remittances schooling and child labor in mexico abstract this paper studies the effects of remittances from the u s on child labor and school attendance in recipient mexican households we identify these effects using the impact of the 2008 2009 u s recession on remittance receipts the methodology employed is a differences in differences strategy that compares households that were remittance recipients before the crisis with never recipient households to avoid possible selection problems we instrument for membership in the remittance recipient group we find that the negative shock on remittance receipts caused a significant increase in child labor and a significant reduction of school attendance

comovements in national stock market returns evidence of predictability but not cointegration abstract this paper is a response to the literature that tests for cointegration between national stock market indices it argues that apparent findings of cointegration in other studies may often be due to the use of asymptotic rather than small sample critical values in fact economic theory suggests that cointegration is unlikely to be observed in efficient markets however this paper finds evidence for the predictability of relative returns and the existence of a winner loser effect across 16 national equity markets a conclusion is that national stock market indices include a common world component and two country specific components one permanent and one transitory

international stock market linkages evidence from the pre and post october 1987 period abstract this paper uses recent developments in the theory of cointegration to provide new methods of testing the linkage and dynamic interactions among stock market movements our findings are in sharp contrast with previous research which discovered strong interdependence among national stock markets prior to october 1987 for the post october 1987 period however our results show that the degree of international co movements among stock price indices has increased substantially with the nikkei index the only exception furthermore the us stock market is found to have a considerable impact on the french german and uk markets in the post crash period we also find the response of the french german and uk markets to us stock market innovations to be consistent with the view of cross border informationally efficient stock markets finally we find the japanese equity market performance to have no links with both the us stock market and the stock markets in france germany and uk during the pre and post october crash period

remittances liquidity constraints and human capital investments in ecuador summary over the last decade ecuador has experienced a strong increase in financial transfers from migrated workers this paper investigates how remittances via trans national networks affect human capital investments through relaxing resource constraints and facilitate households in consumption smoothing by reducing vulnerability to economic shocks our results show that remittances increase school enrollment and decrease incidence of child work especially for girls and in rural areas furthermore we find that aggregate shocks are associated with increased work activities while remittances are used to finance education when households are faced with these shocks 2008 elsevier ltd all rights reserved

agricultural distortions in sub saharan africa for decades agricultural price and trade policies in sub saharan africa hampered farmers contributions to economic growth and poverty reduction this paper draws on a modification of so called tr

school attendance child labour and remittances from international migration in el salvador abstract international migrant remittances can increase household budget and reduce liquidity constraint problems generating consumption and investment opportunities for recipient households in particular remittances can enable investing in children s human capital and reduce child labour key outcomes from the perspective of growth in a developing country using data for el salvador this article shows a a null or insignificant overall impact of remittances on schooling b a strong reduction of child wage labour in remittance recipient households and c an increase in unpaid family work activities for children in those households moreover the evidence shows important differences by gender and age of the child in consideration while girls seem to indeed increase school attendance upon remittance receipts by reducing labour activities boys do not benefit on average from higher schooling but some time substitution takes place favouring family work activities over paid jobs and among secondary sc

international market correlation and volatility international correlations for stocks and bonds fluctuate widely over time as previous studies have found volatility appears to be contagious across markets in addition international correlation increases in periods of high market volatility although the correlation of individual foreign stock markets with the u s stock market has generally increased slightly over the past 37 years it has not increased during the past 10 years similarly the international correlation of bond markets increased in the early 1980s but it has had no discernible trend in the past 10 years the fairly low levels of international correlation among stocks or bonds suggests that national factors still strongly affect local asset prices the link between correlation and market volatility is bad news for global money managers because when the domestic market is subject to a strong negative shock is when the benefits of international risk diversification are needed most

