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on Development |
| By: | Raphaёl Franck (Bar-Ilan University); Ilia Rainer |
| Abstract: | In this paper we reassess the role of ethnic favoritism in Sub-Saharan Africa. Using data from 18 African countries, we study how primary education and infant mortality of ethnic groups were affected by changes in the ethnicity of the countries’ leaders during the last fifty years. Our results indicate that the effects of ethnic favoritism are large and widespread, thus providing support for ethnicity-based explanations of Africa’s underdevelopment. We also conduct a crosscountry analysis of ethnic favoritism in Africa. We find that ethnic favoritism is less prevalent in countries with one dominant religion. In addition, our evidence suggests that stronger fiscal capacity may have enabled African leaders to provide more ethnic favors in education but not in infant mortality. Finally, political factors, linguistic differences and patterns of ethnic segregation are found to be poor predictors of ethnic favoritism. |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:biu:wpaper:2012-06&r=dev |
| By: | Lagakos, David; Moll, Benjamin; Porzio, Tommaso; Qian, Nancy |
| Abstract: | Using recently available large-sample micro data from 36 countries, we document that experience-earnings profiles are flatter in poor countries than in rich countries. Motivated by this fact, we conduct a development accounting exercise that allows the returns to experience to vary across countries but is otherwise standard. When the country-specific returns to experience are interpreted in such a development accounting framework -- and are therefore accounted for as part of human capital -- we find that human and physical capital differences can account for almost two thirds of the variation in cross-country income differences, as compared to less than half in previous studies. |
| Keywords: | Cross-country income; Development Accounting; Returns to Experience |
| JEL: | O11 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9253&r=dev |
| By: | James Fenske |
| Abstract: | State capacity matters for growth. I test Bates’ explanation of pre-colonial African states. He argues that trade across ecological boundaries promoted states. I find that African societies in ecologically diverse environments had more centralized states. This is robust to reverse causation, omitted heterogeneity, and alternative interpretations of the link between diversity and states. Ecological diversity also predicts states outside of Africa. I test mechanisms connecting trade to states, and find that trade supported class stratification between rulers and ruled. I underscore the importance of ethnic institutions and inform our knowledge of the effects of geography and trade on institutions. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:csa:wpaper:2012-18&r=dev |
| By: | Andrew Kerr |
| Abstract: | In this paper I build an equilibrium search model of the urban Tanzanian labour market that explains the choice between wage and self-employment and the variation in earnings across and within these sectors. Self-employment is very common in urban Tanzania and survey data show both that there are large overlaps in the distribution of earnings in private wage employment and self-employment and that there is little movement between wage and self-employment. This suggests that self-employment represents a worthwhile alternative to wage employment in small, low-productivity firms for the majority of urban Tanzanians, in contrast to the traditional view of African labour markets in which wage employment in small firms and self-employment are lumped together as the informal sector. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:csa:wpaper:2012-21&r=dev |
| By: | Valérie Golaz; Laurent Nowik; Muriel Sajoux |
| Abstract: | The countries of Africa have young populations today, but progress in life expectancy and the sharp drop in birth rates will lead to population ageing. This change will be incomparably faster than the slow ageing process observed in developed countries in the nineteenth and twentieth centuries: by 2050, the number of persons aged 60 and over will increase four-fold in Africa, raising yet another social challenge for the continent. At present, old persons in Africa are supported primarily through private solidarity. In the future, it will be increasingly difficult for families to meet the special needs of growing numbers of older adults unless public policies can provide the necessary backup. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:idg:posoce:491&r=dev |
| By: | Annim, Samuel Kobina (University of Central Lancashire); Arun, Thankom (University of Central Lancashire); Kostov, Philip (University of Central Lancashire) |
