rural nonfarm employment and incomes in latin america overview and policy implications abstract rural nonfarm employment rnfe and incomes rnfi are crucial to latin american rural households the 11 rural household income studies in this volume reviewed in this paper use 1990s data and show that rnfi averages 40 of rural incomes rnfi and rnfe have grown quickly over the past three decades the review of evidence provided some surprising departures from traditional images of nonfarm activities of latin american rural households in terms of shares of rural incomes 1 nonfarm wage incomes exceed self employment incomes 2 rnfi far exceeds farm wage incomes 3 local rnfi far exceeds migration incomes 4 service sector rnfi far exceeds manufactures rnfi these findings suggest the need for more development program attention to wage employment in the service sector versus the traditional focus on small enterprise manufactures moreover poor households and zones tend to have higher shares in their incomes but lower absolute levels of rnfi as compared to richer households and zones the rnfe of the poor tend to be the low paid nonfarm equivalent of semi subsistence farming raising the capacity of the poor to participate in the better paid types of rnfe is crucial via employment skills training education infrastructure credit finally rnfe has grown fastest and been most poverty alleviating where there are dynamic growth motors in particular in the agricultural sector but also in tourism links to urban areas mining and forestry this means that developing rnf jobs cannot be done at the expense of programs promoting agricultural development

diversification and livelihood sustainability in a semi arid environment a case study from southern ethiopia abstract this paper examines the recently growing adoption of non pastoral livelihood strategies among the borana pastoralists in southern ethiopia a large portion of the current non pastoral participation is in petty and natural resource based activities pastoral and crop production functions are estimated using the cobb douglas model to analyse the economic rationale behind the growing pastoralist shift to cultivation and other non pastoral activities the low marginal return to labour in traditional pastoralism suggests the existence of surplus labour that can gainfully be transferred to non pastoral activities an examination of the pastoralist activity choices reveals that the younger households with literacy and more exposure to the exchange system display a more diversified income portfolio preference the findings underscore the importance of human capital investment and related support services for improving the pastoralist capacity to manage risk through welfare enhancing diversified income po

the economic psychology of stock market bubbles in china the chinese stock markets were extremely volatile during the period 2005 08 the shanghai stock exchange sse composite index increased more than sixfold from 1 012 in 2005 to 6 124 by the end of 2007 it then declined continuously to reach a low of 1 929 on 17 september 2008 or a drop of 70 per cent from its peak in less than 10 months although the market downturn may have been affected by the financial crisis in the united states and the rest of the world the extreme fluctuations of stock prices signify a big market bubble and the burst of that bubble must be explained by intrinsic characteristics or the economic psychology of chinese investors based on a detailed market data analysis this paper attributes the development of the stock market bubble to three key psychological factors greed envy and speculation and the burst of the bubble to three contrasting factors fear lack of confidence and disappointment it concludes that only after chinese companies become really commercialised and profitable and investors become rational can the stock markets become stable without extreme volatility as seen in the past government policies can play a role in soothing market volatility detrimental to shareholders and the wider economy but investors should not depend on government for making their own investment decisions journal compilation 2009 blackwell publishing ltd

are exports of china japan and korea diverted in the major regional trading blocs in recent years china japan and korea the three major economies in east asia have been gearing up their efforts to sign free trade agreements with many different regions and countries one of the main reasons for this is that they fear that with a regionalism movement rising in every corner of the world their exports are discriminated against and diverted in the trading blocs of other nations the main purpose of this paper is to investigate whether this is a real fear we utilise the gravity equation augmented with dummy variables for regional trading blocs in three different specifications one is the static standard gravity model to examine the effect of regional blocs on the level of exports from these three countries in 2003 the second is the fixed effects and random effects panel models for the period 1993 2003 and the third is the dynamic partial adjustment model to examine the effect of blocs on the changes in exports between 1993 and 2003 the results show that trade diversion is observed only for china s exports in eu efta and eaec but no diversion effect is observed for japan s and korea s exports in any of the major trading blocs on the other hand trade creation is observed for exports from china in asean for exports from japan in asean cacm caricom eaec eu and nafta and for exports from korea in asean cacm eaec and mercosur thus japan s and korea s fear of discrimination and trade diversion is ungrounded while china s fear is grounded only to a limited extent

