gender occupational segregation and its impact on the gender wage differential among rural urban migrants a chinese case study since the late 1980s massive rural urban migration in china has attracted considerable attention from economists and policymakers both within and outside china one of the most striking features of rural urban migration is that job attainment among the migrants differs considerably between males and females it is of great interest to know the reasons for this difference and more importantly whether gender occupational segregation has a large impact on the gender wage differential among migrants this paper examines these issues using data on 1504 migrants collected in jinan city shandong province it is found that gender occupational segregation in this sector is mainly due to the unequal treatment of male and female attributes in occupational assignment and that this contributes very significantly to the gender wage differential among migrants a comparison with another study on china s rural industrial labour market is made which suggest that intra occupational gender wage discrimination is l

rates of return to human capital a test using el salvador data most of the empirical work on human capital has been confined to conditions in developed countries this is probably due to difficulties in obtaining data for other countries it would be interesting to see how robust the theory and its associated models are in conditions regarded as typical for developing countries this will be considered here using a large data set describing the el salvador labor market two questions will be examined namely a how well does the earnings function of the human capital theory explain earnings distribution in el salvador and b does the return to training called experience here approximate the return to school as is often assumed in human capital research the latter issue is of course related to the notion of overtaking the point in the experience profile when the flat earnings stream is intersected from below by the earnings stream affected by postschool investments

entrepreneurial human capital and the long run survival of firms in india abstract this paper analyses the characteristics of entrepreneurs that contribute to firms survival in less developed countries ldcs the study which relies on data collected in a 1971 survey of entrepreneurs in south india and a follow up survey of surviving firms in 1993 finds that entrepreneurial human capital greatly influences firm survival the results indicate that firms founded by older entrepreneurs in higher castes are most likely to survive but that increased education of the founding entrepreneur reduces survival these results provide evidence that opportunities of entrepreneurs outside the firm ignored in most theories are important in firm survival

a critical evaluation of rate of return analysis since the development of the concept of human capital schultz i 96 i becker i964 analysis of rates of return has been a standard means of assessing education the conventional way of measuring the return to education is to take a snap shot view of the earnings of people with differing educational experiences it is then possible to calculate the average income earned at different stages of a working life the rate of return to education can then be calculated as the internal discount rate which equates the discounted increment to average earnings to the costs involved in obtaining education both private and social rates of return can be calculated provision of education is often subsidised so that the private cost is lower than the social cost and this will tend to raise the private return above the social return taxation of the private benefit of education offsets this at least partly however ziderman i 973 records that in developed countries private returns normally exceed social returns this pattern is confirmed by psacharopoulos i985 in many cases it is not possible to calculate a full rate of return but one can look at the incremental effect of schooling on earning power thus denison i 967 suggests that in the united states each year of education raises earning power by an average of around 5 6 with the effect tending to rise with the duration of education card and kruger i992 identify effects of similar magnitude it need not be the case that education goes on raising earning power overeducation is clearly possible rudd i990 suggests that in the social sciences education beyond degree level is very damaging to earnings prospects tarsh i992 questions aspects of rudd s study but agrees that higher education graduates do suffer some pay disadvantage rate of return calculations can form the basis for policy decisions in principle social returns to investment in human capital could be compared with those on physical capital so as to give a basis for the allocation of resources between the two types of investment estimates of social rates of return to different types of education could also be used to guide expenditure decisions between these different types however there are many possibly offsetting biases entering into the calculations of rates of return and it is perhaps concern with these that has

if we knew ability how would we tax individuals abstract the suggestion to tax people on earnings capacity instead of earnings has been around for a long time and is attractive in terms of economic efficiency in this paper we reflect on the feasibility of such a system and give an exploratory empirical implementation we apply the leyden welfare function of income a survey based measure of an individual s welfare associated with income to derive implications for ability taxation under the assumption that iq and schooling reflect earnings capacity we derive the tax functions using different criteria to distribute the utility loss due to taxation

the effect of family background on children s level of schooling attainment in spain this paper provides microeconomic estimates of the role played by family background in determining children s level of schooling attainment in spain we use an ordered logit model to explore the effects of family background and other supply factors on the probability of various educational outcomes our estimates are based on household data obtained from the ecvt living and working conditions survey ministerio de economia y hacienda 1985 a spanish nation wide household survey conducted at the end of 1985 in general and given the spanish capital constraints parental income social class and family size explain children s level of schooling these results are consistent with those of the literature that focuses on the role of family background in determining schooling attainment

effects of family background on earnings and returns to schooling evidence from brazil we investigate whether omitted family background variables are responsible for high returns to schooling estimated in brazil returns to schooling fall by about one third when parental schooling is added to wage equations surprisingly the schooling of fathers in law has larger effects on wages than the schooling of fathers on the basis of a model of assortative mating we interpret this as evidence that parental characteristics represent unobservable worker attributes rather than nepotism in the labor market we conclude that the family background bias in returns to schooling is modest and need not imply returns to family connections

skills schooling and household income in ghana this article examines the impact of cognitive skills on the income of households in ghana it uses scores on mathematics and english tests to measure cognitive skills and estimates the returns to these skills based on farm profit off farm income and total income the article uses powell s censored least absolute deviations and symmetrically trimmed least squares estimators to estimate farm and off farm income in contrast to heckman s two step or the tobit estimator powell s estimators are consistent in the presence of heteroscedasticity and are robust to other violations of normality the results show that cognitive skills have a positive effect on total and off farm income but do not have a statistically significant effect on farm income

