a simple estimator for simultaneous models with censored endogenous reggressors this paper presents a simple two step estimator for models with censored endogenous regressors and sample selection bias the approach unifies the literature on censored endogenous regressors and sample selection bias and provides extensions the procedure employs generalized residuals to adjust for the inconsistency caused by the endogeneity of the censored regressors the paper also provides two new tests of weak exogeneity an empirical example examining the trade off between fringe benefits and wages indicates that the estimation procedure works well a monte carlo experiment suggests that the proposed tests have good power properties copyright 1993 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

credit market imperfections and economic development theory and evidence abstract a model of credit markets in which there is a costly state verification problem is integrated into a neoclassical growth model the presence of a credit market friction gives rise to credit rationing which in turn impacts on the growth path of an economy the model delivers predictions about the co movements between per capita income credit rationing interest rates and factor prices the implications of the model are generally empirically supported in u s and taiwanese data the model also makes predictions about the consequences of government regulation of credit markets which are supported by the taiwanese data

the public private wage differential in a poor urban economy the occupational structure of wages is generally more compressed in high than in low income countries the role of non market forces in determining the structure of wages is of interest for reasons of allocative efficiency as well as for distributional concerns this paper considers how wage differentials may be generated between the public and private sectors of a developing economy data from a 1971 household survey of the tanzanian urban wage labor force are used to determine the pattern of wage differences across employer groups after standardizing by worker characteristics public sector employees are found to have earned a substantial wage premium over workers employed in the private sector the non market character of these differentials is examined in light of a number of hypotheses on public sector wage determination

the geographical dimension of innovation collaboration networking and innovation in norway this paper looks at the geographical dimension of firm networking in norway by examining the impact of manager level firm level and regional level variables on the decisions of firms to collaborate with partners at different levels of geographical distance using data stemming from a survey of 1604 businesses in five norwegian city regions we model firms use of partners located within the region elsewhere in the country and abroad respectively the results indicate that collaboration is affected in different ways by variables related to all three levels at the level of the manager trust is an important predictor of regional and national collaboration but has no significant effect on the formation of international partnerships which are fundamentally associated with factors such as education and the open mindedness of managers at the regional level r d expenditure tends to increase collaboration between regional actors but reduces the likelihood of engagement with international partners education by contrast has the opposite effect it encourages international collaboration at the expense of local links the results highlight the need to balance policies for boosting regional social capital and r d with investments in education and fostering open mindedness as a means to prevent lock in and develop innovation enhancing global pipelines

interest controls and credit allocation in developing countries planning authorities in less developed countries ldcs often regard financial market intervention as an efficient way to induce gr wth and structural change elaborate regimes of interest ceilings and subsidies have been used to promote industrialization exporting geographic decentralization and other national priorities some of these programs have doubtless achieved their intended objectives however with inflation frequently exceeding controlled interest rates they have also tended to generate an excess demand for loans legally prohibited from price discrimination creditors have been obliged to allocate their portfolios according to various rationing criteria and loan applicants whom creditors find relatively unappealing have been forced to rely heavily on self finance or the unregulated curb markets mckinnon 1973 and shaw 1973 have argued that such rationing regimes lead to serious factor misallocations inappropriate technology choices and unnecessarily low growth rates in the past decade their perspective has been formalized with macro models of financially repressed economies and numerous supportive empirical studies have been reported fry 1982 surveys the literature surprisingly however several fundamental micro issues have received little attention what is the nature of the bias in credit allocation that nonprice rationing induces and how does

who suffers the penalty a panel data analysis of earnings gaps in vietnam in spite of its predominant economic weight in developing countries little is known about the informal sector earnings structure compared to that of the formal sector taking advantage of the rich vhlss dataset in vietnam in particular its three wave panel data 2002 2004 2006 we assess the magnitude of various formal informal earnings gaps while addressing heterogeneity at three different levels the worker the job wage employment vs self employment and the earnings distribution we estimate fixed effects and quantile regressions to control for unobserved individual characteristics our results suggest that the informal sector earnings gap highly depends on the workers job status and on their relative position in the earnings distribution penalties may in some cases turn into premiums by comparing our results with studies in other developing countries we draw conclusions highlighting vietnam s labour market specificity

