entrepreneurship versus joblessness explaining the rise in self employment a large share of the workforce throughout the developing world is self employed and this proportion has increased in recent decades assessments of this development vary with pull factors such as high returns to capital contrasted with push factors such as barriers to more desirable salaried jobs using a long panel dataset from ghana we empirically investigate the changing structure of earnings in self employment relative to salaried work our analysis allows workers to sort into self employment for different reasons including expected earnings differentials and endogenous capital accumulation whilst highlighting constraints that workers may face we estimate a correlated random coefficient model using iv gmm taking into account the endogeneity of sector choice and capital accumulation we find that returns to productive characteristics in self employment have increased significantly between 2004 and 2011 whilst self employment has attracted increasingly skilled workers this points against the negative view of self employment as an occupation of last resort

heterogeneity in informal salaried employment evidence from the egyptian labor market survey summary this paper contributes to the continuing debates on the mechanisms driving labor market informality in developing countries by proposing an innovative way to discriminate between segmented and competitive markets an empirical analysis is applied to egyptian paid employment in the highly dynamic context of 1998 2006 the study is based on recent nonparametric methods applied to estimate the model with essential heterogeneity the model is extended to decomposing the treatment effects into unobserved and observed components the results show triple heterogeneity of workers on the egyptian labor market offering support to both segmented and competitive views on informal labor

the state and economic stagnation in tropical africa abstract politics while only one strand in the explanation of africa s massive economic problems is nonetheless a significant factor a central conundrum facing postcolonial political leaders is how to govern and hold together unintegrated peasant societies in the absence of legitimacy personal rule a particular mode of patrimonial governance provides an answer permitting regime survival and the advancement of political insiders but personal rule has an economically destructive tendency that only shrewd political leadership and propitious world economic conditions can check if uncontrolled certain political practices corrode bureaucratic and legal rationality and promote the misallocation of scarce public resources the result can be a downward spiral of interrelated political and economic decline that is increasingly difficult to reverse

the demand for and impact of learning hiv status this paper evaluates an experiment in which individuals in rural malawi were randomly assigned monetary incentives to learn their hiv results after being tested distance to the hiv results centers was also randomly assigned without any incentive 34 percent of the participants learned their hiv results however even the smallest incentive doubled that share using the randomly assigned incentives and distance from results centers as instruments for the knowledge of hiv status sexually active hiv positive individuals who learned their results are three times more likely to purchase condoms two months later than sexually active hiv positive individuals who did not learn their results however hiv positive individuals who learned their results purchase only two additional condoms than those who did not there is no significant effect of learning hiv negative status on the purchase of condoms

informality and poverty in ecuador this paper uses national representative data from the ecuadorian family expenditure survey to study the determinants of poverty and informality in the country taking into account the two way relationship between these two phenomena the main contribution of this paper is to present new empirical evidence on this relationship for a developing country where more than 60 of workers are in the informal sector the results support the view of a heterogeneous informal market in which informal work is both a demand led phenomenon and a voluntary and primarily supply led form of employment

informality property rights and poverty in china s favelas in this study of households living in informal settlements in three principal chinese cities we analyze the associations between informality property rights and poverty we propose that informality can be understood in terms of property rights presence absence strength completeness and ambiguity drawing on the property rights entitlements theories of sen de soto ostrom alchian and coase we refine a list of property rights effects that can be tested empirically using a household questionnaire survey of 1 208 respondents from a representative sample of 60 urban villages in beijing shanghai and guangzhou we use robust regression models to detect statistical relationships between household performance on six poverty domains as a function of four property rights domains controlling for income human capital and other influences we find evidence for what we call sen effects and de soto effects our models show that some property rights are associated with lower poverty indicators but we also find evidence to show that the absence weakness or ambiguity of property rights also reduce poverty indicators on particular domains through what we assume to be a substitution effect informal settlements permit poorer household to live at lower costs than is usually or officially acceptable and thus spend more on other welfare enhancing expenditures the distribution of property rights determines the size distribution and impacts of these trade offs and shapes the economic and social performance of informal settlements

management practices across cultures role of support in technology usage as global corporations pursue a dual strategy of global integration and local responsiveness it becomes necessary to determine whether some management practices can be applied across borders using a sample of 143 employees from nine nigerian organizations we found that organizational support contributed to technology usage however only employees with low computer training associated support with aspects of technology usage such as daily use frequency of use and total application

interrogating inclusive growth formal informal duality complementarity conflict i find through analyses of across state across industry over state and pooled data involving state and time on the indian economy that the behaviour of the urban informal unorganised sector is explained by the modern formal organised sector besides petty agriculture but the vast rural informal sector is like surplus population associated only with petty agriculture i also show there could be interactions between the formal sector and modern agriculture these empirical relations are analysed and theoretical departures from the literature are identified i propose using a structuralist kaleckian framework with accumulation in the formal sector a large part of petty agriculture is modernised or converted to suit the needs of accumulation and thereby we have a long run drain of resources from petty agriculture and hence from informal sectors as well however even under such a resource drain the urban informal sector may sustain or expand due to productivity advantages and due to pull from the formal sector at the cost of its rural counterpart in the short run when the formal sector and hence the urban informal sector expand or when the government promotes the urban or productive part of informal economy a basic conflict between urban and rural informal sectors is exposed given the generic agricultural supply constraint thus the paradigms of inclusive growth and development management are questioned copyright oxford university press

