group lending repayment incentives and social collateral abstract in this paper we investigate the impact on repayment rates of lending to groups which are made jointly liable for repayment this type of scheme especially in the guise of the grameen bank in bangladesh has received increasing attention we set up and analyze the repayment game which group lending gives rise to our analysis suggests that such schemes have both positive and negative effects on repayment rates the positive effect is that successful group members may have an incentive to repay the loans of group members whose projects have yielded insufficient return to make repayment worthwhile the negative effect arises when the whole group defaults even when some members would have repaid under individual lending we also show how group lending may harness social collateral which serves to mitigate its negative effect

probability and timing of succession or closure in family firms a switching regression analysis of farm households in germany in a two step econometric approach that corrects for selectivity bias we analyse the determinants of the probability of succession and the timing of succession or closure in a unique sample of 233 north german family farms we set up the succession decision as an intertemporal optimization problem the empirical results show that larger and more profitable farms which are specialized in dairy production are significantly more likely to have an intra family successor we find that a nonagricultural education of the current manager or the successor delay succession when the family decided to stop farming operations nonagricultural education of the owner delays closure of the farm closure occurs earlier if the manager is able to lease out the land in the process of retirement although farm households react to incentives originating from tax and pension regulations many important determinants of succession are beyond the control of policymakers

gender and microfinance performance why does the institutional context matter summary this paper investigates why and under which institutional circumstances female membership in microfinance institutions mfi improves mfi performance in terms of debt repayment specifically this paper theorizes that female membership in mfis improves the mfi s performance through enhanced debt repayment especially under adverse cognitive and regulatory institutional conditions we draw upon unique qualitative and quantitative data covering 26 microfinance projects in 22 african eastern european latin american and asian countries this study has implications for the microfinance literature in that it challenges the widely held assumption that female participation has a positive effect on mfi performance under all institutional circumstances

wage labour activities by agricultural households in nicaragua this article considers wage labour activities by agricultural households in nicaragua it analyses the role of 1 comparative advantage as determined by individual and household characteristics and 2 agricultural conditions and market imperfections in shaping wage labour supply an econometric specification is developed which allows for random household specific effects results reveal that non agricultural wage work is largely determined by comparative advantages whereas agricultural wage work is used to deal with a number of agricultural conditions and market imperfections

does unemployment insurance crowd out spousal labor supply previous research on unemployment insurance ui has emphasized the program s effect on individual search behavior this state contingent income may also reduce the labor supply of family members during the unemployment spell we investigate this question within the context of wives labor supply responses to their husbands unemployment spells we find strong crowdout of this form of family self insurance our estimates imply that for each dollar of ui receipt wives earn up to 73 cents less the reduction in spousal hours of work is over 40 as large as previous estimates of the effect of ui on search time of husbands

is consumption smooth at the cost of volatile leisure an investigation of rural india this study examines the institutions in rural india that enable households to insure against unanticipated idiosyncratic shocks to income using a decentralized general equilibrium model it tests for consumption and leisure insurance against unanticipated income shocks it is found that differential access to markets particularly financial markets force villagers to differ in their response to similar shocks medium and large farmers have unrestricted access to credit markets and are unaffected by unanticipated changes in household income the small farmers are excluded from credit markets however some of the small farmers are able to insure consumption against unanticipated income shocks through compensating changes in labour market participation and reducing own farm work

an empirical analysis of the demand for multiple peril crop insurance knowledge of factors affecting farmer purchases of crop insurance is essential for evaluating the soundness and profitability of crop insurance programs despite this importance the demand for crop insurance has received limited empirical attention the present paper reports on an empirical assessment of the demand for crop insurance by iowa corn producers adverse selection in the insured pool suggests that producers with differing levels of loss risk have different demand elasticities loss risk is included in the empirical analysis and is found to influence the elasticity of demand results show average demand elasticities of about 0 32 for relative insured acres and 0 73 for liability per planted acre implications for the actuarial soundness of the industry are provided

technology productivity and the multinational enterprise this article reviews the relevance of the transactions costs model to the role of the firm in production and diffusion of knowledge a revival of interest in technology productivity and growth has generated a new empirical and theoretical literature a review of these developments suggests that they have not yet been reflected in significant adaptation of the conventional firm versus market concept research has been severely hampered by data gaps and suggestions are made with respect to improvements in the information base finally technology issues are and will be of increasing significance in both domestic and international policy and must be factored into the conceptual template of corporate strategy

microenterprise credit programs deja vu abstract microenterprises in low income countries are the target of an increasing number of credit programs these efforts resemble earlier problematic attempts to assist operators of small farms with credit similarities discussed include target group definition assumptions policies and project justifications authors go on to list a dozen lessons from the experience with small farmer credit that might apply to microenterprise credit efforts authors then conclude that debt is not an effective tool for helping most poor people to enchance their economic conditions be they operators of small farms or microenterprises

the future of farm policy analysis a household perspective farms farmers farm families and even farm policy have changed since the new deal now it is time to bring the methods of farm policy analysis and the scope of data collection up to date agricultural economics by tradition an empirical discipline can once again offer important insights into the design implementation and effectiveness of policy to succeed in this century though requires an emphasis on understanding microeconomic behavior at the farm household level

national culture and expatriate deployment we hypothesize that expatriate deployment is a control function predicted by home country culture dimensions with transaction cost and agency repercussions rather than culture in the aggregate this departure from the traditional conceptualization and measurement of cultural impact also yields a hypothesized asymmetrical effect which is tested for a multi country sample of 236 multinational subsidiaries using multiple measures of national culture hypotheses are supported with assertiveness and power distance confirmed as prime predictors of expatriate deployment

