entrepreneurship and income inequality in southern ethiopia this article uses inequality decomposition techniques in order to analyze the consequences of entrepreneurial activities to household income inequality in southern ethiopia a uniform increase in entrepreneurial income reduces per capita household income inequality this implies that encouraging rural entrepreneurship may be favorable for both income growth and income distribution such policies could be particularly successful if directed at the low income low wealth and relatively uneducated segments of the society

entrepreneurial human capital and the long run survival of firms in india abstract this paper analyses the characteristics of entrepreneurs that contribute to firms survival in less developed countries ldcs the study which relies on data collected in a 1971 survey of entrepreneurs in south india and a follow up survey of surviving firms in 1993 finds that entrepreneurial human capital greatly influences firm survival the results indicate that firms founded by older entrepreneurs in higher castes are most likely to survive but that increased education of the founding entrepreneur reduces survival these results provide evidence that opportunities of entrepreneurs outside the firm ignored in most theories are important in firm survival

nonfarm employment and poverty in rural el salvador abstract this paper analyzes two complementary data sets to study poverty and the nonfarm sector in rural el salvador we find that rural poverty in el salvador remains acute and significantly higher than in urban areas while the rural poor are mainly agricultural laborers and marginal farmers some nonfarm activities are also of importance to the poor in fact nonfarm activities in el salvador account for a significant share of rural employment and income for both the poor and the nonpoor the poor on the one hand are engaged in last resort nonfarm activities that are not associated with high levels of labor productivity the nonpoor on the other are engaged in productive nonfarm activities which are likely to present a potent force for upward mobility significant correlates of these high productivity occupations include education infrastructure location and gender while most of the analysis is at the household level the data also permit some focus on small scale rural enterprise activities it appears that in el salvador very few rural enterprises report utilizing formal credit in setting up their activities in addition a significant proportion of enterprises are engaged in subcontracting arrangements with some larger often urban based firm

dynamic expected shortfall a spectral decomposition of tail risk across time horizons abstract the tail risk of financial institutions is traditionally measured by expected shortfall es that does not characterize risk changes over investment horizons using wavelet analysis we propose a new method to capture the dynamics of es across time horizons the new method decomposes the stock return of financial institutions into different frequency e g short mid and long run components and then models the dynamics of these components separately to produce an aggregated es forecast we provide numerical and empirical examples to illustrate the new method we also study the relevance of each frequency component to out of sample es forecasts over different predictive horizons our empirical results confirm that the different frequency components of stock returns exhibit different persistence explicitly considering this distinction when modeling es significantly improves the out of sample forecasting performance in addition excluding the long run e g yearly return component can largely reduce short run e g weekly or monthly es forecasts without impacting the regulatory quality of the risk assessment

intersectoral transfer growth and inequality in rural ecuador abstract in this paper we study intersectoral transfer and its impact on the distribution of income in ecuador we find that income shares between farm and nonfarm activities are roughly equal on average although the rich in rural areas typically receive a greater share of income from nonfarm sources thus decomposing inequality by income source reveals that a rise in nonfarm incomes increases inequality drawing on a new method to estimate local level distributional outcomes growth of the high productivity nonfarm sector is observed to have a strong and positive association with average consumption and inequality growth of the low productivity nonfarm sector is associated with little change in either average income or income inequality irrespective of subsector growth of the nonfarm sector is associated with a substantial fall in poverty

the impact of microcredit programs on self employment profits do noncredit program aspects matter microcredit programs provide a two tiered approach to poverty alleviation credit for the purchase of capital inputs in order to promote self employment and noncredit services and incentives these noncredit aspects may be an important component of the success of microcredit programs however because they are costly to deliver and their contribution to the success of the programs is difficult to measure they may not be properly valued this paper uses primary data on household participants and nonparticipants in grameen bank and two similar microcredit programs to measure the total and noncredit effects of microcredit program participation on productivity the total effect is measured by estimating a profit equation and the noncredit effect by estimating the profit equation conditional on productive capital productive capital and program participation are treated as endogenous variables in the analysis i find large positive effects of participation and the noncredit aspects of participation on self em

assets activities and income generation in rural mexico factoring in social and public capital in recent years there has been increasing emphasis in the rural development literature on the multiple income generating activities undertaken by rural households and the importance of assets in determining the capacity to undertake these activities controlling for the endogeneity of activity choice and applying lee s generalisation of amemiya s two step estimator to a simultaneous equation model household returns to assets from multiple activities are explored for the mexico ejido sector to incorporate the multiple variables representing social and public capital into the analysis factor analysis is used the results indicate that the asset position of the household has a significant effect on household participation in income generating activities and returns to those activities furthermore the inclusion of measures of social and public capital into the analysis show that these assets play an important role in income generating activities and that the influence is dependent on the type of social and public capital as well as the particular activity

non agricultural earnings in peri urban areas of tanzania evidence from household survey data abstract this study draws on purposive survey data of approximately 600 households in peri urban tanzania to describe the degree and nature of non farm diversification in these settings with the exception of relatively dynamic cities such as dar es salaam and arusha overall non farm incomes shares are not unambiguously higher than in rural areas as a whole non farm income shares rise sharply and monotonically with quintiles defined in terms of per capita food consumption in that sense the sector appears to offer an important route out of poverty the evidence suggests that education and access to infrastructure are important determinants of non farm incomes in peri urban areas women appear to be poorly placed vis a vis the non farm sector even after controlling for education age and other characteristics kinship and tribal affinities and time devoted to communal activities appear to deter entrepreneurial activity and non farm employment but trust in officials and public servants and strong heterogeneous village associations are important in stimulating non farm activity

entrepreneurship selection and performance a meta analysis of the impact of education in developing economies this meta analytical review of empirical studies of the impact of schooling on entrepreneurship in selection and performance in developing economies looks at variations impact across specific characteristics of the studies a marginal year of schooling in developing economies raises enterprise income by an average of 5 5 percent which is close to the average return in industrial countries the return varies however by gender rural or urban residence and the share of agriculture in the economy furthermore more educated workers typically end up in wage employment and prefer nonfarm entrepreneurship to farming the education effect that separates workers into self employment and wage employment is stronger for women possibly stronger in urban areas and also stronger in the least developed economies where agriculture is more dominant and literacy rates are lower

