political economy of income distribution dynamics abstract income distribution varies considerably across countries it tends to become more equal with development in some countries but just the opposite occurs in other countries this paper provides a theoretical investigation of the persistent differences in income distribution across countries over time motivated by the relationship between income distribution and public spending at different school levels for a broad range of countries over the past 30 years the analysis centers on the role of public education where specific investments interact with political involvement by different socio economic groups socio economic groups may form lobbies to influence education policy making the formation of lobbies is endogenous persistent inequality is caused by persistent lobbying efforts of the wealthy that lead to an allocation of public education spending more biased toward them

the evolution of the racial wage hierarchy in post apartheid south africa this article develops a multilateral decomposition procedure for the analysis of wage differentials and applies this to the evolution of the racial wage hierarchy in south africa over the period 1993 2001 we find evidence that the wage position of the majority african workforce improved relative to all other racial groups immediately following the transition to democratic rule in 1994 but that these gains have been largely eroded in the ensuing years of the post apartheid era we review the range of policy initiatives that have been taken by the government since 1994 in the light of our empirical findings

the geography and causes of food insecurity in developing countries abstract at the 1996 world food summit 186 countries made a commitment to reduce the number of chronically undernourished people by half by 2015 in order to formulate effective policies for reaching this goal a thorough understanding of the location and causes of food insecurity is needed this paper provides a broad overview of the current character of food insecurity in developing countries focusing on two questions 1 why are they food insecure and 2 why are the food insecure to answer the latter question data from 58 developing countries with high prevalences of food insecurity are employed to examine the relative importance of two of food insecurity s most basic causes national food availability and the inability of people to access food due to poverty using child malnutrition as a proxy along with descriptive controls for non food determinants of malnutrition the paper finds little correlation between national food availabilities and food insecurity the group of countries that exhibit the highest severity of food insecurity are those with high poverty and food dietary energy surpluses consistent with the view that poverty is the most widespread cause of food insecurity in the 1990s the paper concludes by considering the implications of the analysis for appropriate geographical and policy targeting to improve food security for the greatest numbers of people at the fastest pace now and into the 21st century

a population macroeconomic growth model for currently developing countries abstract this paper constructs a theoretical model that predicts as observed in some currently developing countries that the average school enrollment ratio may fall even when the average fertility rate declines unlike existing models the current analysis indicates that economic growth may slow down when a fertility transition starts asymmetric behavior with respect to fertility and education between households stemming from income inequality plays an important role in generating this result we examine the implications of an education subsidy policy contrary to intuition in some circumstances this policy may decrease the average school enrollment ratio and future economic growth

public education occupational choice and the growth inequality relationship this article develops a dynamic general equilibrium model in which the occupational structure of the economy drives a wedge between the social and private returns to schooling for some workers i study the impacts of alternative allocations of public resources between basic and higher levels of education on enrollments income distribution and growth in particular i illustrate how the growth inequality relationship depends on the tension between two forces 1 the trickle down effects of expenditures on higher education and 2 the positive impacts on secondary enrollments generated by high quality basic education and reduced parental inequality

an econometric model of the two part decision process in the demand for health the decision to contact a physician and the decision about how often to contact a physician are determined by different decisionmakers we introduce a negative binomial distributed hurdle model that specifies the two stages of the decisionmaking process as different stochastic processes while at the same time taking care of the discrete nature of the data empirical results are based on a cross section of the west german socioeconomic panel specification tests reveal that the two stages of the process need to be treated as two distinct processes this in turn implies that ignoring this distinction leads to serious misinterpretation

industry wage differentials and efficiency wages a dissenting view with south african evidence abstract does industry wage dispersion constitute evidence of either efficiency wages or rent sharing comparison of the industry wage premia of whites and africans in south africa casts doubt upon the rent extraction and the gift exchange explanations of the industry wage structure unions combined with union threats fail to explain the data other explanations unobserved ability compensating differentials and the shirking monitoring and turnover models are rejected here as they have been before remaining possibilities are expense preference theory and internal equity rules implications for future research are pointed out

