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on Economic Growth |
| By: | Philipp Ager (Department of Business and Economics, University of Southern Denmark); Casper Worm Hansen (Department of Economics, University of Copenhagen) |
| Abstract: | The introduction of immigration quotas in the 1920s fundamentally changed U.S. immigration policy. We exploit this policy change to estimate the economic consequences of immigration restrictions for the U.S. economy. The implementation of the quota system led to a long-lasting relative decline in population growth in areas with larger pre-existing immigrant communities of affected nationalities. This effect was largely driven by the policy-restricted supply of immigrants from quota-affected nationalities and lower fertility of first- and second-generation immigrant women. In the more affected areas labor productivity growth in manufacturing declined substantially and native workers were pushed into lower-wage occupations. While native white workers faced sizable earnings losses, black workers benefited from the quota system and improved their relative economic status within the more affected areas. |
| Keywords: | Immigration restrictions, productivity growth, local labor markets, racial wage gap |
| JEL: | J31 J61 N31 O15 |
| Date: | 2017–10–31 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuiedp:1722&r=gro |
| By: | Cemal Eren Arbatli; Gunes Gokmen |
| Abstract: | We study the long-term economic legacy of highly-skilled minorities a century after their wholesale expulsion. Using mass expulsions of Armenian and Greek communities of the Ottoman Empire in the early 20th century as a unique natural experiment of history, we show that districts with greater presence of Armenian and Greek minorities at the end of the 19th century are systematically more densely populated, more urbanized, and more developed today. Results are robust to accounting for an extensive set of geographical and historical factors of development and minority settlement patterns. Matching type estimators, instrumental variable regressions, and a sub-province level case study corroborate our findings. Importantly, we provide evidence on the channels of persistence. Armenian and Greek contribution to long-run development is largely mediated by their legacy on local human capital accumulation. In comparison, the mediating effect of minority asset transfer on development appears less important. |
| Keywords: | human capital, economic development, expulsion, minorities, ethnicity, Armenians, Greeks, persistence |
| JEL: | O10 O43 P48 N40 Z12 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6268&r=gro |
| By: | Jeremy Edwards |
| Abstract: | This paper investigates the Becker-Woessmann (2009) argument that Protestants were more prosperous in nineteenth-century Prussia because they were more literate, a version of the Weber thesis, and shows that it cannot be sustained. The econometric analysis on which Becker and Woessman based their argument is fundamentally flawed, because their instrumental variable does not satisfy the exclusion restriction. When an appropriate instrumental-variable specification is used, the evidence from nineteenth-century Prussia rejects the human-capital version of the Weber thesis put forward by Becker and Woessmann. |
| Keywords: | Protestantism, Weber thesis, human capital, instrumental variables |
| JEL: | Z12 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6646&r=gro |
| By: | Victor Gay |
| Abstract: | I explore the pathways underlying the diffusion of women's participation in the labor force across generations at the individual level. I rely on a severe exogenous shock to the adult sex ratio, World War I military fatalities in France, which generated a short-run upward shift in female labor force participation. I find that this shock to female labor transmitted across generations: women residing under the same institutional conditions but born in locations exposed to higher military death rates were more likely to be in the labor force from 1962 to 2012. Three primary mechanisms account for the long-run impact of World War I military fatalities on women's working behavior: vertical intergenerational transmission (from mothers and fathers to daughters), transmission through marriage (from husbands to wives, and from mothers in-law to daughters in-law), and oblique intergenerational transmission (from migrants to non-migrants). Consistent with theories of intergenerational diffusion of female labor force participation, I provide supporting evidence that WWI military fatalities altered preferences and beliefs about female labor in the long run. |
| JEL: | J16 J22 N34 Z13 |
| Date: | 2017–11–11 |
| URL: | http://d.repec.org/n?u=RePEc:jmp:jm2017:pga905&r=gro |
| By: | Yaroslava Babych (International School of Economics at Tbilisi State University, Tbilisi) |
