economic shocks wealth and welfare the immediate effects of the asian crisis on the well being of indonesians are examined using the indonesia family life survey an on going longitudinal household survey there is tremendous diversity in the effect of the shock for some households it was devastating for others it brought new opportunities a wide array of mechanisms were adopted in response to the crisis households combined to more fully exploit benefits of scale economies in consumption labor supply increased even as real wages collapsed households reduced spending on semi durables while maintaining expenditures on foods rural households used wealth particularly gold to smooth consumption

the measurement and trend of inequality comment in a recent article in this review morton paglin proposes a measure of concentration which he claims will correct the gini ratio for overstatement in populations where each individual may be expected to vary his income or wealth over his life cycle the paglin measure suggests that the gini ratio overstates income concentration in the united states by a third and does not reveal a 23 percent decline in concentration which has occurred between 1947 and 1972 these results are based on an improper decomposition of the gini ratio in this note i decompose the gini ratio to derive the paglin measure it is shown to correct for neither demographic nor life cycle income effects and to understate intracohort income or wealth inequality if properly normalized the paglin measure shows that the gini overstates u s income concentration by 7 percent or less and indicates a decline in u s interfamily income concentration of less than 12 percent four percentage points of this decline are the result of demographic change while less than 7 points comparable to the 5 percent decline of the gini are the result of decreased income concentration within cohorts of family heads decomposition further reveals major changes in the division of income among cohorts and in concentration of income within cohorts these changes compensate each other in the paglin measure the use of which as a measure of income or wealth concentration is not recommended the gini concentration ratio

strikes and political activism of trade unions theory and application to bangladesh the behavior of bangladeshi trade unions is characterized bypolitical activism and momentous strikes called hartalsthere have played a crucial part in most political changes inthis country we offer a theoretical framework for discussingthis fact and we test empirically its main prediction bybringing out the political cycle that characterizes theoccurrence of strikes in bangladesh

causality between public expenditure and national income this paper deploys the granger method to determine the directions and patterns of causality between national income and total as well as various components of public expenditure empirical results based on the data for india 1950 81 suggest that while at the disaggregate level the causal process is rather diverse it is essentially feed back type at the aggregate level it neither confirms the wagnerian income public expenditure nor the keynesian public expenditure national income view the paper recommends that two variables be treated as jointly dependent in both the public finance and macroeconometric studies

an analysis of the relationship between various redistributive programs and poverty this paper utilizes multivariate exogeneity causality tests to analyze the relationship between various income policy programs and the poverty rate the framework we develop allows us to make a distinction between intended poverty reduction objectives and automatic stabilizing behavior since we find that the poverty in a given year affects the funding of social programs in later years we conclude that these programs are primarily acting as automatic stabilizers i e the poverty reduction instruments do not appear to have been implemented with a relentless intent to reduce poverty a result consistent with tullock s 1983 1986 theorem

children of war the long run effects of large scale physical destruction and warfare on children this paper provides causal evidence on the long term consequences of large scale physical destruction on educational attainment health status and labor market outcomes of children i exploit the plausibly exogenous region by cohort variation in the intensity of world war two wwii destruction as a unique quasi experiment i find that exposure to destruction had long lasting detrimental effects on the human capital formation health and labor market outcomes of germans who were at school age during wwii an important channel for the effect of destruction on educational attainment is the destruction of schools whereas malnutrition is partly behind the estimated impact on health

the macroeconomic strike model a study of seventeen countries 1948 1975 this paper reports the results of an analysis of data on industrial conflict strikes and lockouts in seventeen oecd countries during the period 1948 75 a number of models are tested on this broad data set including the major elements of the ashenfelter and johnson model contrary to ashenfelter and johnson s results for the united states this study finds for most countries a positive relationship between the number of conflicts and the rate of increase in real wages in manufacturing further the increase in nominal wages produces stronger results in all models tested than the increase in real wages the effect of unemployment is unstable across countries and only one of two political variables yields even modest results the authors suggest that an explanation of their findings might be found in the relationship between changes in the wage structure and changes in the level of conflict

