Essays on Human Capital Accumulation and Inequality.

This thesis is composed by four independent chapters. Their common denominator is the process of human capital accumulation analyzed under different perspectives and using different techniques. In the following I will shortly describe each chapter in more detail. Chapter 1 addresses an important aspect of the effects of trade liberalization that has gained much attention in recent years: raising skill premia. It is motivated by recent evidence showing that trade liberalization in developing countries is often associated with a large increase in wage inequality. I investigate the mechanism through which a trade related increase in the demand for skilled labor affects human capital investment and the wealth distribution of a developing country economy. In particular I focus on a scenario where the liberalizing economy is in a poverty trap. This is because developing economies are often plagued by credit market imperfections. Imperfect financial markets raise the probability that individuals are constrained in their human capital investment decisions and that the economy is a poverty trap. I use a standard overlapping generation model to show how a trade related increase in the demand for skilled labor can release a developing country from a poverty trap, leading to increased human capital accumulation and technology progress. The skill biased technological shock benefits the whole economy and "trickles down" - through the interest rate - to unskilled workers a la Aghion & Bolton (1997). Chapter 2, which is joint work with Lidia Farre, analyzes the educational choices of Argentinean teenagers during different phases of the economic cycle. We use data for Argentinean households over the period 1995-2002 to examine households' response to negative idiosyncratic income shocks in different macroeconomic scenarios. We study how teenagers' school progress responds to household head unemployment during periods of high economic growth and compare it to the response during recession years, when families are more likely to be financially constrained. After accounting for the potential endogeneity of household head unemployment we find that school failure in response to unemployment shocks increases during periods of economic instability. Further we find that for first born boys this results from a greater involvement in labor market activities. Our results add to the existing literature on the long term cost of macroeconomic crises. In Chapter 3 I analyze a different aspect of the Argentinean macroeconomic crisis and the related social costs. Argentina experienced an important increase of informal employment and wage dispersion in the last 20 years. This chapter extends a search model with exogenous human capital accumulation to include an informal sector. The model is parametrized such to fit Argentinean data in order to investigate the effect of employment protection measures on informality, employment and wage dispersion under two different macroeconomic conditions. I find that for low educated workers both severance pay and minimum wages increase informality. In the presence of vii a wage floor severance payments do not affect employment but only shift marginal workers from the covered sector to the unregulated one. I find that a decrease in the return to human capital skills increases the incentives to seek informal employment. Labor market protection measures and declining human capital return are able to explain most of the increase in informality and much of the increase in wage dispersion. Last chapter is coauthored with Christian Dustmann and focuses on the very early phases of human capital investment: pre school years. In this chapter we investigate test score gaps and their evolution for white and ethnic minority children aged 3 and 5 in the UK. We also analyse the effect of early school exposure on test score gaps, and differences in the effect of entry age on early school performance. Ethnic test score gaps at age 3 - when most children are not enrolled in Kindergarten yet - are large. Background characteristics (in particular exposure to the English language) explain part, but not all of this differential. Between the age of 3 and 5, the ethnic test score gap narrows. Exposure to preschool measured at age 5 - even if limited to only a few months - has a larger positive effects on test scores for those minority groups who started from a more disadvantaged position. Further, keeping exposure to pre-school constant, ethnic minority children loose less from entering pre-school at a younger age than majority individuals; for some groups, there is an overall gain from entering school early. Our findings point at a reduction in achievement gaps between minority and majority children in the UK between age 3 and age 5, which is partly due to a larger positive effect of pre-school on achievements of minorities.Human capital; Economic development;

Ethnic patterns of returns to education in Bulgaria: Do minorities have an incentive to invest in education?

It is widely accepted that disparities in education contribute to the poor labor market outcomes experienced by ethnic minority groups and consequently to their poverty. However, incentives to invest in education are significantly diminished if individuals are discriminated in the labor market and precluded from access to employment. In this paper we analyze differential educational benefits in Bulgaria and compare Roma returns to education with the majority population and the Turkish minority. We show that both ethnic minority groups have lower educational levels and employment rates than the majority population and that they also have lower returns to education. However, the gap in returns to education is much wider for the Roma with respect to both employment and labour-market earnings. The evidence suggests that this group is more vulnerable to discrimination, with a high percentage of the employment gap unexplained by differences in observable skills or characteristics.minorities, Roma, discrimination, returns to education, transition

