verbal interventions and exchange rate policies the case of swiss franc cap abstract we ask whether verbal interventions by the swiss national bank snb affected market beliefs in the desired direction during the period from 2011 to 2015 when the snb imposed a cap on the swiss franc at 1 20 against the euro a verbal intervention was a speech by a member of the snb governing board containing the wording utmost determination and or unlimited quantities we show that these verbal interventions lowered uncertainty regarding the future value of euro swiss franc exchange rate and steered market beliefs toward franc depreciation therefore reinforcing the credibility of the swiss franc cap

benefit incidence with incentive effects measurement errors and latent heterogeneity a case study for china abstract in what is probably the largest cash transfer program in the world today china s dibao program aims to fill all poverty gaps in theory the program creates a poverty trap with 100 benefit withdrawal rate bwr but is that what we see in practice the paper proposes an econometric method of estimating the mean bwr allowing for incentive effects measurement errors and correlated latent heterogeneity under the method s identifying assumptions a feasible instrumental variables estimator corrects for incentive effects and measurement errors and provides a bound for the true value when there is correlated incidence heterogeneity the results suggest that past methods of assessing benefit incidence using either nominal official rates or raw tabulations from survey data are deceptive the actual bwr appears to be much lower than the formal rate and is likely to be too low in the light of the literature on optimal income taxation the paper discusses likely reasons based on qualitative observations from field work the program s local implementation appears to matter far more than incentives implied by its formal rules

efficiency in spatial negotiations abstract we examine two party spatial negotiations with single peaked preferences and two sided uncertainty about those preferences a classical ex post efficient dominant strategy incentive compatible individually rational mechanism exists if and only if there is either complete information or one sided incomplete information about the gains from agreement if there is two sided uncertainty about gains from agreement a classical ex post efficient bayesian incentive compatible individually rational mechanism does not exist

limit theorems for markets with sequential bargaining this paper models trade as a non coopertative strategic game played at an inlinite sequence of dates a single indivisible commodity is traded buyers and sellers have transferable utility and are characterized by their reservation utilities they meet at random and bargain over the price at which a single unit of the good will be exchanged under a variety of circumstances it is shown that as the costs of search and bargaining become negligible the outcome of the game converges to the competitve flow equilibrium even when there is complete information journal of economic literature classification numbers 022 19x7

agency and brokerage of real assets in competitive equilibrium brokerage contracts for many categories of real assets are characterized by a common constant commission rate payable upon sale exclusive agency and contractual asking prices for a large market in steady state these conventional contracts produce in equilibrium no agency problem between a broker and his clients each broker spends the same time or effort selling each client s asset as the broker would spend on his own assets as in standard agency problems extra effort by a broker generates first order stochastically dominant distributions of bids by potential buyers unlike standard agency problems each broker can allocate his time or effort between selling the assets of his multiple clients and searching for new clients in competition with other brokers because brokers time spent searching for new sellers is dissipative entry by brokers is excessive in equilibrium article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

target zones and exchange rate dynamics this paper develops a simple model of exchange rate behavior under a target zone regime it shows that the expectation that monetary policy will be adjusted to limit exchange rate variation affects exchange rate behavior even when the exchange rate lies inside the zone and is thus not being defended actively somewhat surprisingly the analysis of target zones turns out to have a strong formal similarity to problems in option pricing and investment under uncertainty

nature of transfers income tax function and empirical estimation of elasticity of taxable income for brazil abstractthis article aims to estimate the elasticity of taxable income eti taking into account the nature of transfers and their use as a redistribution package involving cash and in kind transfers to households in brazil our contributions are twofold first we provide a simple model with balanced budget government that reveals the role played by cash and in kind transfers on the labour supply and income tax revenues thereof next in order to estimate eti in the presence of cash and in kind transfers brazilian population surveys pesquisa nacional por amostra de domicilios pnad are used to explore a limited tax reform that was implemented between 1997 and 1998 this reform only affected the higher income tax bracket our findings suggest that in kind cash transfers are positively negatively associated with reported taxable income and precise estimation of eti requires estimates of both types of transfers last we estimate the eti for brazil in the range from 0 4 to 1 3 not different fro

should central bankers talk to the foreign exchange markets in this paper we study the role of official statements and speeches given by central bank authorities in charge of foreign exchange policy we investigate the impact of statements that comment on and confirm such interventions on the day of the intervention on the two major foreign exchange markets over an extended period 1989 2003 we also study the impact in terms of policy effectiveness of central bank communication before the actual operations our results suggest that appropriate speeches clarifying the current intervention policy can have marginally virtuous effects both in terms of exchange rate level and exchange rate volatility this leads us to conclude that in general actual interventions on the market should still be employed provided that official statements are used to clarify the nature and purpose of these interventions c 2008 elsevier ltd all rights reserved