unobserved household and community heterogeneity and the labor market impact of schooling a case study for indonesia studies have claimed that schooling investments have high rates of return in developing countries researchers however fail to control for all of the unobserved household and community effects which may affect estimates of returns using data from the 1986 indonesian labor force survey wage functions are estimated for indonesia with and without fixed effects to see if controls for outside factors which might be correlated with years of schooling and wages make a difference the impact of schooling on wage rates and hours supplied to the paid labor market is assessed with separate consideration given to males and females results suggest that estimates of the impact of schooling on wage rates and hours supplied to the paid labor market which do not control for household fixed effects are quite misleading the directions and magnitudes of biases caused by failing to take control measures differ according to sex between wage rates and hours supplied and among schooling levels specifically ordinary least squares estimates of the impact of schooling are biased to overestimate returns to school returns to lower schooling levels relative returns of schooling for males relative to females and the positive impact of schooling on hours supplied to the paid labor force advocating schooling investments in other societies based upon the standard estimates may therefore create unrealistic expectations

refuting two claims about virtual water trade abstract using the heckscher ohlin trade model i refute two prominent but incorrect claims on virtual water trade these claims are that virtual water trade i levels uneven water distribution and ii reduces the potential for water conflict both claims are based on an incorrect understanding of comparative advantage in the production of water intensive goods the results show that both claims only hold under certain conditions but do not necessarily follow from the heckscher ohlin trade model

water scarcity and food trade in the southern and eastern mediterranean countries abstract this study investigates food trade patterns in relation to water resources availability in the southern and eastern mediterranean countries semed examinations show that most of these countries have a high dependence on the import of water intensive crops cereal vegetable oil and sugar in the domestic food supply the region as a whole is marginally a net exporter of fruits and vegetables while variations are substantial across countries multi variable regression analyses show that intensification of water scarcity is an important factor in explaining the increase in food import in the semed countries during the past two decades it also finds that while gdp per capita has a strong influence on the level of food import in a country its impact on changes in the import during the same period is rather modest no significant relationship is found between the trade of fruits and vegetables and water resources availability the projection on food import with respect to the decline in per capita water resources availability results in an increase of 40 39 and 14 respectively for cereal vegetable oil and sugar by 2020 in the region holding other factors constant the european union eu is the major food trade partner of the semed countries except for cereal about 70 of the fruit export and 55 of the vegetable export of the region currently go to the eu market expanding the export of fruits and vegetables is conducive to improving the value of water use in the semed countries however the expansion is constrained partly by the barriers in the destination markets notably the eu

health insurance and the demand for medical care evidence from a randomized experiment we estimate how cost sharing the portion of the bill the patient pays affects the demand for medical services the data come from a randomized experiment a catastrophic insurance plan reduces expenditures 31 percent relative to zero out of pocket price the price elasticity is approximately 0 2 we reject the hypothesis that less favorable coverage of outpatient services increases total expenditure for example by deterring preventive care or inducing hospitalization

wage premiums for education and location of south african workers by gender and race this paper focuses on wage premiums associated with educational investments and on how wages vary by region and within race and sex subsamples through the use of data from the 1993 project for statistics on living standards and development in south africa analysis of the given data revealed that although the quality of education for africans in south africa was lower than that for whites the percentage wage gains associated with additional years of primary secondary and higher education were significantly higher for africans than for whites these rates increased at higher levels of education for both race groups the lower quantity of education received by africans compared to whites is a simple explanation for the wage structure presented in this paper meanwhile the other two racial groups colored mixed races and indians occupy intermediate positions between whites and africans in terms of both the quantity of education received and wage returns to those levels of education

