economic freedom human rights and the returns to human capital an evaluation of the schultz hypothesis abstractin 1975 theodore w schultz suggested that the returns to human capital are highest in economic environments experiencing unexpected price productivity and technology shocks that create disequilibria in such environments the ability of firms and individuals to adapt their resource allocations to shocks becomes most valuable in the case of negative shocks government policies that mitigate the impact of the shock will also limit the returns to the skills of managing risk or adapting resources to changing market forces in the case of positive shocks government policies may restrict access to credit labor or financial markets in ways that limit reallocation of resources toward newly emerging profitable sectors this article tests the hypothesis that the returns to skills are highest in countries that allow individuals to respond to shocks using estimated returns to schooling and work experience from 122 household surveys in 86 developing countries the article demonstrates a strong positi

how important is the capacity of local governments for improvements in welfare evidence from decentralised uganda abstract decentralisation is often claimed to be effective for improvements in welfare and hence the reduction of poverty but empirical evidence is scarce this paper seeks to gain further insights into the relationship between decentralisation and welfare by investigating the role of local governments capacity for household consumption and school enrolment in uganda using household survey data it finds suggestive evidence that both household consumption and school enrolment are positively related with the level of capacity of district governments

revisiting the role of education for agricultural productivity while the majority of micro studies finds that rural education increases agricultural productivity various recent cross country regressions analysing the determinants of agricultural productivity were only able to detect insignificant or even surprising negative effects of schooling in this paper we argue and show that this failure to find a positive impact of education in the international context is rather a data problem related to the use of enrolment and literacy indicators using a panel of 95 developing and middle income countries from 1961 to 2002 together with the newest version of the barro lee educational attainment dataset we show that education indeed has a highly significant positive effect on agricultural productivity which is robust to changes in the control variables and in the econometric methods applied distinguishing between different levels of education further reveals that only primary and secondary schooling have significant positive impacts while tertiary education remains insignificant finally the effect of education is estimated separately for countries with different income levels results indicate that the coefficient of the education variable remains insignificant for countries from the poorest three income quintiles while it is positive and highly significant for the richest two quintiles this finding can be interpreted as support for the prominent argument claiming that education leads to higher agricultural productivity only in the presence of rapid technical change where education will help farmers to adjust more readily to the new opportunities

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

health and schooling investments in africa this paper first outlines an organizing framework for considering how health and schooling affect labor productivity and growth and how household and community factors can in turn affect the demand for these human capital investments both cross country growth models and various aspects of microeconomic studies of individual productivity as related to education and health are discussed the conclusion offers some tentative leads for policy in this area based on existing research and an agenda for future research

human capital family planning and their effects on population growth statistical evidence at the household level suggests that fertility and child mortality are related to factors specified by economic models of family resource allocation and behavior several of these factors such as women s education and family planning appear to decrease both fertility and child mortality leaving in doubt what net effects these human capital and social welfare programs have had on the recent slowing of world population growth the specific factors considered here include family planning programs human capital endowments of women and men natural resource wealth other economic structural determinants of the costs and benefits of children and the availability of nutritional inputs cross sectional relationships are reported and changes within countries are analyzed with fixed effect methods using data for 68 lowincome countries for the last two decades

optimal retirement with increasing longevity we develop an optimizing life cycle model of retirement with perfect capital markets we show that longer healthy life expectancy usually leads to later retirement but with an elasticity less than unity we calibrate our model using data from the us and find that over the last century the effect of rising incomes which promote early retirement has dominated the effect of rising lifespans our model predicts continuing declines in the optimal retirement age despite rising life expectancy provided the rate of real wage growth remains as high as in the last century

education and freedom of choice evidence from arranged marriages in vietnam abstractusing household data from vietnam we provide evidence on the effects of education on freedom of spouse choice we use war disruptions and spatial indicators of schooling supply as instruments the point estimates indicate that a year of additional schooling reduces the probability of an arranged marriage by about 14 percentage points for an individual with eight years of schooling we also estimate bounds on the effect of education on arranged marriage when exclusion restrictions are violated locally the lower bound is six to seven percentage points the impact of education is strong for women but significantly weaker for men