| Abstract: | Do political regime changes as well as the quality of political institutions help predict the turning points in a country’s growth history? I show that controlling for a variety of economic factors, both democratic and autocratic regime changes help predict growth “takeoffs†. However, I find evidence that countries with low levels of income per capita benefit less from democratizations. This threshold level of income is estimated using Hansen’s threshold regression methodology. The threshold regression approach also reveals non-linearities in the effect of trade openness and level of political development on growth. In particular, I find that countries in the mid-range of trade openness benefit the most from an increase in trade volumes. In addition, the paper presents a methodology for identifying growth takeoffs which defines takeoffs relative to country’s own economic history while taking into account the historical growth conditions in the rest of the world. |
| Keywords: | economic growth; growth takeoffs; democratization; regime change; threshold effects |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:tbs:wpaper:17-008&r=gro |
| By: | Raouf Boucekkine; Paolo Giovanni Piacquadio; Fabien Prieur |
| Abstract: | The paper reexamines Lipset’s theory of democratization, by distinguishing the role of (economic) development from that of education, inequality, and (natural) resources. We highlight two contrasting effects of education and human capital accumulation. On the one side, education prompts economic growth and enriches the budget of the autocratic elite. On the other side, education increases the “awareness†of citizens - capturing their reluctance to accept a dictatorship and their labor-market aspirations - and forces the elite to expand redistribution. Along the lines of this trade-off, our theory provides a Lipsetian explanation of the positive relationship between economic development, education, and democratization, and of the negative relationship between inequality and democratization. Furthermore, we obtain new insights on the resources-curse hypothesis and on the design of effective aid to education. |
| Keywords: | democratization, human capital, Lipset’s theory, resource curse |
| JEL: | D72 I25 O11 O43 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6283&r=gro |
| By: | Kiyoka Akimoto (Graduate School of Economics, Osaka University); Takaaki Morimoto (Graduate School of Economics, Osaka University) |
| Abstract: | This paper introduces examination of newly developed varieties into a standard gvariety expansion h and glab-equipment h type R&D-based growth model. Producing newly developed varieties requires approval, and their examination incurs both cost and time. Reducing the examination duration increases the unit cost of examination. This paper investigates the effects of reducing the examination duration on examination backlogs (the number of varieties under examination), economic growth, and welfare. Examination backlogs and examination duration have an inverted-U shaped relationship, because reducing the examination duration on the one hand decreases the examination backlogs by accelerating the examination process, but on the other hand increases backlogs by promoting R&D and increasing the number of applications. Reducing the examination duration promotes economic growth; while it tightens the resource constraint and thus seems to hurt initial consumption, but the numerical analysis shows that this is not always the case. Nevertheless, a drastic reduction in the examination duration is detrimental to initial consumption, so there is an optimal examination duration. |
| Keywords: | Endogenous growth; R&D; Examination duration |
| JEL: | O31 O34 O38 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:1733&r=gro |
| By: | Mauro Bambi; Siritas Kettanurak |
| Abstract: | The existing contributions on endogenous taxation, and balanced budget rules, suggest that countercyclical taxes should be avoided, because they may lead to aggregate instability (i.e. sunspot equilibria); on the other hand, procyclical taxes have always been praised for their stabilizing role. In this paper, we re-examine this issue in an endogenous growth model with productive government investment, and we prove that an economy with procyclical taxes, and a sufficiently large income effect, can still be characterized by i) global indeterminacy because two balanced growth paths may exist; ii) aggregate instability around the balanced growth path with the lowest growth rate. Finally, we show that this dynamics may emerge for reasonable choices of the parameters. |
| Keywords: | Endogenous growth, time-varying consumption tax, local and global indeterminacy. |
| JEL: | C62 E32 H20 O41 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:17/15&r=gro |
| By: | Marc Badia-Miró (Universidad de Barcelona (España).); Esteban Nicolini (Universidad Nacional de Tucumán (Argentina).; Universidad Santo Tomás de Aquino (Argentina).); Henry Willebald (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía) |