a switching regression model for wage determinants in the public and private sectors of a developing country governments in less developed countries face severe budgetary constraints given that public sector employment is a large part of modern sector employment the government wage bill h as come under increased scrutiny the central question is how do gove rnment wages compare with those in the private sector in this paper the authors develop and estimate a model to answer this question an important aspect of this model is the endogenous treatment of sector choice the estimation results full information maximum likelihood sound a strong warning against the use of ordinary least squares est imates that are based on sector specific samples data are from the i vory coast copyright 1988 by mit press

does it pay to be ethical evidence from the ftse4good abstract the empirical mean variance evidence comparing the performance of socially responsible investments sri and conventional investments suggests that there is no significant difference between the two this paper re examines the problem in the context of marginal conditional stochastic dominance mcsd which can accommodate any return distribution or concave utility function our results provide strong evidence that there is a financial price to be paid for socially responsible investing indices composed of socially responsible firms are mcsd dominated by trademarked indices composed of conventional firms as well as by indices carefully matched by size and industry with the firms in the sri indices zero cost portfolios created by shorting the sri index and using the proceeds to invest in the conventional index generate higher average returns lower variance and higher skewness than either of the two indices standing alone they also mcsd dominate the sri and conventional indices standing alone

school supply constraints and children s educational outcomes in rural ghana abstract studies of school attainment often fail to acknowledge the possibility that prices for all schooling levels affect the decision to attend any one schooling level in developing countries the assumption that schooling costs are constant throughout the education cycle is manifestly untrue this paper concentrates on the empirical implications of introducing schooling costs that increase with schooling level the results suggest that the cost of advanced levels of education influences decisions at the primary school level the relative magnitude of the cross price elasticities suggests that cross price effects should not be ignored when designing educational user fees

urban employment and the labor market in developing nations urban employment in developing countries is actually richer and considerably more diverse and rural urban migration is less ill fated than can be inferred from the literature this paper focuses on 1 urban labor force growth 2 urban labor market structure outcomes and processes and 3 the interplay among economic growth traditional factors and the urban labor market the assumption that urban unemployment is typically high or rising has never been clearly established this review of the functioning of urban labor markets emphasizes 3 points prevailing sectoral aggregations fail as examples of dual labor markets urban wage rigidity is not typical and there are enough indications of a dispersed wage structure tending toward equilibrium the diverse migratory and employment channels and probabilities also suggest decentralized and flexible adjustments rather than a chronically unresponsive unemployment rate these leave us without an economywide theory of urban unemployment but this is not a great loss as more important and troublesome are the pervasive indicators of inequality rents and differential labor utilization and productivity that have no such simple origin and reflect the unequal endowments pockets of privilege and noncompeting traits that are endemic in the social order urbanization is an aspect of economic transformation that involves changes in location and types of economic activity capital widening activities old new input combinations the viability of traditional skills and the economic basis for self employment and entrepreneurship are relatively poorly explained by current models although traditional and modern are seen as opposing factors it is surely a mistake to see the former as extraneous to the process of economic transformation the economic value of traditional skills has been consistently underrated because of an assumption that the urban demand for them is negligible and that the rural labor force is homogenous analyses of urban employment problems in developing countries must embrace 3 neglected but promising directions 1 a focus on the range of capital widening economic activities that cannot be conveniently be classified as either traditional or modern 2 more knowledge about the differentiating elements in the complex traditional sector and 3 more in depth analysis of the microeconomic units that illuminate the choices made by firms and households in a variety of contexts

labor markets in northeast brazil does the dual market model apply the economy of northeast brazil despite an impressive 7 real annual growth rate in recent years lags behind the rest of the country and far behind the dynamic south in particular with more than half of its 40 million residents living in poverty the region contains the largest concentration of the poor in latin america agriculture has traditionally been the dominant industry there but its importance is being eroded by the growth of manufacturing and services this shift has been aided by federal government policies which have provided jobs through direct government employment and have offered tax breaks subsidies advice and encouragement to large manufacturing firms in the region urban growth meanwhile especially in the major regional centers of recife fortaleza and salvador has swelled because of inflows of migrants by 1980 more than half of the population of what had been a predominantly rural region now lived in urban

earnings and ethnicity in trinidad and tobago this study employs 1993 continuous sample survey of the population cssp data for trinidad and tobago to investigate the determinants of earnings by ethnicity the data organised into three ethnic groupings reveal lower levels of remuneration in the labour market for africans and indians than for individuals of other ethnicities taken as a whole while the larger portion of the earnings differentials generally appears to be explained by ethnic differences in characteristics valued by the labour market africans and indians would benefit substantially if they were to receive the same rates of remuneration for their educational endowments as workers of other ethnicities in the trinidad and tobago labour market notwithstanding indians lowest average earnings africans appear more likely to be discriminated against

earnings functions for the self employed comment abstract the standard human capital earnings model is applied to data from a 1975 socioeconomic survey conducted in tehran iran results show that the returns to schooling for the self employed not including street vendors canvassers and newsvendors are statistically equivalent to those of wage and salary workers thus in contradiction to conclusions drawn from a study by chiswick 1976 the high rates of return to schooling found in many studies of less developed countries do not appear to be the result of the systematic exclusion of the self employed from the estimating samples in other words when wage and salary workers are compared with the self employed in similar occupations their earnings profiles are similar

wage structure as implicit insurance on human capital in developed versus underdeveloped countries abstract this paper explores the role of wage structure as implicit insurance on human capital it illustrates how smaller wage differentials in the developed world can be welfare enhancing by acting as implicit insurance while larger wage differentials in underdeveloped countries make investments in human capital riskier in other words with smaller wage differentials the students in a developed country are insured against poor educational outcomes through the existence of well paid alternative employments which are not present in the economy of a less developed country this result arises as multiple equilibria in a general equilibrium model when there are no insurance markets for human capital

