preference based vs market based discrimination implications for gender differentials in child labor and schooling abstract this paper studies the effects of son preference by parents and earnings function bias on child labor and schooling in a model in which parents are altruistic it finds that son preference leads to gender differential in child labor with female children working more than male children but it does not lead to gender differential in schooling except when the bequest constraints are binding on the other hand the earnings function bias results in gender differential in both child labor and schooling dowry and marriage expenses can lead to inefficiently low level of schooling and high level of child labor son preference magnifies gender differential in child labor and schooling in the presence of dowry and marriage expenses

women s work and economic development using a cross country dataset and microdata from india and thailand we examine how women s work status changes with economic development several clear patterns emerge women s labor force participation first declines and then rises with development women move from work in family enterprises to work as paid employees fertility declines and gender gaps in education narrow women s education levels and those of their spouses appear to be important determinants of women s labor market activities broad welfare indicators such as mortality rates and education levels indicate that women s well being improves on average with development both in absolute terms and relative to men

child fostering in africa when labor and schooling motives may coexist abstract the paper proposes a theoretical framework for understanding purposive child fostering in africa whereby a non orphaned child is sent to live temporarily with relatives in the model adults decide whether to foster in or out a child in conjunction with other household choices e g own time allocation between market and non market activities children s amount of work and schooling by allowing for positive externalities from fostering and thus asymmetric motives for fostering in labor and out human capital the proposed framework predicts that school age children are sent to better off households and that some families may foster in and out simultaneously the model identifies the conditions under which all actors involved children included may benefit from fostering arrangements but also points to situations where fostering may become an opportunity to marginalize a subset of children the paper aims to provide a sound theoretical foundation that sheds light on why there exists mixed empirical evidence on the effects of fostering on children s well being and cautions against demonizing non parent residence as unequivocally detrimental to children

poverty and public policy the problem of poverty is particularly acute in india with 14 of the world s population we have the misfortune of having almost twice as large a share of the world s poor indeed as i shall presently underline the question of poverty and its amelioration has been at the center of our concerns from the beginning of our planning efforts almost four decades ago little therefore can be said on it that some distinguished indian economist has not already said in some ways therefore to talk on the design of public policy for poverty to an indian audience is to carry coal to newcastle or as the old saying goes to teach your grandmother how to suck eggs nonetheless i hope to provide a fresh perspective by putting the problem into an explicit analytical framework that permits alternative policy designs to be sharply defined and contrasted i also intend to draw on international experience to put our efforts and problems into both historical and comparative perspectives

income shocks and gender gaps in education evidence from uganda abstract this paper uses exogenous variation in rainfall across districts in uganda to estimate the causal effects of household income shocks on children s enrollment and academic performance conditional on gender i find negative deviations in rainfall from the long term mean to have negative and highly significant effects on female enrollment in primary schools and the effect grows stronger for older girls i find no effect of rainfall variation on the enrollment of boys and young girls moreover i find that when schooling is free of charge and both marginal boys and girls are enrolled a negative income shock has an adverse effect on the test scores of female students while boys are not affected the results imply that households respond to income shocks by varying the amount of schooling and resources provided to girls while boys are to a large extent sheltered a finding consistent with a model where parents values of child labor differ across sexes

intra household gender disparity in school choice evidence from private schooling in india abstractthis paper explores gender inequality within households in the decision of private versus government school choice in india using a three period longitudinal dataset on rural households from uttar pradesh a northern state of india this paper estimates a household fixed effects model and finds that there is an intra household gender bias of 6 percentage points in private school enrolment among children aged 6 16 years contrary to the trend in overall enrolment the gender gap in private school choice is rising over time and is more pronounced in villages with a larger cost difference between private and government schooling this finding remains robust even after controlling for average school quality and considering potential endogeneity of the cost variables

input choices in agriculture is there a gender bias summary this paper examines evidence of gender biases in the decisions of agricultural households utilizing data from international crops research institute for the semi arid tropics s village level studies in india 1975 85 the main empirical finding is that households with a high proportion of boys tend to use some agricultural inputs including fertilizers and irrigation services more intensively than households with girls this pattern is more pronounced among wealthier households but does not appear to be driven solely by bequest motives or male child labor productivity

