credit natural disasters coffee and educational attainment in rural honduras summary this paper exploits a two stage estimation approach to examine the impact on secondary school attainment in rural honduras of four key variables affecting household choices wealth credit access crop choice and shocks the first stage estimates the probability that a household is credit constrained while the second estimates secondary school educational attainment of appropriately aged children the second stage includes variables for crop selection and household wealth shocks from hurricane mitch in addition to other characteristics of the child household and community that can influence educational attainment credit constrained households have lower educational attainment and are more likely to be adversely affected by negative shocks

the behavior of prices and inflation an empirical analysis of disaggregat price data this paper analyzes the effects of inflation on the dispersion of prices as well as other aspects of price behavior using disaggregated data on prices of foodstuffs in israel during 1978 84 we find that the effect of expected inflation on intramarket price variability is stronger than the effect of unexpected inflation we show that even in times of high inflation price quotations are not trivially short and price changes are not synchronized across firms these facts taken together confirm that there is some staggering in the setting of prices we find that the distribution of real prices is far from being uniform as many menu cost based models assume or conclude in fact as inflation increases to very high levels this distribution is not even symmetric when the annual inflation rate reaches 130 percent there are equal chances of finding real prices above or below the market average but upward deviations in the real price are further away from zero than downward ones furthermore as the annu

does globalization increase child labor abstract there is no empirical evidence that trade exposure per se increases child labor as trade theory and household economics lead us to expect the crosscountry evidence seems to indicate that trade reduces or at worst has no significant effect on child labor consistently with the theory a comparatively well educated labor force and active social policies appear to be conducive to a reduction in child labor for countries with a largely uneducated workforce the problem is not so much globalization as not being allowed to take part in it

money and the dispersion of relative prices a price dispersion equation is tested with data from the german hyperinflation the equation is derived from a version of lucas s and barro s partial information localized market models in this extension different excess demand elasticities across commodities imply a testable dispersion equation in which the explanatory variable is the magnitude of the unperceived money growth in order to test this hypothesis a price dispersion series is constructed and a measure of the unperceived part of money growth is estimated the model receives support from the empirical analysis although it is evident that unincluded variables have important effects on price dispersion

the impact of household income on child labour in urban turkey abstract the aim of this study is to investigate the determinants of child labour in urban turkey with a special reference to low household income or poverty as one of its root causes studies done elsewhere have produced mixed results which necessitate the relationship to be studied at country level the data from urban turkey indicate that children from poorer families stand at a higher risk of employment this finding is confirmed using various measures of household material well being simulation results have further pointed out that current interventions are not likely to produce a sizeable impact on the child labour problem

the global child labor problem what do we know and what can we do the problem of child labor has moved from a matter of regional and national concern to one of international debate and possible global persuasion and policy intervention in crafting policy for mitigating this enormous problem of our times it is important to start with a proper theoretical and empirical understanding of the phenomenon what gives rise to child labor and what are its consequences what interventions might end child labor without hurting children a well meaning but poorly designed policy can exacerbate the poverty in which these laboring children live even leading to starvation the article surveys the large and rapidly growing literature on this subject focusing mainly on the new literature based on modern economic theory and econometrics it also looks at some of the broad policy implications of these new findings with the objective of contributing to better informed discussion and policy design

child labor cause consequence and cure with remarks on international labor standards although the literature on child labor is enormous it lacks a common theoretical foundation in this paper analytical survey of this field is provided keeping in mind that this is an area where the primary reason for theorizing is ultimately to influence policy overall it is noted that the literature on child labor is an illustration of abundance and anarchy although empirical writings on child labor are numerous they are not usually founded on theory it is argued that there is much that can be done in curbing the issue of child labor several theories were studied in this paper including collaborative intervention such efforts include public action which alters the economic environment such that the parents of their own accord prefer to withdraw the child from labor force another strategy involves the government a legal intervention is enforcing a total ban on the subject although such interventions have good intentions some of them may not be feasible in general it is better to take economy wide measures against child labor and if there is to be a sector specific ban it should be based on the working conditions of that sector rather than the destination of the goods

the economics of communist party membership the curious case of rising numbers and wage premium during china s transition abstract as the chinese communist party has loosened its grip in a more market oriented economy why have membership and the economic benefits of joining risen we use three national household surveys over 11 years to answer this question for wages in urban china individual demand for party membership is treated as an investment in political capital that brings monetary rewards in terms of a wage premium that has risen in recent years however this does not explain why the wage premium is higher for the personal characteristics that reduce the probability of membership rationing with a scarcity value for members with those characteristics provides an explanation

crop choice school participation and child labor in developing countries cotton expansion in burkina faso we estimate the effects of changes in cotton adoption on children s schooling and child labor in rural burkina faso using time and spatial variations we find evidence that expansion of cotton farming has led to an increase in enrollment and to a reduction of participation in child labor for girls there are however no detectable effects on boys in theory cotton adoption could increase household income leading to increased demand for schooling and reduced child labor on the other hand because children are productive on cotton farms adoption of cotton could increase the opportunity cost of child time and the demand for child labor we provide suggestive evidence showing that boys are more productive than girls on cotton farms taken together the results suggest that the income effect from cotton adoption might have been larger than the wage effect for girls hence the overall positive impacts on school enrollment for girls