After the Financial Crisis: Achieving the Millennium Development Goals in Europe, the Caucasus and Central Asia

The Pan-European Region made significant progress from 1995 to 2007 in improving the economic, social, environmental and health indicators incorporated into the Millennium Development Goals (MDGs). However, given the huge set-backs associated with the transition recession in the early 1990s and the more recent economic declines from the global financial crisis, achievement of some of the MDGs in a significant number of countries by 2015 is now problematic. The degree to which the actual targets can be achieved by 2015 will depend critically on: (i) the speed of recovery from the current crisis and the policy responses to it; (ii) the commitment by national governments to focus resources on the MDG objectives and their willingness to implement new policy initiatives, and (iii) the level of foreign assistance and regional cooperation that can be obtained. The EU new Member States (NMS) are most likely to meet the MDGs, while the prospects for the other European emerging economies are more mixed, especially for MDGs related to poverty and health. All of the Pan-European economies are falling short in terms of achieving environmental sustainability and gender equality.millennium development goals, economic development, Europe, financial crisis, transition economies, CIS, Russia, caucasus, central Asia, health, education, environmental sustainability, gender, HIV, AIDS, Tuberculosis, trade,

The educational attainment, labour market participation and living conditions of young Roma in Bulgaria, Hungary and Romania

This paper investigates the educational attainment, labour market participation and living conditions of young Roma adults in Bulgaria, Hungary and Romania based on data from the generations and gender surveys and other sources of information. It shows that in spite of a small improvement in the educational attainment of young Roma in comparison to the generation of their parents, the educational achievement and employment gaps have increased considerably during the post-communist period. The paper also compares living conditions of the Roma with other population groups. It concludes with a discussion of policy challenges.minorities, Roma, discrimination, employment, education, transition

Factors affecting the schooling performance of secondary school pupils - the cost of high unemployment and imperfect financial markets

This paper investigates the implications of major ¯nancial markets crises for the human capital accumulation decisions of households. We use data for Argentinean households over the period 1995-2002 to examine households' response to negative idiosyncratic income shocks in di®erent macroeconomic scenarios. In particular we study how teenagers' school progress responds to household head unemployment during periods of high economic growth and compare it to the response during recession years, when families are more likely to be ¯nancially constrained. After accounting for the potential endogeneity of household head unemployment we ¯nd that school failure in response to unemployment shocks increases during periods of economic instability and that, at least for boys, this results from a greater involvement in labor market activities. Our results add to the existing literature on the long term cost of macroeconomic crises.imperfect credit markets, human capital, parental unemployment

Gender-sensitive Economic Policies in the UNECE Region in the Context of the Economic and Financial Crisis

Gender equality is a basic human right and is as such a part of the social policy framework. At the same time, it is a multi-faceted concept with its cultural, social, legal, political and economic dimensions and interrelations. The prevalent practice in most countries illustrates that traditionally, macroeconomics and gender equality have been considered as two distinct policy areas that are independently shaped and carried out by different authorities. However, this approach fails to acknowledge the numerous interlinkages between both areas. Indeed, it is in the interest of both gender equality advocates and economic policymakers to closely cooperate. On the one hand, economic policies have an effect on gender equality through their potential to rebalance economic opportunities for both men and women and by influencing the incentive structure of economic agents; on the other hand, gender equality has an impact on the economy, for example through changes in labour force participation and the full use of human capital. This paper presents the interplay between these two policy areas highlighting mechanisms through which they influence each other, both under a structural - or long-term - perspective and in the context of the current economic crisis. The concluding recommendations are primarily directed to national decision-makers but also to international organizations, particularly financial institutions which influence national decision-making in the economic field.gender, economic crisis, transition economies, CIS, Russia

Increased Serum Beta-Secretase 1 Activity is an Early Marker of Alzheimer's Disease