land tenure arrangements and rural urban migration in china summary obstacles to internal migration in china contribute to inefficiency inequality and land degradation academic and policy debate has primarily focused on discrimination against rural migrants on arrival in urban areas meanwhile barriers to migration out of rural areas have received less attention this paper examines the role of incomplete rural property rights in the migration decisions of rural households we examine the relationship between tenure insecurity and restrictions on land rentals and participation in outside labor markets the results indicate that tenure insecurity reduces migration this relationship is particularly pronounced on forest land which has implications for the conservation of recently replanted forest areas

internal adjustments to falling civil service salaries insights from uganda abstract real basic salaries of civil servants in many developing countries have fallen during the past 15 years little is known however as to how the civil service personnel structure and pay system have responded to the salary cuts civil service basic salaries fell drastically in uganda during 1975 1988 the adaptive responses of the civil service are identified allowances have not increased to cushion the salary cuts as is alleged to have happened in many developing countries the adaptive responses have had negative effects on efficiency and equity within the civil service they have reversed the decline in the public wage bill the raison d etre for deep salary slashes in the first place

china s uneven progress against poverty while the incidence of extreme poverty in china fell dramatically over 1980 2001 progress was uneven over time and across provinces rural areas accounted for the bulk of the gains to the poor though migration to urban areas helped the pattern of growth mattered rural economic growth was far more important to national poverty reduction than urban economic growth agriculture played a far more important role than the secondary or tertiary sources of gross domestic product gdp rising inequality within the rural sector greatly slowed poverty reduction provinces starting with relatively high inequality saw slower progress against poverty due both to lower growth and a lower growth elasticity of poverty reduction taxation of farmers and inflation hurt the poor external trade had little short term impact

divergent cultures when public organizations perform well in developing countries abstract throughout the developing world there are organizations that perform relatively well despite dauntingly unfavorable contexts and despite overall poor public sector performance this article explores evidence from 29 organizations in six countries to suggest that the concept of organizational culture provides a useful hypothesis to explain why some of them performed relatively well while others did not organizational mystique management style and performance expectations contributed to positive organizational cultures in better performing organizations while some autonomy in personnel management provided a facilitating context for these characteristics to be developed

hiv wages and the skill premium abstract the hiv epidemic has dramatically decreased labor supply among prime age adults in sub saharan africa using within country variation in regional hiv prevalence and a synthetic panel i find that hiv significantly increases the capital labor ratio in urban manufacturing firms the impact of hiv on average wages is positive but imprecisely estimated in contrast hiv has a large positive impact on the skill premium the impact of hiv on the wages of low skilled workers is insignificantly different from 0 and is strongly dampened by competition from rural migrants the hiv epidemic disproportionately increases the incomes of high skilled survivors thus increasing inequality

leader member exchange lmx paternalism and delegation in the turkish business culture an empirical investigation although businesses increasingly operate across cultures there is a paucity of research that examines the influence of national culture on leadership practices this study uses a structural equation modeling approach to investigate relationships among leader member exchange lmx delegation paternalism and job satisfaction in turkish business organizations results from a survey study of n 185 full time employees from turkish companies support the relationship of lmx to delegation and job satisfaction however the effect of lmx on job satisfaction is mediated by paternalism an emic cultural dimension results suggest that delegation might not be an effective management tool in the middle eastern context

concessions of infrastructure in latin america government led renegotiation this paper analyzes government led renegotiations in infrastructure concession contracts in latin america based on the same sample used in guasch laffont and straub 2003 to examine firm led renegotiations after extending the theoretical framework to a multiple period context in which both pareto improving and rent shifting renegotiations at the initiative of the government can occur we develop an original instrumental variable strategy to address the issue of contract endogeneity and derive empirical results while some of the main insights concerning the importance of having a regulator in place when awarding concessions and the fragility of price cap regulatory schemes are unchanged significant differences arise with respect to the effect of investment and financing as well as the corruption variables we provide evidence that a good regulatory framework is especially important in contexts with weak governance and political opportunism copyright 2007 john wiley sons ltd

governing access to forests in northern ghana micro politics and the rents of non enforcement summary decentralization of natural resource management is often presented as a novelty however successive attempts to decentralize authority were undertaken during the development of forest policy in the northern territories of the gold coast colony between the 1930s and 1950s from 1960 however this was rolled back forest policy was thenceforth characterized by centralization exclusion and restrictive legislation new forest policies of local management from the 1990s attempt to change this but differ from colonial decentralization in terms of institutional fragmentation and the absence of effective fiscal decentralization the assumed illegality of people s use of the resources and the non enforcement of the law provides a context for monetary and political rent seeking for political agents

