gender occupational segregation and its impact on the gender wage differential among rural urban migrants a chinese case study since the late 1980s massive rural urban migration in china has attracted considerable attention from economists and policymakers both within and outside china one of the most striking features of rural urban migration is that job attainment among the migrants differs considerably between males and females it is of great interest to know the reasons for this difference and more importantly whether gender occupational segregation has a large impact on the gender wage differential among migrants this paper examines these issues using data on 1504 migrants collected in jinan city shandong province it is found that gender occupational segregation in this sector is mainly due to the unequal treatment of male and female attributes in occupational assignment and that this contributes very significantly to the gender wage differential among migrants a comparison with another study on china s rural industrial labour market is made which suggest that intra occupational gender wage discrimination is l

cash transfer programs with income multipliers procampo in mexico abstract cash transfer programs create multiplier effects when recipients put the money they receive to work to generate further incomes when this is the case the ultimate income effects are multiples of the amounts transferred we analyze the procampo program in mexico that was introduced to compensate farmers for the anticipated negative effect of nafta on the prices of basic crops the transfer rules and the timing of the panel data collected allow unique control of biases in this impact analysis we find that the multiplier among ejido sector recipients is in the range 1 5 2 6 multipliers are higher for households with medium and large farms low numbers of adults in the household nonindigenous backgrounds and located in the center and gulf regions high multipliers reflect income opportunities that had remained unrealized due to liquidity constraints that are relaxed by the transfers opportunities come from the asset endowments that these households received through the land reform particularly irrigated land and they are enhanced by access to technical assistance

income tax evasion revisited the impact of interest rate yields on tax free municipal bonds 1 introductionincome tax evasion remains a timely issue as evidenced by recently published studies e g see feige 1989 1994 alm jackson and mckee 1992 pestieau possen and slutsky 1994 cebula 1997 2001 alm mcclelland and schulze 1999 atkins 1999 panteghini 2000 ali cecil and knoblett 2001 saltz 2001 in an effort to provide further insight into the determinants of tax evasion this study hypothesizes that the tax evasion decision may include an assessment of the tax free interest rate yield on say high grade municipal bonds relative to the taxable interest rate yield on alternative high quality bond issues such as 10 year treasury notes presumably the higher the interest rate yield on high grade municipals whose interest is legally exempt from federal income taxation relative to the taxable interest rate yield on 10 year treasury notes the more attractive those municipals become ceteris paribus in effect the interest paid on tax free bonds especially for households in higher tax brackets may offer an attractive legal alternative income tax avoidance to illegal income tax evasion 1 thus it is hypothesized that the higher the tax free interest rate yield on high grade municipals relative to the taxable yield on 10 year treasury notes or equivalent taxable issues the less the incentive for and hence the less the degree of income tax evasion this study investigates empirically whether higher yields on tax free municipals relative to the taxable yields on 10 year treasury notes reduce the degree of aggregate federal personal income tax evasion section 2 provides the model which includes a variety of variables already established in the literature to affect tax evasion section 3 describes the data sections 4 and 5 provide the empirical findings and concluding remarks 2 the modelthe economy consists of agents who generate economic value that is reflected in the form of income and choose whether to report none some or all of their income to the internal revenue service irs the probability that the representative economic agent will not report taxable income pnr is treated as an increasing function of the expected gross benefits to the agent of not reporting income eb and a decreasing function of the expected gross costs to the agent of not reporting income ec formula omitted see article image the expected gross benefits from not reporting income to the irs are hypothesized to be an increasing function of income tax rates unlike previous studies this study focuses on both the average effective federal personal income tax rate aept and the maximum marginal federal personal income tax rate max such that formula omitted see article image furthermore as suggested by feige 1994 and cebula 2001 the higher the level of public dissatisfaction dis with the perceived performance of government employees and elected government officials the greater the subjective benefit taxpayers derive from tax evasion accordingly becomes formula omitted see article image finally as explained in section 1 it is hypothesized in this study that the higher the tax free interest rate yield on high grade municipal bonds tf relative to the taxable interest rate yield on 10 year treasury notes ten the greater the incentive to engage in legal tax avoidance and the lower the incentive to engage in tax evasion thus becomes formula omitted see article image the expected gross costs of not reporting income to the irs are hypothesized to be an increasing function of the expected risks thereof in this study to the representative economic agent the expected penalty from not reporting taxable income to the irs if said activity is detected by the irs is measured in part by the total pecuniary penalties including both penalties per se and interest previously assessed by the irs on audited tax returns pen