the value of u s labor market experience in the home country the case of puerto rican return migrants many immigrants to the united states and other industrialized economies eventually return to their home country more than one million foreign born persons left the united states between 1960 and 1970 1 research has documented return migration to israel italy ireland mexico and puerto rico as well as the return of thousands of guest workers from industrialized european economies in the mid seventies 2 however little is known about how the migration experience shapes the earnings profiles of returnees and how the economic standing of returnees compares to that of stayers in the home labor market in this article i analyze the transferability of human capital accumulated abroad by return migrants and the economic assimilation process of returnees i investigate if return migrants can capitalize at home on the years of labor market experience accumulated abroad i also examine whether return migrants assimilate that is if their earnings increase with time spent in the home labor market to evaluate how returnees fare in the home labor market the earnings of returnees are compared to the earnings of stayers one of the findings from the literature of immigration to the united states and other industrialized economies is that immigrants lose human capital on crossing national borders 3 it has also been noted that the earnings of immigrants grow with time spent in the host labor market suggesting that immigrants undergo a process of assimilation 4 most of the research on international return migrants is qualitative in nature and the small sample sizes caution about generalizations a large amount of this research has focused on rural communities the primary concern in the return migration literature has been the effect on local economic development 5

education and economic growth some cross sectional evidence from brazil abstract capital labor human capital and technical progress are the four principal sources of growth of aggregate real output based on data from individual brazilian states in 1970 and 1980 an aggregate meta production function relating aggregate real output of each state to capital labor average education and time is estimated it is found that one additional year of average education per person of the labor force increases real output by approximately 20 percent however there is also evidence that this large measured effect of average education may be due to the existence of a threshold effect in average education at between three and four years of the four sources of growth technical progress or equivalently total factor productivity is the most important accounting for approximately 40 percent of the growth in brazilian output in the 1970s followed by human capital accounting for approximately 25 percent physical capital and labor together account for the remainder

real convergence in europe how robust are econometric inferences the paper examines the convergence properties of productivity in fifteen european countries over the period 1960 1997 european productivity is estimated using modified translog production systems with a completely general intertemporal structure to capture the notion that trade may have an influence on aggregate convergence imports are included in the production function stationarity tests are used to test for convergence around a common long run trend including unit root tests the kpss and bayesian tests as well as testing based on fractional differencing parameter estimation for long memory models it is found that convergence inferences are sensitive to the type of test employed

the opportunity cost of negative screening in socially responsible investing this paper investigates the impact of negative screening on the investment universe as well as on financial performance we come up with a novel identification process and as such depart from mainstream socially responsible investing literature by concentrating on individual firms conduct and by studying a much wider range of issues firstly we study the size and financial performance of fourteen potentially controversial issues abortion adult entertainment alcohol animal testing contraceptives controversial weapons fur gambling genetic engineering meat nuclear power pork embryonic stem cells and tobacco we investigate an international sample of more than 1 600 stocks for more than twenty years we then analyze the impact of applying negative screens to a market portfolio our findings suggest that the choice for negative screening strategies does matter for the size of the investment universe as well as for risk adjusted return performance investing in controversial stocks in many cases results in additional risk adjusted returns whereas excluding them may reduce financial performance these findings suggest that there are opportunity costs to negative screening

estimating returns to education using twins in urban china abstract this paper empirically estimates the return to education using twins data that the authors collected from urban china our ordinary least squares estimate shows that one year of schooling increases an individual s earnings by 8 4 if we use a within twin fixed effects model the return is reduced to 2 7 but rises to 3 8 after the correction of measurement error these results suggest that a large portion of the estimated returns to education is due to omitted ability or the family effect we further investigate why the true return is low and the omitted ability bias high and find evidence showing that it may be a consequence of china s education system which is highly selective and exam oriented more specifically we find that high school education may mainly serve as a mechanism to select college students but as a human capital investment per se it has low returns in terms of earnings in contrast both vocational school education and college education have a large return that is comparable to that found in the united states

outmigration of u s immigrants a methodology is devised for the empirical analysis of the determinants of outmigration of immigrants in a population empirical studies in this area have been hindered by a lack of longitudinal data on the characteristics of the immigrants this problem is tackled by making use of cross sectional data at two points in time it is applied to the study of male immigrants in the united states it is found that education is positively related to the rate of outmigration for immigrants from canada asia and the pooled sample of immigrants this finding suggests that the cross sectional estimates of the growth in earnings of immigrants in the united states are underestimated for these groups of immigrants

returns to education a further international update and implications this paper updates evidence on the returns to investment in education by adding estimates for new countries and refining existing estimates to bring the total number of country cases to over 60 the new cross country evidence confirms and reinforces earlier patterns namely that returns are highest for primary education the general curricula the education of women and countries with the lowest per capita income the findings have important implications for directing future investment in education which for efficiency and equity purposes should concentrate on these priority areas

formal measures of the informal sector wage gap in mexico el salvador and peru using comparable micro level data from three countries we ask what type of person works in the informal sector and whether informal workers earn lower wages than observationally equivalent workers in the formal sector the characteristics of informal workers are similar across countries surprisingly when we control for these personal characteristics we find a significant wage premium associated with formal employment in el salvador and peru but a premium associated with work in the informal sector in mexico a model of endogenous selection offers little help in explaining the differences in wage patterns the research casts doubt on the received wisdom that the informal sector always and everywhere is a poorly paid but easily entered refuge for those who have no other employment opportunities this abstract was borrowed from another version of this item

