External Shocks, Household Consumption and Fertility in Indonesia

This paper examines the impact of idiosyncratic income shocks on household consumption, educational expenditure and fertility in Indonesia, and assesses whether the investment in human capital of children and fertility are used to smooth household consumption. Using six different kinds of self-reported economic hardships, our findings indicate that coping mechanisms are rather efficient for Indonesian households that perceive an economic hardship. Only in case of unemployment we find a significant decrease in consumption spending and educational expenditure while fertility increases. Theses results indicate that households that perceive an unemployment shock use children as a means for smoothing consumption. Regarding the death of a household member or natural disaster we find that consumption even increases. These results are consistent with the argument that coping mechanisms even over-compensate the actual consumption loss due to an economic hardship. One important lesson from our findings is that different types of income shock may lead to different economic and demographic behavioral adjustments and therefore require specific targeted social insurance programs.Consumption, Insurance, Fertility and Indonesia

Female education and its impact on fertility

The negative correlation between women’s education and fertility is strongly observed across regions and time; however, its interpretation is unclear. Women’s education level could affect fertility through its impact on women’s health and their physical capacity to give birth, children’s health, the number of children desired, and women’s ability to control birth and knowledge of different birth control methods. Each of these mechanisms depends on the individual, institutional, and country circumstances experienced. Their relative importance may change along a country’s economic development process

The Environmental Consequences of Economic Growth Revisited

Although numerous studies on the economic growth-environment nexus exist, relatively little attention has been paid to model the effect of income on the environment, controlling for other relevant factors. The primary contribution of this paper is to examine the environmental consequences of economic growth for developed and developing countries in a dynamic cointegration framework by incorporating energy consumption and foreign direct investment (FDI). For this purpose, an autoregressive distributed lag (ARDL) approach to cointegration is applied to annual data for the period 1971-2005. Results show that economic growth improves environmental quality for developed countries in the long-run, but worsen the environment in developing economies. We also find that energy consumption has a detrimental long-run effect on environmental quality for both developed and developing countries. FDI, however, is found to have little long-run effect on the environment in both developed and developing countries. Finally, it is found that, in the short-run, income and energy play key roles in affecting the environment in developed and developing countries, but FDI does not.

Learning by doing and learning from others in contraceptive technology

This paper provides a theoretical and empirical investigation of the impact of social learning on modern contraceptive prevalence. A theory is developed where own or neighbors' experience increases the benefit from using modern contraceptives by reducing the uncertainty regarding contraceptive efficacy. Empirical results from the Indonesian Family Life Survey suggest that the more own experience of modern contraceptives a woman has she is more likely to use those methods. However, neighbors' experience does not have a significant impact on one's current usage of contraceptives. One explanation of these findings is that the information on contraceptive efficacy, or failure rates is likely to contain much noise when women communicate with each other. These findings contrast those of recent literature, which show the adoption of contraceptives by one's social contacts has positive impact on one's own adoption

Employment effects of low-skilled immigrants in Korea

This study examines the impact of inflows of foreign workers on Korean natives' economic performance - namely, employment - through the Employment Permit System, the basis of Korea's system by which to introduce low-skilled immigrants. Using National Employment Insurance data, analyses reveal that the adjustment cost related to the introduction of foreign workers was not substantial over the 2004-2005 period. However, a substitution effect exists between the employment of foreign and native workers in the service industry and among less-educated natives. The results suggest that policy assistance is needed to lessen the impacts caused by inflows of foreign workers and to enhance adjustments within the labor market on a sector-by-sector basis