nep-sea New Economics Papers
on South East Asia
Issue of 2020‒10‒12
twenty-one papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Who bears the burden of climate variability? A comparative analysis of the impact of weather conditions on inequality in Vietnam and Indonesia By Grazia PACILLO
  2. Measuring the non-use value of the Dugong (Dugong dugon) in Thailand By Petcharat, Areeyapat; Lee, Yohan
  3. Traditional Norms, Access to Divorce and Women’s Empowerment: Evidence from Indonesia By Olivier Bargain; Jordan Loper; Roberta Ziparo
  4. Are Employment Protection Laws for Disabled People Effective in a Developing Country? By Michael Palmer; Jenny Williams
  5. Trade, Financial Flows and Stock Market Interdependence: Evidence from Asian Markets By Sudha Narayanan; Sowmya Dhanaraj; Arun Kumar Gopalaswamy; M. Suresh Babu
  6. On Possible Measures and Processes to Issue Digital Common Currency in ASEAN + 3 Including Challenges and Opportunities By Taiji Inui; Wataru Takahashi; Mamoru Ishida
  7. Mind the Gap: Trade Costs and Markups in the Philippines By Eugenia C. Go
  8. Does Education Affect Time Preference? Evidence from Indonesia By Dawoon Jung; Tushar Bharati; Seungwoo Chin
  9. Land Rights and Migration in Vietnam By Nguyen, Linh
  10. Fintech and big tech credit: a new database By Giulio Cornelli; Jon Frost; Leonardo Gambacorta; Raghavendra Rau; Robert Wardrop; Tania Ziegler
  11. Who is Most Vulnerable to Climate Change Induced Yield Changes? A Dynamic Long Run Household Analysis in Lower Income Countries By Wilts, Rienne; Latka, Catharina; Britz, Wolfgang
  12. Valuing Ecosystem Services in the Bang Ka Chao Green Area, Thailand By Petcharat, Areeyapat; Lee, Yohan
  13. Agro-industry, exports, and income distribution: A multiplier decomposition analysis for Myanmar By Dirk van Seventer; Finn Tarp
  14. A Counterfactual Economic Analysis of Covid-19 Using a Threshold Augmented Multi-Country Model By Chudik, A.; Mohaddes, K.; Pesaran, M. H.; Raissi, M.; Rebucci, A.
  15. On Covid-19: New Implications of Job Task Requirements and Spouse's Occupational Sorting By Warn N. Lekfuangfu; Suphanit Piyapromdee; Ponpoje Porapakkarm; Nada Wasi
  16. Exploring alternative approaches to estimate the impact of non-tariff measures and further implementation in simulation models By Ana Sanjuan Lopez; Marie-Luise Rau; Geert Woltjer
  17. Current Status of Coral Reefs in India: Importance,Rising Threats and Policies for its Conservation and Management By Srihitha Baswapoor; Zareena Begum Irfan
  18. Financial Flows Centrality: Empirical Evidence using Bilateral Capital Flows By Rogelio V. Mercado Jr.; Shanty Noviantie
  19. Shedding Light on the Dark: The Impact of Legal Enforcement on Darknet Transactions By Jason Chan; Shu He; Dandan Qiao; Andrew B. Whinston
  20. Children and the Remaining Gender Gaps in the Labor Market By Cortes, Patricia; Pan, Jessica
  21. Weighing up the Credit-to-GDP Gap: A Cautionary Note By Özer Karagedikli; Ole Rummel

  1. By: Grazia PACILLO
    Abstract: Is climate variability regressive? One argument could be as follows: People living in areas with high risk of climate hazards usually correspond to the most disadvantaged populations. Due to existing structural inequalities, they have limited opportunities to cope with climate hazards and often fall into a spiral of further poverty and social exclusion. In this paper, we investigate whether climate variability indeed has a regressive effect in Vietnam and Indonesia where both climate variability and inequality have been increasing. We directly analyse the effect of annual and seasonal temperature on income and income inequality across years.