humanitarian crises and adolescent well being knowledge gaps and prospects adolescence constitutes the second and final window of human growth and a period of specific vulnerabilities such as early pregnancy early marriage hiv infection suicide violence alcohol and drugs only a limited body of research investigates the effects of humanitarian crises on the human capital and well being of adolescents the evidence focuses on the short term effects of conflict and to a lesser extent natural disasters on education physical health and nutrition but not on mental health most analyses examine the situations of individuals exposed in utero and young childhood but rarely during adolescence typically missing are robust empirical identification strategies and estimates on heterogeneous effects across age or gender the lack of quality data and challenges in defining adolescence establishing causality or ensuring ethical research explain the knowledge gaps possible ways to expand the evidence base include mixing georeferenced data on individual location with georeferenced data on crises sharpening quasi experimental analytical techniques and reconsidering the current timing of demographic data collection now spanning 4 or 5 year intervals the failure to make such adjustments will end by ignoring specific vulnerabilities among adolescents and render sustainable progress in well being globally narrowing inequalities and guaranteeing human rights to all more difficult to achieve

the cost of fear the welfare effect of the risk of violence in northern uganda although the effects of insecurity are believed to be important these have never been directly measured previous estimates of the costs of conflict have only captured the joint effect of violence and insecurity the distinction is important for understanding the origins of the costs and for policy design spatially disaggregated measures of insecurity are created based on the spatial temporal variation in the placement of violence these are used to generate the first estimates of the relative causal contributions of the risk and experience of violence the article also provides the first micro data based counterpart to the cross country literature on the costs of conflict

the economic and organizational basis of early united states strikes 1900 1948 this paper examines the question of whether economic factors played an important role in determining strike activity in the united states in the first half of the twentieth century a review of recent research shows one author david snyder concluding that economic factors mattered little during that period and that union organization and political variables explained much more and another p k edwards concluding the opposite a retest of these authors analyses employing ordinary least squares regression and a variety of measures suggests that snyder s position is more sound this author argues however that edwards was correct in claiming that economic factors are major determinants of the extent of unionism as well as of strike activity and thus one needs to apply a two stage least squares test of the snyder hypothesis when that is done the results show that economic variables are highly significant determinants of strike activity throughout the pre 1949 period but for the subperiod 1921 29

war and institutions new evidence from sierra leone scholars of economic development have argued that war can have adverse impacts on later economic performance war destroys physical capital and infrastructure and disrupts human capital accumulation and it may also damage institutions by creating political instability destroying the social fabric and endangering civil liberties world bank 2003 understanding war s impact on development is particularly important for sub saharan africa where two thirds of all nations suffered from armed conflict during the 1980s and 1990s the proliferation of armed conflict in the world s poorest region begs the question of what role conflict may be playing in africa s disappointing economic performance yet the net long run effects of war are ambiguous from the point of view of economic theory to the extent that war impacts are limited to the destruction of capital the neoclassical model predicts rapid economic growth postwar converging back to steady state growth several recent papers that study war impacts including in japan donald r davis and david e weinstein 2002 and vietnam miguel and gerard roland 2005 find few persistent local impacts of u s bombing with heavily bombed areas experiencing rapid recovery to prewar population and economic trends this is consistent with the neoclassical model if war s main consequence is to destroy capital war could also affect long run growth either positively or negatively by modifying the scale parameter in the neoclassical growth model for example while the world bank 2003 argues that war has adverse institutional consequences charles h tilly shows how war promoted state formation and nation building in europe historically ultimately strengthening institutions tilly 1975 we study the aftermath of the recent civil conflict in sierra leone one notable aspect of this project is the extensive household data for sierra leone on conflict experiences and on local institutions our results are complementary to the other recent studies mentioned above none of which examines institutional impacts

economic status and health in childhood the origins of the gradient the well known positive association between health and income in adulthood has antecedents in childhood not only is children s health positively related to household income but the relationship between household income and children s health becomes more pronounced as children age part of the relationship can be explained by the arrival and impact of chronic conditions children from lower income households with chronic conditions have worse health than do those from higher income households the adverse health effects of lower income accumulate over children s lives part of the intergenerational transmission of socioeconomic status may work through the impact of parents income on children s health

the vp function a survey of the literature on vote and popularity functions after 25 years vp functions explain the support for the government at votes and polls by economic and political variables most studies analyze macro time series we also cover studies of individual voters socio economic groups and regional cross sections the theory starts from the responsibil ity hypothesis voters hold the government responsible for economic conditions it works in two party block systems but not else voters in most countries are found to be sociotropic egotropic voting also occurs voters myopia is well established voting is retrospective as expectations are static it costs the average government almost 2 of the vote to rule