the globalization of virtual water flows explaining trade patterns of a scarce resource abstract water availability is paramount for security and development yet many countries suffer from water scarcity virtual water trade or trade in water embedded agricultural commodities has been considered a means for countries to overcome water deficits provided they can import food rather than produce locally despite a rich literature research on the subject has not reached a consensus on whether virtual water trade is actually driven by relative water endowment differentials e g countries seeking to alleviate pressure on their own resources or by comparative advantage in water utilization e g countries using their most abundant and cheap factors of production understanding what drives virtual water trade would support water management policies in targeting the roots of water depletion excessive use due to lack of other available inputs and bad water management due to absence of water use regulation using panel data of bilateral virtual water trade flows from 1994 to 2007 applied to a gravity model we first demonstrate that arid countries do resort to trade as a means to alleviate water scarcity second we demonstrate that there is much inefficiency in water use in some countries where other agricultural inputs land labor are available and cheap given the increased urgency related to global water scarcity our results suggest how agricultural production and trade could help countries preserve and better use precious water resources

water scarcity and food import a case study for southern mediterranean countries abstract taking six southern mediterranean countries as a case study this paper addresses the water food challenges facing water scarce countries and the implications for the world food economy by accounting the volume of virtual water embedded in food imports into the countries concerned a close relationship between water endowment and food import dependence is elaborated a projection of the cereal demand suggests an increment of 40 60 percentage points in these countries by 2020 above their 1998 99 levels raising the aggregate volume of cereal imports to around 40 million tons the analysis also finds that the trend of shifting from staple grain crops to higher value cash crops was weak during the past two decades a deteriorating trade deficit for both cereal and noncereal agricultural products was evident in almost all the countries suggesting a rigid and persistent constraint of water scarcity on overall agricultural development the results of this case study highlight two important points a food imports are imperative for compensating water resource deficiency b water scarcity related food imports will continue to expand and impose increasing impacts on the global food economy

an empirical analysis of comparative advantage in egyptian agriculture egyptian comparative advantage in each of 18 agricultural commodities is assessed for a number of years using both the domestic resource coefficient and net social profitability it is found that egypt enjoys a comparative advantage in most cash crops but a comparative disadvantage in many grains and pulses the results suggest that foreign exchange could be earned more efficiently by altering relative incentives in favour of export oriented crops

virtual land use and agricultural trade estimating environmental and socio economic impacts abstract liberalization has caused an increase in the global trade of goods and services in particular the value and physical volume of agricultural goods traded have largely increased as the environmental and social consequences of trade are complex they are rarely included in the national and international agricultural policies one reason is that there is a lack of concepts and methods for assessing the environmental and social impacts of trade policies in this paper we develop a method for quantifying and assessing the land use hidden in the export and import of agricultural goods for the case of switzerland for our analysis we focus on arable crops the first methodological step of our research illustrates the spatial relationship of switzerland with countries all over the world through the import and export of land use for arable crops the second step links this spatial dimension with a qualitative assessment of the environmental and socio economic impacts of agricultural land use we applied the method to the case of wheat cultivation within switzerland and import to switzerland the major problem we were confronted with was the availability of data which had both to be reliable and available for the countries wheat is imported from the results show that the calculation of land use is credible in spite of the problems related with data availability the assessment results for each indicator are in agreement with the current situation in the respective countries in addition the aggregation seems to accurately reflect the countries agricultural polices the developed method is used to estimate the overall environmental and socio economic impacts of an increase in wheat imports to switzerland we argue that this method could be applied for anticipating potential impacts of trade agreements still further research is required for fine tuning of the utility functions including a weighting procedure in the aggregation procedure for practical applications important aspects like water shortage should enlarge our limited set of indicators in addition the average impact on a country level was assessed to refine that different agricultural systems ranging from intensive to extensive to organic should be considered beyond our scope was to analyze impacts due to other life cycle stages than the agricultural production for informed decision however information on the whole life cycle of agricultural products is required

cost sharing and pharmaceutical utilisation and expenditure in russia this paper presents estimates of the impact of exemption status and other socio economic variables on pharmaceutical use in russia estimates are derived from a newly collected household survey covering around four thousand households separate results for a zero inflated negbin model of utilisation of prescriptions and for a two part model of the overall level of household expenditure on pharmaceuticals are presented full exemption from prescription charges is shown to increase the utilisation of prescription items and reduce the probability of the households incurring drug expenditure