child labour and resistance to change we study the interaction between technological innovation investment in human capital and child labour in a two stage game first firms decide on innovation then households decide on education in equilibrium the presence of inefficient child labour depends on parameters related to technology parents altruism and the diffusion of firms property child labour is due either to firms reluctance to innovate or to households unwillingness to educate or both in some cases compulsory schooling laws or a ban on child labour are welfare reducing whereas a subsidy for innovation is the right tool to eliminate child labour and increase welfare

the problem of population and growth a review of the literature from malthus to contemporary models of endogenous population and endogenous growth abstract this paper deals with the evolution of the literature on the problem of population and growth from the classical period to the recent literature on endogenous growth and development the problem concerns two distinct issues 1 how to explain the observed covariation of the levels and rates of growth of per capita income and population size over time and space and 2 how to improve the human condition represented by these variables through an accommodating social policy the evolution of the literature we survey is reflected by the progressive treatment of key variables as endogenous rather than exogenous to the growth process it is also reflected by a shift from the historical concern about population explosion and its implications for growth to the more recent concern about the association between growth and population implosion in many developed countries

the global child labor problem the problem of child labor has moved from a matter of regional and national concern to one of international debate and possible global persuasion and policy intervention in crafting policy for mitigating this enormous problem of our times it is important to start with a proper theoretical and empirical understanding of the phenomenon what gives rise to child labor and what are its consequences what interventions might end child labor without hurting children a well meaning but poorly designed policy can exacerbate the poverty in which these laboring children live even leading to starvation the article surveys the large and rapidly growing literature on this subject focusing mainly on the new literature based on modern economic theory and econometrics it also looks at some of the broad policy implications of these new findings with the objective of contributing to better informed discussion and policy design

families and firms agency costs and labor market imperfections in sialkot s surgical industry abstract the family firm is generally viewed as an organizational solution to agency costs in the labor market for managers and institutional underdevelopment consistent with this view this paper links the preponderance of family firms in the surgical instrument industry of sialkot to the prevailing agency and institutional problems however strong dependence on family management coupled with restrictions on family size constrains the firms from optimally choosing management size the resulting labor market distortion is manifested by a significant positive correlation between the founder s family size and the firm size such that the founders who have more brothers a larger pool of potential managers end up with bigger firms

inflation fixed cost of price adjustment and measurement of relative price variability theory and evidence in an interesting paper julio rotemberg 1983 extends the works of eitan sheshinski and yoram weiss 1977 and michael mussa 1981 to examine the aggregate consequences of monetary growth in an economy in which sellers incur a fixed cost of price adjustment the fixed cost prevents a continual adjustment of individual prices so each seller keeps his price constant in periods of discrete length increasing his price in discrete jumps at the end of these periods a central feature of the inflationary process is therefore that relative prices become dispersed around their means and the theory predicts that even a fully anticipated inflation increases the variability of relative prices the empirical evidence on this point does however appear to be mixed on the one hand richard parks 1978 and stanley fischer 1981a b 1982 conclude that anticipated inflation does increase relative price variability which fischer interprets as providing empirical support for the theory on the other hand mario blejer 1981 1983 and blejer and leonardo leiderman 1982 find that anticipated inflation has no effect or only a very weak effect on relative price variability which makes john taylor 1981 doubt the quantitative significance of the theory 2 this paper uses rotemberg s theoretical framework to demonstrate that the proxy for relative price variability adopted in the empirical literature does not properly capture the relative price variability that is caused by a fixed cost of price adjustment the methodology of the above cited studies is therefore not appropriate for evaluating the empirical relevance of the fixed cost theory and the divergence of their results is not surprising specifically the proxy which consists of the variance of the rates of price change between successive observations does not always increase with the anticipated inflation even with disaggregate data 3 the proxy decreases with the anticipated inflation in approximately half of any interval of inflation rates for which a seller adjusts his price no more than a given number of times between successive observations moreover the relationship between the anticipated inflation and the proxy depends on such extraneous factors as the timing of the observations a change in the timing may change a positive relationship between the anticipated inflation and the proxy to a negative one and vice versa the paper also proposes alternative more satisfactory measures of relative price variability and provides empirical support for the theoretical conclusions

international migration and child labour in developing countries this paper investigates the labor market effect of international migration on child work in countries of origin we use an original cross country survey dataset which combines information on international migration with detailed individual level data on child labour at age 5 14 in a wide range of developing countries by exploiting both within and cross country variation and controlling for country fixed effects we find strong and robust evidence on the role of international mobility of workers in reducing child labour in disadvantaged households through changes in the local labour market