performance factors of small tourism ventures the interface of tourism entrepreneurship and the environment abstract performance factors of small israeli tourism ventures were examined using an integrated model that combines four theoretical approaches each focusing on a different central facet environmental milieu institutional support entrepreneurial human capital and the venture s bundle of services the current research developed an operational instrument for assessing environmental attractiveness components of tourism ventures and their relationship to performance a factor analysis based on this instrument revealed three environmental factors tourist related infrastructure options for excursions and scenery including climate an attractive environment contributed to higher revenues in tourism ventures however it did not assure profitability the results indicate the dual nature of the impact of institutional support upon the tourism venture s performance regardless of the size and age of ventures those obtaining the advisory type of assistance from the governmental tourism incubator performed less well than those ventures that did not obtain such support by contrast those tourism ventures that were financially supported by external sources performed better than those that were not financially supported the explanation for this curious and seemingly contradictory finding may lie in the different criteria for receiving financial and advisory assistance success in persuading external sources to provide financial support would seem to be evidence of the soundness of the venture s planning and its economic viability by contrast insofar as virtually any venture in the area may apply for and obtain advisory assistance from the governmental tourism incubator with no requirement to meet financial criteria of any kind it could be that precisely the weaker ventures are being carried along by this form of assistance among the various entrepreneur s attributes examined managerial skills provided the strongest association with the performance measures the managerial skills were also found to be the most significant variable explaining performance relatively to the variables derived from the other three approaches these results have implications regarding the nature of the support to be given by a governmental tourism incubator to entrepreneurs operating in the region given that lack of managerial skills is one of the main barriers to a venture s success particularly in small businesses where the owners have to be involved in all areas of activity the incubator needs to provide entrepreneurs with tailored regional business and management training tools to promote tourism venture development and success the study also reveals that the number of services offered by a tourism venture made only a minor contribution in the revenues regression which may indicate that providing a bundle of services for the tourist customer does not necessarily guarantee profitability a noteworthy finding is the similarity in the differential association between the number of services offered and the performance measures on the one hand and attractiveness features with performance on the other in both cases these factors positively contribute to the revenues regression but neither contributes to the profitability or income regression this means that an attractive environment does contribute to higher revenues in that more tourists choose to visit the tourist attractions however this does not assure profitability similarly providing many services to the visitors may also contribute to higher revenues but does not necessarily assure profitable business outcomes the current findings indicate that small tourism venture profitability is contingent on human capital especially the skills of the entrepreneurs running the venture in accordance with our findings that managerial skills are so crucial for venture success the main objective of advisory incubators should be to promote managerial competencies

the impact of subsidies on x efficiency in ldc industry theory and an empirical test the x inefficiency costs of protection and industrial concentration have been topics of considerable interest in the literature on economic development balassa 1975 and bergsman 1974 for example have argued that protection by increasing x inefficiency generates a major welfare cost which is not captured by traditional costs of protection calculations and white 1976 has examined the relationship between inappropriate factor intensities which he associates with xinefficiency and industrial concentration the common theme which emerges from each of these studies is that public policy can have a major impact on economic performance not only by influencing factor proportions but also by influencing the intensity with which a non measurable input x efficiency is employed despite the intuitive appeal of the x efficiency concept there have been very few empirical tests of this hypothesis this partly reflects the imprecise nature of the basic concept but also the lack of adequate micro economic data x efficiency clearly relates to efficiency within firms so that the most appropriate tests would rely on data on firm level efficiency in this paper we propose a direct test of the x efficiency hypothesis using firm level data we build on previous work by corden 1970 1974 and martin 1978 who showed how to model x efficiency effects using the concept of managerial leisure we extend these simple models of managerial behavior emphasizing the role of the external managerial labor market the model is then used to explore the relationship between changes in public policy managerial effort and x inefficiency certain predictions of the model are tested using cross section data from a survey of firms in two subsidized industries in ghana efficiency indices are computed on the basis of a translog frontier production function variations in relative efficiency are then correlated with several explanatory variables including the presence or absence of subsidy payments to the firm subsidized firms in both industries are found to exhibit higher relative levels of x inefficiency

israeli women entrepreneurs an examination of factors affecting performance abstract this article examines individual factors influencing performance of 200 israeli women owned businesses whereas research on women entrepreneurs is extensive in developed countries especially in the united states and europe there are comparatively few studies of performance of women owned businesses in non oecd countries there is evidence that social structures work family and organized social life vary among developed and developing countries as these relate to women entrepreneurs however these differences have not been considered as they may relate to theories explaining performance of women owned businesses the extent to which existing theories are useful in the context of non oecd countries is of increasing importance as women in these countries are assuming a greater role in enterprise creation and economic development as a result of radical geopolitical and economic policy changes worldwide in israel women suffer from occupational segregation and typically earn less money than their male counterparts despite a generally high level of education entrepreneurship offers a vehicle for israeli women to achieve economic parity approximately 5 1 of israeli women are self employed compared with 15 of israeli men of the 816 800 israeli working women this study is the first systematic investigation of performance variation among israeli women entrepreneurs thereby contributing to our understanding of women s entrepreneurship in non oecd countries five theoretical perspectives explain performance individual motivations and goals social learning entrepreneurial socialization network affiliation contacts and membership in organizations human capital level of education business skills and environmental influences location sectoral participation and sociopolitical variables each of these perspectives is associated with empirical work showing relationships between these individual level factors and performance three questions directed this study 1 which factors influence the performance of israeli women entrepreneurs 2 which factors explain any variance in performance among businesses established by israeli women entrepreneurs 3 how similar are these explanatory factors to those found in other countries a sample of 220 israeli women business owners responded to a survey instrument originally composed by hisrich and brush 1982 1985 that was translated into hebrew and adapted to the particular conditions of the israeli population a majority of the questionnaires was distributed at meetings of professional associates of women entrepreneurs and returned by mail but one fourth was distributed to women who were not members of any professional association no significant differences were found between the respondents who were members or non members of associations reliability testing showed alpha coefficients of 0 65 and higher for scaled questions which is acceptable for survey data statistical analyses including pearsons s correlations and multiple regressions examined relationships between factors identified from theoretical perspectives and performance which was measured by profitability income size number of employees and revenues demographic variables were examined and the age of the woman entrepreneur s children was significantly related to profitability p of the five theoretical perspectives results showed network affiliation motivation human capital and environmental factors affected different aspects of performance whereas social learning theory or existence of a role model had no significant effect on performance outcomes network affiliation was significantly related to profitability p motivations showed a strong relationship to performance factor analysis identified three basic groups of motives achievement independence and economic necessity similar to findings in other countries achievement motives were highly related to personal income whereas economic necessity was significantly related to both profitability and revenue analyses of human capital variables showed mixed results education level areas of study and previous entrepreneurial experience had no effect on previous experience the fact that this population was highly educated 51 had university degrees may have impacted on this result consistent with prior research findings previous experience in the industry had a direct and significant effect on performance p p p this study supports previous research from the united states and europe on women entrepreneurs which found that performance is related to previous industry experience business skills and achievement motivation however the differential effects of network affiliations was significantly more important for women entrepreneurs in israel affiliation with a single network was highly related to profitability whereas involvement in multiple networks was detrimental to both revenues and the number of employees these findings imply that to perform well israeli women entrepreneurs should gain related industry experience develop business skills and seek to achieve success most importantly commitment to a single network for support and advice is better than a loose alignment with many support groups this research has implications for studies of women entrepreneurs in other non oecd as well as developing countries in countries such as russia or china anecdotal evidence shows self employment offers women an opportunity to improve their economic status as more capitalistic policies are adopted the extent to which individual factors found important in this study such as business skills motivations previous industry experience and network affiliation affect performance in these countries is a topic for future investigation this study suggests that individual factors affect performance differentially as a consequence of variations in social structures work organized social life and family future research should explore the extent to which this is the case examination of aspects of organizational strategies and government policies as these influence performance is another topic for future study