nonfarm income diversification and household livelihood strategies in rural africa concepts dynamics and policy implications abstract asset activity and income diversification lie at the heart of livelihood strategies in rural africa this paper introduces a special issue on the topic income diversification and livelihoods in rural africa cause and consequence of change we concentrate on core conceptual issues that bedevil the literature on rural income diversification and the policy implications of the empirical evidence presented in this special issue

estimating labor supply of farm households under nonseparability empirical evidence from nepal abstract this paper examines the labor supply of farm households in nepal using a recently developed methodology that accounts for the simultaneity between production and consumption decisions of the households estimates of marginal products of male and female labor or shadow wages are obtained from an agricultural production function an instrumental variable approach is then used to recover the household s structural labor supply from variations in the shadow wages and income as well as other household characteristics the findings reveal that both male and female total labor supply are sensitive to changes in shadow wages and income human capital embodied in education is found to exert a significant positive effect on output but has no statistically significant impact on total labor supply of individuals the results also rejects the existence of efficient labor markets in rural nepal

competition between private and public schools vouchers and peer group effects a theoretical and computational model with tax financed tuition free public schools and competitive tuition financed private schools is developed students differ by ability and income achievement depends on own ability and on peers abilities equilibrium has a strict hierarchy of school qualities and two dimensional student sorting with stratification by ability and income in private schools high ability low income students receive tuition discounts while low ability high income students pay tuition premia tuition vouchers increase the relative size of the private sector and the extent of student sorting and benefit high ability students relative to low ability students

urban poverty and juvenile crime evidence from a randomized housing mobility experiment this paper uses data from a randomized housing mobility experiment to study the effects of relocating families from high to low poverty neighborhoods on juvenile crime outcome measures come from juvenile arrest records taken from government administrative data our e ndings seem to suggest that providing families with the opportunity to move to lower poverty neighborhoods reduces violent criminal behavior by teens

going to college to avoid the draft the unintended legacy of the vietnam war between 1965 and 1975 the enrollment rate of college age men in the united states rose and then fell abruptly many contemporary observers e g james davis and kenneth dolbeare 1968 attributed the surge in college attendance to draft avoidance behavior under a policy first introduced in the korean war the selective service issued college deferments to enrolled men that delayed their eligibility for conscription these deferments provided a strong incentive to remain in school for men who wanted to avoid the draft for example the college entry rate of young men rose from 54 percent in 1963 to 62 percent in 1968 the peak year of the draft moreover both the college entry rate and the number of inductions dropped sharply between 1968 and 1973 as the draft was being phased out although these parallel trends are suggestive they do not necessarily prove that draft avoidance raised the education of men who were at risk of service during the vietnam war such an inference requires an explicit specification of the counterfactual what would have happened to schooling outcomes in the absence of the draft in this paper we use trends in enrollment and completed schooling of men relative to those of women to measure the effects of draftavoidance behavior during the vietnam war our maintained hypothesis is that in the absence of gender specific factors such as the draft the relative schooling outcomes of men and women from the same cohort would follow a smooth trend in light of the sharp discontinuity in military induction rates between 1965 and 1970 we look for similar patterns in the relative enrollment rate of men and in the relative college graduation rate of men from cohorts that were at risk of induction during this period

using evidence of household income diversification to inform study of the rural nonfarm labor market in africa abstract the labor market literature in developing countries has seldom drawn on the studies of rural household income diversification this paper draws on such studies to inform future study of the rural nonfarm labor market in africa the review of evidence provides some surprising departures from traditional images of nonfarm activities of rural households among the most striking is the dominant importance in the majority of case study areas of nonfarm wage labor as compared to self employment of nonfarm sector earnings as compared to farm sector wage earnings and of local nonfarm earnings as compared to migration earnings the most worrying finding was the poor distribution of nonfarm earnings in rural areas despite the importance of these earnings to food security and farm investments this poor distribution implies significant entry barriers and market segmentation it is probable that this will lead over time to an increasingly skewed distribution of land and other assets in rural africa