    Keywords: Indonésie, Vietnam
    JEL: Q
    Date: 2020–09–23
  2. By: Petcharat, Areeyapat; Lee, Yohan
    Abstract: The dugong is an herbivorous marine mammal species, being vulnerable to extinction throughout its range in the Indo-Pacific region. This paper used the choice experiment method to elicit the non-use value, or the non-users’ willingness to pay (WTP) for conserving the dugongs in Thailand. A face-to-face interview was used to obtain data from 300 residents in five selected districts of Bangkok. The results show that the average WTP for the most preferred dugong conservation scheme (a marker buoy system, recreating habitats, and slowing down the population decline) was 4,382 Thai Baht (USD122) annually per household. Significantly, developing the marker buoy system to identify dugong habitats was the most valued by the general public. However, the respondents were not willing to pay for educating local fishers about the conservation of dugongs. Our results implies that a conservation policy should concentrate on the participation of key fishers in dugong protection projects using incentive measures. We also suggest the government to create protected areas as dugong sanctuaries that consistently support the remaining dugong population.
    Keywords: Environmental Economics and Policy
    Date: 2020–09–16
  3. By: Olivier Bargain; Jordan Loper; Roberta Ziparo
    Abstract: Social norms can interact with formal institutions in shaping women’s autonomy. We examine this question in the context of legal reforms and their differentiated impact on divorce and empowerment across traditional modes of post-marital cohabitation. Global evidence first shows that the degree of ancestral matrilocality (i.e. the practice of living with the bride’s relatives after marriage) correlates with contemporaneous opinions about gender role. This is especially the case in countries with low divorce rates such as Indonesia. We then exploit a policy experiment for this country, which exogenously fosters women’s access to justice and ability to divorce. We theoretically establish how women originating from matrilocal ethnic groups should respond to the reform compared to those from patrilocal ethnicities. We confirm the model predictions using a panel difference-in-difference approach: the former divorce more and, when in stable marriages, experience a significant improvement in well-being and empowerment. This result is consistently obtained for a broad range of outcomes including women’s health, fertility control, asset value, women’s and children’s well-being as well as women’s final say over key decisions. Modern legal reforms compound with ancestral norms and exacerbate potential inequalities between women of different ethnic origins. This conclusion calls for better tailored policies that can transcend cultural contexts and overcome the adherence to informal laws.
    Keywords: Legal Reforms; Divorce; Ethnic Norms; Intra-Household Decision-Making
    JEL: D13 I15 I38 J16 K36 Z13
    Date: 2020
  4. By: Michael Palmer (Economics Discipline, Business School, University of Western Australia); Jenny Williams (Department of Economics, University of Melbourne)
    Abstract: This paper investigates the impact of a law protecting the employment rights of disabled people in Cambodia. Similar to studies in high income countries, we find that Cambodia's national disability law did not improve the employment situation of persons with disabilities, and may have worsened it, four years after implementation. The reduction in employment of disabled persons following the laws introduction is larger among employees, females, and in the industrial sector. The most plausible mechanism through which employment is reduced is via lower demand for disabled workers by employers seeking to avoid the cost of workplace accommodations in an environment of monitoring by a non-government organization and where employment quotas for disabled workers are set at non-binding levels.
