nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2007‒01‒13
ten papers chosen by
Maximo Rossi
Universidad de la Republica

  1. Economic-Social Interaction during China’s Transition By Lindbeck, Assar
  2. An Essay on Economic Reforms and Social Change in China By Lindbeck, Assar
  3. Democracy and Protectionism By Kevin O'Rourke
  4. Investment in Schooling and the Marriage Market By Pierre-Andre Chiappori; Yoram Weiss; Murat Iyigun; Yoram Weiss
  5. Why are Married Men Working So Much? By John Knowles
  6. "Implementing Nonparametric and Semiparametric Estimators" By Hidehiko Ichimura; Petra E. Todd
  7. Are there lasting impacts of aid to poor areas ? Evidence from rural China By Chen, Shaohua; Mu, Ren; Ravallion, Martin
  8. The structural determinants of external vulnerability By Loayza, Norman V.; Raddatz, Claudio
  9. Trade liberalization, employment flows, and wage inequality in Brazil By Ferreira, Francisco H. G.; Leite, Phillippe G.; Wai-Poi, Matthew
  10. Social health insurance reexamined By Wagstaff, Adam

  1. By: Lindbeck, Assar (Research Institute of Industrial Economics)
    Abstract: I discuss the nature of the economic reforms in China during the last quarter of a century in the context of a typology of economic systems, emphasizing the interaction between economic and social mechanisms. I also consider China’s options for further reforms. I focus on economic reforms that make the growth path less resource demanding and social reforms that enhance income security and improve education and health care for disadvantaged population groups.
    Keywords: China; Transition Economies; Social Insurance; Human Services
    JEL: I18 I19 I38 O53 P30
    Date: 2006–12–04
    URL: http://d.repec.org/n?u=RePEc:hhs:iuiwop:0680&r=ltv
  2. By: Lindbeck, Assar (Research Institute of Industrial Economics)
    Abstract: This paper applies a systems-oriented, “holistic” approach to China’s radical economic reforms during the last quarter of a century. It characterizes China’s economic reforms in terms of a multidimensional classification of economic systems. When looking at the economic consequences of China’s change of economic system, I deal with both the impressive growth performance and its economic costs. I also study the consequences of the economic reforms for the previous social arrangements in the country, which were tied to individual work units: agriculture communes, collective firms and state-owned enterprises. I continue with the social development during the reform period, reflecting a complex mix of social advances, mainly in terms of poverty reduction, and regress for large population groups in terms of income security and human services, such as education and, in particular, health care. Next, I discuss Chinas future policy options in the social field, whereby I draw heavily on relevant experiences in developed countries over the years. The future options are classified into three broad categories: policies influencing the level and distribution of factor income, income transfers including social insurance, and the provision of human services.
    Keywords: China; Transition Economies; Social Insurance; Human Services
    JEL: I18 I19 I38 O53 P30
    Date: 2006–12–06
    URL: http://d.repec.org/n?u=RePEc:hhs:iuiwop:0681&r=ltv
  3. By: Kevin O'Rourke
    Abstract: Does democracy encourage free trade? It depends. Broadening the franchise involves transferring power from non-elected elites to the wider population, most of whom will be workers. The Hecksher- Ohlin-Stolper-Samuelson logic says that democratization should lead to more liberal trade policies in countries where workers stand to gain from free trade; and to more protectionist policies in countries where workers will benefit from the imposition of tariffs and quotas. We test and confirm these political economy implications of trade theory hypothesis using data on democracy, factor endowments, and protection in the late nineteenth century.