rates of return to human capital a test using el salvador data most of the empirical work on human capital has been confined to conditions in developed countries this is probably due to difficulties in obtaining data for other countries it would be interesting to see how robust the theory and its associated models are in conditions regarded as typical for developing countries this will be considered here using a large data set describing the el salvador labor market two questions will be examined namely a how well does the earnings function of the human capital theory explain earnings distribution in el salvador and b does the return to training called experience here approximate the return to school as is often assumed in human capital research the latter issue is of course related to the notion of overtaking the point in the experience profile when the flat earnings stream is intersected from below by the earnings stream affected by postschool investments

entrepreneurial human capital and the long run survival of firms in india abstract this paper analyses the characteristics of entrepreneurs that contribute to firms survival in less developed countries ldcs the study which relies on data collected in a 1971 survey of entrepreneurs in south india and a follow up survey of surviving firms in 1993 finds that entrepreneurial human capital greatly influences firm survival the results indicate that firms founded by older entrepreneurs in higher castes are most likely to survive but that increased education of the founding entrepreneur reduces survival these results provide evidence that opportunities of entrepreneurs outside the firm ignored in most theories are important in firm survival

a critical evaluation of rate of return analysis since the development of the concept of human capital schultz i 96 i becker i964 analysis of rates of return has been a standard means of assessing education the conventional way of measuring the return to education is to take a snap shot view of the earnings of people with differing educational experiences it is then possible to calculate the average income earned at different stages of a working life the rate of return to education can then be calculated as the internal discount rate which equates the discounted increment to average earnings to the costs involved in obtaining education both private and social rates of return can be calculated provision of education is often subsidised so that the private cost is lower than the social cost and this will tend to raise the private return above the social return taxation of the private benefit of education offsets this at least partly however ziderman i 973 records that in developed countries private returns normally exceed social returns this pattern is confirmed by psacharopoulos i985 in many cases it is not possible to calculate a full rate of return but one can look at the incremental effect of schooling on earning power thus denison i 967 suggests that in the united states each year of education raises earning power by an average of around 5 6 with the effect tending to rise with the duration of education card and kruger i992 identify effects of similar magnitude it need not be the case that education goes on raising earning power overeducation is clearly possible rudd i990 suggests that in the social sciences education beyond degree level is very damaging to earnings prospects tarsh i992 questions aspects of rudd s study but agrees that higher education graduates do suffer some pay disadvantage rate of return calculations can form the basis for policy decisions in principle social returns to investment in human capital could be compared with those on physical capital so as to give a basis for the allocation of resources between the two types of investment estimates of social rates of return to different types of education could also be used to guide expenditure decisions between these different types however there are many possibly offsetting biases entering into the calculations of rates of return and it is perhaps concern with these that has

if we knew ability how would we tax individuals abstract the suggestion to tax people on earnings capacity instead of earnings has been around for a long time and is attractive in terms of economic efficiency in this paper we reflect on the feasibility of such a system and give an exploratory empirical implementation we apply the leyden welfare function of income a survey based measure of an individual s welfare associated with income to derive implications for ability taxation under the assumption that iq and schooling reflect earnings capacity we derive the tax functions using different criteria to distribute the utility loss due to taxation