poverty and the shadow economy the role of governmental institutions this paper examines the impact of poverty on the size of the shadow economy using cross country panel data for over 100 countries for the period 1991 2015 the results show that poverty has a positive and significant effect on the size of the shadow economy furthermore we argue that the quality and size of governmental institutions matter in moderating the impact of poverty on the shadow economy considering the interactions between poverty and government quality and size we find that poverty has the largest effect on the size of the shadow economy when government quality is the lowest and the size of the government is the largest these results withstand a battery of robustness checks

enforcing higher labor standards within developing country value chains consequences for mnes and informal actors in a dual economy the 2013 collapse of the rana plaza building in dhaka bangladesh led external stakeholders to insist on higher labor standards in apparel global value chains gvcs stakeholders now expect mnes to take full chain responsibility however the increased monitoring and enforcement costs of a large network of suppliers have been non trivial mnes instead implement a cascading compliance approach coupled with a partial re internalization elevated costs are further exacerbated in developing countries where the informal and formal sectors are linked and cost competitiveness greatly depends on this duality monitoring actors in the informal sector is difficult and few informal actors can achieve compliance gvcs have therefore reduced informal sector engagement by excluding non compliant actors and investing in greater automation by seeking to strictly enforce compliance mnes are attenuating some of the positive effects of mne investment particularly the prospects for employment creation especially among women and enterprise growth in the informal sector i discuss how these observations might inform other cross disciplinary work in development ethics and sociology finally i note implications for ib theory from the disparities between the ownership control and responsibility boundaries of the firm

lifetime earnings and the vietnam era draft lottery evidence from social security administrative records errata the randomly assigned risk of induction generated by the draft lottery is used to construct estimates of the effect of veteran status on civilian earnings these estimates are not biased by the fact that certain types of men are more likely than others to service in the military social security administrative records indicate that in the early 1980s long after their service in vietnam had ended the earnings of white veterans were approximately 15 percent less than the earnings of comparable nonveterans copyright 1990 by american economic association

money for nothing universal child care and maternal employment abstract the strong correlation between child care and maternal employment rates has led previous research to conclude that affordable and readily available child care is a driving force both of cross country differences in maternal employment and of its rapid growth over the last decades we analyze a staged expansion of subsidized child care in norway our precise and robust difference in differences estimates reveal that there is little if any causal effect of subsidized child care on maternal employment despite a strong correlation instead of increasing mothers labor supply the new subsidized child care mostly crowds out informal child care arrangements suggesting a significant net cost of the child care subsidies

the informal sector wage gap new evidence using quantile estimations on panel data abstractwe estimate the informal formal sector pay gap throughout the conditional wage distribution using panel data from brazil mexico and south africa we control for time invariant unobservables and identification stems from intersector movers we control for observables in a nonlinear way using propensity score reweighting and carefully check for potential measurement errors using similar definitions of informality we obtain consistent results for all three countries informally employed workers earn much less than formal workers primarily because of lower observable and unobservable skills estimates of the conditional wage gap show that they are also underpaid compared to their formal sector counterparts in all three countries the informal wage penalty is larger in the lower part of the conditional distribution and tends to disappear at the top i e the informal sector increases wage dispersion the magnitudes of these effects vary across countries with the largest penalties in lower cond

a competitive model of the informal sector abstract in developing nations formal workers tend to be more experienced more educated and earn more than informal workers these facts are often interpreted as evidence that low skill workers face barriers to entry into the formal sector yet there is little empirical evidence that such barriers are important this paper describes a model where in equilibrium the characteristics of formal and informal workers differ systematically even though labor markets are perfectly competitive the informal sector emphasizes low skill work as in the data because informal managers have access to less outside financing and choose to substitute low skill labor for physical capital

rural urban disparities in india and china abstract this paper compares rural urban disparities in china and india in light of differences in the following indicators income and consumption deposit to credit ratios and agricultural and industrial productivity access to such public services as health are also considered reasons for disparities are sought in government policies affecting agricultural terms of trade credit and rural to urban migration the paper concludes that the chinese economy during the mao zedong period was much more egalitarian than the indian but the case is less clearcut for the deng xiaoping period

much ado about two reconsidering retransformation and the two part model in health econometrics in health economics applications involving outcomes y and covariates x it is often the case that the central inferential problems of interest involve e y x and its associated partial effects or elasticities many such outcomes have two fundamental statistical properties y 0 and the outcome y 0 is observed with sufficient frequency that the zeros cannot be ignored econometrically this paper 1 describes circumstances where the standard two part model with homoskedastic retransformation will fail to provide consistent inferences about important policy parameters and 2 demonstrates some alternative approaches that are likely to prove helpful in applications

policies for a heterogeneous informal sector in latin america abstract the concept of the informal sector has gained increasing acceptance in latin america some 30 million persons now work outside the modern economy in low productivity jobs with marginal incomes many of them are living in poverty international and national policy makers have become aware of the political and economic consequences of this phenomenon and are seeking ways to improve returns and incomes the sector however is composed of different kinds of activities each with its own problems which need to be addressed in different ways policy planners should bear this in mind as they seek solutions the paper recommends three types of measures providing productive assistance to informal enterprises supporting informal sector workers and revising regulations that govern informal sector activities