    JEL: I18 J21 K31 C21
    Date: 2020
  5. By: Sudha Narayanan (Associate Professor, Indira Gandhi Institute of Development Research (IGIDR)); Sowmya Dhanaraj (Lecturer, Madras School of Economics); Arun Kumar Gopalaswamy (IIT Madras, India); M. Suresh Babu (IIT Madras, India)
    Abstract: Liberalization and globalization of Newly Industrialized Economies have contributed to increased integration of capital markets. This study tests whether convergence of macroeconomic variables and enhanced bilateral trade and financial flows causes greater interdependence of markets. Daily closing indices and quarterly differentials in interest, inflation, growth rates, exchange rates, trade of goods and services, direct and portfolio investment were used. Results revealed that markets of Asia are not immune to shocks originating in US although co-movements of macroeconomic variables do not help in explaining level of interdependence. Portfolio flows were found to be important than trade flows in explaining market interdependence
    Keywords: Dynamic market interdependence, US and Asian Newly Industrialized Economies (NIEs), Emerging Market Economies (EMEs), FEVD, Trade and Financial Flows
    JEL: F4 G1
  6. By: Taiji Inui (Japan International Cooperation Agency (JICA) advisor for Central Bank of Myanmar and Asian Development Bank (ADB) consultant for Cross-border Settlement Infrastructure Forum (CSIF)); Wataru Takahashi (Faculty of Economics, Osaka University of Economics and Research Fellow, Research Fellow, Research Institute for Economics and Business Administration, Kobe University, Japan); Mamoru Ishida (Itochu Corporation, Japan)
    Abstract: Following the previous paper by Inui, Takahashi, and Ishida (2020), this paper discusses possible measures and processes of Asia (ASEAN+3) digital common currency (ADCC) issued by central banks in ASEAN+3 countries/economies backed by the ADCC denominated bonds issued by an international organization (such as AMRO). This paper also tries to explain authors' views on some possible challenges which need to be solved from practical perspective such as anonymity, counterfeit, AML/CFT, etc. as well as weight of local currencies for the basket currency ACU which could be used as a currency unit for ADCC (AMRO coin for example). In recent years, central banks in many countries are interested in developing the individual digital currencies as their legal tenders. Also, considering the trend of borderless economy, a borderless (cross-border) currency will naturally be focused on sooner or later to meet such an economic trend. Because of the development of digital technologies, it is getting easier to issue and circulate such a borderless currency in a digital form. This paper is trying to propose an idea to meet such a trend.
    Keywords: Digital currency; Asia common currency; Anonymity; AML/CFT
    JEL: E42 F33 F36
    Date: 2020–09
  7. By: Eugenia C. Go (Asian Development Bank)
    Abstract: I investigate the effect of a transport program in the Philippines on spatial price gaps and markups of agricultural products. The Roll-on Roll-off Terminal System (RRTS) introduced in 2003 promotes the use of roll-on roll-off (RORO) ships for interisland trade. Using an origin-destination mapped dataset and the variation in the availability and timing of RORO services between provinces, I find that conditional on distance, price gaps as proportion of farmgate prices are on average 28% smaller in province pairs that have RRTS connection. The gap narrowing effect is driven by higher farm prices without the corresponding increase in retail markets. During episodes of localized weather shocks, farmers in RRTS provinces retain a higher share of the rents from price increases, while changes in consumer prices are not significantly different than in non-RRTS provinces. The results are consistent with a reduction in markups from RRTS-induced competition in intermediation and shipping services.
    Keywords: Markups, trade cost, transport cost
    JEL: F14 R12 R40
    Date: 2020–09
  8. By: Dawoon Jung (Korea Institute of Public Finance); Tushar Bharati (Economics Discipline, Business School, University of Western Australia); Seungwoo Chin (Ministry of Finance and Strategy, Korea)
    Abstract: The paper examines the causal effect of education on time preference. To define our measure of time preference, we use responses to hypothetical questions involving inter-temporal trade-offs from the Indonesian Family Life Survey. We instrument years of education with exposure to the Indonesian INPRES primary school construction program of the 1970s that caused exogenous variations in the cost of going to school. The local average treatment effect of the program was a nine percentage point decrease in the probability of a female respondent choosing the most impatient response for every additional year of schooling. The results are robust to alternative definitions of the time preference measures but sensitive to changes in samples and specifications. The findings add to the evidence on the endogeneity of individual preferences parameters that are often taken to be constant in neoclassical economics.
