Date:

2011-11

By:

Juergen Jung (Department of Economics, Towson University)
  Chung Tran (Research School of Economics, The Australian National University)

URL:

http://d.repec.org/n?u=RePEc:tow:wpaper:2011-06&r=dev  

We study the dynamic general equilibrium effects of introducing  a social pension program to elderly informal sector workers in developing  countries who lack formal risk sharing mechanisms against income and  longevity risk. To this end, we formulate a stochastic dynamic general  equilibrium model that incorporates defining features of developing  countries: a large informal sector, private transfers as an informal safety  net, and a non-universal social security system. We find that the extension  of retirement benefits to informal sector workers results in efficiency  losses due to adverse effects on capital accumulation and the allocation of  resources across formal and informal sectors. Despite these losses recipients  of social pensions experience welfare gains as the positive insurance effects  attributed to the extension of a social insurance system dominate. The  welfare gains crucially depend on the skill distribution, private intr

Keywords:

Informal Sector, Family Social Safety Nets, Social Pension,  General Equi-librium, and Welfare.

JEL:

E6

Date:

2011-01-14

By:

Roberto Burguet
  Marcelo Soto

URL:

http://d.repec.org/n?u=RePEc:aub:autbar:890.11&r=dev  

The Millennium Declaration (2000) set as one of its targets a  substantial reduction in child mortality. This paper studies whether the  massive increase in development aid can account for part of the reduction in  child mortality observed in developing countries since the year 2000. To do  so, we analyze a panel of more than 130 developing countries over the  2000-2008 period. We use the time trend evolution of aid to identify an  exogenous source of variation. Total aid has had no statistically significant  effect on child mortality. However, a disaggregate analysis identifies  certain sectors of aid that have had a significant impact. The effects have  been larger in high mortality countries, including Sub-Saharan Africa.  Projections based on our estimates strongly support the concern that most  countries in that region will miss the Millennium Goals target on child  mortality.

Keywords:

ODA, child mortality, aid effectiveness.

JEL:

O11

Date:

2011-10

By:

Giles, John T. (World Bank)
  Wang, Dewen (World Bank)
  Cai, Wei (World Bank)

URL:

http://d.repec.org/n?u=RePEc:iza:izadps:dp6088&r=dev  

This paper highlights the employment patterns of China’s over-45  population and, for perspective, places them in the context of work and  retirement patterns in Indonesia, Korea, the United States, and the United  Kingdom. As is common in many developing countries, China can be  characterized as having two retirement systems: a formal system, under which  urban employees receive generous pensions and face mandatory retirement by  age 60, and an informal system, under which rural residents and individuals  in the informal sector rely on family support in old age and have much longer  working lives. Gender differences in age of exit from work are shown to be  much greater in urban China than in rural areas, and also greater than  observed in Korea and Indonesia. Descriptive evidence is presented suggesting  that pension eligible workers are far more likely to cease productive  activity at a relatively young age. A strong relationship betwee

Keywords:

retirement, population aging, labor supply, pensions, China,  Indonesia, Korea

JEL:

J26

Date:

2011-10

By:

Collier, William (University of Kent)
  Piracha, Matloob (University of Kent)
  Randazzo, Teresa (University of Kent)

URL:

http://d.repec.org/n?u=RePEc:iza:izadps:dp6091&r=dev  

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

Date:

2011-11-01

By:

Baybars Karacaovali (Department of Economics, University of  Hawaii)

URL:

http://d.repec.org/n?u=RePEc:hai:wpaper:201115&r=dev  

In this paper, I start out with a standard political economy of  trade policy model to guide the subsequent estimation of the determinants of  trade policy in a developing country. I carefully test the model with  Colombian data from 1983 to 1998 accounting for endogeneity and omitted  variable bias concerns and then expand it empirically in several directions.  I show that it is important to control for the impact of a drastic trade  reform shock that affects all sectors and disentangle its effect from  preferential trade agreements (PTAs). I find that protection is higher in  sectors that are important exports for preferential partners which may be  seen as a stumbling block effect of PTAs for Colombia. I also relax the  assumption of fixed political weights that measure the extra importance of  producers' welfare relative to consumers in the government objective. I  measure the impact of sectoral characteristics on tariffs indirectly thro

Keywords:

Political economy of trade policy, trade liberalization,  preferential trade agreements, empirical trade

JEL:

F13

Date:

2011-10

By:

McDermott, Thomas K. J.
  Barry, Frank
  Tol, Richard S. J.