designing payments for environmental services in theory and practice an overview of the issues abstract payments for environmental services pes have attracted increasing interest as a mechanism to translate external non market values of the environment into real financial incentives for local actors to provide environmental services es in this introductory paper we set the stage for the rest of this special issue of ecological economics by reviewing the main issues arising in pes design and implementation and discussing these in the light of environmental economics we start with a discussion of pes definition and scope we proceed to review some of the principal dimensions and design characteristics of pes programs and then analyze how pes compares to alternative policy instruments finally we examine in detail two important aspects of pes programs their effectiveness and their distributional implications pes is not a silver bullet that can be used to address any environmental problem but a tool tailored to address a specific set of problems those in which ecosystems are mismanaged because many of their benefits are externalities from the perspective of ecosystem managers pes is based on the beneficiary pays rather than the polluter pays principle and as such is attractive in settings where es providers are poor marginalized landholders or powerful groups of actors an important distinction within pes is between user financed pes in which the buyers are the users of the es and government financed pes in which the buyers are others typically the government acting on behalf of es users in practice pes programs differ in the type and scale of es demand the payment source the type of activity paid for the performance measure used as well as the payment mode and amount the effectiveness and efficiency of pes depends crucially on program design

engaging simplifications community based resource management market processes and state agendas in upland southeast asia abstract in the struggle to secure resource rights for rural populations who gain their livelihoods from state claimed lands advocacy agendas highlight community interest in and capacity for sustainable resource management in the uplands of southeast asia the strategic simplifications of community based natural resource management cbnrm advocacy are being translated into legal frameworks and program initiatives which make rights conditional upon particular forms of social organization and livelihood as well as conservation outcomes when set in the context of agricultural intensification among both indigenous and migrant populations and the desire of many upland dwellers to claim the benefits of a fuller citizenship cbnrm offers a problematic basis for justice

schooling search and spouse selection testing economic theories of marriage and household behavior the implications of the economic theories of marriage and of household fertility behavior are tested in a framework in which educational investment marital search and marital matches are responsive to marriage market conditions and the personal traits of individual agents some of which are unobserved by the econometrician implications are also derived and tested for the effects of longevity attractiveness preferences and labor and marriage market conditions on schooling marriage age and spouse choice the empirical results indicate that inattention to heterogeneity and martial selection leads to a false rejection of the economic theory of marriage but to a false acceptance of the value of time fertility hypothesis

real income equivalence among one earner and two earner families in an earlier paper we proposed a technique for making income comparisons across various household sizes in this paper we employ a modified version of that method to convert nominal income to some real equivalent comparable across families of a given size but with one or two family earners we begin with a discussion of some of the conceptual difficulties involved in making cross family size or structure comparisons in income we then describe spending pattern differences between one and two earner families the final section discusses our effort to convert nominal income into comparable real income units we conclude that nominal income differences between two and one earner families far overstate differences in standards of living excerpt

trust and cooperation social capital and community resource management social capital is one of the main determinants of community resource management success we use the average amount sent in a trust game as a measure of social capital in five rural villages in india combining these experimental data with household surveys we analyze i how the amount sent is correlated with socio cultural community characteristics ii how social capital affects community resource management and iii to what extent experimental play is consistent with real on farm behavior in terms of providing a semi public good the results are interesting from a policy perspective and provide insight into bridging the gap between lab experiments and the field

an inquiry into power and participatory natural resource management decentralised environmental governance based on community participation is increasingly replacing top down natural resource management there is increasing awareness however that such mechanisms might fail to ensure effective participation by all stakeholders and be prone to producing and or perpetuating power inequalities against this backdrop we claim that power should be positioned at the centre of analyses of natural resource management in this paper we provide a taxonomy of positions to analyse participatory decision making in natural resource management we operationalise this framework to analyse two failures of participatory natural resource management in turkey focusing on reasons for failure and the role of power asymmetries our results are based on case studies comprising in depth interviews focus groups and a survey administered to 944 individuals we conclude that participatory mechanisms are highly unlikely to bring democratic and equitable outcomes unless power relations are addressed at both institutional and local levels copyright oxford university press

investments in schooling in two generations in pre revolutionary nicaragua the roles of family background and school supply abstract family background and school supply underlie the demand and supply for schooling but are usually ignored in empirical estimates these considerations are investigated for two generations in nicaragua using unique data on adult sisters and their offspring to identify inter versus intrafamilial effects and to control for unobserved family background the results suggest that the standard interpretations are misleading 1 unobserved family background and school supply factors are important in schooling determination 2 omission of these factors leads to overestimates of impacts of parental schooling and family size 3 both parental schooling and family size primarily represent unobserved family background and school supply in standard estimates

birth order and the intrahousehold allocation of time and education this paper develops a model of intrahousehold allocation with endogenous fertility which captures the relationship between birth order and investment in children it shows that a birth order effect in intrahouse hold allocation can arise even without assumptions about parental preferences for specific birth orders of children or genetic endowments varying by birth order the important contribution is that fertility is treated as endogenous a possibility that other models of intrahousehold allocation have ignored the implications of the model are that children with higher birth orders that is who are born later have an advantage over siblings with lower birth orders and that parents who are inequality averse will not have more than one child the model furthermore shows that not taking account of the endogeneity of fertility when analyzing intrahousehold allocation may seriously bias the results the effects of a child s birth order on its human capital accumulation are analyzed using a longitudinal