explaining positive deviance in public sector reforms in development summary public sector reforms are commonplace in developing countries much of the literature about these reforms reflects on their failures this paper asks about the successes and investigates which of two competing theories best explain why some reforms are positive deviants solution and leader driven change sldc and problem driven iterative adaptation pdia the theories are used to analyze data emerging from a case survey involving thirty cases from princeton university s innovations for successful society iss program the bulk of evidence from this study supports a pdia explanation but there is reason to believe that sldc hypotheses also have value

brain drain informality and inequality a search and matching model for sub saharan africa abstract this paper revisits the effect of brain drain on development and inequality using a two sector model with formal and informal labor markets contrary to existing studies we use a search and matching setting that allows to endogenize the employment structure and the wage differentials between different skill groups in the same sector and between workers with identical skills employed in different sectors theoretically the brain drain induces ambiguous welfare effects for those left behind as the potential loss gain depends on the parameters of the model we thus parameterize our model on 33 sub saharan african countries and produce comparative results for each of them we find that skilled emigration induces heterogeneous welfare losses for the low skilled population the size of these losses varies between 0 2 and 8 and is influenced by the parameters of the production and education technologies the results are fairly robust to identifying assumptions to the inclusion of technological externalities and to the endogenization of training decisions

the structure of jibs s social network and the relevance of intra country variation a typology for future research we examine articles published in the journal of international business studies jibs and introduce a typology to support the relevance of intra country variation in international business ib based on social network theory our analysis uses multidimensional scaling to study 53 203 citations from 1158 qualifying jibs articles to determine the journal s social structure the results indicate that three current research clusters multinational enterprise knowledge development foreign entry and cultural effects and the internationalization process and national culture are based on established ib theory then we respond to calls in the literature to improve research concerning intra country variation and propose a typology of three dimensions social demographic and geographic to study the diversity of individual firm and economic activity in a country the social dimension evaluates the importance of modernist and traditionalist values the demographic dimension proposes differences between urban and rural settings and the geographic dimension discusses the relevance of border and interior locations we suggest a nested typology that unifies these three dimensions for continued use in ib future research opportunities related to jibs s social structure and the intra country variation typology are recommended

labor market segmentation and the determination of wages in the public private formal and informal sectors in san jose costa rica a striking feature of many cities in less developed countries ldcs is the coexistence of large well organized high technology firms with the small street vendors who own little but a wooden box to sit on this apparent dualism in the urban economy has been a concern of students of economic development for many years several international agencies notably the international labour organisation ilo and the world bank have focused attention on this phenomenon the ilo popularized the terms formal sector and informal sector to describe this dichotomy to many economists one consequence of this dualism is labor market segmentation labor market segmentation plays a crucial role in explanations provided for some important issues such as rural urban migration urban poverty unemployment underemployment and growth 2 in this article i examine the hypothesis that labor market segmentation exists in san jos6 costa rica between the public and private formal sectors and between the privateformal and informal sectors defined in the appendix i define labor market segmentation as a situation where because of institutional barriers to occupational mobility between sectors a worker in the lower sector has less than full access to a job in the upper sector held by an observationally identical worker 3 if there were no barriers workers in the low wage sector would enter the high wage sector and force the wages in that sector down until wages across sectors were equalized that is labor market segmentation implies differences in wages for observationally identical workers relying on this inference most of the empirical literature on labor market segmen

limitations of contract farming as a pro poor strategy the case of maize outgrower schemes in upper west ghana summary contract farming cf arrangements have the potential to address market failures and improve technology adoption productivity and welfare in ghana government and donors use cf as a strategy for increasing adoption of new agricultural technologies and developing value chains yet to date there has not been a rigorous assessment of these cf schemes the focus in this paper is on different maize based cf schemes in the poorest and most remote region in ghana it assesses the profitability and potential impact of these cf schemes utilizing a unique plot level dataset that covers two periods of data and two maize plots scheme and non scheme per household and employing matching techniques and an instrumental variable approach to address selection bias and unobserved heterogeneity across farmers these are complemented by a community level survey in depth interviews with scheme operators and a series of key informant interviews results show that these schemes led to improved technology adoption and yield increases in addition a subset of maize farmers with high yield improvements due to cf participation have high profits maize cf schemes also enabled market coordination and consistent supply of quality maize to downstream industries however on average the impact of the cf schemes on profitability is negative even when input diversion is accounted for yield increases are not high enough to compensate for higher input requirements and the cost of capital under the schemes despite higher yields the costs to produce one metric tonne of maize under cf schemes are higher than on maize farms without cf schemes twice that of several countries in africa and more than seven times higher than that of major maize exporting countries the united states brazil and argentina sustainability of these cf schemes will largely depend on developing and promoting much improved varieties and technologies that boost yields in order to compensate for the high input and credit costs

