transition to fully funded pension schemes a non orthodox criticism summary the paper examines the dominant views on the adoption of mandatory fully funded pension schemes ff as a partial or complete substitute for the unfunded payg three obstacles to the ff reform are envisaged to begin with the reform may fail to boost workers marginal propensity to save since workers may contract their voluntary saving to compensate the larger mandatory saving to ff schemes secondly if payg s payroll contributions are reduced and diverted to a ff scheme the larger private saving supply will be balanced by a lower government saving if the government is committed to honour the current pension payments thirdly keynes saving paradox reinforced by the capital theory critique initiated by sraffa suggests that the effect of the rise in the marginal propensity to save is not an increase in capital accumulation but rather a fall of income and employment

economic and other determinants of infant and child mortality in small developing countries the case of central america and the caribbean inter country differences in infant and child mortality are explained by looking at demographic economic health and educational factors a model is presented in which the infant mortality rate the child mortality rate and the birth rate are endogenous the model is tested using cross national multiple regression analysis and simulations the presence of simultaneity is confirmed introducing non economic factors transforms the character of the relationship between exogenous and endogenous variables from a diminishing returns to an increasing returns one the role played by public expenditure in education vaccination coverage low birth weight female schooling number of nurses access to safe water or malnutrition can be assessed as well as that played by structural adjustment variables such as the inflation rate or the external debt to gnp ratio infant and child mortality can be diminished everywhere in the region with relatively small amounts of expenditure disappointing outcomes in som

education and contraceptive choice a conditional demand framework a multiperiod model of fertility and contraceptive choice which considers unobserved differential preferences for the timing of births is formulated conventional and conditional demand equations for contraceptives are derived from the model and the relationships in each between female education birth intentions and the level of contraceptive efficiency are compared demand equations derived from the model conditioned on birth intentions were shown to be superior to conventional demand equations in testing some of the assumptions pertaining to the technology of contraceptives embedded in the utility maximization framework a weak test of the hypothesis that education lowers the fixed costs of information associated with new technologies as exemplified by the oral contraceptive was shown to be obtainable only from consistent estimates of conditional contraceptive choice demand parameters as a consequence of the dual technological attributes of contraceptive methods if education affects both the costs of children and preference orderings over the spacing of births the education contraceptive use association conditional on the number of intended children cannot be used to make welfare comparisons across households the log linear model in which contraceptives were categorized on the basis of their cost characteristics and simulatenous equations techniques were used to obtain estimates of the conditional demand equations for contraceptives based on data from the national fertility survey 1970 estimates indicated that the education of the wife among households with identical fertility plans was significantly and positively associated with the adoption of the newer birth control methods in 1970 with quantitiative affects significantly greater than those indicated in reduced form and inconsistently estimated conditional equations appearing in a priori studies the results support the hypothesis that the relative magnitudes of fixed and variable contraceptive costs influence contraceptive decisions with the value of the wifes time an important component of the former and suggest that women with higher levels of education are more likely to use traditional contraceptive methods

nutrients impacts and determinants understanding the determinants of nutrient intake and the influence of nutrition on performance is critical in designing policies to alleviate hunger and malnutrition a series of studies undertaken by the authors which are synthesized here analyzes the influence of prices income and women s schooling on the nutrient intake of those in developing countries and the effect of nutrition on health productivity wages and fertility these studies suggest that the impact of food price increases may be strong particularly among those with the lowest incomes that the growth of income may be less likely to improve nutrient intake than has been suggested by others and that womzen s schooling is important in improving nutrition these studies also indicate that nutrition exerts a positive influence on wages productivity and fertility our limited knowledge of the role and determinants of nutrition is reflected in the finding of unduly strong effects of seasonalitv on price nutrition relations and the lack of a direct association between nutrition and health the nutrition of poor populations is of substantial interest because of the widespread and plausible presumption that better nutrition improves the welfare of individuals in such populations nutrition also is of interest because of the common conjecture that better nutrition improves productivity a series of our studies have analyzed the relations between nutrition and health labor productivity and fertility and the relations between prices income women s schooling and nutrition intake here we synthesize the results of these studies and address some of the puzzles and policy implications that have arisen

determinants of child mortality health and nutrition in a developing country abstract child health and nutrition status are important determinants of adult productivities and earnings and thus are an important channel of intergenerational socioeconomic mobility building upon economic models of household behavior we investigate the determinants of child mortality and health and nutrition status in regions defined by the degree of urbanization in the developing country of nicaragua and offer some policy suggestions our estimates suggest that determinants differ significantly across regions income is not an important factor there is an inverse relation with number of siblings and there are positive associations with calorie intake schooling except in the relatively low income rural areas the availability of refrigeration and the quality of sewage systems