| Abstract: | This study investigates the effect of financial perception and behaviour on; (a) general accounts and services, (b) investment/savings and (c) insurance/assurance Using FinScope dataset from South Africa over the period 2003 to 2009,ordered probit, generalized ordered probit and pseudo panel micro-econometric techniques have been employed. Results based on all three estimations support the hypothesis that financial perception has a greater effect on the decision to access and use general accounts and services. The cross section and pooled models confirm the hypothesis that the effect of financial behaviour is greater than financial perception when making decisions on the take-up and use of investment financial services. It is also observed that the degree of responsiveness of financial perception on access to, and use of financial services decreases as the depth of usage deepens from basic to advance levels of financial products. In a policy context, targeting demand-side factors to increase access to and use of financial services should be financial type and level specific. Furthermore, the approach should be based on an understanding of the experiences of borrowers. |
| Keywords: | financial, perception, behaviour, general accounts, investment, insurance, South Africa |
| JEL: | O16 O17 O55 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7042&r=dev |
| By: | Brück, Tilman (Humboldt University Berlin); Esenaliev, Damir (DIW Berlin); Kroeger, Antje (DIW Berlin); Kudebayeva, Alma (KIMEP); Mirkasimov, Bakhrom (DIW Berlin); Steiner, Susan (DIW Berlin) |
| Abstract: | This paper summarizes the micro‐level survey evidence from Central Asia generated and analyzed between 1991 and 2012. We provide an exhaustive overview over all accessible individual and household‐level surveys undertaken in Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan ‐ and of all English‐language academic papers published using these datasets. We argue that Central Asia is a fascinating region for the study of comparative economics given its dual experience of transition and development. However, the region is also understudied, in part due to lack of data, and especially due to a lack of panel data. We identify knowledge gaps caused from this lack of longitudinal surveys and suggest worthwhile areas for future research. Finally, we also present the new and novel individual‐level panel dataset called "Life in Kyrgyzstan". |
| Keywords: | survey data, poverty, labor force participation, Central Asia |
| JEL: | O12 I32 J22 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7055&r=dev |
| By: | Falco, Paolo (University of Oxford); Maloney, William F. (World Bank); Rijkers, Bob (World Bank); Sarrias, Mauricio (Universidad Catolica del Norte) |
| Abstract: | By exploiting recent advances in mixed (stochastic parameter) ordered probit estimators and a unique longitudinal dataset from Ghana, this paper examines the distribution of subjective wellbeing across sectors of employment and offers insights into the functioning of developing country labor markets. We find little evidence for the overall inferiority of the small firm informal sector: there is not a robust average satisfaction premium for formal work vis a vis self-employment or informal salaried work and, in fact, informal firm owners who employ others are on average significantly happier than formal workers. Moreover, the estimated underlying random parameter distributions unveil substantial latent heterogeneity in subjective wellbeing around the central tendency that fixed parameter models cannot detect. All job categories contain both relatively happy and disgruntled workers. Concretely, roughly 67%, 50%, 40% and 59% prefer being a small firm employer, sole proprietor, informal salaried, and civic worker respectively, to formal work. Hence, there is a high degree of overlap in the distribution of satisfaction across sectors. The results are robust to the inclusion of fixed effects, and using alternate measures of satisfaction. Job characteristics, self-perceived autonomy and experimentally elicited measures of attitudes toward risk do not appear to explain these distributional patterns. |
| Keywords: | subjective wellbeing, mixed ordered probit, self-employment, informality, developing country labor markets, Africa |
| JEL: | C35 J2 J3 J41 L26 I32 O17 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7057&r=dev |
| By: | Asadullah, Niaz (University of Reading); Wahhaj, Zaki (University of Kent) |
| Abstract: | This paper looks at the determinants of secondary school attendance in Bangladesh with a focus on the interaction between community gender norms and relative supply of madrasas (i.e. Islamic schools). We present a theoretical framework where the probability of children's school participation varies with respect to a non‐economic factor – how the community observes social norms regarding female mobility – conditional upon the types of available schools. Household data from the Bangladesh Demographic Health Survey (BDHS) is combined with community information on the availability of non‐religious secondary schools and madrasas to test our theoretical predictions. We find that in communities which are more 'progressive', in the sense that women have a relatively high level of mobility, the effect of non‐religious school availability on attendance does not vary by gender. However in the more 'conservative communities', female schooling is more sensitive to the availability of, or distance to, madrasas. |
| Keywords: | burka, school availability, gender norms, female education, madrasa, Bangladesh |
| JEL: | D04 I21 O15 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7059&r=dev |
| By: | Stampini, Marco (Inter-American Development Bank); Tornarolli, Leopoldo (CEDLAS-UNLP) |
