Risk, Implicit Contracts and the Family in Rural Areas of Low-Income Countries

In this paper the role of family structure in mitigating income volatility in the absence of income insurance in low-income agricultural environments is discussed. Hypotheses concerning the relationship between the membership, size and composition of households and insurance-based income transfers are tested using longitudinal data from India. A test is also performed of whether a household's ability to reduce risk ex post via family arrangements affects its willingness tobear risk ex ante through its selection of formal tenancy contracts. The results support these hypotheses concerning the risk-mitigating roles of both household structure and share contracts, and indicate as well the importance of heterogeneity in risk-aversion across households.Consumer/Household Economics,

The circulation migration of the skilled and economic development

I will consider three questions. First, how inefficient is the global allocation of workers and how large are the gains from increased international migration? How do you measure these gains? We will see that standard GDP comparisons are not sufficient. Second, how would reallocating high-skill workers from low- to high wage areas affect low-wage countries? Third, what is the relationship between the net international flow of skilled individuals and the development of low-income countries? Which countries benefit the most and least from skill migration?Emigration and immigration ; Economic development ; Human capital

Microeconomic Approaches to Development: Schooling, Learning, and Growth

I illustrate the variety of approaches to development issues microeconomists employ, focusing on studies that illuminate and quantify the major mechanisms posited by growth theorists who highlight the role of education in fostering growth. I begin with a basic issue: what are the returns to schooling? I discuss microeconomic studies that estimate schooling returns using alternative approaches to estimating wage equations, which require assumptions that are unlikely to be met in low-income countries, looking at inferences based on how education interacts with policy and technological changes in the labor and marriage markets. I then review research addressing whether schooling facilitates learning, or merely imparts knowledge, and whether there is social learning that gives rise to educational externalities. I next examine studies quantifying the responsiveness of educational investments to changes in schooling returns and assess whether and where there exist important barriers to such investments when returns justify their increase.schooling, development, growth

Global Wage Inequality and the International Flow of Migrants

A framework for understanding the determinants in the variation in the pricing of skills across countries and the model underlying the Mincer specification of wages that is used widely to estimate the relationship between schooling and wages are described. A method for identifying skill prices and for testing the Mincer model, using wages and the human capital attributes of workers located around the world, is discussed. A global wage equation that nests the Mincer specification is estimated that provides skill price estimates for 140 countries. The estimates reject the Mincer model. The skill price estimates indicate that variation in skill prices dominates the cross-country variation in schooling levels or rates of return to schooling in accounting for the global inequality in the earnings of workers worldwide. Variation in skill prices and GDP across countries has opposite and significant effects on the number and quality of migrants to the United States.wage, skill price, international migration, inequality

The Consequences of the Agricultural Productivity Growth for Rural Landless Households: Findings from Research Based on the Indian Green Revolution Experience

There has been much debate over the extent to which economic growth reduces poverty and augments human development among the poor. This paper describes ongoing research using survey data on the Green Revolution experience in India that focuses on this issue. The research is based on a general-equilibrium model of labour markets for adults and children that differentiates households by whether they own land and incorporates a public sector that chooses the amount of school building. The empirical results suggest, consistent with the model, that expectations of improvements in agricultural productivity increase the schooling of children in landed households and reduce schooling in landless households, in part because of the operation of the child labour market, as landless child labour is used to replace landed child labour lost due to increased child school attendance in landed households. The results also show, however, that school construction in India was undertaken at higher levels in areas in which there were expectations of greater future productivity increases, and that the closer proximity of schools differentially benefited landless households. Thus school building policy in India tended to offset the adverse distributional consequences of agricultural technological change in the early stages of the Green Revolution. The allocation of schools, however, did not fully offset the incentives for landless households to reduce schooling investments. The perverse correlation between human development and income growth observed among the poor landless households in India at the initial stages of the Green Revolution, thus, was not due to lack of responsiveness of public resources but to the lack of a return to schooling in the non-farm sector.

Agricultural Prices, Food Consumption and the Health and Productivity of Farmers

Demand and Price Analysis, Farm Management, Food Consumption/Nutrition/Food Safety,

Estimating the Intrafamily Incidence of Health: Child Illness and Gender Inequality in Indonesian Households

In this paper, we demonstrate the difficulties of identifying both the own- and cross-effects of health on the allocation of time within a household, and develop and implement a method for estimating the effects of infant morbidity on the differential allocation of time by other family members based on discrete indicators of health and of activity participation commonly available in survey data. Estimates obtained from Indonesian household data indicate that inattention to problems of the measurement and endogeneity of health leads to a substantial underestimate of the effects of variations in child morbidity on the intrahousehold division of labor, and our estimates that take into account the "simultaneity" of health-activity associations indicate that increased levels of infant morbidity significantly exacerbate existing differentials in work-home time allocations across teenage boys and girls in Indonesia.Consumer/Household Economics, Health Economics and Policy,

The Selectivity of Fertility and the Determinants of Human Capital Investments: Parametric and Semi-Parametric Estimates

In this paper we assess the importance of heterogeneity and selective fertility in altering estimates and interpretations of the determinants of the human capital of children. We set out a sequential model of human capital investments in children incorporating endogenous fertility and heterogeneity in human capital endowments to illustrate the fertility selection problem and issues of identification. Empirical results based on parametric and semi-parametric estimates of selectivity models applied to data on birthweight and schooling in Malaysia indicate that the hypothesis of no fertility selection is strongly rejected, with mothers having higher birthweight children tending to have substantially lower birth probabilities (negative birth selectivity). As a consequence, the positive association between mother's schooling and birthweight is substantially underestimated and the positive effects of delaying childbearing overestimated when birth selectivity is not taken into account. The schooling results indicate strong rejection of the "efficient schooling" model, in which schooling is allocated efficiently across children, but only when the selectivity of fertility is taken into account.Labor and Human Capital,

English Language Skill Acquisition, Locational Choice and Labor Market Returns Among the Major Foreign-Born Language Groups in the United States in 1900 and 1980

Labor and Human Capital,

What's In a Name? Country-of-Origin Influences on the Earnings of Immigrants in the United States

Labor and Human Capital,