risk and farm operator labour supply this study uses a large increase in us federal crop insurance subsidies as a natural experiment to identify the importance of risk for farm operator labour supply subsidy increases induced greater crop insurance coverage which in turn reduced farmers financial risks crop insurance participation data are merged with farm level census of agriculture data from 1992 and 1997 to compare how individuals off farm labour supply changed in response to the policy induced change in insurance coverage the empirical approach controls for unobserved heterogeneity and accounts for the censored nature of the data it is found that greater insurance coverage reduces the off farm labour supply of operators who produced at least 100 000 of output and increased the labour supply of small farm operators who produced less than 25 000 of output

testing the bargaining hypothesis in the manufacturing sector in developing countries the bargaining power model of hc mnc host country multinational corporation interaction conceives of economic nationalism in terms of rational self interest and assumes both inherent conflict and convergent objectives in extractive industries there is strong evidence that outcomes are a function of relative bargaining power and that as power shifts to developing hcs over time the bargain obsolesces a cross national study of the bargaining model using data from 563 subsidiaries of u s manufacturing firms in forty nine developing countries indicates that while the bargaining framework is an accurate model of mnc host country relationships manufacturing is not characterized by the inherent structurally based and secular obsolescence that is found in the natural resource industries shifts in bargaining power to hcs may take place when technology is mature and global integration limited in industries characterized by changing technologies and the spread of global integration the bargain will obsolesce very slowly and the relative power of mncs may even increase over time

farm income variability and the supply of off farm labor if farmers are risk averse greater farm income variability should increase off farm labor supply this effect is confirmed for a sample of kansas farmers off farm employment of farmers and their spouses is also found to be significantly influenced by farm experience off farm work experience farm size leverage efficiency and farm specific education in addition farm operators and spouses who receive significant income support through government farm programs are less likely to work off the farm this may suggest that policy changes reducing farm income support payments may increase off farm employment of farmers and their spouses

testing expected utility maximization under price and quantity risk with a heterogeneous panel refutable implications based on the curvature properties of the indirect utility function for the competitive firm operating under uncertainty are extended to the case of both price and quantity uncertainty using unit roots and cointegration tests for heterogeneous panels a model of us agricultural production is developed based on the time series properties of a panel of state level data most refutable hypotheses under output price and output quantity risk are not rejected but symmetry conditions implied by a twice continuously differentiable indirect utility function are rejected the same test conclusions are obtained from a traditional model that presumes stationarity in all variables

rural financial markets in developing countries their use and abuse until recently the use of agricultural credit as a developmental tool seemed clear and straightforward most concerned people believed that increases in the volume of cheap credit were necessary to boost agricultural production and that the rural poor could be brought into the mainstream of development through supervised credit programs it seemed that certain ideal types of rural credit institutions offered the promise of meeting farmers credit needs and that experience in the industrialized countries with cooperatives and specialized agricultural finance institutions could be effectively transplanted to low income countries this collection of readings highlights facets of rural financial markets that have often been neglected in discussions of agricultural credit in developing countries it moves beyond a narrow concern with the simple provision of credit to a broad consideration of the performance of rural financial markets and of ways to improve the quality and range of financial services for low income farmers it reflects new thinking on the design administration evaluation and policy framework of rural finance and credit programs in developing countries

anticipated and unanticipated wage changes wage risk and intertemporal labor supply in this article i estimate how labor supply responds to anticipated wage growth unanticipated wage growth and wage risk using the 1989 93 panel section of the bank of italy survey of households income and wealth shiw which collects individual expectations of future wages the use of subjective expectations has several advantages first they provide information on the evolution and riskiness of future wages that the econometrician may never hope to observe moreover this avoids the need for specifying instruments for the growth rate of wages finally forecast errors can be directly controlled for thus avoiding inconsistency in short panels

full insurance in the presence of aggregate uncertainty this paper tests implications of full consumption insurance the object is to determine how much mileage can be obtained from a model with complete markets with such features as private information or liquidity constraints omitted the implication exploited is that individual consumption responds to aggregate risk but not to idiosyncratic risk the test involves regressing the change in household consumption onto the change in aggregate consumption and other right hand side variables such as the change in household income and change in employment status all variables other than the change in aggregate consumption are predicted to be insignificant in explaining the change in household consumption with observations on consumption and income for 10 695 households from the consumer expenditure survey the results are mixed the results for one specification exponential utility are mostly consistent with full consumption insurance the results for the other specification power utility are not

tax revenue and the marginal cost of public funds in sweden abstract we assess the welfare cost of raising a marginal unit of tax revenue in a balanced budget general equilibrium framework the calculated social cost of an increment of public funds is sensitive to both the specific type of tax increase and the type of public spending used on the margin best guess assumptions on labor supply elasticities yield marginal costs of public funds for different fiscal mixes of between 0 67 and 4 51 at prevailing tax rates in sweden alternative labor supply assumptions well within the range of current estimates substantially affect the results and can imply infinite marginal welfare costs marginal welfare costs are also sensitive to assumptions about both the income and substitution effects of labor supply

risk financial markets and human capital in a developing country this paper explores the link between financial market incompleteness and human capital accumulation we examine how child school attendance responds to seasonal fluctuations in the income of agrarian households using panel data from rural india to pinpoint market imperfections we study responses to aggregate and idiosyncratic as well as to anticipated and unanticipated income shocks our main finding is that seasonal fluctuations in school attendance are a form of self insurance but one which does not result in a substantial loss of human capital on average