| Abstract: | The aim of this paper is to analyze the evolution of regional income disparities in the South American Southern Cone (SASC) in historical perspective. One of the first results of our analysis is that most of the regional inequality in this geographic area stems from differences within countries rather than from disparities across countries. The second result is that the evolution of regional inequality between the end of the 19th century and the second third of the 20th century is different in each country: while Chile shows a higher inequality and a U-shaped evolution (reduction of inequality and a slight increase in the 1960), Uruguay presents a monotonically declining inequality and Argentina exhibits a U-shaped evolution with decreasing disparities until the beginning of the 20th century and increasing inequality afterwards. When the entire subnational units are analyzed together, we find a U-shaped curve which started at the end of the 19th century with high levels of inequality, a minimum is found in the 1940s and another local maximum ended with the collapse of the Import Substitution Industrialization (ISI) polices in the 1960s-1970s. We also analyze regional convergence in the long run for the Southern Cone at both national and regional level. The existence of convergence at a national level depends on the periods and countries: while Uruguay shows convergence in all the analyzed sub-periods, the provinces of Argentina only converge during the period of the first globalization; most of the departments of Chile converge in general but the presence of outliers induces the rejection of convergence hypothesis during the first globalization. Convergence at a regional level (including all the sub-national units from the three countries in the same analysis) is accepted for the period of the first globalization but rejected for the central decades of the 20th century. The empirical findings are interpreted as the result of the combination of the varying potential of the sub-national units for taking advantage of (i) the forces of agglomeration (inducing high growth rates in the main cities and, in particular, in the administrative capitals), (ii) the abundance of natural resources, and (iii) the stimulus originated in technological change, integration (or dis-integration) to international markets and public policies for industrialization. |
| Keywords: | Latin America, regional convergence, regional inequality, Southern Cone |
| JEL: | N16 N56 N96 R12 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:ulr:wpaper:dt-11-17&r=gro |
| By: | Batuo, Enowbi; Mlambo, Kupukile; Asongu, Simplice |
| Abstract: | In the aftermath of the 2008 global financial crisis, the implications of financial liberalisation for stability and economic growth has come under increased scrutiny. One strand of literature posits a positive relationship between financial liberalisation and economic growth and development. However, others emphasise the link between financial liberalisation is intrinsically associated with financial instability which may be harmful to economic growth and development. This study assesses linkages between financial instability, financial liberalisation, financial development and economic growth in 41 African countries for the period 1985-2010. The results suggest that financial development and financial liberalisation have positive effects on financial instability. The findings also reveal that economic growth reduces financial instability and the magnitude of reduction is higher in the pre-liberalisation period compared to post-liberalisation period. |
| Keywords: | Economic Growth , Financial Development, Financial instability and Africa |
| JEL: | G23 O16 O47 O55 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:82641&r=gro |
| By: | Christa N. Brunnschweiler (University of East Anglia); Pietro F. Peretto (Duke University); Simone Valente (University of East Anglia) |
| Abstract: | Wealth creation driven by R&D investment and wealth dilution caused by disconnected generations interact with households' fertility decisions, delivering a theory of sustained endogenous output growth with a constant endogenous population level in the long run. Unlike traditional theories, our model fully abstracts from Malthusian mechanisms and provides a demography-based view of the long run where the ratios of key macroeconomic variables - consumption, labor incomes and financial assets - are determined by demography and preferences, not by technology. Calibrating the model parameters on OECD data, we show that negative demographic shocks induced by barriers to immigration or increased reproduction costs may raise growth in the very long run, but reduce the welfare of a long sequence of generations by causing permanent reductions in the mass of firms and in labor income shares, as well as prolonged stagnation during the transition. |
| Keywords: | R&D-based growth, overlapping generations, endogenous fertility, population level, wealth dilution |
| JEL: | O41 J11 E25 |
| Date: | 2017–10–18 |
| URL: | http://d.repec.org/n?u=RePEc:uea:ueaeco:2017_04&r=gro |