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

consumer demand and household production the relationship between fertility and child mortality forces which link biological and behavioral factors to infant mortality and fertility in the united states are examined estimates can be arrived at if all of the important types of behavior affecting infant survival prices and income constraints facing households are diligently gathered using equations to determine the relationship between a family health endowment index in conjunction with a childs health information about optimal prenatal and postnatal behavior can be estimated and observed this estimate which is strongly a factor of parental and environmental health related factors attempts to characterize the biological effects of parents behavior on birthweight gestation and the rate of fetal growth another estimate presented is one which establishes a link between biological effects of birth order on infant mortality in this analysis factors such as medical care during pregnancy mothers rate of smoking mothers age duration of breastfeeding mothers race and childs sex were included household socioeconomic and health data were also estimated in order to understand state and county ability to provide adequate health facilities for pre and postnatal maternal care in particular results suggest that child mortality declines in developed countries and that mothers seek prenatal medical care in early stages of their pregnancy when risk is anticipated further study of the differential pattern of black and white fertility behavior in regard to seeking medical care is warranted

fundamentals of shareholder tax capitalization abstract we investigate how shareholder level taxes are capitalized into stock prices using a model that incorporates the investment and payout decisions of a firm and the investment alternatives available to investors shareholder taxes affect stock prices both indirectly via the effect of taxes on corporate investment decisions and directly by reducing both the mean and variance of after tax returns in our model tax capitalization is not eliminated by the presence of tax exempt investors does not depend on whether equity is composed of contributed capital or retained earnings and does not depend on the tax rate faced by a hypothetical marginal investor

an analysis of childhood malnutrition in rural india role of gender income and other household characteristics there are controversies regarding the role of individual and household characteristics in childhood nutritional status measured by anthropometric indicators using a nutrition index based on weight for age of children in rural india the paper re examines this issue ordered probit estimates of nutritional status suggest female literacy improves the nutritional status of boys at the cost of girls while higher per capita current income improves that of both boys and girls though the impact is higher for boys however effect of income is not robust when we use instruments of longer run income but more income and literacy give more ways to discriminate between boys and girls

should america save for its old age fiscal policy population aging and national saving he federal government has recently seen an abrupt turnaround in its budget balance from years of deficits to the now predicted years of surpluses this switch has been widely hailed since many analysts believe that the united states saves too little and that the switch to government budget surpluses can help to address that problem indeed concern about low u s saving and the long term budget outlook has increased of late as the retirement of the baby boom generation draws closer and the financial pressures associated with population aging loom larger in this paper we cite a collection of arguments for why u s fiscal policy should be used to increase national saving then we focus on whether the aging of the u s population adds force to these arguments for boosting national saving and conclude perhaps surprisingly that it may not the potential role of fiscal policy in preparing the country for the coming demographic change is at the center of recent budget proposals although the sudden emergence of budget surpluses is to a large extent based on economic and other factors beyond the government s direct control one can argue that the political will to maintain these surpluses stems in part from a desire to prepare for the retirement of the baby boomers moreover the question of whether the projected surpluses should be devoted to new spending tax cuts or debt reduction is entangled with arguments over what portion of the surpluses should go to saving social security and medicare yet the appropriate saving response to population aging is not clear cut while aging boosts the demands on future resources it also changes the rate of return the u s economy can expect from saving the net effect of aging on desired saving is

life expectancy and human capital investments evidence from maternal mortality declines longer life expectancy should encourage human capital accumulation since a longer time horizon increases the value of investments that pay out over time previous work has been unable to determine the empirical importance of this life expectancy effect due to the difficulty of isolating it from other effects of health on education we examine a sudden drop in maternal mortality risk in sri lanka between 1946 and 1953 which creates a sharp increase in life expectancy for school age girls without contemporaneous effects on health and which also allows for the use of boys as a control group using additional geographic variation we find that the 70 reduction in maternal mortality risk over the sample period increased female life expectancy at age 15 by 4 1 female literacy by 2 5 and female years of education by 4 0 authors

the consumption value of schooling an empirical estimate of one aspect the purpose of this paper is to demonstrate by example that human capital is more than just a capital good in the strictest sense of the term certain forms of human capital have consumption value in addition to the value of the increased stream offuture monetary and nonmonetary benefits a methodfor empirically estimating the consumption value of schooling as a vehicle to avoid the vietnam war draft is presented