the impact of coupled and decoupled government subsidies on off farm labor participation of u s farm operators with the 1996 farm act the united states introduced payments that were designed to be decoupled labor allocation choices are likely to be affected by receipt of payments and income from off farm jobs has been the major source of income for most farm households for sometime this article examines whether the 1996 change has affected the off farm labor participation of farm households we conclude that the observed increase in off farm participation of farm operators who received payments was not the result of the 1996 policy change government payments whether coupled or decoupled have a negative effect on off farm labor participation

the off farm labor supply of farmers theoretical and empirical models are developed to examine the off farm wages labor force participation and hours of work of farmers econometric estimates use data from a 1971 survey of illinois farmers the off farm wage depends on farmer human capital and the local labor market the major result confirms the sensitivity of off farm work to economic incentives a 10 increase in the off farm wage entails an 11 increase in hours of off farm work holding farm characteristics constant results also indicate effects of seasonality risk and life cycle factors on off farm work

are the poor less well insured evidence on vulnerability to income risk in rural china the authors test how well consumption is insured against income risk in a panel of sampled households in rural china they estimate the risk insurance models by generalized method of moments treating income and household size as endogenous insurance exists for all wealth groups although the hypothesis of perfect insurance is universally rejected those in the poorest wealth decile are the least well insured with 40 percent of an income shock being passed on to current consumption by contrast consumption by the richest third of households is protected from almost 90 percent of an income shock the extent of insurance in a given wealth stratum varies little between poor and nonpoor areas

technology transfer and public policy a review of research and theory abstract my purpose is to review synthesize and criticize the voluminous multidisciplinary literature on technology transfer to reduce the literature to manageable proportions i focus chiefly not exclusively on recent literature on domestic technology transfer from universities and government laboratories i begin by examining a set of fundamental conceptual issues especially the ways in which the analytical ambiguities surrounding technology transfer concepts affect research and theory my literature review follows and i emphasize technology transfer s impact and effectiveness i employ a contingent effectiveness model of technology transfer to organize the literature as the model s name implies it assumes that technology effectiveness can take a variety of forms in addition to examining the more traditional effectiveness criteria those rooted in market impacts the model considers a number of alternative effectiveness criteria including political effectiveness capacity building

informal credit markets and economic development in taiwan abstract taiwan is a case which shows how informal credit markets help to compensate for the limitations of the formal financial system especially in satisfying the needs of medium and small enterprises government regulations and policies affect the way participants in informal credit markets solve selection enforcement and incentive problems recent changes demonstrate the continued resilience and relevance of informal credit markets during a process of financial liberalization

insurance and rural welfare what can panel data tell us assessing the scope for insurance in rural communities usually requires a structural model of household behaviour under risk one of the few empirical applications of such models is the study by rosenzweig and wolpin 1993 who conclude that indian farmers in the icrisat villages would not benefit from the introduction of formal weather insurance in this article we investigate how models such as theirs can be estimated from panel data on production and assets we show that if assets can take only a limited number of values the coefficients of the model cannot be estimated with reasonable precision we also show that this can affect the conclusion that insurance would not be welfare improving

labour supply effects of unemployment insurance benefits data from the 1976 wave of the panel study of income dynamics are employed to study the effect of unemployment insurance ui benefits on weeks worked ols regressions to model labour supply behaviour are estimated for both recipients and nonrecipients of ui benefits we find some inteesting differences between the labour supply behaviour of ui recipients and nonrecipients

why farmers quit a county level analysis we identify the effects of alternative explanatory variables on the propensity of u s farmers to cease farming with a particular emphasis on understanding the roles of off farm employment and federal farm program payments conventional ordinary least squares analysis using all counties suggests that off farm employment has no statistical effect on the net number of farmers quitting between 1987 and 1997 ceteris paribus a more refined analysis which separates counties losing farmers from those that gained farmers reveals subtle and less clear cut effects of off farm employment and federal program payments on farm exits copyright 2001 oxford university press

income risk and allocation of labour time an empirical investigation this study investigates the behaviour of risk averse farm operators in response to farm income and employment variability economic theory maintains that greater farm income variability should incr

labor supply under wage uncertainty abstract we consider an agent in an atemporal setting facing an increase in the uncertainty of her uncertain wage more labor is supplied given small initial wage uncertainty by a person with a ces utility function with an elasticity greater than unity we relate this result to an extended measure of decreasing relative risk aversion a cobb douglas person makes no change in her labor supply in response to increased wage uncertainty

determinants of economic well being among u s farm operator households participation in government programs has a mild impact on the economic well being of u s farm households major factors that determine farm household prosperity are the primary operator s education level and ethnicity education level of the spouse and other characteristics such as forward purchasing of inputs use of contract shipping of products having a succession plan farm ownership and location in a metro area this article uses the 2001 agricultural resource management survey arms as well as relative and an absolute measure to assess u s farm households economic well being the relative measure compares the income and wealth position of farm households relative to median income and median wealth of the general population the absolute measure adds annualized wealth to a farm household s income

how valuable is on farm work to farmers in this article we estimate a rural household model that allows specific tastes for working on farm and can fit the data as well as the general model of lopez we use two samples that are matched by individual characteristics and adopt the method for matched surveys proposed by arellano and meghir we replicate using french data the empirical finding of elhorst who reports evidence that implicit wages of on farm family labor are significantly below off farm wages we then provide estimates of the lower bounds for preferences for on farm work for males and females which are significant and positive

