the economic impact of social ties evidence from german reunification we use the fall of the berlin wall in 1989 to show that personal relationships which individuals maintain for noneconomic reasons can be an important determinant of regional economic growth we show that west german households who had social ties to east germany in 1989 experienced a persistent rise in their personal incomes after the fall of the berlin wall moreover the presence of these households significantly affects economic performance at the regional level it increases the returns to entrepreneurial activity the share of households who become entrepreneurs and the likelihood that firms based within a given west german region invest in east germany as a result west german regions that for idiosyncratic reasons have a high concentration of households with social ties to the east exhibit substantially higher growth in income per capita in the early 1990s a one standard deviation rise in the share of households with social ties to east germany in 1989 is associated with a 4 7 percentage point rise in income per capita over six years we interpret our findings as evidence of a causal link between social ties and regional economic

how important is selection experimental vs non experimental measures of the income gains from migration measuring the gain in income from migration is complicated by non random selection of migrants from the general population making it difficult to obtain an appropriate comparison group of non migrants this paper uses a migrant lottery to overcome this problem providing an experimental measure of the income gains from migration new zealand allows a quota of tongans to immigrate each year with a lottery to choose among the excess number of applicants a unique survey conducted by the authors in these two countries allows experimental estimates of the income gains from migration by comparing the incomes of migrants to those who applied to migrate but whose names were not drawn in the lottery after allowing for the effect of non compliance among some of those whose names were drawn the authors also conducted a survey of individuals who did not apply for the lottery comparing this non applicant group with the migrants enables assessment of the degree to which non experimental methods can provide an unbiased estimate of the income gains from migration they find evidence of migrants being positively selected in terms of both observed and unobserved skills as a result non experimental methods are found to overstate the gains from migration by 9 to 82 percent a good instrumental variable works best while difference in differences and bias adjusted propensity score matching also perform comparatively well

oiling the palms restructuring of settlement schemes in malaysia and the new international trade regulations abstract the felda resettlement program in malaysia is internationally recognized as a success story in terms of cultivated area number of settlers and scope of vertical integration in the malaysian palm oil industry since the mid 1980s however a series of reorganizations of work and property rights in the settlement schemes have taken place it is argued here that the recent adjustments of felda are in accordance with the new rules for international regulation of agricultural production and trade in the wto international trade regulations increasingly influence the direction of socioeconomic and institutional struggles over rural reform programs in developing countries

social networks as a catalyst of economic change abstract this letter finds that east germans with strong social ties invested earlier in a popular new financial product after reunification while long term ownership remained unaffected hence studies of the economic impact of social networks should distinguish transitory from long run effects

economic effects of migration on the left behind in cambodia abstractusing propensity score matching this study examines the effects of migration on various indicators of household wellbeing in cambodia the results indicate that migration would reduce poverty headcount rate by 3 7 percentage points and decrease the depth of poverty migration is also found to reduce by 5 10 per cent the hours worked by members left behind the impact of migration on labour participation may be however vulnerable to unobservable factors nevertheless the study suggests that important heterogeneous effects which differ from the average impact exist the analysis is conducted separately by internal and international migration

social interaction and stock market participation we propose that stock market participation is influenced by social interaction in our model any given social investor finds the market more attractive when more of his peers participate we test this theory using data from the health and retirement study and find that social households those who interact with their neighbors or attend church are substantially more likely to invest in the market than non social households controlling for wealth race education and risk tolerance moreover consistent with a peer effects story the impact of sociability is stronger in states where stock market participation rates are higher

remittances and working poverty abstractthis article shows that the level and the predictability of remittances reduce working poverty in receiving economies through their effects on labour market dynamics it takes advantage of the new cross country dataset ilo kilm 7th edition containing information on the share of individuals working for less than us 2 per day to identify the main impacts the article proposes a novel approach to deal with the endogeneity of remittances and migration in addition the results are robust to the possible error in measuring working poverty to the potential attrition bias and to the presence of various control variables

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

international migration remittances and schooling evidence from el salvador abstract we examine the effect of remittances from abroad on households schooling decisions using data for el salvador following the massive war related emigration of the 1980s remittances became a significant source of household income throughout the 1990s we use the cox proportional hazard model to examine the determinants of school attendance measuring income from a source that is uncorrelated with parental schooling remittances we find that remittances have a large significant effect on school retention we estimate that while household income net of remittances has a small though significant impact on the hazard of leaving school in rural and urban areas remittances have a much larger impact on the hazard of leaving school in urban areas the effect of remittances is at its smallest 10 times the size of the effect of other income in rural areas the effect of remittances is about 2 6 times that of other income our finding is of interest in that it suggests that subsidizing school attendance particularly in poor areas may have a large impact on school attendance and retention even if parents have low levels of schooling

ponzi schemes and the financial sector dmg and drfe in colombia abstract we use a novel dataset to estimate for the first time in the literature the effects of ponzi schemes on the formal financial sector dmg and drfe two ponzi schemes that were shut down by the colombian government in november 2008 had over half a million customers who invested funds corresponding to 1 2 of colombia s annual gdp we find that pyramid costumers obtained more loans from the financial sector and their credit standings were better than those in the respective control groups while the schemes were operating afterwards their loan stocks started to decrease and their ratings with the banking sector deteriorated prior to november 2008 deposits in the financial sector fell more in the municipalities more affected by the schemes