domestic distortions and international trade in this paper we develop techniques for measuring the trade policy equivalent of domestic distortions using a distance function approach our measure the trade restrictiveness index is shown to equal the uniform tariff which is welfare equivalent to a given pattern of domestic taxes and subsidies we extend the index to incorporate taxes in markets for nontraded goods and factors of production and illustrate its operationality with an application to liberalisation in mexican agriculture we conclude that our index has considerable potential in empirical work and as an aid to trade negotiators it is widely appreciated that government policies of a purely domestic nature can have major implications for a country s international trade to give just one example such implications were widely discussed in the context of the recent gatt round in which u s negotiators insisted that intra ec agricultural policy should be viewed as trade distorting however analysts and negotiators have not hitherto had access to a conceptual framework which would allow the trade effects of domestic policies to be measured in a consistent way in this paper we propose such a framework and show how it may be implemented empirically of course other attempts have been made to quantify the overall distortionary effects of domestic policies these have involved constructing empirically based indexes such as producer or consumer subsidy equivalents 2 however such measures have no theoretical foundation moreover since they use the shares of different sectors in production or consumption as weights they are likely to be systematically biased for example sectors whose output levels are reduced by high taxation are assigned low weights whereas their true weights should be higher by contrast we show below that our approach is based firmly on welfare economics and correctly uses marginal rather than average production and consumption shares as weights the approach we propose draws on recent work by two of the authors anderson and neary 1990 1992b which dealt with trade distortions only that work developed a scalar index the trade restrictiveness index or tri which equals the equiproportionate rate of trade restriction which is equivalent in welfare terms to

network effects and the dynamics of migration and inequality theory and evidence from mexico international migration is costly and initially only the middle class of the wealth distribution may have both the means and incentives to migrate which can increase inequality in the sending community however the migration networks formed lower the costs for future migrants which can in turn lower inequality this paper shows both theoretically and empirically that wealth has a nonlinear effect on migration and then examines the empirical evidence for an inverse u shaped relationship between emigration and inequality in rural sending communities in mexico after instrumenting we find that the overall impact of migration is to reduce inequality across communities with relatively high levels of past migration we also find some suggestive evidence for an inverse u shaped relationship among communities with a wider range of migration experiences

how do agricultural policy restrictions on global trade and welfare differ across commodities for decades the world s agricultural markets have been highly distorted by national government policies but very differently for different commodities hence a weighted average across countries of nominal rates of assistance or consumer tax equivalents for a product can be misleading as an indicator of the trade or welfare effects of policies affecting that product s global market this is especially the case when some countries tax and others subsidize its production or consumption this article develops a new set of more satisfactory indicators for that purpose drawing on the recent literature on trade restrictiveness indexes it then exploits a global agricultural distortions database recently compiled by the world bank to generate the first set of estimates of those two indicators for each of 28 key agricultural commodities from 1960 to 2004 based on a sample of 75 countries that together account for more than three quarters of the world s production of those agricultural commodities these reveal the considerable extent of reforms in agricultural policies of developing as well as high income countries over the past two decades

financial integration in european equity markets the final stage of economic and monetary union emu and its impact on capital markets this paper examines the extent of financial integration in european equity markets before during and after the adoption of the single currency on 1 january 1999 two groups of european economies are examined the first set comprises the member states of the european union eu that participated in the euro the euro 11 austria belgium finland france germany ireland italy luxembourg netherlands portugal and spain the second set consists of the remaining members of the euro 15 denmark greece sweden and the united kingdom along with norway and switzerland multivariate cointegration procedures granger causality tests and generalised variance decomposition analyses based on error correction and vector autoregressive models are conducted to examine long and short run relationships among these markets the results indicate that there is a stationary long run relationship and significant short run causal linkages between the equity markets of both the euro and non euro currency areas however while the large equity markets remain the most influential the lower causal relationships that exist between these and at least some middle belgium spain and netherlands and small ireland luxembourg finland and norway equity markets suggests that opportunities for international portfolio diversification in european equity markets may still exist

the causal relationships between equity indices on world exchanges the engle and granger cointegration analysis and granger causality tests are applied to monthly time series of nine major stock market indices over the period january 1982 to february 1991 to examine for causal linkages the empirical results indicate that there is adequate evidence to refute the notion of informationally efficient stock markets