unemployment risk labour force participation and savings this paper analyses labour force participation and precautionary savings in the presence of risks of being fired or failing to secure a job offer when out of the labour market we use a finite horizon framework with two employment states and a stage utility function which is cara in consumption but non separable in leisure the results are that there is precautionary labour force participation employment risk lowers the reservation wage generally it also reduces consumption however due to the non separability assumption precautionary savings as usually defined may not be positive we characterize the reservation wage and contrast the results with those in which the stage utility is additive in leisure and consumption we extend the analysis to study the effects of cyclical variation in employment risk of stochastic future wage rates and of adding a third employment state of search

parametric and semiparametric modeling of the off farm labor supply of agrarian households in transition bulgaria the reaction of labor marketsto economic reforms is an important indicator of the progress of transition because of diminished government support and the breakup of state and collective enterprises labor market adjustments in the transition economies have been particularly severe in the agricultural sector thisarticle evaluatesthe off farm labor market for a sample of agrarian households in transition bulgaria we give particular attention to the distributional assumptions that underlie standard approaches to the evaluation of labor supply a variety of specification tests are considered and support for standard maximum likelihood estimates which rely on normality as a maintained hypothesis is mixed alternative semiparametric distribution free estimators are also considered the empirical results indicate that five years after the initiation of the transition off farm labor supply patterns for bulgarian agricultural households are similar to what is commonly observed in developed market economies labor supply is positively affected by factors such as education and work experience which are hypothesized to increase off farm wages social benefit programs providing monetary or in kind support payments are shown to significantly decrease off farm work copyright 2002 oxford university press

disability insurance benefits and labor supply a critical input for assessing the optimal size of disability insurance programs is the elasticity of labor force participation with respect to the generosity of benefits unfortunately this parameter has been difficult to estimate in the context of the u s disability insurance program since all workers face an identical benefits schedule i surmount this problem by studying the experience of canada which operates two distinct disability insurance programs for quebec and for the rest of canada the latter program raised its benefits by 36 percent in january 1987 whereas benefits in quebec were constant i find a sizable labor supply response to the policy change my central estimates imply an elasticity of labor force nonparticipation with respect to disability insurance benefits of 0 28 0 36

modelling labour decisions of french agricultural households a joint model of labour decisions for farm couples is presented attention is given to operator and spouse participation decisions in the off farm labour market as well as the decision to use hired farm labour farm household labour choices which include both on farm and off farm work decisions and hired labour decisions are thus modelled as a household joint process the model is applied to a sample of french farm households empirical results illustrate the importance of spouse decisions on off farm labour participation and supply function structure they also show that operator labour and hired farm labour are complementary but wife labour and hired farm labour are substitutable

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

the determinants of vinegrowers employment and policy implications the case of a greek island this study investigates the employment of vinegrowers on a greek island samos where there exist attractive alternative employment opportunities particularly in the tourist sector the recent dramatic decline in the number of vinegrowers has been of great concern particularly to wine producers policy makers and local authorities because such a pattern has had and most importantly will have serious economic social and environmental implications the focus of this paper is on two issues first some descriptive statistics on the demographics of vinegrowers and characteristics of vineyards are presented and second a probit model is developed to identify the demographic and other determinants of the probability of off farm and off vineyard work participation the most important source of data information is primary data collected by the authors using a questionnaire which was completed by a representative sample of vinegrowers from the island of samos the empirical findings suggest that the promotion of vinegrowing requires policies that will enlarge the size of vineyards promote investments in human and physical capital and improve the public infrastructure

mighty oaks from little acorns can microenterprise serve as the seedbed of industrialization abstract how can microenterprises foster the development of an industrial sector featuring a dynamic medium or large enterprise sector we propose two possible mechanisms graduation of microenterprises and savings by microentrepreneurs we examine the barriers to both mechanisms and reexamine policies designed to aid the sector projects aimed at the enterprise level are not likely to remove barriers to firms graduating or saving changes in macro policy may have a positive effect reforms of the legal and regulatory environment may be very important and should be rethought with the mechanisms of the seedbed role specifically in mind

labor income and risky investments can part time farmers compete abstract in the developed countries a majority of farm households receive at least as much income from nonfarm sources as from the farm such part time farms have survived inspite of lower returns than full time farms this paper considers when lower returns to part time farming could be compensated by risk reduction due to diversification of income sources the paper uses a dynamic portfolio choice model with labor income the model and results could be applied in other contexts as well

family composition and off farm participation decisions in israeli farm households this article studies the relationship between the off farm participation behavior of farm operators and their spouses and the demographic composition of the household we focus on farm families without parents siblings or partners and examine the effects of the existence of elderly children of the farm couple we find that both the father and the mother tend to reduce their participation in off farm work as the number of elderly children rises this result holds even after controlling for observed characteristics we also find that the effect of elderly children stems from considerations related to both farm production and household production

smoothing consumption by smoothing income hours of work responses to idiosyncratic agricultural shocks in rural india while research has demonstrated that farm households in developing economies are able to protect consumption from idiosyncratic crop shocks little evidence shows how this is achieved this paper examines the extent to which labor markets allow households to shift labor from farm to off farm employment and the extent to which such a shift explains the observed lack of correlation between consumption and idiosyncratic crop shocks the empirical analysis uses a novel measure of the idiosyncratic crop income shock which utilizes information on start of season cropping choices to more accurately estimate household expectations of weather