getting out the vote participation in gubernatorial elections scholarship on electoral turnout has long emphasized two main themes explanations of nonvoting in terms of individual characteristics and in terms of contextual variables these investigations have deeply enriched our understanding of electoral participation but their limitations have also sensitized us to the remaining problems of explanation perusal of the work on american politics exposes a rather striking tendency in studies of participation to ignore or soft pedal the effects of active political mobilization in this article we formulate two models of electoral turnout socioeconomic and political mobilization and apply them to aggregate data on voting in gubernatorial elections of 1978 and 1980 the socioeconomic model of turnout includes such influences as income age and educational attainment to assess the effects of political mobilization we have considered campaign spending partisan competition electoral margin and the presence or absence of a simultaneous race for the united states senate both of the models perform quite well individually producing significant and meaningful coefficients and adequate fits yet in the final analysis we demonstrate that quite apart from major sources of variation in gubernatorial turnout such as region and presidential versus nonpresidential years the mobilizing influences of campaign activism and competitiveness have a strong impact on electoral participation electoral law i e closing date of registration retains a small but significant effect on voting for governor and socioeconomic characteristics included in a fully specified model have little to contribute independently to an explanation of electoral turnout these findings are very much in the same vein as related cross national investigations which emphasize the crucial role of electoral law and political parties and downplay individual characteristics as determinants of electoral participation on the basis of the research reported here we argue that scholars need to pay more attention to political mobilization as an explanation of electoral turnout in the presidential election between cox and harding in 1920 only half of the eligible voters participated this relatively low turnout together with the historically minimal rates of participation in state and local elections created deep concern among those who believed that reasonably high levels of political involvement are crucial in maintaining a healthy democratic politics it was in this atmosphere of worry about low electoral turnout that charles e merriam and harold f gosnell 1924 conducted in the city of chicago the first systematic study of nonvoting subsequently gosnell 1927 went even further and executed the first experimental study in modern political science demonstrating conditions that could stimulate electoral turnout we too worry about low participation in elections today at every level of government and we believe these classic studies

education returns across quantiles of the wage function alternative explanations for returns to education by race in south america private wage returns to schooling in south africa in 1993 are twice as high for nonwhites as for whites and substantially higher at advanced levels of schooling for both races to explore how these returns might be expected to change as the proportion of africans with secondary and higher education increases quantile regressions for the wage function are estimated for african males and white males if the residuals based on a standard wage function specification are interpreted as omitted ability and it is assumed that ability increases decreases returns to schooling then we expect quantile returns to increase decrease at higher quantiles this is not observed for africans at the higher and secondary school level but is evident among whites at higher educational levels the opposite pattern of differential returns favoring the least able i e lowest deciles is reported for the lower tail of the educational distribution that is for africans at the level of primary school and for whites at secondary school authors

wage and labor supply effects of illness in cote d ivoire and ghana instrumental variable estimates for days disabled abstract sickness should make individuals less productive but there are problems in measuring this effect first how is adult morbidity measured in a household survey second how is the impact or morbidity on productivity inferred if earning is partly used to improve health self reported functional activity limitation due to illness is considered an indicator of morbidity for wage earners and self employed people to deal with both the measurement and joint determination problems an instrumental variable estimation approach is used where local food prices and health services instrument for disability days that reduce wages by at least 10 and hours by 3 or more

geography health and the pace of demo economic development abstract this paper investigates the impact of subsistence consumption and extrinsic and intrinsic causes of child mortality on fertility and child expenditure it offers a theory for why mankind multiplies at higher rates at geographically unfavorable tropical locations placed into a macroeconomic framework this behavior creates an indirect channel through which geography shapes economic performance it is explained why it are countries of low absolute latitude where we observe exceedingly slow if not stalled economic development and demographic transition

