beauty premium and marriage premium in search equilibrium theory and empirical test we propose a theoretical explanation for the so called beauty premium our approach relies entirely on search frictions and the fact that physical appearance plays an important role in attracting a marriage partner we analyze the interaction between frictional labor and marriage markets making use of what we label constrained job search the optimal strategy entails different reservation wages for different men and we establish the existence of a search equilibrium characterized by a beauty premium and or marriage premium predicted profiles of premia allow for potential falsification tests and point to relevant empirical evidence in support of our theory

sustainability of power sector reform in india what does recent experience suggest abstract india has been flirting with the idea of power sector reform for more than a decade however despite the enactment of a comprehensive legal framework for governing the electricity industry limited progress has been made in terms of achieving widespread sector liberalisation and privatisation this paper presents a systematic approach to analysing the sustainability of the reform model and the experience in implementing it it argues that the reforms to date have not produced desirable political economic financial social or environmental outcomes political instability and opportunistic behaviour of political parties in india have reduced the acceptability of reforms while the poor financial performance of utilities and subsidy burden show little signs of improvement reform has not succeeded in rationalising tariffs or balancing supply and demand electricity market reform has not increased access levels and the rise of captive power generation is likely to have an adverse impact upon the natural environment in conclusion there are doubts about the sustainability of reform measures highlighting a need to find policy alternatives

bidimensional matching with heterogeneous preferences education and smoking in the marriage market we develop a frictionless matching model under transferable utility where individuals are characterized by a continuous trait and a binary attribute the model incorporates attributes for which there are heterogeneous preferences in the population regarding their desirability that is the impact of the traits cannot be summarized by a one dimensional attractiveness index we present a general resolution strategy based on optimal control theory and characterize the stable matching we then consider education and smoking status further specify the model by observing that there are more male than female smokers above each education level and derive additional predictions about equilibrium matching patterns and how individuals with different smoking habits marry down or marry up by education using the cps march and tobacco use supplements for the period 1996 to 2003 we find that the hypotheses based on our model predictions are borne out in the data

quality of available mates education and household labor supply we investigate the impact of sex ratios by education and metropolitan area on spouses bargaining power and labor supplies to capture the local and qualitative nature of mate availability using current population survey and census data for 2000 1990 and 1980 we estimate these effects in a collective household framework we find that a higher relative shortage of comparably educated women in the couple s metropolitan area reduces wives labor supply and increases their husbands the impact is stronger for couples in higher education groups but not significant for high school graduates results are similar across decades no such effects are found for unmarried individuals jel d1 j22 2008 western economic association international

dutch disease effect of oil rents on agriculture value added in middle east and north african mena countries abstract this paper investigates the effect of oil rents on agriculture value added in oil producing middle east and north african mena countries annual data from 1970 to 2011 panel cointegration tests by pedroni 1999 long ran panel causality tests by canning and pedroni 2008 and two step system gmm by blundell and bond 1998 are used in this study we find a negative relationship between oil rents and agriculture value added in the long run with a rather slow rate of short run adjustment of agriculture value added back to equilibrium after a boom in oil rents these results indicate that an oil sector boom is associated with a contraction in the agriculture sectors of the countries in the panel in the long run this is probably attributable to a resource movement effect from other economic sectors to the booming oil sector in these countries this serves as evidence of a dutch disease effect of an oil sector boom on agriculture in the mena countries in this study

price reforms in the power sector the world bank s role this paper discusses whether the world bank s bank s policy has been successful in promoting economic efficiency in the power sector the conclusion is that the bank s presence has improved the situation as four countries receiving a disproportionate share of bank assistance have witnessed a more positive development since the late 1980s than developing countries as a whole loans provided through periods of non compliance may have eased the urgency of reform in a longer perspective the financing of such over investment may have been justified on grounds of maintaining the bank s presence in these countries and laying the foundation for the more recent sector reforms co ordination with broader sector reforms is also found to yield positive results

the macroeconomic implications of a resource discovery in an open economy this paper analyses the macroeconomic impact on an economy of the discovery of significant quantities of a natural resource the resource will be termed oil and the analysis is intended to be suggestive of the effects on the u k economy of the discovery of north sea oil and of possible policy responses our motivation is what appears to be an inconsistency between the commonly expressed view that north sea oil has generated unemployment by causing the exchange rate to appreciate2 and the contention of proponents of the new classical macroeconomics that the oil discovery creates no special macroeconomic problems 3 in order to abstract from microeconomic questions we shall assume that oil is perfectly tradable and that there are no extraction costs 4 we also assume that the foreign currency oil price is exogenous and rises at the foreign interest rate the effect of these assumptions is that for the economy as a whole the oil discovery can be considered as a foreign exchange windfall of fixed magnitude and we define the term oil revenue in a permanent income sense as the infinite term foreign exchange annuity value of this windfall oil revenue as defined is independent of depletion policy it accrues whether or not depletion is occurring at any date since it includes capital gains on the oil stock and depends in no way on whether the oil is exported or used domestically it will be assumed throughout that the economy operates with a flexible exchange rate and that international capital mobility is perfect at the date of discovery the economy is assumed to be at zero inflation full employment with both current and capital accounts balanced we are primarily interested in the dynamics of adjustment to the oil discovery but comparative static analysis5 provides a convenient point of departure for this purpose only we suppose that depletion is managed so as actually to realise the oil revenue each year if all the oil revenue is saved then there are no effects on demand prices or