informal employment in developing countries opportunity or last resort there is an ongoing debate among researchers and policy makers whether informal sector employment is a result of competitive market forces or labor market segmentation more recently it has been argued that none of the two theories sufficiently explains informal employment but that the informal sector shows a heterogenous structure for some workers the informal sector is an attractive employment opportunity whereas for others rationed out of the formal sector the informal sector is a strategy of last resort to test the empirical relevance of this hypothesis we formulate an econometric model which allows for several unobserved segments within the informal sector and apply it to the urban labor market in cote d ivoire

incumbent innovation and domestic entry this paper analyzes the escape entry incentive for innovation by incumbent firms the threat posed by the possibility of leading edge firms entering the market influences incumbent innovation to overcome problems of endogeneity we apply an instrumental variable approach to analyze a rich firm level dataset 1987 2000 for germany we find evidence that domestic entry has a negative effect on incumbent product innovation which is a strong indication of new entrants comparative advantage in commercializing new ideas in contrast domestic entry has a positive effect on incumbent process innovations an effect also known as the escape entry effect

do workplace smoking bans reduce smoking in recent years workplace smoking policies have become increasingly prevalent and restrictive using data from two large scale national surveys we investigate whether these policies reduce smoking our estimates suggest that workplace bans reduce smoking prevalence by 5 percentage points and daily consumption among smokers by 10 percent although workers with better health habits are more likely to work at firms with smoking bans estimates from systems of equations indicate that these results are not subject to an omitted variables bias the rapid increase in bans can explain all of the recent drop in smoking among workers relative to nonworkers

does compulsory school attendance affect schooling and earnings we establish that season of birth is related to educational attainment because of school start age policy and compulsory school attendance laws individuals born in the beginning of the year start school at an older age and can therefore drop out after completing less schooling than individuals born near the end of the year roughly 25 percent of potential dropouts remain in school because of compulsory schooling laws we estimate the impact of compulsory schooling on earnings by using quarter of birth as an instrument for education the instrumental variables estimate of the return to education is close to the ordinary least squares estimate suggesting that there is little bias in conventional estimates every developed country in the world has a compulsory schooling requirement yet little is known about the effect these laws have on educational attainment and earnings 1 this paper exploits an unusual natural experiment to estimate the impact of compulsory schooling laws in the united states the experiment stems from the fact that children born in different months of the year start school at different ages while compulsory schooling laws generally require students to remain in school until their sixteenth or seventeenth birthday in effect the interaction of school entry requirements and compulsory schooling laws compel students born

poverty and famines an essay on entitlement and deprivation this book focuses on the causes of starvation in general and famines in particular the traditional analysis of famines is shown to be fundamentally defective and the author develops an alternative analysis

estimating outcome distributions for compliers in instrumental variables models in imbens and ingrist 1994 angrist imbens and rubin 1996 and imbens and rubin 1997 assumptions have been outlined under which instrumental variables estimands can be given a causal interpretation as a local average treatment effect without requiring functional form or constant treatment effect assumptions we extend these results by showing that under these assumptions one can estimate more from the data than the average causal effect for the subpopulation of compliers one can in principle estimate the entire marginal distribution of the outcome under different treatments for this subpopulation these distributions might be useful for a policy maker who wishes to take into account not only differences in average of earnings when contemplating the merits of one job training programme vs another we also show that the standard instrumental variables estimator implicitly estimates these underlying outcome distributions without imposing the required nonnegativity on these implicit density estimates and that imposing non negativity can substantially alter the estimates of the local average treatment effect we illustrate these points by presenting an analysis of the returns to a high school education using quarter of birth as an instrument we show that the standard instrumental variables estimates implicitly estimate the outcome distributions to be negative over a substantial range and that the estimates of the local average treatment effect change considerably when we impose nonnegativity in any of a variety of ways

segmented or competitive labour markets a normal roy model with four sectors is developed it allows to derive tests of several assumptions on the working of the labor market strongly or weakly competitive or segmented it shows that more important a feature of labor markets than segmentation is the presence of comparative advantages for individuals between the various economic sectors the model is applied to data on women s labor force participation in the main towns of colombia in 1980 it uses multivariate probit and tobit techniques copyright 1991 by the econometric society

trust in a rent seeking world health and government transformed in northeast brazil abstract this article draws lessons from a set of innovative programs carried out by a state government in brazil now widely acclaimed for excellence in public management key to the high performance was strong worker commitment to the job and what the state did to elicit a topic of little note in the development literature but of central importance in the literature of industrial performance and workplace transformation in the industrialized countries the state created an unusual sense of calling among the program s workers new prestige in the communities where they worked and an informed citizenry that both monitored the workers and trusted them