a more general approach to fertility determination in a developing country the importance of biological supply considerations endogenous tastes and unperceived jointness the chicago columbia economic model of fertility emphasizes that both the number quantity and the unobservable quality of children are arguments in the parental preference function focus is generally on demand determinants with fixed tastes biological supply considerations gernerally are deemphasized the major alternative to the chicago columbia model is the pennsylvaina model which emphasizes that parental utility is conditional on norms regarding family size and own consumption empirical tests which shed some light on the relevance of the chicago columbia versus the pennsylvania models for understanding fertility determination in a developing country were conducted on a sample of nicaraguan women aged 15 45 using a more general fertility model epw which encompasses features of both models the estimation of a linear approximation to the fertility determination relation resulting from a generalized model includes 3 sets of variables 1 those included in standard chicago columbia empirical estimates 2 some related to the pennsylvaina models emphasis on natural fertility supply factors and 3 some related to the latter models emphasis on endogenous norms tastes the pennsylvania model with its emphasis on supply tastes and unperceived jointness adds to the understanding of the empirical completed fertility experience in the nicaraguan sample beyond that of the standard chicago columbia model the implications of this basic result are numerous and may be quite important in understanding fertility behavior in developing economies and in devising appropriate related policies 4 examples are given 1 fertility behavior may be more complicated than assumed in conventional chicago columbia analyses 2 results suggest that it may be important to analyze fertility and to formulate policy within a larger framework which integrates fertility and health and nutrition concerns 3 if tastes are important and endogenous as the results suggest they are interpretations of the impact of fertility changes on private welfare are much more ambiguous than often is realised 4 some conventional interpretations of the variables in the standard model may be misleading in understanding and in policy formulation standard chicago columbia variables are womens schooling and household income the full epw pennsylvania model correlates the supply variables parasites therapeutically treatable medically preventable womens age age of 1st cohabitation months breastfed nutrition the taste variables religious or civil marriage religious services month residence birth rate siblings parents present migration currently or in childhood and compares them to the chicago columbia variables outcome on the nicaraguan sample

the demand for energy using assets among the world s rising middle classes we study household decisions to acquire energy using assets in the presence of rising incomes we develop a theoretical framework to characterize the effect of income growth on asset purchases when consumers face credit constraints we use large and plausibly exogenous shocks to household income generated by the conditional cash transfer program in mexico oportunidades to show that asset acquisition is nonlinear depends as predicted in the presence of credit constraints on the pace of income growth and both effects are economically large among beneficiaries our results may help explain important worldwide trends in the relationship between energy use and income growth

health as a family matter do intra household education externalities matter for maternal and child health abstract this paper is concerned with the role of education as a determinant of health care choices the central premise of the paper is that utilisation of health services is determined not solely by an individual s own education but rather by a notion of effective education which incorporates the educational attainment of other household members the paper sets out a general framework for representing intra household education externalities and proposes a number of specific hypotheses concerning the way in which the education of different household members affects health care choices these hypotheses are tested on data from mozambique focusing on maternity services child immunisations and child malnutrition we draw four major conclusions from the analysis first while maternal education seems to be the education variable of primary importance for the health service and malnutrition variables under consideration the education of other household members does have a significant and sometimes larg

the poor and the social sectors during a period of macroeconomic adjustment empirical evidence for jamaica considerable uncertainty remains about the human impact of macroeconomic adjustment analysis of the impact of adjustment on the poor and on the social sectors is difficult because it involves evaluating a counterfactual situation in which households are affected by prices incomes and public services with the possibility of substantial substitutions all within an economywide framework with complicated concurrent and lagged interactions time series data for jamaica is utilized in this article to examine whether macroeconomic adjustment initiated in the early 1980s but intensified in 1984 85 was associated with significant deterioration in various indicators of health nutritional and welfare outcomes particularly among the poor although the authors find evidence of substantial cuts in governmental expenditures on social services there is little confirmation of significant short run deterioration in human capital indicators during the adjustment period

new evidence that taxes affect the valuation of dividends this paper uses british data to examine the effects of dividend taxes on investors relative valuation of dividends and capital gains british data offer great potential to illuminate the dividends and taxes question since there have been two radical changes and several minor reforms in british dividend tax policy during the last 30 years studying the relationship between dividends and stock price movements during different tax regimes offers an ideal controlled experiment for assessing the effects of taxes on investors valuation of dividends using daily data on a small sample of firms and monthly data on a much broader sample we find clear evidence that taxes affect the equilibrium relationship between dividend yields and market returns these findings suggest that taxes are important determinants of security market equilibrium and deepen the puzzle of why firms pay dividends financial economists have long been puzzled by corporate dividend behavior many individual investors should value a dollar of corporate dividends less than a dollar of corporate retentions because the former gives rise to greater tax liabilities corporations however face equal costs of paying out dividends and retaining earnings miller and modigliani 31 demonstrated that in the absence of taxes dividend policy should have no effect on share valuation if dividends are tax penalized however a value maximizing firm should pay no dividends widespread dividend payments to taxable investors are therefore surprising in 1981 dividend tax revenues in the united states were estimated to exceed 20 billion dollars indeed some have interpreted the large volume of dividends paid as evidence against the rational behavior postulates typically used by economists the dividend question has stimulated a large theoretical and empirical literature concerned with the qluestion of investors valuation of dividends in particular the question of how taxes affect the market valuation of dividends has generated considerable controversy numerous studies including auerbach 2 litzenberger and ramaswamy 24 26 morgan 34 and rosenberg and marathe

