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on Development |
| By: | Laura Kiku Rodriguez-Takeuchi (School of Social Sciences, University of Manchester, UK); Katsushi S. Imai (School of Social Sciences, University of Manchester, UK) |
| Abstract: | The present study simulates the impacts of price surges in 2006-2008 on household poverty in the main Colombian cities. It is found that the price surges increased both extreme and moderate poverty in urban areas in short and medium terms. However, the magnitude of poverty rise is not homogeneous geographically or by household types – e.g., the poorest or less educated households were more badly affected than the wealthier or educated households. We suggest 'demographic targeting' or 'geographical targeting' as a policy option that selects and supports poor households by demographic characteristics or by geographical areas according to the degree of vulnerability. Protecting those households from food price shocks would be still important now given that rising and volatile food prices have continued due to erratic climate patterns and demand and supply conditions along with economic and financial crisis. |
| Keywords: | food price surges, urban poverty, Colombia |
| JEL: | C21 I32 O15 O54 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:kob:dpaper:dp2011-33&r=dev |
| By: | Katsushi S. Imai (School of Social Sciences, University of Manchester, UK); Jing You (School of Agricultural Economics and Rural Development, Renmin University of China) |
| Abstract: | The objective of our study is to identify pattern and causes of households' transitions in and out of poverty using the long household panel data on rural China in the period 1989-2009. We propose a discrete-time multi-spell duration model that not only corrects for correlated unobserved heterogeneity across transitions and various destinations within the transition, but also addresses the endogeneity due to dynamic selection associated with household's livelihood strategies. Duration dependence is generally found to be negative for both poverty exit and re-entry. The household who chose either farming or out-migration as a main livelihood strategy was more likely to escape from this persistent poverty than those who took local non-agricultural employment, while the role of social protection, such as health insurance, was not universally good for alleviating chronic poverty. Overall, the present study emphasises the central role of agriculture in helping the chronically poor escape from poverty. |
| Keywords: | poverty transition, discrete-time duration model, correlated unobserved heterogeneity, dynamic selection, rural China |
| JEL: | C33 C41 I32 O15 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:kob:dpaper:dp2011-35&r=dev |
| By: | Mario Biggeri (Università degli Studi di Firenze, Dipartimento di Scienze Economiche); Jean-Francois Trani; Vincenzo Mauro |
| Abstract: | This paper examines child poverty from a multidimensional perspective. The main goal is to apply a general methodology in order to measure child poverty as a deprivation of capabilities and achieved functionings. In the capability perspective, child poverty is intended as the lack of freedom to choose to do and to be what children have reason to value. Although the various approaches to conceptualising, defining and measuring poverty, several researchers underline the need for children to be separated from their adult nexus, and treated according to their own specificities. The case study is focused on Afghan children, and it is based on a survey carried out by Handicap International that took into consideration many dimensions of children’s wellbeing, including concepts that are usually missing in standard surveys. |
| Keywords: | Afghanistan, Multidimensional poverty measurement, Capability Approach, Children |
| JEL: | O53 I3 I32 J13 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:frz:wpaper:wp2011_18.rdf&r=dev |
| By: | Akresh, Richard (University of Illinois at Urbana-Champaign); Bhalotra, Sonia R. (University of Bristol); Leone, Marinella (University of Sussex); Osili, Una Okonkwo (Indiana University-Purdue University Indianapolis) |
| Abstract: | The Nigerian civil war of 1967-70 was precipitated by secession of the Igbo-dominated south-eastern region to create the state of Biafra. It was the first civil war in Africa, the predecessor of many. We investigate the legacies of this war four decades later. Using variation across ethnicity and cohort, we identify significant long run impacts on human health capital. Individuals exposed to the war at all ages between birth and adolescence exhibit reduced adult stature and these impacts are largest in adolescence. Adult stature is portentous of reduced life expectancy and lower earnings. |
| Keywords: | war, height, early life, human capital investments, Nigeria |
| JEL: | I12 O12 J13 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6194&r=dev |
| By: | Baliamoune-Lutz, Mina (University of North Florida); Brixiova, Zuzana (United Nations Development Programme (UNDP), Swaziland); Ndikumana, Leonce (University of Massachusetts Amherst) |