the intra day impact of communication on euro dollar volatility and jumps abstract in this paper we examine the intra day effects of verbal statements and comments on the fx market uncertainty using two measures continuous volatility and discontinuous jumps focusing on the euro dollar exchange rate we provide empirical evidence of how these two sources of uncertainty matter in measuring the short term reaction of exchange rates to communication events talks significantly trigger large jumps or extreme events for approximately an hour after the news release continuous volatility starts reacting prior to the news intensifies around the release time and stays at high levels for several hours our results suggest that monetary authorities generally tend to communicate with markets on days when uncertainty is relatively severe and higher than normal disentangling the us and euro area statements we also find that abnormal levels of volatility are mostly driven by the communication of the euro area officials rather than us authorities

conditional cash transfers schooling and child labor micro simulating brazil s bolsa escola program a growing number of developing economies are providing cash transfers to poor people that require certain behaviors on their part such as attending school or regularly visiting health care facilities a simple ex ante methodology is proposed for evaluating such programs and used to assess the bolsa escola program in brazil the results suggest that about 60 percent of poor 10 to 15 year olds not in school enroll in response to the program the program reduces the incidence of poverty by only a little more than one percentage point however and the gini coefficient falls just half a point results are better for measures more sensitive to the bottom of the distribution but the effect is never large

screening in a matching market contract design under incomplete information is often analysed in a bilaterally monopolistic setting if the informed party s reservation value does not depend on its private information its type it is a standard result that the uninformed side offers low types distorted contracts to reduce the information rent left to high types we challenge this result by embedding contract design in a matching market environment we consider a market where players meet pairwise and where in each match either side may be chosen to make a take it or leave it offer as frictions become sufficiently low we find that the set of equilibria is independent of whether there is complete or incomplete information in particular all contracts are free of distortions

why have urban poverty and income inequality increased so much argentina 1991 2001 abstract this article analyzes the trends in income inequality and poverty among argentine households during the nineties we assess the effect of changes in labor force participation unemployment educational levels and returns to individual characteristics on income inequality and poverty by using a microsimulation approach we found that unemployment accounts for a large part of the increase in income inequality and poverty experienced in the past decade changes in labor force participation had an equalizing effect over the whole period while changes in the returns to workers sociodemographic characteristics could be associated with a small increase in income inequality with respect to poverty unemployment affected negatively the proportion of households below the poverty line amplified the poverty gap and increased the severity of poverty in contrast changes in labor force participation are associated with a reduction in the poverty rate

dynamic matching and bargaining games a general approach this paper presents a new characterization result for competitive allocations in quasilinear economies this result is informed by the analysis of non cooperative dynamic search and bargaining games such games provide models of decentralized markets with trading frictions a central objective of this literature is to investigate how equilibrium outcomes depend on the level of the frictions in particular does the trading outcome become walrasian when frictions become small existing specifications of such games provide divergent answers the characterization result is used to investigate what causes these differences and to generalize insights from the analysis of specific search and bargaining games

examining the reliability of self reported data on school participation abstract many studies evaluate the impacts of conditional cash transfer cct programs on schooling using self reports on enrollment and attendance even though there are reasons to doubt the reliability of these data in this paper we examine the extent to which school age girls overstate their school participation using administrative data from a cash transfer experiment in malawi and school attendance ledgers collected as part of the impact evaluation we find that while all study participants overstate their enrollment and attendance rates the extent to which this happens is significantly higher in the control group than the cct arm this finding implies that exclusive reliance on self reported school participation data can lead to a serious underestimation of actual program impacts we recommend that self reports be supplemented using alternative sources of data on school participation that are appropriate to the experiment at hand even if such efforts are likely to increase evaluation costs

trade protection and industry wages in india this paper examines the link between trade protection and industry wage premia in india using a unique dataset combining employment survey data with industry level data for various years between 1983 and 2000 the author finds that india s trade reforms were not distributionally neutral the impact of protection on industry wage premia was positive and statistically significant though modest in magnitude workers employed in industries with high tariffs received higher wages than apparently identical workers in low tariff industries because industries with high initial levels of protection were also those with the largest tariff reductions during this period and had the highest share of unskilled workers the positive tariff wage effect implies that the trade reforms were likely to have increased wage inequality as the relative wages of the predominantly unskilled workers in these manufacturing industries fell

in the same boat but not equals the heterogeneous effects of parental income on child labour this paper examines the impact of parental income on child labour the empirical literature has found conflicting results regarding whether poverty leads parents to send their children to work mos