| Abstract: | Conditional Cash Transfers (CCTs) are an endogenous innovation from Latin America and the Caribbean (LAC) that aims to reduce current poverty while developing the human capital of the next generation, in the attempt to break the intergenerational transmission of poverty. Pioneered in Brazil and Mexico in the late 1990s, by 2011 CCTs had spread to 18 countries in the region and covered as many as 135 million beneficiaries. In this paper, we use administrative and household survey data to document (i) the evolution of CCTs and poverty in LAC, (ii) the relationship between expanded coverage and the quality of targeting and (iii) the change in beneficiary household characteristics. We show that in most countries the transfers represent over 20% of poor beneficiaries’ incomes, and the poverty headcount index would be on average 13% higher, had CCTs not been implemented. A decade of sustained and widespread economic growth has expanded the fiscal space for social assistance. The largest programs (in Brazil, Colombia and Mexico) have achieved coverage rates around 50-55% of the poor. At the same time, economic growth contributed to reducing the incidence of poverty. As a result, the number of CCT beneficiaries overtook the number of poor in the region in 2006 (using a standardized income poverty line of USD 2.5 per day (purchasing-power-parity adjusted)). Higher coverage was accompanied by increasing levels of leakage. For example, the share of non-poor beneficiaries increased from 46% to 65% in Ecuador over the period 2004-10 and from 40% to 61% in Mexico over the period 2002-10. Beneficiaries’ level of education and participation in formal labor markets have increased. Yet, the analysis of household data shows that CCT beneficiaries remain mostly poor or vulnerable, characterized by extremely low levels of schooling and unstable labor market outcomes. Hence, while further expansion of the programs may in many cases be unnecessary, the need for social assistance and human capital development remains high. The transition to the new generation of CCT programs will require focusing on the quality of the services that accompany the transfers, in order to maximize the impact on current and future poverty. |
| Keywords: | Socio-Economic Database for Latin America and the Caribbean (SEDLAC), beneficiary characteristics, social assistance, leakage, coverage, Latin America and the Caribbean (LAC), Conditional Cash Transfers (CCTs) |
| JEL: | I38 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izapps:pp49&r=dev |
| By: | Linda Kleemann |
| Abstract: | The development of the agricultural sector and the improvement of the food security situation are seen as essential components to sustainable development in Africa. However, continuing population growth, impacts of climate change and environmental degradation add to an unprecedented combination of pressures that threaten existing efforts and solutions. This article discusses the challenges of meeting the food security needs in a sustainable way. Due to its involvement of all three dimensions of sustainable development, economic, social and ecological, we argue that organic farming could be one possible approach to create a more sustainable agricultural system |
| Keywords: | sustainability, organic agriculture, food security |
| JEL: | O13 Q01 Q56 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1812&r=dev |
| By: | Kamal Vatta (RIEB, Kobe University (Japan) and Department of Economics and Sociology, Punjab Agricultural University (India)); Takahiro Sato (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan) |
| Abstract: | The present study is an attempt to examine the trends in returns to education in light of the long-term economic growth in India during 1983 to 2009-10. It outlines various forms of inequality issues prevalent in Indian labour markets, with respect to the rural/urban areas, gender, caste and nature of work. The unit level data from 6 rounds of National Sample Survey during 1983, 1987-88, 1993-94, 1999-2000, 2004-05 and 2009-10 were used for this study. Mincer wage function was estimated by using the OLS method and the results were also compared to the median wage equation, which proved the consistency of these estimates. The casual wage markets for males provided incentives for higher education till some intermediate levels in the form of higher wage earnings than their illiterate or below primary educated counterparts but no additional advantage for secondary or graduate levels of education. Higher education could not translate into better wage earnings for female casual workers. The returns to all education levels were converging at low levels with the returns for secondary and graduate levels for urban casual male workers declining over time. There was a decline in the returns to secondary and graduate level of education for rural male regular workers with almost no change in the pattern of returns for urban male regular workers. The returns to education for graduation for female workers increased tremendously due to increased employment opportunities for better educated females in the India during the last decade of fast economic growth, led largely by the growth of the service sector. While there is need to enhance public investment in education for improving higher education opportunities in India, there is also a need to reorient rural education by focusing on imparting working skills between middle level of education and secondary levels. The education curriculum must ensure that higher education translates into better wage earnings for the unskilled or semi-skilled majority of the rural workforce in the long run. |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:kob:dpaper:dp2012-33&r=dev |