remittances and labor force participation in mexico an analysis using propensity score matching summary about 2 5 million mexicans migrated to the united states during 1997 2002 and 1 6 million of them sent remittances to their families did recipients change their labor force status in response to these remittances this question has been examined before unlike the previous studies we separate persistent from sporadic remittances and we use propensity score matching to measure differences in behavior we find limited evidence of labor force participation effects of persistent remittances which is broadly consistent with remittances being an integral part of household s income generation strategy

the eec s policies and its food abstract this article examines four interrelated aspects of the european community s policy as they affect food supply the customs union the adoption of a common agricultural policy the move towards a single market and the recent extension of the ec s competence to embrace environmental matters ec intervention has certainly affected the range quality composition and price of food in europe s stores and that involvement is likely to grow but the cap does not have the dominant role in determining the food europeans eat europe s international buying power and the ready availability of foods on world markets are more potent considerations

social interaction and economic organization toward an integrative microeconomic model in the context of increasingly complex economies with information more and more complicated to handle social interaction may allow spontaneous co operation and be more efficient than market or state regulations to overcome co ordination and information problems this article provides a theoretical model that compares three pure forms of economic organization state controlled production unregulated market and voluntary organization we model the behavior of agents who are embedded in a social structure that is characterized by three parameters the intensity of socialization the size of individual social space and the overall level of trust in society we then study how social interaction parameters influence the relative efficiency of the three different forms of organization

remittances labour supply and activity of household members left behind abstractthis paper analyses the role of remittances on labour supply and activity of household members left behind by explicitly distinguishing between different types of self employment contrary to the existing evidence we find no dependency effect of remittances our results show that remittances received by households in tajikistan decrease the probability of wage employment and increase that of small scale self employment activities of men staying behind without affecting the number of job specific hours worked any positive effect on economic development would be however limited as self employment is in rather small scale activities that do not generate a regular income stream

food law and the internal market taking stock abstract the history of community food law is briefly traced the changes in policy which followed the difficulties encountered in vertical harmonization and the cassis de dijon case are described 1989 is identified as a turning point since the legal framework for community food law has now been agreed the future legislative programme is described as is the need for cooperation between member states and the commission through all processes from scientific assessment to control

tax morale and tax evasion reports the study proposes a new measure of tax morale for italy based on voluntary tax evasion reports using this measure i detected a positive relationship between tax morale and social capital political participation and immigration but a negative relationship between tax morale and the dissatisfaction with public services and unemployment

economic shocks and crime evidence from the crash of ponzi schemes abstract in november 2008 colombian authorities dismantled a network of ponzi schemes making hundreds of thousands of investors lose tens of millions of dollars throughout the country using original data on the geographical incidence of the ponzi schemes this paper estimates the impact of their breakdown on crime we find that the crash of ponzi schemes differentially exacerbated crime in affected districts confirming the intuition of the standard economic model of crime this effect is only present in places with relatively weak judicial and law enforcement institutions and with little access to consumption smoothing mechanisms such as microcredit in addition we show that with the exception of economically motivated felonies such as robbery violent crime is not affected by the negative shock

are remittances insurance evidence from rainfall shocks in the philippines several facts motivate this study first life in developing countries is prone to many kinds of risk such as crop and income loss due to natural disasters weather insect infestations and fire and civil conflict second international migration and remittance flows are substantial and growing between 1965 and 2000 individuals living outside their country of birth grew from 2 2 to 2 9 percent of the world population totaling 175 million people in 2000 the remittances that these migrants send to their countries of origin are an important but poorly understood type of international financial flow this article examines a mechanism for coping with shocks ex post on which previous micro level studies have not focused remittances from family members overseas at the international level it is commonly posited that remittance flows from overseas buffer economic shocks in migrants home countries but there have been relatively few empirical tests of this claim with micro level household data related research on the role of domestic migration in pooling risk within extended families includes lucas and stark 1985 rosenzweig and stark 1989 and paulson 2000

remittances output and exchange rate regimes theory with an application to latin america immigrant remittances have a broad effect on the receiving economies we show this impact on the main macroeconomic aggregates is dependent on the policy arrangements in place that manage capital flows we look at remittance inflows in a small open economy to examine their influence on output under alternative exchange rate regimes using a simple stochastic limited participation model we are able to reproduce dynamics consistent with the empirical literature we find that the dynamics of labor inflation and output are dependent on the parameterization of the utility function and on the monetary rule governing the evolution of the interest rate and in particular with respect to the response of interest rates to exchange rate movements we find that the initial drop of output resulting from a remittances shock is similar under alternative exchange rate regimes but the subsequent recovery of output is faster and stronger under more flexible exchange rate regimes we provide suggestive empirical evidence from a panel vector autoregression specification for 17 latin american countries that corroborates our results