the role of wages and auditing during a crackdown on corruption in the city of buenos aires abstract we study the prices paid for basic inputs during a crackdown on corruption in the public hospitals of the city of buenos aires argentina during 1996 97 we find a well defined negative effect on the measures used to capture corruption prices paid by hospitals for basic homogeneous inputs decrease by 15 percent during the first 9 months of the crackdown after this period prices increase but they are still 10 percent lower than those prevailing before the crackdown relative to the precrackdown period higher wages play no role in inducing lower input prices when audit intensity can be expected to be maximal during the first phase of the crackdown but have a negative and well defined effect when audit intensity takes intermediate levels the last phase of the crackdown controlling for fixed effects we find that the wage elasticity of input prices exceeds 20 these results are consistent with the standard model of bribes of gary becker and george stigler

private finance companies in ldcs lessons from an experiment abstract in many ldcs liberalizing the financial sector will involve creating new financial institutions in the private sector to attract untapped savings and provide new services this paper provides a detailed account of an experiment with private finance companies pfcs in pakistan the complex legal ideological and economic factors which explain the initial success and the ultimate failure of that experiment are identified it is concluded that pfcs have an important role in mobilizing rural savings but to safeguard depositors a legal framework has to be provided care should be taken that nationalized banks acting in their self interest as monopolists do not create hurdles in the provision of such minimum regulation

aggregate savings financial intermediation and interest rate there has been considerable controversy about the role of financial factors as determinants of savings in developing countries this paper explores the importance of two such factors namely real interest rate and financial intermediation using pooled time series cross section data a model of savings is estimated for asia latin america and for the total sample particular attention is paid to the error structure in estimation the results suggest that pooling is not justified further there is no unequivocal support for the effect of either of the two factors some qualified support is found for asia but none for latin america copyright 1987 by mit press

the long run demand for skilled and unskilled labor in colombian manufacturing plants this note estimates the long run demand for skilled and unskilled labor using panel data for colombian manufacturing plants unobserved heterogeneity and measurement error problems that commonly arise in microdata production estimates are examined output measurement errors cause ols estimators to underestimate the output and wage response of employment demand time difference estimators exaggerate the measurement error biases instrumental variable estimates of the output elasticities are 0 89 and 0 76 and own wage elasticities are 0 42 and 0 65 for skilled and unskilled labor respectively the output elasticity is larger for skilled labor whereas the wage elasticity is larger for unskilled labor in virtually every industry

fixed capital adjustment is latin america different we examine capital adjustment patterns using two large and largely novel plant level data sets from the manufacturing sectors of colombia and mexico the data suggest that irreversibilities play a more important role than in more advanced economies however we do not find support for the presence of increasing returns in the adjustment cost technology such as arising from fixed costs firms go through periods of inaction and rarely sell capital but they do not invest at discrete times only an examination of the dynamic patterns of adjustment of factors differing in their flexibility supports this interpretation

a switching regression model for wage determinants in the public and private sectors of a developing country governments in less developed countries face severe budgetary constraints given that public sector employment is a large part of modern sector employment the government wage bill h as come under increased scrutiny the central question is how do gove rnment wages compare with those in the private sector in this paper the authors develop and estimate a model to answer this question an important aspect of this model is the endogenous treatment of sector choice the estimation results full information maximum likelihood sound a strong warning against the use of ordinary least squares est imates that are based on sector specific samples data are from the i vory coast copyright 1988 by mit press

determinants of the low sme loan approval rate in croatia the paper proposes a new methodological framework for investigating consistency in loan assessment decisions and determinants of loan approval based on structural equation modelling and covariance structure analysis we focus on a governmental sme loan programme in croatia and investigate possible reasons for low loan approval rate that occurred in spite of interest rates subsidisation and sufficient supply of the loan funds the novelty of the methodological approach taken is that it enables simultaneous investigation of the determinants of the loan approval and testing for consistency in the loan assessment decisions which need not be assumed we test several hypotheses about consistency in the loan approval decisions and lending preferences in croatia the empirical findings reject overall consistency of criteria but indicate a preference toward smaller loans among all sme loan requests banks preferred smaller firms that requested smaller loans the results suggest that individual banks differ in their criteria and in their loan size preferences and that there is no positive correlation between the bank s size and its loan size preference

public private sector wage differentials in canada evidence from quantile regressions abstract quantile regressions are used to estimate the size of the public sector wage premium in canada we find that public sector rent payments tend to be highest for federal government employees females and individuals at the lower tail of the wage distribution

urban decline and durable housing urban decline is not the mirror image of growth and durable housing is the primary reason the nature of decline is so different this paper presents a model of urban decline with durable housing and verifies these implications of the model 1 city growth rates are skewed so that cities grow more quickly than they decline 2 urban decline is highly persistent 3 positive shocks increase population more than they increase housing prices 4 negative shocks decrease housing prices more than they decrease population 5 if housing prices are below construction costs then the city declines and 6 the combination of cheap housing and weak labor demand attracts individuals with low levels of human capital to declining cities