| By: | Md. Faruq Hasan (Department of Agricultural Extension, Hajee Mohammad Danesh Science and Technology University, Bangladesh); Katsushi S. Imai (Economics, School of Social Sciences, University of Manchester (UK) and RIEB, Kobe University (Japan)); Takahiro Sato (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan) |
| Abstract: | The present study examines whether agricultural extension improves household crop productivity, reduces poverty as well as vulnerability in rural Uganda drawing upon Uganda National Panel Survey data in 2009-10. We first estimate household crop productivity using stochastic frontier analysis that can allow for stochastic shocks in the production function. Then, the effect of different types of agricultural extension programmes on the crop productivity is estimated by treatment effects model which controls for the sample selection associated with household participation in agricultural extension. In this model, the distance to agricultural extension service centre is used as an instrument for participation in agricultural extension. It is found that household crop productivity was significantly raised by household participation in all types of agricultural extension programs except NGO programs, while household expenditure per capita was also significantly increased by participation in most cases. This is consistent with the central objectives of agricultural extension to improve productivity and reduce poverty. Further evidence is provided on the role of extension in reducing vulnerability as expected poverty associated with extension programs of NAADS, large farmers and other types of extension service providers. |
| Keywords: | Agricultural Extension, Poverty, Vulnerability, Treatment Effects Model, Uganda |
| JEL: | C31 I32 N57 O13 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:kob:dpaper:dp2012-34&r=dev |
| By: | Masako Kimura,Daishin Yasui (Graduate School of Economics, Nagoya City University; Graduate School of Economics, Kobe University) |
| Abstract: | In the pre-industrial era, there was a positive association between income and fertility across households within societies, but in the modern era, a clear association does not seem to exist, neither positive nor negative. Why the income-fertility relationship within societies changed over time is an unsolved puzzle in the history of economic growth, one that has been raised by Gregory Clark (e.g., A Farewell to Alms, 2007). This paper suggests that public policy for children has a key role in solving this puzzle. The interaction between changes in public policy for children and economic development generates changes in the income-fertility relationship across households, as well as hump-shaped dynamics of the average fertility rate over time. |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:koe:wpaper:1224&r=dev |
| By: | Cally Ardington (SALDRU, School of Economics, University of Cape Town); Till Bärnighausen (Africa Centre for Health and Population Studies and Harvard School of Public Health); Anne Case (Princeton University); Alicia Menendez (University of Chicago) |
| Abstract: | Using a large longitudinal dataset, we quantify the impact of adult deaths on household economic wellbeing. The timing of lower socioeconomic status observed for households in which members die of AIDS suggests that the socioeconomic gradient in AIDS mortality is being driven primarily by poor households being at higher risk for AIDS. Following a death, households that experienced an AIDS death are observed being poorer still. However, the additional socioeconomic loss following death is very similar to the loss observed from deaths from other causes. Funeral expenses can explain some of the impoverishing effects of death in the household. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ldr:wpaper:91&r=dev |
| By: | Luca Gandullia; Nicola Iacobone; Alastair Thomas |
| Abstract: | This paper examines the taxation of labour income in five key emerging economies: Brazil, China, India, Indonesia and South Africa (the “BIICS” countries). The paper highlights the key features of the taxation of labour income in these countries, and then uses this information to model the tax burdens on labour income in each country following the OECD's Taxing Wages methodology. Average and marginal tax wedges in Brazil and China (Shanghai) are found to be similar in size in 2010 to those of many OECD countries. In contrast, India, Indonesia and South Africa (as well as rural China) impose very low average and marginal tax wedges compared to the vast majority of OECD countries. These relatively low tax wedge results are not altogether surprising given that these countries also currently have lower tax-to-GDP ratios than the OECD average. However, the results suggest that, in the long-term, reforms will be necessary in most of the BIICS countries if the labour income base is to significantly contribute to funding the substantial increases in public expenditure, particularly on infrastructure and social insurance, that will inevitably come as these countries continue to grow.