equilibrium in a market with sequential bargaining this paper considers a market where pairs of agents who are interested in carrying out a transaction are brought together by a stochastic process and upon meeting initiate a bargaining process over the terms of the transaction the basic bargaining problem is treated with the strategic approach the paper derives the steady state equilibrium agreements analyzes their dependence on market conditions such as the relative numbers of agents of different types and discusses their relations with the competitive equilibrium outcome and other results in the search equilibrium literature this paper considers a market that operates in the following way pairs of agents who have mutual interest in carrying out a transaction are brought together by a stochastic process when two agents meet they initiate a bargaining process over the terms of the transaction if two agents reach an agreement a transaction takes place and they leave the market of course the bargaining positions and hence the agreement reached in any particular meeting will be affected by the conditions prevailing in the market these will include the chances that each of the negotiating parties have of meeting other partners in the event that the agreement in the current negotiations is delayed also the expected length of time required to achieve an alternative transaction and the expected behavior of alternative partners the study of such a market mechanism is of interest for two reasons firstly it captures some realistic aspects of the trade in certain specific markets e g asset markets such as housing and some labor markets secondly it contributes to an understanding of the micro mechanisms of price formation and their role in shaping market outcomes in both cases the features studied are largely neglected in the traditional market equilibrium analyses the related literature includes the articles by diamond 4 5 diamond and maskin 6 mortensen 8 9 and zusman and bell 13 these articles consider markets of the type described above in which transactions are concluded at pairwise meetings of agents the major difference between our work and these articles is in the approach to the basic bargaining problem in the cited articles it is assumed that a meeting is concluded with an instantaneous agreement which divides the associated surplus in an arbitrary predetermined way when the surplus is assumed to be divided equally the division rule is in fact nash s axiomatic bargaining solution in contrast the present paper treats the basic bargaining problem with the strategic approach see rubinstein 19 which constitutes an attempt to look into the bargaining black box this approach explicitly models the time dimension of the bargaining process describes in detail the bargaining procedure and justifies the agreement as a perfect equilibrium in

the global child labor problem what do we know and what can we do the problem of child labor has moved from a matter of regional and national concern to one of international debate and possible global persuasion and policy intervention in crafting policy for mitigating this enormous problem of our times it is important to start with a proper theoretical and empirical understanding of the phenomenon what gives rise to child labor and what are its consequences what interventions might end child labor without hurting children a well meaning but poorly designed policy can exacerbate the poverty in which these laboring children live even leading to starvation the article surveys the large and rapidly growing literature on this subject focusing mainly on the new literature based on modern economic theory and econometrics it also looks at some of the broad policy implications of these new findings with the objective of contributing to better informed discussion and policy design

child labor cause consequence and cure with remarks on international labor standards although the literature on child labor is enormous it lacks a common theoretical foundation in this paper analytical survey of this field is provided keeping in mind that this is an area where the primary reason for theorizing is ultimately to influence policy overall it is noted that the literature on child labor is an illustration of abundance and anarchy although empirical writings on child labor are numerous they are not usually founded on theory it is argued that there is much that can be done in curbing the issue of child labor several theories were studied in this paper including collaborative intervention such efforts include public action which alters the economic environment such that the parents of their own accord prefer to withdraw the child from labor force another strategy involves the government a legal intervention is enforcing a total ban on the subject although such interventions have good intentions some of them may not be feasible in general it is better to take economy wide measures against child labor and if there is to be a sector specific ban it should be based on the working conditions of that sector rather than the destination of the goods

is child labor inefficient we build a model of child labor and study its implications for welfare we assume that there is a trade off between child labor and the accumulation of human capital even if parents are altruistic and child labor is socially inefficient it may arise in equilibrium because parents fail to fully internalize its negative effects this occurs when bequests are zero or when capital markets are imperfect we also study the effects of a simple ban on child labor and derive conditions under which it may be pareto improving in general equilibrium we show that the implications of child labor for fertility are ambiguous

innovation adoption and diffusion when there are competing innovations abstract firms face a choice between two innovations without knowing which of the two is better each firm has a prior that one of the innovations is better which is updated by bayes rule as trials with the innovations are made a simple decision rule indicating which innovation should be tried given any posterior is derived and used to define an expected diffusion curve for the better innovation this curve has the commonly observed ogive shape even in the absence of any external demonstration effect when the distribution of firm priors belongs to a general class

the policy analysis of child labor a comparative study the policy analysis of child labour c grootaert h a patrinos modelling the determinants of child labour c grootaert child labour in cote d ivoire k cartwright child labour in urban bolivia k cartwright h a patrinos child labour in the philippines c sakellariou a lall policies to reduce child labour c grootaert h a patrinos