migration risk and liquidity constraints in el salvador abstract this article utilizes panel data from el salvador to investigate the use of transnational migration as an ex post risk management strategy i show that adverse agricultural conditions in el salvador increase both migration to the united states and remittances sent back to el salvador i show that in the absence of any agricultural shocks the probability that a household sent members to the united states would have decreased on average by 24 26 i also show that the 2001 earthquakes reduced net migration to the united states a one standard deviation increase in earthquake damage reduced the average probability of northward migration by 37 11 the evidence suggests that the effects of the earthquakes had more to do with households retaining labor at home to cope with the effects of the disaster than with the earthquakes disrupting migration financing

agricultural distortions in sub saharan africa trade and welfare indicators 1961 to 2004 for decades agricultural price and trade policies in sub saharan africa have hampered farmers contributions to economic growth and poverty reduction although there has been much policy reform over the past two decades the injections of agricultural development funding together with ongoing regional and global trade negotiations have brought distortionary policies under the spotlight once again a key question asked of those policies is how much are they still reducing national economic welfare and trade economy wide models are able to address that question but they are not available for many poor countries even where they are typically they apply to just one particular previous year and so are unable to provide trends in effects over time this paper provides a partial equilibrium alternative to economy wide modeling by drawing on a modification of so called trade restrictiveness indexes to provide theoretically precise indicators of the trade and welfare effects of agricultural policy distortions to producer and consumer prices over the past half century the authors generate time series of country level indexes as well as africa wide aggregates they also provide annual commodity market indexes for the region and a sense of the relative importance of the key policy instruments used

how do remittances affect human capital formation of school age boys and girls we revisit the impact of remittances on educational attainment of school age children in nepal paying particular attention to differences between girls and boys a heightened interest in understanding the impact of remitting practices on a variety of economic variables has emerged as remittances to developing countries continue to rise in nepal the world bank reports that remittances amounted to 1 2 billion us dollars in 2005 while gdp was 8 2 billion and official development assistance totaled 425 million world bank 2007 we use the 1995 1996 nepal living standards survey nlss to examine the impact of remittances on human capital investments for female and male children if remittances do affect human capital positively then not only will remittances affect long run growth in nepal but the opportunities for women in nepal should improve as the female population becomes more educated the effect of remittances on human capital investment is unclear a priori increasing income through remittances may increase investment in children s schooling by relaxing household budget and capital constraints conversely household absenteeism pressures children to work in the home reducing time for education our data provide an opportunity to separate the effect of household disruption from the income effect of remittances on the decision to invest in schooling we are able to measure the number of adults living outside the household so that we may control for absenteeism in estimating the impact of remittances on household schooling choices we ask if the impact varies by gender and age group young child versus older child our results indicate that young children benefit more from remittances but the benefits controlling how do remittances affect human capital formation of school age boys and girls

superexogeneity and the dynamic linkages among international equity markets abstract in this article we combine the johansen procedure for cointegration testing with tests of weak exogeneity and invariance in order to ascertain whether a system of equity markets is characterized by superexogeneity superexogeneity is rejected for the system comprised of stock indices of the us uk germany and japan this finding implies that agents participating in these financial markets are forward looking all markets are endogenous in our system and the assumption of stability of the asset demand function is questionable

the demand for primary schooling in madagascar price quality and the choice between public and private providers abstract we estimate a discrete choice model of primary schooling and simulate policy alternatives for rural madagascar among school quality factors the results highlight the negative impacts on schooling demand of poor facility quality and the use of multigrade teaching several grades being taught simultaneously by one teacher in public schools simulations indicate the feasibility of reducing multigrade in public schools by adding teachers and classrooms a policy that would lead to modest improvements in overall enrollments and would disproportionately benefit poor children given much higher price elasticities for poorer households raising school fees to cover some of the additional costs would strongly counteract these favorable distributional outcomes an alternative policy of consolidation of primary schools combined with multigrade reduction or other quality improvements is likely to be ineffective because of the strongly negative impact of distance to school