impact of microfinance on schooling evidence from poor rural households in bolivia summary channels for the influence of microfinance programs on a rural household s demand for schooling are identified income growth risk management child labor demand gender empowerment and parent information within a random utility framework a model of household consumption investment in education and borrowing suggests determinants at the individual household and regional levels of the probability of schooling gaps using data from two surveys of households of clients of microfinance organizations in bolivia regression models examine determinants of schooling gaps inferences about otherwise positive microfinance impacts identify potential negative effects of increased child labor demand which challenge usual assumptions and pose dilemmas for policymakers

from exclusion to participation turning senegal s forestry policy around abstract a century of centralized forestry policies has excluded senegal s forest villagers from charcoal production and marketing policies have given access to marketing and labor opportunities to urbanbased merchants who hire guinean migrant laborers while forest villagers neither produce nor consume charcoal commercial production is cutting forests on which villagers rely in 1993 progressive forestry agents ushered in a new participatory forestry code but this new policy may not be equitable nor beneficial and it risks adding control over village labor for forest management to the long list of forest service controls locally accountable representation local decision making powers and simple local management enabling policies could diminish these risks

fairness concepts and the intrahousehold allocation of resources abstract how do parents allocate scarce resources among their children while much research has focused on investment strategies parents preferences for equity may also play a role in the household allocation of resources while the studies that incorporate equity define it in limited terms in this paper several fairness concepts are applied to the problem of intrahousehold distribution comparing food allocations and health outcomes across fairness concepts indicates that each concept results in a different allocation of food and a different health outcome the implications of this result for empirical studies of intrahousehold distribution and policy interventions are discussed

the effect of sibling sex composition on women s education and earnings this paper documents the impact of siblings on the education of men and women born in the united states between 1920 and 1965 we examine the effect of the number and sex composition of a boy or girl s siblings on that child s educational attainment we find that throughout the century women s educational choices have been systematically affected by the sex composition of her siblings and that men s choices have not women raised only with brothers have received on average significantly more education than women raised with any sisters controlling for household size since sibling sex composition affects women s educational attainment and plausibly may be unrelated to other determinants of earnings it may provide a useful instrument for education in earnings functions for women our results suggest that standard estimates significantly underestimate the return to schooling for women

decentralization of governance and development all around the world in matters of governance decentralization is the rage even apart from the widely debated issues of subsidiarity and devolution in the european union and states rights in the united states decentralization has been at the center stage of policy experiments in the last two decades in a large number of developing and transition economies in latin america africa and asia the world bank for example has embraced it as one of the major governance reforms on its agenda for example world bank 2000 burki perry and dillinger 1999 take also the examples of the two largest countries of the world china and india decentralization has been regarded as the major institutional framework for the phenomenal industrial growth in the last two decades in china taking place largely in the nonstate nonprivate sector india ushered in a landmark constitutional reform in favor of decentralization around the same time it launched a major program of economic reform in the early 1990s on account of its many failures the centralized state everywhere has lost a great deal of legitimacy and decentralization is widely believed to promise a range of benee ts it is often suggested as a way of reducing the role of the state in general by fragmenting central authority and introducing more intergovernmental competition and checks and balances it is viewed as a way to make government more responsive and efe cient technological changes have also made it somewhat easier than before to provide public services like electricity and water supply relatively efe ciently in smaller market areas and the lower levels of government have now a greater ability to handle certain tasks in a world of rampant ethnic cone icts and separatist movements decentralization is also regarded as a way of diffusing social and political tensions and ensuring local cultural and political autonomy these potential benee ts of decentralization have attracted a very diverse range

endogenous altruism theory and evidence from chinese twins this paper studies the endogenous formation of intersibling altruism the theory suggests that parental incentive to foster children s fraternal love is positively related to efficiency gains from

what you don t know can hurt you or at least mislead you family behaviors unobserved heterogeneities and the determinants and impacts of human resources over the life cycle what one does not know in the form of unobserved heterogeneity can mislead one in empirical estimates a simple model of intrahousehold allocations illustrates the possible importance of unobserved factors such as abilities in determining human resources and their impacts the author reviews over forty years of studies primarily from latin america and the caribbean but also from elsewhere to illustrate the substantial empirical importance of unobserved heterogeneity with regard to preferences and intrahousehold allocations schooling returns school quality early life nutrition and program evaluation