weak and strong signals akerlof spence and stiglitz showed that competitive markets can perform very poorly in the presence of informational asymmetry in this paper i show that if there is a signaling technology which is sufficiently strong i e the marginal cost of signaling declines sufficiently rapidly with quality the cost of sorting is low and a nash equilibrium exists empirically testable necessary and sufficient conditions for existence are derived i further show that if akerlovian participation constraints are added to a signaling model there is a minimum signaling threshold finally i argue that these conclusions hold regardless of whether it is the uninformed or informed agents who move first

labor migration and earnings differences the case of rural china this article presents empirical evidence supporting the hypothesis that the decision of chinese rural people to migrate is affected by noneconomic forces using the 1820 rural household survey from sichuan province migration behavior and earnings are analyzed logistic probability models show that the decision to migrate is driven largely by the availability of rural non farm employment opportunities however if jobs are available in the province even at lower wages rural people will choose to stay rather than to migrate the major deterrent to migration is the lack of safety during transportation and in destination cities as well as forced separation from families moreover rural migrants are denied the legal right to reside permanently in cities furthermore findings reveal that although labor productivity in migrant activities is higher than it is in local non farm sectors the economic cost of migration in china is so high as to significantly limit reallocation one implication of this study is that without artificial barriers to labor migration the number of migratory workers would be higher since the important objective of the chinese government is to control rural to urban migration it is likely that restrictive migration policies will continue however putting aside the issue of social justice the economic efficiency loss under the chinese system should not be ignored

gender entrepreneurship and the formal informal dilemma evidence from indonesia summary this study analyzes the preferences of entrepreneurs about formality and focuses on the role of gender relying on original data collected in indonesia we unpack the differences between various types of female entrepreneurs currently in the informal sector according to their preferences about formalization contrary to the existing literature we find that female entrepreneurs possess highly nuanced preferences about formalization that are conditional on many factors the preference for formalization is strongest among female entrepreneurs who are older married rural based and have recently started their firms our work contributes to research that seeks to better understand entrepreneurial preferences and the role that gender plays

assessing the impact of microcredit a zambian case study expectations are high but evidence of the impact of microcredit remains in short supply this article estimates the impact of an urban credit programme in zambia on business performance and on a range of indicators of wellbeing borrowers who obtained a second loan experienced significantly higher average growth in business profits and household income inflexible group enforcement of loan obligations resulted in some borrowers especially amongst those who had taken only one loan being made worse off our methodological investigations suggest that the supply of rigorous impact studies can be increased by basing them on data collection that serves a wider range of purposes including market research

self employment and self selection in developing country labor markets labor markets in less developed countries ldcs have traditionally been characterized as non competitive this view is expressed in well known models in the development economics literature for example the labor surplus model of lewis 16 asserts that labor in rural areas of ldcs in early stages of development is so abundant that if the wage rate were determined competitively it would be below the subsistence level hence institutions are assumed to arise to determine the wage rate non competitively and to provide the resulting excess supply of labor to agriculture with a subsistence level of living the harristodaro 11 model of rural urban migration asserts that labor unions minimum wage laws public sector hiring practices and other institutional factors tend to keep formal sector wages in urban areas above labor market clearing levels the resulting excess supply of labor in urban areas is assumed to survive at a subsistence level by becoming selfemployed in the low productivity informal sector recent empirical studies provide little support for the non competitive view of ldc labor markets evidence from india thailand malaysia kenya and guatemala suggests that labor markets are much less imperfect than often assumed an important empirical finding in several of these studies is that self employed workers appear to have higher earnings than their wage employee counterparts in urban areas 2 this fact is inconsistent with the notion that self employment is typically a low productivity occupation engaged in by individuals who are searching for scarce well paying formal sector jobs the purpose of this study is to analyze and estimate a model of individual choice between wage and self employment in the ldc context the model incorporates a production function in the self employment sector that includes managerial ability as an input analysis of the influence of managerial ability on the choice of self employment leads to a theory that can explain the observed pattern of earnings of the urban self employed compared to wage employees implications of the model for estimation of production function

how industrial reform worked in china the role of innovation competition and property rights in china early attempts at partial reform unleashed forces that fifteen years later have brought china s economy to the brink of a market system the participation of tens of thousands of enterprises and millions of administrators managers and workers over the duration of the reform eventually built a constituency for market directed change that was far stronger than any official announcement could have produced gradual and partial reform shifted the economy toward a market system under a regime of growth improved productivity accelerated technical change and rising exports reactions of firms and governments focused incresingly on innovation cost reduction and further deregulation deepening the cumulative impact of reform rather than on rent seeking and subsidies this process of reform is very different from the top down centrally planned approach to reform that is widely advocated by international organizations and economic researchers but it has produced a durable reform constituency that easily rebuffed high level efforts to roll back reform in the wake of the inflation scare and political repression of 1989

new institutional economics in the post socialist transformation debate the paper suggests that there is a tension between the basic tenant of new institutional economics nie and the manner in which it has been applied in the debate on post socialist transformation this tension is explored in the context of four main perspectives on nie i property rights ii transaction costs economics iii new economic history and iv evolutionary economics there are two main arguments the first is that the transformation phase should be seen as open ended rather than a closed process where the pure market is the inevitable end result the second is that although the nie literature touches on most of the issues which are relevant to post socialist transformation the insights that it offers are still too general for policy guidance

earnings functions for the self employed comment abstract the standard human capital earnings model is applied to data from a 1975 socioeconomic survey conducted in tehran iran results show that the returns to schooling for the self employed not including street vendors canvassers and newsvendors are statistically equivalent to those of wage and salary workers thus in contradiction to conclusions drawn from a study by chiswick 1976 the high rates of return to schooling found in many studies of less developed countries do not appear to be the result of the systematic exclusion of the self employed from the estimating samples in other words when wage and salary workers are compared with the self employed in similar occupations their earnings profiles are similar

the roots of entrepreneurship and labour demand individual ability and low risk aversion the topic of entrepreneurship currently experiences a revived interest as is shown by the research agenda of today s empirical researchers there are few issues in economics which are backed up by such a rich historical knowledge base as is the case with entrepreneurship this paper aims to give an overview of some important classic contributions relating to today s and tomorrow s empirical research subjects the overview consists of answers to six research questions by six historical contributors to entrepreneurship research together these questions give some insight into the determinants of successful entrepreneurship the classic contributors considered are cantillon say marshall schumpeter knight and kirzner their views are compared to each other as well as to some recent results of empirical research into the determinants of successful entrepreneurship

reducing start up costs for new firms the double dividend on the labor market starting a firm with expansive potential is an option for educated and high skilled workers if there are labor market frictions this additional option can be seen as reducing the chances of ending up in a low wage job and hence as increasing the incentives for education in a matching model we show that reducing the start up costs for new firms results in higher take up rates of education it also gives rise through a thick market externality to higher rates of job creation for high skilled labor as well as average match productivity we provide empirical evidence to support our argument