the costs of low birth weight birth weight has emerged as the leading indicator of infant health and welfare and the central focus of infant health policy this is because low birth weight lbw infants experience severe health and developmental difficulties that can impose enormous costs on society but would the prevention of lbw generate equally sizable cost savings and health improvements estimates of the return to lbwprevention from cross sectional associations may be biased by omitted variables that cannot be influenced by policy such as genetic factors to address this we compare the hospital costs health at birth and infant mortality rates between heavier and lighter infants from all twin pairs born in the united states we also examine the effect of maternal smoking during pregnancy the leading risk factor for lbw in the united states on health among singleton births after controlling for detailed background characteristics both analyses imply substantially smaller effects of lbw than previously thought suggesting two possibilities 1 existing estimates overstate the true costs and consequences of lbw by at least a factor of four and by as much as a factor of 20 or 2 different lbw preventing interventions have different health and cost consequences implying that policy efforts that presume a single return to reducing lbw will necessarily be suboptimal

the dynamics of livelihood diversification in post famine ethiopia abstract based on data for almost 300 households this paper explores associations among income diversification household perceptions of livelihood risks and changes in consumption outcomes across two points in time in post famine ethiopia four key questions are addressed i to what extent did households emerging from the famine period with relatively higher income and calorie consumption levels also have a more diversified income base ii was higher income diversification in 1989 associated with higher income and consumption levels by 1994 iii which households increased their share of income from non cropping activities most during the inter survey years and iv did household heads perceive a lack of non farm income activities to be an important risk factor in famine vulnerability we find that wealthier households tended to have more diversified income streams those initially more diversified subsequently experienced a relatively greater increase in both income and calorie intake households with a greater concentration of assets were more likely to fall in their relative outcome ranking as were female headed households and initially less diversified households subsequently realized greater gains in income diversification we also find suggestive evidence that personal perceptions of risk factors guided subsequent diversification decisions

moving to opportunity in boston early results of a randomized mobility experiment this paper examines the short run impacts of a change in residential neighborhood on the well being of low income families using evidence from a program in which eligibility for a housing voucher was determined by random lottery we examine the experiences of households at the boston site of moving to opportunity mto a demonstration program in five cities families in high poverty public housing projects applied to mto and were assigned by lottery to one of three groups experimental offered mobility counseling and a section 8 subsidy valid only in a census tract with a poverty rate of less than 10 percent section 8 comparison offered a geographically unrestricted section 8 subsidy or control offered no new assistance but continued to be eligible for public housing our quantitative analyses of program impacts uses data on 540 families from a baseline survey at program enrollment a follow up survey administered l to 3 5 years after random assignment and state administrative data on earnings and welfare receipt 48 percent of the experimental group and 62 percent of the section 8 comparison group moved through the mto program one to three years after program entry families in both treatment groups were more likely to be residing in neighborhoods with low poverty rates and high education levels than were families in the control group however while members of the experimental group were much more likely to be residing in suburban communities than were those in the section 8 group the lower program take up rate among the experimental group resulted in more families remaining in the most distressed communities households in both treatment groups experienced improvements in multiple measures of well being relative to the control group including increased safety improved health among household heads and fewer behavior problems among boys experimental group children were also less likely to be a victim of a personal crime to be injured or to experience an asthma attack there are no significant impacts of either mto treatment on the employment earnings or welfare receipt of household heads in the first three years after random assignment

peer effects in medical school abstract using data on the universe of students who graduated from us medical schools between 1996 and 1998 we examine whether the abilities and specialty preferences of a medical school class affect a student s academic achievement in medical school and his choice of specialty we mitigate the selection problem by including school specific fixed effects and show that this method yields an upper bound on peer effects for our data we estimate positive peer effects that disappear when school specific fixed effects are added to control for the endogeneity of a peer group we find no evidence that peer effects are stronger for blacks that peer groups are formed along racial lines or that students with relatively low ability benefit more from their peers than students with relatively high ability however we do find some evidence that peer groups form along gender lines

crime in the lab detecting social interaction abstract according to the standard economic perspective criminal activities vary with the price of crime which depends on the severity of punishment and the detection probability an alternative view claims that crime is also influenced by social interaction phenomena such as peer pressure or neighbourhood effects detecting social interaction in the field is fraught with difficulties however in this paper we argue that given its extensive control possibilities experiments are well suited to show the potential existence of social interaction effects we present an experimental study where people can engage in criminal activities we find support for the importance of social interaction on average subjects steal the more the more others steal this behaviour can be interpreted in terms of reciprocity