    Keywords: factor endowments, Heckscher-Ohlin trade theory, Stolper- Samuelson theorem and tariffs
    Date: 2007–01–05
    URL: http://d.repec.org/n?u=RePEc:iis:dispap:iiisdp191&r=ltv
  4. By: Pierre-Andre Chiappori; Yoram Weiss (Economics University of Colorado); Murat Iyigun; Yoram Weiss
    Abstract: We produce a model with pre-marital schooling investment, endogenuos marital matching and spousal specialization in homework and market production. Schooling investments generate two kinds of returns in our framework: a labor-market return due to the education premium and a marriage-market return because education can improve the intra-marital share of the surplus one can extract from marriage. When the returns to education are gender neutral, men and women educate in equal proportions and there is pure positive assortative matching in the marriage markets. But if the returns are not gender neutral, then there is mixing in equilibrium where some educated individuals marry uneducated spouses and those who educate less because their labormarket return is lower extract a relatively larger share of the marital surplus. Conditional on the choice of schooling, couples’ career decisions affect the size of their marital surplus, but the existence of large and frictionless marriage markets can still produce efficient household specialization where the higher-wage spouse specializes in market production and the lower-wage spouse engages in homework. Even when cultural and social norms or the time requirements of homework dictate that wives devote relatively more time to homework, women can acquire more schooling than men if a gender wage gap exists but narrows with the level of education
    Keywords: Pre-Marital Investments, Intra-Household Allocations, Assortative Matching.
    JEL: C78 D61 D70
    Date: 2006–12–03
    URL: http://d.repec.org/n?u=RePEc:red:sed006:43&r=ltv
  5. By: John Knowles (University of Pennsylvania)
    Abstract: We document a negative trend in the leisure of men married to women aged 25-45, relative to that of their wives, and a positive trend in relative housework. We develop a simple bargaining model of marriage, divorce and allocations of leisure-time and housework. Calibration to US data shows the trend in the wage gender gap explains most of the trend in relative leisure, but has little effect on married women's labor supply, which appears to be due mainly to the trend in the price of home equipment.
    Keywords: Marriage; Marital Dissolution; Economics of Gender; Time Allocation and Labor Supply
    JEL: E13 J12 J16
    Date: 2006–12–03
    URL: http://d.repec.org/n?u=RePEc:red:sed006:445&r=ltv
  6. By: Hidehiko Ichimura (Faculty of Economics, University of Tokyo); Petra E. Todd (Department of Economics, University of Pennsylvania)
    Abstract: This chapter reviews recent advances in nonparametric and semiparametric estimation, with an emphasis on applicability to empirical research and on resolving issues that arise in implementation. It considers techniques for estimating densities, conditional mean functions, derivatives of functions and conditional quantiles in a flexible way that imposes minimal functional form assumptions. The chapter begins by illustrating how flexible modeling methods have been applied in empirical research, drawing on recent examples of applications from labor economics, consumer demand estimation and treatment effects models. Then, key concepts in semiparametric and nonparametric modeling are introduced that do not have counterparts in parametric modeling, such as the so-called curse of dimensionality, the notion of models with an infinite number of parameters, the criteria used to define optimal convergence rates, and "dimension-free" estimators. After defining these new concepts, a large literature on nonparametric estimation is reviewed and a unifying framework presented for thinking about how different approaches relate to one another. Local polynomial estimators are discussed in detail and their distribution theory is developed. The chapter then shows how nonparametric estimators form the building blocks for many semiparametric estimators, such as estimators for average derivatives, index models, partially linear models, and additively separable models. Semiparametric methods offer a middle ground between fully nonparametric and parametric approaches. Their main advantage is that they typically achieve faster rates of convergence than fully nonparametric approaches. In many cases, they converge at the parametric rate. The second part of the chapter considers in detail two issues that are central with regard to implementing flexible modeling methods: how to select the values of smoothing parameters in an optimal way and how to implement "trimming" procedures. It also reviews newly developed techniques for deriving the distribution theory of semiparametric estimators. The chapter concludes with an overview of approximation methods that speed up the computation of nonparametric estimates and make flexible estimation feasible even in very large size samples.