Background: Beta-site APP cleaving enzyme 1 (BACE1) is the rate-limiting enzyme in amyloid-beta (A beta) plaques formation. BACE1 activity is increased in brains of patients with Alzheimer's disease (AD) and mild cognitive impairment (MCI) and plasma levels of BACE1 appears to reflect those in the brains.Objective: In this work, we investigated the role of serum BACE1 activity as biomarker for AD, estimating the diagnostic accuracy of the assay and assessing the correlation of BACE1 activity with levels of A beta(1-40), A beta(1-42), and A beta(40/42) ratio in serum, known biomarkers of brain amyloidosis.Methods: Serum BACE1 activity and levels of A beta(1-40), A beta(1-42), were assessed in 31 AD, 28 MCI, diagnosed as AD at follow-up (MCI-AD), and 30 controls. The BACE1 analysis was performed with a luciferase assay, where interpolation of relative fluorescence units with a standard curve of concentration reveals BACE1 activity. Serum levels of A beta(1-40), A beta(1-42) were measured with the ultrasensitive Single Molecule Array technology.Results: BACE1 was increased (higher than 60%) in AD and MCI-AD: a cut-off of 11.04 kU/L discriminated patients with high sensitivity (98.31%) and specificity (100%). Diagnostic accuracy was higher for BACE1 than A beta(40/42) ratio. High BACE1 levels were associated with worse cognitive performance and earlier disease onset, which was anticipated by 8 years in patients with BACE1 values above the median value (> 16.67 kU/L).Conclusion: Our results provide new evidence supporting serum/plasma BACE1 activity as an early biomarker of AD

Higher health effects of ambient particles during the warm season: Therole of infiltration factors

A large number of studies have shown much higher health effects of particulate matter (PM) during the warm compared to the cold season. In this paper we present the results of an experimental study carried out in an unoccupied test apartment with the aim of understanding the reasons behind the seasonal variations of the health effects due to ambient PM2.5 exposure. Measurements included indoor and outdoor PM2.5 mass and chemical composition as well as particle size distribution of ultrafine particles. Monitoring campaigns were carried out during summer and winter following a ventilation protocol developed to replicate typical occupant behaviour according to a questionnaire-based survey. Our findings showed that seasonal variation of the relationship between ambient and indoor mass concentrations cannot entirely explain the apparent difference in PM toxicity between seasons and size distribution and chemical composition of particles were identified as other possible causes of changes in the apparent PM toxicity. A marked decrease of ultrafine particles (<100\u202fnm) passing from outdoors to indoors was observed during winter; this resulted in higher indoor exposure to nanoparticles (<50\u202fnm) during summer. With regards to the chemical composition, a pooled analysis showed infiltration factors of chemical species similar to that obtained for PM2.5 mass with values increasing from 0.73 during winter to 0.90 during summer and few deviations from the pooled estimates. In particular, significantly lower infiltration factors and sink effect were found for nitrates and ammonium during winter. In addition, a marked increase in the contribution of indoor and outdoor sulfates to the total mass was observed during summer

The Sex-Specific Detrimental Effect of Diabetes and Gender-Related Factors on Pre-admission Medication Adherence Among Patients Hospitalized for Ischemic Heart Disease: Insights From EVA Study

Background: Sex and gender-related factors have been under-investigated as relevant determinants of health outcomes across non-communicable chronic diseases. Poor medication adherence results in adverse clinical outcomes and sex differences have been reported among patients at high cardiovascular risk, such as diabetics. The effect of diabetes and gender-related factors on medication adherence among women and men at high risk for ischemic heart disease (IHD) has not yet been fully investigated.Aim: To explore the role of sex, gender-related factors, and diabetes in pre-admission medication adherence among patients hospitalized for IHD.Materials and Methods: Data were obtained from the Endocrine Vascular disease Approach (EVA) (ClinicalTrials.gov Identifier: NCT02737982), a prospective cohort of patients admitted for IHD. We selected patients with baseline information regarding the presence of diabetes, cardiovascular risk factors, and gender-related variables (i.e., gender identity, gender role, gender relations, institutionalized gender). Our primary outcome was the proportion of pre-admission medication adherence defined through a self-reported questionnaire. We performed a sex-stratified analysis of clinical and gender-related factors associated with pre-admission medication adherence.Results: Two-hundred eighty patients admitted for IHD (35% women, mean age 70), were included. Around one-fourth of the patients were low-adherent to therapy before hospitalization, regardless of sex. Low-adherent patients were more likely diabetic (40%) and employed (40%). Sex-stratified analysis showed that low-adherent men were more likely to be employed (58 vs. 33%) and not primary earners (73 vs. 54%), with more masculine traits of personality, as compared with medium-high adherent men. Interestingly, women reporting medication low-adherence were similar for clinical and gender-related factors to those with medium-high adherence, except for diabetes (42 vs. 20%, p = 0.004). In a multivariate adjusted model only employed status was associated with poor medication adherence (OR 0.55, 95%CI 0.31–0.97). However, in the sex-stratified analysis, diabetes was independently associated with medication adherence only in women (OR 0.36; 95%CI 0.13–0.96), whereas a higher masculine BSRI was the only factor associated with medication adherence in men (OR 0.59, 95%CI 0.35–0.99).Conclusion: Pre-admission medication adherence is common in patients hospitalized for IHD, regardless of sex. However, patient-related factors such as diabetes, employment, and personality traits are associated with adherence in a sex-specific manner