crime and social interactions the high variance of crime rates across time and space is one of the oldest puzzles in the social sciences this variance appears too high to be explained by changes in the exogenous costs and benefits of crime we present a model where social interactions create enough covariance across individuals to explain the high cross city variance of crime rates this model provides an index of social interactions which suggests that the amount of social interactions is highest in petty crimes moderate in more serious crimes and almost negligible in murder and rape

china coming to grips with the new global player this paper analyses china s economic performance in the last 25 years and discusses its prospect for growth in the future exports and investment have been the two driving forces for the high annual gdp growth rates fdi plays an important role however structural issues such as the loss making state owned firms and the fragile banking industry have to be solved monetary policy is complicated by the accumulation of reserves which however provide an insurance for the fragile banking system property rights a crucial element in transforming a communist society are far from being clearly developed major policy issues in the future include the correction of the distorted growth process and of the institutional deficits especially with respect to the rule of law and the lack of democracy

mother s education and the intergenerational transmission of human capital evidence from college openings we examine the effect of maternal education on birth outcomes using vital statistics natality data from 1970 to 1999 we also assess the importance of four channels through which maternal education may improve birth outcomes use of prenatal care smoking marriage and fertility in an effort to account for the endogeneity of education attainment we use data about the availability of colleges in the womans country in her 17th year as an instrument for maternal education we find that higher maternal education improves infant health as measured by birth weight and gestational age it also increases the probability that a new mother is married reduces parity increases use of prenatal care and reduces smoking suggesting that may be important pathways for the ultimate effect on health our results add to the growing body of literature which suggests that estimates of the returns to education which focus only on increases in wages understate the total return

combining household income and asset data to identify livelihood strategies and their dynamics abstractcurrent approaches to identifying and describing rural livelihood strategies and household movements between strategies over time in developing countries are imprecise here we i present a new statistical quantitative approach combining income and asset data to identify household activity choice variables characterise livelihood strategy clusters and analyse movements between strategies and ii apply the approach using an environmentally augmented three wave household n 427 level panel dataset from nepal combining income and asset data provides a better understanding of livelihood strategies and household movements between strategies over time than using only income or asset data most households changed livelihood strategy at least once over the two three year periods a common pathway out of poverty included an intermediate step during which households accumulate assets through farming petty trading and migratory work

income and asset poverty among pastoralists in northern kenya abstractin this study we use household panel data collected in marsabit district of northern kenya to analyse the patterns of livelihood sources and poverty among pastoralists in that area we estimate income poverty using imputed household income relative to the adjusted poverty line and asset poverty using a regression based asset index and tropical livestock units tlu per capita our results indicate that keeping livestock is still the pastoralists main source of livelihood although there is a notable trend of increasing livelihood diversification especially among livestock poor households the majority of households over 70 are both income and livestock poor with few having escaped poverty within the five year study period disaggregating income and asset poverty also reveals an increasing trend of both structurally poor and stochastically nonpoor households the findings show that the tlu based asset poverty is a more appropriate measure of asset poverty in a pastoral setting

work environment and individual background explaining regional shirking differentials in a large italian firm the prevalence of shirking within a large italian bank appears to be characterized by significant regional differentials in particular absenteeism and misconduct episodes are substantially more prevalent in the south we consider a number of potential explanations for this fact different individual backgrounds group interaction effects sorting of workers across regions differences in local attributes different hiring policies and discrimination against southern workers our analysis suggests that individual backgrounds group interaction effects and sorting effects contribute to explaining the north south shirking differential none of the other explanations appears to be of first order importance i introduction whether individual behavior is determined by group interactions or by individual background is undoubtedly a fundamental question for the social sciences this question presented itself forcefully when we stumbled onto the following piece of evidence there appear to be significant regional differentials in the prevalence of shirking among the employees of a large italian bank in particular absenteeism and misconduct episodes are considerably more frequent in the southern branches of the bank in this paper we examine several potential explanations for this fact first individual preferences for shirking versus working may differ according to one s region of hirth we will refer to this hj othesis as one of different individual hackgrounds the second possibility is one of locational sorting low shirking types may tend to migrate to the north high shirking types may tend to migrate to the south or hoth third the northern and southern