household responses to economic and demographic shocks marginal logit analysis using indonesian data abstract we analyse the responses of indonesian households to demographic and economic shocks and examine how these responses vary in relation to the household s permanent income and the extent to which the shock is common across the community households respond in different ways to demographic and economic shocks economic shocks are more likely to result in a labour supply response from the household and this probability is further increased if the shock is common for rural households use of savings increases with permanent income the article also examines the role of the interviewer in influencing survey responses

rural credit markets and institutions in developing countries lessons for policy analysis from practice and modern theory this article presents evidence of the failure of government intervention in rural credit markets of ldcs in the past three decades it then shows how lessons for policy analysis can be drawn from modern theory particularly those theories focussing on credit rationing in competitive markets and interlinking of credit contracts with labor and land contracts the article outlines the policy implications of these theories and finds them insufficient to account for the empirical evidence it contends that a more systematic and rigorous analysis of institutions and institutional environments is essential for understanding and implementing effective policy reforms of rural credit markets it presents suggestions for undertaking such an analysis

credit market constraints consumption smoothing and the accumulation of durable production assets in low income countries investments in bullocks in india in this paper we formulate and estimate a finite horizon structural dynamic model of agricultural investment behavior that incorporates the major features of low income agricultural environments income uncertainty constraints on borrowing and rental markets and the use of investment assets to generate income and smooth consumption the model is fit to longitudinal indian household data on farm profits bullock stocks and pump sets the estimated structural parameters are used to assess the effects on the life cycle accumulation of bullocks agricultural profits and welfare associated with complete markets and bullock liquidity and with second best policies that provide assured sources of income to farmers and weather insurance

nonpecuniary benefits to farming implications for supply response to decoupled payments we develop a household model wherein farmers allocate labor to maximize utility from leisure consumption and nonpecuniary benefits from farming the model shows that farmers with decreasing marginal utility of income respond to higher decoupled payments by decreasing off farm labor and increasing farm labor resulting in greater agricultural output we then estimate the difference between farm and off farm returns to labor using data from three nationally representative farm household surveys the finding of a large on farm off farm wage differential provides compelling evidence of substantial nonpecuniary benefits from farming

real options approach to inter sectoral migration of u s farm labor the core of the literature on inter sectoral labor migration is based on net present value models of investment in which individuals are assumed to migrate to take advantage of positive wage differentials in this article we argue that a real options approach taken together with the adjustment costs associated with sectoral relocation may provide a basis for explaining the migration of farm labor out of the agricultural sector given the irreversibility of migration decisions and uncertainty in the economy potential migrants might choose to postpone migration even in the face of positive wage differentials using annual u s employment data from between 1948 and 2009 our results indicate that large elasticities between economic incentives and out farm migration are observed after a high threshold of wage differentials between farm and off farm sectors is surpassed

testing the response of consumption to income changes with noisy panel data this paper tests the rational expectations lifecycle model of consumption against i a keynesian model and ii the rational expectations lifecycle model with imperfect capital markets the tests are based upon the relative responsiveness of consumption to income changes that can be predicted from past information and income changes that cannot he predicted the tests allow for measurement error in income the results reject the keynesian model and generally support the lifecycle model but the results are not sufficiently precise to rule out the possibility that some households are liquidity constrained measurement error has a strong influence on the relationship between consumption and income

off farm work decisions of husbands and wives joint decision making theoretical and econometric models are developed to examine joint wage labor participation and hours decisions of a husband and wife in farm households the econometric model is multiple equation and recursive the specification of the off farm labor supply equation of the husband wife depends on whether his her wife husband does or does not work off the farm and this structure is endogenous the model is fitted to data for iowa farm households the main conclusion is that the off farm labor supply equation of a married individual differs significantly depending on whether his or her spouse also works for a wage copyright 1989 by mit press

an empirical model of labor supply in a life cycle setting this paper formulates and estimates a structural intertemporal model of labor supply using theoretical characterizations derived from an economic model of lifetime behavior a two step empirical analysis yields estimates of intertemporal and uncompensated substitution effects which provide the information needed to predict the response of hours of work to life cycle wage growth and shifts in the lifetime wage path

international technology transfer in services this study examines the nature of technology and the process of its transfer in five service industries from parent companies to foreign affiliates three principal research questions are posed what is the key technology in each industry what are the main methods for transferring this technology how and why do technology and transfer methods differ across firms industries and countries the empirical analysis shows that key technologies were generally knowledge of experience in the industry and methodology for producing the service transfer of the technology was mainly done through the training and transfer of experts and organizational forms were wholly owned subsidiaries and international partnerships more technology transfer occurred when firms were more international when affiliates were more recently established and when parent ownership was lower in the affiliate some evidence exists that more firm specific jointly produced technology leads to higher ownership percentage and greater transfer to affiliates

the supply of off farm labor a random coefficients approach a joint model of off farm labor decisions for farm operator and spouse is presented attention is given to operator and spouse participation decisions as well as associated problems of multiple sample selectivity biases two stage fixed and random coefficient methods corrected for possible selectivity biases are used to estimate supply function parameters results indicate that supply function parameters are random variation in important supply parameters is investigated results also illustrate the importance of spouse decisions on off farm labor supply function structure

conservation payments liquidity constraints and off farm labor impact of the grain for green program on rural households in china this study evaluates the labor response of rural households participating in the grain for green program in china the largest payments for ecosystem services program in the developing world using a panel data set that we designed and implemented we find that the participating households are increasingly shifting their labor endowment from on farm work to the off farm labor market however the effects vary depending on the initial level of human and physical capital the results support the view that one reason why the participants are more likely to find off farm employment is because the program is relaxing households liquidity constraints