on the malthusian theory of long swings in the essay on population economic growth consists of alternating surges of population during which real wages fall and the rate of profit rises and capital during which the reverse occurs a series of temporary equilibria exists at which wages are maximal the rate of profit minimal and fully employed work force in technically determined relation to fixed capital stock between these equilibria occur episodes of excess labour below maximum wages above minimum profit rate and capital accumulation malthus s ratios presuppose a logarithmic production function that implies first that the full employment real wage will fall to subsistence secondly that the full employment wages fund is constant summary in fre

parental preference heterogeneity and human capital inequality abstract in this article i provide an empirical account of the human capital investment behavior of parents in the face of endowment differences among siblings the data set used contains a three wave panel of 4 030 individuals the article presents a rare case in which endowments are measured explicitly health endowments are estimated from dynamic health production functions while educational endowments are obtained from test scores the simple score of the standard raven s colored progressive matrix cpm test is used to measure educational endowments i use estimation procedures that combine an instrumental variables method with panel data estimators to control for endogeneity and heterogeneity the results suggest that parents compensate for initial differences in health but reinforce initial educational differences among siblings hence an educational subsidy aimed at reducing inequality may end up reinforcing the inequality that might exist in the absence of such subsidy when parents invest mor

land technical progress and the falling rate of profit abstract the paper sets out a one sector growth model with a neoclassical production function in land and a capital labour aggregate if the elasticity of substitution between land and the capital labour aggregate is less than one and if the rate of capital augmenting technical progress is strictly positive then the rate of profit will fall to zero this result holds regardless of the rate of land augmenting technical progress no amount of technical advance in agriculture can stop the fall in the rate of profit the paper also discusses the relation of this result to the classical and marxist literature

traditional vs modern production systems price and nonmarket considerations of cacao producers in northern ecuador many factors besides profit maximization such as nonmarket ecological and social benefits influence smallholder households to adopt a specific agricultural production system or sell in a particular market thus different analytical techniques are needed that take into consideration more than monetary income to fully capture these additional benefits to better understand the production decisions of smallholder farmers we build on previous work on the household model and shadow wage estimation to develop a shadow wage for ecuadorian cacao producers that includes these nonmarket benefits we found that the shadow wage correctly indicated that on average these households would prefer to use an agroforestry production system instead of the more profitable modern system because of the nonmarket benefits received from the former system

turgot founder of classical economics a r j turgot s capital theory is rightly famous this paper argues that his contribution to distribution theory should also be recogniz ed as a major achievement the interest rate or profit rate is equa lized between different activities and governed by returns at the agr icultural margin intensive and extensive returns decrease as the m argin moves out with capital accumulation this implies a rent theory and a theory of accumulation substantially equivalent to that of dav id ricardo and makes turgot who wrote before adam smith the origin al inventor of the main lines of classical economics copyright 1987 by the review of economic studies limited

in markets we trust setting the boundaries of market based instruments in ecosystem services governance abstract a growing tendency to frame environmental problems as a failure to price ecosystem services has coincided with the rise of so called market based instruments mbis the aim of this introductory article to the special section in markets we trust contrasting views on the performance and legitimacy of market based instruments in global environmental governance is to promote critical reflection about the nature scope and limits of mbis in ecosystem services governance and to provide guidance on where the boundaries for the application of markets ought to be set first we examine the role that methodological assumptions and implicit normative positions play in shaping academic perception of the effectiveness and legitimacy of mbis second we examine mbis in the broader ideological context and socio political processes that have favored their development and implementation third we test claims of the literature on mbis against insights and data from case studies presented in the special section fourth we discuss the scope and limits of markets in ecosystem services governance in the light of biophysical institutional and normative boundaries we end with a summary of concluding remarks from the special section and by identifying critical tasks for the scientific and policy agenda on ecosystem services governance

explaining global patterns of international aid for linked biodiversity conservation and development summary there is little systematic knowledge about the nature extent and trends of international aid for projects that link biodiversity conservation and development goals this study uses a new dataset to analyze spatial and temporal patterns of such aid globally over the past three decades results reveal significant donor selectivity in aid allocation though linked conservation and development aid comprised more than two thirds of all biodiversity related assistance biodiversity aid generally was directed to biodiversity rich well governed countries but countries able to exert greater political leverage secured more linked aid than aid targeted to conservation without a stated development objective