no fault divorce laws and the labor supply of women with and without children we use a difference in difference in difference estimator to compare changes in labor force participation weeks and hours of work associated with no fault divorce laws allowing for differential responses for married women with and without children although other research has found that the labor supply of women in general does not respond to no fault divorce laws we find that no fault divorce laws are associated with increases in the labor supply of married mothers relative to married nonmothers even after controlling for changes in female labor supply in states without no fault divorce laws and for property division rules associated with the laws

the political economy of resource driven growth abstract in recent decades resource poor countries have out performed resource abundant ones a stylised facts model of competitive industrialisation describes the long run development of a resource poor country with a political state that is developmental only minor change is required to adapt the model to trace the development trajectory of a resource abundant country with a similar political state however most resource abundant countries engender a political state that is factional or predatory and distorts the economy in the pursuit of rents a staple trap model describes the development trajectory under these conditions the model predicts a growth collapse from which recovery is protracted especially for small economies that lack a niche trade link with a large economy

power sector reform in india current issues and prospects power sector reforms in india were initiated at a juncture when the sector was plagued with commercial losses and burgeoning subsidy burden investment in the sector was not able to keep pace with growing demand for electricity this paper takes stock of pre reform situation in indian power sector and identifies key concerns that led to initiation of the process of reform the paper discusses major policy and regulatory changes undertaken since the early 1990s the paper also illustrates changes in the market structure as we move along the reform process we also discuss some of the major provisions of the recently enacted electricity act 2003 that aims to replace the prevailing acts which govern the functioning of the power sector in the country in this context we discuss two issues arising out of it namely open access and multi year tariff that we think would have a significant bearing on the performance of the sector in the near future the paper also evaluates the reform process in the light of some of the regulatory changes undertaken finally the paper briefly discusses the issues involved in introduction of competition in the power sector primarily through development of a market for bulk power

the effects of mongolia s booming mining industry on its agricultural sector a test for dutch disease dutch disease occurs when currency strengthening associated with a booming sector of an economy crowds out a lagging trade dependent sector in this study a keynesian style model is specified to deduce hypotheses about how increased foreign direct investment fdi aimed at mongolia s mining sector affects its agricultural sector a key finding is that while econometric results suggest the increased fdi strengthened mongolia s currency its adverse effect on mongolia s trade sensitive agricultural sector is not sufficiently strong to cause the sector to decline although dutch disease was not detected the posited mechanism clearly is important specifically when currency strengthening is ignored the reduced form elasticity of agricultural value added with respect to fdi is 2 7 times larger than when currency strengthening is taken into account 0 103 vs 0 038 also fdi induced currency strengthening causes the keynesian multiplier y g to drop from 2 40 to 2 00 and the fdi multiplier y fdi to drop from 3 05 to 1 89

energy and resource allocation a dynamic model of the dutch disease it is well known that a domestic resource discovery gives rise to wealth effects that cause a squeeze of the tradeable good sector of an open economy the decline of the manufacturing sector following an energy discovery has been termed the dutch disease and has been investigated in many recent studies our model extends the principally static analyses to date by allowing for 1 short run capital specificity and long run capital mobility 2 international capital flows and 3 far sighted intertemporal optimizing behaviour by households and firms the model is solved by numerical simulation

when it rains it pours under what circumstances does job loss lead to divorce much of the previous research that has examined the effect of job loss on the probability of divorce either rely on data from the 1970s 80s data from european countries or focus on aggregate divorce rates this study uses u s micro data from 2000 to 2012 thus including effects of the great recession to examine how displacement i e exogenous job loss affects the probability of divorce the author finds displacement significantly increases the probability of divorce but only if the husband is the spouse that is displaced and his earnings represented approximately half or less of the household s earnings prior to displacement similarly results show that the probability of divorce increases if the wife is employed and as her earnings increase while the mechanism behind these asymmetric results remains unclear these results are consistent with recent research that finds a destabilizing effect on marriages when a wife earns more than her husband

house prices and marital stability we investigate the effect of house price changes on divorce using data for 1991 2010 from the current population survey and the federal housing finance agency our findings suggest that changing house prices significantly affect the share of a cohort that is divorced and that these effects are asymmetric with respect to housing gains versus losses in addition we find differential effects for groups that are more likely to be homeowners versus renters some of this evidence is consistent with homeowners being locked into their homes and hence marriages by increased transactions costs in down markets

democratizing access to higher education in russia the consequences of the unified state exam reform this is the first paper that evaluates the effects of a reform requiring russian universities to make admission decisions based on the results of a national high school exam we show the reform led to a threefold increase in geographic mobility rates among high school graduates from small cities and towns to start college this is robust to different techniques samples and specifications the reform was also accompanied by increases in students expectations to attend university parental transfers and educational expenditures there is no evidence the reform affected parental labor supply divorce and employment outcomes of graduates who did not move

partner choice investment in children and the marital college premium abstract we construct a model of household decision making in which agents consume a private and a public good interpreted as children s welfare children s utility depends on their human capital

cleaning in the shadow of the law bargaining marital investment and the impact of divorce law on husbands intrahousehold work abstractprevious literature has established that unilateral divorce laws may reduce women s household work and overall marital investment if unilateral divorce has differential costs by gender it may impact household work by gender through bargaining channels however little research has examined how divorce laws affect men s levels and share of household production to examine this i use data on matched couples from the panel study of income dynamics and exploit time variation in state divorce laws i find that unilateral divorce laws lead to a decrease in marital investment as measured by mens and women s household work the evidence also supports a bargaining response to divorce laws as fathers in states without joint custody laws engage in a significantly higher share of household work under unilateral divorce than those in states with joint custody laws consistent with a higher cost of marital dissolution among fathers who stand to lose custody of their children