the effect of family background on children s level of schooling attainment in spain this paper provides microeconomic estimates of the role played by family background in determining children s level of schooling attainment in spain we use an ordered logit model to explore the effects of family background and other supply factors on the probability of various educational outcomes our estimates are based on household data obtained from the ecvt living and working conditions survey ministerio de economia y hacienda 1985 a spanish nation wide household survey conducted at the end of 1985 in general and given the spanish capital constraints parental income social class and family size explain children s level of schooling these results are consistent with those of the literature that focuses on the role of family background in determining schooling attainment

fdicia after five years at year end 1991 congress enacted fundamental deposit insurance reform for banks and thrifts the fdic improvement act this reform followed the failure of more than 2 000 depository institutions in the 1980s many failed because the incentive incompatibility of the structure of federal government provided deposit insurance encouraged moral hazard behavior by banks and poor agent behavior by regulators insurance was put on a more incentive compatible basis providing for a graduated series of sanctions mimicking market discipline that first may and then must be applied by the regulators on floundering banks this article reviews these changes and evaluates early results

effects of family background on earnings and returns to schooling evidence from brazil we investigate whether omitted family background variables are responsible for high returns to schooling estimated in brazil returns to schooling fall by about one third when parental schooling is added to wage equations surprisingly the schooling of fathers in law has larger effects on wages than the schooling of fathers on the basis of a model of assortative mating we interpret this as evidence that parental characteristics represent unobservable worker attributes rather than nepotism in the labor market we conclude that the family background bias in returns to schooling is modest and need not imply returns to family connections

weighing what s practical proxy means tests for targeting food subsidies in egypt abstract despite achieving a significant cost reduction over the past two decades the absolute cost of food subsidies in egypt is still high relative to the benefits received by the poor there is scope for better targeting these food subsidies in particular for targeting cooking oil and sugar ration cards both because reforms in this area are perceived to be far less politically sensitive than adjusting subsidy policy for bread and wheat flour and because higher income groups presently receive a significant percentage of the benefits targeting the high subsidy green ration cards to the poor and the low subsidy red ration cards to the nonpoor will require identification of both poor and nonpoor households an international food policy research institute research team in egypt in collaboration with the egyptian ministry of trade and supply developed a proxy means test for targeting ration cards the paper describes the process of moving from the optimal income predicting model to the final model that was both administratively and politically feasible an ex ante evaluation of the levels of accuracy of the proxy means testing model indicates that the model performs quite well in predicting the needy and nonneedy households an effective and full implementation of this targeting method would increase the equity in the ration card food subsidy system and at the same time the total budgetary costs of rationed food subsidies would decline moreover the experience gained under this reform would facilitate targeting future social interventions to reduce and prevent poverty in egypt

taxes on tax exempt bonds implicit tax rates priced in the cross section of municipal bonds are approximately two to three times as high as statutory income tax rates with implicit tax rates close to 100 using retail trades and above 70 for interdealer trades these implied tax rates can be identified because a portion of secondary market municipal bond trades involves income taxes after valuing the tax payments market discount bonds which carry income tax liabilities trade at yields around 25 basis points higher than com parable municipal bonds not subject to any taxes the high sensitivities of municipal bond prices to tax rates can be traced to individual retail traders dominating dealers and other institutions the issue of how taxes affect asset prices is an important issue in finance accounting and economics in theoretical models examining the effect of taxes

raising primary school enrolment in developing countries the relative importance of supply and demand abstract few policies are as universally accepted as raising primary school enrolment in developing countries but the policy levers for achieving this goal are not straightforward this paper merges household survey data with detailed school supply characteristics from official sources in order to estimate the relative impact of demand and supply side determinants of rural primary school enrolment in mozambique policy simulations based on a set of plausible interventions show that in rural mozambique building more schools or raising adult literacy will have a larger impact on primary school enrolment rates than interventions that raise household income when relative costs are considered adult literacy campaigns are nearly 10 times more cost effective than the income intervention and 1 5 to 2 5 times better than building more schools