financial repression and firm self financing of investment empirical evidence from brazil analysis of 86 brazilian manufacturing firms operating during a period marked by some degree of financial repression demonstrates that investment spending influences the liquid asset holdings of firms this self finance motive is weaker than the transactions motive but in general remains statistically significant across a variety of model specifications small firms are more likely than large firms to finance investment spending through accumulation of liquid assets contrary to the complementarity hypothesis however there is some evidence that firms treat liquid assets and capital as substitutes specification tests comparing the shaw hypothesis with the mckinnon hypothesis weakly favour the complementarity model

social interaction and urban sprawl abstract various authors most notably putnam putnam r d 2000 bowling alone simon and schuster new york have argued that low density living reduces social capital and thus social interaction and this argument has been used to buttress criticisms of urban sprawl if low densities in fact reduce social interaction then an externality arises validating putnam s critique in choosing their own lot sizes consumers would fail to consider the loss of interaction benefits for their neighbors when lot size is increased lot sizes would then be inefficiently large and cities excessively spread out the paper tests the premise of this argument the existence of a positive link between interaction and density using data from the social capital benchmark survey in the empirical work social interaction measures for individual survey respondents are regressed on census tract density and a host of household characteristics using an instrumental variable approach to control for the potential endogeneity of density

what has 20 years of public private pay gap literature told us eastern european transitioning vs developed economies this paper surveys the literature on public private sector pay differentials based on 20 years of research in transitioning countries of eastern europe ee and compares the results with estimates obtained from developed market economies the majority of empirical studies from ee economies found evidence of public sector pay penalties during the period of economic transition from a communist to market based economy in developed economies however the average differential is usually around zero or positive the public sector pay inequality reducing effect relative to the private sector is greater in transitioning economies than in developed economies nevertheless there is evidence that the sign of the public sector pay gap as well as the relative public sector pay distribution change with the progress of economic transition towards those usually observed in developed economies different pay setting arrangements between private and public sectors and competition for workers seem to be major arguments for the existence of systematic pay differences between the two sectors

immiserizing deindustrialization a dynamic trade model with credit constraints abstract the paper develops an open economy dynamic model with bequests and credit constraints the agricultural sector uses only labor the industrial sector needs an indivisible investment under autarky productive agriculture provides the funds needed for investment in industry and in equilibrium credit constraints are not binding if agriculture is not sufficiently productive the price of the industrial good must be high enough to make the industrial sector sustainable in an open economy if the country has the comparative advantage in agriculture deindustrialization may occur over time deindustrialization is welfare reducing when the negative wealth distributional effects swamp the gains from trade

small businesses and liquidity constraints in financing business investment evidence from shanghai s manufacturing sector abstract when firms experience financial hierarchy external finance if at all available is substantially more expensive than internal finance factors such as transaction costs agency problem and asymmetric information have created such a hierarchy stiglitz and weiss 1981 argue that asymmetric information between firms and potential suppliers of external finance creates adverse selection and moral hazard problems in the credit market in developed market economies this problem of a higher cost of external finance is commonly thought to be more serious for small firms because they are more disadvantaged than their larger counterparts in accessing external finance due to several factors 1 public information on small firms is generally not available and leads to the even greater problem of asymmetric information i e more severe adverse selection and moral hazard problems these information problems have excluded small firms from bond and share markets 2 due to the lack of available means of external finance small firms rely more heavily on bank loans than their larger counterparts in addition as small firms are more interested in cultivating stable relationships with a few banks in order to secure a stable supply of credit these banks become virtual monopolies by lending to small businesses and exercise their market power in lending to small firms most of existing research considers only small firms in market economies little research has been done to understand the relationship between firm size and investment financing in any economy in transition this paper makes a contribution to the literature by studying the relationship between firm size and liquidity constraints by using a firm level data of manufacturing enterprises in shanghai during the period of 1989 1992 we consider whether small manufacturing firms in shanghai are constrained by the availability of liquidity compared with their larger counterparts when they are financing their fixed investment in a transforming economy such as china or other similar transition economies external finance relies heavily on loans from banks that are fully owned by the state due to historical reasons allocations of credit are always biased in favor of state owned enterprises such a lending bias imposes an extra cost on small chinese enterprises in financing investment as the majority of them are not state owned in such an environment our empirical results show that small manufacturing firms in shanghai are actually less liquidity constrained than their larger counterparts in financing their fixed investment this surprising result is rather different from what people normally predict based on the experience in market economies we suggest three possible explanations for this peculiar finding 1 the composition of various firm size classes plays an important role in explaining the result non state enterprises which are fast growing and efficient dominate the small firm classes their successes in the markets helps them to generate enough internal funds to smooth their investment over time 2 the presence of heavy indebtedness of large state owned enterprises may deprive them of sufficient cash available for investment decision given that state owned enterprises have been making heavy losses the central and regional governments have a liquidity problem in satisfying their huge liquidity demands 3 small enterprises in non state sectors can rely on the informal credit market to obtain funds for investment although they are excluded from the state banking system however the further trade liberalization in terms of eliminating tariffs and quotas caused by china s bid of joining the wto will erode the profits of these small enterprises as imported goods will be supplied at lower prices in addition further reforms in financial sectors may also affect the supply of external finance to small enterprises in nonstate sectors the consequence may lead to a tight liquidity constraint for small enterprises in china

