do better schools matter parental valuation of elementary education the evaluation of numerous school reforms requires an understanding of the value of better schools given the difficulty of calculating the relationship between school quality and student outcomes i turn to another method and use house prices to infer the value parents place on school quality i look within school districts at houses located on attendance district boundaries houses then differ only by the elementary school the child attends i thereby effectively remove the variation in neighborhoods taxes and school spending i find that parents are willing to pay 2 5 percent more for a 5 percent increase in test scores this finding is robust to a number of sensitivity checks

school finance reform assessing general equilibrium effects abstract in 1994 the state of michigan implemented one of the most comprehensive school finance reforms undertaken to date in any of the states understanding the effects of the reform is thus of value in informing other potential reform initiatives in addition the reform and associated changes in the economic environment provide an opportunity to assess whether a simple general equilibrium model can be of value in framing the study of such reform initiatives in this paper we present and use such a model to derive predictions about the effects of the reform on housing prices and neighborhood demographic compositions broadly our analysis implies that the effects of the reform and changes in the economic environment are likely to have been reflected primarily in housing prices and only modestly on neighborhood demographics we find that evidence for the detroit metropolitan area from the decade encompassing the reform is largely consistent with the predictions of the model

public versus private investment in human capital endogenous growth and income inequality in this paper we present an overlapping generations model with heterogeneous agents in which human capital investment through formal schooling is the engine of growth we use simple functional forms for preferences technologies and income distribution to highlight the distinction between economies with public education and those with private education we find that income inequality declines more quickly under public education on the other hand private education yields greater per capita incomes unless the initial income inequality is sufficiently high we also find that societies will choose public education if a majority of agents have incomes below average

long run welfare effect of energy conservation regulation we investigate the long run effect of energy conservation regulation which forces firms to raise energy saving investment above the cost minimizing level if pigovian tax is imposed additional regulation always harms social welfare under perfect competition while it can improve welfare under imperfect competition our result under imperfect competition holds regardless of whether strategies are strategic substitutes or complements in contrast to direct entry regulation

community membership aspirations the link between inequality and redistribution revisited the issue at stake is to explain why redistributive policies may vary so greatly for a given distributional skewness to this end we abandon the stylized median voter and study how distributional tensions can act in many different ways depending on social affinity between the different economic classes and their prospect of upward or downward mobility in particular we consider that socioeconomic group membership through its implied social interactions and peer effects is an important determinant of an individual s outcome hence agents while voting on a social contract must take into account the consequences of their choice over their ex post belonging to a particular community this allows us to shed light on how the endogenous sorting of the population into clusters may interact with the balance of political power leading to a non monotonic relationship through the pattern of community formation in the economy between inequality and the pressure for redistributive policies

social networks and technology adoption in northern mozambique despite their potentially strong impact on poverty agricultural innovations are often adopted slowly using a unique household dataset on sunflower adoption in mozambique we analyse whether and how individual adoption decisions depend upon the choices of others in the same social networks since farmers anticipate that they will share information with others we expect farmers to be more likely to adopt when they know many other adopters dynamic considerations however suggest that farmers who know many adopters might strategically delay adoption to free ride on the information gathered by others we present empirical evidence that shows that the relationship between the probability of adoption and the number of known adopters is shaped as an inverse u in line with information sharing the network effect is stronger for farmers who report discussing agriculture with others the data contains information which is needed to ameliorate the identification issues that commonly arise in this context in particular social networks are precisely identified and in addition we can control for village heterogeneity and endogenous group formation

rescuing gender from the poverty trap the new poverty agenda is seen as incorporating gender within a new broader concept of poverty lipton and maxwell 1992 capable of measuring evaluating and redressing gender bias along with poverty reduction policies based on labor intensive growth targeted social services and safety nets multilateral positions on gender and development gad for their part also stress the poverty of women as a primary justification for development interventions designed to improve the position of women it is argued here however that the concept of poverty cannot serve as a proxy for the subordination of women that antipoverty policies cannot be expected to improve necessarily the position of women and that there is no substitute for a gender analysis which transcends class divisions and material definitions of deprivation the instrumental interest in women as the means to achieve development objectives such as poverty reduction may ultimately undermine gad gender appears to have collapsed into a poverty trap this essay raises a call for help or at least a discussion about the relative benefits of captivity vs escape

optimal debt endogenous fertility and human capital externalities in a model with altruistic bequests abstract this paper explores optimal debt in a model with altruistic bequests endogenous fertility and human capital externalities because of such externalities education investment is too low and fertility is too high while education subsidies are the conventional means to deal with these problems we show that the optimal policy also comprises debt even when distortionary taxes are used the reason is that debt tips the usual trade off between children s quantity and quality in favor of the latter by increasing the bequest cost of children the optimal debt output ratio exceeds 10 for plausible parameterization

institutions infrastructure and economic growth abstract this paper develops a structural model of infrastructure and output growth that takes account of institutional and economic factors that mediate in the infrastructure gdp interactions cross country estimates of the model indicate that the contribution of infrastructure services to gdp is substantial and in general exceeds the cost of provision of those services the results also shed light on the factors that shape a country s response to its infrastructure needs and offer policy implications for facilitating the removal of infrastructure inadequacies