mobility and the return to education testing a roy model with multiple markets self selected migration presents one potential explanation for why observed returns to a college education in local labor markets vary widely even though u s workers are highly mobile to assess the impact of self selection on estimated returns this paper first develops a roy model of mobility and earnings where workers choose in which of the 50 states plus the district of columbia to live and work available estimation methods are either infeasible for a selection model with so many alternatives or place potentially severe restrictions on earnings and the selection process this paper develops an alternative econometric methodology that combines lee s 1983 parametric maximum order statistic approach to reduce the dimensionality of the error terms with more recent work on semiparametric estimation of selection models e g ahn and powell 1993 the resulting semiparametric correction is easy to implement and can be adapted to a variety of other polychotomous choice problems the empirical work which uses 1990 u s census data confirms the role of comparative advantage in mobility decisions the results suggest that self selection of higher educated individuals to states with higher returns to education generally leads to upward biases in ols estimates of the returns to education in state specific labor markets while the estimated returns to a college education are significantly biased correcting for the bias does not narrow the range of returns across states consistent with the finding that the corrected return to a college education differs across the u s the relative state to state migration flows of college versus high school educated individuals respond strongly to differences in the return to education and amenities across states

diagnosing measurement equivalence in cross national research many researchers have pointed out that it is necessary to ensure measurement equivalence in cross national comparative research three aspects of measurement equivalence translation metric and calibration equivalence are necessary to establish the cross national reliability and validity of items used to measure theoretical constructs this paper discusses these issues and proposes two recently developed empirical techniques multiple group lisrel and optimal scaling for use in diagnosing cross national measurement equivalence these techniques are illustrated by reanalysis of a pioneering u s and japanese study the two techniques yield convergent results indicating measurement equivalence for some but not all ordinal level items under consideration the findings demonstrate that the proposed methods are useful diagnostic tools for exploring measurement equivalence several suggestions for reducing the likelihood of problems with measurement equivalence and a number of methods for dealing with items where lack of equivalence persists are also discussed

informal employment in developing economies multiple heterogeneity abstractthis paper contributes to the literature on the nature of informal employment in developing economies drawing on the model with essential heterogeneity it offers a list of scenarios describing the behavioural patterns which informal workers follow the list nests not only classical patterns of a rationed formal sector versus an integrated labour market but also different patterns of rationing using non parametric techniques and data from a few african economies with different levels of development the paper proposes empirical case studies fitting various informality schemes developing economies show disparate patterns of allocation of workers and various patterns of rationing

double penalty in returns to education informality and educational mismatch in the colombian labour market abstractthis article examines the returns to education taking into consideration the existence of educational mismatches in the formal and informal employment of a developing country results show that the returns of surplus required and deficit years of schooling are different in the two sectors moreover they suggest that these returns vary along the wage distribution and that the pattern of variation differs for formal and informal workers in particular informal workers face not only lower returns to their education but suffer a second penalty associated with educational mismatches that puts them at a greater disadvantage compare to their formal counterparts

semi parametric estimation of simultaneous equations with limited dependent variables a case study of female labour supply we propose a general strategy to estimate semi parametrically simultaneous equations with limited dependent variables first each reduced form rf is estimated with various semi parametric methods second the specification of each rf is tested to select an appropriate method third the structural form sf equations are estimated using minimum distance methods and the restrictions among the sf and rf parameters a case study of female labour supply is presented

management style and productivity in two cultures global competition has motivated an increasing number of united states firms to set up production facilities in mexico this study examines productivity and management style differences in a mexican maquiladora operation and its u s parent plant likert s system 4 theory was used as the theoretical basis of comparison as hypothesized significant differences were found in the management systems while productivity at the two facilities was equal

culture and congruence the fit between management practices and national culture the financial performance of european and asian work units of one multinational company is examined as a function of the congruence between management practices and national culture using hofstede s five national culture dimensions and analogous management practices we find that work unit financial performance is higher when management practices in the work unit are congruent with the national culture

estimation of limited dependent variable models with dummy endogenous regressors applied economists have long struggled with the question of how to accommodate binary endogenous regressors in models with binary and nonnegative outcomes i argue here that much of the difculty with limited dependent variables comes from a focus on structural parameters such as index coefcients instead of causal effects once the object of estimation is taken to be the causal effect of treatment several simple strategies are available these include conventional two stage least squares multiplicative models for conditional means linear approximation of nonlinear causal models models for distribution effects and quantile regression with an endogenous binary regressor the estimation strategies discussed in the article are illustrated by using multiple births to estimate the effect of childbearing on employment status and hours of work

a test of dual labor market theory despite substantial differences in their views of the appropriate policy response to the existence of poverty neither the proponents of dual market theory nor its critics have proposed potentially conclusive tests of the dual market hypothesis this paper presents a test of the two central propositions of dual market theory 1 the existence of two distinct labor markets with different wage setting mechanisms and 2 the existence of barriers to mobility between the labor markets we find considerable support for both hypothesis estimation of a switching model of wage determination with unknown regimes yields two distinct wage equations the one which most workers are associated with closely resembles the standard human capital regression with significant returns to education and experience the other equation is flat with no returns to human capital these two equations resemble the predictions of dual market theory for the primary and secondary markets respectively further we present evidence that at least some non white workers are involuntarily confined to the secondary market this crowding of minority workers into the low wage labor market accounts for a substantial portion of white non white wage differences we interpret these results as providing empirical support for the dual market hypothesis and for recent theoretical work on efficiency wagemodels in addition combining the efficiency wage argument with the observation that much of the white non white wage difference is explained by the exclusion of non whites from the primary sector suggests an explanation for the persistance of wage differences this abstract was borrowed from another version of this item