how income transfer programs affect work savings and the income distribution a critical review for helpful comments on earlier drafts we thank without implicating moses abramovitz yves balcer john bishop alan blinder richard burkhauser michael darby irwin garfinkel alan gustman daniel hamermesh martin holmer george jakubson robert lampman paul menchik robert moffitt michael murray joseph quinn timothy smeeding eugene smolensky barbara wolfe and two anonymous referees

adjusting the labor supply to mitigate violent shocks evidence from rural colombia this paper studies the use of labor markets to mitigate the impact of violent shocks on households in rural areas in colombia it examines changes in the labor supply from on farm to off farm labor as a means of coping with the violent shock and the ensuing redistribution of time within households it identifies the heterogeneous response by gender because the incidence of violent shocks is not exogenous the analysis uses instrumental variables that capture several dimensions of the cost of exercising terror as a response to the violent shocks households decrease the time spent on on farm work and increase their supply of labor to off farm activities non agricultural ones men carry the bulk of the adjustment in the use of time inasmuch as they supply the most hours to off farm non agricultural work and formal labor markets labor markets do not fully absorb the additional labor supply women in particular are unable to find jobs in formal labor markets and men have increased time dedicated to leisure and household chores additional off farm supply does not fully cover the decrease in consumption the results suggest that in rural colombia labor markets are a limited alternative for coping with violent shocks thus policies in conflict affected countries should go beyond short term relief and aim at preventing labor markets from collapsing and at supporting the recovery of agricultural production

early childhood nutrition and academic achievement a longitudinal analysis abstract many policymakers propose early childhood nutrition programs as a way to increase students academic achievement this paper investigates the nutrition learning nexus using a unique longitudinal data set that follows a large sample of filipino children from birth until the end of their primary education we find that better nourished children perform significantly better in school partly because they enter school earlier and thus have more time to learn but mostly because of greater learning productivity per year of schooling our cost benefit analysis suggests that a dollar invested in an early childhood nutrition program in a developing country could potentially return at least three dollars worth of gains in academic achievement and perhaps much more

civil conflict and human capital accumulation the long term effects of political violence in peru this paper provides empirical evidence of the persistent effect of exposure to political violence on human capital accumulation i exploit the variation in conflict location and birth cohorts to identify the long and short term effects of the civil war on educational attainment conditional on being exposed to violence the average person accumulates 0 31 less years of education as an adult in the short term the effects are stronger than in the long run these results hold when comparing children within the same household further exposure to violence during early childhood leads to permanent losses i also explore the potential causal mechanisms

household behaviour in times of political change evidence from egypt abstract using representative household survey data we study the short term effects of the 2011 egyptian uprisings on household behaviour in terms of education and health expenditure as well as savings we construct a measure of political instability by analysing the number of fatalities during political protests throughout the country difference in difference estimations show that affected households increased spending on education especially on their sons higher education the increase in education expenditure is particularly prominent in areas where households were in favour of a regime change we argue that after the fall of mubarak those households had a positive outlook towards the future with better labour market prospects and therefore invested more in their sons education at the same time households decreased spending on health and increased savings which can be interpreted as precautionary behaviour our results are robust to placebo tests excluding cairo spillovers and alternative ways of measuring political instability

multivariate exogeneity tests and poverty abstract many recent studies presume direction of the relationship between poverty and other economic factors is one way that is they assume that the various economic phenomena cause or affect poverty and that there is no feedback however if feedback is present it is possible that the level of poverty or the perception of poverty may not only impact public policy decisions aimed at eradicating poverty but may have indirect effects on other economic variables as well we test that hypothesis in this paper using multivariate exogeneity tests

schooling violent conflict and gender in burundi this paper investigates the effect of exposure to violent conflict on human capital accumulation in burundi it combines a nationwide household survey with secondary sources on the location and timing of the conflict only 20 percent of the birth cohorts studied 1971 1986 completed primary education depending on the specification the probability of completing primary schooling for a boy exposed to violent conflict declines by 7 to 17 percentage points compared to a nonexposed boy with a decline of 11 percentage points in the preferred specification in addition exposure to violent conflict reduces the gender gap in schooling but only for girls from nonpoor households forced displacement is one of the channels through which conflict affects schooling the results are robust to various specifications and estimation methods

the paradox of politics and policy in redistributing income with political ideology with respect to the income distribution measured by proxy as the fraction of conservative coalition victories it is found that over the period 1961 1984 the degree of conservative coalition strength is positively associated with changes in inequality holding the effects of unemployment and inflation constant