<P>Modéliser la charge fiscale pesant sur les revenus du travail en Afrique du Sud, au Brésil, en Chine, en Inde et en Indonésie<BR>Ce document propose un examen de la taxation des revenus du travail dans cinq grandes économies émergentes, à savoir l’Afrique du Sud, le Brésil, la Chine, l’Inde et l’Indonésie. Il met l’accent sur les principales caractéristiques des régimes d’imposition en vigueur dans ces pays, les informations correspondantes étant ensuite utilisées pour modéliser la charge fiscale pesant sur les revenus du travail dans chaque pays à l’aide de la même méthodologie que celle suivie par l’OCDE pour sa publication intitulée Les impôts sur les salaires. Il apparaît qu’au Brésil et en Chine (Shanghai), les coins fiscaux moyens et marginaux sont du même ordre que ceux d’un grand nombre de pays de l’OCDE en 2010. En Afrique du Sud, en Inde et en Indonésie (ainsi qu’en Chine rurale) en revanche, les coins fiscaux moyens et marginaux sont très faibles en comparaison de ceux de la grande majorité des pays de l’OCDE. Le niveau relativement bas de ces chiffres n’est pas vraiment surprenant étant donné que ces pays affichent actuellement des rapports impôt/PIB inférieurs à la moyenne de l’OCDE. Il donne cependant à penser que, sur le long terme, des réformes seront nécessaires dans la plupart de ces économies si la taxation des revenus du travail doit apporter une contribution notable au financement des hausses considérables des dépenses publiques, en particulier dans les domaines des infrastructures et de la sécurité sociale, qu’elles devront inévitablement assumer à mesure qu’elles continueront à croître. |
| Keywords: | personal income tax, tax wedge, social security contributions, labour income, coin fiscal, cotisations de sécurité sociale, revenus du travail, impôt sur le revenu des personnes physiques |
| JEL: | H24 H55 |
| Date: | 2012–12–12 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ctpaaa:14-en&r=dev |
| By: | Jens Arnold |
| Abstract: | Indonesia has come a long way in improving its tax system over the last decade, both in terms of revenues raised and administrative efficiency. Nonetheless, the tax take is still low, given the need for more spending on infrastructure and social protection. With the exception of the natural resources sector, increasing tax revenues would be best achieved through broadening tax bases and improving tax administration, rather than changes in the tax schedule that seems broadly in line with international practice. Possible measures to broaden the tax base include bringing more of the self-employed into the tax system, subjecting employer-provided fringe benefits and allowances to personal income taxation and reducing the exemptions from value-added taxes. Similarly, broad-based investment credits would be a less distortive way to enhance investment incentives than selective tax holidays. Introducing a targeted, simplified tax regime for small and medium-sized enterprises, as currently planned by the government, could foster their integration into the tax system in the longer run, even if its short-run revenue potential is limited. Upgrading tax administration has made substantial progress in Indonesia since 2002, although there is still scope to improve the training of tax officers and the administration’s audit and litigation capacities, while strengthening internal control systems and enhancing the transparency of administrative decisions. The audit system could be further improved by allocating more tax audits on the basis of compliance risks. In the natural resources sector, particularly in mining, there is a case for increasing the government’s share of resource rents through higher tax rates imposed on these rents, as opposed to taxing revenues. This would imply a willingness of the government to bear a larger share of the exploration and development risk than heretofore, which Indonesia, with its improved access to international financial markets and a diversified resource portfolio, is now well placed to do. In the mining sector, a powerful rent tax regime with a large government take would serve the country better than export taxes and ownership restrictions that have been decided recently. This Working Paper relates to the 2012 OECD Economic Review of Indonesia (www.oecd.org/eco/surveys/Indonesia).