domestic violence and divorce law when divorce threats become credible the cost of divorce influences the bargaining position of spouses and thus their behavior within the marriage this study takes advantage of a major and unexpected reduction in divorce costs in spain to estimate the causal effects on domestic violence results suggest a 30 decline in spousal conflict as a consequence of the reform spousal violence is found to have decreased among couples who remained married after the modification in the law which suggests an important role for changes in bargaining within the marriage when divorce becomes a more credible cheaper option

cohabitation marriage and divorce in a model of match quality the objective of this research is to further our understanding of how and why individuals enter and leave coresidential relationships we develop and estimate an economic model of nonmarital cohabitation marriage and divorce that is consistent with current data on the formation and dissolution of relationships jovanovic s journal of political economy 87 1979 972 90 theoretical matching model is extended to help explain household formation and dissolution behavior implications of the model reveal what factors influence the decision to start a relationship what form this relationship will take and the relative stability of the various types of unions the structural parameters of the model are estimated using longitudinal data from a sample of female high school seniors from the united states new numerical methods are developed to reduce computational costs associated with estimation the empirical results have interesting interpretations given the structural model they show that a significant cause of cohabitation is the need to learn about potential partners and to hedge against future bad shocks the estimated parameters are used to conduct several comparative dynamic experiments for example we show that policy experiments changing the cost of divorce have little effect on relationship choices

power sector reform in south asia why slow and limited so far although south asian developing countries had initiated some form of electric power sector reform in the 1990s often under external lending agency pressures not much progress has been made so far and there is hardly any noteworthy example of a successful reform in the region this paper provides a brief review of power sector reform efforts in five south asian countries and uses an institutional economics framework to identify the factors shaping the success of power sector reforms four factors namely instability of rule makers poor overall acceptance slow adaptation and poor transition management are identified and their effect on the reform process of south asia are analysed the paper finds that political instability has affected the power sector reform of the region making hard decisions difficult to take slow progress of reform has also affected the sector viability as signs of adverse effects on the power sector investment and performance are already visible

inflation and other aggregate determinants of the trend in us divorce rates since the 1960s this article extends empirical research on the determinants of divorce in two ways first i examine the effect of inflation on divorce second the use of a structural time series modelling approach attributes unobservables and omitted variables to an unobserved component which allows for the model s parameters to be estimated consistently inflation is statistically significant positive and persistent i show that the effects of inflation are robust to the inclusion of additional explanatory variables and various trend specifications the long run implications of inflation are also substantial i conclude that price stability has the potential to reduce divorce rates

the impact of conditional cash transfers on marriage and divorce abstracta growing number of less developed countries have introduced conditional cash transfer programs in which funds are targeted to women economic models of the family suggest that these transfer programs may lead to marital turnover among program beneficiaries data from the experimental evaluation of the progresa program in mexico is used to provide new evidence on the short run impacts of targeted transfers on couples union dissolution and individuals new union formation decisions we find that although the overall share of women in union does not change as a result of the program marital turnover increases intact families eligible for the transfers experienced a modest 0 32 percentage points increase in separation rates with most of the effect concentrated among young and relatively educated women households in contrast young single women with low educational attainment levels experienced a substantial increase in new union formation rates the marital transition patterns are consistent

principal players in utility restructuring the case of orissa abstract research on reform and restructuring in the electricity supply industry does not adequately focus on the process of actual implementation using the restructuring of orissa state electricity board as a case study this paper identifies the principal players and their roles during the restructuring of an electric utility the key players in a utility restructuring exercise are the government top management lending agencies and the consultants three conceptual phases are identified in the restructuring process namely impetus phase reorganisation phase and consolidation phase as the restructuring process moves from one phase to another the roles of the principal players also undergo significant qualitative changes this paper highlights the changing role of the key players as the restructuring process moves from one phase to another

promoting policy reforms the twilight of conditionality abstract for the past 15 years the world bank often in cooperation with the international monetary fund and sometimes also with bilateral donors has tried to encourage policy reforms through conditions attached to structural or sector adjustment loans in the 1990s however such loans are a rapidly dwindling portion of the bank s disbursements this article examines major reasons for this shift including increased flows of private capital democratization the changing nature of the reform agenda itself and growing bank emphasis on ownership reduced direct conditionality is likely to be replaced in part by growing selectivity the results may well be constructive but will not ease tensions in the aid relationship

sin city why is the divorce rate higher in urban areas divorce rates are higher in cities based on danish register data this paper shows that of the marriages formed in the city those couples who remain in the city have a 23 higher divorce rate than those who move out in this paper we test whether this observation is due to sorting of more stable marriages into rural areas or if there exists a causal effect of living in urban areas on marriage instability our identification strategy supplements the timing of events approach with an instrumental variable our findings suggest that the effect of living in an urban area on the divorce risks drops substantially and loses statistical significance once we address sorting keywords divorce search mobility city keywords j12 j64

the dutch disease in a developing country oil reserves in cameroon abstract noting that most of the literature on the dutch disease refers to developed countries this paper looks at the impact of an oil boom on a developing country when certain features of developing countries particularly the imperfect substitutability between domestic and imported goods are incorporated one of the standard dutch disease results can be reversed not all the traded goods sectors will contract a simulation with a computable general equilibrium model of cameroon reveals that the agricultural sector is most likely to be hurt whereas some of the manufacturing sectors will benefit this suggests possible areas for government intervention should it be warranted and may explain the differential performance between the agricultural and industrial sectors of oil exporting countries in the post 1973 period

the economics of grief we study the short run and long run economic impact of one of the largest losses that an individual can face the death of a child we utilise unique registers on the entire swedish population combining information on the date and cause of death with parental outcomes we exploit the longitudinal dimension of the data and deal with several selection issues losing a child has adverse effects on labour income employment status marital status and hospitalisation the value of policy measures aimed at preventing mortal accidents of children is underestimated if it does not take bereavement effects on parents into account