structural and behavioural characteristics of informal service employment evidence from a survey in new delhi this article argues that at least two distinct categories within the informal sector informal services and informal manufacturing exhibit different structural and behavioural characteristics while some segments of informal manufacturing may indeed be dynamic as noted by some recent studies the hypothesis is tested for the informal service employment on the basis of a survey by the author in new delhi india it examines investment earnings returns to human capital socio economic characteristics and scope for upward mobility of informal service employment it finds formal education does not explain differences in earnings in the sample but background characteristics do earnings in the informal service sector are neither the lowest in the economy nor are they comparable to wages in the urban formal unskilled sector when differences between migrants and non migrants are taken into account on the basis of these results the paper reflects on the nature of growth and structural change in the indi

large scale minimum variance portfolio allocation using double regularization abstract estimation of time varying covariances is a crucial input in minimum variance mv portfolio allocations rolling window based sample estimates are widely used for this purpose but they usually suffer from two major issues when applied to a moderately large number of assets the curse of dimensionality and temporal instability here we propose a double regularized estimator for a high dimensional covariance matrix in which we impose both a temporal and cross sectional sparsity regularization on the sample based estimates to simultaneously mitigate these two issues we investigate the performance of our proposed covariance estimator for mv portfolio construction using monte carlo experiments and empirical examples we find that the resulting mv portfolio strikes a good balance between risk and turnover reduction and produces more accurate equivalent returns after transaction costs are taken into account when compared to four other mv strategies

labor market adjustment to political conflict changes in the labor market in el salvador during the 1980s abstract i use household survey data for the 1980s to examine changes in the labor market of el salvador the findings suggest that the labor market does adjust to conflict there have been significant effects of conflict on the regional distribution of employment on international migration on internal migration in the areas directly affected other indicators such as labor force participation and self employment rates show outcomes are lower in the areas that were affected by conflict but were lower even before the conflict began and for earnings the level of real hourly earnings has fallen substantially in all areas in the 1980s

caviar conditional autoregressive value at risk by regression quantiles value at risk var has become the standard measure of market risk employed by financial institutions for both internal and regulatory purposes var is defined as the value that a portfolio will lose with a given probability over a certain time horizon usually one or ten days despite its conceptual simplicity its measurement is a very challenging statistical problem and none of the methodologies developed so far give satisfactory solutions interpreting the var as the quantile of future portfolio values conditional on current information we propose a new approach to quantile estimation which does not require any of the extreme assumptions invoked by existing methodologies such as normality or i i d returns the conditional autoregressive value at risk or caviar model moves the focus of attention from the distribution of returns directly to the behavior of the quantile we specify the evolution of the quantile over time using a special type of autoregressive process and use the regression quantile framework introduced by koenker and bassett to determine the unknown parameters since the objective function is not differentiable we use a differential evolutionary genetic algorithm for the numerical optimization utilizing the criterion that each period the probability of exceeding the var must be independent of all the past information we introduce a new test of model adequacy the dynamic quantile test applications to simulated and real data provide empirical support to this methodology and illustrate the ability of these algorithms to adapt to new risk environments

returns to schooling in non farm self employment an econometric case study of ghana abstract does educational attainment affect the income from family enterprises this study examines this relationship from various angles heteroskedasticity proves to be an important econometric factor in determining the optimal estimation strategy in ghana educational attainment of the entrepreneur has a small positive effect which represents primarily a contribution to allocative efficiency the size of the effect is close to the rate of return estimated for ghanaian employees educational attainment of the entrepreneur s family members has a significant positive effect reflecting the idea that as family members share financially in die firm s outcome they volunteer services from their human capital stock

the informal sector elephant abstract different analysts have used the term informal sector to mean different things a data set with 2 200 small enterprises chosen using random procedures in seven countries makes it possible to test the relationships between different measures the analysis finds only limited parallels between definitions based on size on registration on conformity to fiscal and other regulations and on degrees of modernization wide variations appear from one country to another the term may be appropriate for examination of individual countries especially if the analyst defines it precisely but its use in multicountry analysis is fraught with difficulties

consistent estimates of the wage equation when individuals choose among income earning activities one of the most stable relationships in economics is the human capital wage determination equation numerous studies using data from the u s as well as low income countries have found that education raises the individual s wage rate and that experience affects wage rates in a non linear way peaking in the age cross section generally at around thirty years of experience the wage rate is an aggregate concept in that it represents the returns per hour of work regardless of the type of work performed this paper is a first step toward a disaggregation of wages according to income earning activities the activities distinguished here are work in the wage labor market and vork in self employment these activities earn respectively market wages and self employment wages but this nomenclature does not imply that work in self employment is an activity outside the labor market self employment is an individual s choice among labor market alternatives the motivation for this paper is three fold first of all current literature has not explored in any depth the issue whether the determinants of the wage rates earned in the two activities are similar differences may well exist entrepreneurial human capital varies from that of employees the mix of pecuniary wage and non pecuniary compensation may differ entrepreneurs frequently use their own assets like land or capital in their business activity section ii will expound on these theoretical differences in more detail second little is known about self employment wages most wage studies admit to the different nature of the two activities by omitting all individuals reporting self employment earnings from the sample and estimate wage equations for employees only this is not the optimal solution to the problem in developing countries up to one half of the labor force is self employed and even in industrialized countries 10 to 15 percent adds up to a sizeable group in absolute numbers restricting the sample to employees is likely to intro

social capital innovation and growth evidence from europe this paper investigates the interplay between social capital innovation and economic growth in the european union we identify innovation as an important mechanism that transforms social capital into economic growth in an empirical investigation of 102 european regions in the period 1990 2002 we show that higher innovation performance is conducive to economic growth and that social capital affects growth indirectly by fostering innovation our estimates suggest that there is only a limited role for a direct effect of social capital on economic growth

education and entrepreneurial success this paper estimates the effect of education on the success of entrepreneurial activity using survey data from malawi an instrument variable approach is used to address the endogeneity of education we find a significant and substantial effect of an added year of primary education on entrepreneurial profitability this is consistent with theoretical arguments that primary schooling provides a generalised form of competence that underpins the variety of skills an entrepreneur needs to succeed in business results are robust to non random selection into entrepreneurship

the determinants of nonfarm activities and incomes of rural households in mexico with emphasis on education abstract this paper presents the main results of a study of the effects of education as well as other household assets on the choice of activities and incomes of rural mexican households our study examines the various income sources as well as the education of the household s head and its members implications are drawn for rural education and development policies to promote rural nonfarm incomes and employment

rural nonfarm incomes in nicaragua abstract this paper examines nonfarm incomes of rural nicaraguan households using a nationwide survey lsms from 1998 the key findings are as follows a rural nonfarm income rnfi constitutes 41 of rural household incomes b rnfi is much more important than farm wage labor income c rnfi tends to be relatively concentrated geographically and socioeconomically toward the rural areas of the managua zone and the rest of pacific zone which are denser in infrastructure and population and toward the upper income quartile of rural households this concentration implies high entry barriers and capital requirements for rural nonfarm activity that the poor are simply not equipped to overcome equipping the rural poor through training and acquisition of diverse forms of capital to have a chance at the higher return nonfarm jobs would be a major step toward helping them to share the benefits of the rural nonfarm economy d self employment small enterprise income in manufactures is very minor probably due to the ease of obtaining manufactured goods from urban industries and imports wage employment constitutes the bulk of rnfi despite it receiving little attention in development programs and debate e three quarters of rnfi is in the service sector and only one quarter is from manufactures that can be contrasted with the emphasis on small manufactures enterprises in rural development programs and research f education road access as well as access to electricity and water were found to be important to nonfarm incomes