profits from self employment the case of cote d ivoire abstract in the past self employed workers were often viewed as less productive individuals yet recent research has indicated that the nonagricultural self employed fill a niche in the economy that large industry cannot the goods and services they produce may well be a necessary part of the infrastructure within which large scale industry can flourish this paper examines the productivity of nonagricultural family enterprises in cote d ivoire marginal returns to self employed labor are somewhat less than the wage rate of equivalent salaried workers capital yields extremely high returns in self employment possibly above 100 per month assuming limited access to credit the self employed may do well by establishing enterprises and gaining the large returns to capital that offset the somewhat lower returns to labor

does compulsory school attendance affect schooling and earnings we establish that season of birth is related to educational attainment because of school start age policy and compulsory school attendance laws individuals born in the beginning of the year start school at an older age and can therefore drop out after completing less schooling than individuals born near the end of the year roughly 25 percent of potential dropouts remain in school because of compulsory schooling laws we estimate the impact of compulsory schooling on earnings by using quarter of birth as an instrument for education the instrumental variables estimate of the return to education is close to the ordinary least squares estimate suggesting that there is little bias in conventional estimates every developed country in the world has a compulsory schooling requirement yet little is known about the effect these laws have on educational attainment and earnings 1 this paper exploits an unusual natural experiment to estimate the impact of compulsory schooling laws in the united states the experiment stems from the fact that children born in different months of the year start school at different ages while compulsory schooling laws generally require students to remain in school until their sixteenth or seventeenth birthday in effect the interaction of school entry requirements and compulsory schooling laws compel students born

investments in the schooling and health of women and men quantities and returns this paper surveys the evidence on recent trends in the growth of human capital investments in women that raised womens productivity in thus century in most countries patterns in school investments in men and women across regions and across birth cohorts within countries indicate that expected years of school enrollment is converging between low and high income countries to where the gaps have closed from about seven years in 1950 to five years in 1985 women today are receiving nearly as many years of education as men in industrially advanced high income countries latin america south east and east asia are relatively similar to the high income countries at the other extreme in most of the countries of south and west asia and north and sub saharan africa women receive about two fifths to three fourths the number of years of schooling as men do in every region however the ratio of female to male expected years of enrollment increased from 1950 to 1985 gender differences in mortality and nutritional status reveal that there has been a dramatic but largely unexplained advance in female longevity relative to male in the 20th century in most countries with the exception of certain countries in south asia this development is associated with the shift of populations from dependence on agriculture to working in urban areas these changes are a major source of decreasing inequality within and between countries in this century market failure could be responsible for families investing less than the socially efficient amount in girls than boys there are problems in measuring without bias these private and social return empirical patterns across countries in estimated returns to schooling illustrate that private returns at the primary secondary and higher education levels can vary for women and men

gender and education impacts on employment and earnings in west africa evidence from guinea this study examines the determinants of labor force participation for men and women in guinea for three sectors and for earnings employment includes self employment private wage employment and public wage employment data were obtained from a survey of 1725 households in the capital city of conakry in 1990 labor force participation lfp was 40 for women aged 15 65 years and almost 100 for men aged 30 50 years men were engaged almost equally in all three sectors while women were mostly engaged in self employment self employed women tended to come from low income households all public sector employees were well educated about 10 12 years average levels of education among the self employed were very low 2 3 years in the private wage sector men averaged 5 years and women averaged 9 years of schooling 47 of men and 59 of women in the public sector were in professional or managerial jobs in the private sector over 50 of women were in professional managerial or clerical jobs compared to only 16 of men few women in the private sector were engaged in skilled trades or unskilled work most self employed women and only 50 of men tended to work in retail trade migration during the past 5 years was positively associated with mens entry in self employment and the private sector and negatively associated with their public sector employment determinants of womens self employment included residence near commercial areas of the center city electricity in the house and work activity during the rainy season of april september fulani and malinke women were less likely to be self employed for women the benefits of education and experience declined after a certain level returns to schooling were high for both genders men earned more than women there is a need to increase educational and employment opportunities for women