the british electricity experiment the privatization of the electricity supply industry esi in britain which began 1990 is in itself an unremarkable event much of the esi is privately owned in several european countries and in the united states and the u k privatization program has embraced utilities since 1984 when british telecom was privatized the thing that is remarkable about recent policy toward the industry is the radical nature of the regulatory reform accompanying privatization a vertically integrated administered generation and transmission structure was replaced overnight on march 31 1990 by one that is deintegrated and market based generation and transmission have been separated and there has been an attempt to establish competition in generation a number of countries have been moving gradually in the direction of encouraging competition but nowhere else have such dramatic changes been implemented so quickly

desperate housewives communication difficulties and the dynamics of marital un happiness this paper develops a model of marital dissolution based on communication difficulties the quality of a marriage depends on the proximity of an action to a target the target is unknown and must be learned over time each individual receives private signals about the target and can communicate them only imperfectly to his or her spouse because of imperfect communication spouses may hold different beliefs about the optimal action the action actually chosen is a compromise of the spouses distinct beliefs if a couple s beliefs diverge too widely one or both of them may prefer to dissolve the marriage the paper explores how poor communication contributes to marital unhappiness as well as its implications for the dynamics of divorce risk the welfare properties of divorce decisions and the role of counseling when the distribution of decision making power in the household favors men wives but not husbands can find themselves trapped for prolonged periods in a marriage that leaves them as unhappy as it is possible to be without seeking relief through divorce

child support and partnership dissolution this article studies the determinants of partnership dissolution and focuses on the role of child support we exploit the variation in child support liabilities and entitlements driven in part by the introduction of a new set of complex rules that determined child support liability in the uk and by their interaction with welfare rules our panel has the virtue that the post 1993 variation in child support liability for all couples in partnerships formed prior to 1993 is unanticipated we find strong evidence that the resulting large child support liabilities significantly reduced dissolution risks

match quality new information and marital dissolution this article investigates the role of surprises in marital dissolution surprises consists of changes in the predicted earning capacity of either spouse data from the national longitudinal study of the high school class of 1972 is used we find that an unexpected increase in the husband s earning capacity reduces the divorce hazard while an unexpected increase in the wife s earning capacity raises the divorce hazard couples sort into marriage according to characteristics that are likely to enhance the stability of the marriage the divorce hazard is initially increasing with the duration of marriage and the presence of children and high levels of property stabilizes the marriage

lucky in life unlucky in love the effect of random income shocks on marriage and divorce abstract economists have long been interested in the extent to which economic resources affect decisions to marry and divorce however this issue has been difficult to address empirically due to a lack of exogenous income shocks we overcome this problem by exploiting the randomness of the florida lottery and comparing recipients of large prizes to those of small prizes results indicate that while positive income shocks of 25 000 to 50 000 do not cause statistically significant or economically meaningful changes in divorce rates single women are less likely to marry as a result of the additional income

household finances income shocks and family separation in britain we examine the effect of household financial indebtedness on the incidence of partnership dissolution using a large survey of families with children in britain we use detailed data on household finances to provide a robust statistical analysis of the relationship between indebtedness and partnership dissolution and to avoid the potential simultaneity of financial and psychological health responses that arise when using self reported data on the extent of household financial problems we examine whether the data provides any support for the economic models of divorce and separation developed by gary becker and his colleagues

the dynamics of marriage and divorce we formulate and estimate a dynamic model of marriage divorce and remarriage using panel data on two cohorts of danish men and women the marital surplus is identified from the probability of divorce and the surplus shares of husbands and wives from their willingness to enter marriage we find that the educations of husbands and wives are complements education raises the share of the marital surplus for men but not for women as men and women get older husbands receive a larger share of the marital surplus the estimated costs of divorce are high both early and late in marriage

external disturbances domestic policy responses and debt accumulation in nigeria abstract this paper provides a case study of the link between external shocks domestic policy responses and external debt accumulation in nigeria the indonesian experience during 1970 1989 is provided as a contrast for policy comparison a significant part of the increase in external debt in the two countries corresponds to financing of capital flight after 1981 current account deficits assumed greater importance in the accumulation of external debt the growth in external debt was caused in part by adverse external conditions the results of this study show that the nigerian debt crisis was exacerbated by inappropriate policy responses indonesia avoided a crisis by applying prudent real exchange rate management and fiscal restraint

fatter attraction anthropometric and socioeconomic matching on the marriage market we construct a marriage market model of matching along multiple dimensions some of which are unobservable in which individual preferences can be summarized by a one dimensional index combining the various characteristics we show that under testable assumptions these indices are ordinally identified and that the male and female trade offs between their partners characteristics are overidentified using psid data on married couples we recover the marginal rates of substitution between body mass index bmi and wages or education men may compensate 1 3 additional units of bmi with a 1 percent increase in wages whereas women may compensate two bmi units with 1 year of education

changing the rules midway the impact of granting alimony rights on existing and newly formed partnerships this article analyses the effect of a reform granting alimony rights to cohabiting couples in canada a collective household model with a matching framework predicts that changes in alimony laws would affect existing couples and couples to be differently for existing couples it benefits the intended beneficiary but for couples not yet formed it generates offsetting intra household transfers and lower intra marital allocations for the beneficiary our empirical analyses confirm these predictions among couples united before the reform obtaining the right to petition for alimony led women to lower their labour force participation but not among newly formed cohabiting couples