what drives migration moves to urban areas in spain evidence from the great recession during the great recession international emigration skyrocketed while internal migration strongly declined however when the focus is on migration to the larger urban areas in spain an increase i

urban resurgence and the consumer city cities make it easier for humans to interact and one of the main advantages of dense urban areas is that they facilitate social interactions this paper provides evidence for the us suggesting th

matching severance payments with worker losses in the egyptian public sector severance pay programs can reduce political opposition and minimize the social costs of labor redundancies in egypt only voluntary programs are feasible because legal limitations preclude layoffs and strong organized labor groups oppose any weakening of job security protections a common problem with voluntary severance programs however is that they tend to overpay workers relative to the welfare losses they experience from displacement this article estimates the losses that public sector workers would incur if they were displaced from their jobs and simulates several voluntary severance schemes to determine how well the schemes match compensation payments to these estimated losses it provides a fairly strong argument for looking at the structure of opportunity costs and wage profiles when designing severance programs it shows that significant overpayment can be avoided by matching compensation payments to the expected losses of workers it also provides a method for estimating these losses from standard labor force surveys that are available in most countries

beyond economic base theory the role of the residential economy in attracting income to swiss regions segessemann a and crevoisier o beyond economic base theory the role of the residential economy in attracting income to swiss regions regional studies regional development theories are mainly focused on export based activities to explain regional competitiveness the increasing mobility of workers and residents leads to a reconsideration of this approach residential economy has become a strategic issue to generate incomes within regions with this view the paper analyses the link between economic activities and incomes from workers and annuitants residents a spatial typology breakdown is compiled for swiss regions using a hierarchical cluster analysis hca empirical results highlight various regional development profiles conversely to export based theories regions with higher income are those with strong residential economy thus opening new avenues for local governance

global capital flows and financing constraints firms often cite financing constraints as one of their primary obstacles to investment global capital flows by bringing in scarce capital may ease the financing constraints of host country firms but if incoming foreign investors borrow heavily from domestic banks foreign direct investment may exacerbate financing constraints by crowding host country firms out of domestic capital markets combining a unique cross country firm level panel with time series data on restrictions on international transactions and capital flows harrison love and mcmillan find that different measures of global flows are associated with a reduction in firm level financing constraints first the authors show that one type of capital inflow foreign direct investment is associated with a reduction in financing constraints second they test whether restrictions on international transactions affects the financing constraints of firms the results suggest that only one type of restriction those on capital account transactions negatively affects firms financing constraints the authors also show that multinational firms are not financially constrained and do not appear to be sensitive to the level of foreign direct investment this implies that foreign direct investment eases financing constraints for non multinational firms finally the authors show that 1 foreign direct investment only eases financing constraints in the non g7 countries and 2 other kinds of flows such as portfolio investment have no impact on financing constraints

mckinnon shaw versus the neostructuralists on financial liberalization a conceptual note abstract the views of the mckinnon shaw group and the neostructuralists differ about the approach to financial liberalization not about financial liberalization itself the neostructuralists view as it is normally interpreted is misleading in that it recommends that developing countries maintain low interest rates in the banking sector a practical way for developing countries to pursue financial liberalization would be through the organized financial system

new housing supply and the dilution of social capital this paper examines the role of local housing supply conditions for social capital investment using an instrumental variables approach and data from the social capital community benchmark survey it is documented that the positive link between homeownership and individual social capital investment is largely confined to more built up neighborhoods with more inelastic supply of new housing the empirical findings provide support for the proposition that in these localities house price capitalization provides additional incentives for homeowners to invest in social capital the findings are also largely consistent with the proposition that built up neighborhoods provide protection from inflows of newcomers that could upset a mutually beneficial equilibrium involving reciprocal cooperation however the results do not appear to be driven by selection based on inherent differences in social aptitudes or by tiebout sorting