    Keywords: Time preference, patience, education, Indonesia
    JEL: D01 D90 I25
    Date: 2020
  9. By: Nguyen, Linh
    Keywords: International Development, Agricultural and Food Policy, Labor and Human Capital
    Date: 2020–07
  10. By: Giulio Cornelli; Jon Frost; Leonardo Gambacorta; Raghavendra Rau; Robert Wardrop; Tania Ziegler
    Abstract: Fintech and big tech platforms have expanded their lending around the world. We estimate that the flow of these new forms of credit reached USD 223 billion and USD 572 billion in 2019, respectively. China, the United States and the United Kingdom are the largest markets for fintech credit. Big tech credit is growing fast in China, Japan, Korea, Southeast Asia and some countries in Africa and Latin America. Cross-country panel regressions show that such lending is more developed in countries with higher GDP per capita (at a declining rate), where banking sector mark-ups are higher and where banking regulation is less stringent. Fintech credit is larger where there are fewer bank branches per capita. We also find that fintech and big tech credit are more developed where the ease of doing business is greater, and investor protection disclosure and the efficiency of the judicial system are more advanced, the bank creditto- deposit ratio is lower and where bond and equity markets are more developed. Overall, alternative credit seems to complement other forms of credit, rather than substitute for them.
    Keywords: fintech, big tech, credit, data, technology, digital innovation
    Date: 2020–09
  11. By: Wilts, Rienne; Latka, Catharina; Britz, Wolfgang
    Abstract: Climate change impacts on agricultural production will shape the challenges of reaching food security and reducing poverty across households in the future. Existing literature lacks analysis of these impacts on different household groups under consideration of changing socio-economic developments. Here, we analyze how crop yield shifts induced by climate change will affect different household types in three low and low middle-income countries, namely Vietnam, Ethiopia and Bolivia. The long-run analysis is based on a recursive-dynamic Computable General Equilibrium model. We first construct a baseline scenario projecting global socio-economic developments up to 2050. From there, we implement business-as-usual climate change shocks on crop yields. In the baseline, all households benefit from welfare increases over time. Adding climate change induced yield changes reveals impacts different in size and direction depending on the level of the households’ income and on the share of income generated in agriculture. We find that the composition of the factor income is of large importance for the vulnerability of households to climate change, as, the loss for non-agricultural households is highest in absolute terms. The complementary comparative static analysis shows smaller absolute and relative effects for most households as the differentiated factor income growth over time is not considered, which makes household types more or less vulnerable. A sensitivity analysis varying the severity of climate change impacts on yields confirms that more negative yield shifts exacerbate the situation of the most vulnerable households. Furthermore, it underlines that yield shocks on staple crops are of major importance for the welfare effect. Our findings reveal the need for differentiated interventions to mitigate consequences especially for the most vulnerable households.
    Keywords: Consumer/Household Economics, Crop Production/Industries, Demand and Price Analysis, Food Security and Poverty, International Development, International Relations/Trade
    Date: 2020–10–02
  12. By: Petcharat, Areeyapat; Lee, Yohan
    Abstract: Bang Ka Chao, the largest green area in the Bangkok metropolitan area, delivers significant ecosystem services to sustain society free of charge. It is therefore difficult to achieve socially optimal services because of inefficient allocation of resources, over-consumption, and negative externalities resulting from market failures. This study assesses the value, or consumers’ willingness to pay (WTP), for enhanced ecosystem services from the Bang Ka Chao Green Area and to investigate factors influencing the WTP of Bangkok residents. The choice experiment approach was applied by interviewing 200 respondents living in the Bangkok metropolitan area. The data were collected between July and September 2016 and analyzed using a conditional logit model. The results reveal that the respondents are willing to pay USD41.5 per year to improve the ecosystem services provided by the Green Area. The respondents identified air purification as the most important service, while food products and recreational benefits were somewhat important, and bird habitat was the least important. We therefore suggest that the government take immediate steps to establish restoration projects with the concrete objective of enhancing regulating services, especially air purification. Traditional agricultural practices (mixed fruit orchards), agroforestry, and agritourism should also be implemented and promoted in the green area. Therefore, a payment for ecosystem services (PES) scheme funded by Bangkok and recreational users should be a possible approach to guarantee the quality of the ecosystem services provided by the landowners within the Bang Ka Chao Green Area.