dutch disease economics and oil syndrome an empirical study abstract this paper integrates the existing dutch disease models of an oil boom into a reduced form three sector model and estimates it for five developing oil exporting countries having significant agricultural and manufacturing sectors time series annual data for the period 1966 1986 are used for algeria ecuador indonesia nigeria and venezuela their output composition is altered by an increase in their oil revenues the spending effect and in the world price of manufactured goods relative to agricultural products the world price effect both effects expand the manufacturing sectors of these countries and contract their agricultural sectors the spending effect expands their nontraded sectors whereas the world price effect may expand or contract them the opposite results are implied for the oil collapse of the 1980s

natural resources education and economic development economic growth since 1965 has varied inversely with the share of natural capital in national wealth across countries four main channels of transmission from abundant natural resources to stunted economic development are discussed a the dutch disease b rent seeking c overconfidence and d neglect of education public expenditure on education relative to national income expected years of schooling for girls and gross secondary school enrolment are all shown to be inversely related to the share of natural capital in national wealth across countries natural capital appears to crowd out human capital thereby slowing down the pace of economic development

the narrow moving band the dutch disease and the competitive consequences of mrs thatcher notes on trade in the presence of dynamic scale economies abstract this paper presents a model of trade in which comparative advantage instead of being determined by underlying attributes of countries evolves over time through learning by doing in this model arbitrary patterns of specialization once established tend to become entrenched over time the model sheds light on three widely held views that do not make sense in more conventional models first is the view that temporary protection of selected sectors can permanently alter the pattern of comparative advantage in the protecting country s favor second is the view that seemingly favorable developments such as the discovery of exportable natural resources may lead to a permanent loss of other sectors and reduce welfare in the long run third is the possibility that a temporary overvaluation of a currency due to tight money can lead to a permanent loss of competitiveness in some sectors

natural resources rent seeking and welfare abstract a new and very simple mechanism to explain why natural resource abundance may lower income and welfare is developed in a model with rent seeking a greater amount of natural resources increases the number of entrepreneurs engaged in rent seeking and reduces the number of entrepreneurs running productive firms with a demand externality it is shown that the drop in income as a result of this is higher than the increase in income from the natural resource more natural resources thus lead to lower welfare

should we get married the effect of parents marriage on out of wedlock children i introduction while marriage remains the foundation of family life in the united states the traditional process of family formation specifically marriage before having children has been dwindling the proportion of american children born to unmarried parents has increased dramatically over the past three decades from 12 in 1970 to nearly one third of all births today siglerushton and mclanahan 2002 the decoupling of marriage and fertility behavior is particularly common among the low income less educated urban population mclanahan and sandefur 1994 unmarried parents often have fewer resources and their children tend to display inferior outcomes compared to those raised by two married parents 1 concerned with the rise in out of wedlock parenthood and its implications for the children involved policies in recent years have been geared toward promoting marriage among unmarried parents 2 however little is known about the potential benefits of marriage after childbirth couples who have children out of wedlock are known to be selectively different from those who marry before having children unmarried parents tend to be of lower socioeconomic standing face poorer prospects in the marriage market and have lower incentives for assortative mating brown 2004 garfinkel glei and mclanahan 2002 rosenzweig 1999 hence interpreting the outcome differences found in simple comparisons of children born to married versus unmarried parents as benefits of marriage can be misleading as these differences may largely reflect the more favorable characteristics of married parents this study examines whether marriage between the biological parents after childbearing benefits the children involved using data on a representative sample of children all born to unmarried couples drawn from the fragile families and child wellbeing study ffcws the ffcws is particularly well suited to address this question as it provides child assessment data and detailed marriage fertility and socioeconomic information on both biological parents for a large representative sample of children born outside of marriage we focus on the effect of marriage among parents who are romantically involved at childbirth on child cognitive ability measured at age 3 based on scores from the peabody picture vocabulary test ppvt a widely used interviewer administered measure of receptive hearing and verbal ability in addition effects of marriage on child health and behavioral outcomes are analyzed a significant fraction of children in our sample experience the marriage of their parents we analyze whether marriage after childbearing affects early developmental outcomes using an empirical strategy centering around a potential outcome framework similar to an experiment where the treatment marriage after childbirth is randomly assigned we draw on matching methods e g heckman ichimura and todd 1998 rosenbaum and rubin 1983 to identify the treatment effect exploiting the detailed information on the parents provided in the ffcws this approach addresses the selection into marriage by constructing an appropriate comparison group for children whose parents marry after childbirth we first estimate the probability of marriage among unwed parents with a newborn and then compare the outcomes of children whose parents share similar probabilities of marriage but differ only in whether their parents transitioned into marriage within 3 yr after their birth the present study also sheds light on the role of typically unobserved factors likely to be important determinants of selection into marriage including the father s attributes and the degree to which the parents have similar characteristics positive assortative matching while some studies have examined the determinants of marital union formation among the population of single mothers e g aassve 2003 relatively little is known about the factors influencing the transition into marriage and the role of similarities in traits between unmarried biological parents

a new statistic and practical guidelines for nonparametric granger causality testing abstract in this paper we introduce a new nonparametric test for granger non causality which avoids the over rejection observed in the frequently used test proposed by hiemstra and jones 1994 testing for linear and nonlinear granger causality in the stock price volume relation journal of finance 49 1639 1664 after illustrating the problem by showing that rejection probabilities under the null hypothesis may tend to one as the sample size increases we study the reason behind this phenomenon analytically it turns out that the hiemstra jones test for the null of granger non causality which can be rephrased in terms of conditional independence of two vectors x and z given a third vector y is sensitive to variations in the conditional distributions of x and z that may be present under the null to overcome this problem we replace the global test statistic by an average of local conditional dependence measures by letting the bandwidth tend to zero at appropriate rates the variations in the conditional distributions are accounted for automatically based on asymptotic theory we formulate practical guidelines for choosing the bandwidth depending on the sample size we conclude with an application to historical returns and trading volumes of the standard and poor s index which indicates that the evidence for volume granger causing returns is weaker than suggested by the hiemstra jones test