consumer demand and household production the relationship between fertility and child mortality forces which link biological and behavioral factors to infant mortality and fertility in the united states are examined estimates can be arrived at if all of the important types of behavior affecting infant survival prices and income constraints facing households are diligently gathered using equations to determine the relationship between a family health endowment index in conjunction with a childs health information about optimal prenatal and postnatal behavior can be estimated and observed this estimate which is strongly a factor of parental and environmental health related factors attempts to characterize the biological effects of parents behavior on birthweight gestation and the rate of fetal growth another estimate presented is one which establishes a link between biological effects of birth order on infant mortality in this analysis factors such as medical care during pregnancy mothers rate of smoking mothers age duration of breastfeeding mothers race and childs sex were included household socioeconomic and health data were also estimated in order to understand state and county ability to provide adequate health facilities for pre and postnatal maternal care in particular results suggest that child mortality declines in developed countries and that mothers seek prenatal medical care in early stages of their pregnancy when risk is anticipated further study of the differential pattern of black and white fertility behavior in regard to seeking medical care is warranted

distributional effects of public education in an economy with public pensions we study how the allocation of government expenditures between two major outlays education and pay as you go social security affects human capital distribution in an economy with heterogeneous agents we consider an overlapping generations economy where the government maintains both programs and allocates tax revenues to finance them in our model human capital is one of the factors of production it is itself produced as a combined result of public inputs and private inputs parents decisions to invest time and material resources in education of their children are motivated by altruism heterogeneous in its strength across the population which leads to heterogeneity of incomes we investigate the effect of an increase in public funding for education on the human capital distribution we show that in this framework contrary to some earlier results increased spending on public education may lead to higher inequality our results depend crucially on the interaction of education funding with the social security budget and on the elasticity of substitution in the learning technology

interregional redistribution and mobility in federations a positive approach the paper studies the effects and the determinants of interregional redistribution in a model of residential and political choice we find that paradoxical consequences of inter jurisdictional transfers arise if people are mobile while self sufficient regions are nec essarily identical with respect to policies and average incomes in our model interregional redistribution always leads to the divergence of regional policies and per capita incomes thus interregional redistribution prevents interregional equality at the same time however transfers may allow for more interpersonal equality among the inhabitants of each region the voting population may therefore in a decision over the fiscal constitution deliberately implement such a transfer scheme to foster regional divergence empirical evidence from panel data from oecd countries and candian provinces is consistent with the theory

productivity gains from geographic concentration of human capital evidence from the cities abstract based on recent theoretical developments the argument is made that the average level of human capital is a local public good cities with higher average levels of human capital should therefore have higher wages and higher land rents after conditioning on the characteristics of individual workers and dwellings this prediction is supported by data for standard metropolitan statistical areas smsas in the united states where the smsa average levels of formal education and work experience are used as proxies for the average level of human capital the alternative explanations of omitted smsa variables and self selection are evaluated an estimate of the effect of an additional year of average education on total factor productivity is computed

the evolution of modern educational systems technical vs general education distributional conflict and growth abstract we study the evolution of an educational system founded on a hierarchical differentiation between vocational and general education with vocational playing an inferior role in the society the dynamics are best summarized by the ratio of the fraction of the population in vocational to that in general education which we interpret as a measure of the degree of stratification of the society we show that this ratio first rises and then declines with the level of development displaying an inverted u shape which reflects the complex interaction between economic and political forces including aggregate income growth wealth inequality and political participation

centralization fiscal federalism and private school attendance a cge model is used to analyze the impact of public school financing on private school attendance the common perception that public school finance centralization will necessarily lead to greater private school attendance is not correct in such a model even when that centralization involves an extreme equalization as in california furthermore if centralization is less dramatic as in most states declines in private school attendance are even more pronounced this weakens the speculation that low exit rates to private schools in centralizing states imply that general public school quality does not drop as a result of such centralization

productivity health and inequality in the intrahousehold distribution of food in low income countries a model is formulated incorporating linkages among nutrition labor market productivity health heterogeneity and the intrahousehold distribution of food and work activities in a subsistence economy empirical results based on a sample of households from bangladesh indicate that despite considerable intrahousehold disparities in calorie consumption households are averse to inequality furthermore consistent with the model the results also indicate that both the higher level and greater variance in the calories consumed by men relative to women reflect in part the greater participation by men in activities in which productivity is sensitive to health status copyright 1990 by american economic association

unequal societies income distribution and the social contract this paper develops a theory of inequality and the social contract aiming to explain how countries with similar economic and political fundamentals can sustain such different systems of social insurance fiscal redistribution and education finance as those of the united states and western europe with imperfect credit and insurance markets some redistributive policies can improve ex ante welfare and this implies that their political support tends to decrease with inequality conversely with credit constraints lower redistribution translates into more persistent inequality hence the potential for multiple steady states with mutually reinforcing high inequality and low redistribution or vice versa