governance land and distribution a discussion on the political economy of community based conservation abstract the effectiveness of community based conservation cbc has been under discussion through the review of cbc initiatives in developing countries we contribute to the debate by analysing how players influence different factors that determine the outcomes of cbc we highlight several points first the promise of benefits has been overshadowed by constraints on the extraction of natural resources along with the use of governmental schemes to extract partially the rents from cbc which has left little to share inside the communities second cbc design and implementation has often overlooked the asymmetries of power within the community and at the individual level which has produced unequal access to the design decision making and outcomes of this activity third while the elites have had a determinant role in shaping the governance of cbc external agents promotion of cbc has tended to reproduce the existent negotiating power at the community local and national levels fourth land contestation plays a key role in the dynamics of relationship and conflict between the governments corporate interests and the communities finally cbc adaptation to new scenarios depends critically on the process of community empowerment and the building of networks with external agents

the aid effectiveness literature the sad results of 40 years of research abstract the aid effectiveness literature ael consists of empirical macroeconomic estimates of the effects of development aid by the end of 2004 it comprised 97 econometric studies of three families of related effects each family has been analyzed in a separate meta analysis the ael is an ideal subject for meta analysis as it uses only a few formally similar models to estimate the same underlying effects it is also an area with strong beliefs often generated by altruism when this whole literature is examined a clear pattern emerges after 40 years of development aid the preponderance of the evidence indicates that aid has not been effective we show that the distribution of results is significantly asymmetric reflecting the reluctance of the research community to publish negative results the dutch disease effect on exchange rates provides a plausible explanation for the observed aid ineffectiveness

nutrition health birth order and seasonality intrahousehold allocation among children in rural india abstract nutrients available to children are determined largely by intrahousehold allocations there are a number of reasons why birth order may affect these allocations a model is developed to estimate critical parameters of parental preferences regarding the allocation of nutrients among their children latent variable estimates for rural south india indicate that parental preferences have productivity equity tradeoffs and parents favor older children the productivity equity tradeoff however is much less for the lean season therefore when food is scarcest parents follow more closely a pure investment strategy exposing their more vulnerable children to greater malnutrition tisk

effects of a sibship extension to foster children on children s school enrolment a sibling rivalry analysis for indonesia in this paper we question whether and how the sibship extension to foster children a common practice in many developing countries affects children s school enrolment status based on indonesian data we show that children s school enrolment increases with the number of foster grandchildren in their sibship given that grandchildren fostering is associated with positive transfers from biological to host parents this result reflects either a release of liquidity constraints in the host household or the uncommon preferences of host grandparents conversely the proportion of other foster children in a sibship does not have any effect the latter result s explanation depends on the reason children other than grandchildren are fostered

land inheritance and schooling in matrilineal societies evidence from sumatra abstract this paper explores statistically the implications of the shift from communal to individualized tenure on the distribution of land and schooling between sons and daughters in matrilineal societies based on a sumatra case study the inheritance system is evolving from a strictly matrilineal system to a more egalitarian system in which sons and daughters inherit the type of land which is more intensive in their respective work effort while gender bias is either non existent or small in land inheritance daughters tend to be disadvantaged with respect to schooling the gender gap in schooling however appears to be closing for the generation of younger children

gender and poverty issues and policies with special reference to asian developing countries abstract recent years saw the outpouring of a theoretical and empirical literature exploring the nexus between gender and poverty in developing countries this paper which provides a critical review of the literature examines the conceptual basis for a gender focused approach to poverty alleviation reviews the relevant empirical studies and data drawn principally but not exclusively from asian developing countries and explores the role of public policies to redress gender disparity the present review argues that the conceptual basis for many gender focused policies is far from well established the empirical foundations of many conventional wisdoms as well as of popular policies remain fragile due to the dearth of reliable gender segregated data and rigorous empirical studies the paper underscores the need for more careful empirical analyses as an input to formulating sound public policy with regard to gender and poverty

a paradox of thrift or keynes s misrepresentation of saving in the classical theory of growth every year thousands of introductory economics students are made to accept as valid one of keynes s lasting inversions of classical economics namely the proposition that saving may be a private virtue but is a public vice according to keynes a community that seeks to increase its rate of saving would end up impoverishing itself and actually saving less but the community that increases its consumption at the expense of saving would end up being richer and saving more this proposition frequently stated in macroeconomics textbooks as the paradox of thrift arises mainly from keynes s definition of saving to include the hoarding of cash contrary to the classical definition and language of the marketplace but has received little recognition or criticism as such rather than emphasizing keynes s misrepresentation of the classical theory of income determination and growth in which hoarding constitutes a reduction in saving most critics have pointed out only that saving may take other forms besides hoarding 2 thus several reviewers of the general theory 22 in which keynes fully develops the argument criticized it mainly for having assigned too much importance to the hoarding of cash e g pigou 37 robertson 40 viner 51 and hawtrey 11 some modern textbook writers employ the loanable funds view of savings to show the lim