booming sector and de industrialisation in a small open economy this paper presents a theoretical analysis of the dutch disease the phenomenon whereby a boom in one traded goods sector squeezes porfitability in other traded goods sectors both by directly bi

world oil and agricultural commodity prices evidence from nonlinear causality abstract the increasing co movements between the world oil and agricultural commodity prices have renewed interest in determining price transmission from oil prices to those of agricultural commodities this study extends the literature on the oil agricultural commodity prices nexus which particularly concentrates on nonlinear causal relationships between the world oil and three key agricultural commodity prices corn soybeans and wheat to this end the linear causality approach of toda yamamoto and the nonparametric causality method of diks panchenko are applied to the weekly data spanning from 1994 to 2010 the linear causality analysis indicates that the oil prices and the agricultural commodity prices do not influence each other which supports evidence on the neutrality hypothesis in contrast the nonlinear causality analysis shows that i there are nonlinear feedbacks between the oil and the agricultural prices and ii there is a persistent unidirectional nonlinear causality running from the oil prices to the corn and to the soybeans prices the findings from the nonlinear causality analysis therefore provide clues for better understanding the recent dynamics of the agricultural commodity prices and some policy implications for policy makers farmers and global investors this study also suggests the directions for future studies

why have divorce rates fallen the role of women s age at marriage american divorce rates rose from the 1950s to the 1970s peaked around 1980 and have fallen ever since the mean age at marriage also substantially increased after 1970 i explore the extent to which the rise in age at marriage can explain the decrease in divorce rates for cohorts marrying after 1980 using data from the survey of income and program participation 1979 national longitudinal survey of youth and national survey of family growth three different empirical approaches suggest that the increase in women s age at marriage is the main proximate cause of the fall in divorce rates

inflation employment and the dutch disease in oil exporting countries a short run disequilibrium analysis the author uses nontraded goods and labor shortages in the gulf countries the decline of the traded goods sector in oil producers dutch disease and the absence of employment benefits of higher oil revenues in latin american oil producers higher oil revenues can be likened to a transfer putting pressure on non oil traded nt goods prices and drawing resources out of the t sector the slope of the wage indexation line determines whether classical unemployment or repressed inflation results various policy measures are analyzed 3 references 8 figures

waiting for mr right rising inequality and declining marriage rates abstract this paper demonstrates that women search longer for their first or second husband in cities with higher male wage inequality and examines several alternative explanations a causal link is established by controlling for city fixed effects and city specific time trends and by using inequality in the woman s state of birth as a proxy for local male inequality increasing inequality explains about 25 of the marriage rate decline over the last few decades and this is not due to the endogenous moving or labor force decisions of women nor to the marital decisions of men in reaction to changes in their own wages

energy efficiency in world bank power sector policy and lending new opportunities abstract this paper examines the role of and opportunities for energy efficiency in the world bank s electric power sector policy and lending it finds that the dynamic environment in which the bank operates provides substantial opportunity for the bank to more effectively fulfill its mandate through an aggressive effort to develop the energy efficiency market opportunities in its client countries the paper finds a variety of market conditions that indicate both an opportunity for the bank in efficiency markets and a need for bank influence in the development of these markets in assessing the bank s current policy and lending practices the paper finds that the bank continues to be fundamentally oriented towards the traditional supply side measures that have long defined the bank s focus between 1992 and 1996 less than one half of one percent of the bank s power sector loans financed demand side efficiency improvements by neglecting the significant potential for demand side efficiency improvements the bank is missing major opportunities to fulfill its mandate in developing countries and capitalize on the investment opportunities in this business in new markets as the flow of private sector financing to developing country power sectors grows the bank s continued focus on traditional supply side investments is increasingly inconsistent with its mandate to be a lender of last resort yet more importantly in neglecting the emerging energy efficiency market the bank is missing a strategic opportunity to foster environmentally sound development in developing countries and establish a vital new role for itself in the dynamic power sector the paper recommends that the bank take advantage of this opportunity by adopting a new approach to the power sector one that combines continued pricing reforms with institutional reforms and capital investments in both demand side efficiency and supply side expansion towards this end it identifies ways in which the bank could finance large scale investments in demand side efficiency in developing countries finally the paper suggests that only by considering such energy efficiency investments early in the project identification process rather than as an add on to projects fundamentally conceived as supply side projects will the full potential for such investments be realized

adjustment and income distribution in an agricultural economy a general equilibrium analysis of cameroon abstract to distinguish policy packages that have favorable characteristics for both structural adjustment and income distribution this paper uses static and dynamically optimizing simulations of a computable general equilibrium cge model based on detailed country and household data from cameroon model results indicate that public spending to reduce transport and marketing costs are beneficial for the poor and for economic growth even at the expense of competing public investments

the economics of child custody i develop a model of marriage in which spouses decide on investments in child quality during marriage and on the allocation of child custody should they divorce the custodial allocation determines the share of the marital surplus each spouse appropriates which in turn influences spouses investment incentives the custodial allocation therefore has both distributional and efficiency consequences i derive the equilibrium investments and optimal custodial allocation and identify three channels through which making divorce easier affects child welfare investments in child quality during marriage the likelihood of divorce and the allocation of custody if divorce occurs