school supply constraints and children s educational outcomes in rural ghana abstract studies of school attainment often fail to acknowledge the possibility that prices for all schooling levels affect the decision to attend any one schooling level in developing countries the assumption that schooling costs are constant throughout the education cycle is manifestly untrue this paper concentrates on the empirical implications of introducing schooling costs that increase with schooling level the results suggest that the cost of advanced levels of education influences decisions at the primary school level the relative magnitude of the cross price elasticities suggests that cross price effects should not be ignored when designing educational user fees

labor markets in northeast brazil does the dual market model apply the economy of northeast brazil despite an impressive 7 real annual growth rate in recent years lags behind the rest of the country and far behind the dynamic south in particular with more than half of its 40 million residents living in poverty the region contains the largest concentration of the poor in latin america agriculture has traditionally been the dominant industry there but its importance is being eroded by the growth of manufacturing and services this shift has been aided by federal government policies which have provided jobs through direct government employment and have offered tax breaks subsidies advice and encouragement to large manufacturing firms in the region urban growth meanwhile especially in the major regional centers of recife fortaleza and salvador has swelled because of inflows of migrants by 1980 more than half of the population of what had been a predominantly rural region now lived in urban

social capital and coping with economic shocks an analysis of stunting of south african children abstract south african households live in an environment characterized by risks and many face a significant probability of experiencing economic losses that threaten their daily subsistence using household panel data that include directly solicited information on economic shocks and employing household fixed effects estimation we explore how well households cope with shocks by examining the effects of shocks on child nutritional status unlike in the idealized village community some households appear unable to insure against risk particularly when others in their communities simultaneously suffer large losses households in communities with more social capital however seem better able to weather shocks

earnings functions for the self employed comment abstract the standard human capital earnings model is applied to data from a 1975 socioeconomic survey conducted in tehran iran results show that the returns to schooling for the self employed not including street vendors canvassers and newsvendors are statistically equivalent to those of wage and salary workers thus in contradiction to conclusions drawn from a study by chiswick 1976 the high rates of return to schooling found in many studies of less developed countries do not appear to be the result of the systematic exclusion of the self employed from the estimating samples in other words when wage and salary workers are compared with the self employed in similar occupations their earnings profiles are similar

wage structure as implicit insurance on human capital in developed versus underdeveloped countries abstract this paper explores the role of wage structure as implicit insurance on human capital it illustrates how smaller wage differentials in the developed world can be welfare enhancing by acting as implicit insurance while larger wage differentials in underdeveloped countries make investments in human capital riskier in other words with smaller wage differentials the students in a developed country are insured against poor educational outcomes through the existence of well paid alternative employments which are not present in the economy of a less developed country this result arises as multiple equilibria in a general equilibrium model when there are no insurance markets for human capital

the value of u s labor market experience in the home country the case of puerto rican return migrants many immigrants to the united states and other industrialized economies eventually return to their home country more than one million foreign born persons left the united states between 1960 and 1970 1 research has documented return migration to israel italy ireland mexico and puerto rico as well as the return of thousands of guest workers from industrialized european economies in the mid seventies 2 however little is known about how the migration experience shapes the earnings profiles of returnees and how the economic standing of returnees compares to that of stayers in the home labor market in this article i analyze the transferability of human capital accumulated abroad by return migrants and the economic assimilation process of returnees i investigate if return migrants can capitalize at home on the years of labor market experience accumulated abroad i also examine whether return migrants assimilate that is if their earnings increase with time spent in the home labor market to evaluate how returnees fare in the home labor market the earnings of returnees are compared to the earnings of stayers one of the findings from the literature of immigration to the united states and other industrialized economies is that immigrants lose human capital on crossing national borders 3 it has also been noted that the earnings of immigrants grow with time spent in the host labor market suggesting that immigrants undergo a process of assimilation 4 most of the research on international return migrants is qualitative in nature and the small sample sizes caution about generalizations a large amount of this research has focused on rural communities the primary concern in the return migration literature has been the effect on local economic development 5