private and public choices in public education an investigation of trustee effects the paper applies the concepts of the horizon problem agency costs monitoring and special interest incentives to trustee management of public schools and higher education we examine whether south carolina s 1984 education improvement act a major restructuring of educational organization and spending in south carolina is related to the ratio of pupils in private versus public schools we employ 30 years of county level data in south carolina and we uncover several things there is no statistically credible relation between public school expenditures per pupil and the private school public school enrollment ratio however we do find that the directed changes in rules organizational structure and incentives mandated by the 1984 educational improvement act are associated with a reduction in the relative number of children attending private school we interpret this to mean that the features of the law requiring better accountability and the like were perceived by parents to make for better education while the increased money spent was only a transfer to teachers or some other groups we find that organization matters more than money

agricultural incentives in developing countries measuring the effect of sectoral and economywide policies the impact of sector specific direct and economywide indirect policies on agricultural incentives for 18 developing countries for the period 1975 84 are estimated the direct effect is measured by the proportional difference between the producer price and the border price adjusting for distribution storage transport and other marketing costs the indirect effect has two components 1 the impact of the unsustainable portion of the current account deficit and of industrial protection policies on the real exchange rate and thus on the price of agricultural commodities relative to nonagricultural nontradables and 2 the impact of industrial protection policies on the relative price of agricultural commodities to that of nonagricultural tradable goods the authors found that a in almost all cases the direct effect is equivalent to a tax on exportable goods and to a subsidy for importables b the indirect effect also taxes agriculture and dominates the direct effect and c the direct policies for both importables and exportables stabilize domestic producer prices

migration remittances and inequality estimating the net effects of migration on income distribution this paper examines the net effects of migration and remittances on income distribution potential home earnings of migrants are imputed as are the earnings of non migrants in migrant households in order to construct no migration counterfacmals to compare with the observed income distribution including remittances the earnings functions used to impute migrant home earnings are estimated from observations on non migrants in a selection corrected estimation framework which incorporates migration choice and labor force participation decisions for a sample of households in bluefields nicaragua migration and remittances increase income inequality when compared with the no migration counterfactual 1998 elsevier science b v

networks in the modern economy mexican migrants in the u s labor market this paper attempts to identify job networks among mexican migrants in the u s labor market the empirical analysis uses data on migration patterns and labor market outcomes based on a sample of individuals belonging to multiple origin communities in mexico over a long period of time each community s network is measured by the proportion of the sampled individuals who are located at the destination the united states in any year we verify that the same individual is more likely to be employed and to hold a higher paying nonagricultural job when his network is exogenously larger by including individual fixed effects in the employment and occupation regressions and by using rainfall in the origin community as an instrument for the size of the network at the destination

remittances household expenditure and investment in guatemala the author uses a large household data set from guatemala to analyze how the receipt of internal remittances from guatemala and international remittances from the united states affects the marginal spending behavior of households on various consumption and investment goods contrary to other studies the author finds that households receiving remittances actually spend less at the margin on consumption food and consumer goods and durables than do households receiving no remittances instead of spending on consumption households receiving remittances tend to spend more on investment goods like education health and housing the analysis shows that a large amount of remittance money goes into education at the margin households receiving internal and international remittances spend 45 and 58 percent more respectively on education than do households with no remittances these increased expenditures on education represent investment in human capital like other studies the author finds that remittance receiving households spend more at the margin on housing these increased expenditures on housing represent a type of investment for the migrant as well as a means for boosting local economic development by creating new income and employment opportunities for skilled and unskilled workers

how do migration and remittances affect human capital investment the effects of relaxing information and liquidity constraints abstractthis article explores the heterogeneous effects of the migration remittance process on the educational attainment of nepalese children the results suggest that when controlling for remittances the children of more educated or informed parents suffer from parental absence while the children of less informed parents gain from migration implying that the migration experience helps less educated parents estimate the value of and returns to education more precisely the results also suggest that remittances help severely credit constrained households enrol their children in school and prevent dropouts these remittances help households that face less severe liquidity constraints increase their investment in quality education