capital constraints and the performance of entrepreneurial firms in vietnam entrepreneurship has been among the key driving forces of the emergence of a dynamic private sector during the recent decades in vietnam this article addresses for vietnam the questions how capital constraints affect the performance of family firms and how entrepreneurs human and social capital interact with capital constraints to leverage entrepreneurial income a panel of 1721 firms in 4 years is used results are consistent with the resource dependency approach indicating an adverse effect of capital constraints on firm performance firms suffering capital constraints perform substantially better suggesting that they need more capital simply to finance newly recognized profit opportunities human capital plays a vital role in relaxing capital constraints and improves the entrepreneurial performance whereas the effect of social capital stemming from strong ties and weak ties is limited strong ties bring emotional support and weak ties give nonfinancial benefits from regular and useful business contacts advanced econometric analysis tools to take into account the endogeneity of capital constraints are used to establish relationships among relevant variables

health and productivity in a heterogeneous urban labour market the effects of changes in various health indicators on hourly earnings in different sectors of the labour market are examined using survey data from conakry guinea greater height which is associated with greater strength raises earnings of men both in self employment and the private wage sector where work is likely to involve physical labour height does not matter for women s earnings which likely reflects the less physically strenuous nature of most women s activities body mass index treated as an endogenous variable appears to raise earnings of men in self and private wage employment and of women in self employment no impacts are found for household per capita calorie and protein availability also treated as endogenous overall the results suggest that health matters for productivity in poor urban environments with these effects depending on gender and the sector of employment or type of work

migration from nicaragua some recent evidence abstract i utilize two unique data sources to examine migration from and remittance flows to the capital city of managua nicaragua approximately 10 12 of the population has emigrated these emigrants tend to be disproportionately of working age better educated and more often white collar workers than nonmigrants in addition emigrants are more likely to come from larger premigration households and higher income households remittance flows to managua are quite large the second largest source of foreign exchange earnings after coffee in addition remittances have a negative income effect on labor force participation and a positive effect on self employment of nonmigrants

high growth entrepreneurial firms in africa a quantile regression approach this article analyses the growth performance of a large set of entrepreneurial firms in ten manufacturing sectors of 11 sub saharan african countries the focus of the article is on identifying those entrepreneurs attributes and firm characteristics that tend to generate a significant number of high growth firms in these countries to this end we use a quantile regression which provides a more complete estimation of the growth distribution of firms conditional on different attributes the results indicate that firms that engage in product innovation have their own transport means and are connected to the internet through their own website are especially characterized by higher growth rates and also display a distribution of growth rates skewed to the right hosting a higher number of high growth firms the effect of the last two variables which relate to distance bridging modes of infrastructure points to the self reinforcing growth effects they generate in creating wider input and output markets education raises growth opportunities by affecting the lower quantiles but it does not appear to influence the upper quantiles the estimated conditional growth distributions for the technology intensive machinery and electronics sectors show more extreme tails and a lower mean in comparison to the traditional industries indicating the more risky nature of doing business in these industries

forecasting value at risk and expected shortfall using a semiparametric approach based on the asymmetric laplace distribution value at risk var forecasts can be produced from conditional autoregressive var models estimated using quantile regression quantile modeling avoids a distributional assumption and allows the dynamics of the quantiles to differ for each probability level however by focusing on a quantile these models provide no information regarding expected shortfall es which is the expectation of the exceedances beyond the quantile we introduce a method for predicting es corresponding to var forecasts produced by quantile regression models it is well known that quantile regression is equivalent to maximum likelihood based on an asymmetric laplace al density we allow the density s scale to be time varying and show that it can be used to estimate conditional es this enables a joint model of conditional var and es to be estimated by maximizing an al log likelihood although this estimation framework uses an al density it does not rely on an assumption for the returns distribution we also use the al log l

improving daily value at risk forecasts the relevance of short run volatility for regulatory quality assessment abstract in this paper we present a novel perspective on data filtering and present an innovative wavelet based approach that leads to improved value at risk var forecasts a separation of financial conditional volatility into short mid and long run components allows us to study the relevance of these frequency components with respect to a regulatory quality assessment for daily var forecasts a simulation study and an analysis of daily market prices suggest that short and mid run information components cover the relevant information that is necessary for estimating adequate daily var excluding long run information components reduces daily var forecasts by up to 4 and does not impact the quality of regulatory back testing

profits from self employment the case of cote d ivoire abstract in the past self employed workers were often viewed as less productive individuals yet recent research has indicated that the nonagricultural self employed fill a niche in the economy that large industry cannot the goods and services they produce may well be a necessary part of the infrastructure within which large scale industry can flourish this paper examines the productivity of nonagricultural family enterprises in cote d ivoire marginal returns to self employed labor are somewhat less than the wage rate of equivalent salaried workers capital yields extremely high returns in self employment possibly above 100 per month assuming limited access to credit the self employed may do well by establishing enterprises and gaining the large returns to capital that offset the somewhat lower returns to labor

growth efficiency and convergence in china s state and collective industry in china as in the soviet union and eastern europe economic reform initiatives seek to increase productivity by introducing elements of market oriented policies and institutions into an economy formerly dominated by state planning efforts to evaluate the impact of reform of chinese industry have focused on the measurement of productivity change in state enterprises this study expands the prior framework of analysis in several directions our investigation of productivity trends is not limited to state enterprises but includes quantitative comparisons with china s fast growing collective industries which contributed 36 of overall industrial output in 1988 1 unlike previous studies our analysis works with gross rather than net output this permits us to investigate changes in the productivity of intermediate inputs which occupy a large portion of total costs in chinese industry as well as labor and capital to do this we develop a quasi frontier estimation procedure which seems appropriate for comparisons of total factor productivity based on chinese industrial data finally we offer a quantitative perspective on the extent to which reform efforts have moved industrial resource allocation toward patterns expected of a market system the analysis confirms our previous finding based on a restricted framework employing only labor fixed capital and net output that multifactor productivity in state industry has risen substantially during

sri lanka s rural non farm economy removing constraints to pro poor growth summary we use a survey of rural enterprises from sri lanka to explore characteristics of the informal non farm sector and identify obstacles to its expansion and productivity value added in this sector amounts to 80 of agricultural gdp participating households incomes are significantly higher than those of households who do not participate barriers to entry are low and the impact of non farm development on inequality modest implying a large potential contribution to growth and poverty reduction infrastructure constraints negatively affect new startups investment in and productivity of existing enterprises with small enterprises being particularly affected

the rural non farm sector issues and evidence from developing countries abstract the rural non farm sector has traditionally been viewed as a low productivity sector which produces low quality goods it is often expected to wither away as a country develops recent years have seen a shift away from this position towards recognition that the rural non farm sector can and often does contribute to economic growth rural employment poverty reduction and a more spatially balanced population distribution this paper reviews the literature on the conceptual and empirical underpinnings of this more recent perspective focussing on the experience in developing countries the paper documents the size and heterogeneity of the sector pointing to evidence that in many countries the sector is expanding rather than declining the issues associated with measuring the sector s economic contribution are discussed followed by empirical assessments for several countries and regions the distributional impact of non farm earnings is examined and it is found that a pro poor impact while by no means inevitable can be considerable the sector s trajectory over time in different settings is reviewed and the scope for and experience of various policy interventions is discussed

