Education and earnings inequality in Mexico

Education attainment levels increased dramatically for Mexico's labor force in the 1980s and early 1990s. In parallel, the country experienced a pronounced increase in earnings inequality from 1984-94, reflected in a higher dispersion of wages and an absolute decline in the real incomes of less educated, poorer Mexicans. This increased wage dispersion presents policymakers with a tradeoff between efficiency considerations (favoring increased spending on higher education) and equity considerations (favoring a more equal distribution of per student spending) in the allocation of fiscal resources to education. The author concludes that the best way to deal with this equity-efficiency tradeoff is to encourage greater private participation in higher education. His main findings are that: a) The accumulation of human capital during 1984-94, as proxied by education attainment, was accompanied by a more equal distribution of education attainment levels over that period and, thus, exerted an equalizing effect on the distribution of incomes. The increased income inequalityobserved over that period appears to be caused by an increased rate of skill-based technological change, whose transmission to Mexico and other developing countries may have been facilitated by the increased openness of their economies. b) The greater dispersion of wager observed in Mexico during the past decade raised the rates of return on investing in higher education, reversing the traditional pattern where primary education exhibits the highest rates of return. c) The social rates of return across levels of schooling were more uniform in 1994 than in 1984, suggesting a more efficient assignment of education spending. At the same time, the distribution of spending on education became more egalitarian, as per student spending in higher education declined markedly compared with per student spending at the primary level. This surprising coincidence in the pattern of spending on education was only possible because Mexico started out with a very distorted resource allocation in education that was both highly inequitable and inefficient. As Mexico's policymakers are on the way to correcting these distortions, the opportunities for avoiding the equity-efficiency tradeoff within Mexico's centralized education framework will become progressively exhausted. d) There is little reason to expect the pace of technological change, which appears mainly responsible for raising wage dispersion and the relative returns on higher education, to abate. Efficiency considerations dictate that Mexico should respond by devoting more resources to higher education. However, the federal budget, which traditionally has financed the lion's share of higher education costs in Mexico, is unable to accommodate additional spending on higher education, while spending cuts elsewhere in the education sector are bound to raise serious equity questions. Thus, to avoid falling behind in terms of human capital accumulation, greater private sector participation is necessary, at least, in terms of cost recovery from the main beneficiaries of higher education.Decentralization,Teaching and Learning,Environmental Economics&Policies,Public Health Promotion,Curriculum&Instruction,Teaching and Learning,Environmental Economics&Policies,Health Monitoring&Evaluation,Gender and Education,Curriculum&Instruction

Public investment and economic growth in Mexico

Mexico's growth rate began to plummet at roughly the same time that its public investment expenditures declined. That decline also appears to coincide with a slowdown in the growth of infrastructure capital in the electricity, transport, and communications sectors. Because of these parallel developments, many economists have attributed at least part of the blame for the decline in Mexico's growth after 1981 to the decline of public infrastructure investment. The empirical results presented in this report provide only limited support for this argument. They also suggest, in turn, that increases in public investment would not automatically translate into faster output and productivity growth. One reason not to take for granted a positive relationship between more public investment and faster growth is public investment's crowding out effect on private investment. Although the time-series regression results for Mexico all point toward a crowding out coefficient of less than unity, the existence limits the growth impact of public investment by reducing its net effect on capital accumulation. The time-series results also suggest that the economy's total factor productivity growth responds positively to increases in the ratio of public to private investment. In light of that result, increases in public investment should have a positive net impact on economic growth, despite significant crowding out effects. Chow breakpoint tests indicate, however, that the positive productivity effect appears to have weakened significantly in the past decade. A third reason for questioning a stable relationship is that the impact of increased public investment is likely to depend on how it is financed. The cross-country regressions reported here indicate that a general increase in the public capital stock has a positive impact on growth only if financed through savings generated through lower public consumption expenditures, but not if financed through higher public debt, which implies higher current and future taxation levels. The scope for reducing public consumption expenditures in Mexico is very limited, however, since they are already at rock bottom levels. Therefore, the only way to assure that the public investment program makes a significant contribution to growth is by improving its"quality"through careful attention to its rate of return and complementarity with private capital. In Mexico the most important reforms to make public investment more productive came from policymakers'recognition of the need to distinguish more clearly between the roles of the public and private sectors. This led to the privatization of most public enterprises and a reorientation of public investment to a more narrowly focused set of activities. In addition, the government took important steps to strengthen the institutional framework within which the public investment program is determined.Macroeconomic Management,Inequality,Economic Theory&Research,Environmental Economics&Policies,Economic Stabilization