convergence endogenous growth and productivity disturbances abstract kelly 1992 has recently shown that evidence on convergence cannot be taken as evidence against endogenous growth in general this study uses a well known class of stochastic growth models to show other difficulties with traditional empirical studies of convergence key parameters typically cannot be estimated consistently in cross section regressions when the parameters are assumed known implications for convergence are unavailable except under restrictive and economically unmotivated assumptions those same assumptions that relate key parameters to cross country convergence render cross section regressions impossible to estimate consistently

do socially responsible fund managers really invest differently to date research into socially responsible investment sri and in particular the socially responsible investment funds industry has focused on whether investing in sri assets has any differential impact on investor returns prior findings generally suggest that on a risk adjusted basis there is no difference in performance between sri and conventional funds this result has led to questions about whether sri funds are really any different from conventional funds this paper examines whether the portfolio allocation across industry sectors and the stock picking ability of sri managers are different when compared to conventional fund managers the study finds that sri funds exhibit different industry betas consistent with different portfolio positions but that these differences vary from year to year it is also found that there is little difference in stock picking ability between the two groups of fund managers

does more schooling make women better nourished and healthier adult sibling random and fixed effects estimates for nicaragua there is debate on whether schooling causes increases in productivity or whether the estimated relationships reflect ability knowledge tastes etc that are associated with schooling this paper examines the impact of women s schooling on women s health and nutrition with and without controls for unobserved childhood background factors related to ability and motivation random and fixed effects models are estimated using data on adult sisters both sets of estimates reinforce the relationships found in standard estimates that women s schooling positively affects their health and nutrient intakes the latter result is particularly robust

intergenerational earnings mobility inequality and growth abstract we examine a model in which per capita income inequality intergenerational mobility and returns to education are all determined endogenously individuals earn wages depending on their ability which is a random variable they purchase an education with transfers received from their parents and are subject to liquidity constraints in the model multiple steady state equilibria are possible countries with identical tastes and technologies can reach differing rates of mobility inequality and per capita income equilibria with higher levels of output also have lower inequality higher mobility and more efficient distribution of education

wage functions and occupational selection in a rural less developed country setting economists are just beginning to develop empirical knowledge about the basic relationships that determine the distribution of incomes and allocation of resources in the poor rural regions of the world understanding interactions between agriculture and the rest of the economy is particularly important in this context this paper empirically investigates the allocation of human resources between farm work and other jobs and the compensation received by individuals for their work in agriculture and elsewhere specifically two related tasks are undertaken in this paper 1 the estimation of wage functions and 2 the estimation of functions determining the allocation of time among occupations there have been a series of papers which estimate the earnings function using data from poor countries for examples see blaug 1974 chiswick 1977 and valdes 1971 however this study focuses not on total earnings but on the wage rates a person may earn in labor market work because the wage rate is the relevant price of time for many allocative decisions for example in dividing the work year between self employed farming and work as an employee off the farm a key price is the potential wage rate the person can earn in the labor market for discussion and evidence on this issue see sumner 1978 recently a few studies have appeared which illustrate the importance of understanding potential wage variations across individuals in less developed countries rosenzweig 1978 uses wage estimates from aggregate indian data in a model determining the impact of land reform bardhan 1979 develops wage functions from a sample survey in rural india as a step in estimating labor supply for rural households kusnic and davanzo 1980 use wage functions to impute potential incomes and to measure the full income distribution these previous studies illustrate the importance of understanding the determinants of market wages the present paper develops wage functions in more detail focusing especially on industrial differentials in many rural areas employment opportunities may be usefully categorized into 1 self employment mainly on small farms 2 work for wages on large farms and 3 work for wages in non farm industries the combination of selfemployment and work as an employee is also important in many rural areas in both rich and poor countries this paper examines the impact of personal characteristics on the choice to participate in work for wages and on the choice of industry these estimates also form a basis for studying industrial wage differentials tentative estimates of the dependence of participation on expected wages are also presented below the empirical analysis in this paper is based on a 1974 sample of five villages in central guatemala see corona 1978 and stein 1978 one village petapa is larger richer and more urban than the others it lies south of guatemala city within commuting distance of the capital the other villages are outside the capital city region the population sampled is almost exclusively ladino spanish culture as opposed to indian data are available on the earnings hours of work industry age schooling literacy and village of 1 005 male heads of households approximately one third of the sample work as both self employed farmers and hired workers and most of these men work on fincas large plantations another quarter of the sample work as self employed farmers and do no work for wages the suburban village has mostly nonagricultural workers whereas the four other villages have predominantly farmers and farm employees in received for publication june 21 1979 revision accepted for publication december 31 1980 north carolina state university research on this paper began while i was a rockefeller foundation supported post doctoral fellow in the labor and population group of the economics department of the rand corporation and continued at north carolina state university supported by the agricultural research service at rand robert newman served as my research assistant and at n c state james cochell provided able assistance i have benefited from the comments of colleagues at both institutions and from members of the labor economics workshop at the university of north carolina at chapel hill i also thank two anonymous referees for useful suggestions this is paper number 6558 of the journal series of the north carolina agricultural research service raleigh n c

the effects of public sector hiring and compensation policies on the egyptian labor market this article examines the combined impact of the employment guarantee for graduates and public sector compensation policies on the egyptian labor market besides contributing to an unsustainable rate of growth in the government labor force these policies have encouraged queuing for government jobs contributed to high graduate unemployment rates and reduced the employment of graduates in the private sector despite substantial wage erosion in the public sector in recent years government wages when appropriately corrected for observed heterogeneity and sample selection are on a par with or higher than private sector wages especially for graduates when combined with the more desirable nonwage aspects of government jobs these compensation levels explain the attractiveness of public sector employment to graduates government pay scales are especially advantageous to female secondary school graduates who appear to face considerable discrimination in the private sector