trade unions v statistical discrimination theory and application to post apartheid south africa a simple model of statistical discrimination is analyzed which captures some stylized facts of the south african labor market it shows that this type of discrimination disappears when the wage rates are determined by efficient bargaining between a representative firm and a union with endogenous membership this may explain why the wage gap between black and white workers in post apartheid south africa is smaller among unionized workers than among non unionized ones

educational policy in a credit constrained economy with skill heterogeneity an overlapping generations model where agents choose whether to become educated when young is presented education enhances productivity but needs to be financed by borrowing because of the possibility of default lenders may ration credit we characterize the steady state equilibrium with and without credit constraints and show that credit constraints are associated with lower education and a lower real interest rate we then study the role of public policy in remedying the inefficiency which occurs with credit market imperfections and examine whether public education can improve on the constrained equilibrium

are virtual water flows in spanish grain trade consistent with relative water scarcity abstract virtual water adds a new dimension to international trade and brings along a new perspective about water scarcity and water resource management most virtual water literature has focused on quantifying virtual water flows and on its application to ensure water and food security nevertheless the analysis of the potential gains from international trade at least from a water resources perspective needs to take into account both spatial and temporal variations of blue groundwater and stream flow and green soil moisture water as well as the socioeconomic and policy conditions this paper evaluates whether spanish international trade with grains is consistent with relative water scarcity for this purpose the study estimates the volume and economic value of virtual water flow through international grain trade for the period 1997 2005 which includes 3 years with different rainfall levels the calculations show that spain is a net virtual water importer through international grain trade the volume of net virtual water imports amounts to 3420 4383 and 8415 million m 3 in wet 1997 medium 1999 and dry 2005 years respectively valuing blue water at its shadow price or scarcity value blue water exports oscillate between 0 7 and 34 2 million euros for a wet and dry year respectively overall grain trade is apparently consistent with relative water scarcity as net imports increase in dry years however the evolution of grain exports expressed as a variation in quantity and volume does not match the variations in resource scarcity a disaggregated crop analysis reveals that there are other factors such as quality product specialization or the demand for a standardized product which also influence trade decisions and are not included in the notion of virtual water these facts among others can therefore create potential distortions in the application of virtual water to the analysis of specific trade patterns nevertheless from a water resources perspective virtual water can bring important insights across countries for improving water and land management globally fostering adaptation strategies to climate change and to transboundary resource management

shared literacy and employment in the nonfarm sector this article empirically examines the external effect of family literacy on the earnings of illiterate workers considering recent findings that rural nonfarm sectors in developing countries are becoming more important in determining the welfare of households this article tests two hypotheses 1 an illiterate person living with literate members i e a proximate illiterate person is more likely to find a job in the nonfarm sector than is an illiterate person living with no literate person i e an isolated illiterate person and 2 wage income of a proximate illiterate worker is higher than that of an isolated illiterate worker the empirical results suggest that proximate illiterate persons earn higher wages than isolated illiterate persons because they are more likely to be employed in the nonfarm sector

the demand for health some new empirical evidence this paper presents some new estimates of the pure investment and pure consumption models of the demand for health in contrast to previous studies the paper presents parameter estimates of both reduced form and structural demand for health care equations the latter which are obtained by treating health capital as a latent variable in a recursive equation system provide a safer way of checking the consistency of the model s predictions with the data the present analysis of the pure consumption model differs from previous analyses in its recognition of the dependency of the shadow price of initial assets on the entire lifetime profiles of the model s exogenous variables the paper also explores the implications in terms of reliability of parameter estimates of the failure on the part of previous studies to recognize this

inequality is bad for growth of the poor but not for that of the rich the paper assesses the impact of overall inequality as well as inequality among the poor and among the rich on the growth rates along various percentiles of the income distribution the analysis uses micro census data from u s states covering the period from 1960 to 2010 the paper finds evidence that high levels of inequality reduce the income growth of the poor and if anything help the growth of the rich when inequality is deconstructed into bottom and top inequality the analysis finds that it is mostly top inequality that is holding back growth at the bottom