Essays on Human Capital Accumulation and Inequality

Defense Date: 17/09/2009Examining Board: Prof. Orazio Attanasio, University College London Prof. Andrea Ichino, EUI and Università di Bologna Prof. Eliana La Ferrara, Università Bocconi/IGIER Prof. Morten Ravn, EUI and University College London, SupervisorThis thesis is composed by four independent chapters. Their common denominator is the process of human capital accumulation analyzed under different perspectives and using different techniques. In the following I will shortly describe each chapter in more detail. Chapter 1 addresses an important aspect of the effects of trade liberalization that has gained much attention in recent years: raising skill premia. It is motivated by recent evidence showing that trade liberalization in developing countries is often associated with a large increase in wage inequality. I investigate the mechanism through which a trade related increase in the demand for skilled labor affects human capital investment and the wealth distribution of a developing country economy. In particular I focus on a scenario where the liberalizing economy is in a poverty trap. This is because developing economies are often plagued by credit market imperfections. Imperfect financial markets raise the probability that individuals are constrained in their human capital investment decisions and that the economy is a poverty trap. I use a standard overlapping generation model to show how a trade related increase in the demand for skilled labor can release a developing country from a poverty trap, leading to increased human capital accumulation and technology progress. The skill biased technological shock benefits the whole economy and "trickles down" - through the interest rate - to unskilled workers a la Aghion & Bolton (1997). Chapter 2, which is joint work with Lidia Farre, analyzes the educational choices of Argentinean teenagers during different phases of the economic cycle. We use data for Argentinean households over the period 1995-2002 to examine households' response to negative idiosyncratic income shocks in different macroeconomic scenarios. We study how teenagers' school progress responds to household head unemployment during periods of high economic growth and compare it to the response during recession years, when families are more likely to be financially constrained. After accounting for the potential endogeneity of household head unemployment we find that school failure in response to unemployment shocks increases during periods of economic instability. Further we find that for first born boys this results from a greater involvement in labor market activities. Our results add to the existing literature on the long term cost of macroeconomic crises. In Chapter 3 I analyze a different aspect of the Argentinean macroeconomic crisis and the related social costs. Argentina experienced an important increase of informal employment and wage dispersion in the last 20 years. This chapter extends a search model with exogenous human capital accumulation to include an informal sector. The model is parametrized such to fit Argentinean data in order to investigate the effect of employment protection measures on informality, employment and wage dispersion under two different macroeconomic conditions. I find that for low educated workers both severance pay and minimum wages increase informality. In the presence of vii a wage floor severance payments do not affect employment but only shift marginal workers from the covered sector to the unregulated one. I find that a decrease in the return to human capital skills increases the incentives to seek informal employment. Labor market protection measures and declining human capital return are able to explain most of the increase in informality and much of the increase in wage dispersion. Last chapter is coauthored with Christian Dustmann and focuses on the very early phases of human capital investment: pre school years. In this chapter we investigate test score gaps and their evolution for white and ethnic minority children aged 3 and 5 in the UK. We also analyse the effect of early school exposure on test score gaps, and differences in the effect of entry age on early school performance. Ethnic test score gaps at age 3 - when most children are not enrolled in Kindergarten yet - are large. Background characteristics (in particular exposure to the English language) explain part, but not all of this differential. Between the age of 3 and 5, the ethnic test score gap narrows. Exposure to preschool measured at age 5 - even if limited to only a few months - has a larger positive effects on test scores for those minority groups who started from a more disadvantaged position. Further, keeping exposure to pre-school constant, ethnic minority children loose less from entering pre-school at a younger age than majority individuals; for some groups, there is an overall gain from entering school early. Our findings point at a reduction in achievement gaps between minority and majority children in the UK between age 3 and age 5, which is partly due to a larger positive effect of pre-school on achievements of minorities