aids treatment and intrahousehold resource allocation children s nutrition and schooling in kenya this brief summarizes the results of a gender impact evaluation study entitled acquired immunodeficiency syndrome aids treatment and intra household resource allocation children s nutrition and schooling in kenya conducted in late 2003 till present in kenya the study observed the impact of antiretroviral arv medications to human immunodeficiency virus infection hiv or aids on the time allocated to various household tasks by treated hiv positive patients and their household members on the individual level treating adult aids patients with arv treatment results in substantial improvements in the welfare of children living with the patients after nine months of treatment the increases in school attendance are maintained with no significant drop off over the time period of study for boys in particular the increase in hours of attendance is almost exactly equal to the treatment driven decrease in their hours of market labor supply the short term nutritional status of young children in adult patients households improves significantly also within six months after treatment is initiated for the patients not presented separately for boys and girls these gains in nutritional status can be expected to improve the physical and cognitive abilities of children and eventually their post school productivity levels funding for the study derived from the economic and social research council pfizer the world bank yale university s center for interdisciplinary research on aids the national institute of mental health the social science research council and the calderone program at columbia university

human capital and economic development abstract this paper develops a general equilibrium model of fertility and human capital investment with young adult mortality because young adult mortality is negatively related to average young adult human capital human capital accumulation lowers mortality inducing demographic transition and industrial revolution data confirm that young adult mortality is related negatively to schooling and the rate of return to schooling and positively to fertility the data indicate a negative relationship between tfp growth and schooling accumulation the model fits the data on country populations per capita incomes human capital total fertility rates infant mortality life expectancy and conditional life expectancy

dodging adverse selection how donor type and governance condition aid s effects on school enrollment summary we employ aiddata to test the effects of primary education aid on school enrollment we argue that the problem of adverse selection complicates both the allocation and the effectiveness of aid we hypothesize that bilateral donors ought to have greater freedom to condition aid on recipient governance quality than multilateral donors which are often bound by institutional rules to provide aid more impartially compared to their multilateral counterparts bilateral donors may have advantages in overcoming adverse selection resulting in bilateral aid s boosting enrollments to a greater degree aiddata s extensive coverage of multilateral aid enables this analysis for up to 100 low and low middle income countries from 1995 to 2008 latent growth regression analysis suggests that compared to multilateral donors bilateral donors indeed condition their primary education aid on recipient control of corruption and that bilateral aid is significantly related to improved enrollments

does better nutrition raise farm productivity household level data from sierra leone are used to test whether higher caloric intake enhances family farm labor productivity this is the notion behind the efficiency wages hypothesis which has found only weak empirical support a farm production function is estimated accounting for the simultaneity in input and calorie choice instruments include prices household demographic characteristics and farm assets the latter two sets of instruments are later dropped to explore the robustness of the results to different specifications of exogeneity the exercise shows a highly significant effect of caloric intake on labor productivity providing solid support for the nutrition productivity hypothesis the marginal effect on productivity falls drastically as calorie consumption rises but remains positive at moderately high levels of intake one result is a fall in the effective price of food a decline that is larger for households that consumer fewer calories

stochastic adaptation in finite games played by heterogeneous populations we analyze stochastic adaptation in finite n player games played by heterogeneous populations containing best repliers better repliers and imitators individuals select strategies by applying a

income productivity in china on the role of health this study provides empirical evidence regarding the income productivity of health human capital in china we appeal to concepts from human capital theory to support a basic model that treats health as a form of human capital in the income production process our model examines the economic return at the household level from the health of its individual members we estimate this with a longitudinal sample drawn from the china health and nutrition survey chns allowing us to exploit within variation in health and income to address possible unobservables biasing estimates of the impact of health on income in the simple cross sectional setting household income is strongly influenced by the health of its members particularly in rural areas these findings could have important implications for health and economic policy making aimed at reducing the long standing urban rural economic gap and more comprehensively insuring the rural population against health and economic risk

fertility and child mortality in cote d ivoire and ghana this article examines individual household and community characteristics that may affect fertility in contemporary cote d lvoire and ghana and the relationship between child mortality and fertility it was not possible to reject the null hypothesis that child mortality is exogenous treating child mortality as exogenous fertility responds directly to child mortality but by a smaller proportion than estimated in studies of east asia and latin america increases in female education and urbanization are likely to contribute to declines in fertility in both countries but economic growth without these structural changes is not yet strongly related to lower fertility