strikes are more common in countries with majoritarian electoral systems strikes are more common in those oecd countries where the legislature is elected in single member districts smd than in those where it is elected by proportional representation pr furthermore more working days are lost due to industrial conflict in countries with smd i suggest a politico economic explanation for these rarely noticed empirical regularities further empirical testing including controls drawn from previous strike research reveals that they hold up in a variety of econometric specifications

economic conditions early in life and individual mortality this paper analyzes the effect of economic conditions early in life on the individual mortality rate later in life using business cycle conditions early in life as an exogenous indicator we have individual data records from dutch registers of birth marriage and death certificates covering an observation window of unprecedented size 1812 2000 these are merged with historical data on macro economic and health indicators we correct for secular changes over time and other mortality determinants we nonparametrically compare those born in a recession to those born in the preceding boom and we estimate duration models where the individual s mortality rate depends on current conditions conditions early in life age individual characteristics including individual socio economic indicators and interaction terms the results indicate a significant negative effect of economic conditions early in life on individual mortality rates at all ages

child health and conflict in cote d ivoire we examine the impact of the 2002 07 civil conflict in cote d ivoire on children s health status measured by height for age we use pre and post war survey data coupled with information on the location of violent incidents to capture exposure to the conflict of children born during 1997 2007 our results indicate that children from regions more affected by the conflict suffered significant health setbacks compared with children from less affected regions further household level victimization such as war related economic stress health stress and displacement has a large and negative effect on child health in conflict affected regions

union density and political strikes why do trade unions organize antigovernment strikes in some countries but not in others this article argues that there is a curvilinear relationship between union density and political strike activity political strikes are rare in countries with low union density since effective protests require a basic level of organizational capacity they are also rare in countries with high union density since a government that faces a strong union movement has powerful incentives to adjust its policies in order to avoid open confrontation but political strikes are relatively common in countries with moderate levels of union density since it is difficult for governments and unions to find viable compromises when the strength of the unions is not secure the empirical part of the article estimates the relationship between union density and the likelihood of political strikes in two samples of advanced democracies

quantifying the microeconomic effects of war using panel data evidence from nepal summary the extensive coverage of household surveys in conflict regions in recent decades has fueled a growing literature on the microeconomic effects of war in this paper we use a unique panel dataset to quantify the impact of the nepalese civil conflict on schooling attainment given longitudinal data we are able to directly estimate unobserved individual heterogeneity and thus address selective wartime displacement despite the widely held view that war is detrimental to human capital formation we find no effect of war intensity on schooling attainment once unobserved individual heterogeneity is accounted for we draw on supplementary data to explain our findings

the making of policy institutionalized or not this paper develops a framework for analyzing different policymaking styles their causes and their consequences in latin america finding that lower institutionalization and greater use of alternative political technologies apts are more likely the lower the cost of using these technologies the higher the potential damage they can cause the lower the wealth of the economy and the more asymmetric the distribution of de jure political power moreover strategic complementarity exists in the use of alternative political technologies for instance bribes by the rich and protests by the poor are likely to be countervailing forces and will both occur in polities with weaker political institutions

majoritarian electoral systems and consumer power price level evidence from the oecd countries a straightforward extension of the standard stigler peltzman model of regulation coupled with a taagepera shugart analysis of electoral system effects suggests a that the greater seat vote elasticities of majoritarian electoral systems will tilt policy in favor of consumers while propor tional systems should strengthen producers and b that the pro con sumer bias of majoritarian systems should be manifested in systemati cally lower prices empirical tests controlling for the structural determi nants of national price levels estab lished in the earlier law of one price literature establish majoritarian elec toral systems as a significant and robust predictor lowering national price levels in the mean oecd coun

child growth shocks and food aid in rural ethiopia this brief summarizes the results of a gender impact evaluation study entitled child growth shocks and food aid in rural ethiopia conducted between 1995 and 1996 in ethiopia the study observed the impact of food aid on child growth and shocks in communities on the child level food aid has a positive significant impact on the growth in height of children the total amount of food aid appears on average to be sufficient to offset the negative effects of plot damage on child growth given the fact there remains a massive amount of child stunting there must be large amounts of mis targeting of aid girls seem to be more resilient to shocks than boys

strategic bargaining models and interpretation of strike data attrition screening and signalling models of strategic bargaining are characterized in terms of their predictions about the incidence mean duration and settlement rates of strikes and the terms of wage settlements these predictions are compared with the general features observed in empirical studies of strikes in canada and the united states conclusions are drawn about the types of models capable of generating these features and about the conformity of the models to the evidence methods are described for computing the numerical examples used to illustrate the models