gary becker s contributions to economics from his first published work gary becker has consistently strived to extend the domain of economic analysis his interest is in social science broadly defined and he is convinced that economic theory in its established neoclassical form provides the best set of tools for analysing social science questions when he finds an interesting problem on the borderland of what is conventionally thought of as economics and that is where he is looking for his problems he is not worried that he is trespassing on the traditional grounds of sociologists political scientists lawyers anthropologists or biologists on the contrary he clearly delights in showing how economic theory can be brought to bear on such problems he is of course not alone in trying to extend the borders of economics many other scholars have contributed to the movement which some have characterized as economic imperialism becker is one of the most outstanding of the imperialists this review of his work is organized in accordance with the main topics on which becker has worked chronologically his work on the economics of discrimination which grew out of his doctoral dissertation comes first next in order come his fundamental contributions to human capital theory he was also one of the founders of the so called new theory of consumption which is no longer so new and he has made important contributions to the economic study of crime and punishment and to the economics of political decision making some of his most original work is in the economics of the family where he provides economic explanations of such questions as marriage divorce and procreation after the topic by topic review of becker s contributions i will try to provide a more general evaluation of his work and to characterize it more fully in terms of research traditions and methodological attitudes

family ties and labor markets in the united states and brazil we use comparable surveys from brazil and the united states to examine vertical and horizontal connections between families motivated by a model of assortative mating and intergenerational transmission of schooling and earnings we include the schooling of relatives in male wage equations we find that the effect offather in law s schooling is larger than the effect offather s schooling in brazil while the opposite is observed in the united states we interpret these effects as indicators of unobservable worker characteristics with differences in assortative mating and female labor market activity explaining the differences in the apparent effect of fathers and fathers in law in the two countries

decomposing the gender gap in cognitive skills in a poor rural economy girls lag markedly behind boys in education in many developing countries which may slow economic growth and increase inequity this paper uses indicators of the output of the education production process cognitive skills to characterize and to investigate the determinants of the large educational gender gap in rural pakistan local school availability accounts for about a third of the total cognitive achievement gender gap and over two fifths of that in numeracy which implies that policies that increased local school availability for girls could reduce substantially the gender gaps in cognitive skills to further reduce these gender gaps will require policies that focus on the demand side of the market where our results suggest the response to modest changes in incentives may be high

does it really hurt to be responsible prior literature on socially responsible investment has contended that excluding sin stocks from a portfolio negative screening will reduce performance and increase risk further incorporating stocks of firms with positive social responsibility scores positive screening will improve performance and reduce risk we simulate portfolios designed to mimic typical equity mutual funds holdings and investigate these propositions we remove the potentially confounding influences of differences in manager skill transaction costs and fees and conduct a clean experiment on the effect of positive and negative portfolio screening we find no difference in the return or risk of screened and unscreened portfolios we conclude that a typical socially responsible fund will neither gain nor lose from screening its portfolio

cointegration and unit roots this paper provides an updated survey of a burgeoning literature on testing estimation and model specification in the presence of integrated variables integrated variables are a specific class of non stationary variables which seem to characterise faithfully the properties of many macroeconomic time series the analysis of cointegration develops out of the existence of unit roots and offers a generic route to test the validity of the equilibrium predictions of economic theories special emphasis is put on the empirical researcher s point of view

school quality and returns to education of u s immigrants using the u s labor market as a common point of reference this article investigates the influence of source country school quality on the returns to education of immigrants based on 1980 and 1990 census data we first estimate country of origin specific returns to education results reveal that immigrants from japan and northern europe receive high returns and immigrants from central america receive low returns next we examine the relationship between school quality measures and these returns holding per capita gdp and other factors constant immigrants from countries with lower pupil teacher ratios and greater expenditures per pupil earn higher returns to education

changes in the returns to education in costa rica abstract i document patterns in the returns to education in costa rica from 1976 to 1992 the most important change during this period was that from the late 1970s to the mid 1980s the return to education fell by about one fourth i construct demand and supply indices within a fixed manpower requirements framework to estimate demand and supply shifts i find a significantly positive relationship between measures of demand for education and a significantly negative relationship between measures of supply for education these findings suggest that calculations based on the returns to education such as the returns to social investments in education must take into account future changes in the returns to education as supply and demand conditions develop

incentives allocation and labour market reforms during transition the case of urban china 1986 1990 has the reform process in china resulted in the introduction of incentives directed at a more efficient allocation of resources using data on individual earnings in urban liaoning province for the period 1986 1990 and a wage equation approach we address this issue in the context of labour market reforms focusing specifically on returns to education our results indicate that failure to address the issue of endogenous selection of more able individuals into state owned enterprises soes can severely bias returns downwards unlike in soes returns in collective owned enterprises coes increased the latter having been allowed to grow out of the plan more quickly and subject to more competition in factor and product markets we conclude that decentralization without competition is unlikely to result in the introduction of an efficient incentive mechanism the more administratively determined regular wages are one avenue for increased returns we find evidence of differentiated bonuses in coes but

the schooling decision family preferences intergenerational conflict and moral hazard in the brazilian favelas this paper experimentally analyzes the schooling decisions of poor households in urban brazil we elicit parents choices between monthly government transfers conditional on their adolescent child attending school and guaranteed unconditional transfers of varying sizes in the baseline treatment an overwhelming majority of parents prefer conditional transfers to larger unconditional transfers however few parents prefer conditional payments if they are offered text message notifications whenever their child misses school these findings suggest important intergenerational conflicts in these schooling decisions a lack of parental control and observability of school attendance and an additional rationale for conditional cash transfer programs the monitoring they provide