evaluating familial support for the elderly the intrahousehold allocation of medical expenditures in rural pakistan introduction in this article i examine the determinants of medical expenditures on the elderly in rural pakistani households analyzing in particular the dependence of such expenditures on the economic contribution of the elderly to household income the results for older males are contrasted with those for younger males improved life expectancies in the south asian economies as in other developing economies have generated new policy interest in the economic status of the elderly there is however little empirical evidence on this topic while the scant research on the elderly in south asia undoubtedly reflects the fact that they represent one of the smallest demographic groups in these economies it also reflects the widespread belief that they are well provided for by the intergenerational households where the vast majority of them reside with their adult children however this assumption has been questioned by a number of scholars who find that medical expenditures on the elderly are closely correlated with the elderly s individual incomes and wealth household data from pakistan support such claims data on individual medical expenditures and days of illness are available from two household surveys a panel data set collected by the international food policy research institute ifpri and from the pakistan living standards measurement survey lsms both data sets reveal a strong correlation between the number of days of illness reported by adult males and age leading one to expect a similarly strong correlation between medical expenditures and age instead the ifpri data yield a correlation that is less than one would expect given the relationship between illness and age the lsms data set which provides information on many more

alimony rights and intrahousehold allocation of resources evidence from brazil can family policy affect well being of individuals without altering the resources available to their families this article examines the extension of alimony rights and obligations to cohabiting couples in brazil for women in intact relationships alimony rights upon dissolution should improve outside options strengthening their negotiating positions and increasing their influence over intrahousehold allocation of resources robust econometric evidence indicates that more decision power in the hands of women impacts hours worked by female adults and investments in the education of children this suggests that family policy and models of family decision making should take intrahousehold heterogeneity of preferences into account

gender of children bargaining power and intrahousehold resource allocation in china abstract based on the prevalent son preference in china this paper proposes a new measure of relative bargaining power within the household using data from china health and nutrition survey we show that a woman with a first born son has a 3 9 percentage points greater role in household decision making than a woman with a first born daughter having a first born son improves the mother s nutrition intakes and reduces her likelihood of being underweight while thinking of these impacts as being channeled through intrahousehold bargaining power we cannot fully rule out other possible direct effects of a first born son on the outcomes

educational choice families and young people s earnings this paper presents two optimizing models of educational choice discusses issues of identification estimates earnings equations in the context of these models and presents conditions under which we can test one against the other the estimates indicate that education is endogenous for young people s earnings creating a downward bias in estimated returns from education that assume exogeneity identification and estimation relies on family background information from a special sample from the british household panel study 1991 95 which matches mothers and their young adult children our estimates favor a family model over an individual model and they suggest that parents allocate resources to education to compensate for differences in their children s earnings endowments

assessing the impact of a school subsidy program in mexico using a social experiment to validate a dynamic behavioral model of child schooling and fertility this paper uses data from a randomized social experiment in mexico to estimate and validate a dynamic behavioral model of parental decisions about fertility and child schooling to evaluate the effects of the progresa school subsidy program and to perform a variety of counterfactual experiments of policy alternatives our method of validation estimates the model without using post program data and then compares the model s predictions about program impacts to the experimental impact estimates the results show that the model s predicted program impacts track the experimental results our analysis of counterfactual policies reveals an alternative subsidy schedule that would induce a greater impact on average school attainment at similar cost to the existing program

the canonical classical model of political economy adam smith david ricardo thomas robert malthus and john stuart mill shared in common essentially one dynamic model of equilibrium growth and distribution when the limitation of land and natural resources is added to the model of karl marx he also ends up with this same canonical classical model in its present version the model is stripped down to its minimal essentials for brevity i employ modern mathematical tools but only to characterize in modern terms the relations that were actually common to all these writers the reader should of course be warned that any simple codification of the classical economists discursive writings must be an oversimplification in some of their passages they qualify what they have written elsewhere in some they provide negations and contradictions not a few of the stereotypes about the classical writers are to paraphrase voltaire myths agreedupon by later commentators distortions that both improve and libel the originals the relevant object of study for a modern scholar is the corpus of original texts and the commentaries on them the latter not being genuinely of less interest than the former once we have succeeded in telling them apart to the fascinating question of whether classical political economy does or can be made to offer an alternative paradigm in the sense of thomas kuhn 11 1962 to modern mainstream economics the present investigation provides an instructive answer so to speak within every classical economist there is to be discerned a modern economist trying to be born a ricardo or mill did not so much replace supply and demand by quite different mechanisms but rather sought to be able to say something significant and limiting about their properties quite in the same way that we moderns endeavor to do i describe and analyze here the basic classical model in its essential form