| Abstract: | Limited access of entrepreneurs to credit constrains the creation and growth of private firms. In Africa, access to credit is particularly limited for small and medium enterprises (SMEs) due to unclear property rights and the lack of assets that can be used as collateral. This paper presents a model where firm creation and growth hinge on matching potential entrepreneurs with productive technologies, while firm growth depends on acquired capital. The shortage of collateral creates a binding credit constraint on borrowing by SMEs and hence private sector growth and employment, even though the banking sectors have ample liquidity, as is the case in many African countries. The model is tested using a sample of 20 African countries over the period 2005-09. The empirical results suggest that policies aimed at easing the binding credit constraints (e.g., the depth of credit information and the strength of legal rights pertaining to collateral and bankruptcy) would stimulate productive entrepreneurship and private sector employment in Africa. |
| Keywords: | credit constraints, productive entrepreneurship, employment, policies |
| JEL: | G21 L26 D24 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6193&r=dev |
| By: | Menon, Nidhiya (Brandeis University); van der Meulen Rodgers, Yana (Rutgers University) |
| Abstract: | This paper examines how Nepal’s 1996-2006 civil conflict affected women’s decisions to engage in employment. Using three waves of Nepal Demographic and Health Survey, we employ a difference-in-difference approach to identify the impact of war on women’s employment decisions. Results indicate that as a result of the Maoist-led insurgency, women’s employment probabilities were substantially higher in 2001 and 2006 relative to the outbreak of war in 1996. These employment results also hold for self-employment decisions, and they hold for smaller sub-samples that condition on husband’s migration status and women’s status as widows or household heads. Numerous robustness checks of the main results provide compelling evidence that women’s likelihood of employment increased as a consequence of the conflict. |
| Keywords: | conflict, women’s employment, added worker effect, geography, Nepal |
| JEL: | J21 O12 D74 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6209&r=dev |
| By: | Verbeke, Karel; Renard, Robrecht |
| Abstract: | Only flows to countries that are on the DAC list of recipients can be labelled Official Development Assistance (ODA). The countries on that list however are a mixed bag. Based on a World Bank classification, the DAC list for instance includes Burundi, with an income per capita in 2009 of $150, and Brazil, with an income per capita in 2009 of $ 8840. Burundi, on this count, is 59 times poorer than Brazil. And there is not just income. Burundi is small, landlocked, politically and institutionally unstable, with an unimpressive record in terms of economic growth, a modest player in Africa and an insignificant player in the world. Brazil by contrast is huge, rich in natural resources, technologically sophisticated, growing fast, ambitious, and a major player on the world scene. Recently, it has even started to think about setting up its own aid agency (The Economist, 2011a). How more heterogeneous can one get? One can pick similar contrasting pairs from the DAC list, such as DRCongo and China, or Niger and India. How much aid, in pursuit of which development objectives, addressing which constraints in which sectors, using which modalities and channels: surely no single strategy can fit such dissimilar realities. What constitutes a sensible donor strategy in one country may be very inadequate in another. A differentiated strategy is called for. |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iob:wpaper:2011011&r=dev |
| By: | Giovanni Facchini (Erasmus University, University of Milan, Centro Studi Luca d’Agliano, CEPR and CES-Ifo); Anna Maria Mayda (Georgetown University, Centro Studi Luca d’Agliano, CEPR and IZA); Mariapia Mendola (University of Milan Bicocca and Centro Studi Luca d’Agliano) |
| Abstract: | This paper empirically investigates the determinants of individual attitudes towards immigration in South Africa using the 1996, 2001 and 2007 rounds of the World Value Survey. The main question we want to answer is whether South African public opinion on migration is affected by the potential labor market competition of migrants towards natives. We investigate this issue by estimating the impact of survey respondents’ individual skill on their pro-migration attitudes. Our estimates show that the impact of individual skill – measured both with educational attainment and an occupationbased measure – is positive and significant in both 1996 and 2001. Given that in both years immigrants to South Africa are on average more skilled than natives, we conclude that the labor-market channel does not play a role in preference formation over immigration. What might explain the positive impact of individual skill are noneconomic determinants. |
| Keywords: | Immigration Attitudes; South Africa |
| JEL: | F22 J61 |
| Date: | 2011–12–27 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:325&r=dev |
| By: | Diego Angemi (Centro Studi Luca d\'Agliano) |
| Abstract: | While it has long been demonstrated (Rosenzweig and Binswanger, 1993; Banerjee and Newman, 1994) that considerations of risk and uncertainty are key to understand the dynamics leading to and perpetuating poverty, it is only recently that policy makers have taken a more active interest in trying to incorporate considerations of risk and vulnerability into their strategies to reduce poverty (Christiaensen and Subbarao, 2001). The aim of this paper is to quantify the severity of vulnerability by generating the first quantitative assessment of vulnerability in Uganda, a country at the forefront of poverty analysis. The findings support the hypothesis that during the past decade, alongside sharp reductions in poverty, vulnerability to poverty in Uganda declined from 57% in 1992/93 to 25% in 1999/00. Such results highlight the importance for policy makers to distinguish between the effective implementation of poverty-prevention and poverty-reduction programmes. |