    Keywords: Environmental Economics and Policy
    Date: 2020–09–16
  13. By: Dirk van Seventer; Finn Tarp
    Abstract: This paper considers the impacts of agro-industry development and international trade on income distribution in Myanmar, focusing on low-income rural households. We use a social accounting matrix multiplier (SAM) decomposition model featuring detailed economic linkages. After describing the Myanmar economy through the lens of a SAM for 2017, we focus on agriculture development. Our results suggest that low-income rural households benefit considerably from exogenous increases in crop and agro-processing activities.
    Keywords: Social Accounting Matrix, Decomposition, Myanmar
    Date: 2020
  14. By: Chudik, A.; Mohaddes, K.; Pesaran, M. H.; Raissi, M.; Rebucci, A.
    Abstract: This paper develops a threshold-augmented dynamic multi-country model (TG-VAR) to quantify the macroeconomic effects of Covid-19. We show that there exist threshold effects in the relationship between output growth and excess global volatility at individual country levels in a significant majority of advanced economies and in the case of several emerging markets. We then estimate a more general multi-country model augmented with these threshold effects as well as long term interest rates, oil prices, exchange rates and equity returns to perform counterfactual analyses. We distinguish common global factors from trade-related spillovers, and identify the Covid-19 shock using GDP growth forecast revisions of the IMF in 2020Q1. We account for sample uncertainty by bootstrapping the multi-country model estimated over four decades of quarterly observations. Our results show that the Covid-19 pandemic will lead to a significant fall in world output that is most likely long-lasting, with outcomes that are quite heterogenous across countries and regions. While the impact on China and other emerging Asian economies are estimated to be less severe, the United States, the United Kingdom, and several other advanced economies may experience deeper and longer-lasting effects. Non-Asian emerging markets stand out for their vulnerability. We show that no country is immune to the economic fallout of the pandemic because of global interconnections as evidenced by the case of Sweden. We also find that long-term interest rates could fall significantly below their recent lows in core advanced economies, but this does not seem to be the case in emerging markets.
    Keywords: Threshold-augmented Global VAR (TGVAR), international business cycle, Covid-19, global volatility, threshold effects
    JEL: C32 E44 F44
    Date: 2020–09–18
  15. By: Warn N. Lekfuangfu (Universidad Carlos III de Madrid); Suphanit Piyapromdee (University College London); Ponpoje Porapakkarm (National Graduate Institute for Policies Studies (GRIPS)); Nada Wasi (Puey Ungphakorn Institute for Economic Research, Bank of Thailand)
    Abstract: The Covid-19 pandemic has disrupted working life in many ways, the negative consequences of which may be distributed unevenly under lockdown regulations. In this paper, we construct a new set of pandemic-related indices from the Occupational Information Network (O*NET) using factor analysis. The indices capture two key dimensions of job task requirements: (i) the extent to which jobs can be adaptable to work from home; and (ii) the degree of infection risk at workplace. The interaction of these two dimensions help identify which groups of workers are more vulnerable to income losses, and which groups of occupations pose more risk to public health. This information is crucial for both designing appropriate supporting programs and finding a strategy to reopen the economy while controlling the spread of the virus. In our application, we map the indices to the labor force survey of a developing country, Thailand, to analyze these new labor market risks. We document differences in job characteristics across income groups, at both individual and household levels. First, low income individuals tend to work in occupations that require less physical interaction (lower risk of infection) but are less adaptable to work from home (higher risk of income/job loss) than high income people. Second, the positive occupational sorting among low-income couples amplifies these differences at the household level. Consequently, low-income families tend to face a disproportionately larger risk of income/job loss from lockdown measures. In addition, the different exposure to infection and income risks between income groups can play an important role in shaping up the timing and optimal strategies to unlock the economy.