the family inheritance and the intergenerational transmission of inequality unequal inheritance of material wealth is commonly considered a major cause of inequality in consumption however theoretical models of the intergenerational transmission of inequality by becker blinder and ishikawa imply that unequal inheritance may either increase or reduce consumption inequality differences in inherited wealth resulting from unequal parental incomes increase inequality in recipients consumption however unequal bequests caused by differences among families in the endowed ability of children or the costs of producing human capital are equalizing empirical results confirm these predictions the inheritance received by children is inversely related to both children s income and parental education thus bequests are compensatory in that ceteris paribus low income children inherit more than their advantaged contemporaries

specialization and competition in marriage models abstract i present a marriage model that includes pre marital investments in human capital individuals expect the future role specialization in marriage the specialization effect but at the same time before marriage individuals have the incentive to invest in order to make themselves more attractive the competition effect the interaction of two effects generates multiple equilibria no equilibria are ex ante efficient when the benefits of role specialization exist the competition effect is a source of coordination failure in the match formation this result stands in contrast to those of other models in which the competition effect leads to efficiency in some equilibrium

the empirical content of nash bargained household behavior in households whose allocation decisions can be represented as nash bargained household decisions extrahousehold environmental parameters eeps serve as pure shifters of the threat points the comparative statics of changes in demands due to changes in these eeps are given these are incorporated into a comprehensive statement of the empirical content of nash bargained household behavior including a nash generalization of barten s 1966 fundamental matrix equation of the theory of consumer demand estimation and data requirements are discussed along with nested testing of the following structure the neoclassical model is nested in the nash bargained model which in turn is nested in an unrestricted model of household demands emphasized throughout is the enriched menu of explanatory variables for demand analysis provided by the nash model as well as the model s ability to jointly analyze i household formation and ii intrahousehold allocation decisions

globalization forest resurgence and environmental politics in el salvador summary globalization is often viewed as a driver of deforestation but there are contexts where it promotes forest recovery this is the case in el salvador in spite of population densities in excess of 200 people per km2 the country which has been seen as a malthusian parable of population and ecological catastrophe is now increasingly wooded this reflects the impacts of globalization new flows of labor capital commodities and ideas which profoundly affected the rural economy as well as local processes such as civil war which constrained the agricultural frontier structural adjustment policies and agrarian reform

investments time preferences and public transfers paid to women abstract the literature suggests that men and women may have different preferences this paper exploits a social experiment in which women in treatment households were given a large public cash transfer progresa in an effort to disentangle the effect of additional income in the household from the effect of changing the distribution of income within the household the impact of progresa income on savings and investments decisions is compared with all other income sources after taking into account participation in the program additional money in the hands of women is spent on small livestock which are traditionally managed and cared for by women improved nutrition and child goods particularly clothing among single headed households progresa income is not treated differently from other income direct evidence on intertemporal preferences gathered in the mexican family life survey indicates that women are more patient than men when thinking about the future taken together the results suggest t

early health shocks intra household resource allocation and child outcomes an open question in the literature is whether families compensate or reinforce the impact of child health shocks discussions usually focus on one dimension of child investment this paper examines multiple dimensions using household survey data on chinese child twins whose average age is 11 we find that compared with a twin sibling who did not suffer from negative early health shocks at ages 0 3 the other twin sibling who did suffer negative health shocks received rmb 305 more in terms of health investments but received rmb 182 less in terms of educational investments in the 12 months prior to the survey in terms of financial transfers over all dimensions of investment the family acts as a net equalizer in response to early health shocks for children we estimate a human capital production function and establish that for this sample early health shocks negatively affect child human capital including health education and socioemotional skills compensating investments in health as measured by bmi reduce the adverse effects of health shocks by 50 but exacerbate the adverse impact of shocks on educational attainment by 30

reconciling theory and practice an alternative conceptual framework for understanding payments for environmental services article i nfo this article provides an alternative and novel theoretical approach to the conceptualization and analysis of payments for environmental services pes we devote special emphasis to institutional and political economy issues which have been somewhat neglected in the literature on pes we argue that the coasean and pure market approach dominating the conceptualization of pes in the literature cannot be easily generalized and implemented in practice by contrast taking into account complexities related to uncertainty distributional issues social embeddedness and power relations permits acknowledging the variety of contexts and institutional settings in which pes operate the alternative approach presented in this introductory article to the special section may be more appealing to pes practitioners since while avoiding restrictive and prescriptive standpoints it allows some key sources of complexities they usually deal with on the ground to be more easily understood

