Household Saving Behavior and the Real Interest Rate: An Empirical Study

This paper tests several hypotheses about the responsiveness of household saving to the real interest rate. It tests how the interest responsiveness in a country depends on certain common macroeconomic and demographic variables. These include per-capita income, the income distribution, the pervasiveness of borrowing constraints, the degree of financial depth, and demographic characteristics. The rationale for considering these variables is provided in the context of a theoretical model of household saving behavior, which then leads to the estimation of a structural equation for household saving

Household Saving Behavior and the Real Interest Rate: An Empirical Study

This paper tests several hypotheses about the responsiveness of household saving to the real interest rate. It tests how the interest responsiveness in a country depends on certain common macroeconomic and demographic variables. These include per-capita income, the income distribution, the pervasiveness of borrowing constraints, the degree of financial depth, and demographic characteristics. The rationale for considering these variables is provided in the context of a theoretical model of household saving behavior, which then leads to the estimation of a structural equation for household saving

Wars and Child Health: Evidence from the Eritrean-Ethiopian Conflict

This is the first paper using household survey data from two countries involved in an international war (Eritrea and Ethiopia) to measure the conflict’s impact on children's health in both nations. The identification strategy uses event data to exploit exogenous variation in the conflict's geographic extent and timing and the exposure of different children's birth cohorts to the fighting. The paper uniquely incorporates GPS information on the distance between survey villages and conflict sites to more accurately measure a child’s war exposure. War-exposed children in both countries have lower height-for-age Z-scores, with the children in the war-instigating and losing country (Eritrea) suffering more than the winning nation (Ethiopia). Negative impacts on boys and girls of being born during the conflict are comparable to impacts for children alive at the time of the war. Effects are robust to including region-specific time trends, alternative conflict exposure measures, and an instrumental variables strategy.child health, conflict, economic shocks, Africa

AIDS Treatment and Intrahousehold Resource Allocations: Children's Nutrition and Schooling in Kenya

The provision of life-saving antiretroviral (ARV) treatment has emerged as a key component of the global response to HIV/AIDS, but very little is known about the impact of this intervention on the welfare of children in the households of treated persons. We estimate the impact of ARV treatment on children’s schooling and nutrition outcomes using longitudinal household survey data collected in collaboration with a treatment program in western Kenya. We find that children’s weekly hours of school attendance increase by over 20 percent within six months after treatment is initiated for the adult household member. For boys in treatment households, these increases closely follow their reduced market labor supply. Similarly, young children’s short-term nutritional status—as measured by their weight-for-height Z-score—also improves dramatically. We also present evidence that the impact of treatment is considerably larger when compared to the counterfactual scenario of no ARV treatment. The results illustrate how intrahousehold allocations of time and resources are altered in response to significant health improvements. Since the improvements in children’s schooling and nutrition at these critical early ages will affect their socio-economic outcomes and wellbeing in adulthood, the widespread provision of ARV treatment is likely to generate significant long-run welfare benefits.antiretroviral drugs, ARVs, HIV/AIDS, Kenya, children school attendance, children nutrition,

The Economic Impact of AIDS Treatment: Labor Supply in Western Kenya

Using longitudinal survey data collected in collaboration with a treatment program, this paper is the first to estimate the economic impacts of antiretroviral treatment in Africa. The responses in two important outcomes are studied: (1) labor supply of adult AIDS patients receiving treatment; and (2) labor supply of children and adults living in the patients' households. We find that within six months after the initiation of treatment, there is a 20 percent increase in the likelihood of the patient participating in the labor force and a 35 percent increase in weekly hours worked. Since patient health would continue to decline without treatment, these labor supply responses are underestimates of the impact of treatment on the treated. The upper bound of the treatment impact, which is based on plausible assumptions about the counterfactual, is considerably larger and also implies that the wage benefit from treatment is roughly equal to the costs of treatment provision. The responses in the labor supply of patients' household members are heterogeneous. Young boys and women work considerably less after initiation of treatment, while girls and men do not change their labor supply. The effects on child labor are particularly important since they suggest potential schooling impacts from treatment.

AIDS Treatment and Intrahousehold Resource Allocations: Children's Nutrition and Schooling in Kenya

The provision of life-saving antiretroviral (ARV) treatment has emerged as a key component of the global response to HIV/AIDS, but very little is known about the impact of this intervention on the welfare of children in the households of treated persons. We estimate the impact of ARV treatment on children’s schooling and nutrition outcomes using longitudinal household survey data collected in collaboration with a treatment program in western Kenya. We find that children’s weekly hours of school attendance increase by over 20 percent within six months after treatment is initiated for the adult household member. For boys in treatment households, these increases closely follow their reduced market labor supply. Similarly, young children’s short-term nutritional status—as measured by their weight-for-height Z-score—also improves dramatically. We argue that these treatment effects will be considerably larger when compared to the counterfactual scenario of no ARV treatment. The results provide evidence on how intrahousehold resource allocation is altered in response to significant health improvements. Since the improvements in children’s schooling and nutrition at these critical early ages will affect their socio-economic outcomes in adulthood, the widespread provision of ARV treatment is likely to generate significant long-run macroeconomic benefits.

Health and Labor Supply in the Context of HIV/AIDS: The Long-Run Economic Impacts of Antiretroviral Therapy

Using longitudinal survey data collected in Kenya, this paper estimates the longer-term impacts of antiretroviral therapy (ART) on the labor supply of treated adults and their household members. Building upon previous work in Kenya, data collected from 2004–2006 indicate that early evidence on the short-run impacts of ART tends to be upheld over the long-term as well. The results show that the labor supply response among treated adults occurs rapidly and is sustained through the 3-year observation period in our study. These results underscore the strong relationship between health and labor supply that has been observed in other contexts

Age and Gender Effects on Time Discounting in a Large Scale Cash Transfer Programme

Understanding its determinants can provide vital insight into decisions ranging from savings and financial investment to smoking, obesity and human capital accumulation. This article contributes to a growing literature that seeks to identify the determinants of inter-temporal choice. We explore the role of income shocks, age and gender on time discounting using evaluation data from the Government of Kenya’s largest social protection programme, the Kenya Cash Transfer for Orphans and Vulnerable Children (CT-OVC). Study participants were randomised to treatment and control arms in 2007 and data on time discounting was collected on participants four years after programme inception. Our paper confirms that middle-aged groups are more patient than younger and older adults. In contrast to the empirical evidence, females are less patient than males and this situation is more evident during young and adult life. Males lose their patient during old age. Considering the impact of the programme, the average treatment effect of the programme on time discounting is negligible. However, it varies strongly with age of the recipient, with large and statistically significant effects among prime-age recipients and no effects on younger or older recipients. Moreover, these results are stronger for females than males, an important result given that over 60 per cent of recipients in target households are females

Wars and child health: Evidence from the Eritrean–Ethiopian conflict

Conflict between and within countries can have lasting health and economic consequences, but identifying such effects can be empirically challenging. This paper uses household survey data from Eritrea to estimate the effect of exposure to the 1998–2000 Eritrea-Ethiopia war on children’s health. The identification strategy exploits exogenous variation in the conflict’s geographic extent and timing and the exposure of different birth cohorts to the fighting. The unique survey data include details on each household’s migration history, which allows us to measure a child’s geographic location during the war and without which war exposure would be incorrectly classified. War-exposed children have lower height-for-age Z-scores, with similar effects for children born before or during the war. Both boys and girls who are born during the war experience negative impacts due to conflict. Effects are robust to including region-specific time trends, alternative conflict exposure measures, and mother fixed effects