the effect of school capital investments on local housing markets and household sorting in california abstractin this paper i investigate what effect school capital investments have on housing values and household location choice in the context of the tiebout model this research identifies an exogenous variation in school capital investments by exploiting the lottery allocation of entitlement to an interest free construction bond among districts in california although the lottery is exogenous additional non lottery allocation complicates identification this paper develops an empirical model based on sample selection methods in order to create a counterfactual state in which additional non lottery allocation would not have existed i find that receiving the interest free construction bond increases school capital expenditure and housing values at the district level i view the increase in housing values as the capitalization of school capital investments i find little evidence for the effect of the interest free construction bond on household sorting and student s academic outcomes

effect of constraints on tiebout competition evidence from a school finance reform abstracteffect of constraints on tiebout competition evidence from a school finance reform regional studies michigan s school finance reform significantly increased state aid to low spending districts and placed restraints on the growth of spending in high spending districts it is noteworthy that there is no literature yet on the impact of such reforms on resource allocation by school districts this study begins to fill this gap it finds that the reform led the high spending districts to allocate a lower share of their total expenditure to support services and a higher share to instruction relative to the low spending districts to the extent that instructional expenditures are more productive and contribute to student achievement more than support services expenditures these results suggest that the reform led to a relative increase in productivity in the high spending districts

public versus private education when differential fertility matters we assess the merits of different education systems in a framework that accounts for the joint decision problem of parents regarding fertility and education specifically we compare the implications of a public and a private schooling regime for economic growth and inequality we find that private schooling leads to higher growth when there is little inequality in human capital endowments across families in contrast when inequality is high public education yields higher growth by reducing fertility differentials in addition public schooling leads to income convergence while private schooling can result in ever increasing inequality our analysis highlights theimp ortanceof accounting for endogenous fertility differentials when analyzing educational policies

inequality and crime this paper considers the relationship between inequality and crime using data from urban counties the behavior of property and violent crime are quite different inequality has no effect on property crime but a strong and robust impact on violent crime with an elasticity above 0 5 by contrast poverty and police activity have significant effects on property crime but little on violent crime property crime is well explained by the economic theory of crime while violent crime is better explained by strain and social disorganization theories

does competition among public schools benefit students and taxpayers tiebout choice among districts is the most powerful market force in american public education naive estimates of its effects are biased by endogenous district formation i derive instruments from the natural boundaries in a metropolitan area my results suggest that metropolitan areas with greater tiebout choice have more productive public schools and less private schooling little of the effect of tiebout choice works through its effect on household sorting this finding may be explained by another finding students are equally segregated by school in metropolitan areas with greater and lesser degrees of tiebout choice among districts

gender poverty and deprivation evidence from the republic of guinea the article examines the relationship between gender and consumption poverty and between gender and deprivation in the republic of guinea national household survey data reveal that women are not more likely than men to be consumption poor or to suffer greater consumption poverty participatory poverty assessment data from the village of kamatiguia reveal that women are worse off than men when deprivation includes inter alia excessive work load and reduced decision making authority when consumption poverty poorly correlates with other dimensions of deprivation it should not be the sole guide for equity based policy intervention

alternative definitions of headship and the feminisation of income poverty in post apartheid south africa abstract in measuring gender differences in the risk of income poverty many studies use female headship as a proxy for gender however a number of well documented concerns with the use of self reported headship as an analytical category have suggested that headship is often a relatively blunt unit of analysis against the backdrop of a large and growing difference in income poverty rates between self reported female and male headed households in post apartheid south africa this study considers several alternative definitions of headship that have been proposed in the development literature the findings suggest that there is an association between self reported female headship and a female household member being identified as the main breadwinner however the conventional definition of headship is likely to underestimate the growing risk of income poverty in female headed households relative to male headed households compared with several alternative definitions the findings also suggest that alte

educational vouchers and cream skimming educational vouchers and cream skimming epple and romano 1998 show equilibrium provision of education by public and private schools has the latter skim off the wealthiest and most able students and universal vouchers lead to further cream skimming here we study voucher design that injects private school competition and increases technical efficiencies without cream skimming conditioning vouchers on student ability without restriction on participating schools policies fails to affect significantly cream skimming however by adding restrictions like tuition constraints such vouchers can reap the benefits of school competition without increased stratification this is accomplished while allowing voluntary participation in the voucher system and without tax increases

the effect of rising income inequality on taxation and public expenditures evidence from u s municipalities and school districts 1970 2000 the income distribution in many developed countries widened dramatically from 1970 to 2000 some scholars argue that income inequality contributes to a host of social ills by undermining voters will ingness to support public expenditures in contrast we find that growing income inequality is associated with an expansion in government reven ues and expenditures on a wide range of services in u s municipalities and school districts results are robust to a number of model specifica tions including instrumental variables that address the endogeneity of the local income distribution our results are inconsistent with models pre dicting that heterogeneous societies provide lower levels of public goods public sector 3 two types of identification problems com plicate estimation of the empirical relationship between income inequality and public goods provision the cross country variation often used for this exercise suffers from omitted variable bias that is countries with high income inequality may also have other characteristics that could limit the size of the public sector cross state comparisons also suffer from endogenous household sorting if low or high income families migrate to states with high public expenditures the positive association observed in the litera ture between state public expenditures and income inequal ity may be spurious in this paper we examine the relationship between income inequality and government finances in municipali ties and school districts in the united states from 1970 to 2000 local government represents a large segment of the economy in fiscal year 2009 local governments disbursed more than 3 trillion for such important services as educa tion and public safety 4 our study has several advantages over existing empirical work first the large number of local governments in our data exhibit much greater variation in income inequality over time than do the small number of countries or states used in previous studies a large sample size allows us to separately control for changes in the top end or bottom end of the income distribution and for initial levels of inequal ity thus ruling out a mechanical association between tax revenues and rising income for the affluent second we develop an instrumental variable strategy to mitigate con cerns about potential reverse causality from the endogenous