Interest rates, credit, and economic adjustment in Nicaragua

The high commercial lending rates Nicaragua is currently experiencing, together with a perceived scarcity of credit, have often been blamed for the country's slow growth and have been considered a major failing of the adjustment program initiated in 1991. The author insists that such blame is largely misplaced. Current interest rates are indeed higher than historical levels or international benchmark rates (such as LIBOR or the U.S. treasury bill rate), but those are not the appropriate comparators for Nicaragua today. On the other hand, Nicaragua's real interest rates have risen significantly in recent years and currently exceed real rates in other Central American countries. These high real rates are attributable entirely to a real currency depreciation that has been taking place since 1992, and are not greatly different from rates observed in other Latin American countries that underwent similar adjustments. The author explains the link between real interest rates and adjustment in Nicaragua and, in that context, explores policy options for reducing interest rates. The author's main conclusion: a sustained reduction in real interest rates to below those observed in neighboring countries would require further major structural cahnges, such as the adoption of a foreign currency standard.Payment Systems&Infrastructure,Banks&Banking Reform,Insurance&Risk Mitigation,Environmental Economics&Policies,Economic Theory&Research,Economic Theory&Research,Insurance&Risk Mitigation,Macroeconomic Management,Environmental Economics&Policies,Banks&Banking Reform

Low hanging fruit and the Boasian trilogy in digital lexicography of morphologically rich languages: Lessons from a survey of Indigenous language resources in Canada

Online lexicographical resources for the morphologically rich Indigenous languages in Canada use a wide range of strategies for conveying their language’s morphological system, i.e. how words are inflected and derived, which this paper illustrates in a survey of seventeen bilingual online resources. The strategies these resources employ boil down to two basic approaches to the underlying structure of the resource: 1) a lexical database, or 2) a computational model. Most resources we surveyed are constructed around lexical databases. These assume the word(form) as the basic unit, an assumption that makes it difficult to incorporate the language’s sub-word, morphological structure in full detail. However, one resource uses a computational morphological model to bring the language’s morphology into the core of the lexicon – this proved to be a “low-hanging fruit” in the application of language technology that had been accomplished within a reasonable time-frame, as has been advocated by Trond Trosterud. We discuss the value created and questions raised by this approach and argue that it successfully overcomes the traditional Boasian three-way partition of dictionary, grammar, and text, creating integrated language resources that meet the modern needs of low-resource endangered languages and their communities

The role of linguistics in community-based language documentation: Bottle-neck or boot-strap?

The key to successful community-based language documentation is a cohort of speakers who are trained in the basics of documentary linguistics. With this foundation, speakers understand that for documentation to be authentic, it must be wide (sampled from many speakers and genres), full (emphasizing conversationally contextualized expressions), and deep (properly recorded, transcribed, analyzed and archived). Across North America, a variety of programs have emerged over the past several decades to support speakers “working on their languages”. For the past 13 years, the Canadian Indigenous Languages and Literacy Development Institute (CILLDI) at the University of Alberta has provided intensive training in linguistics during its annual summer school for endangered language revitalization. Since 2007, CILLDI has offered a Community Linguist program, a series of six courses providing the essentials of documentary linguistics. The first four cover the core descriptive and analytical areas. The final two cover topics directly relating to the needs of community linguists, including use of technology, grant-writing, language planning, and best practices in audio and video recording. Students who complete all six courses earn the provincially-recognized Community Linguist Certificate (CLC). Building on more than a decade of delivering Certificate courses and drawing on the expertise of a wide range of collaborators, CILLDI is now developing the Community Linguist Handbook. It serves as an integrated training manual for future community linguists, covering the content of all six CLC courses. The Handbook and its accompanying website allow students to systematically build up a portfolio of their language through a graded series of elicitations and exercises, beginning with individual sounds and eventually moving through words and phrases, and on to full texts or conversations. The approach is usage-based and surface-true. Students acquire facility with a range of terminology as they learn to compare and contrast their language with English and other indigenous languages. Beyond the basics of documentation, the Handbook aims to provide students with an understanding of the importance of genre and the ubiquity of variation across speakers, a respect for the primacy of oral language, and strategic skills in designing language programs. With the skills developed in the Handbook, students are well-prepared for more advanced topics such as dictionary-building and language archiving, as well as digesting technical materials produced by field or theoretical linguists. They are also ready to apply this knowledge as “super speakers” in their community, thus being more effective language advocates at the tribal or national level