income smoothing and consumption smoothing one way that risk averse households protect consumption levels is to borrow and use insurance mechanisms another way common in low income economies is to diversify economic activities and make conservative production and employment choices households thus tend toward limiting exposure only to shocks that can be handled with available credit and insurance typically both types of mechanisms are studied independently but much more can be learned by studying them together first we obtain a more complete picture of risks costs and insurance possibilities second it opens the way to considering biases in standard tests of credit and insurance

consumption insurance an evaluation of risk bearing systems in low income economies the hypothesis of full risk sharing can be taken to data from low income countries and evaluate formal and informal financial systems in many contexts idiosyncratic risks are high so credit insurance arrangements could be beneficial statistical tests reveal that households in southern india take advantage of these possibilities villages in cote d ivoire and countries in thailand do not do as well the paper includes an empirical description of the devices used to smooth consumption and a theoretical discussion of private information and incentives on ideal operating systems the full information and mechanism design frameworks provide benchmarks for policy analysis

multiple job holdings among dairy farm families in new york and ontario abstract previous empirical studies of multiple job holding have tended to focus on the characteristics of those obtaining off farm employment and the factors affecting the hours supplied to those obtaining off farm activities none of these studies have explicitly addressed the reasons behind the decision to seek off farm employment neither have they been able to examine in depth the important issue of how this major component of the farm sector responds to alternative policies since most studies have used cross sectional data for a given region a comparison between countries would permit the analysis of how multiple job holding responds to differing government policies the purpose of this paper is to examine the reasons for and factors affecting multiple job holdings of dairy farm families in neighboring regions of two counties united states and canada the bordering regions of new york and ontario have similar geographic conditions but significantly different farm support and social service policies the results indicate the importance of farm income on why people work off the farm and provide evidence of multiple job holding as a flexible mechanism for coping with changes in the economic environment facing the household for operators the driving characteristics influencing off farm labor participation is the farm s financial position the supply managed milk marketing system ensures higher and more stable returns for ontario dairy farm labor in contrast it is family demographics educational level and social support policy that appears to largely influence spousal off farm employment decisions free medical care in ontario lowers the reservation wage for household members the effect of these farm and social support policies on the relative returns to labor in agriculture and non farm employment explains the lower participation rate and hours supplied in off farm work by both operators and hours supplied in off farm work by both operators and spouses in ontario dairy farm household

risk and insurance in village india comment the protection of poor households in high risk agrarian economies from shocks to their incomes has often been seen as a compelling motive for various forms of policy intervention including transfers of cash or food credit subsidies and public employment schemes for a survey see lipton and ravallion 1995 the desirability of such safety net policies clearly depends on how well pre existing risk sharing arrangements work while it is commonly thought that without effective policy intervention rural households are vulnerable to village wide shocks such as adverse prices or poor rains it is less clear to what extent risk sharing institutions within the village mitigate the effects of idiosyncratic income risk stemming for instance from ill health or localized crop damage 2 several recent papers have used household level data to implement tests of risk sharing that might inform such concerns 3 these tests are based on the proposition that with perfect risk sharing consumption at the household level should be insured against idiosyncratic risks and thus depend solely on the realization of the aggregate risk wilson 1968 diamond 1967 townsend 1994 tests this implication of perfect intra village risk sharing using longitudinal household data on consumptions and incomes for three villages in india he reports that the full insurance hypothesis provides a surprisingly good benchmark in that household consumptions co move and do not appear to be much influenced by contemporaneous own income our aim here is to examine the robustness of this potentially important finding we have two main concerns the first is that the specification townsend adopts potentially biases his test towards the null hypothesis of full insurance because it yields inconsistent estimates of the key test parameter under a plausible alternative we therefore estimate a different specification that generates consistent estimates under both the null and the alternative our second concern is that a particular form of measurement error in the consumption data townsend uses may have further biased his results toward the null hypothesis of full insurance to address this concern we use an instrumental variables procedure when we implement the test of consumption insurance with townsend s consumption data we also re estimate the test equations with a measure of consumption derived from the same underlying primary data by an alternate method finally townsend reports 1discussions with robert townsend stimulated our interest in this investigation the staff of the

investment credit and child labour it is generally assumed that credit has a positive effect on children s schooling among poor households this article shows that need not be the case when households obtain credit for investment purposes in fact investment loans may not have any effect on the likelihood of schooling for children who work in their family business our estimates confirm that this is the case credit used to finance investments has no effect on the odds of schooling for employed children this may be because investment loans increase children s labour productivity which in turn increases the opportunity cost of schooling the results of this study suggest that improving access to credit may not by itself constitute a solution to the problem of child labour in developing countries

a simple test of consumption insurance are consumers effectively insured against idiosyncratic shocks to income or wealth either by formal institutions such as charities private insurance and government programs or by informal mechanisms such as gifts and loans from relatives friends and neighbors under full insurance consumption growth should be cross sectionally independent of idiosyncratic variables that are exogenous to consumers this proposition is tested by cross sectional regressions of consumption growth on a variety of exogenous variables full insurance is rejected for long illness and involuntary job loss but not for spells of unemployment loss of work due to strike and an involuntary move