are women overrepresented among the poor an analysis of poverty in 10 developing countries abstract this paper presents new evidence on the proportion of women in poverty in 10 developing countries it compares poverty measures for males and females and for male and female headed households and investigates the sensitivity of these measures to the use of per capita and per adult equivalent units and different definitions of the poverty line while poverty measures are higher for female headed households and for females the differences are significant in only a fifth to a third of the datasets the contribution of female headed households to aggregate poverty is less than that of females due to the low population share of the former stochastic dominance analysis reveals that differences between male and female headed households and between males and females are often insignificant except for ghana and bangladesh where females are consistently worse off these results suggest that cultural and institutional factors may be responsible for higher poverty among women in these countries our results point to the need to analyze determinants of household income and consumption using multivariate methods and to give greater attention to the processes underlying female headship

human capital accumulation and endogenous public expenditures in this paper we present an overlapping generations model where individuals accu mulate human capital through formal schooling we model the role of the public sector in schooling as one of collecting taxes from households and providing inputs to the learning technology public expenditures on schools are determined endogenously under plausible restrictions our model s predictions qualitatively match the observations on schooling pub lic expenditures on education and student teacher ratios jel classification el 3 e62 accumulation de capital humain et depenses publiques endogenes dans ce memoire les auteurs presentent un modele de generations qui se chevauchent ofu les individus accumulent du capital humain via l education formelle le r6le du secteur public dans l education est defini comme celui de collecteur d imp6ts aupres des menages et de fournisseur d intrants dans la technologie d apprentissage les depenses publiques en education sont determinees de maniere endogene a partir de restrictions plausibles les predictions du modele s arriment qualitativement aux observations sur le monde scolaire aux depenses publiques en educa tion et aux ratios 6leves enseignants

the economics of schooling production and efficiency in public schools n recent years public and professional interest in schools has been heightened by a spate of reports many of them critical of current school policy these policy documents have added to persistent and long standing concerns about the cost effectiveness and fairness of the current school structure and have made schooling once again a serious public issue as in the past however any renewed interest in education is likely to be short lived doomed to dissipate as frustration over the inability of policy to improve school practice sets in this frustration about school policy relates directly to knowledge about the educational production process and in turn to underlying research on schools although the educational process has been extensively researched clear policy prescriptions flowing from this research have been difficult to derive 2 there exists however a consistency to the research findings that does have an immediate application to school policy schools differ dramatically in quality

economic and mechanical models of intergenerational transmission the author critically examines gary beckers attempt to integrate the theory of income distribution intragenerational differences with the theory of mobility intergenerational differences in an economic model of the family he assesses beckers claims of distinctiveness integration explanatory power and surprise and arrives at a rather skeptical view of the contribution that the core of microeconomics has made to this study of the family a reply by becker is included pp 514 8 excerpt

the poverty and heterogeneity among female headed households revisited the case of panama abstract investigating whether female headed households fhhs are particularly disadvantaged requires more systematic means of comparing poverty than are typically found in past studies in panama while fhhs as a whole appear to be better off on average such results are somewhat sensitive to assumptions about economies of scale in household consumption more disaggregated analysis reveals that particular segments of fhhs particularly self reported fhhs with common law partners living in urban areas are disadvantaged in both consumption and some nonconsumption dimensions thus less systematic analysis could fail to identify such pockets of poverty that might deserve special policy attention

persistent parochialism trust and exclusion in ethnic networks decentralized groups such as close knit residential neighborhoods and ethnically linked businesses often achieve high levels of cooperation while engaging in exclusionary practices that we call parochialism we investigate the contribution of within group cultural affinity to the ability of parochial groups to cooperate in social dilemmas we analyze parochial networks in which the losses incurred by not trading with outsiders are offset by an enhanced ability to enforce informal contracts by fostering trust among insiders we show that there is a range of degrees of parochialism for which parochial networks can coexist with an anonymous market offering unrestricted trading opportunities

the desegregating effect of school tracking this paper makes the following point detracking schools that is preventing them from allocating students to classes according to their ability may lead to an increase in income residential segregation it does so in a simple model where households care about the school peer group of their children if ability and income are positively correlated tracking implies that some high income households face the choice of either living in the areas where most of the other high income households live and having their child assigned to the low track or instead living in lower income neighbourhoods where their child would be in the high track under mild conditions tracking leads to an equilibrium with partial income desegregation where perfect income segregation would be the only stable outcome without tracking

