nep-iue New Economics Papers
on Informal and Underground Economics
Issue of 2013‒01‒12
five papers chosen by
Catalina Granda Carvajal
Universidad de Antioquia

  1. Growth, Poverty and Labor Market Rigidity in Indonesia: A General Equilibrium Investigation By Arief Anshory Yusuf; Ahmad Komarulzaman; Muhammad Purnagunawan; Budy P. Resosudarmo
  2. Political reservations and women's entrepreneurship in India By Ghani, Ejaz; Kerr, William R.; O'Connell, Stephen D.
  3. Fighting software piracy: which IPRs laws (treaties) matter in Africa? By Simplice A, Asongu
  4. Riding for Survival: A Worst Form of Human Trafficking By Safana , Shaheen; Masood , Sarwar; Muhammad, Waqas; Amir , Aslam
  5. The impact of risk perception and risk attitudes on corrupt behavior: Evidence from a petty corruption experiment By Fahr, René; Djawadi, Behnud Mir

  1. By: Arief Anshory Yusuf (Department of Economics, Padjadjaran University); Ahmad Komarulzaman (Department of Economics, Padjadjaran University); Muhammad Purnagunawan (Department of Economics, Padjadjaran University); Budy P. Resosudarmo (Australian National University)
    Abstract: In this paper, we argue that the intensification of capital use and an acceleration of real wage growth can be the main culprits of the “jobless growth” in Indonesian manufacturing sector for the period of 1999-2008, a period of recovery from the Asian Crisis. This can also endanger the poverty reduction aspiration during the same period. We simulate the situation using a Computable General Equilibrium model and find that the effect of the increased capital utilization and the acceleration of real wage growth are equally important in explaining the jobless-growth phenomenon. Increased capital utilization help the economy recover and reduces poverty but when constrained with the increasing real wage, the recovery and the rate of poverty reduction is slower. The situation is in favor of the non-poor because first, the poor is mainly dependent on non-formal employment, hence do not benefit from the increased real wage; second, the slower expansion of the manufacturing sector affect the rest of the economy affecting the real wage of the labor employed in other sectors, such as unskilled non-formal labor and agricultural labor upon which the poor are heavily dependent; and third, the income rise from increased capital utilization mainly benefits the urban non-poor.
    Keywords: Growth, poverty, labor market, general equilibrium, Indonesia
    JEL: O53 J21 I38
    Date: 2013–01
  2. By: Ghani, Ejaz; Kerr, William R.; O'Connell, Stephen D.
    Abstract: This paper quantifies the link between the timing of state-level implementations of political reservations for women in India with the role of women in India's manufacturing sector. It does not find evidence that overall employment of women in manufacturing increased after the reforms. However, the analysis finds significant evidence that more women-owned establishments were created in the unorganized/informal sector. These establishments were concentrated in industries where women entrepreneurs have been traditionally active and the entry was mainly found among household-based establishments. This heightened entrepreneurship does not appear linked to changes in reporting, better access to government contracts and business, or improved financing environments. One interpretation of these results is that the implementation of the political reservations inspired more women to open establishments, and they did so at a small establishment scale in industries where they had experience and/or the support networks of other women.
    Keywords: Access to Finance,Water and Industry,Gender and Development,Rural Development Knowledge&Information Systems,Gender and Law
    Date: 2013–01–01
  3. By: Simplice A, Asongu
    Abstract: With the proliferation of technology used to prate software, this paper answers some key questions in policy decision making. Dynamic panel Generalized Methods of Moments and Two Stage Least Squares are employed. IPRs laws (treaties) are instrumented with government quality dynamics to assess their incidence on software piracy. The following findings are established. (1) Government institutions are crucial in enforcing IPRs laws (treaties) in the fight against software piracy. (2) Main IP laws enacted by the legislature and Multilateral IP laws are most effective in combating piracy. (3) IPRs laws, WIPO Treaties and Bilateral Treaties do not have significant negative incidences on software piracy. Policy implications are discussed.
    Keywords: Software piracy; Intellectual property rights; Panel data; Africa
    JEL: F42 O38 O34 O57 K42
    Date: 2012–08–16
  4. By: Safana , Shaheen; Masood , Sarwar; Muhammad, Waqas; Amir , Aslam
    Abstract: Trafficking of the humans is a growing concern at international level. Among all the trafficked ones, children who are misused and continuously mistreated claim the special attention. It is, further, a known fact that these poverty stricken children are trafficked from Pakistan to wealthy Gulf States for camel racing. In order to find out the socioeconomic characteristics of trafficked children this study interviewed the ex-camel jockeys and their families from district Rahim Yar Khan (RYK), Muzafargarh, Multan, D.G. Khan, Bahawalpur and Rajan Pur. Results suggested that the problem of ex-camel jockey children is certainly a social issue and it can only be addressed by taking simultaneous reinforcing actions across all economic and social sectors, including the sectors of education and health. Moreover, it was observed that effective prevention requires family empowerment, basic education, capacity building, awareness raising and social mobilization. Rehabilitation measures should seek to offer different solutions and provide a comprehensive socio-economic package of services encompassing education, health and nutrition, social protection and shelter.
    Keywords: Human Trafficking; Camel Racing; Pakistan
    JEL: I12 I31 I32
    Date: 2012–09–12
  5. By: Fahr, René; Djawadi, Behnud Mir
    Abstract: We investigate one possible explanation for corrupt behavior namely that individual decision makers who engage frequently in illegal actions might underestimate the overall probability of being caught. This might be in particular true for petty corruption where small amounts of bribes are involved and detection rate is rather low. To abstract from confounding effects of reciprocal behavior we design an experiment where a public official decides upon accepting a bribe that leads to a higher present period income while facing the risk of being audited and left with a considerable lower income in all subsequent periods. Because risk attitudes might be different when putting earned versus endowed income at risk we compare treatments where participants either receive an endowment beforehand or earn their income by conducting a real effort task in every period. Independent of the treatments we already find high rates of corruption in very early periods. Risk attitudes measured with a subsequent lottery-choice experiment do not correlate with the behavior observed in the corruption experiment. We explain our findings by a systematic underestimation of the overall probability to be audited. Although detection probability is small in each period, the probability of being caught only once is substantially high when engaging in corrupt behavior on a regular basis. Our findings have important political implications because the underestimation of the total risk involved in engaging in corrupt behaviour might nullify measures to fight petty corruption by increased governmental auditing. --
    JEL: D73 C91 D81
    Date: 2012

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