The Substitutability of Labor between Immigrants and Natives in the Canadian Labor Market: Circa 1995

This paper examines the substitutability or complementarity between Canadian-born and immigrant workers. These are examined by estimating a set of wage equations using a Generalized Leontief Production Function. The paper finds that, in general, there is no displacement of Canadian-born workers by immigrants. Recent immigrants affect the native-born positively, while older immigrants are neither substitute nor complement for natives. However, the effects differ across industries. Overall the evidence that immigrants harm the opportunities of native-born workers is scant.Immigration, substitutability, complementarity, displacement

Medium and Long-Term Participation in Microcredit: An Evaluation Using a New Panel Dataset from Bangladesh

The objective of this paper is to estimate the impacts of medium- and long-term participation in microcredit programs. It utilises a new and large panel dataset collected from treatment and control households from 1997 to 2005. The data enables us to identify continuing participants in the program as well as newcomers and leavers. We employ different estimation strategies including triple-difference and propensity score matching methods to control for selection bias. The impact estimates indicate that the benefits from microcredit vary more than proportionately with the duration of participation in a program. Larger benefits are realized from longer-term participation, and that the benefits continue to accrue beyond departure from the program. The findings indicate the need to observe longer periods of participation to provide a reliable basis for assessing the effectiveness of microcredit lending.Microcredit, Bangladesh, fixed effects, triple-difference, matching, medium-term.

Medium and Long-Term Participation in Microfinance: An Evaluation Using a New Panel Dataset from Bangladesh

The objective of this paper is to estimate the impacts of medium and long term participation in microfinance programs. It utilises a new, large and unique panel dataset collected from treatment and control households from 1997 to 2005. The data enables us to identify continuing participants in the program as well as newcomers and leavers. We employ different estimation strategies including triple-difference and propensity score matching methods to control for selection bias. The impact estimates indicate that the benefits from microfinance vary more than proportionately with the duration of participation in a program. Larger benefits are realized from longer-term participation, and that the benefits continue to accrue beyond departure from the program. The findings indicate the need to observe longer periods of participation to provide a reliable basis for assessing the effectiveness of microfinance lending.Microfinance, Bangladesh, triple-difference, matching, medium-term,long-term.

WHO BENEFITS FROM MICROFINANCE? THE IMPACT EVALUATION OF LARGE SCALE PROGRAMS IN BANGLADESH

This paper evaluates the impact of microfinance on household consumption using a new, large and unique cross-section data set from Bangladesh. The richness of the data and program eligibility criterion allow the use of a number of non-experimental impact evaluation techniques, in particular instrumental variable (IV) estimation and propensity score matching (PSM). Estimates from both IV and PSM strategies have been interpreted as average causal effects that are valid for various groups of participants in microfinance. The overall results indicate that the effects of micro loans are not robust across all groups of poor household borrowers. It appears that the poorest of the poor participants are among those who benefit most. The impact estimates are lower, or sometimes even negative, for those households marginal to the participation decision. The effects of participation are, in general, stronger for male borrowers. These results hold across different specifications and methods, including correction for various sources of selection bias (including possible spill-over effects).Microfinance, treatment effect, Matching, Consumption.

HEALTH SHOCKS AND CONSUMPTION SMOOTHING IN RURAL HOUSEHOLDS: DOES MICROCREDIT HAVE A ROLE TO PLAY?

This paper estimates, using a large panel data set from rural Bangladesh, the effects of health shocks on household consumption and how access to microcredit affects households' response to such shocks. Our results suggest that even though in general consumption remains stable in many cases when households are exposed to health shocks, households that have access to microcredit appear to cope (slightly) better. The most important instrument used by households appear be sales of productive assets (livestock) and there is a significant mitigating effect of microcredit: households that have access to microcredit do not need to sell livestock to the extent households that do not have access to microcredit need to, in order to insure consumption against health shocks. The results suggest that microcredit organizations and microcredit per se have an insurance role to play, an aspect that has not been analyzed previously.Health Shocks, Microcredit, Consumption Insurance, Bangladesh.