the economic and demographic status of female headed households in rural botswana analyzes the economic and demographic status of female headed households in botswana where insufficient economic opportunities force many men to live and work away from home the analysis is based on the rural income distribution survey conducted in 1974 75 by the central statistical office of botswana in which 957 households containing 6475 individuals were interviewed once a month for 23 months the relevant items surveyed were age and sex of household nembers amount and sources of income identity and value of assets use of time extent of education and sex of perceived head of household the analysis recognizes 4 types of households male head with male aged 20 64 present 452 male head with no male 20 64 present 77 female head with male aged 20 64 present 131 and female head with no male aged 20 64 present 277 the primary analysis consists of a comparison of the 1st and 4th of these groups categories 2 and 3 are intermediate positions and their characteristics are less clear cut the income distribution in rural botswana is more unequal than in many other developing countries with female headed households faring especialy poorly on a per adult equivalent basis the welfare attained by members of female headed households is nearly 25 lower than that attained in male headed households such is the case despite the fact that women in botswana have been shown to compare favorably with men in regard to education willingness to work agricultural know how and entrepreneurial ability reasons for womens lower economic status in this country are discussed and policy suggestions to overcome this discrepancy are made

housing markets and residential segregation impacts of the michigan school finance reform on inter and intra district sorting abstract local financing of public schools in the u s leads to a bundling of two distinct choices residential choice and school choice and has been argued to increase the degree of socioeconomic segregation across school districts a school finance reform aimed at equalization of school finances can in principle weaken this link between housing choice and choice of schools in this paper we study the impacts of the michigan school finance reform of 1994 proposal a on spatial segregation the reform was a state initiative intended to equalize per pupil expenditures between michigan school districts and reduce the role of local financing we find that proposal a led to a decline in neighborhood sorting within education markets as measured by changes in the value of housing stock and several socioeconomic indicators we also find that the reform affected the dispersion of incomes and educational attainment within school districts increasing within district heterogeneity in the lowest spending school districts while decreasing the same in the highest spending districts however there is a continued high demand for residence in the highest spending communities these findings are robust to various alternative definitions of education market and survive several sensitivity checks these spatial segregation patterns are not replicated in neighboring ohio that did not face similar school finance equalization

program conditionality and food security the impact of progresa and procampo transfers in rural mexico this paper examines the progresa and procampo cash transfer programs in mexico and evaluates their impact on household food security and nutrition these two programs differ in their targeting and design progresa is aimed at women and program conditionality is linked to current consumption and human capital investment procampo benefits male farmers and program conditionality is linked to agricultural production the main question addressed by the paper is whether a cash transfer program geared to agricultural production can have the same impact on food security as a cash transfer program geared to consumption through purchases our results suggest that monetary payments linked to a productive asset land can have as large or larger impact on food security as cash transfers not linked to a productive asset we show that both programs boost total food consumption and caloric intake in similar proportions however increased food security is achieved through different channels for progresa through purchases while for procampo through investment in home production this suggests that the choice of program design depends on objectives beyond total food consumption and caloric intake such as consumption from specific food categories diversity of food consumption investment in agricultural production and the degree of access to retail food markets

household food security and child nutrition the interaction of income and gender of household head abstract data from kenya and malawi suggest that food security and preschooler nutritional status are influenced by the interaction of income and gender of the head of household rather than simply one or the other not only is household food security influenced by total household income but the proportion of income controlled by women has a positive and significant influence on household caloric intake households were disaggregated not simply in male and female headed households but female headed households were further disaggregated into de jure legal head of household is a woman and de facto female headed households male head of household is absent more than 50 of the time in both kenya and malawi the de facto female headed households had the lowest income despite this low income preschoolers nutritional status was significantly better than in the higher income male headed and de jure female headed households the ability to improve nutritional status in a low income environment in the de facto female headed households is related to a combination of child feeding practices and other nurturing behavior the findings suggest that interventions that exploit incentives to invest in children can provide more immediate improvements in child health and nutrition where sustained income growth is possible only in the long term

tax and education policy in a heterogeneous agent economy what levels of redistribution maximize growth and efficiency this paper studies the effects of progressive income taxes and education finance in a dynamic heterogeneous agent economy such redistributive policies entail distortions to labor supply and savings but also serve as partial substitutes for missing credit and insurance markets the resulting tradeoffs for growth and efficiency are explored both theoretically and quantitatively in a model that yields complete analytical solutions progressive education finance always leads to higher income growth than taxes and transfers but at the cost of lower insurance overall efficiency is assessed using a new measure that properly reflects aggregate resources and idiosyncratic risks but unlike a standard social welfare function does not reward equality per se simulations using empirical parameter estimates show that the efficiency costs and benefits of redistribution are generally of the same order of magnitude resulting in plausible values for the optimal rates aggregate income and aggregate welfare provide only crude lower and upper bounds around the true efficiency tradeoff

ethnic capital and intergenerational mobility this paper analyzes the extent to which ethnic skill differentials are transmitted across generations i assume that ethnicity acts as an externality in the human capital accumulation process the skills of the next generation depend on parental inputs and on the quality of the ethnic environment in which parents make their investments or ethnic capital the empirical evidence reveals that the skills of today s generation depend not only on the skills of their parents but also on the average skills of the ethnic group in the parent s generation