ability tracking school competition and the distribution of educational benefits abstract to study the effects of ability grouping on school competition we develop a theoretical and computational model of tracking in public and private schools we examine tracking s consequences for the allocation of students of differing abilities and income within and between public and private schools private schools tend to attract the most able and wealthiest students and rarely track in equilibrium public sector schools can maximize attendance by tracking students public schools retain a greater proportion of higher ability students by tracking but lose more wealthy lower ability students to the private sector consequently socioeconomic status is a predictor of track assignment in public schools for the entire population public sector tracking has small aggregate effects on achievement and welfare but results in significant redistribution from lower to higher ability students

using shadow wages to estimate labor supply of agricultural households with few exceptions most studies of the labor demand and supply decisions of agricultural households in developing countries have relied on the empirical advantages of separability given the questionable nature of some of the assumptions sufficient for separability i apply a recent methodology that accounts for the simultaneity between the production and consumption decisions of a farm household using data from rural india direct estimates of the marginal productivities shadow wages of family male and female labor are derived from a cobb douglas agricultural production function the estimated shadow wages and income are then used as regressors in a structural model of labor supply

choice of ontario high schools and student sorting by ability to what extent can offering more choice in schooling lead to cream skimming or the sorting of students by ability i study whether increased choice leads to student sorting by ability into high schools in the greater toronto area on average 41 of students opt out of the high school to which they would normally be assigned based on their residence students are more likely to opt out in areas where accessibility to other schools is greatest due to population density and explicit open enrolment policies while students of higher ability are generally more likely to opt out an interaction term between school choice and ability is insignificant suggesting that increased choice does not have differential impacts by student ability findings are robust to changes in assumptions about instrument exogeneity

income schooling and ability evidence from a new sample of identical twins we develop a model of optimal schooling investments and estimate it using new data on approximately 700 identical twins we estimate an average return to schooling of 9 percent for identical twins but estimated returns appear to be slightly higher for less able individuals simple cross section estimates are marginally upward biased these empirical results imply that abler individuals attain more schooling because they face lower marginal costs of schooling not because of higher marginal benefits

does school quality matter returns to education and the characteristics of public schools in the united states this paper estimates the effects of school quality measured by the pupil teacher ratio average term length and relative teacher pay on the rate of return to education for men born between 1920 and 1949 using earnings data from the 1980 census we find that men who were educated in states with higher quality schools have a higher return to additional years of schooling rates of return are also higher for individuals from states with better educated teachers and with a higher fraction of female teachers holding constant school quality measures however we find no evidence that parental income or education affects average state level rates of return

mitigating economic risk from climate variability in rain fed agriculture through enterprise mix diversification abstract climate variability and its increase with climate change pose substantial economic risks to agriculturalists and hence limit their ability to respond to global challenges such as food security enterprise mix diversification is the most common and is widely regarded as the most effective strategy for mitigating multiple sources of short term economic risk to agricultural enterprises however assessments of enterprise mix diversification as a strategy for mitigating climate risks to ensure long term viability of agricultural enterprises are sparse using the lower murray region in southern australia as a case study we combined apsim modelling with monte carlo simulation probability theory and finance techniques to assess the extent to which enterprise mix diversification can mitigate climate induced variability in long term net returns from rain fed agriculture we found that diversification can reduce the standard deviation by up to a 200 ha 1 or 52 of mean net returns increase the probability of breaking even by up to 20 and increase the mean of 10 of worst probable annual net returns conditional value at risk by up to a 100 ha 1 we conclude that enterprise mix diversification can also be an effective strategy for hedging against climate induced economic risk for agriculturalists in marginal areas

clean evidence on peer effects we study subjects who were asked to fill letters into envelopes with a remuneration independent of output in the pair treatment two subjects worked at the same time in the same room and peer effects were possible in the single treatment subjects worked alone and peer effects were ruled out we find evidence of peer effects in the pair treatment because the standard deviations of output are smaller within pairs than between pairs moreover average output is higher in the pair treatment thus peer effects raise productivity finally low productivity workers are the most sensitive to the behavior of peers