household income as a determinant of child labor and school enrollment in brazil evidence from a social security reform abstractthis article studies the effects of household income on labor participation and school enrollment of children aged 10 14 in brazil using a social security reform as a source of exogenous variation in household income i find that increased benefits are associated with increases in school enrollment for girls as well as a smaller reduction in their labor participation but i find no effects for boys i also uncover evidence that the gender of the benefit receiver matters for girls labor variables only benefits received by females reduce girls work

wealth crucial but not sufficient evidence from pakistan on economic growth child labor and schooling the relationship between wealth and child labor has been widely examined this paper uses three rounds of time series cross sectional data to examine the relationship between wealth and child labor and schooling the paper finds that wealth is crucial in determining a child s activities but that this factor is far from being a sufficient condition to enroll a child in school this is particularly the case for rural girls nonparametric analysis shows a universal increase in school enrollment for rural girls from 1998 to 2006 this increase is independent of wealth measured by per capita expenditure multinomial logit regression further shows that wealth is insignificant in determining rural girls activity decisions thus interventions to increase school enrollment should incorporate broad targeted demand side interventions as well as supply side interventions

using trivariate copulas to model sample selection and treatment effects simultaneous nonlinear econometric models with discrete outcomes are often difficult to implement this article considers the use of the copula approach for a model with three jointly determined outcomes it also deals with the discrete case in which outcomes include a mixture of dichotomous choices and discrete count data we apply this technique to study self selection and interdependence between health insurance and health care demand among married couples the full model consists of a dichotomous choice equation for family insurance and a separate negative binomial equation for each spouse s health care use

the targeting benefit of conditional cash transfers conditional cash transfers ccts are a popular type of social welfare program that make payments to households conditional on human capital investments in children compared to unconditional cash transfers ucts ccts may exclude some low income households as access is tied to normal investments in children this paper argues that conditionalities on children s school enrollment offer an unexplored targeting benefit over ucts ccts target money to households that forgo a discrete amount of child income this paper shows that the size of this targeting benefit is directly related to the distribution of parental incomes the size of forgone child incomes and two elasticities already popular in the literature the income effect of a uct and the price effect of a cct these elasticities are estimated for a large cct program in rural mexico progresa using variation in transfers to younger siblings to identify income effects in this setting the analysis finds that the targeting benefit is almost as large as the cost of excluding some low income households this implies that 41 percent of the progresa budget should go to a cct over a uct based on targeting grounds alone

nash equilibrium search for the best alternative in a recent paper weitzman econometrica 47 1979 641 654 described a policy of optimal search for the best alternative the present paper is concerned with the development and characterization of a policy of nash equilibrium search for the best alternative specifically it is shown that under certain monotonicity assumptions and under the assumption that firms have incomplete information regarding the results of rivals search behavior a nash equilibrium search policy exists and has the same form as weitzman s optimal search policy

the impact of the bolsa escola familia conditional cash transfer program on enrollment dropout rates and grade promotion in brazil this paper examines the impact of brazil s bolsa escola later renamed bolsa familia program on children s progress in school in brazil the bolsa program which started in the 1990s and expanded rapidly in 2001 and 2002 provides monthly cash payments to poor households if their children between the ages of 6 and 15 are enrolled in school using eight years of school census data from 1998 to 2005 our estimation method compares changes in enrollment and in dropout and grade advancement rates across schools that adopted the bolsa program at different times we estimate that after accounting for cumulative effects the bolsa program has increased enrollment in brazil by about 5 5 percent in grades 1 4 and by about 6 5 percent in grades 5 8 we also estimate that the program has lowered dropout rates by about 0 5 percentage points and raised grade promotion rates by about 0 9 percentage points for children in grades 1 4 and has reduced dropout rates by about 0 4 percentage points and increased grade promotion rates by about 0 3 percentage points for children in grades 5 8 only about one third of brazil s children participate in the bolsa program so the assumption that these results are due only to the impact of the program on participants with no spillover effects onto non participants implies that the impact of participating in the bolsa program is about three times higher than these estimates while these impacts cast a favorable light on the program simple calculations based on the enrollment impacts suggest that the likely benefits in terms of increased wages may not exceed the costs of the program

gender differences in bargaining outcomes a field experiment on discrimination abstract relying on a commonly used fixed offer bargaining script we examine gender differences in bargaining outcomes in a highly competitive and frequently used market the taxi market in lima peru our bargaining script secures that only the seller can change prices and terminate negotiations thus we are able to examine differences in the seller s entire path of negotiation and in the reservation price at which they are willing to trade we find that male and female passengers who use the same bargaining script are not treated equally men face higher initial prices final prices and rejection rates these differences are consistent with male drivers being more reluctant to give in to demanding negotiations by male passengers and with male passengers being perceived as having high valuations to identify whether taste based or statistical discrimination drives the inferior treatment of men we conduct an experiment where passengers send a signal on valuation before negotiating the signal eliminates gender differences and the response is shown only to be consistent with statistical discrimination thus in the limiting case of a highly competitive market with experienced traders we do not find evidence of taste based discrimination the differential observed is however consistent with statistical discrimination