population growth and natural resource scarcity long run development under seemingly unfavorable conditions in this paper i consider an economy that is constrained by the use of natural resources and driven by knowledge accumulation resources are essential inputs in all sectors i show that population growth and poor input substitution are not detrimental but on the contrary are even necessary to obtain a sustainable consumption level i find a general rule to define the conditions for a constant innovation rate the rule does not apply to capital but to labor growth which is the crucial input in research furthermore the rule relates to the sectoral structure of the economy and to demographic transition the results continue to hold with a backstop technology and are extended for the case of minimum resource constraints

market opportunities genetic endowments and intrafamily resource distribution child survival in rural india the authors examine how intrafamily resource allocations respond to changes in economic conditions and to genetic differences in children by estimating the determinants of variations in the sex specific survival differentials of rural indian children based on standard census and household survey data they explore in particular the hypothesis that such differences are related to the relative returns to survival with households selectively allocating resources to children in response to variation in sex differences in their expected earnings opportunities as adults data are from the 1961 census and a 1971 household survey excerpt

the classical classical fallacy a flagrant error dogged james steuart adam smith david ricardo john barton john stuart mill karl marx and classical writers generally modern commentators on classicism are enough tempted by the fallacy to generally overlook it as a vital flaw in the earlier writers this fallay can be called classically classical not in the sense of being the greatest error in the classical paradigm an award that would be hard even to define but in the sense that modern scholars ignorant of pre 1900 literature would be little tempted by it i do not denigrate or patronize a great writer of the past such as david ricardo when i objectively delineate his hits and misses the fallacy can be simply put fixed capitals are prejudicial to wages and the demand for labor circulating capitals wage fund items that represent wage outlays paid to workers at the beginning of a period of production which are not recouped until the end of that period of production and which of course bear an interest or profit rate during the transition are allegedly favorable to the real wage rate and to the demand for labor fixed capitals are durable produced inputs that render their services over a number of different production periods circulating capitals are produced inputs used up within one period of production they are relatable to but distinguishable from wage fund advances paid to workers at the beginning of a period of production to be recouped at its end along with an interest or profit return in the minds of heterodox economists and the lay public generally a technological change that made machinery newly viable was supposedly the kind of invention that could put people out of work temporarily reduce market clearing wage rates and in long run equilibrium at an unchanged subsistence wage rate call for a significantly reduced population by contrast therefore a new invention that displaced machinery in favor of various raw materials as inputs would supposedly raise the short run real wage and increase the demand for labor so powerful was the grip of what i shall dub the classical fallacy that it was being reminded of it in 1819 21 that appears to have enabled ricardo to recant in his famous third edition chapter on machinery his previous boner that every viable invention can be expected to raise every factor s return from today s wisdomor indeed the wisdom of 1900 that previous position of ricardo was nonsense there is no invisible hand that seeks out machines or new techniques only if they benefit everyone i

does participation in common pool resource management help the poor a social cost benefit analysis of joint forest management in jharkhand india abstract joint forest management jfm has succeeded in halting forest degradation in india but its poverty reduction objective has not fully been evaluated previously this paper compares jfm forests and government managed forests to assess their respective net social benefits to different groups of local villagers it shows that the jfm regime reflects the social preference of the rural nonpoor and that the poor are net losers over a 40 year time horizon future plans for jfm need to include suitable compensatory mechanisms to reduce the poverty of the poorest within a village

do parents favor boys in an optimizing model of parental allocation systematic differences in human capital investments betwen the sexes may originate in at least 3 ways 1 parents may respond to expected gender wage differentials 2 parents may respond to systematic differences by gender in the price of human capital investments 3 parental preferences may favor girls or boys in the sense that they value identical outcomes at the same cost more highly for one sex than for the other this paper analyzes the role of parental preferences in general and unequal concern in particular in the allocation of human capital investments among children the authors generalize their earlier model of the human capital investments among children to incorporate the possibility that the returns to such investments may include not only the childs own ecpected earnings but also the expected earnings of his or her spouse thus the model assumes that parents may value returns that accrue trough the marriage market as well as through education the relevant returns to education may include marrying a spouse with higher expected earnings the empirical analysis indicates that gender wage differentials like endowment differentials are mildly reinforced by the parental allocation of human capital investments marriage market outcomes are significant determinants of the allocation of human capital investments among children there is no evidence that parental preferences favor boys this study shows that parental preferences either exhibit equal concern or slightly favor gils

towards a theory of famine relief policy abstract this paper examines how famine mortality is related to the distribution of food consumption a theoretical model is proposed of how individual survival chances are affected by changes in consumption uncertainty in survival prospects arises from the errors made by any observer in assessing health at given current consumption the theory is used to explore two policy issues in famine relief the choice of budgetary rules for allocating emergency aid and the case for price stabilization policies during famines applications to data for two famines in south asia suggest that successful price stabilization would have had substantial benefits in reducing mortality