asymmetric information and the structure of the banking industry abstract we analyze the effects of informational asymmetries on the market structure of the banking industry in a multi period model of spatial competition in the process of lending incumbent banks gather proprietary information about their clients acquiring an advantage over potential entrants we show that these informational asymmetries are important determinants of the industry structure and of banks strategic behavior contrary to traditional models of horizontal differentiation the steady state equilibrium is characterized by a finite number of banks even in the absence of exogenous fixed costs in addition less concentrated industry structures may be associated with higher interest rates

returns to education a further international update and implications this paper updates evidence on the returns to investment in education by adding estimates for new countries and refining existing estimates to bring the total number of country cases to over 60 the new cross country evidence confirms and reinforces earlier patterns namely that returns are highest for primary education the general curricula the education of women and countries with the lowest per capita income the findings have important implications for directing future investment in education which for efficiency and equity purposes should concentrate on these priority areas

outmigration of u s immigrants a methodology is devised for the empirical analysis of the determinants of outmigration of immigrants in a population empirical studies in this area have been hindered by a lack of longitudinal data on the characteristics of the immigrants this problem is tackled by making use of cross sectional data at two points in time it is applied to the study of male immigrants in the united states it is found that education is positively related to the rate of outmigration for immigrants from canada asia and the pooled sample of immigrants this finding suggests that the cross sectional estimates of the growth in earnings of immigrants in the united states are underestimated for these groups of immigrants

targeting the poor in mexico an evaluation of the selection of households into progresa abstract in this paper we conduct an evaluation of the targeting method used by health education and nutrition program progresa of mexico to identify beneficiary households we address two key questions a how well does progresa s targeting perform and b how does the program perform in terms of its impact on poverty alleviation relative to other feasible methods and transfer schemes the first question is accomplished by comparing progresa s method to an alternative selection method based on household consumption which is our preferred measure of welfare we employ the concepts of undercoverage and leakage and find that progresa selection method is more effective in identifying the extremely poor localities or households but less so when it comes to distinguishing among localities or households in the middle of the scale to address the second question we compare the potential impact of progresa on poverty alleviation against uniform transfers that involve no targeting at all targeting based on consumption and geographic targeting i e targeting at the locality level rather than at the household level we find that progresa s method of targeting households outperforms uniform coverage and targeting at the locality level in terms of reducing the poverty gap and severity of poverty indices even after taking into account the economic costs of targeting but the closeness of progresa s performance to what could be achieved by geographic targeting alone raises some serious questions about the costs and benefits associated with the practice of household targeting within poor localities

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

does more schooling make women better nourished and healthier adult sibling random and fixed effects estimates for nicaragua there is debate on whether schooling causes increases in productivity or whether the estimated relationships reflect ability knowledge tastes etc that are associated with schooling this paper examines the impact of women s schooling on women s health and nutrition with and without controls for unobserved childhood background factors related to ability and motivation random and fixed effects models are estimated using data on adult sisters both sets of estimates reinforce the relationships found in standard estimates that women s schooling positively affects their health and nutrient intakes the latter result is particularly robust

intergenerational earnings mobility inequality and growth abstract we examine a model in which per capita income inequality intergenerational mobility and returns to education are all determined endogenously individuals earn wages depending on their ability which is a random variable they purchase an education with transfers received from their parents and are subject to liquidity constraints in the model multiple steady state equilibria are possible countries with identical tastes and technologies can reach differing rates of mobility inequality and per capita income equilibria with higher levels of output also have lower inequality higher mobility and more efficient distribution of education

linkages between the farm and nonfarm sectors at the household level in rural ghana a consistent stochastic distance function approach this article explores the effects within households of an expanding rural nonfarm rnf sector in ghana we ask whether the growing rnf sector allows for economies of diversification within farms how it affects household input demands and whether it has measurable effects in overall household production efficiency we explore the intrahousehold linkages between agricultural and rnf activities first assuming perfectly competitive input and output markets and then with market failures in particular missing labor and credit markets we then measure these linkages using a household level input distance function finding high levels of inefficiency in ghanaian farms also there are cost complementarities between the rnf sector and the agricultural sector particularly with food crops in which the poorest tend to specialize the expansion of the rnf sector increases demand for most inputs including agricultural land finally we show that smaller farms tend to be more efficient and that rnf output is helping the farm household to become more efficient but the latter result is not robust