child labour in indonesian small industries abstract we analyse the geographic incidence of child labour in small manufacturing firms in indonesia at the village level our unique data set covers virtually all indonesian villages and urban neighbourhoods it allows us to distinguish between demand and supply side determinants of child labour we show by correcting for sample selection that a number of counterintuitive results child labour being unaffected by credit access and school proximity are the result of an interplay between supply and demand side determinants credit access and school proximity reduce child labour supply but simultaneously constitute positive location factors for firms thereby increasing the demand for child labourers to effectively reduce child labour growth oriented policies such as enhancing school and credit facilities should be complemented by policies specifically geared towards increasing school attendance

financial markets views about the euro swiss franc floor exchange rates and option prices incorporate market participants views about the credibility and the effects of exchange rate targets i present a model to determine exchange rates under policy targets that can be used to price options the model is estimated with euro swiss franc exchange rate and options price data in the first few months of the minimum exchange rate policy the implied survival probability of the policy for a 3 month horizon was typically less than 75 over time the credibility increased and this probability reached 95 in august 2014

families schools and primary school learning evidence for argentina and colombia in an international perspective this article presents evidence on the associations between family background school characteristics and student performance in primary school in argentina colombia and several comparison countries as a general pattern educational performance is strongly related to family background weakly to some institutional school features and hardly to schools resource endowments in an international perspective family background effects are relatively large in argentina and relatively small in colombia a specific argentine feature is the lack of performance differences between rural and urban areas a specific colombian feature is the lack of significant between gender performance differences nonnative students and students not speaking spanish at home perform particularly weak in both countries in argentina students perform better in schools with a centralized curriculum and ability based class formation

efficient delivery of subsidies to the poor improving the design of a cash transfer program in ecuador abstract many governments provide monetary transfers to low income families the mechanism through which these subsidies are distributed may contain several inefficiencies that diminish the net value obtained by the recipients in this paper we build and estimate a behavioral dynamic model that allows us to evaluate the efficiency of current and alternative distribution mechanisms the proposed model is simple and resembles the individual s decision to collect the transfer to estimate it we use data from a cash transfer program in ecuador where recipients incur high transaction costs each time they collect their benefits despite its simplicity our model is able to replicate the observed data remarkably well we use it to simulate alternative payment mechanisms and show that an adequate design of the delivery of payments can substantially increase the value of cash transfer programs

prices delay and the dynamics of trade we characterize the dynamics of trading patterns and market composition when trade is bilateral finding a trading partner is costly prices are determined by bargaining and preferences are private information we show that equilibrium is inefficient and exhibits delay as sellers price discriminate between buyers with different values as frictions vanish transaction prices are asymptotically competitive and the welfare loss of inefficient trading approaches zero even though the trading patterns continue to be inefficient and delay persists journal of economic literature classification numbers d40 d50

social transfers and growth what do we know what do we need to find out summary the paper examines the extent to which emerging social transfer programs in developing countries can improve the productive capacity of households in poverty and contribute to micro level growth it introduces a basic framework linking transfers to growth mediating processes and productive capacity outcomes this is then used to organize and assess relevant findings from program evaluation studies the paper concludes that social transfer programs can have positive effects on the productive capacity of poor and poorest groups but further research is needed to identify and measure the size and significance of these effects

mobility and the return to education testing a roy model with multiple markets self selected migration presents one potential explanation for why observed returns to a college education in local labor markets vary widely even though u s workers are highly mobile to assess the impact of self selection on estimated returns this paper first develops a roy model of mobility and earnings where workers choose in which of the 50 states plus the district of columbia to live and work available estimation methods are either infeasible for a selection model with so many alternatives or place potentially severe restrictions on earnings and the selection process this paper develops an alternative econometric methodology that combines lee s 1983 parametric maximum order statistic approach to reduce the dimensionality of the error terms with more recent work on semiparametric estimation of selection models e g ahn and powell 1993 the resulting semiparametric correction is easy to implement and can be adapted to a variety of other polychotomous choice problems the empirical work which uses 1990 u s census data confirms the role of comparative advantage in mobility decisions the results suggest that self selection of higher educated individuals to states with higher returns to education generally leads to upward biases in ols estimates of the returns to education in state specific labor markets while the estimated returns to a college education are significantly biased correcting for the bias does not narrow the range of returns across states consistent with the finding that the corrected return to a college education differs across the u s the relative state to state migration flows of college versus high school educated individuals respond strongly to differences in the return to education and amenities across states