    Date: 2006–12
    URL: http://d.repec.org/n?u=RePEc:tky:fseres:2006cf452&r=ltv
  7. By: Chen, Shaohua; Mu, Ren; Ravallion, Martin
    Abstract: The paper revisits the site of a large, World Bank-financed, rural development program in China 10 years after it began and four years after disbursements ended. The program emphasized community participation in multi-sectoral interventions (including farming, animal husbandry, infrastructure and social services). Data were collected on 2,000 households in project and nonproject areas, spanning 10 years. A double-difference estimator of the program ' s impact (on top of pre-existing governmental programs) reveals sizeable short-term income gains that were mostly saved. Only modest gains to mean consumption emerged in the longer term-in rough accord with the gain to permanent income. Certain types of households gained more than others. The educated poor were under-covered by the community-based selection process-greatly reducing overall impact. The main results are robust to corrections for various sources of selection bias, including village targeting and interference due to spillover effects generated by the response of local governments to the external aid.
    Keywords: Rural Poverty Reduction,Poverty Monitoring & Analysis,Economic Theory & Research,Poverty Impact Evaluation,Social Accountability
    Date: 2006–12–01
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:4084&r=ltv
  8. By: Loayza, Norman V.; Raddatz, Claudio
    Abstract: The authors examine empirically how domestic structural characteristics related to openness and product- and factor-market flexibility influence the impact that terms-of-trade shocks can have on aggregate output. For this purpose, they apply an econometric methodology based on semi-structural vector auto-regressions to a panel of 90 countries with annual observations for the period 1974-2000. Using this methodology, the authors isolate and standardize the shocks, estimate their impact on GDP, and examine how this impact depends on the domestic conditions outlined above. They find that larger trade openness magnifies the output impact of external shocks, particularly the negative ones, while improvements in labor market flexibility and financial openness reduce their impact. Domestic financial depth has a more nuanced role in stabilizing the economy. It helps reduce the impact of external shocks particularly in environments of high exposure-that is, when trade and financial openness are high, firm entry is unrestricted, and labor markets are rigid.
    Keywords: Pro-Poor Growth and Inequality,Free Trade,Economic Theory & Research,Inequality,Macroeconomic Management
    Date: 2006–12–01
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:4089&r=ltv
  9. By: Ferreira, Francisco H. G.; Leite, Phillippe G.; Wai-Poi, Matthew
    Abstract: Using nationally representative, economywide data, this paper investigates the relative importance of trade-mandated effects on industry wage premia; industry and economywide skill premia; and employment flows in accounting for changes in the wage distribution in Brazil during the 1988-95 trade liberalization. Unlike in other Latin American countries, trade liberalization appears to have made a significant contribution toward a reduction in wage inequality. These effects have not occurred through changes in industry-specific (wage or skill) premia. Instead, they appear to have been channeled through substantial employment flows across sectors and formality categories. Changes in the economywide skill premium are also important.
    Keywords: Economic Theory & Research,Free Trade,Labor Markets,Trade Policy,Trade Law
    Date: 2007–01–01
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:4108&r=ltv
  10. By: Wagstaff, Adam
    Abstract: Social health insurance (SHI) is enjoying something of a revival in parts of the developing world. Many countries that have in the past relied largely on tax finance (and out-of-pocket payments) have introduced SHI, or are thinking about doing so. And countries with SHI already in place are making vigorous efforts to extend coverage to the informal sector. Ironically, this revival is occurring at a time when the traditional SHI countries in Europe have either already reduced payroll financing in favor of general revenues, or are in the process of doing so. This paper examines how SHI fares in health care delivery, revenue collection, covering the formal sector, and its impacts on the labor market. It argues that SHI does not necessarily deliver good quality care at a low cost, partly because of poor regulation of SHI purchasers. It suggests that the costs of collecting revenues can be substantial, even in the formal sector where nonenrollment and evasion are commonplace, and that while SHI can cover the formal sector and the poor relatively easily, it fares badly in terms of covering the nonpoor informal sector workers until the economy has reached a high level of economic development. The paper also argues that SHI can have negative labor market effects.
    Keywords: Health Monitoring & Evaluation,Health Economics & Finance,Public Sector Economics & Finance,Labor Markets,Health Systems Development & Reform
    Date: 2007–01–01
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:4111&r=ltv

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