a note on mr meade s relation and international capital movements recognition that a change in investment expenditure always leads to an equal increase in voluntary saving has been highlighted by several commentators as one of the key innovations in keynes s general theory see especially hicks 1936 239 robinson 1937 ch 2 meade 1975 82 patinkin 1976 65 1993 647 and skidelsky 1992 554 following a reference in kami s 1931 189 seminal presentation of the multiplier this identity relationship between investment and voluntary saving has been called mr meade s relation and in a brief note meade 1993 has described how he first discovered and presented it to the cambridge circus in the first half of 1931 1 first meade set out the causal relationships among increases in investment income and saving in the form of arrowed lines within a sequential diagram this method of process or period analysis often using robertson s 1936 1940 equivalent tabular presentation remains an important part of post keynesian textbooks see harcourt et al 1967 ch 10 chick 1983 ch 14 and davidson 1994 ch 3 but has virtually disappeared from modern day research as far as we are aware chick 1985 cottrell 1986 earl 1990 and dalziel 1996a b are the only recent authors to advocate its wide use

can buy me love the effect of child welfare expenditures on maltreatment outcomes i consider the effect of state level child welfare expenditures on child abuse victimization and fatality rates the main result is that these expenditures are strongly associated with improved child maltreatment outcomes further the well known negative association between income and child abuse is overstated if one fails to control for relevant policy differences that are correlated with economic circumstances the effect of income diminishes further upon controlling for social attitudes correlated with income the source of identification is a set of large and explicitly exogenous changes in child welfare expenditures induced by the circa 2000 recession i show that endogeneity problems are small and tend to work against the result

schooling and economic well being the role of nonmarket effects standard estimates of the economic value of additional schooling based on earnings differences associated with differences in the level of schooling attained cover only a portion of the total effects of education that are valued by citizens we first identify a catalog of nonmarketed effects many of which have been recently studied by economists and then propose a procedure for estimating a willingness to pay value for these effects using empirical estimates of the magnitude of a selection of these effects found in the literature we calculate willingness to pay values using our proposed procedure these illustrative calculations suggest that standard estimates of the benefit of incremental schooling substantially understate the full value of such investments

the role of intergenerational transfers and life cycle saving in the accumulation of wealth he purpose of this paper is to review what economists know at present about the following question how large a portion of the existing wealth is the result of a bequest motive that is of accumulation for the specific purpose of leaving bequests i will also endeavor to clarify why an answer to this question is of interest in the early keynesian period when the study of national saving first attracted wide interest relatively little attention was paid to what led people to save though it was generally understood that the main systematic reason was to leave bequests j m keynes in the famous chapter 9 of the general theory of employment interest and money 1936 had listed seven distinct motives for saving besides the leaving of bequests but five of these which include to increase one s future income or to insure one s independence and power implied that all or nearly all the accumulation would finally wind up as bequeathed wealth this in turn meant that most private wealth originated through bequests that is it either had been received through bequests or was destined to be bequeathed and indeed how else could society accumulate wealth however keynes 1936 p 107 also mentioned two further motives precaution that is to build up a reserve against unforeseen contingencies and foresight that is to provide for an anticipated future relation between the income and the needs of the individual or his family different from that which exists in the present as for example in relation to old age family education or the maintenance of dependents these motives in contrast to most of the previous ones have the

payout taxes and the allocation of investment when corporate payout is taxed internal equity retained earnings is cheaper than external equity share issues if there are no perfect substitutes for equity finance payout taxes may therefore have an effect on the investment of firms high taxes will favor investment by firms who can finance internally using an international panel with many changes in payout taxes we show that this prediction holds well payout taxes have a large impact on the dynamics of corporate investment and growth investment is locked in in profitable firms when payout is heavily taxed thus apart from any level effects payout taxes change the allocation of capital

the effect of capital gains taxes on the initial pricing and underpricing of ipos we investigate the extent to which capitalization of expected capital gains taxes and the lock in effect induced by the capital gains tax rate differential simultaneously impact the pricing and underpricing of initial public offerings ipos using a large sample of ipos from 1987 to 2010 we estimate regressions of offer prices and first day underpricing on tax rates supporting tax capitalization ipo offer prices decrease in long term capital gains taxes supporting lock in ipo underpricing increases in the long term and short term tax rate differential these effects are consistent with capital gains taxes simultaneously reducing ipo proceeds and exacerbating ipo underpricing