the long side of the market and the short end of the stick bargaining power and price formation in buyers sellers and balanced markets the determinants of bargaining power and price formation in a dynamic exchange market where new traders enter randomly over time are studied when agents on the long side of the market possess the option to wait for the arrival of future partners the terms of trade in the spot market must honor the value of this option the equilibrium terms of trade are expressed in intuitive closed form equations that highlight the distinct influences of short run spot market conditions and long run market demographics i introduction few concepts in economics are as intuitive as the idea that traders on the long side of a market wind up holding the short end of the stick that is they receive little or none of the gains from trade consider for instance the classic setting in which b identical buyers each with unit demands for an indivisible homogeneous good face s identical sellers each with one unit of the good for sale it is well known that in a broad class of one shot trading games all of the surplus in this setting goes to the short side of the market in equilibrium that is if b s buyers bid the price up to their reservation value often it is only when b s that market institutions the rules of the game have any bearing on the equilibrium division of surplus this classic result is somewhat brittle because of the discontinuity in the terms of trade when moving from positive to negative levels of excess demand its logic is familiar however from bertrand competition and it is very compelling the option value to an agent frozen out of a trade in a one shot market game is his reservation payoff of zero any outcome that confers nonzero surplus to a long side agent cannot be sustained in equilibrium because all of the long side agents who would otherwise be frozen out possess a strict incentive to undercut

collective labor supply and welfare the paper develops a general collective model of household labor supply in which agents are characterized by their own possibly altruistic preferences and household decisions are only assumed to be pareto efficient an alternative interpretation is that there are two stages in the internal decision process agents first share nonlabor income according to some given sharing rule then each one optimally chooses his or her own labor supply and consumption this setting is shown to generate testable restrictions on labor supplies moreover the observation of labor supply behavior is sufficient for recovering individual preferences and the sharing rule up to a constant finally the traditional tools of welfare analysis can be adapted to the new setting

effects of public policy on child labor current knowledge gaps and implications for program design many policy instruments can be used to address or affect child labor even if they are implemented to achieve other objectives from a theoretical point of view however the impact of these policies on child labor is undetermined this paper discusses the evidence generated by rigorous evaluations on the impact on child labor of labor market programs conditional and unconditional transfers and microcredit among other social programs and interventions the study finds that although transfer programs generally tend to reduce child labor other policies risk increasing child labor especially if they affect households productive opportunities the findings also point to knowledge gaps that should be addressed in future evaluations while progress has been made over the past decade there is still much to learn about the effects of public policy on the labor participation of many children in developing countries

bargaining and reputation in search markets in a two sided search market agents are paired to bargain over a unit surplus the matching market serves as an endogenous outside option for a bargaining agent behavioral agents are commitment types that demand a constant portion of the surplus the frequency of behavioral types is determined in equilibrium even if the frequency of behavioral types is negligible they aect the terms of trade and eciency in an unbalanced market where the entering

child schooling and child work in the presence of a partial education subsidy could a partial subsidy for child education increase children s participation in paid work in contrast to much of the theoretical and empirical child labor literature this paper shows that child work and school participation can be complements under certain conditions using data from the randomized evaluation of a conditional cash transfer program in the philippines the analysis finds that some children who were in neither school nor work before the program increased participation in school and work for pay after the program earlier cash transfer programs notably those in mexico brazil and ecuador increased school attendance while reducing child labor those programs fully offset schooling costs while the transfers under the philippine transfers fall short of the full costs of schooling for a typical child as a result some beneficiary children from poor philippine households increased work to support their schooling the additional earnings from this work represent a substantive share of the shortfall in the schooling costs net of transfer the paper rules out several potential alternative explanations for the increase in child labor including changes in household productive activities adult labor supply and household expenditure patterns that in principle can arise after a cash transfer and may also affect the supply of or demand for child labor

the global child labor problem the problem of child labor has moved from a matter of regional and national concern to one of international debate and possible global persuasion and policy intervention in crafting policy for mitigating this enormous problem of our times it is important to start with a proper theoretical and empirical understanding of the phenomenon what gives rise to child labor and what are its consequences what interventions might end child labor without hurting children a well meaning but poorly designed policy can exacerbate the poverty in which these laboring children live even leading to starvation the article surveys the large and rapidly growing literature on this subject focusing mainly on the new literature based on modern economic theory and econometrics it also looks at some of the broad policy implications of these new findings with the objective of contributing to better informed discussion and policy design