the effects of male and female labor supply on commodity demands we examine the effects of male and female labor supply on household demands and present a simple and robust test for the separability of commodity demands from labor supply using data on individual households from six years of the uk fes we estimate a demand system for seven goods which includes hours and participation dummies as conditioning variables allowance is made for the possible endogeneity of these conditioning labor supply variables we find that separability is rejected furthermore we present evidence that ignoring the effects of labor supply leads to bias in the parameter estimates

more equal but less mobile education financing and intergenerational mobility in italy and in the us a centralised and egalitarian school system reduces the cost of education for poor families and so it should reduce income inequality and make intergenerational mobility easier in this paper we provide evidence that italy compared to the usa displays less income inequality as expected given the type of school system but also less intergenera tional upward mobility between occupations and between education levels we explore some of the reasons which can explain this puzzling result and conclude that in a world in which family background is important for labor market success a centralised and egalitarian tertiary education does not necessarily help poor children and may take away from them a fundamental tool to prove their talent and to compete with rich children 1999 elsevier science s a all rights reserved

efficient equilibrium convergence heterogeneity and growth abstract an endogenous growth model arising from task specialization is used to examine the effects of differing initial human capital distributions two macroeconomic phenomena are produced income convergence and leapfrogging of living standards income convergence occurs for all countries in the same market arising from diminishing returns to individual human capital leapfrogging occurs by comparing countries in two separate markets income leapfrogging can occur because the stationary growth rate increases with market size and human capital heterogeneity reduces growth the introduction of coordination costs of task assignment can produce gains in welfare and growth from human capital heterogeneity

gender headship and intrahousehold resource allocation abstract household head as reported in household surveys may not always identify the main economic provider and decision maker within the household research based on this definition of headship may lead to misleading conclusions on the link between gender and poverty treating female headed households as a homogenous group can also be inappropriate results from jamaica show that it is not female headedness per se that is associated with child welfare but the absence of a potential female decision maker within the household

endogenous determination of public budget allocation across education stages abstract this paper studies the endogenous determination of public budget allocation across hierarchical education stages in less developed economies the top class has dominant political power to implement its most preferred policy which is characterized by exclusive participation and large schooling expenditure at higher education at the expense of basic education in developed economies the budget allocation is more balanced under certain parameters it leads to expanded participation of the middle class in higher education the model offers an explanation to the observed cross country policy difference and is broadly consistent with historical evidence

honey i shrunk the kids benefits revisiting intergenerational conflict in oecd countries intergenerational conflict may arise when the interests of different age groups do not align we examine cross country data to find evidence for this conflict in oecd countries we derive our results from a fgls estimation model which is complemented by a system gmm estimation to account for potential endogeneity the data are from a panel of 22 oecd countries over the time period 1985 2005 we find little support for intergenerational conflict in general however those who are close to statutory retirement age dislike public expenditure on families and education because once they retire they will have less income compared to their work income this effect is transitory however implying a change in voting behavior during retirement age

monopoly regulation in the presence of consumer demand reduction abstract i study a monopoly regulation in the setting where consumers can engage in demand reducing investments i first show that when the regulator ignores the consumers investments the excess investment occurs next i analyze the case where the regulator takes consumers investments into account and compare the optimal policy under asymmetric information with the first best policy optimal policy results in higher average price higher level of consumer investment but lower prices for efficient firms compared to the first best

heterogeneity in the intrahousehold allocation of international remittances evidence from philippine households abstractthis article shows that heterogeneity in the intrahousehold allocation of remittances sent by temporary international migrant workers exists among households in the philippines and may be attributable to the absence of the spouse suggesting moral hazard and to the gender and educational attainment of the household head indicating differences in preferences glm estimates and post estimation tests reveal that male heads spend more on alcohol and tobacco that the presence of a female decision maker in a household increases allocations to goods that improve the welfare of the children and that household heads with less formal education allocate more to education

interactive property valuations this paper estimates models of social interactions within residential neighborhoods using data on neighborhood clusters for standard metropolitan areas in the united states from the american housing survey for 1985 and 1989 it examines eects of social interactions in the form of reaction functions for homeowners valuation of their properties at the level of the immediate residential neighborhood with neighborhoods consisting of a randomly chosen dwelling unit and about ten nearest neighbors the paper identifies the eect of endogenous social interactions to be significant and large ranging from 0 587 to 0 770 and much more important then the dynamic autoregressive structure of the model when both variables are present and both are significant the interactive regressions that it reports improve upon commonly used hedonic regressions as well the paper provides empirical support for the notion common in the real estate world of the importance of neighboring properties in property valuations

intra household resource allocation an inferential approach if household income is pooled and then allocated to maximize welfare then income under the control of mothers and fathers should have the same impact on demand with survey data on family health and nutrition in brazil the equality of parental income effects is rejected unearned income in the hands of a mother has a bigger effect on her family s health than income under the control of a father for child survival probabilities the effect is almost twenty times bigger the common preference or neoclassical model of the household is rejected if unearned income is measured with error and income is pooled then the ratio of maternal to paternal income effects should be the same equality of the ratios cannot be rejected there is also evidence for gender preference mothers prefer to devote resources to improving the nutritional status of their daughters fathers to sons