gender and ethnicity differentials in school attainment and labor market earnings in ecuador summary indigenous people in ecuador are most likely to be disadvantaged and live in poverty this paper reports on the findings of an econometric analysis which explores the extent to which lower educational attainment and labor market discrimination contribute to these disparities the analysis utilizes a proportional hazard regression model to examine which factors raise the probability of early school departure it also employs a classic regression model to explore the relationship between low educational attainment and earnings together with an oaxaca decomposition which parses out the extent to which earning differentials can be attributed to differences in human capital or to discrimination

women s education and fertility an analysis of the relationship between education and birth spacing in indonesia abstract the negative relationship between women s education and fertility is one of the strongest empirical regularities in social science yet there are few empirical studies that identify the mechanisms through which education affects fertility this article goes beyond the usual interpretation of education as a proxy for wage by testing whether education affects fertility through demand for children or through availability of contraceptives using the indonesian case it examines one aspect of fertility namely birth spacing over the period 1970 93 i find that higher levels of female education are associated with a shorter birth interval among earlier cohorts but with a longer birth interval among later cohorts the key finding is that changes in the effects of education on birth hazard over time are primarily driven by changes in the availability of contraceptives rather than by changes in the demand for children in the context of contraceptive technology the result can be interpreted as evidenc

taxes firm financial policy and the cost of capital an empirical analysis abstract this paper develops a theoretical model of firm behavior consistent with the maximization of shareholder utility and derives empirically testable implications of different theories of equity finance using data on firm earnings and previous investment and financial behavior we assess whether firms treat new share issues as a more expensive source of finance than retentions and whether such behavior varies across firms according to the composition of their shareholders our results support the hypothesis that firms perceive a higher cost of capital when issuing new shares and that the cost of capital varies significantly across firms having different estimated tax clienteles as theory would predict

the impact of demographic changes on income distribution in a developing country abstract a common hypothesis regarding the distribution of income is that it tends to become more unequal in the initial and middle stages of economic development in part because of demographic changes however previous studies of the effect of demographic changes on income distribution are not based on the underlying micro determinants of the income components we provide such estimates the micro determinants of the probability of receipt and amount received conditional on receipt of four income components are estimated for three regions defined by the degree of urbanization five simulations of hypothetical demographic changes are conducted the simulated effects on some of the regional income component distributions are fairly considerable in regard both to equalizing the distributions and increasing the shares of the poorest however the overall effects are regressive in both urban and rural regions

health and wage a simultaneous equation model with multiple discrete indicators in this article we propose all econometric approach for estimating the simultaneouls effects of health and wages in a structural equations framework in the theoretical works of grossmana 1972a 1972b health is viewed as anl elldogen1oulsly determined capital stock the demand for health should rise with the wage rate as the rate of return to health investment increases with wage onl the other hand better health should raise market productivity and hence wages since health capital is an abstract theoretical concept it can hardly be measured quantitatively however most population surveys include various health indicators these indicators are usually discrete variables in the empirical work of grossman and benham 1974 these qualitative indicators are treated as continuous variables and two stage least squares estimation techniques are used this specification raises various econometric problems see e g goldberger 1964 pp 248 255 domencich and mcfadden 1975 and nerlove and press 1973 a satisfactory specification should take into account the discrete nature of the indicators our specification generalizes the dummy variables simultaneous equations system of heckman 1978 the measurement models of joreskog and goldberger 1975 and is closely related to the models of muthe n 1976 1979 muthen studies full information maximum likelihood procedures for estimation except for very simple cases this does not generally yield feasible or tractable procedures in this article we introduce a tractable procedure for statistical estimation and testing this specification and the estimation procedure is then applied to study the joint dependence of health and wages another departure of our approach from others is that we will test and correct the possible incompatibility of the various health capital indicators in the population surveys one may have subjective health indicators such as self evaluation of health which may reflect different populations perception of health we propose a statistical procedure for testing measurement compatibility and if required for correcting this problem this article is divided into two parts initially we describe the model specification estimation and statistical tests in a general simultaneous equation model with multiple discrete indicators in the second part of the paper we consider specification of a simultaneous equation model for health and wages the model

multidimensional welfare distributions empirical application to household panel data from vietnam this article explores the empirical application of theoretical multidimensional welfare distribution analysis techniques to real household welfare distributions the article operationalizes recent conceptual developments in multidimensional distribution theory and assesses their usefulness for the measurement of multidimensional household inequality the results strongly highlight the importance of bringing nonmonetary aspects of household welfare into the forefront of inequality analysis agreement over the various approaches to the measurement of multidimensional inequality entails however nontrivial decisions that may limit the practical usefulness of these measures we suggest that the use of multidimensional inequality ranges and the application of restrictive dominance criteria to multidimensional welfare distributions may open significant scope for further developments in the empirical analysis of multidimensional inequality