URL:

http://d.repec.org/n?u=RePEc:esr:wpaper:wp411&r=dev  

We demonstrate, using a simple two-period equilibrium model of  the economy, the potential effects of extreme event occurrences - such as  natural or humanitarian disasters - on economic growth over the medium- to  long-term. In particular, we focus on the effect of such shocks on  investment. We examine two polar cases; an economy in which agents have  unconstrained access to capital markets, versus a credit-constrained version,  where the economy is assumed to operate in financial autarky. Considering  these extreme cases allows us to highlight the interaction of disasters and  economic underdevelopment, manifested through poorly developed financial  markets. The theoretical analysis shows that the shock of a disaster  occurrence could have lasting effects on economic growth only if agents face  borrowing constraints. The predictions of our theoretical model are then  tested using a panel of data on natural disaster events at the country-y

Keywords:

natural disasters,financial development,credit constraints,economic  growth/growth/investment/US/data

Date:

2011-11-01

By:

Carneiro, Pedro
  Lokshin, Michael
  Ridao-Cano, Cristobal
  Umapathi, Nithin

URL:

http://d.repec.org/n?u=RePEc:wbk:wbrwps:5878&r=dev  

This paper estimates average and marginal returns to schooling  in Indonesia using a non-parametric selection model estimated by local  instrumental variables, and data from the Indonesia Family Life Survey. The  analysis finds that the return to upper secondary schooling varies widely  across individual: 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. Returns to the marginal student (14  percent) are well below those for the average student attending upper  secondary schooling (27 percent).

Keywords:

Education For All,Secondary Education,Teaching and  Learning,Primary Education,Population Policies

Date:

2011-11-01

By:

Kweka, Josaphat
  Fox, Louise

URL:

http://d.repec.org/n?u=RePEc:wbk:wbrwps:5882&r=dev  

The household enterprise sector has a significant role in the  Tanzanian economy. It employs a larger share of the urban labor force than  wage employment, and is increasingly seen as an alternative to agriculture as  a source of additional income for rural and urban households. The sector is  uniquely placed within the informal sector, where it represents both  conditions of informal employment and informal enterprise. This paper  presents a case study on Tanzania using a mixed approach by combining both  quantitative and qualitative analysis to examine the important role of  household enterprises in the labor force of Tanzania, and to identify key  factors that influence their productivity. Household enterprise owners are  similar to typical labor force participants although primary education  appears to be the minimum qualification for household enterprise operators to  be successful. Access to location matters -- good, secure location in

Keywords:

Access to Finance,Banks&Banking Reform,Labor  Markets,Population Policies,Debt Markets

Date:

2011-11-01

By:

Limodio, Nicola

URL:

http://d.repec.org/n?u=RePEc:wbk:wbrwps:5881&r=dev  

This paper studies a transmission mechanism through which  pro-vulnerable income transfers may affect individual decision-making of  non-beneficiaries in an extreme poverty context, leading to labor supply  contraction and the so-called dependency syndrome. The argument is based on  the distributional distortion this transfer may provoke to the relative  quality of leisure, enjoyed by the population in an extreme poverty scenario.  Assuming the existence of vulnerable individuals and different income groups  based on certain physical, economic, or social characteristics, the author  studies their decision processes and, in particular, their reactions to the  aid program. The results of this theoretical research provide some insights  on the conditions that an optimal pro-poor income transfer should present. A  literature review is presented in support of the arguments made in the  theoretical part.

Keywords:

Labor Policies,Poverty Monitoring&Analysis,Economic Theory&Research,Services&Transfers  to Poor,Food&Beverage Industry

Date:

2011-09

By:

Vatthanamixay Chansomphou
  Masaru Ichihashi (Graduate School for International Development and  Cooperation, Hiroshima University)

URL:

http://d.repec.org/n?u=RePEc:hir:idecdp:1-2&r=dev  

This paper investigates the impact of foreign aid and foreign  direct investment on the long-run income per capita and short-run income  growth of Lao PDR. We formulate a modification of Solow model; then we employ  a cointegration technique to carry out the long-run relationship, and employ  an error correction model to estimate the short-run growth effects. The  results show that foreign aid has a strong positive impact and is the main  contributor on income level and income growth of Lao PDR in the long run.  Surprisingly, FDI has significant negative impact on long-run income per  capita and small positive impact on income growth in the short run. We  conclude that the long-run negative impact of FDI might be due to its surge  and concentration on few economic sectors and due to its extreme rises and  falls in some period. Therefore, the policies to promote FDI in many sectors  and the policies that attract stable FDI inflows should be p

Keywords:

Foreign direct investment; Convergence; Economic growth

JEL:

C22

Date:

2011-09

By:

Rudy Rahmaddi
  Masaru Ichihashi (Graduate School for International Development and  Cooperation, Hiroshima University)

URL:

http://d.repec.org/n?u=RePEc:hir:idecdp:1-4&r=dev  

This paper explores the impacts of foreign and domestic demand  on Indonesia's exports within demand and supply frameworks using aggregate  data of 1971 - 2007. To capture effects of secular and cyclical movements on  exports, we dissect income variables into trend and business cycle as proxies  of productive capacity and capacity utilization rate, respectively. Our  result suggests that both demand- and supply-price elasticity are elastic,  and secular and cyclical movements may have contrast effects on exports. The  findings draw policy implications namely the importance of price-based  policy, provision of adequate and sound infrastructures, and further  development of human capital-based industrialization.