<P>Améliorer le système fiscal en Indonésie<BR>L’Indonésie a beaucoup amélioré son système fiscal au cours de la dernière décennie, tant en ce qui concerne le montant des recettes collectées que l’efficience administrative. Néanmoins, les recettes fiscales restent faibles au regard de la nécessité d’accroître les dépenses consacrées aux infrastructures et à la protection sociale. À l’exception du secteur des ressources naturelles, l’augmentation des recettes fiscales doit passer avant tout par l’élargissement de l’assiette et l’amélioration de l’administration fiscale, plutôt que par une révision du barème d’imposition qui semble globalement conforme à la pratique internationale. Parmi les mesures possibles pour élargir l’assiette figurent l’intégration des travailleurs non salariés dans le système fiscal, l’assujettissement à l’impôt sur le revenu des personnes physiques des biens en nature et des indemnités versés par l’employeur, et la réduction des exemptions à la TVA. Dans le même ordre d’idées, l’introduction de crédits d’impôt généreux en faveur de l’investissement serait un moyen de stimuler l’investissement qui induirait moins de distorsions que des exonérations fiscales sélectives. La mise en place d’un régime simplifié et ciblé pour les petites et moyennes entreprises, actuellement envisagé par les pouvoirs publics, pourrait favoriser leur intégration dans le système fiscal à plus long terme, même si l’effet à court terme sur les recettes est limité. La modernisation de l’administration fiscale a beaucoup progressé en Indonésie depuis 2002, bien qu’il soit encore possible d’améliorer la formation des agents des impôts et de renforcer les capacités de l’administration à mener des vérifications et à agir en justice, tout en consolidant les systèmes de contrôle interne et en accroissant la transparence des décisions administratives. Le système de vérification pourrait être perfectionné en fondant les décisions de contrôle fiscal sur les risques de non paiement. Dans le secteur des ressources naturelles, et notamment les industries extractives, il y a lieu d’accroître la part des rentes de ressources revenant à l’État en relevant les taux d’imposition de ces rentes, au lieu de taxer les recettes. Une telle mesure impliquerait la volonté des pouvoirs publics de prendre à leur charge une partie des risques d’exploration et de mise en valeur plus importante qu’auparavant, ce qui est tout à fait à la portée de l’Indonésie, qui bénéficie aujourd’hui d’un meilleur accès aux marchés internationaux de capitaux et d’un portefeuille de ressources diversifié. Dans le secteur minier, un régime performant d’imposition des rentes, qui permette à l’État de percevoir une fraction élevée des recettes, servirait davantage les intérêts du pays que les taxes à l’exportation et les restrictions à la propriété qui ont été décidées récemment. Ce Document de travail se rapporte à l’Étude économique de l’OCDE de l’Indonésie 2012 (www.oecd.org/eco/etudes/indonesie). |
| Keywords: | industrial policy, tax administration, Indonesia, export taxes, tax exemptions, tax systems, natural resource taxation, politique industrielle, ressources naturelles, administration fiscale, Indonésie, exonération fiscale, système fiscal, taxes à l’exportation |
| JEL: | F13 H21 H23 H24 H25 H26 H27 L78 O17 O23 O24 O25 |
| Date: | 2012–10–30 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:998-en&r=dev |
| By: | Pedro Neves (CEF.UP and FEP, Universidade do Porto); Sandra Silva (CEF.UP and FEP, Universidade do Porto); Óscar Afonso (CEF.UP, OBEGEF, NIFIP, and FEP, Universidade do Porto) |
| Abstract: | Over the last two decades there has been a growing interest in determining the impact of inequality on growth. The empirical literature has, however, produced controversial results regarding both the signal and the magnitude of such impact. This paper develops a meta-analysis on this literature on an attempt to systematize and explain the diversity in studies' results. We find that most of the heterogeneity is due to differences in studies' methodological characteristics, such as the structure of the data, the sample coverage, the type of distribution, the definition of income, and the estimation technique. These results suggest that there is not one but several underlying effects of inequality on growth, which are likely to differ in their nature and operate in opposing directions. We also find traces of publication bias, as, on the one hand, authors and journals are more willing to report and publish statistically significant results, and, on the other hand, studies' results tend to follow a predictable cycle of fashion and novelty over time. |
| Keywords: | meta-analysis; inequality; economic growth; publication bias. |
| JEL: | O4 D3 H2 C21 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:por:cetedp:1204&r=dev |
| By: | Uwe Dulleck; Jonas Fooken; Yumei He |
| Abstract: | We study discrimination based on the hukou system, a policy segregating migrants and locals in urban China. We hired household aids as participants in our artefactual field experiment and use a gift exchange game to study labor market discrimination. We find that social discrimination based on hukou status also implies individual level discrimination. To identify whether discrimination is statistical or taste-based we introduce the wage promising game, a gift exchange game with a cheap talk wage promise. We find that discrimination is taste-based: Status is exogenous for our participants, migrants and locals behave similarly and discrimination increases when reasons for statistical discrimination are removed. |
| Keywords: | labor market discrimination, artefactual field experiment, hukou |
| JEL: | J7 C93 P36 |
| Date: | 2012–11–28 |
| URL: | http://d.repec.org/n?u=RePEc:qut:qubewp:wp002&r=dev |
| By: | Machikita, Tomohiro (Asian Development Bank Institute); Ueki, Yasushi (Asian Development Bank Institute) |