| Keywords: | Poverty; Vulnerability; Risk; Consumption Expenditure |
| JEL: | I32 O12 |
| Date: | 2011–10–17 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:317&r=dev |
| By: | Anna de Paoli (University of Milan Bicocca) |
| Abstract: | Using a representative sample of Ecuadorian young women’s households, this paper focuses on the role played by education in shaping fertility choices and labor market participation. Education, which is found to be endogenous with respect to teenage childbearing, is instrumented by a reform that took place in 1977. Then, in a model where the choices to be a mother and to be in the labor force are considered simultaneously, we find evidence that schooling is positively related to wom-en’s labor market participation rate and negatively to early motherhood. The last section concludes stressing the potential intergenerational effects of changes in the age at first birth, showing that firstborn children born to older mothers have better educational outcomes than those born to young-er ones. We find that educational policies improve women’s conditions, lowering the risk of teenage childbearing and increasing labor market attachment. |
| Keywords: | schooling, education policy, teenage fertility, labor force |
| JEL: | I21 I28 J13 J20 |
| Date: | 2011–10–17 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:319&r=dev |
| By: | Diego Angemi (Centro Studi Luca d\'Agliano) |
| Abstract: | This manuscript aims to deepen our understanding of poverty in Uganda, by integrating the coun-try’s qualitative and quantitative data, enriching information from one approach with that from the other, and merging the findings from these two approaches into one set of policy recommendations. The results show that this dual approach to poverty analysis enriches the discussion of poverty trends by drawing attention to aspects of poverty and well-being neglected by simple construction of poverty indicators. |
| Keywords: | Quantitative; qualitative; poverty; policy |
| JEL: | I32 O20 |
| Date: | 2011–10–17 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:320&r=dev |
| By: | Guido Friebel (Goethe University Frankfurt, IZA and CEPR); Juan Miguel Gallego (Universidad del Rosario and Centro Studi Luca d\'Agliano); Mariapia Mendola (University of Milan Bicocca and Centro Studi Luca d’Agliano) |
| Abstract: | We investigate how emigration flows from a developing region are affected by xenophobic violence at destination. Our empirical analysis is based on a unique survey among more than 1000 households collected in Mozambique in summer 2008, a few months after a series of xenophobic attacks in South Africa killed dozens and displaced thousands of immigrants from neighbouring countries. We estimate migration intentions of Mozambicans before and after the attacks, controlling for the characteristics of households and previous migration behaviour. Using a placebo period, we show that other things equal, the migration intention of household heads decreases from 37 to 33 percent. The sensitivity of migration intentions to violence is larger for household heads with many children younger than 15 years, decreasing the migration intention by 11 percentage points. Most important-ly, the sensitivity of migration intentions is highest for those household heads with many young children whose families have no access to social networks. For these household heads, the intention falls by 15 percentage points. Social networks provide insurance against the consequences young children suffer in case the household head would be harmed by xenophobic violence and conse-quently could not provide for the family. |
| Keywords: | violence, risk, migration, household behaviour, Mozambique |
| JEL: | O1 R2 J6 D1 |
| Date: | 2011–10–17 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:321&r=dev |
| By: | Nazia Mansoor |
| Abstract: | This study examines the relationship between bargaining power and the use of contraceptives in the household. Using data from rural Bangladesh in 1998-1999 it investigates whether women in a relatively strong bargaining position at the time of marriage continue to remain in a strong position post marriage as seen by their decision to use the contraceptive pill. Empirical results from multinomial logit provide evidence for this showing that as brideprice, taken as a fraction of total household marriage payment, increases from 0.1 to 0.3 the predicted probability of the mother using the contraceptive pill increases by 8 percentage points. |
| Keywords: | marriage market; marriage payments; female bargaining power; contraceptive use; rural Bangladesh |
| JEL: | J12 J13 J16 D10 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:ukc:ukcedp:1119&r=dev |
| By: | Matloob Piracha; Teresa Randazzo |
| Abstract: | This paper utilises survey data of return migrants to analyse the determinants of remittances sent while the migrants were abroad. We approach our research question from the perspective of three sending countries in the Maghreb, namely Algeria, Morocco and Tunisia. We investigate the remittance behaviour using the migrants' conditions before migration as well as during the migration experience. Using a two-part model, we show that the decision to remit and the amount remitted depend on a combination of different migrant characteristics as well as the duration and form of migration. We also consider if the remittance behaviour is dependent on the type of return: decided or compelled. We show that those who decided to return have a higher probability to remit for investment purposes and remit more as the time spent abroad increases. |