wage functions and occupational selection in a rural less developed country setting economists are just beginning to develop empirical knowledge about the basic relationships that determine the distribution of incomes and allocation of resources in the poor rural regions of the world understanding interactions between agriculture and the rest of the economy is particularly important in this context this paper empirically investigates the allocation of human resources between farm work and other jobs and the compensation received by individuals for their work in agriculture and elsewhere specifically two related tasks are undertaken in this paper 1 the estimation of wage functions and 2 the estimation of functions determining the allocation of time among occupations there have been a series of papers which estimate the earnings function using data from poor countries for examples see blaug 1974 chiswick 1977 and valdes 1971 however this study focuses not on total earnings but on the wage rates a person may earn in labor market work because the wage rate is the relevant price of time for many allocative decisions for example in dividing the work year between self employed farming and work as an employee off the farm a key price is the potential wage rate the person can earn in the labor market for discussion and evidence on this issue see sumner 1978 recently a few studies have appeared which illustrate the importance of understanding potential wage variations across individuals in less developed countries rosenzweig 1978 uses wage estimates from aggregate indian data in a model determining the impact of land reform bardhan 1979 develops wage functions from a sample survey in rural india as a step in estimating labor supply for rural households kusnic and davanzo 1980 use wage functions to impute potential incomes and to measure the full income distribution these previous studies illustrate the importance of understanding the determinants of market wages the present paper develops wage functions in more detail focusing especially on industrial differentials in many rural areas employment opportunities may be usefully categorized into 1 self employment mainly on small farms 2 work for wages on large farms and 3 work for wages in non farm industries the combination of selfemployment and work as an employee is also important in many rural areas in both rich and poor countries this paper examines the impact of personal characteristics on the choice to participate in work for wages and on the choice of industry these estimates also form a basis for studying industrial wage differentials tentative estimates of the dependence of participation on expected wages are also presented below the empirical analysis in this paper is based on a 1974 sample of five villages in central guatemala see corona 1978 and stein 1978 one village petapa is larger richer and more urban than the others it lies south of guatemala city within commuting distance of the capital the other villages are outside the capital city region the population sampled is almost exclusively ladino spanish culture as opposed to indian data are available on the earnings hours of work industry age schooling literacy and village of 1 005 male heads of households approximately one third of the sample work as both self employed farmers and hired workers and most of these men work on fincas large plantations another quarter of the sample work as self employed farmers and do no work for wages the suburban village has mostly nonagricultural workers whereas the four other villages have predominantly farmers and farm employees in received for publication june 21 1979 revision accepted for publication december 31 1980 north carolina state university research on this paper began while i was a rockefeller foundation supported post doctoral fellow in the labor and population group of the economics department of the rand corporation and continued at north carolina state university supported by the agricultural research service at rand robert newman served as my research assistant and at n c state james cochell provided able assistance i have benefited from the comments of colleagues at both institutions and from members of the labor economics workshop at the university of north carolina at chapel hill i also thank two anonymous referees for useful suggestions this is paper number 6558 of the journal series of the north carolina agricultural research service raleigh n c

the effects of public sector hiring and compensation policies on the egyptian labor market this article examines the combined impact of the employment guarantee for graduates and public sector compensation policies on the egyptian labor market besides contributing to an unsustainable rate of growth in the government labor force these policies have encouraged queuing for government jobs contributed to high graduate unemployment rates and reduced the employment of graduates in the private sector despite substantial wage erosion in the public sector in recent years government wages when appropriately corrected for observed heterogeneity and sample selection are on a par with or higher than private sector wages especially for graduates when combined with the more desirable nonwage aspects of government jobs these compensation levels explain the attractiveness of public sector employment to graduates government pay scales are especially advantageous to female secondary school graduates who appear to face considerable discrimination in the private sector

