FOREIGN AID AND DOMESTIC SAVINGS: THE CROWDING OUT EFFECT

The paper examines the relationship between foreign aid and savings using annual data for 119 countries. Regressions for each country are run separately in order to find which countries have a positive aid-saving experience. The explanatory variables chosen are thought to be exogenous to current economic policy. Countries are placed into five categories according to the strength of the aid-saving relationship. Few countries show evidence of substantial crowding out. Consequently, aid is found to be clearly beneficial to saving and, hence, investment for the preponderance of these countries.

Why Should State Government Invest in College Education? An Equilibrium Approach for the US in 2000

This paper is a preliminary look at the benefits to states in the US of subsidizing college education. The benefits studies are the external benefits of college education on the earnings of both college graduates and those who have not graduated from college. In completing a college education individuals earn more. In addition, if there are positive external benefits others will also earn more because the average level of college graduates in the state has risen. This study confirms the existence of these positive externalities for the US in 2000 in estimates using the Current Population Survey. Furthermore, these external benefits are large enough that if confirmed in more complete studies would suggest that states invest too little in college education.human capital, externalities, higher education

A Dynamic, Keynesian Model of Development

The Harrod-Domar growth model is extended in a way that introduces the possibility of persistent excess capacity as a potential source of slow growth. This extended model has five growth rates, which must be equal for there to be a full-employment, full-capacity dynamic equilibrium, instead of the three growth rates in the standard Harrod-Domar model. These growth rates will be called the justified, the actual, the warranted, the potential and the natural rate of growth. This model is held to provide a consistent framework for discussing many disparate view of economic development. Specifically, much of development theory can be divided in to three types of theories, which focus on different structural rigidities in the economy. First, there are theories that emphasize a lack of saving and thus propose mechanisms for augmenting saving. Second, theories emphasizing a shortage of investment and thus the existence of excess capacity. Third, there are theories emphasizing inadequate labor absorption and the need to develop or employ labor by using capital saving technology. It is argued that the essence of Keynesian development economics is the belief that the development process is served better by pursuing policies that enhance growth with existing obstacles than by simply trying to remove these obstacles in the hope that development will then occur.

The Working Hours of Immigrants in Germany: Temporary versus Permanent

Migration is often viewed as an investment decision. Temporary migrants can be expected to invest less in accumulating human capital specific to the host country. Instead, they work more hours in order to accumulate savings and invest in financial capital that can be transferred back to their country of origin upon return. In this paper, using German panel data, we explore how temporary migrants differ from permanent migrants in their labor supply decisions and behavior. Upon correcting for endogeneity bias, temporary migrants are found to work more hours than permanent ones. This result supports the human capital theory and a household production model of migration where migrants may be temporary by choice and not because of legal restrictions or even a bad experience in the labor market.migration, temporary migrants, labor supply, Germany

Estimating The Causal Effect of Income on Health: Evidence from Post Reunification East Germany

In this paper we investigate if there was a causal effect of changes in current and 'permanent' income on the health of East Germans in the years following reunification. Reunification was completely unanticipated and therefore can be seen as a providing some exogenous variation, which resulted in a substantial increase in average household incomes for East Germans. Our data source is the German Socio-Economic Panel (GSOEP) between 1991 and 1999, and we fit both random and fixed-effects estimators to our ordinal health measures. Whilst the exogeneity of reunification allows us to establish the causality between income and health, the fixed-effects methodology additionally enables us to control for individual unobservable heterogeneity such as parental background and general attitudes to health. We also provide new evidence on how major life-events impact on health, and we pay close attention to the issue of panel attrition, given that there might be endogenous exits from the panel if the unhealthy are more likely to drop out of the sample. Using cross-sectional variations in income and health we find evidence of a significant positive effect of current income on health. However, after controlling for heterogeneity and using a new decomposition of the fixed-effects estimates, we find no evidence that increased income leads to improved health. This is the case with respect to current income and a measure of 'permanent' income and two alternative definitions of health. We also find no evidence of an effect of regional income on health.Income, Health, German Reunification, Panel Data, Attrition

Fertility in Sub-Saharan African Countries with Consideration to Health and Poverty

Fertility has begun to fall in Sub-Saharan Africa but it remains high on average and particularly for a few countries. This paper examines African fertility using a panel data set of 47 Sub-Saharan countries between 1962 and 2003. Fixed and random country effect estimates are made in models where the explanatory variables are suggested by the theory of the demographic transition as modified by Caldwell. Special attention is paid to the economic status of women, urbanization, the poverty level, and the health of the population including total health expenditures and the prevalence of HIV/AIDS. The results support Caldwell’s hypothesis and are generally supportive of hypothesis that a fertility transition is occurring. HIV/AIDS is found to have a negative impact on fertility.Africa, infant mortality, fertility, poverty, health

ASIAN DEMOGRAPHIC TRANSITION: AN INSTRUMENTAL-VARIABLES PANEL APPROACH

We examine patterns in fertility during the demographic transition using a panel data set across 25 Asian countries for 1975-2003. The adult female literacy rate is used as an instrumental variable for the endogenous female labor force participation rate, which has been unsolved in the population literature. The preliminary panel data analysis suggests that relative cohort size is significant in explaining the decline in fertility before controlling for simultaneity bias. This result, however, may be spurious. After considering the instrumental variables estimation in the panel data structure, the age structure variable no longer plays a dominant role in explaining declining fertility rates in many Asian countries. Systematic differences were found between East and South Asia. A policy implication in South Asia is that development may reduce fertility directly through increasing income rather than indirectly through a change in female labor force participation or urbanization. In East Asia, the indirect effects dominate.Fertility, Easterlin hypothesis, Transition Economies, Relative Cohort Size, Age Structure

Segmental aging underlies the development of a Parkinson phenotype in the AS/AGU rat

There is a paucity of information on the molecular biology of aging processes in the brain. We have used biomarkers of aging (SA β-Gal, p16Ink4a, Sirt5, Sirt6, and Sirt7) to demonstrate the presence of an accelerated aging phenotype across different brain regions in the AS/AGU rat, a spontaneous Parkinsonian mutant of PKCγ derived from a parental AS strain. P16INK4a expression was significantly higher in AS/AGU animals compared to age-matched AS controls (p < 0.001) and displayed segmental expression across various brain regions. The age-related expression of sirtuins similarly showed differences between strains and between brain regions. Our data clearly show segmental aging processes within the rat brain, and that these are accelerated in the AS/AGU mutant. The accelerated aging, Parkinsonian phenotype, and disruption to dopamine signalling in the basal ganglia in AS/AGU rats, suggests that this rat strain represents a useful model for studies of development and progression of Parkinson's disease in the context of biological aging and may offer unique mechanistic insights into the biology of aging

The Value of Reunification in Germany: An Analysis of Changes in Life Satisfaction

We quantify the value of changes in life circumstances in Germany following reunification. To this end, we develop and implement a fixed-effect estimator for ordinal life satisfaction in the German Socio-Economic Panel. We find strong negative effects on life satisfaction from being recently fired, losing a spouse through either death or separation and time spent in hospital, whilst we find strong positive effects from income and marriage. Using a new casual decomposition technique, we find that East Germans experienced a continued improvement in life satisfaction after 1990 to which increased household incomes contributed around 12%. Most of the increase is explained by improved average circumstances, such as public services. For West Germans, we find virtually no change in satisfaction between 1991 and 1999.Life satisfaction, German Reunification, Random and Fixed-Effects Panel Models, Causal Decomposition