| Keywords: | remittances; return migration; Maghreb countries |
| JEL: | F22 F24 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:ukc:ukcedp:1118&r=dev |
| By: | Kpodar, Kangni; Singh, Raju Jan |
| Abstract: | Although there has been research looking at the relationship between the structure of the financial system and economic growth, much less work has dealt with the importance of bank-based versus market-based financial systems for poverty and income distribution. Empirical evidence has indicated that the structure of the financial system has little relevance for economic growth, suggesting that the same could be true for poverty since growth is an important driver in reducing poverty. Some theories, however, claim that, by reducing information and transaction costs, the development of bank-based financial systems could exert a particularly large impact on the poor. This paper looks at a sample of 47 developing economies from 1984 through 2008. The results suggest that when institutions are weak, bank-based financial systems are better at reducing poverty and, as institutions develop, market-based financial systems can turn out to be beneficial for the poor. |
| Keywords: | Debt Markets,Banks&Banking Reform,Access to Finance,Economic Theory&Research,Emerging Markets |
| Date: | 2011–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5915&r=dev |
| By: | Lodhi, Abdul Salam; Tsegai, Daniel; Gerber, Nicolas |
| Abstract: | Using data from Pakistan, this study analyzed the effect of various individual, household, and community level characteristics on the probability that children engage in different activities. According to the existing trend of their prevalence, we considered five childâs activities, namely: secular schooling; religious education; child labor; a combination of child labor and secular schooling; and inactivity (including leisure). Data was collected through field surveys conducted in over 40 villages in four Pakistani provinces: Balochistan, Khyber Paktunkhwa, Punjab, and Sind. A total of 963 households were interviewed on the activities of 2,496 children. Multinomial Probit model was used for the analyses. Results indicated that parental perception had significant relationship to the probability of engagement in secular school attendance, religious education, and child labor. In addition, we investigated the relationships between participation in the different child activities with location (rural/urban) and childrenâs gender. We detected a lower probability of attending secular school and a higher probability of engaging in child labor among female children in rural areas. We also found that even parents who openly expressed appreciation of the importance of secular schooling were more likely to send male children to school than female children. |
| Keywords: | Child productivity, Childâs activities, Parental perception, Gender, Community/Rural/Urban Development, Labor and Human Capital, Teaching/Communication/Extension/Profession, |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ubzefd:119110&r=dev |
| By: | Timothy J. Kehoe; Felipe Meza |
| Abstract: | In 1950 Mexico entered an economic takeoff and grew rapidly for more than 30 years. Growth stopped during the crises of 1982–1995, despite major reforms, including liberalization of foreign trade and investment. Since then growth has been modest. We analyze the economic history of Mexico 1877– 2010. We conclude that the growth 1950–1981 was driven by urbanization, industrialization, and education and that Mexico would have grown even more rapidly if trade and investment had been liberalized sooner. If Mexico is to resume rapid growth — so that it can approach U.S. levels of income — it needs further reforms. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmwp:693&r=dev |
| By: | Domingues, Patrick (Centre d'Economie de la Sorbonne, University of Paris 1 Panthéon Sorbonne) |
| Abstract: | Using a new database on the Mozambican Civil War, this paper utilises the heterogeneity of the duration of conflict across the Mozambican provinces to assess its impact on school enrolment. The results indicate that only conflict exposure during the first seven years of life reduced the probability of school enrolment; no effect was found for exposure after this age or for in-utero exposure. Furthermore, the results show that this negative effect is specific to girls and that these results are linked with choices made by households during the war period. |
| Keywords: | Civil War; Education; Mozambique; Gender. |
| JEL: | I20 O12 O55 |
| Date: | 2011–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:ris:nepswp:2011_001&r=dev |
| By: | Du, Julan (Asian Development Bank Institute); He, Qing (Asian Development Bank Institute); Rui, Oliver M. (Asian Development Bank Institute) |