what is a peer the role of network definitions in estimation of endogenous peer effects we employ a standard identification strategy from the peer effects literature to investigate the importance of network definitions in estimation of endogenous peer effects we use detailed information on friends in the national longitudinal study of adolescent health survey add health to construct two network definitions that are less ad hoc than the school grade cohorts commonly used in the educational peer effects literature we demonstrate that accurate definitions of the network seriously impact estimation of peer effects in particular we show that peer effects estimates on educational achievement smoking and drinking are substantially larger with our more detailed measures than with the school grade cohorts these results highlight the need to further understand how friendships form in order to fully understand implications for policy that alters the peer group mix at the classroom or cohort level

estimating and interpreting peer and role model effects from randomly assigned social groups at west point abstract the random assignment of cadets to social groups at west point provides a rare opportunity to highlight potentially misleading estimates of social group effects found in many studies estimates of contemporaneous group effects in human capital production are typically positive and significant however evidence in this study suggests that occurrences common to a group may account for much of this correlation models that address these biases provide little evidence of group effects in academic performance although there is evidence of group influences in choice outcomes such as the selection of academic major and the decision to remain in the army

exports foreign direct investment and employment the case of china everal theories including the vent for surplus thesis smith 1776 and myint 1958 and the staples theory innis 1930 and 1940 and chambers and gordon 1966 have addressed the role of trade in economic development the former suggests that the opening up of the economy to international trade provides an outlet for surplus productive capacity of the country and promotes economic growth the staples theory argues that the production and trade of resource intensive staple products generates linkages and promotes industrialisation these theories were employed to explain the economic development pattern of the regions of recent settlement in the past such as canada and the united states the plantation economies of malaysia and the peasant export economies of ghana and burma a feature of all these economies was their endowments of natural resources and exports of primary commodities whilst the vent for surplus explanation appears to provide an explanation of the development of natural resource based economies could it also explain the growth of a populous country with huge reservoirs of surplus labour such as china it could be argued that models which specifically address the issue of surplus labour such as the development with unlimited supplies of labour model lewis 1954 provide a much more satisfactory explanation of the development of a surplus labour economy such as china than the vent for surplus model there are though subtle differences between the two explanations these differences discussed later suggest that the vent for surplus explanation may be superior to

china s exchange rate policy its current account surplus and the global imbalances this article is stimulated by current criticisms of chinese exchange rate policy the concern is really about china s current account surplus the article discusses the factors that determine the surplus and the reasons why the surplus increased sharply from 2005 the international implications of china s surplus and growth are discussed and how it has affected the world real interest rate and through that the us current account deficit the surplus has had various international relative price effects which have produced both gainers and losers finally the surplus played only a small part in determining the world credit crisis

excess liquidity inflation and the yuan appreciation what can china learn from recent history this paper analyses the issues of excess liquidity inflation and the exchange rate appreciation currently evolving in china in mapping the co movement between excess liquidity and inflation and developing a dynamic model the paper shows that excess liqu idity ignited by dramatic capital inflows is a significant driver for consumer price inflation in china during the last decade in addition the article compares the dynamic paths of inflation and interest rates between china and the united states and reveals marked changes in their differ entials over recent years associating these findings with the evolving appreciation of the yuan against the dollar the paper a dvises a slowdown in the rate of rmb appreciation instead of quick appreciation the paper proposes more flexibility in the rmb exchange rate regime combined with alternative capital control measures to rein in excess liquidity and curb ongoing inflation in china

neighbourhood effects and housing demand in this paper we estimate a model of housing demand with neighborhood eects we exploit special features of the national sample of the american housing survey and properties of housing markets that allow us to create natural instruments and therefore identify the impact of social interactions we find evidence of both endogenous and contextual neighborhood eects we report two alternative sets of estimates for neighborhood eects that dier in terms of the instruments we use for estimating the model when the endogenous neighborhood eect is large the respective contextual eects are weak and vice versa the elasticity of housing demand with respect to the mean of the neighbors housing demands the endogenous eect ranges from 0 19 to 0 66 and is generally very significant the contextual eects are also very significant a key such eect the elasticity with respect to the mean of neighbors permanent incomes ranges from 0 17 to 0 54