capital market imperfections international credit markets and nonconvergence abstract we consider a two country growth model with international capital markets these markets fund capital investment in both countries and operate subject to a costly state verification csv problem investors in each country require some external finance but also provide internal finance which mitigates the csv problem when two identical except for their initial capital stocks economies are closed they necessarily convergemonotonicallyto the same steady state output level unrestricted international financial tradeprecludesotherwise identical economies from converging and poor countries are necessarily net lenders to rich countries oscillation in real activity and international capital flows can occur journal of economic literatureclassification numbers e00 f00 f34 g14

coping with poor public capital abstract despite recent successes in stabilization and structural reforms in many developing countries the private investment response to date has been mixed even among the strongest reformers this disappointing result can be partly explained by the continued poor provision of public capital and services we test this hypothesis using unique firm level data on investment and provision of public infrastructure services the results suggest that poor complementary public capital significantly reduces private investment however firms can substitute for deficient public services by investing in complementary capital themselves but this comes at a cost less productive capital will be installed

wages rents and the quality of life this study focuses on the role of wages and rents in allocating workers to locations with various quantities of amenities the theory demonstrates that if the amenity is also productive then the sign of the wage gradient is unclear while the rent gradient is positive the theory is extended to include the housing market and nontraded goods these extensions require little modification of the conclusion the empirical work on wages shows that the regional wage differences can be explained largely by these local attributes with the use of site price data implicit prices are estimated and quality of life rankings for the cities are computed

are low skill public sector workers really overpaid a quasi differenced panel data analysis public private sectoral wage differentials have been studied extensively using quantile regression techniques these typically find large public sector premiums at the bottom of the wage distribution this may imply that low skill workers are overpaid prompting concerns over efficiency we note several other potential explanations for this result and explicitly test whether the premium varies with skill using australian data we use a quasi differenced generalized method of moments gmm panel data model which has not been previously applied to this topic internationally unlike other available methods this technique identifies sectoral differences in returns to unobserved skill it also facilitates a decomposition of the wage gap into components explained by differences in returns to all observed and unobserved skills and by differences in their stock we find no evidence to suggest that the premium varies with skill one interpretation is that the compressed wage profile of the public sector ind

the effects of public sector hiring and compensation policies on the egyptian labor market this article examines the combined impact of the employment guarantee for graduates and public sector compensation policies on the egyptian labor market besides contributing to an unsustainable rate of growth in the government labor force these policies have encouraged queuing for government jobs contributed to high graduate unemployment rates and reduced the employment of graduates in the private sector despite substantial wage erosion in the public sector in recent years government wages when appropriately corrected for observed heterogeneity and sample selection are on a par with or higher than private sector wages especially for graduates when combined with the more desirable nonwage aspects of government jobs these compensation levels explain the attractiveness of public sector employment to graduates government pay scales are especially advantageous to female secondary school graduates who appear to face considerable discrimination in the private sector

electoral rules and corruption is corruption systematically related to electoral rules recent theoretical work suggests a positive answer but little is known about the data we try to address this lacuna by relating corruption to different features of the electoral system in a sample of about eighty democracies in the 1990s we exploit the cross country variation in the data as well as the time variation arising from recent episodes of electoral reform the evidence is consistent with the theoretical priors larger voting districts and thus lower barriers to entry are associated with less corruption whereas larger shares of candidates elected from party lists and thus less individual accountability are associated with more corruption individual accountability appears to be most strongly tied to personal ballots in plurality rule elections even though open party lists also seem to have some effect because different aspects roughly offset each other a switch from strictly proportional to strictly majoritarian elections only has a small negative effect on corruption jel e62 h3

composition and determinants of the skilled out migration in the brazilian formal labor market a panel data analysis from 1995 to 2006 this paper aims to examine the composition and identify determinant factors of interstate the skilled labor loss in the brazilian formal labor market between 1995 and 2006 with emphasis on the role of individual motivations and regional factors in order to estimate such determinants we use a fixed effect logit in a wide panel with data from ministry of labor and employment rais migra annual report on social information and ibge the brazilian statistics bureau the estimated results confirm the importance of wage differentials in determining such mobility furthermore an increased skilled out migration probability is explained by skilled workers heading to states showing economic prosperity higher dynamism in the labor market as well as higher population density 2014 national association of postgraduate centers in economics anpec production and hosting by elsevier b v all rights reserved

