: | F14 F21 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:wii:wpaper:97&r=dev |