social security in a classical growth model this paper develops a growth model with overlapping generations of workers who save for life cycle reasons and ricardian capitalists who save from a bequest motive the population of workers accommodates growth so that the rate of capital accumulation is endogenous and determines the growth of employment two regimes are possible one in which workers saving dominates the long run and a second in which the long run equilibrium growth rate is determined completely by the capitalist saving function sometimes called the cambridge equation the second regime exhibits a version of the pasinetti paradox changes in workers saving affect the level but not the growth rate of capital in the long run applied to social security this result implies that an unfunded system relying on payroll taxes reduces workers lifetime wealth and saving creating level effects on the capital stock without affecting its long run growth rate these effects are mitigated by the presence of a reserve fund various levels of which are examined calibrating the model to realistic parameter values for the us facilitates an interpretation of the controversies over the percentage of the national wealth originating in life cycle saving and the effects of social security on saving the model is offered as an analytical framework for the review of current topics in fiscal policy in particular identifying the social security reserve fund as a potential vehicle for generating capital accumulation and effecting a progressive redistribution of wealth copyright 2004 oxford university press

neoliberal economic policies and infant and child mortality simulation analysis of a chilean paradox abstract the paradox of deteriorating living standards for the poorest coexisting with declining infant and child mortality rates during the 1970s is explained by a simultaneous model where these rates and the birth rate are endogenous partial and general equilibrium results conflict some apparently satisfactory policy tools have counterproductive impacts action on small groups of selected policy variables is more effective than overall economic and social welfare expansion and policy effects differ according to social class the role of midwife visits average real earnings and cheap energy for poor urban households are emphasized perversely high unemployment also contributed to the actual mortality decline during the period

labor force participation and earnings determinants for women in the special conditions of developing countries abstract little systematic analysis exists regarding hypothesized special labor market conditions for women in developing countries this study explores such conditions in nicaragua major results are i small children affect participation less than in developed countries due to child care from extended families or while on informal sector jobs and the necessity for poor mothers to work ii schooling and experience have major roles affecting work sector and earnings but the primary school return is half that cited by the world bank iii other human capital variables particularly nutrition have some impact

what accounts for the chilean saving miracle this paper examines the recent saving performance of the chilean economy in the light of its long run 1940 96 trends the first conclusion that can be derived from the data is that most of the increase in private saving since the mid 1980s is due to business saving household saving turns out to be a stationary variable with zero mean since business saving has a unit root households do not seem to take the saving of firms into account when making their own saving decisions within the theoretical framework of a model of business investment with liquidity constraints we estimate a var for business saving private investment public saving and foreign saving the current account deficit we are able to determine that business saving is unaffected by public saving but that in the long run foreign saving and business saving are perfect substitutes private investment business saving and foreign saving are jointly determined the policy conclusions are that policies that stimulate investment are likely to lead to an increase in private saving that policies aimed at raising household saving will be ineffective and that increases in public saving are very powerful for increasing domestic saving in the long run copyright 2001 by oxford university press