immigrating to opportunity estimating the effect of school quality using a natural experiment on ethiopians in israel in may 1991 fifteen thousand ethiopian jews were brought to israel in an overnight airlift and sorted in a haphazard and essentially random fashion to absorption centers across the country this quasi random assignment produced a natural experiment whereby the initial schooling environment of ethiopian children can be considered exogenous to their family background and parental decisions we examine the extent to which the initial elementary school environment affected the high school outcomes of ethiopian children using administrative panel data on the educational career of each child in israel through much of the 1990s the results show that the early schooling environment has an important effect on high school dropout rates repetition rates and the passing rate on matriculation exams necessary to enter college the results are robust to using alternative measures of the schooling environment and to the inclusion of community fixed effects which suggests that aspects of the elementary school itself are important for high school success

income portfolios in rural ethiopia and tanzania choices and constraints the article analyses the different income portfolios of households using survey data from rural ethiopia and rural tanzania it suggests that the different portfolios held by households cannot be e

identification of endogenous social effects the reflection problem this paper examines the reflection problem that arises when a researcher observing the distribution of behaviour in a population tries to infer whether the average behaviour in some group influences the behaviour of the individuals that comprise the group it is found that inference is not possible unless the researcher has prior information specifying the compisition of reference groups if this information is available the prospects for inference depend critically on the population relationship between the variables defining reference groups and those directly affecting outcomes inference is difficult to implossible if these variables are functionally dependent or are statistically independent the prospects are better if the variables defining reference groups and those directly affecting outcomes are moderately related in the population

shadow wages and peasant family labour supply an econometric application to the peruvian sierra a striking feature of developing economies is the large proportion of the work force that is self employed lack of widespread labor market participation in the agricultural sector can pose a major obstacle to the empirical implementation of economic models of the peasant household whether because wage data are simply not available or because the assumptions required to make use of wage data stretch the bounds of credulity this paper develops a methodology for estimating a structural labor supply model for primarily self employed peasant households which holds under a general agricultural technology and set of labor market conditions the unique feature of the approach is that the opportunity cost of time or shadow wage of household workers is explicitly estimated from an agricultural production function and is subsequently used to identify a set of structural labor supply parameters recent household survey data from rural peru is employed to estimate and perform various diagnostic tests on the model the empirical findings lend support to the hypothesis that peasant households allocate their members time as if to maximize a family utility function and moreover demonstrate the tractability of the shadow wage methodology and its usefulness in estimating more elaborate time allocation models

better peers better scores a study of twin junior high school graduates in taiwan using data of twin students graduating from junior high schools between 2002 and 2004 in taiwan we estimate the effects of peers on high school joint entrance examination performance to alleviate the potential endogeneity of peer educational achievement linear models with twin fixed effect and instrumental variables are estimated quantile quantile with twin fixed effect and quantile with instrument variables regressions are also implemented to determine whether estimated peer effects differ at various locations of the testing scores conditional distributions positive and statistically significant peer effects are found to exist at the mean and at different quantile levels

endowments and the allocation of schooling in the family and in the marriage market the twins experiment 03 we show how comparisons between the within twin correlations of human capital outcomes across identical and nonidentical twins can be used to identify the variability in the individual specific component of endowments and the responsiveness of schooling to individual specific endowments in the family and in the marriage market even when schooling is measured with error estimates from two twins samples indicate that 27 42 percent of the variance in log earnings obesity is due to variability in individual specific endowments allocations of schooling reinforce specific endowments and individual specific earnings endowments of men and their wives schooling are negatively associated

identity and schooling some lessons for the economics of education abstract this review culls noneconomic literature on education by sociologists anthropologists and practitioners to present a new economic theory of students and schools this theory elaborates two themes that have eluded economic analysis first is the student as decision maker whose primary motivation is her identity second is a conception of the school as a social institution this framework suggests a new perspective on questions such as resource allocation and school reform it explains why some educational policies succeed and others fail we show how sociological variables may affect outcomes and suggest ways economists can incorporate them into theoretical and empirical research

productivity of men and women and the sexual division of labor in peasant agriculture of the peruvian sierra abstract this paper estimates the productivity of men and women in the peasant agriculture of the peruvian sierra using recent household survey data a sexual division of labor on the farm implies that male and female labor are not perfectly substitutable evidence is found for female specialization on livestock production a translog production function reveals that the use of animal traction and land affect the marginal productivity of male and female labor differently suggesting that the two types of labor cannot be aggregated overall adult male labor is found to contribute more to farm output at the margin than adult female labor though the extent of the difference is sensitive to how farm output and the labor inputs are measured