asymmetries in the union wage premium in ghana the article uses a matched employer employee data set for ghana and adopts a quantile regression approach that allows the effects of unionization to vary across the conditional wage distribution it is shown that if there are intrafirm differences in unionization there does appear to be a premium among poorer paid workers in the formal sector although this cannot be given a causal interpretation it suggests important issues about how unions may affect one part of the labor market

schooling and economic growth a king rebelo experiment with human capital abstract education is added to the standard neoclassical growth model by calibrating a human capital technology to the empirical evidence on schooling simulation experiments patterned after king and rebelo 1993 american economic review 83 908 931 are conducted when agents act as if they are infinitely lived interest rates are too high and the rise in school spending is too weak over the transitional growth path when schooling is inefficiently low due to binding intergenerational credit constraints interest rates deviate only moderately from the steady state level and the historical rise in school spending is fully explained

immigrant selectivity and wages the evidence for women in an effort to extend the analysis of selectivity to female immigrants this paper examines the impact of economic conditions at the time of migration on the subsequent wages of foreign born women in the united states in addition the variables chosen to describe the migration decision have been expanded to include the effects of household status and immigration policy these results are compared to previous results for men and provide additional evidence about how the context of the migration decision affects the subsequent success of immigrants in the united states the sample for this project comes from the april 1983 current population survey and consists of married native and foreign born women between the ages of 16 and 64 excerpt

endogenous fiscal policy and capital market transmissions in the presence of demographic shocks abstract previous analyses of population aging mainly focused on the social security implications of the aging trend this paper addresses aging in an open economy framework with two regions that have politically responsive fiscal policy regarding education finance demographic shocks start an economic growth process but results are sensitive to a critical parameter in the model that indicates return to education spending low values of this parameter are associated with less favorable economic outcomes hence a policy implication emerges that enhancing the education system might pay off in terms of easing the negative growth and welfare consequences of expected demographic shocks

why do diplomas pay an expanded mincerian framework applied to mexico we compare four explanations for the value of diplomas each of which has implications for unemployment and wage variation amongst graduates most of which have not previously been tested for when seeking to explain the effects of diplomas we test for these implications using a refined econometric framework exploiting idiosyncrasies in mexican labour market and educational institutions premiums in mexico appear to result from diplomas tied to jobs with downwards rigid wages an uncommon but simple explanation the standard explanations including screening are not suggested by mexican data our results illuminate how labour markets segmented by diplomas clear this depends upon the nature of the labour market rigidities exactly as predicted by neoclassical theory

labor market choices earnings and informal networks in khartoum sudan a micro economic labor force model was used to explain the relationship between five labor market segments and earnings in khartoum sudan the assumption was that individuals maximized their earnings by comparing the rewards of working in alternative and mutually exclusive segments of the labor market the polychotomous choice model allowing for unobserved factors used the hay dubin and mcfadden extension of heckmans technique for correcting for selection bias data were obtained from a private survey conducted by the authors during 1988 89 the sample included 1756 small scale enterprises and 1505 self employed workers and 2572 employees in the informal sector and 8037 workers in 170 formal sectors firms 12114 workers the five segments included public sector employment in the formal sector private sector employment in the formal sector private large self employed in the informal sector informal sector employees working in permanent structures private small and informal sector employees working for unlicensed firms without a permanent structure unprotected workers earnings were lowest in the unprotected segment and highest among self employed businessmen the model supported the view that private and large employers hired the best workers findings supported kannapans hypothesis that informal networks based on ethnicity were important in determining access to urban labor markets a high correlation was found between province of birth of the employer and employees the public sector earnings model had the highest degree of explanatory power of earnings differences wages in the private small and unprotected segments were also determined by education the findings suggested that studies of the rate of return to education should account for how social networks affect the probability of workers obtaining employment in a particular segment and should account for fixed wage rates in particular segments

heteroskedastic sample selection and developing country wage equations many researchers have dealt with potential selectivity bias in developing country wage equations by employing heckman s 1979 two step method or related techniques despite the potential for such methods to produce misleading results if the assumptions on which they are based are incorrect this paper argues that the results produced even by parametric easy to implement selectivity bias correction methods can inspire more confidence than the typical applications to date when model selection testing is used to select from a specified diverse set assumptions for which there is support in the data and when sensitivity analysis is used to identify parameters whose estimates are robust across a wide range of assumptions in particular it highlights the importance of allowing for the nonlinearities implied by selection rule heteroskedasticity there is economic reason to suspect heteroskedasticity and econometric reason to believe that the nonlinearities it introduces into the first stage will improve

heterogeneity in returns to schooling econometric evidence from ethiopia this paper investigates whether returns to schooling in ethiopia vary across the wage distribution of individuals to do so it adopts an instrumental variables quantile regression framework that allows for both endogeneity of schooling resulting from unmeasured ability and possible heterogeneity in the impact of schooling the empirical estimates indicate that education contributes more to the earnings of individuals at a lower end of the income distribution

the returns to education in africa some new estimates abstractwe estimate the rate of return to education for 12 african countries using recent data and a range of methodologies which we apply consistently across all countries our findings confirm that the return to basic education is the lowest 7 10 the returns to upper secondary and tertiary education are similar to one another 25 30 accounting for the risk of joblessness increases these rates of return particularly for basic education and for women at tertiary level our results at the country level suggest that great care should be taken in choosing the appropriate methodology to estimate rates of return