gary becker s contributions to economics from his first published work gary becker has consistently strived to extend the domain of economic analysis his interest is in social science broadly defined and he is convinced that economic theory in its established neoclassical form provides the best set of tools for analysing social science questions when he finds an interesting problem on the borderland of what is conventionally thought of as economics and that is where he is looking for his problems he is not worried that he is trespassing on the traditional grounds of sociologists political scientists lawyers anthropologists or biologists on the contrary he clearly delights in showing how economic theory can be brought to bear on such problems he is of course not alone in trying to extend the borders of economics many other scholars have contributed to the movement which some have characterized as economic imperialism becker is one of the most outstanding of the imperialists this review of his work is organized in accordance with the main topics on which becker has worked chronologically his work on the economics of discrimination which grew out of his doctoral dissertation comes first next in order come his fundamental contributions to human capital theory he was also one of the founders of the so called new theory of consumption which is no longer so new and he has made important contributions to the economic study of crime and punishment and to the economics of political decision making some of his most original work is in the economics of the family where he provides economic explanations of such questions as marriage divorce and procreation after the topic by topic review of becker s contributions i will try to provide a more general evaluation of his work and to characterize it more fully in terms of research traditions and methodological attitudes

education labor supply and market development in rural peru summary research suggests that education has a limited effect on subsistence farm productivity yet rural incomes include more than farming as households diversify their income portfolios furthermore education may affect the number of labor hours supplied utilizing data from peru this paper finds that farm households benefit from more education by finding more lucrative opportunities characterized by fewer hours the extent to which this is possible depends on how well local markets are developed since education policy takes time to yield returns policy makers have an additional tool at their disposal improving market access will also increase the returns to education

family ties and labor markets in the united states and brazil we use comparable surveys from brazil and the united states to examine vertical and horizontal connections between families motivated by a model of assortative mating and intergenerational transmission of schooling and earnings we include the schooling of relatives in male wage equations we find that the effect offather in law s schooling is larger than the effect offather s schooling in brazil while the opposite is observed in the united states we interpret these effects as indicators of unobservable worker characteristics with differences in assortative mating and female labor market activity explaining the differences in the apparent effect of fathers and fathers in law in the two countries

decomposing the gender gap in cognitive skills in a poor rural economy girls lag markedly behind boys in education in many developing countries which may slow economic growth and increase inequity this paper uses indicators of the output of the education production process cognitive skills to characterize and to investigate the determinants of the large educational gender gap in rural pakistan local school availability accounts for about a third of the total cognitive achievement gender gap and over two fifths of that in numeracy which implies that policies that increased local school availability for girls could reduce substantially the gender gaps in cognitive skills to further reduce these gender gaps will require policies that focus on the demand side of the market where our results suggest the response to modest changes in incentives may be high

whose education matters in the determination of household income evidence from a developing country the plan of this article is as follows section ii discusses the data used and presents a few descriptive statistics on headship in ghana and labor activities of ghanaian households section iii presents three simple paradigms about whose education matters in regression models of household income this section also describes the composition of household income and proposes the appropriate explanatory variables for estimation section iv describes the estimation methodology consistent estimates for the farm and off farm income functions are obtained by using j l powells censored least absolute deviations estimators standard errors are obtained by using a bootstrap methodology that mimics the two stage sample design section v contains a summary of the estimation results most notably the results suggest that the allocative effect is the largest effect for total income while the productivity effect appears to dominate when considering farming and nonfarming activities separately all specifications of household income and its components reject the use of the minimum level of household schooling as well as the schooling level of the head of the household section vi provides some concluding comments excerpt