does risk matter the case of wage labour allocation by owner cultivators this study analyses the impact of revenue risk on the hiring out behaviour of owner cultivators since hiring out is not certain labour market risk is also allowed for a large sample of owner cultivators residing in semi arid regions in india and hence subject to high production and labour market risks is used for this purpose it is found that possibly because production risks carry forward into the local labour market households are unable to use the labour market as a hedge against production risk we also find that labour force participation is positively affected by increases in the real wage rate a result that is contrary to the findings of earlier studies using data from less developed agriculture several other insights also result

microenterprise lending to female entrepreneurs sacrificing economic growth for poverty alleviation abstract this research compares the performance of female and male entrepreneurs in a microenterprise credit program in guatemala previous research and field practice has suggested that targeting credit at female borrowers allows for greater increases in household welfare but that male entrepreneurs may more aggressively expand enterprises when given access to credit in this paper we develop a model that shows that increases in value of home time during childbearing years for women may substantially account for gender differences in responses to credit access empirical results from guatemalan survey data yield estimations consistent with the predictions from our model

household unemployment and the labour supply of married women a recent reform to the uk unemployment insurance ui system has reduced the duration of entitlement from 12 to six months the ui and welfare systems interact in the uk in such a way that exhaustion of ut for married individuals has potentially large disincentive effects on the labour supply of spouses a model of labour supply is estimated for married women allowing for endogenous unemployment durations of husbands and wives we distinguish between transfer programme induced incentive effects correlation between labour supply and wages within couples complementarity between the leisure times of spouses and a discouraged worker effect

microenterprise development programs in the united states and in the developing world abstract sparked by examples from bangladesh bolivia indonesia and other developing countries hundreds of microenterprise programs have been started in the united states will these us efforts be successful this paper reviews the evidence and concludes that microenterprise development is much more difficult in the united states than in the developing world the paper suggests some ways to address the challenges of us microenterprise development

fishing and nonfishing income decisions the role of human capital and family structure resource dependent households often diversify their income we model demand for remittances and supply of off resource labor as a joint decision and discuss household trade offs we extend the off farm labor supply literature to a rural fishery contrasting our results to common findings in the farm literature and providing empirical evidence of the interdependence between education and family structure in determining income diversification using a unique dataset from malaysia we find that more educated households are less likely to diversify their income with caveats depending on family composition policy implications for resource management in a remittance economy with alternative livelihoods are discussed

does household composition matter the impact of the grain for green program on rural livelihoods in china article i nfo this research introduces family composition into the sustainable livelihoods framework for policy analysis we apply this approach to a case study on the grain for green program in western china using recent survey data from zhouzhi county we show that the impact of the policy on rural livelihoods varies across household compositions the environmental program neither targets asset poor households nor does it necessarily shift the on farm labor to non farm sectors which would improve household incomes after controlling for the effect of assets households with children but without the elderly tend to have lower migration rates and lower incomes after participation in the program policy strategies should consider household heterogeneity particularly household composition in rural china

nonmarket institutions for credit and risk sharing in low income countries the design credit and risk institutions in low income countries provides one of the most exciting testing grounds for theories of contracting with imperfect information and limited enforcement this paper reviews some of the recent literature with a special focus on nonmarket institutions that cope with risk and provide credit this literature attempts to bring together insights from economic theory especially information economics contract theory and mechanism design theory however it is also applied being motivated by the circumstance of the poor countries that their authors have visited and studied

global market shocks and poverty in vietnam the case of rice world food prices have experienced dramatic increases in recent years these shocks affect food importers and exporters alike vietnam is a major exporter of rice and rice is also a key item in domestic production employment and consumption accordingly rice price shocks from the world market have general equilibrium impacts and as such their implications for household welfare are not known ex ante in this paper we first present a simple framework for understanding the direct and indirect welfare effects of a global market shock of this kind second we quantify the transmission of the price shock from global indicator prices to domestic markets third we then we use an applied general equilibrium age model to simulate the effects of domestic price changes in more detail fourth a recursive mapping to a large nationally representative living standards survey permits us to identify in detail the ceteris paribus effects of the shock on household incomes and welfare in this analysis interregional and intersectoral adjustments in the labor market emerge as key channels transmitting the effects of global price shocks across sectors and among households

the institutions and governance of economic development and reform why are the ambitions of economic development practitioners and reformers so often disappointed one answer is that development policymakers and reformers are congenital optimists another answer is that good plans are regularly defeated by those who occupy strategic positions an intermediate answer is that institutions are important yet are persistently neglected in the planning process the article takes a bottom up microanalytical approach to economic development and reform it examines the governance of contract investment and private ordering through the lens of transaction cost economizing and it assesses the efficacy of the de facto as against the de jure institutional environment with respect to credible commitments in effect institutional economists are cast in the role of archaeologists of economic reform and development with the task of unpacking the lessons of the past to inform choices and programs for the future

the problem of transaction costs in group based microlending an institutional perspective abstract to be financially viable group based microlending needs to economize on transaction costs for both lenders and borrowers group lending programs vary in their transaction cost characteristics depending on their specific credit delivery arrangements and social contexts this article illustrates these arguments by examining the challenges faced by various group lending programs worldwide it also examines how social capital or the lack of it affects the transaction costs and operations of three typical group lending arrangements group loan with joint liability individual loan with joint liability and individual loan with individual liability

risk coping and starvation in rural china we use a 3 year panel from two poor provinces in southern china to examine the nature of risks to which rural households are exposed and their ability to insure calorie consumption and spending of total consumption against idiosyncratic shocks to their income we find that idiosyncratic risks are indeed the main source of income variation in the sample consumption is better insured than total spending unlike total spending where full insurance is rejected in most cases calorie intake is completely insured for both land rich and land poor households in both provinces access to even modest amounts of land significantly enhances households ability to guard against total spending land rich households are much better insured against total spending than land poor households the results are robust across model specifications although generalized method of moments gmm estimations increase the magnitude of difference in total spending between the land rich and the land poor policies targeting poverty red