nonfarm employment and poverty alleviation of rural farm households in honduras abstract this paper analyzes the role of nonfarm income of rural farm households in honduras it uses the national income and expenditure survey from 1993 to 1994 income from nonfarm wage and self employment represents 16 25 of farm household income and is especially important for middle and higher income strata nonfarm wage labor is geographically concentrated in small rural towns and in the industrial free zones located in the northern region while self employment is particularly developed in the southern region access to nonfarm wage employment is confined to educated individuals that belong to large households while female members of wealthier households are mainly involved in self employment food security is strongly enhanced through the engagement in nonfarm activities moreover nonfarm income enables farmers to purchase external inputs for improving yields and labor productivity suitable policies to enhance nonfarm employment include education training and technical assistance to reduce labor intensity in agricultural production as well as public investment and credit services to improve access to nonfarm activities

gender and education impacts on employment and earnings in west africa evidence from guinea this study examines the determinants of labor force participation for men and women in guinea for three sectors and for earnings employment includes self employment private wage employment and public wage employment data were obtained from a survey of 1725 households in the capital city of conakry in 1990 labor force participation lfp was 40 for women aged 15 65 years and almost 100 for men aged 30 50 years men were engaged almost equally in all three sectors while women were mostly engaged in self employment self employed women tended to come from low income households all public sector employees were well educated about 10 12 years average levels of education among the self employed were very low 2 3 years in the private wage sector men averaged 5 years and women averaged 9 years of schooling 47 of men and 59 of women in the public sector were in professional or managerial jobs in the private sector over 50 of women were in professional managerial or clerical jobs compared to only 16 of men few women in the private sector were engaged in skilled trades or unskilled work most self employed women and only 50 of men tended to work in retail trade migration during the past 5 years was positively associated with mens entry in self employment and the private sector and negatively associated with their public sector employment determinants of womens self employment included residence near commercial areas of the center city electricity in the house and work activity during the rainy season of april september fulani and malinke women were less likely to be self employed for women the benefits of education and experience declined after a certain level returns to schooling were high for both genders men earned more than women there is a need to increase educational and employment opportunities for women

segmented or competitive labour markets a normal roy model with four sectors is developed it allows to derive tests of several assumptions on the working of the labor market strongly or weakly competitive or segmented it shows that more important a feature of labor markets than segmentation is the presence of comparative advantages for individuals between the various economic sectors the model is applied to data on women s labor force participation in the main towns of colombia in 1980 it uses multivariate probit and tobit techniques copyright 1991 by the econometric society

soft budget constraint and inflation cycles a positive model of the macro dynamics in china during transition abstract in this paper we develop a positive general equilibrium model consistent with china s institutional and political environment to explain the growth and inflation cycles during transition central to our explanation is the government s use of the monetary and financial system to support the state sector and the growing tension between a long running commitment to the sector and economic decentralization given this commitment we show how the cycles emerge as a product of the government s imperfect control over credit allocation under decentralization and the high costs of implementing administrative credit control

the dynamics of micro and small enterprises in developing countries abstract the number of people engaged in micro and small enterprises increases as a result of new enterprises being started and through an expansion of existing activities as a partial offset to these increases employment declines when existing businesses cease operations this article draws on recent survey work to examine the magnitude and determinants of enterprise births closures and expansions it explores the ways in which these different sources of change are influenced by the state of the macroeconomy and examines policy and project implications

household labor supply in urban areas of bolivia we analyze labor supply behavior and the choice between formal and informal sector work of the two spouses in families in urban areas of a developing country using cross section data from bolivia drawn in 1989 the model generalizes the neoclassical family labor supply model nonmonetary returns of formal sector employment capture the fact that the choice between sectors is not exclusively based on wage differentials wage equations nonmonetary returns equations and labor supply equations are estimated jointly by smooth simulated maximum likelihood we find substantial cross wage elasticities of working hours of both partners and large substitution elasticities between the two sectors

the household and employment in small scale nonfarm enterprises abstract this paper investigates the elasticity of hired labor demand in malawian small scale nonfarm enterprises to illustrate some key issues in considering employment policy in the less developed country ldc context where such enterprises comprise a large share of the labor market it is argued that recognizing the household character of production has important bearing on the estimation and understanding of the hired labor demand function a variant of the household production models which have become prevalent in analyses of underdeveloped agriculture is used to demonstrate conceptual differences from conventional studies of labor demand of particular relevance is the conclusion that the disemployment effect of wage hikes is likely to be smaller than in the more conventional enterprise and that the demographic composition of the household will affect employment patterns

the return to education street vendors in mexico abstract a simple accounting identity model estimated using data collected from a 1994 survey of street vendors revealed a rate of return on capital approaching 20 participation in vendor associations significantly increased the return by approximately 2 5 since educational attainment and capital investment were positively correlated in the sample data omitting the return to capital in an earnings equation as many researchers have done will overstate returns to education controlling for differences in capital each additional year of education increased earnings an average of us 06 per hour an increase significant at the 0 0001 level

the first shall be last entrepreneurship and communist cadres in the transition from socialism this article reviews the sociological literature on the transition from socialism to capitalism it distinguishes between the erosion and transition phases and between traditional and corporate segments in the emerging private sector panel survey data from hungary show that during the transition ex communist cadres maintain their advantageous position and do especially well in the more dynamic corporate segment they are successful because human capital is important in both capitalism and socialism and because the cadres are able to convert past political power to economic advantage contrary to the findings of studies based only on agriculture the transition increases income inequalities

rural poverty in latin america determinants and exit paths abstract while rural poverty in latin america has declined over the last three decades success has been uneven across countries and rural poverty remains huge reduction in the number of rural relative to urban poor has been mainly the outcome of migration not of successful rural development we show that rural incomes are explained by the asset position of households and the characteristics of the context where assets are used given heterogeneity in asset positions and contexts many strategies to escape poverty consequently exist we identify four paths out of poverty exit agricultural pluriactive and assistance successful rural development to promote the agricultural and pluriactive paths requires a wholesale new approach based on regional development decentralization and participation agricultural technology has a role to play in these two strategies in latin america however the bulk of the benefits from technological change has been captured through indirect effects via the price of food employment creation and contributions to aggregate growth