Keywords:

Exports; demand and supply for exports; domestic demand  pressure; Indonesia; simultaneous equations.

JEL:

F11

Date:

2011-11-14

By:

Simplice A., Asongu

URL:

http://d.repec.org/n?u=RePEc:pra:mprapa:34700&r=dev  

This paper sets a new tone in the legal origins debate with the  overwhelming dominance of French civil-law countries in private investment:  contrary to mainstream consensus where-in, English common-law countries are  better at championing private property rights (La Porta et al., 1998; Beck et  al, 2003). Findings are premised on much recent data (1996-2007) from 38  African countries. The study investigates how French, English, French  sub-Saharan, Portuguese and North African legal origins shape domestic, foreign,  private and public investments through law channels of regulation quality and  the rule of law.

Keywords:

Law; investment; developing countries

JEL:

K40

Date:

2011-09-14

By:

Saraswat, Deepak

URL:

http://d.repec.org/n?u=RePEc:pra:mprapa:34671&r=dev  

Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)  is the largest and most ambitious public works program for poverty  alleviation, adopted by Government of India since independence. It was  implemented in year 2006, starting with the first phase of 200 most backward  districts in India. Two more consecutive phases were implemented to cover all  rural regions in India but, even after almost 6 years of its implementation,  it has not been adequately analyzed for its effect on various development indicators.  This paper aims to study, whether participating in a typical employment  guarantee program like MGNREGA, increases access to financial services and in  particular, credit. Results provide evidence that, MGNREGA has been  successful in self-selecting rural poor into participation and households  participating longer in the program have been able to borrow more from formal  sources. This paper also provides evidence that, inc

Keywords:

MGNREGA; Access to Credit

JEL:

C13

Date:

2011-11

By:

Charles Yuji Horioka
  Akiko Terada-Hagiwara

URL:

http://d.repec.org/n?u=RePEc:nbr:nberwo:17581&r=dev  

In this paper, we present data on trends over time in domestic  saving rates in twelve economies in developing Asia during the 1966-2007  period and analyze the determinants of these trends. We find that domestic  saving rates in developing Asia have, in general, been high and rising but  that there have been substantial differences from economy to economy and that  the main determinants of these trends appear to have been the age structure  of the population (especially the aged dependency ratio), income levels, and  the level of financial sector development. We then project future trends in  domestic saving rates in developing Asia for the 2011-2030 period based on  our estimation results and find that the domestic saving rate in developing  Asia as a whole will remain roughly constant during the next two decades  despite rapid population aging in some economies in developing Asia because  population aging will occur much later in other ec

JEL:

D91

Date:

2011-11

By:

Ejaz Ghani
  William R. Kerr
  Stephen D. O'Connell

URL:

http://d.repec.org/n?u=RePEc:nbr:nberwo:17596&r=dev  

We analyze the spatial determinants of female entrepreneurship  in India in the manufacturing and services sectors. We focus on the presence  of incumbent female-owned businesses and their role in promoting higher  subsequent female entrepreneurship relative to male entrepreneurship. We find  evidence of agglomeration economies in both sectors, where higher female  ownership among incumbent businesses within a district-industry predicts a  greater share of subsequent entrepreneurs will be female. Moreover, higher  female ownership of local businesses in related industries (e.g., those  sharing similar labor needs, industries related via input-output markets)  predict greater relative female entry rates even after controlling for the  focal district-industry’s conditions. The core patterns hold when using local  industrial conditions in 1994 to instrument for incumbent conditions in  2000-2005. The results highlight that the traits of busin

JEL:

J16

Date:

2011-11

By:

Tomoki Fujii (School of Economics, Singapore Management  Unversity)

URL:

http://d.repec.org/n?u=RePEc:siu:wpaper:14-2011&r=dev  

We simulate the impact of actual food price increase between  June 2006 and June 2008 on poverty across different areas and whether the  household’s main income source is agricultural activities. We explicitly  treat heterogeneity in food price changes and the patterns of consumption and  production by merging a expenditure survey dataset and a price dataset at the  provincial level or lower. While the increase of head count index is larger  for non-agricultural households than agricultural households, the opposite is  true for the poverty gap and poverty severity measures, because poor  agricultural households are particularly vulnerable to food inflation.

Keywords:

non-parametric regression, net consumption ratio, global food  crisis, vulnerability

JEL:

E31