| Abstract: | This paper analyzes consumption risk sharing among provinces in the People’s Republic of China (PRC) during 1980–2007. The analysis finds that 9.4% of shocks to gross provincial product are smoothed by the interprovincial fiscal transfer system. This system also cushions a relatively large percentage of province-specific shocks in coastal areas. Using a variety of indicators, we explored nonfiscal channels of consumption risk sharing. We found that the migration of rural labor to urban areas and the remittance of migrant wages play an important role in promoting interprovincial consumption risk sharing in inland PRC provinces. In contrast, the extent of risk sharing through financial intermediation and capital markets is very limited. These factors have resulted in a low degree of risk sharing among provinces, especially during the last decade. |
| Keywords: | prc provinces; interprovincial fiscal transfers; consumption risk sharing |
| JEL: | O16 O53 R11 |
| Date: | 2011–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0334&r=dev |
| By: | Verónica Amarante; Marco Manacorda; Edward Miguel; Andrea Vigorito |
| Abstract: | There is limited empirical evidence on whether unrestricted cash social assistance to poor pregnant women improves children's birth outcomes. Using program administrative micro-data matched to longitudinal vital statistics on the universe of births in Uruguay, we estimate that participation in a generous cash transfer program led to a sizeable 15% reduction in the incidence of low birthweight. Improvements in mother nutrition and a fall in labor supply, out-of-wedlock births and mother's smoking all appear to contribute to the effect. We conclude that, by improving child health, unrestricted unconditional cash transfers may help break the cycle of intergenerational poverty. |
| Keywords: | Poverty relief program, maternal health, cash transfers, social assistance, Uruguay, birth outcomes,Low birthweight, Cash transfer program, Nutrition |
| JEL: | J88 I38 J13 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1106&r=dev |
| By: | Yona Rubinstein; Sheetal Sekhri |
| Abstract: | Public college graduates in many developing countries outperform graduates of private ones on the college exit exams. This has often been attributed to the cutting edge education provided in public colleges. However, public colleges are highly subsidized, suggesting that the private-public education outcome gap might reflect the pre-determined quality of the students who sort into public colleges rather than the causal impact of the public tertiary education on students' outcomes. We evaluate the impact of public colleges using a newly assembled unique data set that links admission data with the educational outcomes on a set of common exit exams in India. Admission to general education public colleges is strictly based on the results of the Senior Secondary School examinations. We exploit this feature in a Regression Discontinuity Design, and find that the public colleges have no added value in the neighborhood of the admission cut off scores. |
| Keywords: | private education, public education, India |
| JEL: | O15 I21 H41 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:ceedps:0130&r=dev |
| By: | Pedro Carneiro (Institute for Fiscal Studies and University College London); Michael Lokshin; Cristobal Ridao-Cano; Nithin Umapathi (Institute for Fiscal Studies and World Bank) |
| Abstract: | <p>This paper estimates average and marginal returns to schooling in Indonesia using a non-parametric selection model. Identification of the model is given by exogenous geographic variation in access to upper secondary schools. We find that the return to upper secondary schooling varies widely across individuals: it can be as high as 50 percent per year of schooling for those very likely to enroll in upper secondary schooling, or as low as -10 percent for those very unlikely to do so. Average returns for the student at the margin are well below those for the average student attending upper secondary schooling.</p> |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:cemmap:36/11&r=dev |
| By: | Orazio Attanasio (Institute for Fiscal Studies and University College London); Britta Augsburg (Institute for Fiscal Studies); Ralph de Haas; Emla Fitzsimons (Institute for Fiscal Studies); Heike Harmgart (Institute for Fiscal Studies) |
| Abstract: | <p>Although microfinance institutions across the world are moving from group lending towards individual lending, this strategic shift is not substantiated by sufficient empirical evidence on the impact of both types of lending on borrowers. We present such evidence from a randomised field experiment in rural Mongolia. We find a positive impact of access to group loans on food consumption and entrepreneurship. Among households that were offered group loans the likelihood of owning an enterprise increases by ten per cent more than in control villages. Enterprise profits increase over time as well, particularly for the less-educated. For individual lending on the other hand, we detect no significant increase in consumption or enterprise ownership. These results are in line with theories that stress the disciplining effect of group lending: joint liability may deter borrowers from using loans for non-investment purposes. Our results on informal transfers are consistent with this hypothesis. Borrowers in group-lending villages are less likely to make informal transfers to families and friends while borrowers in individual-lending villages are more likely to do so. We find no significant difference in repayment rates between the two lending programs, neither of which entailed weekly repayment meetings.</p> |
| Keywords: | Microcredit; group lending; poverty; access to finance; randomised field experiment |
| JEL: | G21 D21 I32 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:11/20&r=dev |