oil price agricultural commodity prices and the dollar a panel cointegration and causality analysis abstract this study examines the dynamic relationship between world oil prices and twenty four world agricultural commodity prices accounting for changes in the relative strength of us dollar in a panel setting we employ panel cointegration and granger causality methods for a panel of twenty four agricultural products based on monthly prices ranging from january 1980 to february 2010 the empirical results provide strong evidence on the impact of world oil price changes on agricultural commodity prices contrary to the findings of many studies in the literature that report neutrality of agricultural prices to oil price changes we find strong support for the role of world oil prices on prices of several agricultural commodities the positive impact of a weak dollar on agricultural prices is also confirmed

oil curse and finance growth nexus in malaysia the role of investment abstract we empirically examine the existence of an oil curse in the finance growth nexus in malaysia we provide new insights into the oil curse phenomenon in malaysia that challenges the conventional argument that malaysia is a counter example of an oil curse country we do not find any significant evidence of direct effects of financial development on tfp however there are direct and positive effects on the level of investment due to financial development and oil dependence while we do not find statistical evidence of a direct negative impact of oil rent on economic growth our results reveal that the symptoms of an oil curse exist specifically we find that oil rent has a weak indirect impact on the finance growth nexus through the quantitative channel or investment quantity the policy implications of our findings are that the financial sector should be more involved in productive investment activities that can strengthen its role in economic growth and that policymakers should reduce dependence on oil and promote economic diversification

exogenous impacts on the links between energy and agricultural commodity markets abstract the main purpose of this paper is to identify the effects of exogenous factors which have been somewhat controversial on the price links between the energy and agricultural commodity markets our study differs from other studies by employing multivariate normal mixture models to capture the structural properties of the price dependencies in the underlying states this paper investigates price dependencies from both quantitative and structural perspectives by analyzing the overall dependencies and structural heterogeneity in the empirical results we conclude that the global financial crisis is the most influential shock on the price links between energy and agricultural commodities because price links are vulnerable to financial shocks our results also suggest introducing state based analysis to risk management and portfolio diversification across the energy and agriculture markets during times of turmoil

divorce and the cognitive achievement of children children of divorced parents exhibit lower test scores and educational attainment have these correlations a causal interpretation parents who divorce may be less likely to invest in their children while together or they may divorce to shield their children from the effects of marital conflict i study the relationship between children s achievement and the marital status of their parents within a dynamic framework in which partners decide on whether to remain married how to interact with or without conflict and child investments i then assess whether a child whose parents divorced would have been better off had divorce not occurred

women s college decisions how much does marriage matter this article investigates the sequential college attendance decision of young women and quantifies the effect of marriage expectations on their decision to attend and graduate from college a dynamic choice model of college attendance labor supply and marriage is formulated and structurally estimated using panel data from the nlsy79 the model is used to simulate the effects of no marriage benefits and finds that the predicted college enrollment rate will drop from 58 0 to 50 5 using the estimated model the college attendance behavior for a younger cohort from the nlsy97 is predicted and used to validate the behavioral model

political pricing of electricity can it go with universal service provision abstract political parties in india are known to use electricity prices as a tool to secure a win in the democratic election process this article examines the setting of electricity prices from a political economy perspective citizens differ in their willingness to pay for electricity and the consumer surplus and electoral uncertainty seem to influence their choices while exercising their franchise to win political parties must receive a majority of votes and a party in power may try to achieve this by choosing to ignore a consumer group either by charging a price higher than their willingness to pay or by choosing to satisfy them by charging a lower price two theoretical models are proposed the first model computes the possible prices when common perfectly correlated electoral shocks are anticipated while the second model computes the possible prices for independent and identically distributed electoral shocks we test these models with available data on willingness to pay and electricity price for agricultural domestic and industrial consumers in an indian state by generating prices that would be charged to each of these types of consumers to maximize the chances of re election actual prices seem to confirm the second model more than the first

social insurance and the marriage market social insurance is often linked to marriage existing evidence suggests small marital responses to financial incentives and stems from settings where benefits are realized in the near future i an

job displacement disability and divorce earnings shocks should affect divorce probability by changing a couple s expected gains from marriage we find that the divorce hazard rises after a spouse s job displacement but does not change after a spousal disability this difference casts doubt on a purely pecuniary motivation for divorce following earnings shocks since both types of shocks exhibit similar long run economic consequences furthermore the increase in divorce is found only for layoffs and not for plant closings suggesting that information conveyed about a partner s noneconomic suitability as a mate due to a job loss may be more important than financial losses in precipitating divorce

labor supply and marital separation panel data are used to estimate the effect of marital separation on labor supply female labor supply increases substantially and male labor supply declines marginally lending support to the theory of specialization within the household the most interesting finding is that women began to increase their labor supply well before the actualsplit occurs suggesting either that shocks to labor supply change divorce probabilities or that women with a higher likelihood of divorcework more this argument is pursued by constructing and estimating a simultaneous model of labor supply and divorce risk copyright 1986 by american economic association

consume now or later time inconsistency collective choice and revealed preference this paper develops a revealed preference methodology for exploring whether time inconsistencies in household choice are the product of nonstationarities at the individual level or the result of individual heterogeneity and renegotiation within the collective unit an empirical application to household level microdata highlights that an explicit recognition of the collective nature of choice allows the vast majority of household behaviour to be rationalised by theory that assumes preference stationarity at the individual level for our particular short panel data set simply permitting limited intrahousehold heterogeneity in time preferences allows the choices of 98 4 of the sample to be rationalised by a model that assumes exponential discounting at the individual level we also find that couples characterized by lower divergence in spousal discount rates are older more likely to have children and wealthier which we take as indications of experiencing higher match quality