poverty and the political economy of public education spending evidence from brazil a large body of literature has emphasized the elite capture of democratic institutions as the explanation for the low levels of spending on public education in many low income democracies this paper provides an alternative to that longstanding hypothesis motivated by new cross country facts and evidence from brazilian municipalities we hypothesize that many democratic developing countries might invest less in public education spending because poor decisive voters prefer the government to allocate resources elsewhere one possible explanation is that low income voters could instead favor redistributive programs that increase their incomes in the short run such as cash transfers to test for this possibility we design and implement an experimental survey and an incentivized choice experiment in brazil the findings from both interventions support our hypothesis

the economic rationale for investing in nutrition in developing countries abstract studies of experimental and socioeconomic survey data on the direct productivity effects of nutrition indicate growing though qualified evidence of positive direct effects of nutrition on labor productivity of poorer individuals in developing countries greater productivity effects for nutrition than for formal schooling studies on the indirect productivity effects of nutrition through cognitive achievement schooling and preschool ability also indicate positive productivity effects through these channels therefore for productivity reasons alone policies that favor better nutrition among the poorer members of society merit serious consideration that productivity and equity concerns are in harmony is an important plus

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

factors affecting the transmission of earnings across generations a quantile regression approach in this paper we estimate intergenerational earnings mobility models using quantile regressions quantile regression is a less restrictive estimation approach than more commonly used methods such as ordinary least squares and instrumental variables which only estimate the mean effects of intergenerational earnings correlation further we investigate the role of education as an intergenerational transmission mechanism for earnings we find that the intergenerational earnings correlation is greater at the bottom of the son s conditional earnings distribution than at the top and that controlling for son s education reduces the intergenerational earnings correlation we also find that education is relatively more valuable at the bottom of the conditional earnings distribution and thus tends to compress the distribution

an examination of wage determination in china s rural industrial sector under traditional chinese socialist ideology labour is not considered as a commodity and wages are not viewed as the price of labour market oriented economic reform initiated in the late 1970s however has brought some changes to this politically sensitive area pricing and allocation of labour especially in the rural industrial sector are now much more sensitive to market pressures the performance of labour markets are examined in china s rural industrial sector after 10 years of economic reform when modified to reflect the peculiar circumstances of the chinese rural labour market can conventional models of wage determination be used to explain variations in wages in this sector of china it is found that after only a decade of change the pattern of wage determination in rural china has many parallels with wage determination in western countries

risks and rewards gary becker s contributions to economics gary becker is one of the most original and influential economists of our age his originality lies in extending the frontiers of economics and broadening the range of important social science problems that are amenable to economic analysis he has gone against the grain of establishment thinking in the economics profession invariably choosing to work on problems that were considered beyond the boundaries of modem economics yet this work made close contact with many of the great economists of the past and many of the concepts he invented and developed are now widely if not routinely used in modem economics several of the approaches to problems he pioneered have evolved into fields and specialities in their own right that becker has had an immense intellectual impact and influence in the economics profession is supported empirically by the voluminous citations to his work over the years and in other ways obviously citation counts have well known difficulties and cannot prove anything by themselves but if used in conjunction with more fundamental evidence they do have the virtue of being quantifiable marshall medoff s 1989 1 recent citation study is one of the best available because citations are weighted by the importance of the journals in which articles appear among non nobel prize economists working in u s universities under 65 years of age becker ranks first in total citations over the 1971 85 period to which medoff s study refers and he is first by a very wide margin though the study is limited to economists in the united states it is clear that becker would rank at or very close to the top of any worldwide list furthermore becker s work is virtually all substantive economic analysis hardly any of it is devoted to the development of methodological tools or to surveys both of which gamer citations more easily and many concepts

human capital entrepreneurship and farm household earnings abstract the allocation of resources between agriculture and non agriculture is a central decision of the farm household in this paper we formulate a profit maximization model in which human capital enhances efficiency through both within sector effects and across sector allocation of quasi fixed inputs the model is estimated using chinese household data that contain detailed information on production activities we find that schooling and experience improve the sectoral uses of household supplied inputs accounting for 27 of their total contribution to earnings the evidence suggests that conventional estimates of human capital returns obtained within sectors would undervalue the role of human capital in development

education as a deterrent to crime education conveys a civic externality a benefit to society over and above the benefit to the student in enhancing his future earning power students are taught not only to be productive but to be law abiding and loyal to their country the civic externality is incorporated into an anarchy model where people choose to be farmers or bandits and schooling inculcates a distaste for a life of crime estimates of the return to education are biased down when the civic externality is overlooked public schooling can sometimes convey public benefits that private schooling even with a voucher scheme cannot

education experience and earnings in the labor market of a developing economy the case of urban khartoum abstract this paper examines the relevance of the human capital approach to explaining the variance in workers productivity and earnings in the labor market or urban khartoum the analysis produces two principal findings first the rate of return to education in sudan is relatively low compared with the rate of return in other developing countries perhaps a reflection of poor quality of education in the sudan second while returns to primary education are lower than average returns to college education are higher this creates an interesting paradox because the sudan educates a higher percentage of children at the secondary and tertiary levels than most sub saharan african countries the most likely explanation is that the emigration of skilled manpower to other arab states combined with an influx of unskilled labor into khartoum has created a situation where skilled manpower is relatively scarce the paper also examines the temporal relationship between education and the labor market and identifies how sudan s rapid expansion of the education system has led to the filtering down of the educational qualifications and job competition a process that may well stimulate dynamic growth throughout the economy