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

vouchers for private schooling in colombia evidence from a randomized natural experiment colombia used lotteries to distribute vouchers which partially covered the cost of private secondary school for students who maintained satisfactory academic progress three years after the lotteries winners were about 10 percentage points more likely to have finished 8th grade primarily because they were less likely to repeat grades and scored 0 2 standard deviations higher on achievement tests there is some evidence that winners worked less than losers and were less likely to marry or cohabit as teenagers benefits to participants likely exceeded the 24 per winner additional cost to the government of supplying vouchers instead of public school places

the significance of diversification for rural livelihood systems abstract there is an increasing awareness that diversification plays a strategic role in rural livelihood systems the principal question to be addressed in this paper pertains to the conditions and the ways in which rural households diversify their livelihood activities and strategies to answer this question empirical evidence will be reviewed specific attention will be paid to perspectives that may shed new light on the issue of rural livelihood diversification a gender perspective a temporal perspective and the hiv aids lens in the paper the livelihood system is seen as an open system interfacing with other systems and using various resources and assets to produce livelihood with the household as the locus of livelihood generation diversification is defined as the process by which households construct increasingly diverse livelihood portfolios making use of increasingly diverse combinations of resources and assets

household strategies and rural livelihood diversification this article reviews the recent literature on diversification as a livelihood strategy of rural households in developing countries with particular reference to sub saharan africa livelihood diversification is defined as the process by which rural families construct a diverse portfolio of activities and social support capabilities in order to survive and to improve their standards of living the determinants and effects of diversification in the areas of poverty income distribution farm output and gender are examined some policy inferences are summarised the conclusion is reached that removal of constraints to and expansion of opportunities for diversification are desirable policy objectives because they give individuals and households more capabilities to improve livelihood security and to raise living standards

social interactions and schooling decisions abstract the aim of this paper is to study whether a child s schooling choices are affected by the schooling choices of other children identification is based on a randomized targeted intervention that grants a cash subsidy conditional on school attendance to a subgroup of eligible children within small rural villages in mexico progresa this policy change spills over to ineligible children if social interactions are relevant results indicate that the eligible children tend to attend school more frequently and the ineligible children acquire more schooling when the subsidy is introduced in their local village moreover the overall effect of progresa on eligible children is the sum of a direct effect due to cash transfers and an indirect effect due to changes in peer group schooling interestingly the social interactions effect is almost as important as the direct effect

income diversification poverty traps and policy shocks in cote d ivoire and kenya abstract this paper presents evidence on the effects of two different sorts of policy shocks on observed income diversification patterns in rural africa in cote d ivoire households with poor endowments were less able to respond to attractive emerging on farm and non farm opportunities due to entry barriers to superior livelihood strategies the benefits of exchange rate reform accrued disproportionately to households that were richer prior to devaluation by contrast food for work transfers to households in kenya significantly reduced liquidity constraints enabling project participants to pursue more lucrative livelihood strategies in non farm activities and higher return agricultural production patterns jointly these two shocks underscore the importance of liquidity market access and skill constraints to skilled non farm income sources to dynamic poverty traps in rural africa

the effects of generalized school choice on achievement and stratification evidence from chile s voucher program in 1981 chile introduced nationwide school choice by providing vouchers to any student wishing to attend private school as a result more than 1000 private schools entered the market and the private enrollment rate increased by 20 percentage points with greater impacts in larger more urban and wealthier communities we use this differential impact to measure the effects of unrestricted choice on educational outcomes using panel data for about 150 municipalities we find no evidence that choice improved average educational outcomes as measured by test scores repetition rates and years of schooling however we find evidence that the voucher program led to increased sorting as the bbestq public school students left for the private sector d 2005 elsevier b v all rights reserved

social interactions in high school lessons from an earthquake after an earthquake hit southern italy in 1980 young men from certain towns were exempted from compulsory military service we show that the exemption raised high school graduation rates of boys by more than 2 percentage points we do this by comparing high school graduation rates of young exempt men and older nonexempt men from the least damaged areas and men of the same age groups from nearby towns that were not hit by the quake similar comparisons show that graduation rates of young women in the affected areas also increased since in italy women are not subject to the draft the findings suggest the presence of spillover effects jel i21 j13