dynamic regulation of quality we develop a dynamic regulation model of quality provision where maintenance efforts and quality shocks have a durable impact when the regulator contracts with a sequence of agents asymmetric information can lead to overprovision of quality reflecting a dynamic rent extraction effect when the regulator contracts with a single agent the efficiency of their relationship depends on the regulator s ability to transfer rents across periods hiring a single agent with unlimited liability is socially preferable to hiring a sequence of agents even when no commitment is feasible by contrast shorter franchises are socially preferable if the agent has limited liability

keeping one step ahead of the joneses status the distribution of wealth and long run growth assuming that the utility of each agent depends on its relative wealth position in the society this chapter constructs an endogenous growth model it is shown that even if the subjective discount rates differ across agents there exists a unique balanced growth equilibrium in which each agent owns a positive share of the world wealth it is also shown that if the agents are identical then an increase in savings incentives always raises the long run growth rate but if they are heterogeneous then an increase in savings incentives may lower the long run growth rate

school choice through relocation evidence from the washington d c area abstract in this paper i show how the monetary value parents place on school quality may be inferred from their residential location choice the method identifies parental valuation of school quality from the differential effect of school quality on residential choices of households with and without children i implement the method with 1990 census data for washington d c for whites households with children are willing to pay 1800 more per year for schools generating a 100 sat point advantage while some evidence indicates african american choices are negatively associated with school quality additional evidence suggests african american households may be constrained in available choices

tiebout sorting and neighborhood stratification tiebout s classic 1956 paper has strong implications regarding stratification across and within jurisdictions predicting in the simplest instance a hierarchy of internally homogeneous communities ordered by income typically urban areas are less than fully stratified and the question arises how much do departures from standard tiebout assumptions contribute to observed within neighborhood mixing this paper quantifies the separate effects of employment geography via costly commuting and preferences for housing attributes on neighborhood stratification it does so using an equilibrium sorting model estimated with rich census micro data simulations based on the model and credible preference estimates show that counterfactual reductions in commuting costs lead to marked increases in racial and education segregation and to a lesser degree increases in income segregation given that households now find it easier to locate in neighborhoods with like households while turning off preferences for housing characteristics increases racial segregation especially for blacks doing so reduces income segregation indicating that heterogeneity in the housing stock serves to stratify households based on ability to pay further we show that differences in housing help to accentuate differences in the consumption of local amenities

women headed households and household welfare an empirical deconstruction for uganda abstract analysis of the first nationally representative household survey of uganda shows that women headed households are not poorer when assessed by consumption or income nor do they appear consistently disadvantaged on social indicators some subgroups of women headed households do have lower economic welfare including those headed by widows and those in urban areas gender inequalities in educational attainment appears to be the major source of what economic disadvantage such women headed households do face high remittances receipts play a key role in maintaining economic parity between women and men headed households

neighborhood income distributions this paper studies the distribution of income within neighborhoods and contrasts it with the national income distribution it relies on a unique feature of the american housing survey whose 1985 1989 and 1993 waves of interviews provide data for small residential neighborhoods these consist of a dwelling unit and up to ten of its nearest neighbors most previous work on neighborhoods has used information for much larger groupings of the population such as census tracts the paper employs a variety of parametric and nonparametric econometric tools to study income sorting across us residential neighborhoods it documents the patterns of dependence among neighbors income and imperfect sorting with moderate but very significant correlation among incomes of neighbors and of considerable income mixing in u s neighborhoods

distributive politics and economic growth a crude distinction between economics and politics would be that economics is concerned with expanding the pie while politics is about distributing it in this paper we analyze the relationship between the two we focus on how an economy s initial configuration of resources shapes the political struggle for income and wealth distribution and how that in turn affects long run growth our main conclusion is that inequality is conducive to the adoption of growth retarding policies we derive this result from a simple political economy model of growth and present cross country evidence consistent with it the key feature of our model is that individuals differ in their relative factor endowments we distinguish between two types of factors an accumulated factor called capital and a nonaccumulated factor called labor growth is driven by the expansion of the capital stock which is in turn determined by individual saving decisions long run growth is endogenous as the aggregate production function is taken to be linearly homogeneous in capital and productive government services taken together the provision of government services is financed by a tax on capital because government services are productive a small tax on

the effects of spending on test pass rates evidence from michigan abstract this study uses data on standardized test scores from 1992 through 1998 at michigan schools to determine the effects of spending on student performance the years in the data set straddle 1994 when michigan dramatically changed the way that k 12 schools are funded and moved toward equalization of spending across schools focusing on pass rates for a fourth grade math tests the most complete and consistent data available for michigan i find that increases in spending have nontrivial statistically significant effects on math test pass rates and the effects are largest for schools with initially poor performance