cultural amenities and unemployment in dutch cities disentangling a consumerist and productivist explanation for less educated urbanites varying unemployment levels across urban economies previous studies on the advanced economies have shown that unemployment levels of the less educated are low in cities with high employment shares in the advanced producer services scholars have consistently interpreted this finding according to sassen s polarisation thesis this article confronts this production based interpretation with a competing consumption based explanation which focuses on the role of cultural amenities analysing data on 22 dutch metropolitan agglomerations between 1996 and 2008 it is shown that in line with consumerists notions of richard florida advanced producer services settle in cities that are rich in cultural amenities instead of the other way around as classical labour follows capital explanations imply yet only advanced producer services prove to reduce the unemployment levels of the less educated meaning that the polarisation thesis and not the theory on cultural amenities is a valid explanation for the low level of unemployment in post industrial cities

do school food programs improve child dietary quality this paper estimates the impact of u s school food programs on the distribution of child dietary quality during 2005 10 the distributional approach allows one to better understand how school food impacts children prone to low quality diets separately from those prone to higher quality diets using a fixed effects quantile estimator i find notable heterogeneity in the general population school food has positive impacts below the median of the dietary quality distribution and negative but insignificant impacts at upper quantiles children demonstrating substantial nutritional needs i e food insecure or receiving free reduced price meals exhibit positive impacts at all levels of diet quality with especially high benefits at low quantiles although school food programs may not benefit the above average child they do improve the diets of the most nutritionally disadvantaged

the effect of financial liberalization on the capital structure and investment decisions of indonesian manufacturing establishments this article analyzes the consequences of financial liberalization using a large panel of indonesian manufacturing establishments it discusses whether financial reforms have had an impact on investment and on the allocation of credit and whether the effects differ depending on the type of firms the overall conclusion is that shifting from administrative toward market based allocation of credit has increased borrowing cost particularly for smaller firms but at the same time has benefited firms by giving them widened access to finance

internal funds and corporate investment in india abstract several economists have argued that capital markets in less developed countries are fragmented fragmented capital markets retard the efficient allocation of resources and force business firms to rely on internal sources of funds using firm level data the authors examine the importance of the accelerator internal funds and depreciation for investment by manufacturing firms in india the results indicate that internal funds and depreciation have significant explanatory power in a sales accelerator model of investment and that there exists heterogeneity among firms in the link between internal funds and investment in particular internal funds are relatively more important for large firms and firms that produce luxury goods

a theory of misgovernance this paper tries to explain why government bureaucracies are often associated with red tape corruption and lack of incentives the paper identifies two specific ingredients that together can provide an explanation the fact that governments often act precisely in situations where markets fail and the presence of agency problems within the government we show that these problems are exacerbated at low levels of development and in bureaucracies dealing with poor people we also argue that we need to posit the existence of a welfare oriented constituency within the government in order to explain red tape and corruption

the dynamics of changes in the female wage distribution in the usa a quantile regression approach this paper examines the female wage structure focusing on changes at different points in the wage distribution newly developed quantile regression methods are used in analysing data from the march current population survey the results show that while the most significant changes for the less skilled women took place at the bottom of the wage distribution for the more skilled groups changes occurred at both ends of the distribution consequently wage inequality decreased for the high school graduates and increased for the younger college graduates furthermore the more highly skilled women experienced the steepest gain in wages regardless of their position in the distribution 1998 john wiley sons ltd

local capture evidence from a central government transfer program in uganda according to official statistics 20 percent of uganda s total public expenditure was spent on education in the mid 1990s most of it on primary education one of the large public programs was a capitation grant to cover schools nonwage expenditures using panel data from a unique survey of primary schools we assess the extent to which the grant actually reached the intended end user schools the survey data reveal that during 1991 1995 the schools on average received only 13 percent of the grants most schools received nothing the bulk of the school grant was captured by local officials and politicians the data also reveal considerable variation in grants received across schools suggesting that rather than being passive recipients of flows from the government schools use their bargaining power to secure greater shares of funding we find that schools in better off communities managed to claim a higher share of their entitlements as a result actual education spending in contrast to budget allocations is regressive similar surveys in other african countries confirm that uganda is not a special case

public private sector wage gap by gender in egypt evidence from quantile regression on panel data 1998 2018 abstract this paper estimates the public formal private wage gap in egypt using egypt labor market panel survey for the 20 year period of 1998 2018 for men and women separately we estimate the public formal private sector wage gap with wage equations including a public sector indicator both at the mean and at different quantiles of the conditional wage distribution using the panel feature of the data we also address the endogenous employment and the sector of employment selection issue and find a persistent public wage penalty for the males and public wage premium for the females except at the top even after controlling for the observable and the time invariant unobservable characteristics we further examine the public wage gap over time and in different sub samples by potential experience skill levels and regions generally the results are consistent with a decrease in the public wage gap for both men and women over the period considered we further provide evidence on the quality of workers we find that the public sector fails to attract better quality men throughout the conditional wage distribution while it manages to attract better quality women in the lower parts of the conditional wage distribution but not at the top all on the basis of time invariant unobservable attributes these results indicate concern for the efficient provision of public services