    Keywords: Covid-19, Labor Market, Work-from-home, Physical proximity, Occupational sorting
    JEL: D10 E24 J12 J21
    Date: 2020–04
  16. By: Ana Sanjuan Lopez (Unidade de Economía Agroalimentaria y de los Recursos Naturales, Centro de Investigación y Tecnología Agroalimentaria de Aragón (CITA) Government of Aragon); Marie-Luise Rau; Geert Woltjer (Wageningen UR)
    Abstract: This report generates estimates for the effect of non-tariff measures (NTMs) on trade unit values. Adding to the latest development of the NTM analysis, we account for different types of NTMs for pairs of countries/regions. Our estimates thus provide new insights about the bilaterally distinct effect of specific NTMs. This is particularly interesting for policy makers that like to know which types of measures are relevant for trade from or to specific countries/regions and whether they are trade-hampering or trade-facilitating. We elaborate on the estimation of the price effect (measured in trade unit values) vis-Ã -vis the standard gravity on trade quantities (measured in trade value). A panel dataset (2012-2015) using the last releases of trade unit values (Berthou & Emlinger, 2011) and UNCTAD NTMs global database is built, and alternative approaches to account for the distinct bilateral impact are tested on beef, white meat (poultry) and milk. The focus is on trade between the EU member states and relevant regions with which the EU is negotiating or has just completed trade agreements: MERCOSUR, ASEAN, Japan and New Zealand. In this report, we do not implement the specific Ad-valorem equivalents (AVE) estimates for NTMs in a simulation model but rather provide a literature review that elaborates on the different approaches to depict NTMs in simulation models. The next step would be the application of the AVEs estimated in a simulation model in order to gauge the economy-wide effects of the respective NTMs under review.
    Keywords: non-tariff measures (NTMs), gravity, simulation models.
    Date: 2019–05
  17. By: Srihitha Baswapoor (MA Environmental Economics(student), Madras School of Economics); Zareena Begum Irfan (Associate Professor, Madras School of Economics)
    Abstract: Coral reefs are the most ancient and diverse eco-systems on earth, occupying less than 1 percent of the ocean floor and host more than 25 percent of all known marine species of the world. Reefs provide wide range of economic and environmental services to millions of people. Despite their immense importance, coral reefs are being damaged and destroyed due to natural and anthropogenic activities. If the same situation continues, by 2030, 90 percent of the reefs will be in danger and are likely to cause hunger, poverty and political instability around the world as the livelihoods of millions of people would disappear. In this context, studying the status of coral reefs and increasing threats to them becomes extremely important. The objective of this study is to focus on the exploitation of corals, understand their importance and analyse government policies intended for its conservation and management. The reef formation in India is restricted to four major centres Gulf of Kutch, Gulf of Mannar, Lakshadweep Islands and Andaman and Nicobar Islands. Reefs provide ecosystem services such as provisional, regulatory, cultural and supporting services. Climate change impacts of coral reefs are coral bleaching, sea level rise, stronger storms, ocean acidification and ozone layer depletion. The current law and policy framework for coral reefs in India is virtually non-existent except its protection through five Marine Protected Areas. Brief insights into international policy framework on coral reefs indicates that Australia has done a lot towards private sector involvement and local community participation in conservation of coral reefs, both of which India lacks. Similarly, Indonesia has good public awareness campaigns and capacity building programmes which could be implemented in India to improve reefs. Major policy suggestion made for improving the coral reef ecosystems in India is to have a separate legal status for them so as to regulate and prevent harmful activities
    Keywords: Coral reefs, Conservation, Ecosystem services, Climate change and Policy
    JEL: Q22 Q25 Q26 Q57 Q58
  18. By: Rogelio V. Mercado Jr.; Shanty Noviantie (South East Asian Central Banks (SEACEN) Research and Training Centre)
    Abstract: This paper uses a dataset on bilateral capital flows to construct a financial centrality measure for 64 advanced and emerging economies from 2000-16 to capture an economy’s importance within the global financial flows network. The results highlight the varying significance of network systemic and idiosyncratic factors in explaining financial centrality across different types of investments and residency of investors. Most notably, the findings show that financial centres have deeper and more developed financial system, implying their importance in global financial intermediation.