rural wages labor supply and land reform a theoretical and empirical analysis land reform is one of the most mentioned of the theoretical policy instruments discussed in the development literature yet relatively little attention has been paid to the wage rate consequences of such a program despite the fact that perhaps more than one half of rural families in a developing country receive a substantial proportion of their income from wage earnings in agriculture one reason for this lacuna may be that the determination of wages and family labor supply in the agricultural sector of ldcs has also been somewhat neglected particularly in the context of a heterogeneous labor force 2 the subsistence or institutional wage models of w arthur lewis john fei and gustav ranis and gerald rodgers for instance offer no theory of how rural wage levels or differentials are set and thus provide little guidance on how wage rates would be affected by changes in land ownership patterns more recently pranab bardhan and t n srinivasan david newbery and clive bell and pinhas zusman who formulate general equilibrium market or bargaining models determining endogenously the rental share paid by tenant sharecroppers have assumed that agricultural wage rates are exogenous or determined only by nonagricultural factors all of these models assume that rural labor is homogeneous another reason why the potential wage impact of a land reform program may have received little attention is that models of peasant family behavior such as those of a k sen dipak mazumdar and robert mabro typically embody two restrictive assumptions which would tend to make the equalization of landholdings appear wage augmenting although this implication has never been formally derived these assumptions are that 1 agriculture is dualistic with small farm families facing lower shadow prices of labor leisure than large farm landlords because of impediments to labor mobility and 2 agricultural households are dichotomous small farmers employ family labor and maximize utility while large farms only utilize wage labor and maximize profits data from a 1970 71 allindia survey of over 5 000 households collected by the national council of applied economic research3 indicate however that almost all cultivator households large and small participate actively in the labor market as either buyers or sellers of labor services with almost 88 percent of households cultivating a gross cropped area less than 1 5 acres utilizing some hired labor seventynine percent of these small farm households associate professor yale ujniversity the research embodied in this paper was supported in part by a grant from the ford and rockefeller foundations program in support of social science and legal research on population policy and with funds from the u s agency for international development under order no aid otr 1432 helpful suggestions and comments were provided by james l mccabe mark gersovitz an anonymous referee the managing editor and members of the economic growth center yale university i am also grateful to the members of the research program in development studies princeton university for the use of their facilities research assistance was provided by james devine anne morgan and roberta robson inotable exceptions are r albert berry mark gersovitz and m a rahman all of these authors however employ geometric analyses with differing assumptions leading to wholly different predictions regarding wage effects none consider the heterogeneity of agricultural labor pay attention to questions of stability or attempt to apply their models to data 2lnformation on the differential impact of alternative agricultural policies including land reform on sex or age specific wage rates is not only important in settling income distribution and equity issues but as suggested in an article by the author and robert evenson may have significant implications for population growth and schooling as well 3for a more detailed discussion of these data see the author

dividend taxation in firm valuation new evidence in this paper we develop a residual income model showing how taxes on dividends affect the relative valuation of retained earnings versus contributed equity as well as the value of expected future earnings tests of predictions from our model for a sample of compustat firms from 197594 suggest that overall firm value and the relative valuation weights investors assign to retained earnings contributed equity and current earnings all critically depend on dividend taxes the findings also suggest that investors take a proprietary perspective in valuation and impute an unrecorded shareholder level tax liability on retained earnings the u s tax system subjects retained earnings to dividend taxes upon distribution to shareholders while contributed equity is returned to shareholders as a nontaxable return of capital from the shareholder s proprietary perspective therefore retained earnings should be valued on

mortality decline in the low income world causes and consequences the causes and consequences of the mortality decline that has occurred in developing countries over the course of the twentieth century are reviewed influential factors identified include female education and improved nutrition annotation

household behaviour and nutrition in developing countries abstract this article reviews some of the recent major research findings concerning the effect of household behaviour on food consumption and nutrition important extensions to the understanding of household behaviour have been made in the areas of the impact of income and price changes agricultural households the effects of agricultural commercialization the new household economics and particularly the effect of time as a scarce economic resource the intrahousehold allocation of food and the determinants of nutritional status this knowledge is important because the response by households affects the final impact of economic changes and government actions on the nutritional status of the population

a reply to michl in his comments tom michl defends the proposal for a fully funded pension scheme based on a saving led classical growth model against my keynesian contention that a higher saving supply would be deflationary in both the short run and the long run michl adds a further argument that an increase in the saving rate associated with a lower interest rate may speed up the accumulation process i remark that the thesis that a lower interest rate has a positive influence on investment is empirically and theoretically controversial while the idea that an increase in investment requires a larger saving supply is open to further keynesian objections copyright 2006 oxford university press

income distribution and infant mortality comparing two countries in which the poor have equal real incomes the one in which the rich are wealthier is likely to have a higher infant mortality rate this anomalous result does not appear to spring from measurement error in estimating the income of the poor and the association between high infant mortality and income inequality is still present after controlling for other factors such as education medical personnel and fertility the positive association of infant mortality and the income of the rich suggests that measured real incomes may be a poor measure of social welfare this paper considers and tests several possible explanations such as the provision of medical services the degree of urbanization the extent of female literacy and differences in the composition of births among different income groups none of these factors adequately accounts for the positive association between the incomes of the rich and infant mortality the geographical scope is worldwide excerpt

comments on cesaratto s transition to fully funded pension schemes a non orthodox criticism cesaratto s critique of the neoclassical approach to pension reform is valuable but he has overextended his argument in applying it to proposals to use pre funding as a mechanism for achieving greater public ownership and for redistributing wealth progressively the fiscal surpluses needed to pre fund the public pension system could increase investment provided that they are offset by an appropriately stimulating monetary policy the post keynesian investment literature descending from kalecki s principle of increasing risk motivates on non neoclassical grounds the interest sensitivity of investment required to make this policy mix effective copyright 2006 oxford university press