| By: | Britta Augsburg (Institute for Fiscal Studies) |
| Abstract: | <p><p>This study evaluates an intervention in the dairy subsector by an Indian livelihood promotion institution and conducts a detailed analysis of the main cost and benefit factors of the activity. Two rounds of data are available which allows for the comparison of impacts and costs and benets under different circumstances - a relatively good year as well as one officially declared as a drought period. Results suggest that the programme is benecial but impacts cannot be sustained under the macro shock. Looking at the main cost factors reveals that fodder availability was a major problem. The results help to suggest an improved programme design.</p></p> |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:11/21&r=dev |
| By: | Ilhom Abdulloev (Rutgers University); Ira N. Gang (Rutgers University & Fellow of IZA, OEI, CReaM); John Landon-Lane (Rutgers University) |
| Abstract: | How is migration related to informal activities? They may be complementary since new migrants may have difficulty finding employment in formal work, so many of them end up informally employed. Alternatively, migration and informality may be substitutes since migrants' incomes in their new locations and income earned in the home informal economy (without migration) are an imperfect trade-off. Tajikistan possesses both a very large informal sector and extensive international emigration. Using the gap between household expenditure and income as an indicator of informal activity, we find negative significant correlations between informal activities and migration: the gap between expenditure and income falls in the presence of migration. Furthermore, Tajikistan's professional workers ability to engage in informal activities enables them to forgo migration, while low-skilled non-professionals without post-secondary education choose to migrate instead of working in the informal sector. Our empirical evidence suggests migration and informality substitute for one another. |
| Keywords: | informal, migration, remittances, Tajikistan |
| JEL: | O17 J61 P23 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1124&r=dev |
| By: | Sanjaya DeSilva; Mohammed Mehrab Bin Bakhtiar |
| Abstract: | Using data from the Bicol region of the Phillipines, we examine why women are more educated than men in a rural, agricultural economy in which women are significantly less likely than men to participate in the labor market. We hypothesize that educational homogamy in the marriage market and cross-productivity effects in the household allow Filipino women to reap substantial benefits from schooling regardless of whether they enter the labor market. Our estimates reveal that the return to schooling for women is approximately 20 percent in both labor and marriage markets. In comparison, men experience a 12 percent return to schooling in the labor market. By using birth order, sibship size, percent of male siblings, and parental education as instruments, we correct for a significant downward bias that is caused by the endogeneity of schooling attainment. |
| Keywords: | Returns to Education; Gender; Marriage; Philippines |
| JEL: | I21 J12 J16 J24 O15 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_701&r=dev |
| By: | He, Qichun |
| Abstract: | There is a debate over the reliability of the Chinese data (e.g., Young, 2003; Holz, 2003, 2006). In this paper we test the Chinese provincial panel data for the period 1978-2002 against the predictions from the technology diffusion model. We find that the estimated coefficient on initial real GDP per worker is negative and significant, showing strong evidence of conditional convergence; the estimated coefficients on secondary school human capital investment rate and labor force growth are positive and negative respectively, significant at the 5% level, in both LSDV (Least squares dummy variables) estimation and system GMM (Generalized method of moments) estimation that overcomes the endogeneity of these variables. The test accepts that the estimate coefficients on physical capital and human capital investment rates are equal, with absolute magnitudes about half of that on labor force growth in LSDV estimation. The estimated coefficient on the FDI to GDP ratio that captures technology diffusion is insignificant in LSDV estimation but becomes significant in system GMM estimation. All these are consistent with the technology diffusion model (and the augmented Solow model). Therefore, the reform period Chinese provincial panel data may be reliable for growth regressions. |
| Keywords: | Technology Diffusion; Convergence Equation; Panel Data; System GMM (Generelized method of moments) |
| JEL: | C23 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35418&r=dev |
| By: | Simplice A, Asongu |