a modified switching regression model for earnings differentials between the public and private using dutch 1986 data the wage differentials between public sector and private sector workers are investigated by employing a variation of the switching regression model this model imposes fewer identification restrictions on the parameters of the model than the standard switching regression model the estimation results show that some categories of public sector workers earn substantially less than private sector workers copyright 1993 by mit press

investment in segmented capital markets bankers screening devices are identified to determine firms probability of borrowing in the formal segment of the capital market in pakistan incorporating this information investment functions are estimated using a two stage switching regressions model with endogenous switching it is concluded that firms that borrow in the formal markets behave according to the flexible accelerator model of investment while non borrowing firms plough back profits furthermore the former have higher capital output ratios and find it less difficult to adjust to their desired capital stocks compared to the latter investment determinants related to entrepreneurial and firm features are also identified

what is different about urbanization in rich and poor countries cities in brazil china india and the united states abstract are the well known facts about urbanization in the united states also true for the developing world we compare american metropolitan areas with analogous geographic units in brazil china and india both gibrat s law and zipf s law seem to hold as well in brazil as in the u s but china and india look quite different in brazil and china the implications of the spatial equilibrium hypothesis the central organizing idea of urban economics are not rejected the india data however repeatedly rejects tests inspired by the spatial equilibrium assumption one hypothesis is that spatial equilibrium only emerges with economic development as markets replace social relationships and as human capital spreads more widely in all four countries there is strong evidence of agglomeration economies and human capital externalities the correlation between density and earnings is stronger in both china and india than in the u s strongest in china in india the gap between urban and rural wages is huge but the correlation between city size and earnings is more modest the cross sectional relationship between area level skills and both earnings and area level growth are also stronger in the developing world than in the u s the forces that drive urban success seem similar in the rich and poor world even if limited migration and difficult housing markets make it harder for a spatial equilibrium to develop

investment under uncertainty testing the options model with professional traders abstract an important class of investment decisions is characterized by unrecoverable sunk costs resolution of uncertainty through time and the ability to invest in the future as an alternative to investing today the options model provides guidance in such settings including an investment decision rule called the bad news principle the downside investment state influences the investment decision whereas the upside investment state is ignored this study takes a new approach to examining predictions of the options model by using the tools of experimental economics our evidence drawn from student and professional trader subject pools is broadly consonant with the options model

what makes cities attractive the determinants of urban labour migration in germany striking disparities characterise the population growth of cities in industrialised countries some cities suffer from ongoing population decline whereas other cities have experienced increasing numbers of inhabitants in recent years whether labour market conditions or amenities via their impact on migration primarily account for differences in cities demographic development is an important issue this paper investigates the determinants of the migration balance of german cities between 2000 and 2007 the focus is on the mobility of workers because labour migration in particular affects the future prospects of cities the findings suggest that not only labour market conditions but also amenities have an impact on the net migration rate moreover large cities seem to be ceteris paribus more attractive than small cities this finding possibly points to the importance of amenities such as cultural infrastructure and matching externalities in urban labour markets that are linked to city size urban policy aimed at enhancing the attractiveness of cities should thus consider both boosting the local economy and improving the quality of life

public and private sector wages of male workers in germany we analyze several statistical assumptions used in empirical models on public private sector wage structures based on data for germany which contain a large range of background variables usually not available in other studies we investigate the sensitivity of results to various specification and identification assumptions the standard switching regression model is extended to allow for endogeneity of education level experience and hours worked these extensions lead to considerably different parameter estimates we compare conditional and unconditional wage differentials between the public and the private sector for the various specifications these differentials are sensitive to identification assumptions but robust across specifications which do and do not allow for endogeneity of education experience and hours worked

the economics of the arab spring summary a singular failure of the arab world is the absence of a private sector that is independent competitive and integrated with global markets this paper argues that private sector development is both a political and regional challenge in so far as the private sector generates incomes that are independent of the rent streams controlled by the state it can pose a direct political challenge it is also a regional challenge since fragmented markets deny scale economies to firms and entrench the power of insiders we argue that overcoming regional economic barriers constitutes the single most important collective action problem facing the region since the fall of ottoman empire