myth and reality of pension reform the latin american evidence abstract starting in 1981 with chile to the end of 2000 10 countries in latin america implemented structural pension reforms totally or partially privatizing their former public systems the latin american models have shaped similar reforms in eastern europe and influenced changes in western europe and the current debate in the united states in 1999 the then chief economist of the world bank nobel laureate joseph stiglitz coauthored with peter orszag a provocative paper examining the myths of the narrowly interpreted reform model sponsored by the bank but without using crucial data from latin america this article contrasts 12 myths of structural pension reforms in that region with data collected from eight countries in the last seven to 20 years confirming and expanding several of orszag and stiglitz s conclusions

cost and income based measures of human capital human capital is increasingly believed to play an important role in the growth process however adequately measuring its stock remains controversial in this paper three general approaches to measurement are identified cost based income based and educational stock based this survey focuses on the first two approaches and provides a critical review of the theories and their applications to data from a range of countries particular emphasis is placed upon the work of jorgenson and fraumeni 1989 1992 and some new results for new zealand based upon their approach are also presented

priceless the nonpecuniary benefits of schooling copyright 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 by the american economic association permission to make digital or hard copies of part or all of american economic association publications for personal or classroom use is granted without fee provided that copies are not distributed for profit or direct commercial advantage and that copies show this notice on the first page or initial screen of a display along with the full citation including the name of the author copyrights for components of this work owned by others than aea must be honored abstracting with credit is permitted the author has the right to republish post on servers redistribute to lists and use any component of this work in other works for others to do so requires prior specific permission and or a fee permissions may be requested from the american economic association administrative office by going to the contact us form and choosing copyright permissions request from the menu copyright 2016 aea

proposals to restructure social security the 1995 report of the trustees of social security projected that the combined old age survivor s and disability insurance oasdi trust funds would run out in 2030 this report wasn t much news because the problem was slightly less severe than had been projected the year before the date receded by one year it also wasn t much news because everyone already knew that there was a problem and public confidence in the future of social security was already quite low indeed the fraction of people reporting themselves very or somewhat confident in social security is only around 40 percent this opinion should be taken with a grain of salt since the same surveys show that over 90 percent of the interviewees are expecting to receive social security benefits and commonly expect it as a major source of income reno and friedland forthcoming unlike the medicare problem the oasdi problem does not seem severe to me with prompt legislation we could easily muddle through putting together a package of revenue increases and benefit cuts that would restore actuarial balance for the 75 year horizon 1 in this paper i will not consider the relative merits of alternative packages but will discuss five proposals for basic changes in how social security functions changes that go beyond changing some of the parameters in 1 the country does not seem to have much taste for tax increases right now yet the polls asking about tax increases just for social security find the country solidly behind such increases in an ebri gallup poll 64 percent of respondents favor raising taxes now to lessen tax increases in the future while only 28 percent preferred no tax increase before 2010 a majority oppose 15 percent or strongly oppose 38 percent decreasing benefits by 10 20 percent for those born after 1960 in order to avoid a tax increase since it is always ambiguous how to interpret such a poll and we do not want government by opinion poll this should be viewed as a sampling of mood not as a policy recommendation

evolution of infant and child mortality in chile a model a model in which the birth rate and the infant and child mortality rates are jointly determined is used to explain the coexistence of declining infant and child mortality with increasing unemployment and falling living standards for at least part of the population the causes of the mortality decline are complex and include economic health care welfare urbanization and other aspects unemployment affected the birth rate and therefore the child mortality rate but the fall in infant mortality obeyed different factors such as midwife visits health expenditure and access to cheap energy policies require careful designing since often there is a trade off between infant and child mortality specially if the birth rate is high progress in one of these areas may prove counterproductive in the other if choices along the economy s phillips curve are possible solely on infant and child mortality grounds higher earnings should be preferred to lower unemployment

more evidence on nutrition demand income seems overrated and women s schooling underemphasized abstract malnutrition is widespread in the developing world controversy continues concerning the roles of income household size and women s schooling on nutrient demand empirical estimates for nicaragua suggest that income elasticities are small and inversely associated with income levels there are some economies of scale in household size the elasticity for women s schooling is higher than those for income or household size and women s backgrounds are important the results cast doubt on the strong emphasis the world bank and others have placed on income and suggest that schooling may be working through tastes not only through productivity

what you don t know can hurt you or at least mislead you family behaviors unobserved heterogeneities and the determinants and impacts of human resources over the life cycle what one does not know in the form of unobserved heterogeneity can mislead one in empirical estimates a simple model of intrahousehold allocations illustrates the possible importance of unobserved factors such as abilities in determining human resources and their impacts the author reviews over forty years of studies primarily from latin america and the caribbean but also from elsewhere to illustrate the substantial empirical importance of unobserved heterogeneity with regard to preferences and intrahousehold allocations schooling returns school quality early life nutrition and program evaluation