search price setting and inflation a model of monopolistic competition in an inflationary environment is developed which embodies optimal sequential search price dynamics and entry on the part of consumers and firms respectively equilibrium price strategies are s s these bounds increase continuously with consumer search costs and so does price dispersion indeed the whole equilibrium varies smoothly from the competitive bertrand to the monopolistic diamond 1971 end of the spectrum the latter s paradoxical result is explained as a limiting case where frictions on firms side of the market price adjustment costs but not on buyers search costs tend to zero a positive relationship between smooth and perfectly anticipated inflation and price dispersion or uncertainty is established

relative price variability and inflation a disaggregated analysis relative price variability has been studied at the cross sectional intermarket level this paper addresses the equally important phenomenon of intramarket variability the dispersion of commodity price movements around the industry average using quarterly price data for 80 disaggregated commodity groups in the united kingdom from 1974 to 1984 the paper investigates the determinants of intramarket price variability and replicates some previous crosssectional tests for the united kingdom intermarket price variability is found to be positively related to inflation which confirms previous results for the united states and other countries intramarket variability is found to be positively related to the average market rate of price change but the strength of this relationship appears to be inversely related to the level of industry concentration these results generally support the propositions and findings reported by stigler and kindahl

on the stubbornness of sticky prices this paper presents a simple menu cost example in which there is a clear distinction between price stickiness and downward rigidity of prices while price stickiness may or may not exist in menu cost models downward rigidity shows up whenever there is a reduction of the expected rate of inflation this reduction changes the optimal target and threshold for each firm for some it also implies an immediate increase of their own price this upward jump of prices in case of a disinflationary attempt is interpreted as downward rigidity since there are no symmetric forces when expected inflation increases copyright 1991 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

the trade off between child labour and human capital formation a tanzanian case study we investigate the degree to which there is a trade off between child labour and human capital formation using time log data of children from a tanzanian household survey we find that a tradeoff between hours of work and study exists and hours of work tend to be more affected by social conditions than hours of study hours of work are negatively correlated to reading and mathematical skills through the reduction of human capital investment activities indicating a trade off between child labour and human capital the results point up the complexity of the issue and the need for detailed time allocation data

optimum pricing policy under stochastic inflation we describe aggregate inflation as a stochastic process in which the rate of change of the price level can be positive or zero where the times spent in each state are of random duration this class of processes includes two state markov chains and renewal processes as special cases it is shown that the optimal pricing policy of a monopolistic firm with non convex costs of price adjustment is s s in its real price i e its nominal price relative to the price level a basic certainty equivalence result is proved i e the firm behaves as if it faces a certain and fixed rate of inflation higher than the actual expected rate the difference between the two rates being a risk premium which depends on the real interest rate and the parameters of the stochastic process one can thus apply previous results from the case of certainty sheshinski and weiss review of economic studies 1977 to obtain comparative static results in particular one finds that an increase in the variance of expected inflation leads firms to choose a pricing policy with larger amplitude in real price the paper also addresses the question of consistency in firms expectations when the price level is determined by the firms actions in this paper we consider pricing policies of individual firms in an inflationary environment each firm expects the general price level to increase and must determine the rate of increase of its own price it is assumed that the firm incurs an adjustment cost when it changes its nominal price consequently firms choose to change prices occasionally rather than continuously

child labor and the interaction between the quantity and quality of children this article analyzes the impacts of child labor on the interaction between the quantity and quality of children in the spirit of becker and lewis it shows that without child labor the quantity of children can be a normal good so that it increases with parental income under some fairly standard formulations however the correlation between fertility and parental income becomes negative when the role of child labor is considered the model also implies that fertility increases with the wage rate of child labor moreover it suggests that government intervention not only directly affects the supply of child labor but also influences parents decisions on fertility which indirectly determines children s labor market participations

schooling costs and child labour in rural pakistan a conventional argument in the child labour debate is that improvements in access to schools are an effective way to reduce the labour force participation of children it is argued that schooling competes with economic activity in the use of children s time and enhanced access to schools interpretable as reduction in schooling costs may raise school attendance at the expense of child labour in this article we draw a distinction between child labour within the household intra household and child work in the labour market extra household and examine the separate effects of schooling costs upon these two types of child labour in rural pakistan consistent at least in part with our theoretical framework we find that extra household child labour and schooling costs are positively related whereas intra household child labour is insensitive to changes in the costs of schooling our results suggest that reduction in schooling costs will have limited success in the abatement of child labour in rural p

cropping pattern mechanization child labor and fertility behavior in a farming economy rural egypt tractor and the use of mechanical irrigation is increasing in the countryside the significant policy issue is the role of government in encouraging or discouraging continued labor saving mechanization present policy substantially encourages mechanization diesel oil is available at prices considerably lower than those in many other countries village banks provide farmers with equipment loans at rates below commercial levels machinery is imported at favorable foreign exchange rates and is exempted from import duties the most telling impact of these policies has been on the rapidly growing use of tractors and irrigation pumps both of which are believed to displace labor especially that of children this article addresses the question of whether such changes have indeed had the desired effect on child employment and family size recent developments in the egyptian agricultural sector also reveal significant changes in crop patterns these favor fruit and vegeta