labor market choices earnings and informal networks in khartoum sudan a micro economic labor force model was used to explain the relationship between five labor market segments and earnings in khartoum sudan the assumption was that individuals maximized their earnings by comparing the rewards of working in alternative and mutually exclusive segments of the labor market the polychotomous choice model allowing for unobserved factors used the hay dubin and mcfadden extension of heckmans technique for correcting for selection bias data were obtained from a private survey conducted by the authors during 1988 89 the sample included 1756 small scale enterprises and 1505 self employed workers and 2572 employees in the informal sector and 8037 workers in 170 formal sectors firms 12114 workers the five segments included public sector employment in the formal sector private sector employment in the formal sector private large self employed in the informal sector informal sector employees working in permanent structures private small and informal sector employees working for unlicensed firms without a permanent structure unprotected workers earnings were lowest in the unprotected segment and highest among self employed businessmen the model supported the view that private and large employers hired the best workers findings supported kannapans hypothesis that informal networks based on ethnicity were important in determining access to urban labor markets a high correlation was found between province of birth of the employer and employees the public sector earnings model had the highest degree of explanatory power of earnings differences wages in the private small and unprotected segments were also determined by education the findings suggested that studies of the rate of return to education should account for how social networks affect the probability of workers obtaining employment in a particular segment and should account for fixed wage rates in particular segments

self employment earnings and mobility in peninsular malaysia abstract this study tests several hypotheses about self employment in ldcs that derive from the common view of the self employed as part of the informal sector of a dualistic labor market the empirical findings based upon malaysian survey data reject the hypotheses that the self employed earn less than wage employees ceteris paribus and that the self employed in urban areas are typically recent migrants an alternative interpretation of the determinants of self employment is suggested based upon these findings

the determinants of nonfarm income diversification in rural peru abstract this paper shows that in peruvian rural areas there has been substantial growth over the past decade in household employment outside of own farming at present 51 of the net income of rural households comes from these off farm activities and thus they certainly cannot be considered as marginal the reasons households diversify their incomes are several access to public assets such as roads and private assets such as education and credit is an important factor in diversification increasing access to these assets will help rural households to increase their self employment as well as wage employment in the nonfarm sector

firm size and technical efficiency applications of production frontiers to indian survey data abstract this paper is an empirical investigation of the relationship between relative technical efficiency and firm size in four indian manufacturing industries a frontier translog production function is used to derive measures of technical inefficiency at the enterprise level given the properties of the estimated production frontier these indices of technical efficiency are also indices of total factor productivity tfp which is the single most widely accepted measure of productive efficiency variations in technical efficiency are correlated with several explanatory variables including size of firm firm size is found to be positively associated with relative productive efficiency in only one of the four industries

farm nonfarm linkages in rural sub saharan africa this paper is an accumulation over the past 25 years of a body of detailed work examining the structure of africa s rural nonfarm economy first it systematically reviews empirical evidence on the nature and magnitude of the african rural nonfarm economy it then explores differences across locality and size across countries and over time in an effort to assess likely patterns of growth a subsequent review of key production and consumption parameters allows an estimate of the magnitude of the agricultural growth multipliers in africa the paper concludes with a brief discussion of policies and programs that will be necessary if farm nonfarm growth linkages are to achieve their full potential

human capital entrepreneurship and farm household earnings abstract the allocation of resources between agriculture and non agriculture is a central decision of the farm household in this paper we formulate a profit maximization model in which human capital enhances efficiency through both within sector effects and across sector allocation of quasi fixed inputs the model is estimated using chinese household data that contain detailed information on production activities we find that schooling and experience improve the sectoral uses of household supplied inputs accounting for 27 of their total contribution to earnings the evidence suggests that conventional estimates of human capital returns obtained within sectors would undervalue the role of human capital in development

another day another dollar enterprise resilience under terrorism in developing countries this study extends the literature on entrepreneurship in developing countries by offering a two stage explanation for the paradoxical observation that enterprise activities often flourish under extreme adversity our findings complement the base of pyramid and peace through commerce attention to the growing role of business in international development by fleshing out the functions of enterprise resilience under terrorism we first explain how terrorism conditions outbreak escalation and reduction may create psychological incentives for enterprise resilience then we show that controlling for ex ante terrorism conditions enterprise resilience yields more favorable economic payoffs at higher levels of terrorism especially for informal entrepreneurs

market reforms technological capabilities and the performance of small enterprises in china this paper shows that the domestic and foreign trade liberalization of the chinese economy since the late 1970s has led to much dynamism among small and medium firms such firms have grown at a rapid pace and have increased their share of value added in the chinese economy at the same time they have recorded gains in total factor productivity however after two decades of decontrol the potential for further growth among small and medium industries is limited unless further liberalization is undertaken and government policies pertaining to the allocation of credit levy of taxes and grants of research and other subsidies are applied in a more even handed fashion

leaders managers and the organization of township and village enterprises in china abstract the managerial contractual form in china s township and village enterprise tve sector has evolved rapidly during the past 10 years our paper uses descriptive data and a theoretical model to demonstrate that these changes may be occurring in response to the rapid development of markets in transitional rural china we econometrically test the model s main hypotheses showing that the driving force behind the movement from a leader run fixed wage contract to a fixed payment contract with better incentives for the manager is the relative value of non marketed inputs owned by local leaders and firm managers firm technical structure and local market setting also plays a role in the determination of firm contractual form

modeling determinants of poverty in mauritania abstract this paper presents a brief descriptive summary of poverty in mauritania as revealed by household survey data for 1990 and then uses regression analysis to study the determinants of living standards and hence poverty the latter is conducted at the level of broadly defined socioeconomic groups using an econometric technique which also models the selection of households into socioeconomic groups household characteristics are used as explanatory variables including demographic education and sector specific variables by controlling for many factors multivariate analysis enables a clearer understanding of the nature and determinants of poverty than can be obtained from examination of summary poverty indices

the effect of scale on the response to reform by chinese state owned construction units abstract using firm level data on large and medium state owned construction units a production function approach evaluates the effect of scale on the response of chinese state enterprises to reform large state units have greater economies of scale but are less productive and less input price efficient as investment increases in nonproductive fixed assets large unit profits are declining fastest and a comparison of coastal interior and ministry level units contradicts the hypothesis that competition is the primary source of this decline instead falling profits are explained by the increased autonomy which allows these units to be more inefficient

nairobi s informal sector dynamic entrepreneurs or surplus labor the 1972 international labour office ilo report on kenya and its use of the term informal sector sparked off a great deal of controversy in the development literature over the meaning and usefulness of such a concept some critics have argued that the motivations and activities of participants in what is called the informal sector are so fundamentally diverse in nature that to write of a single sector which can be usefully incorporated in models of the urban economy of ldcs is fruitless partly as a response to these critics others have disaggregated the urban economy into two or three subsectors which are then used to analyze the interdependence and explain the dynamics of the urban labor market through time unfortunately the empirical base for testing these models and resolving some of these arguments is extremely sketchy and in most cases nonexistent in a partial attempt to fill this lacuna especially in kenya a survey of informal sector enterprises in nairobi was launched in mid 1977 the results of the survey are used to test some general hypotheses about the sector and the paper offers an alternative view of the role of the sector in the urban economy of an ldc with particular reference to kenya

informality size and regulation theory and an application to egypt the paper shows how when the enforceability of regulationsis size sensitive price competition can lock firms into informality and thus smallness depending on the form of the production function in thatcontext exogenous help packages targeted to informal firms promote micro and small enterprises i e increase their numbers but do not develop them i e foster their growth the help only generates ashort term span of abnormal profits for existing informal firms and a long term income transfer toward informal market consumers the model istested in the context of egypt s micro and small enterprise sector