| Abstract: | The motivations of the Arab Spring and hitherto unanswered questions about some of its dynamics inspired this paper, which focuses on how democracy, polity and autocracy affect financial development dynamics of depth, efficiency, activity and size in Africa; contingent on religious-domination, income-levels and colonial-legacies. Findings could be summarized in the following. (1) Authoritarian regimes have a higher propensity to effect policies that favor the development of financial intermediary depth, activity and size. Democracy has important effects on the degree of competition for public offices but less significant effects in comparison with autocracy on policies towards financial development. (2) Christian-dominated countries have higher (lower) levels of financial intermediation efficiency (depth) than-Islam oriented countries. (3) Income-levels also matter in financial development as poor countries have a lower propensity to improve their financial dynamics than wealthy states. (4) On average English common-law countries have better democratic institutions that their French civil-law counterparts. (5) There is evidence of a U-shape relationship between national wealth and the level of democracy, with Low-income countries experiencing lower (higher) levels of democracy than Upper (Lower) middle income countries. As a policy implication, once democracy is initiated, it should be accelerated (to edge the appeals of authoritarian regimes) and reap the benefits of level and time hypotheses in financial development. |
| Keywords: | Banking; Finance; Politics; Democracy; Development |
| JEL: | O10 E50 E40 P16 P50 |
| Date: | 2011–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35500&r=dev |
| By: | Attanasio, Orazio; Augsburg, Britta; De Haas, Ralph; Fitzsimons, Emla; Harmgart, Heike |
| Abstract: | Although microfinance institutions across the world are moving from group lending towards individual lending, this strategic shift is not substantiated by sufficient empirical evidence on the impact of both types of lending on borrowers. We present such evidence from a randomised field experiment in rural Mongolia. We find a positive impact of access to group loans on food consumption and entrepreneurship. Among households that were offered group loans the likelihood of owning an enterprise increases by 10 per cent more than in control villages. Enterprise profits increase over time as well, particularly for the less-educated. For individual lending on the other hand, we detect no significant increase in consumption or enterprise ownership. These results are in line with theories that stress the disciplining effect of group lending: joint liability may deter borrowers from using loans for non-investment purposes. Our results on informal transfers are consistent with this hypothesis. Borrowers in group-lending villages are less likely to make informal transfers to families and friends while borrowers in individual-lending villages are more likely to do so. We find no significant difference in repayment rates between the two lending programmes, neither of which entailed weekly repayment meetings. |
| Keywords: | Microcredit; group lending; poverty; access to finance; randomised field experiment |
| JEL: | D13 C93 G21 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35439&r=dev |
| By: | He, Qichun |
| Abstract: | We consider fertility choice and weather in analyzing the effect of farmland abundance in economic development. We find that quality-adjusted agricultural land abundance may confer a type of "resource curse", in that it prolongs the tenure of an economy in the Malthusian regime. This lends new insights to Unified Growth Theory (Galor, 2011) by elucidating a particular determinant of the differential timing of the transition from Malthusian stagnation to industrialization. Moreover, opposite to the Matsuyama (1992) model, good weather is found to be a blessing for a small open economy, while it is a curse for a closed economy. |
| Keywords: | Weather; Fertility; Quality-adjusted Farmland per capita; Quality-adjusted Farmland Abundance Curse |
| JEL: | O41 O53 O13 Q15 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35420&r=dev |
| By: | Simplice A, Asongu |
| Abstract: | This paper examines the big questions of African comparative politics. It assesses the interaction of three crucial components in the development of the continent: law, democracy and quality of government. Political regimes of democracy, polity and autocracy are instrumented with income-levels, legal-origins, religious-dominations and press-freedom levels to account for government quality dynamics of corruption-control, government-effectiveness, voice and accountability, political-stability, regulation quality and rule of law. Findings indicate democracy has an edge over autocracy while the later and polity overlap. A democracy that takes into account only the voice of the majority is better in government quality than autocracy, while a democracy that takes into account the voice of the minority (polity) is worse in government quality than autocracy. As a policy implication, democracy once initiated should be accelerated to edge the appeals of authoritarian regimes and reap the benefits of time and level hypotheses. |
| Keywords: | Law; Politics; Democracy; Government Policy; Development |
| JEL: | P43 O10 K00 P16 P50 |
| Date: | 2011–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35502&r=dev |
| By: | Vuong Quoc, Duy |
| Abstract: | This paper investigates the impact of access to formal credit on household poverty in Mekong Delta (MD) – Vietnam. The analysis is based on some indicators of household poverty such as households’ total assets, educational costs, healthcare costs, food consumption, non-farm expenses, off-farm expenses and total income. Based on the given indicators, a comparison is made between borrowers and non-borrowers in a sample of 325 households using the Matching Methods. The findings suggest that the borrowers are better off in education expenditure, healthcare expenses, and total income than those of non-borrowers. The results show that access to formal credit is likely to reduce poverty levels among rural households in Mekong Delta. |