education employment and earnings of secondary school and university leavers in tanzania evidence from a tracer study this study uses a tracer survey of secondary school completers in tanzania to analyse the impact of educational qualifications on labour market earnings we show that the rates of return to the highest educational qualifications for wage employees are not negligible and at the margin provide an investment incentive however we find little evidence of human capital effects in the earnings determination process for the self employment sector introducing controls for father s educational background and a set of school fixed effects designed to proxy for school quality and potential labour market network effects reduces the estimated rates of return to educational qualifications a comparison of our results with the available evidence from other countries in the region suggest that despite an extremely small secondary and university education system the private rates of return to education in the tanzanian wage employment sector are comparatively low

wage inequality and the distribution of education abstract this paper analyzes the relationship between education and wage inequality in metropolitan brazil the study is based on data from ten brazilian annual household surveys pnads which are available for the period 1976 1986 the universe of analysis is limited to occupied prime age males the inequality measure used was theil s second measure which is analytically convenient for a study of the determinants of inequality it is shown that there exist sharp differences in wage inequality across metropolitan areas to identify whether these large regional differences in inequality are directly associated with differences in educational levels or with differences in the steepness of the wage education profiles some simulations are conducted the results indicate that regional differences in the distribution of education are not able to explain much of the regional differences in wage inequality as a matter of fact the differences in wage inequality were shown to be intrinsically associated with differences in the steepness of the wage education profiles

schooling and earnings distributions with endogenous labour force participation marital status and family size this paper investigates the impact of various schooling investment strategies on family and per capita earnings within a framework that integrates effects on earnings family size marital status and labour force participation data are from a 1977 1978 survey of urban nicaraguan women aged 15 45 excerpt

credit constraints and human capital accumulation in the open economy abstract this paper analyzes the implications of capital market imperfections for understanding the causes and consequences of international trade credit constraints in financing education and exogenous income distribution affect patterns of comparative advantage and are crucial in determining the impact of international trade unlike the standard results in the trade literature in the model here trade liberalization in a skill scarce country leads to higher investments in human capital

distribution and growth cross country evidence an endogenous growth model is presented to examine the determinants of economic growth and income distribution and their relationship three major findings from a cross country analysis of 45 countries are 1 a higher level of educational attainment of the labour force has an equalizing effect on income distribution while the larger the dispersion of schooling among the labour force the greater the income inequality 2 human capital investment as well as physical capital investment are significant factors contributing to economic growth and 3 income inequality has a negative effect on economic growth supporting the existence of a complementary relationship between equity and growth

gender differences in land inheritance schooling and lifetime income evidence from the rural philippines this article examines the difference in lifetime incomes arising from parental preferences in the allocation of land inheritance and investments in schooling between sons and daughters in the rural philippines sons are preferred with respect to land inheritance receiving 0 15 additional hectares of land while daughters are treated more favourably in schooling investments receiving 1 5 more years of schooling however differences in both current and life cycle incomes between sons and daughters are insignificant this suggests that filipino parents allocate intergenerational transfers to equalise incomes among their children without sacrificing efficiency

education earnings and the canadian g i bill canadian second world war veterans benefited from an extensive educational pro gram similar to the u s g i bill because of differences in military enlistment rates how ever a much lower fraction of quebec men were eligible for these benefits than men from other provinces building on this fact we analyse inter cohort patterns of education and earnings for english speaking men from ontario using french speaking men from quebec as a control group we find that the instrumental variables estimates of the return to school ing are typically as big or bigger than the corresponding ols estimates jel classification j24 i21

a time series approach to g convergence this paper applies time series analysis to study how the gap between a number of countries and the usa evolves through time as other authors it is found that time series analysis provides a better insight into the concept of convergence than the cross sectional one the econometric results show that the stochastic behaviour of the output disparity varies considerably neither the steady state equilibrium nor the speed of convergence are unique and constant across countries and time in general there is catching up for european countries convergence for east and south asian countries and neither of them for latin american countries

nobel lecture the economic way of looking at behavior an important step in extending the traditional theory of individual rational choice to analyze social issues beyond those usually considered by economists is to incorporate into the theory a much richer class of attitudes preferences and calculations while this approach to behavior builds on an expanded theory of individual choice it is not mainly concerned with individuals it uses theory at the micro level as a powerful tool to derive implications at the group or macro level the lecture describes the approach and illustrates it with examples drawn from my past and current work

returns to investment in education a global update the author updates compilations of rate of return estimates to investment in education published since 1985 and discusses methodological issues surrounding those estimates some key patterns among the three main levels of education primary education continues to exhibit the highest social profitability in all world regions private returns are considerably higher than social returns because of the public subsidization of education the degree of public subsidy increases with the level of education which is regressive social and private returns at all levels generally decline by the level of a country s per capita income overall the returns to female education are higher than those to male education but at individual levels of education the pattern is more mixed the returns to the academic secondary school track are higher than the vocational track since unit cost of vocational education is much higher and the returns for those who work in the private competitive sector of the economy are higher than in the public noncompetitive sector and the returns in the self employment unregulated sector of the economy are higher than in the dependent employment sector controversies in the literature are discussed in the light of the new evidence the undisputable and universal positive correlation between education and earnings can be interpreted in many ways the causation issue on whether education really affects earnings can be answered only with experimental data generated by randomly exposing different people to various amounts of education given the fact that moral and pragmatic considerations prevent the generation of such pure data researchers have to make do with indirect inferences or natural experiments some have been attempted the author looks at the research on overeducation or surplus schooling the conclusions reinforce earlier patterns they confirm that primary education continues to be the number one investment priority in developing countries they also show that educating females is marginally more profitable than educating males that the academic secondary school curriculum is a better investment than the technical vocational tract and that the returns to education obey the same rules as investment in conventional capital that is they decline as investment is expanded