Skilled Immigration and Wages in Australia

This paper investigates the impact of the relative growth of skilled migration on the structure of Australian wages. Unlike conventional approaches, the present study uses macro data to examine the response of wages to immigration flows. We use instrumental variable (IV) techniques to deal with the potential endogeneity of immigration. Results from alternative estimation strategies support the many prevailing empirical findings. There is no robust evidence that a relative increase in skilled immigrants exerts discernible adverse consequences on the wage structure in Australia.Immigration, wage, endogeneity, instrumental variable

Child Labour and Schooling Responses to Access to Microcredit in Rural Bangladesh

Microcredit has been shown to be effective in reducing poverty in many developing countries. However, less is known about its effect on human capital formation. In this paper, we develop a model examining the relation between microcredit and child labour. We then empirically examine the impact of access to microcredit on children’s education and child labour using a new and large data set from rural Bangladesh. We address the selection bias using the instrumental variable method where the instrument relies on an exogenous variation in treatment intensity among households in different villages. The results show that household participation in a microcredit program may increase child labour and reduce school enrolment. The adverse effects are more pronounced for girls than boys. Younger children are more adversely affected than their older siblings and the children of poorer and less educated households are affected most adversely. Our findings remain robust to different specifications and methods, and when corrected for various sources of selection bias.Microcredit, child labour, school enrolment, instrumental variable, treatment effect

The Economic Returns to Good Looks and Risky Sex in the Bangladesh Commercial Sex Market

This study examines the economic returns to beauty and unprotected sex in the commercial sex market in Bangladesh. The results show that there is a beauty premium for commercial sex work, but it is within the bounds of the economic returns to beauty for women in occupations that do not involve sex work. We find that there is an earnings premium for sex workers who sell unprotected sex and that more attractive sex workers charge a higher premium for unprotected sex. This result is consistent with either attractive sex workers having more bargaining/negotiating power or attractiveness and risky sex being complements for males in the presence of attractive women. The results are robust to a number of empirical specifications including controls for sex workers’ disposition, client characteristics and a number of fixed effects to control for other attributes of sex workers and their clients.

Children and Parental Health: Evidence from China

In most developing countries children provide some form of insurance against risks when parents are old, which, in turn, justifies parental preference to have more children. In this paper, we examine the causal effect of number of children on several measures of health status of elderly parents using newly available China Health and Retirement Survey data. Because number of children in a family is not exogenously determined, we use a natural experiment (variations in China’s one child policy) and preferences for a son to account for exogenous variation in family size. We show that both variation in the one-child policy and having a first born child who is a daughter significantly increase the family size. Overall, our results suggest that having more children has a negative effect on self-reported parental health, but generally no effect on other measures of health. We find no difference between the effect of number of children on maternal and paternal health. We find some evidence that having an adult daughter living at home, or in close geographical proximity, has a positive effect on parental health. The results also suggest that upstream financial transfers have a positive effect on parental health.Children, Parental Health, China, One-child policy, Sex preference

Skilled Immigration and Wages in Australia*

This paper addresses the implications of the increasing skill intensity of cross-border migration flows for labour market outcomes in host countries. Specifically, we investigate the impact of the relative growth of skilled migrants on domestic wages in Australia over the last quarter century (1980-2006). We use instrumental variable (IV) estimation techniques to deal with the potential endogeneity of immigration. Unlike most of the previous literature, we use macro data to allow for the adjustment of wages and aggregate demand to immigration flows. However, the limited time span of such data raises problems of small sample bias. We address the small sample bias problem by using Jackknife IV estimation. Our basic finding challenges popular presumptions about the adverse wage implications of immigration. However, our examination of the skill composition of migration flows supports the many prevailing empirical findings that immigration need not cause labour market outcomes to deteriorate. Specifically, we do not find any robust evidence that a relative increase in arrivals of skilled immigrants exerts discernible adverse consequences on wages in Australia.Immigration, wage, endogeneity, instrumental variable.