| Abstract: | This paper presents a simple model of industrial upgrading as a result of backward and forward information linkages between upstream and downstream relations. It also serves as an empirical investigation of the impact of mutual knowledge exchange on the knowledge production function using data on firms' self-reported customers and suppliers. Evidence from interconnected firms in Indonesia, Thailand, Philippines, and Viet Nam suggests that there are strong spillover effects between downstream and upstream firms in terms of international standard certification. The degree of product and process innovation is quite diverse across manufacturing firms within a local supply chain and within a global supply chain. |
| Keywords: | innovation; international production organization; backward forward linkages |
| JEL: | O31 O32 R12 |
| Date: | 2012–12–05 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0399&r=dev |
| By: | B.P. Zaaruka |
| Abstract: | The purpose of this study is to examine the impact of institutions on fixed capital accumulation over time in two developing countries, both former German colonies: Namibia and Tanzania. This is motivated by two recent underpinning theories: the new institutional theory, which views institutions as fundamental determinants of economic outcomes and income variations among countries (the institutional hypothesis); and the theory of irreversible investment under uncertainty, which emphasis the impact of uncertainty on investment and capital-stock accumulation. Using the theoretical framework of irreversible investment under uncertainty, we apply the Vector Error Correction Model (VECM).The findings highlight the importance of uncertainty (political instability) in explaining capital accumulation over time in Namibia. The empirical evidence for Tanzania indicates the importance of property rights in explaining capital accumulation over time. |
| Keywords: | Namibia, Tanzania, institutional indicators, capital stock, irreversible investment, uncertainty |
| JEL: | E02 K00 N4 O1 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:318&r=dev |
| By: | Julius A. Agbor and Gregory N. Price |
| Abstract: | To the extent that in utero and childhood malnutrition negatively affects later stage mental and physical health, it can possibly constrain later stage human capital acquisition, which is an important driver of economic growth. This paper considers the impact of famine on aggregate adolescent human capital formation in Sub-Saharan Africa. We parameterize a joint adolescent human capital and food nutrition production function to estimate the effects of famine on primary school completion rates of individuals age 15 - 19. Mixed fixed and random coefficient parameter estimates for 32 Sub-Saharan African countries between 1980 - 2010 reveal that primary school completion rates of adolescents are proportional to the quantity of food and nutrition produced during childhood and in utero. This suggests that declines in food production and nutrition associated with famine in Sub-Saharan Africa have large negative effects on the acquisition of human capital by adolescents and on long-run material living standards. Our findings also suggest that policy makers in Sub-Saharan Africa should prioritize food security policies that prevent food shortages and famines, which would increase long-run economic growth and material living standards. |
| Keywords: | Human Capital, Famine, Nutrition, Sub-Saharan Africa |
| JEL: | C33 I15 I25 O10 O15 O55 Q18 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:320&r=dev |
| By: | Gunilla Pettersson (Department of Economics, University of Sussex, UK) |
| Abstract: | Indonesia each year allocates a large proportion of its total public spending to education and it is important to understand whether different groups, for instance, children from less advantageous socioeconomic backgrounds or girls benefit differentially from these public investments. It is also desirable to comprehend whether schooling translates into increases in wages that are similar in size for both for men and for women who obtain additional schooling. This paper uses the large-scale Presidential Instruction Primary School construction programme (SD INPRES) rolled out in Indonesia in the 1970s to examine the effect of increased school supply on schooling attainment: overall, by gender, and by socioeconomic background. It also constructs a new SD INPRES programme exposure variable that is used as an instrument for schooling to assess the causal effect of schooling on wages and whether the additional schooling induced by the programme had differential impacts for men and women. To preview the findings, SD INPRES programme exposure significantly increased schooling both for men and for women. Moreover, women benefitted more from the SD INPRES programme than men and so did individuals from less advantageous socioeconomic backgrounds contributing to a narrowing of schooling gaps by gender and by socioeconomic background. In addition, more schooling is found to cause higher wages for men and women and there appears to be an additional positive effect on wages for women through the additional schooling induced by the SD INPRES programme. |
| Keywords: | wages, schooling, Indonesia, labour, education policy |
| JEL: | O12 J31 I25 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:sus:susewp:4912&r=dev |