increasing consumer well being risk as potential driver of happiness abstractthis article investigates the relation between risk and individual well being we propose a theoretical model of happiness that makes a distinction between ex ante evaluations of happiness and ex post assessments the main assumptions of the model are tested through three studies based on anchoring vignettes we show that even if ex ante consumers fear high risk and do not associate it to a high level of happiness their ex post evaluation of well being is generally higher when identical consequences result from a high risk situation than from a low risk situation control over risk taking reinforces the gap between ex ante and ex post measures of happiness thus our article provides empirical evidence about a positive relation between risk and individual well being suggesting that risky experiences have the potential to increase consumer well being

who does dot respond to the agricultural resource management survey and does it matter the agricultural resource management survey is the primary annual source of information on u s farms but in a typical year one third of sampled farms do not respond we use census of agriculture data to study nonresponse to the survey and how it affects estimates in two econometric models despite larger farms responding less the coefficients estimated from the respondent subsample always fall inside confidence intervals based on draws from the full sample of respondents and nonrespondents although nonresponse bias can vary by application the findings suggest that bias is unlikely to undermine conclusions based on econometrics using respondent data

off and on farm labour participation in italian farm households most farms are family business both in developed and developing countries labour allocation choices of farm household members are therefore relevant both for production choices in the farm and for rural labour markets in particular off farm work and combination of on and off farm work pluriactivity are viewed as an efficient allocation of household labour resources moreover labour choice of the children of the farm household is relevant for farm succession in this article we extend previous literature by estimating in an unified framework labour participation choices both for on and off farm work for operators spouses and their eldest children in working age using a five equation multivariate probit

separability and risk in the static household production model the household production model highlights the possible interdependence of consumption and production decisions in the farm household the structure of this interdependence significantly affects the analytics both theoretical and econometric of farm households singh squire and straus 20 have an excellent discussion of this interdependence and its methodological implications a particular type of interdependence called interchangeably recursiveness or separability allows production decisions to be made independently of consumption decisions although the latter depends on the former through the budget constraint this separability is of interest because it justifies a large number of well developed methodological approaches in farm household studies among these being the various duality theory approaches sasaki and maruyama 19 and jorgenson and lau 10 both and independently found the existence of perfectly competitive goods and factor markets to be sufficient for the existence of separability under deterministic conditions while there are a large number of things that can upset this result even in the deterministic setting e g nonhomogeneity of labor as in kuroda and yotopoulos 13 and lopez 14 the recognition of the role of risk appears especially threatening to separability even in a competitive setting as pointed out by barnum and squire 1 if contingent claims markets exist or if households are risk neutral separability exists under risk situations but insurance markets may not exist and for many risks faced by the farming households could not unless heavily subsidized exist furthermore households have been variously shown to be risk averse 15 7 4 roe and graham tomasi 18 utilizing a multiplicative yield risk in the context of a dynamic model concluded that on the whole independence does not hold and estimating equations from certainty theory are not appropriate thus with respect to risk one can say that the die is loaded against separability this paper aims to show that there are risk specifications which allow separability for the household production model even in the absence of the contingent claims market in section ii we introduce the standard model of the household with commercial production it involves a household that produces an output which it partly consumes and partly sells in the market risk enters the revenue function either additively or multiplicatively we then introduce two definitions of separability in the sense of efficiency and in the sense of elasticity we show in section ii that additive risk whether on yield or on monetary revenue allows sepa

are farmers decisions to work off the farm related to their decisions to participate in the conservation reserve program since both working off the farm and participating in the conservation reserve program crp remove important resources from us agricultural production we utilize two econometric specifications to test hypotheses regarding whether these two decisions by farmers are independent we find statistical evidence that decisions to participate in crp and work off the farm are correlated characteristics of farm households and farm operations affect both decisions directly and indirectly as do local economic conditions and participation in other farm programs to illustrate their importance we simulate the combined direct and indirect effects of changes in decoupled payments and farm size on the probabilities of farm households engaging in these two activities we also illustrate that the probability of engaging in these two activities depends on whether the farm is located in a state or local agricultural district or participates in a related farmland retention program

service multinationals conceptualization measurement and theory the application of mne definitions measurements and theories to international services is still in its infancy despite the considerable size and growth of this sector there are problems in defining classifying measuring comparing and explaining service mnes but they do not require special definitions and theories still research to date suggests 1 delinking the concepts of multinational enterprise and foreign direct investment under certain conditions and 2 qualifying the nature of ownership internalization and location advantages in fdi theory as far as service mnes are concerned

women s participation in local organizations conditions and constraints abstract civic organizations have a capacity to contribute to economic growth and an equitable distribution of welfare by reducing information asymmetries and transaction costs while donors increasingly recognize that group based projects are a means to advocate organizational capacities of target groups it is not clear whether group based organizations always increase efficiency and equity this article analyses the determinants of participation in local development groups ldgs using data from two projects funded by undp in kashmir and gtz in chad a major result of the empirical analysis is the identification of a middle class effect of participation the exclusion of the majority of the poor can be explained by high opportunity costs to join the group especially for income earning women in addition it can be shown that an existing social network is a pre condition for participation finally the assumption has been confirmed that bargaining power of the members is important for their decision to participate in groups