diamonds are forever wars are not is conflict bad for private firms this paper studies the relationship between civil war and the value of firms in a poor resource abundant country using microeconomic data for angola we focus on diamond mining firms and conduct an event study on the sudden end of the conflict marked by the death of the rebel movement leader in 2002 we find that the stock market perceived this event as bad news rather than good news for companies holding concessions in angola as their abnormal returns declined by 4 percentage points the event had no effect on a control portfolio of otherwise similar diamond mining companies this finding is corroborated by other events and by the adoption of alternative methodologies we interpret our findings in light of conflict generated entry barriers government bargaining power and transparency in the licensing process jel d74 g32 o13 o17 q34

unions employers associations and wage setting institutions in northern and central europe 1950 1992 the eight countries examined in this study austria belgium denmark finland germany the netherlands norway and sweden have long been viewed as exemplifying corporatist industrial relations

civil war crop failure and child stunting in rwanda economic shocks at birth have lasting effects on children s health several years after the shock the authors calculate height for age z scores for children under age five using data from a rwandan nationally representative household survey conducted in 1992 they exploit district and time variation in crop failure and civil conflict to measure the impact of exogenous shocks that children experience at birth on their height several years later they find that boys and girls born after the shock in regions experiencing civil conflict are both negatively affected with height for age z scores 0 30 and 0 72 standard deviations lower respectively conversely only girls are negatively affected by crop failure with these girls exhibiting 0 41 standard deviation lower height for age z scores and the impact is worse for girls in poor households results are robust to using sibling difference estimators household level production and rainfall shocks as alternative measures of crop failure

under the weather health schooling and economic consequences of early life rainfall life in rural areas of developing countries is prone to many kinds of risk such as illness or mortality of household members crop or other income loss due to natural phenomena weather insect infestations or fire for example and civil conflict in addition to their contemporaneous effects the effects of certain types of shocks may still be felt many years or even decades later from a public policy standpoint it is particularly important to identify shocks that have large long run effects moreover the mechanics underlying the persistence of shocks may be of con siderable interest for example a health shock may have a long run effect simply because the health shock itself persists over time alternately the health shock may not directly affect long run outcomes but it could affect some other outcome such as educational attainment that helps determine long run well being in this paper we focus on shocks that occur at the very beginning of life we ask how sensi tive long run individual well being is to environmental conditions around the time of birth in particular we examine the effect of weather shocks around the time of birth on the adult health education and socioeconomic outcomes of indonesian women and men born between 1953 and 1974 in addition we attempt to shed light on the intervening pathways connecting early life rainfall to adult outcomes illuminating the roles of health and educational attainment in deter mining adult socioeconomic status this investigation has considerable data requirements it necessitates information on weather shocks experienced by individuals several decades earlier as well as detailed current informa tion on adult outcomes we use information in the indonesian family life surveys ifls on an individual s year and location of birth and link each individual in that survey to locality specific rainfall data for their birth year for individuals born in rural areas on whom we focus rainfall variation across space and time should generate corresponding variation in agricultural output and thus household income to deal with measurement error in the rainfall data we run instrumental variables regressions where variables for rainfall measured at slightly more distant rainfall stations serve as instruments for rainfall in the individual s birthplace and birth year we examine the impact of early life rainfall on a range of adult outcomes observed in 2000 we find that higher early life rainfall leads to improved health schooling and socioeconomic status for women women with 20 percent higher rainfall relative to normal local rainfall in their year and location of birth are 3 8 percentage points less likely to self report poor or very poor health they attain 0 57 centimeters greater height attain 0 22 more completed grades of

the determinants of strikes in the united states 1900 1977 this study aims to assess the recent debate that has emerged in the literature over the economic and organizational political models of strikes and to propose and test a synthesis of those models as an explanation for the pattern of strike activity in the united states since 1900 the paper begins with a review of strike activity in the post 1900 period and then develops a conceptual framework incorporating six factors the size of union membership economic conditions political events institutional arrangements psychological variables and the extent of rival unionism to explain this historical pattern the second part of the paper contains a regression analysis of strike activity over the 1900 1977 period the regression results show that both the economic factors of unemployment and inflation and various noneconomic factors such as changes in union membership the outbreak of world war ii and enactment of new deal legislation are significant in explaining variations in strike activity during t