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

household choices of child labor and schooling a simple model with application to brazil this paper argues that conflicting results from previous literature related to the effect of economic conditions on child labor derive from different income and substitution effects implicit in different types of income variation we use agricultural shocks to local economic activity in brazil coffee production to distinguish between increases in household income and increases in the opportunity cost of time results show that higher household wealth is associated with lower child labor and higher schooling nevertheless temporary increases in local economic activity are associated with higher child labor and lower schooling particularly for children with poor economic backgrounds

agricultural spillover effects of cash transfers what does lewie have to say lewie simulations suggest that there are positive production spillovers fromsctprograms in nominal terms total production multipliers are always significantly greater than zero and income multipliers are always greater than one however real impacts depend on supply elasticities and market closure assumptions to date studies do not point to inflationary impacts of scts opm 2012a opm 2012b although the evidence on price effects is very limited this suggests that simulation 2 best characterizes the production impacts of scts which target poor economies with under utilized factors this simulation reveals a minimal inflationary impact and real production value added multipliers of 1 58 ksh per shilling transferred a key finding of lewie is that the production impacts are concentrated in nonbeneficiary households this is not surprising given the program s eligibility criteria which target the most asset and labor constrained households rcts focusing on treated households are likely to miss many or most of the productive impacts of social cash transfer programs this finding reaffirms the importance of a local economy wide approach if we wish to capture the transfers full impact finally our findings underline the importance of local supply constraints in shaping the impacts of transfer programs in the high unemployment environment characterizing rural kenya we believe it unlikely that there are significant labor constraints on production nevertheless production constraints limit program benefits particularly in nonbeneficiary households which are far and away the main source of new supply when production bottlenecks generate inflation transfers may even negatively affect some households interventions focusing on local production constraints in nonbeneficiary as well as beneficiary households may be needed to unlock the productive potential of scts

does child labour displace schooling evidence on behavioral responses to an enrollment subsidy this brief summarizes the results of a gender impact evaluation study entitled does child labour displace schooling evidence on behavioral responses to an enrollment subsidy conducted between 1995 and 1996 in bangladesh the study observed that the subsidy increases schooling but its effect on child labour is ambiguous the subsidy increased schooling by far more than it reduced child labour substitution effects helped protect current incomes from the higher school attendance induced by the subsidy substitution effects helped protect current incomes from the higher school attendance induced by the subsidy the reduction in the incidence of child labour by boys girls represents about one quarter eighth of the increase in their school enrollment rate

efficiency and disagreement in repeated infinite horizon bargaining games m satterthwaite and s williams 1987 characterize regular equilibria of the sealed bid k double auction that in some cases are efficient the sealed bid k double auction specifies one period of simultaneous offers and requires agents to sometimes disagree at the end of the first period when gains from continued bargaining exist this paper constructs a theory of disagreement based on reputation in repeated bargaining games agents make the offers of a satterthwaite williams regular equilibrium in the first round of a negotiation then if no trade results the agents terminate the negotiation in spite of possible gains from the option of continued bargaining copyright 1991 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

cash or condition evidence from a cash transfer experiment this brief summarizes the results of a gender impact evaluation study entitled cash or condition evidence from a cash transfer experiment conducted from 2008 to the end of 2009 in malawi the study observed the impact of conditionality in cash transfer programs with two distinct interventions unconditional transfers uct arm and transfers conditional on school attendance cct arm targeted at adolescent girls in malawi on individual level dropout rates declined in both treatment arms however the uct arm is 43 percent as large as the cct arm the fraction of days attended in the cct arm is significantly higher than the uct cognitive ability math and english scores significantly improve for the cct but not for the uct probability of pregnancy and marriage were much lower in the uct arm the delays in marriage and fertility in the uct arm are found entirely among adolescent girls who dropped out of school after the start of the intervention improvements in human capital for the recipients of the cct are achieved at the cost of worse outcomes for people who drop out of school funding for the study derived from the global development network bill and melinda gates foundation national bureau of economic research nber africa project world bank research support budget grant world bank knowledge for change trust fund world development report 2007 small grants fund spanish impact evaluation fund and gender action plan trust fund

the long term effects of conditional cash transfers on child labor and school enrollment this paper investigates the long term effects of conditional cash transfers on school attainment and child labor to this end we construct a dynamic heterogeneous agent model calibrate it with brazilian data and introduce a policy similar to the brazilian bolsa familia our results suggest that this type of policy has a very strong impact on educational outcomes sharply increasing primary school completion the conditional transfer is also able to reduce the share of working children from 22 to 17 we then compute the transition to the new steady state and show that the program actually increases child labor over the short run because the transfer is not enough to completely cover the schooling costs so children have to work to be able to comply with the program s schooling eligibility requirement we also evaluate the impacts on poverty inequality and welfare jel o11 i25 j24