the capitalization of education finance reforms abstract the education finance reforms encouraged by state court rulings over the past 25 years have led to increased state aid and educational spending in poorer school districts this empirical study addresses whether these new resources were capitalized into the housing values and residential rents within those districts estimations based on district level census data indicate that the new educational expenditures generated by the court mandates substantially increased median housing values and residential rents this tiebout response implies that court mandated finance reforms increased the perceived quality of the poorer school districts in reform states however the existence and magnitude of this response also implies that these reforms had unintended distributional consequences for example these results indicate that for some the redistributive impact of education finance reform may have been sharply attenuated by the increased cost of residing in the districts that received new educational re

education finance reform and investment in human capital lessons from california abstract this paper examines the effect of different education financing systems on the level and distribution of resources devoted to public education we focus on california which in the 1970 s was transformed from a foundation system of mixed local and state financing to one of effectively pure state finance and subsequently saw its funding of public education fall between 10 and 15 relative to the rest of the us we show that a simple political economy model of public finance can account for the bulk of this drop we find that while the distribution of spending became more equal this was mainly at the cost of a large reduction in spending in the wealthier communities with little increase for the poorer districts our calibrated model implies that there is no simple trade off between equity and resources we show that if california had moved to the opposite extreme and abolished state aid altogether funding for public education would also have dropped by almost 10

expenditure behavior and children s welfare an analysis of female headed households in jamaica abstract evidence from jamaica shows that the sex and union status of the household head can have a significant influence on household expenditure behavior with implications for individual household members while the presence of a female decision maker generally increases the share of the household budget allocated to child and family goods female headed households fhhs also spend more on adult wear and less on health lower health expenditures are partially offset by the differential use of other health inputs in fhhs these differences in resource allocation may explain why poorer fhhs do not necessarily have lower children s outcomes in developing countries

the intergenerational conflict over the provision of public education abstract we study the intergenerational conflict over the provision of public education this conflict arises because older households without children have weaker incentives to support the provision of high quality educational services in a community than younger households with school age children we develop an overlapping generations model for households in a system of multiple jurisdictions this model captures the differences in preferred policies over the life cycle we show that the observed inequality in educational policies across communities is not only the outcome of stratification by income but is also determined by the stratification by age and a political process that is dominated by older voters in many urban communities with low quality of educational services the mobility of older households creates a positive fiscal externality since it creates a larger tax base per student this positive tax externality can dominate the negative effects that arise because older households tend to vote for lower educational expenditures as a consequence sorting by age can reduce the inequality in educational outcomes that is driven by income sorting

tiebout economies with differential genetic types and endogenously chosen crowding characteristics abstract we consider a tiebout economy with differential crowding and public projects in which agents are distinguished by their tastes and genetic endowments agents choose which crowding characteristic for example a skill they wish to express and this affects their value to other members of their jurisdiction club firm etc an agent s choice is influenced both by his genetic endowment which affects his cost of acquiring crowding characteristics and by his preferences over which crowding characteristic he expresses we show that if small groups are strictly effective the core is equivalent to the set of anonymous competitive equilibrium outcomes but that the core generally contains taste homogeneous jurisdictions journal of economic literature classification numbers h41 h72

all school finance equalizations are not created equal school finance equalization has probably affected american schools more than any other reform of the last 30 years understanding it is a prerequisite for making optimal social investments in human capital yet it is poorly understood in this paper i explain why it differs from conventional redistribution because it is based on property values which are endogenous to schools productivity taste for education and the school finance system itself i characterize equalization schemes and show why some level down and others level up schemes that strongly level down have unintended consequences even poor districts can end up worse off i also show how school finance equalization affects property prices private school attendance and student achievement

heterogeneity stratification and growth macroeconomic implications of community structure and school finance this paper examines how socioeconomic stratification and alternative systems of education finance affect inequality and growth agents interact through local public goods or externalities school funding neighborhood effects and economywide linkages complementary skills knowledge spillovers sorting families into homogeneous communities often minimizes the costs of existing heterogeneity but mixing reduces heterogeneity faster integration therefore tends to slow down growth in the short run yet raise it in the long run a move to state funding of education presents society with a similar intertemporal trade off local and global complementarities play major roles in determining the efficient social and educational structures copyright 1996 by american economic association

the effect of increased funding on student achievement evidence from texas s small district adjustment abstract we leverage an obscure set of rules in texas s school funding formula granting some districts additional revenue as a function of size and sparsity we use variation from kinks and discontinuities in this formula to ask how districts spend additional discretionary funds and whether these improve student outcomes a 1000 annual increase in foundation funding or 10 increase in expenditures yields a 0 1 s d increase in reading scores and a near 0 08 increase in math in addition dropout rates decline graduation rates marginally increase as does college enrollment and to a smaller degree graduation these gains accrue in later grades and largely among poorer districts an analysis of budget allocations reveals that additional funding only marginally affects budget shares

more evidence on nutrition demand income seems overrated and women s schooling underemphasized abstract malnutrition is widespread in the developing world controversy continues concerning the roles of income household size and women s schooling on nutrient demand empirical estimates for nicaragua suggest that income elasticities are small and inversely associated with income levels there are some economies of scale in household size the elasticity for women s schooling is higher than those for income or household size and women s backgrounds are important the results cast doubt on the strong emphasis the world bank and others have placed on income and suggest that schooling may be working through tastes not only through productivity