assortative matching under asymmetric information evidence from malawi asymmetric information is a key feature of the marriage market in hiv endemic settings hiv risk is an important partner attribute that may influence marriage timing and partner selection we use a sample of married women in rural malawi to validate a model of positive assortative matching under asymmetric information several correlations support this framework suggesting that hiv risk contributes to adverse selection in the marriage market in this setting

world oil prices and agricultural commodity prices evidence from an emerging market abstract oil prices are thought to have direct effect on agricultural prices followed by an indirect effect through the exchange rate this paper examines the short and long run interdependence between world oil prices lira dollar exchange rate and individual agricultural commodity prices wheat maize cotton soybeans and sunflower in turkey to this end the toda yamamoto causality approach and generalized impulse response analysis for identification of the long and short run interrelationships are applied to the monthly data spanning from january 1994 to march 2010 the impulse response analysis suggests the turkish agricultural prices do not significantly react to oil price and exchange rate shocks in the short run the long run causality analysis reveals that the changes in oil prices and appreciation depreciation of the turkish lira are not transmitted to agricultural commodity prices in turkey hence our results support neutrality of agricultural commodity markets in turkey to both direct and indirect effects of oil price changes

dynamic marriage matching an empirical framework the paper proposes a dynamic version of the frictionless becker shapley shubik marriage matching model with transferable utility its primary objective is to develop a tractable model that rationalizes the marriage distribution of who marries whom by age this behavioral dynamic model rationalizes a new marriage matching function an empirical methodology that relies on the equilibrium outcomes of the model identies the marital preferences over spouses this framework also allows the inverse problem of computing the vector of aggregate marriages given a new distribution of available single individuals and estimated preferences to be solved the solution to this inverse problem has been shown to exist under mild conditions this paper also develops a simple test of the model s empirical validity using aggregate data of new marriages and available single men and women in the us in 1970 1980 and 1990 i investigate the changes in the gains to marriage over this period

matching finding a partner for life or otherwise how do job worker and husband wife relationships form and why do some matched pairs subsequently separate economists and game theorists are in the process of developing and applying an equilibrium explanation of match formation and separation based on the principle of voluntary pairing under competitive conditions the purpose of this paper is to assess the current state of these developments the general existence of patnership structures with the property that no one has an incentive to separate has been established these equilibrium structures maximize aggregate value over the set of all feasible match structures in the transferable utility case according to this pure theory of matching competition for partners can be expected to yield equilibrium match structures that are both stable and socially efficient at least under conditions of frictionless certainty search theoretic models that take account of meeting costs and initial uncertainty about match values have been developed to explain sepa

oil windfalls and export diversification in oil producing countries evidence from oil booms abstract this paper examines the factors behind export diversification in oil countries specifically we investigate the impact of oil booms on export diversification through an empirical framework the paper finds that economy s export structure before the oil boom determines whether oil windfalls might affect the diversification process thus an oil boom negatively affects export diversification only if countries initially exhibit low levels of diversification in countries with a high level of diversification before the boom an oil boom has no impact on diversification these results are based on a large sample of 134 countries and are robust to various sensitivity analyses they are corroborated with data from the manufacturing sector which show that oil booms only reduce diversification in countries with a small manufacturing sector prior to the boom

unilateral divorce versus child custody and child support in the u s this paper explores the response of the divorce rate to law reforms introducing unilateral divorce after controlling for law reforms concerning the aftermath of divorce which are omitted from most previous studies we introduce two main policy changes that have swept the us since the late 1970s the approval of the joint custody regime and the child support enforcement program because those reforms affect divorce decisions by counteracting the reallocation of property rights generated by the unilateral divorce procedure and by increasing the expected financial costs of divorce it is arguable that their omissions might obscure the impact of unilateral divorce reforms on divorce rates after allowing for changes in laws concerning the aftermath of divorce we find that the positive impact of unilateral divorce reforms on divorce rates does not vanish over time suggesting that the coase theorem may not apply to changes in divorce laws supplemental analysis developed to examine the frequency of permanent shocks in us divorce rates indicates that the positive permanent changes in divorce rates can be associated with the implementation of unilateral divorce reforms and that the negative permanent changes can be related to the law reforms concerning living arrangements in the aftermath of divorce this seems to confirm the important role of these policies in the evolution of divorce rates

the economics of the marriage contract theories and evidence abstract we analyze the role of the marriage contract we first formalize three prominent hypotheses on why people marry marriage provides an exogenous payoff to married partners it serves as a commitment device and it serves as a signaling device for each theory we analyze how a reduction in the costs of divorce affects the propensity to divorce for couples at any given duration of marriage we then use individual marriage and divorce certificate data from the united states to bring these alternative views of the marriage contract to bear on the data we exploit variations in the timing of the adoption of unilateral divorce laws across states to proxy a one off and permanent reduction in divorce costs the results suggest that the dominant reason that couples enter into a marriage contract is that it serves as a commitment device

power sector reform in orissa an ex post analysis of the causal factors abstract from the early 1990s dramatic changes have been taking place in the structure of electricity supply industry esi worldwide the primary reasons for electricity sector reform has however been different for industrialised and developing countries the objective of this paper is to study and identify various factors leading to power sector reform in developing countries the restructuring of orissa state electricity board in india was used as a case study in identifying the various factors the factors that result in implementation of restructuring are a contextual factors they are the primary drivers for initiating reform the performance of the utility and the conditionalities of the lending agencies are contextual factors b trigger factor it is the determining factor that creates a compelling necessity to undergo restructuring the inability of the government to continue to support the utility acts as the trigger factor c facilitating factors they act as facilitators for initiating reform support of the government absence of a powerful lobby and the support of the top management are facilitating factors