returns to schooling in less developed countries new evidence from zambia this article provides new evidence on returns to education in a developing country by estimating human capital models for zambia the full model allows for endogenous participation and sector choice removing some bias on the estimated coefficients in the income equation the general finding is that the return to primary schooling is higher in rural than in urban areas the return is higher in the informal sector than in the formal sector and in rural areas it is higher in employment than in self employment moreover selectivity mechanism guides the allocation of workers across sectors among females from urban areas those with the best unobserved characteristics are employed in the formal sector among the males from urban areas the most able are informally employed

income diversification and entry barriers evidence from the tigray region of northern ethiopia abstract farm households diversify their income sources into off farm wage employment motivated by low farm income and availability of surplus family labor whereas they enter into off farm self employment to earn an attractive return farm households have upward sloping although inelastic off farm labor supply curves therefore increasing the availability of off farm activities and improving the wage rate received by farm households can expand the economic activity of the tigray regional state due to entry barriers relatively wealthy farm households may dominate the most lucrative rural non farm activities such as masonry carpentry and petty trade hence the underlying factors that hinder participation in non farm activities such as credit constraints and lack of skill may have to be addressed through the provision of credit and technical training for the poor

what determines success examining the human financial and social capital of jamaican microentrepreneurs abstract this research examines the performance of 215 informal microenterprises in jamaica studying the influence of human capital social capital and financial capital of the owners on their business profitability understanding the importance of particular relationships that result in successful micro businesses is important for a number of reasons first among many developing countries the growth of microenterprise provides the most visibly vibrant and growing economic activity although considerable effort and resources are being directed toward microenterprise promotion schemes empirical research on the subject is quite limited second economies in developing countries mirror many of the social and institutional problems existent in urban economically disadvantaged areas of the united states and other developed countries for these areas microenterprise may be an essential component of urban renewal and community development this study helps in identifying important characteristics of social and individual attributes that may be relevant to those attempting to strengthen this subsector finally this study seeks to provide insight into a dimension of microbusiness research for which there are limited data specifically the role that social capital plays among practicing entrepreneurs and owners this research found that different structural environments even within a singular and small economy may considerably alter the rates of return to human social and financial capital as a result the analysis of enterprises includes segmentation according to both the usage or not of employees and the sophistication of the technologies used several factors were determined to enhance the profitability of the businesses in all categories vocational training for example demonstrated consistently strong and positive effects mother s high occupational status a proxy for socioeconomic status and years of experience in the business were also consistently positive and strongly associated with increasing profits although additional starting capital played an important role for both the businesses with and without employees increasing amounts failed to differentiate the success of those firms that were already operating in the higher technological tier obtaining a small business loan acted in a similar manner enhancing the profitability of all firms except those segmented into a high technological tier one interpretation of this finding is that the role of technological choice is extremely important and appears to dwarf that of varying amounts of starting capital social capital as operationalized by frequent church attendance and marital status of the owner was found generally to increase the profitability of the business the data demonstrate that social networks play an important role in the success of these businesses and that conditions in the highest tier utilize social capital in a somewhat unique manner

examining the formation of human capital in entrepreneurship a meta analysis of entrepreneurship education outcomes abstract effective human capital formation through the medium of entrepreneurship education and training eet is of increasing concern for governments as eet is growing rapidly across the world unfortunately there is a lack of consistent evidence showing that eet helps to create more or better entrepreneurs we undertake the first quantitative review of the literature and in the context of human capital theory find that there is indeed support for the value of eet based on 42 independent samples n 16 657 we find a significant relationship between eet and entrepreneurship related human capital assets r w 217 and entrepreneurship outcomes r w 159 the relationship between eet and entrepreneurship outcomes is stronger for academic focused eet interventions r w 238 than for training focused eet interventions r w 151 we find evidence of heterogeneity in many of our correlations and recommend that future studies examine potential moderators to more clearly delineate eet effect sizes we also find a number of methodological weaknesses among the studies analyzed and that those studies with lower methodological rigor are overstating the effect of eet recommendations to improve the quality of future work in the field are provided

an idea in good currency and how it grew the informal sector abstract the informal sector is an exceedingly fuzzy concept which has come into wide use because it seemed to address the interests of a number of very diverse groups those interested in growth planning those interested in alleviating poverty marxist structuralists and those interested in economic accounting the use of the concept has been helpful in directing attention to phenomena previously ignored but adopting the term obscures analysis of central issues and is counterproductive we should rather specify critical policy issues and design field research around these

education and household inequality change a decomposition analysis for india previous studies show that rising returns to education have lead to higher wage inequality in developing countries however given the importance of non wage employment and indirect effects of education through labour supply and fertility choices a similar relationship does not necessarily hold for inequality between households based on a decomposition analysis for india we find counteracting impacts of education on household expenditure inequality declining returns to education of household heads reduced inequality driven by the self employed in contrast rising returns to spouses education increased inequality in urban areas we also find that changes in education levels increased rural and urban inequality due to persistently high illiteracy finally the indirect effect on fertility had a small equalizing impact in urban areas but slightly increased inequality in rural areas

what have we learned from three decades of research on the productivity of public capital the last three decades have witnessed a great deal of research effort devoted to measuring the private output elasticity of public capital the wide range of available estimates have precluded any consensus so far however this paper reconciles the empirical findings of the literature by quantitatively analyzing a sample of 578 estimates collected from 68 studies for the 1983 2008 period using meta regression analysis we show how study design characteristics and publication bias can explain a large fraction of the variation across estimates we find a short run output elasticity of public capital supplied at the central government level of 0 083 which increases to 0 122 in the long run if in addition only core infrastructure at a regional local level of government is considered these estimates are almost doubled the average output elasticity of public capital amounts to 0 106 our results suggest that public capital is undersupplied in oecd economies

returns to investment in education a global update the author updates compilations of rate of return estimates to investment in education published since 1985 and discusses methodological issues surrounding those estimates some key patterns among the three main levels of education primary education continues to exhibit the highest social profitability in all world regions private returns are considerably higher than social returns because of the public subsidization of education the degree of public subsidy increases with the level of education which is regressive social and private returns at all levels generally decline by the level of a country s per capita income overall the returns to female education are higher than those to male education but at individual levels of education the pattern is more mixed the returns to the academic secondary school track are higher than the vocational track since unit cost of vocational education is much higher and the returns for those who work in the private competitive sector of the economy are higher than in the public noncompetitive sector and the returns in the self employment unregulated sector of the economy are higher than in the dependent employment sector controversies in the literature are discussed in the light of the new evidence the undisputable and universal positive correlation between education and earnings can be interpreted in many ways the causation issue on whether education really affects earnings can be answered only with experimental data generated by randomly exposing different people to various amounts of education given the fact that moral and pragmatic considerations prevent the generation of such pure data researchers have to make do with indirect inferences or natural experiments some have been attempted the author looks at the research on overeducation or surplus schooling the conclusions reinforce earlier patterns they confirm that primary education continues to be the number one investment priority in developing countries they also show that educating females is marginally more profitable than educating males that the academic secondary school curriculum is a better investment than the technical vocational tract and that the returns to education obey the same rules as investment in conventional capital that is they decline as investment is expanded