causal parameters and policy analysis in economics a twentieth century retrospective the major contributions of twentieth century econometrics to knowledge were the definition of causal parameters within well defined economic models in which agents are constrained by resources and markets and causes are interrelated the analysis of what is required to recover causal parameters from data the identification problem and clarification of the role of causal parameters in policy evaluation and in forecasting the effects of policies never previously experienced this paper summarizes the development of these ideas by the cowles commission the response to their work by structural econometricians and var econometricians and the response to structural and var econometrics by calibrators advocates of natural and social experiments and by nonparametric econometricians and statisticians this paper considers the definition and identification of causal parameters in economics and their role in econometric policy analysis it assesses different research programs designed to recover causal parameters from data at the beginning of this century economic theory was mainly intuitive and empirical support for it was largely anecdotal at the end of the century economics has a rich array of formal models and a high quality database empirical regularities motivate theory in many areas of economics and data are routinely used to test theory many economic theories have been developed as measurement frameworks to suggest what data should be collected and how they should be interpreted econometric theory was developed to analyze and interpret economic data most econometric theory adapts methods originally developed in statistics the major exception to this rule is the econometric analysis of the identification problem and the companion analyses of structural equations causality and economic policy evaluation although an economist did not invent the phrase correlation does not imply causation 1 economists clari

spousal control and intra household decision making an experimental study in the philippines i elicit causal effects of spousal observability and communication on financial choices of married individuals in the philippines when choices are private men put money into their personal accounts when choices are observable men commit money to consumption for their own benefit when required to communicate men put money into their wives account these strong treatment effects on men but not women appear related more to control than to gender men whose wives control household savings respond more strongly to the treat ment and women whose husbands control savings exhibit the same response changes in information and communication interact with underlying control to produce mutable gender specific outcomes

is the environmental kuznets curve for deforestation a threatened theory a meta analysis of the literature abstract although widely studied deforestation remains a common research topic the relationship between economic development and deforestation is still in question this paper presents a meta analysis of environmental kuznets curve ekc studies for deforestation using 69 studies offering 547 estimations we shed light on why ekc results differ we investigate the incidence of choices made by authors such as econometric strategy measure of deforestation geographical area and presence of control variables on the probability of finding an ekc after a phase of work corroborating the ekc we find a turning point after the year 2001 building on our results we conclude that the ekc story will not fade until theoretical alternatives are provided

a cross national study of managerial values this study investigated cross national differences in managerial values a total of 567 managers from twelve nations participated in the study managerial values were assessed by means of rokeach s value survey factor analysis of the eighteen instrumental values included in rokeach s value survey revealed four underlying value dimensions the value dimension that included the instrumental values broadminded capable and courageous was ranked as the most important value dimension by managers from all twelve nations national differences were found on three of the four value dimensions

formal but less equal gender wage gaps in formal and informal jobs in urban brazil in developing countries a large share of employees work informally and are not covered by employment protection legislation i study here how gender wage inequality differs across formal and informal jobs in brazil the raw gender wage gap is higher in informal jobs 13 compared to formal jobs 5 but i show that this difference is an artefact of different male and female selection processes first women have better observable characteristics than men and the female advantage is stronger among formal employees second men and women entering formal and informal jobs have different unobservable characteristics controlling for endogenous selection into formal vs informal jobs i find that the gender gap in wage offers is high and increases with education in formal jobs in informal jobs however estimated wage offers are the same for men and women i discuss the potential implications of these findings regarding the effect of labour market regulation on gender wage gaps

are labor markets segmented in developing countries a semiparametric approach abstract we test the hypothesis that observably similar workers earn higher wages in the formal sector than in the informal sector in developing nations using data from argentina s household survey and various definitions of informal employment we find that on average formal wages are higher than informal wages parametric tests suggest that a formal premium remains after controlling for individual and establishment characteristics however this approach suffers from several econometric problems which we address with semiparametric methods the resulting formal premium estimates prove either small and insignificant or negative neither do we find significant differences in measures of job satisfaction between the two sectors we invoke these results to question the mainstream view that labor markets are segmented along formal informal lines in developing nations such as argentina