conditional cash transfers adult work incentives and poverty conditional cash transfer cct programs aim to alleviate poverty through monetary and in kind benefits as well as reduce future levels of poverty by encouraging investments in education health and nutrition the success of cct programs at reducing poverty depends on whether and the extent to which cash transfers affect adult work incentives the authors examine whether the progresa program of mexico affects adult participation in the labor market and overall adult leisure time and they link these effects to the impact of the program on poverty using the experimental design of progresa s evaluation sample the authors find that the program does not have any significant effect on adult labor force participation and leisure time their findings on adult work incentives are reinforced further by the result that progresa leads to a substantial reduction in poverty the poverty reduction effects are stronger for the poverty gap and severity of poverty measures

information revelation in a market with pairwise meetings the paper presents a simple pairwise meetings model of trade the new feature is that agents have asymmetric information about the true state of the world the focus is on the transmission of the information through the process of trade the qualitative question is to what extent is the information revealed to uninformed agents through the trading process when the market is in some sense frictionless in particular does the decentralized process give rise to full revelation results as derived by the literature on rational expectations for centralized and competitive environments in the context of the model of this paper it turns out that the information is not fully revealed to uninformed agents even when the market is in some sense approximately frictionless

transfers to households with children and child development in this paper we utilize a model of household investments in the development of children to explore the impact of various transfer policies on the distribution of child outcomes we develop a cost criterion that can be used to compare the cost effectiveness of unrestricted restricted and conditional cash transfer systems and find that an optimally chosen conditional cash transfer program is the most cost efficient way to attain any given gain in average child quality we explore several design elements for the conditional cash transfer system and discuss the role of production function uncertainty and measurement error

communicating policy options at the zero bound abstract this paper examines a special episode in communication practices of the swiss national bank snb when short term interest rates reached the zero bound non sterilized foreign exchange interventions were frequently mentioned as a potential instrument we ask how the financial markets responded to the snb s repeated references of non sterilized interventions the empirical results with high frequency data provide strong evidence that snb intervention references depreciated the domestic currency for several hours the case study supports the view that communication is an effective tool for monetary policy in unusual situations as well

disagreement in markets with matching and bargaining this paper develops an explanation of why bargainers often terminate negotiations in disagreement in spite of positive expected gains from continued negotiation the key to the analysis is a model which embeds bargaining activity within a market agents are continually faced with the choice between continuing to bargain with an existing partner or searching for a new partner bargainers may then terminate negotiations without an agreement in spite of positive expected gains from continued bargaining because seeking a new bargaining partner promises a higher return

on the credibility of the euro swiss franc floor a financial market perspective we estimate the risk neutral break probabilities of a realignment of the eur chf 1 20 floor maintained by the snb from september 6 2011 to january 15 2015 using put options and an option pricing model which assumes a lower barrier for the exchange rate we estimate probabilities considerably different from zero even when the exchange rate traded far above the floor we observe a drastic increase in the break probabilities up to approximately 50 shortly before the floor was abandoned from an option market perspective the credibility of the snb in maintaining the floor was thus substantially lower than publicly claimed

women s power conditional cash transfers and schooling in nicaragua the social safety net red de proteccion social rps program in nicaragua is one of many conditional cash transfer programs that pay households cash stipends in exchange for school attendance and regular visits to health clinics by the children a key feature is that payments go to the female head of household previous research suggests that exogenous transfers to women are more likely to be spent on their children s health nutrition and education and thus to reinforce the goals of these programs randomized experimental data from rps are used to test for heterogeneous program impacts on school enrollment and spending based on a woman s power as proxied by her years of schooling relative to her husband s years of schooling the results confirm previous findings that more household resources are devoted to children when women are more powerful however when a woman s power greatly exceeds her husband s additional female power reduces school enrollment rps impacts on schooling are much larger than the expected income effects estimated from the control group although no evidence is found that female power alters the impact of rps on school enrollment the conditionality of rps is probably decisive while rps significantly increases food and education expenditures the impact is attributable primarily to income effects

sri lanka can conditional cash transfer programs serve as safety nets in keeping children at school and from working when exposed to shocks this brief summarizes the results of a gender impact evaluation study can conditional cash transfer cct programs serve as safety nets in keeping children at school and from working when exposed to shocks conducted the program started in 1997 and still exists today in sri lanka the study observed that income shocks on poor households are known to induce parents to take their children out of school and send them to work when other risk coping instruments are insufficient cct programs where the condition is on school attendance have been shown to be effective in increasing educational achievements and reducing child work shocks are highly prevalent and children have irregular periods of school enrollment children who are taken out of school are less likely to re enroll