data watch the world bank s living standards measurement study household surveys since 1985 the world bank has been collecting household survey data in developing countries that provide a rich source of information for assessing household welfare understanding household behavior and evaluating the impact of government policies this article describes these household surveys known as living standards measurement study lsms surveys and explains how to obtain their data lsms surveys have been implemented in over twenty developing countries and have been used to analyze poverty labor markets health and education pricing policies determinants of school performance savings and consumption smoothing health and nutrition policies and gender and fertility issues

factor proportions and relative wages the supply side determinants of wage inequality supply side factors may contribute to rising wage inequality first certain changes in the supply of skills allegedly exacerbate wage inequality women s increased labor force participation and increased immigration are the leading candidates both allegedly reduce the wages of less skilled men however immigration s impact on wage inequality has been minor and the effects of women s participation is inconclusive second in evaluating the likelihood that human capital investment will mitigate future inequality evidence suggests that rising returns to education have increased the proportion of young people attending college limiting the growth of inequality among high wage workers

earnings schooling ability and cognitive skills conventional estimates now available for a large number of countries generally indicate that the social returns to education are positive large and competitive with returns to investment in physical capital that such estimates are good guides for public resource allocation has however been questioned the heart of the problem lies in the interpretation of the positive relationship between the education and the earnings of workers whether as the conventional estimates assume the coefficient of the education variable in the earnings function measures the effect on the productivity of workers of human capital acquired in school it has been hypothesized that education in part or instead represents screening for native ability and motivation or credentialism and that as a consequence conventional measures of the social benefit of education are substantially upward biased 2 in this paper we attempt to distinguish the influence on earnings of cognitive achievement native ability and years of education as a means of adjudicating the human capital screening and credentialist hypotheses our econometric analysis is based on two rigorously comparable micro data sets from kenya and tanzania generated by surveys of the urban wage labor force specifically for this study these data sets contain the usual variables found in earnings function estimates of the benefits of schooling individual earnings years of education and years of employment experience in addition they contain two variables measures of the worker s cognitive skills and of his or her reasoning ability not previously found in studies of developing countries and only rarely found in studies of the education earnings relationship in developed countries 3 with these variables we can estimate the direct effects on earnings of cognitive skills ability and years of schooling by using them to estimate educational production functions and educational attainment functions and linking these functions with the earnings function in a recursive framework we can also assess the various indirect effects on earnings of ability and years of schooling having data sets from two countries very similar with respect to size resource endowments structure of production and employment and level of development means that not only can we subject our results to the usual statistical tests but we can also assess their replicability both kenya and tanzania have nearly achieved the objective of universal primary education while university enrollments remain at less than 1 percent of the relevant age group the important policy issues re boissiere development research department the world bank 1818 h street washington d c 20433 knight institute of economics and statistics oxford university sabot williams college williamstown ma 01267 we are grateful to the educational testing service of princeton for the design of tests used in this study and to j armitage j behrman j hausman d hendry d jamison and an anonymous referee for their insights and advice helpful comments were also received from participants in seminars at oxford and yale universities the views presented here are our own they should not be interpreted as reflecting those of the world bank george psacharopoulos 1973 1981 contains a listing of 44 countries in which rate of return studies had been conducted and of the estimates obtained 2for instance kenneth arrow 1973 mark blaug 1976 samuel bowles and herbert gintis 1976 john riley 1979 michael spence 1976 and lester thurow 1975 3for attempts to control for ability and or for cognitive achievement in studies for the united states see jere behrman et al 1980 gary chamberlain and zvi griliches 1977 griliches and william mason 1972 michael olneck 1977 paul taubman and terence wales 1974 taubman 1975 and david wise 1975 see also the survey articles by griliches 1977 1979 in most instances the data refer to special subgroups in the population and clear distinction cannot be made between natural ability and cognitive skills acquired in school