estimation in a class of simultaneous equation limited dependent variable models estimation in a class of simultaneous equation limited dependent variable models is considered the minimum chi squared method is used to compare the asymptotic relative efficiency of marginal and new conditional maximum likelihood estimators for this class of models efficient minimum chi squared estimation procedures are described a two step algorithm based on a conditional maximum likelihood estimator provides a natural framework for both computing a linearized and locating the joint maximum likelihood estimator the unimodality of the simultaneous equation tobit likelihood function is proved and this model is used to illustrate the empirical application of some of the estimators considered in the paper the relative efficiency of these estimators in the simultaneous equation tobit model is examined in a set of monte carlo experiments many applications of microeconomic theory to individual data face the joint problems of censoring and simultaneity in particular the dependent variable under investigation may not be continuously observed and some of the conditioning variables representing the outcome of other decisions by the individual may be simultaneously determined smith and blundell 1986 developed an asymptotically efficient test for exogeneity or simultaneity in the simultaneous equation tobit model as a byproduct a conditional maximum likelihood estimator was obtained which is consistent under the alternative hypothesis of simultaneity nelson and olsen 1978 amemiya 1978 1979 and heckman 1978 consider a number of consistent marginal maximum likelihood estimators based on marginal maximum likelihood estimators of the reduced form parameters for the probit and tobit models in contrast the estimator derived from smith and blundell 1986 is based on the corresponding conditional maximum likelihood estimators this paper is concerned with estimation in a class of simultaneous limited dependent variable regression models which includes the simultaneous probit and tobit models as special cases analogous marginal and conditional maximum likelihood estimators to those of nelson and olsen 1978 amemiya 1978 1979 heckman 1978 and smith and blundell 1986 are derived and other new estimators are suggested the minimum chi squared approach discussed by ferguson 1958 malinvaud 1970 and rothenberg 1973 is used to compare the asymptotic relative efficiency of various estimators considered a simple two step algorithm based on the conditional maximum likelihood

assessing the cross national invariance of formative measures guidelines for international business researchers the importance of establishing equivalence in measurement prior to conducting substantive cross country comparisons has long been emphasized in international business research however all approaches currently available for the investigation of measurement equivalence or invariance me i assume that the focal measures are reflective in nature in our paper we offer guidelines for the assessment of me i when the focal construct is measured with formative indicators we first identify distinct types of me i that are conceptually consistent with the nature of formative measurement models we then describe a step by step procedure that can be employed to test for these types of me i in a comparative context lastly we illustrate the application of the proposed procedure with data from a three country survey on consumers product country image perceptions

an investigation of the labor market earnings of panamanian males evaluating sources of inequality this paper presents empirical evidence on the determinants of labor market earnings and inequality for males in panama using newly available microdata we estimate earnings equations based on the measurement framework of mincer 1974 and compare them with those for other countries at various stages of economic development we present evidence on two aspects of inequality in less developed economies labor market segmentation and social stratification we present tests of the segmentation hypothesis including several of the dual labor market hypotheses and discuss their inherent ambiguity we also present evidence on the importance of family background for earnings determination and educational attainment

informality in the process of development and growth informality is a term used to describe the collection of firms workers and activities that operate outside the legal and regulatory systems it is widespread in the majority of developing countries in a typical developing economy the informal sector produces about 35 per cent of gdp and employs 70 per cent of the labour force this paper studies informality in the context of economic development by presenting a model and projections that link informality regulations migration and economic growth this analytical framework highlights the trade offs between formality and informality the relationship between the different types of informality and the connection between them and the forces of labour capital and productivity growth the paper models the behaviour of the informal sector based on the following fundamental asymmetry formal firms confront higher labour costs while informal firms face higher capital costs and lower productivity using mandated minimum wages as the policy induced distortion the model first studies the static allocation of formal and informal capital and labour in a modern economy second it opens the possibility of labour migration from a rudimentary economy with ample supply of labour e g rural areas or less advanced neighbouring countries third the model analyses the dynamic behaviour of the formal and informal sectors considering how they affect and are affected by economic growth and labour migration then the paper presents projections for the size of labour informality in the modern and rudimentary economies in the next two decades for a large group of countries representing all regions of the world the projections are based on the calibration and simulation of the model and serve to discuss its usefulness and limitations

empowerment effects across cultures three studies examined cross cultural variations in empowerment effects study 1 investigated whether hofstede s power distance scores moderated the effect of job autonomy on job satisfaction using world values survey data on 33 nations study 2 surveyed frontline hotel employees from canada and prc to investigate the moderating role of power distance at the individual level in study 3 hotel management students from canada and prc were asked to play the role of a frontline employee who had to handle a special customer request in a scenario experiment these studies show consistently that the cultural value of power distance moderates the effect of empowerment on job satisfaction moreover willingness to accept and exercise the discretionary power allowed by management and desire to satisfy customer needs and wants are two employee conditions that are essential for the successful implementation of the empowerment approach

co evolution of gated communities and local public goods gated communities are often seen as steps towards the privatization of the public realm this is too simple a characterization however privately and publicly governed infrastructure and services exist and adapt symbiotically there is little empirical research focusing on the co evolution of private and public neighbourhoods in this paper we focus on a specific question that has not yet been answered does the spatial pattern of privately supplied public goods co evolve with the pattern of publicly supplied public goods we examine this question through a case study of seoul where club residential communities are common enough to test co evolution hypotheses we identify co evolutionary relationships between club goods supplied in condominiums and public goods supplied by municipalities and market we also find evidence of tieboutian intra urban market and show how the substitution of club goods for positive urban externalities seems to weaken the influence of general accessibility on residential loca