    Keywords: Financial Centrality, Financial Depth, Network Analysis
    JEL: D85 F21 F36 G15
    Date: 2019–12
  19. By: Jason Chan (Carlson School of Management, University of Minnesota); Shu He (Department of Operations and Information Management, School of Business, University of Connecticut); Dandan Qiao (Department of Informations Systems and Analytics, School of Computing, National University of Singapore); Andrew B. Whinston (Department of Information, Risk, and Operations Management, McCombs School of Business, The University of Texas at Austin)
    Abstract: Darknet markets have been increasingly used for the transaction of illegal products and services in the last decade. In particular, it is estimated that drugs make up two-thirds of darknet market transactions. The growth of illicit transactions on darknet markets have led enforcement agencies to invest greater proportion of time and efforts to monitor and crack down on criminal activities on the darknet websites. Despite the successes in convicting perpetrators, it is unknown whether these policing efforts are truly effective in deterring future darknet transactions, given that the identities of the transacting parties are very well protected by the markets’ features. To this end, this study attempts to empirically evaluate the susceptibility of darknet markets breaking down upon police arrests of dealers and buyers. Using drug review data from a few major darknet markets, we discovered a deterrence impact – the transactions in the targeted country would decrease on the market where arrests occurred. More interestingly, we find that disclosure of the arrests will influence the transactions of vendors not only from the same country but also those from other countries that did not experience any arrest incidents. As the darkweb techniques have led to a considerable proliferation of online drug trading, we believe that study findings that reveal the nature of these illicit markets will have key policy and theoretical implications to law makers, enforcement agencies, and academicians.
    Keywords: darknet; illegal transactions; police enforcement; cybercrime; deterrence effect
    JEL: K42
    Date: 2019–09
  20. By: Cortes, Patricia (Boston University); Pan, Jessica (National University of Singapore)
    Abstract: The past five decades have seen a remarkable convergence in the economic roles of men and women in society. Yet, persistently large gender gaps in terms of labor supply, earnings, and representation in top jobs remain. Moreover, in countries like the U.S., convergence in labor market outcomes appears to have slowed in recent decades. In this article, we focus on the role of children and show that many potential explanations for the remaining gender disparities in labor market outcomes are related to the fact that children impose significantly larger penalties on the career trajectories of women relative to men. In the U.S., we document that close to two-thirds of the overall gender earnings gap can be accounted for by the differential impacts of children on women and men. We propose a simple model of household decision-making to motivate the link between children and gender gaps in the labor market, and to help rationalize how various factors potentially interact with parenthood to produce differential outcomes for men and women. We discuss several forces that might make the road to gender equity even more challenging for modern cohorts of parents, and offer a critical discussion of public policies in seeking to address the remaining gaps.
    Keywords: labor market, children, gender gap, gender
    JEL: J16 J24 J31 J13
    Date: 2020–09
  21. By: Özer Karagedikli (The South East Asian Central Banks (SEACEN) Research and Training Centre); Ole Rummel (The South East Asian Central Banks (SEACEN) Research and Training Centre)
    Abstract: It has been argued that credit-to-GDP gaps (credit gap) are useful early warning indicators for banking crises. In addition, the Basel Committee on Banking Supervision has also advocated using these gaps - estimated using a one-sided Hodrick-Prescott filter with a smoothing parameter of 400,000 - to inform policy on the appropriate counter-cyclical capital buffer. We use the weighted average representation of the same filter and show that it attaches high weights to observations from the past, including the distant past: up to 40 lags (10 years) of past data are used in the calculation of the one-sided trend/permanent component of the credit-to-GDP ratio. We show how past data that belongs to the ‘old-regime’ prior to the crises continue to influence the estimates of the trend for years to come. By using narrative evidence from a number of countries that experienced deep financial crises, we show that this leads to some undesirable influence on the trend estimates that is at odds with the post-crisis environment.
    Keywords: Credit gap, Hodrick-Prescott filter, Trend-cycle decomposition
    JEL: J64
    Date: 2020–02

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