| Keywords: | Formal credit; propensity score matching; household welfare; individual and group based lending |
| JEL: | G2 O2 I3 E5 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35412&r=dev |
| By: | Kariastanto, Bayu |
| Abstract: | Indonesia established a deposit insurance system to maintain stability in its banking sector after the abolishment of blanket guarantees in 2005. Since the insurance premiums are fixed and flat, deposit insurance may create an incentive for banks to take more risks and transfer the risks to the deposit insurer. Using an option pricing based model of deposit insurance, we compute the fair deposit insurance premiums for all banks listed on the Indonesian stock exchange. We find evidence that banks shifted their risks to the deposit insurer. The magnitude of risk-shifting incentives under the deposit insurance regime is higher than under the blanket guarantee regime, as Indonesian depositors seem to lack awareness in monitoring bank performance. |
| Keywords: | Deposit Insurance; Fair Premium; Option-based Pricing; Moral Hazard; Indonesia |
| JEL: | G18 G21 |
| Date: | 2011–12–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35557&r=dev |
| By: | Michael Grimm (International Institute of Social Studies, The Hague); Simon Lange (Georg-August-University Göttingen); Jann Lay (GIGA German Institute of Global and Area Studies, Hamburg) |
| Abstract: | Micro and small enterprises (MSEs) in developing countries are typically considered to be severely credit constrained. Additionally, high business risks may partly explain why capital stocks of MSEs remain low. This article analyzes the determinants of capital stocks of MSEs in poor economies focusing on credit constraints and risk. The analysis is based on a unique, albeit cross-sectional but backward-looking, micro data set on MSEs covering the economic capitals of seven West-African countries. The main result is that capital market imperfections indeed seem to explain an important part of the variation in capital stocks in the early lifetime of MSEs. Furthermore, the analyses show that risk plays a key role for capital accumulation. Risk-averse individuals seem to adjust their initially low capital stocks upwards when enterprises grow older. MSEs in risky activities owned by wealthy individuals even seem to over-invest when they start their business and adjust capital stocks downwards subsequently. As other firms simultaneously suffer from capital shortages, such behaviour may imply large inefficiencies. |
| Keywords: | Informal sector; micro and small enterprises; credit constraints; risk; risk aversion; firm growth; West-Africa |
| JEL: | D13 D61 O12 |
| Date: | 2011–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:got:gotcrc:104&r=dev |
| By: | Verónica Amarante; Marco Manacorda; Edward Miguel; Andrea Vigorito |
| Abstract: | There is limited empirical evidence on whether unrestricted cash social assistance to poor pregnant women improves children’s birth outcomes. Using program administrative micro-data matched to longitudinal vital statistics on the universe of births in Uruguay, we estimate that participation in a generous cash transfer program led to a sizeable 15% reduction in the incidence of low birthweight. Improvements in mother nutrition and a fall in labor supply, out-of-wedlock births and mother’s smoking all appear to contribute to the effect. We conclude that, by improving child health, unrestricted unconditional cash transfers may help break the cycle of intergenerational poverty. |
| JEL: | I38 J13 J88 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17690&r=dev |
| By: | Sean Dougherty; Verónica C. Frisancho Robles; Kala Krishna |
| Abstract: | Using plant-level data from the Annual Survey of Industries (ASI) for the fiscal years from 1998-99 through 2007-08, this study provides plant-level cross-state/time-series evidence of the impact of employment protection legislation (EPL) on total factor productivity (TFP) and labor productivity in India. Identification of the effect of EPL follows from a difference-in-differences estimator inspired by Rajan and Zingales (1998) that takes advantage of the state-level variation in labor regulation and heterogeneous industry characteristics. The fundamental identification assumption is that EPL is more likely to restrict firms operating in industries with higher labor intensity and/or higher sales volatility. Our results show that firms in labor intensive or more volatile industries benefited the most from labor reforms in their states. Our point estimates indicate that, on average, firms in labor intensive industries and in flexible labor markets have TFP residuals 14% higher than those registered for their counterparts in states with more stringent labor laws. However, no important differences are identified among plants in industries with low labor intensity when comparing states with high and low levels of EPL reform. Similarly, the TFP of plants in volatile industries and in states that experienced more pro-employer reforms is 11% higher than that of firms in volatile industries and in more restrictive states; however, the TFP residuals of plants in industries with low labor intensity are 11% lower in high EPL reform states than in states with lower levels of EPL reform. In sum, the evidence presented here suggests that the high labor costs and rigidities imposed through Indian federal labor laws are lessened by labor market reforms at the state level. |
| JEL: | D24 F16 J5 J8 K31 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17693&r=dev |