capital market imperfections before and after financial liberalization an euler equation approach to panel data for ecuadorian firms using a large set of panel data for ecuadorian firms the authors analyze the role of capital market imperfections in investment decisions and investigate whether the financial reforms introduced in the 1980s in ecuador succeeded in relaxing financial constraints to facilitate capital accumulation and growth the ecuadorian government removed administrative controls on the interest rate and eliminated or scaled down directed credit programs the model used here allows both for an increasing cost of borrowing as the degree of leverage increases and for a ceiling on leverage the econometric results suggest that both types of capital market imperfections are important for small and young firms but not for large and old firms moreover the estimated equations do not provide evidence that financial reform in ecuador has helped to relax these financial constraints

using micro surveys to measure and explain corruption summary this paper discusses survey techniques aimed at a better measurement of corruption at the micro level and argues that with appropriate survey methods and interview techniques it is possible to collect quantitative micro level data on corruption public expenditure tracking surveys service provider surveys and enterprise surveys are highlighted with several applications these surveys permit measurement of corruption at the level of individual agents such as schools health clinics or firms they also permit the study of mechanisms responsible for corruption including capture of public funds and bribery 2005 elsevier ltd all rights reserved

financial liberalization credit constraints and collateral investment in the mexican manufacturing sector abstract we examine the impact of financial liberalization on fixed investment in mexico using establishment level data from the manufacturing sector in addition to analyzing changes in cash flow sensitivities an innovative approach explores the role of real estate as collateral and addresses a potential censoring problem the results suggest that financial constraints were eased for the smallest firms but not for larger ones however the importance of possessing real estate increased given banks reliance on collateral in their lending the results also provide microeconomic evidence consistent with the role attributed to financial accelerator mechanisms during lending booms and during post crisis recessions

is the bad news principle for real abstract the bad news principle states that only the expected severity of future bad news matters for the decision whether to invest today good news should not matter at all this paper tests this prediction using firm level expectation data

a free press is bad news for corruption abstract this paper tests the proposition that a free press may be a powerful control on corruption we find evidence of a significant relationship between more press freedom and less corruption in a large cross section of countries this result is robust to specification and sample and the relationship is not sensitive to the choice of a particular measure of corruption or of press freedom furthermore we present evidence which suggests that the direction of causation runs from higher press freedom to lower corruption

public private wage differentials in haiti do public servants earn a rent abstract this study uses a newly collected data set on haiti where data are very limited to assess how individuals are selected into the public vs private sectors and to estimate public private sector wage differentials the central question is whether or not public servants are earning a rent the estimation procedure is an extension of heckman s 1979 sample selection technique to the case where two selection rules generate the sample the procedure first estimates by bivariate probit analysis the probability of employment in the public or private sector and then for those in the public sector the probability of employment in the state owned enterprises soes vs public administration wage functions are then estimated for all three sectors using the inverse mills ratios from reduced form probits selectivity bias is found to exist in one sector soes correction for this bias in the wage equations lowers the wage differentials between the soe and the private sector and the soe and public administration as is clearly demonstrated by the oaxaca decomposition of these estimated mean differentials nevertheless the corrected findings still indicate that the public sector especially the soes earn a sizable rent

public private employment choice wage differentials and gender in turkey abstract the main objective of this article is to examine the factors that explain the employment choice and the wage differentials in public administration state owned enterprises and the formal private wage sector in turkey selectivity corrected wage equations are estimated for each sector for men and women separately oaxaca blinder decomposition of the wage differentials between sectors by gender and between men and women by sector are carried out results indicate that when controlled for observed characteristics and sample selection for men public administration wages are higher than private sector wages except at the university level where the wages are at par state owned enterprise wages for men are higher than private sector wages similar results are obtained for women further while the wages of men and women are at parity in the public administration there is a large gender wage gap in the private sector in favor of men private returns to schooling are found to be lower in the noncompe

the central government private sector wage differential since ehrenberg and schwarz 1986 there has been a plethora of articles investigating the relationship between public and private sector wages this article examines part of this post 1986 literature by reviewing articles that examine central government private sector wage differentials in sum most articles find that there is a premium paid to central government workers although the premium has declined in recent years in developing countries however the differential is usually negative women and minorities tend to do better in the public sector relative to their private sector counterparts the evidence on union premiums between sectors is mixed although the premium tends to be higher in the private sector however public sector union workers do not do much better than private sector union members the magnitude of all of the wage differentials discussed are sensitive to the estimation technique and data source used the most common explanation for the public sector wage premium is economic rent accruing to government workers although the public sector wage determination literature suggests that the differential is due to returns to political and vote producing activities not relevant in the private sector