an empirical note on the impact of the federal budget deficit on ex ante real long term interest rates 1973 1995 this study investigates the impact of the u s federal budget deficit on ex ante real long term interest rates in the u s using quarterly data for the period from 1973 through 1995 the study adopts a loanable funds model two stage least squares estimates reveal that the federal budget deficit acted to elevate the ex ante real long term interest rate on ten year u s treasury notes moody s aaa rated corporate bonds and moody s baa rated corporate bonds

school quality and returns to education of u s immigrants using the u s labor market as a common point of reference this article investigates the influence of source country school quality on the returns to education of immigrants based on 1980 and 1990 census data we first estimate country of origin specific returns to education results reveal that immigrants from japan and northern europe receive high returns and immigrants from central america receive low returns next we examine the relationship between school quality measures and these returns holding per capita gdp and other factors constant immigrants from countries with lower pupil teacher ratios and greater expenditures per pupil earn higher returns to education

the tax rate induced bond substitution hypothesis and the traditional textbook treatment of the relationship between tax free and taxable bond yields abstractthis empirical study posits and tests the tax rate induced bond substitution hypothesis wherein the propensity for bond buyers to substitute tax exempt municipal bonds for taxable bonds

incentives allocation and labour market reforms during transition the case of urban china 1986 1990 has the reform process in china resulted in the introduction of incentives directed at a more efficient allocation of resources using data on individual earnings in urban liaoning province for the period 1986 1990 and a wage equation approach we address this issue in the context of labour market reforms focusing specifically on returns to education our results indicate that failure to address the issue of endogenous selection of more able individuals into state owned enterprises soes can severely bias returns downwards unlike in soes returns in collective owned enterprises coes increased the latter having been allowed to grow out of the plan more quickly and subject to more competition in factor and product markets we conclude that decentralization without competition is unlikely to result in the introduction of an efficient incentive mechanism the more administratively determined regular wages are one avenue for increased returns we find evidence of differentiated bonuses in coes but

changes in the returns to education in costa rica abstract i document patterns in the returns to education in costa rica from 1976 to 1992 the most important change during this period was that from the late 1970s to the mid 1980s the return to education fell by about one fourth i construct demand and supply indices within a fixed manpower requirements framework to estimate demand and supply shifts i find a significantly positive relationship between measures of demand for education and a significantly negative relationship between measures of supply for education these findings suggest that calculations based on the returns to education such as the returns to social investments in education must take into account future changes in the returns to education as supply and demand conditions develop

banking a survey of recent microeconomic theory this paper surveys the recent developments in information economics in so far as they relate to banking and financial intermediation attention is restricted to microeconomic issues banks are seen as institutions that by gathering and processing information can reduce transaction costs and induce more efficient allocations separate sections of the paper deal with the bank borrower relation the bank lender relation competition between banks and the comparison between bank finance and market finance the paper concludes by discussing the implications of the recent theory for the regulation of the banking sector copyright 1994 by oxford university press

intertemporal diversification in financial intermediation abstract this paper examines the incentive problem between a bank and depositors or deposit insurer limited liability makes risk shifting lucrative we show how intertemporal diversification of lending decisions i e bank s loan portfolio consists of overlapping long term loans and is thus gradually renewed may solve the incentive problem of risk shifting a new or expanding bank sets a high equity level and acquires depositors confidence subsequently it can allow its equity to depreciate to a permanently lower level depositors can control the bank by monitoring equity and realized credit losses ex post they do not have to monitor bank s lending choices ex ante maturity mismatch illiquidity of long term loans and liquidity of deposits is optimal the analysis can be extended more generally to the borrower lender relationship

asymmetries in the union wage premium in ghana the article uses a matched employer employee data set for ghana and adopts a quantile regression approach that allows the effects of unionization to vary across the conditional wage distribution it is shown that if there are intrafirm differences in unionization there does appear to be a premium among poorer paid workers in the formal sector although this cannot be given a causal interpretation it suggests important issues about how unions may affect one part of the labor market

schooling and economic growth a king rebelo experiment with human capital abstract education is added to the standard neoclassical growth model by calibrating a human capital technology to the empirical evidence on schooling simulation experiments patterned after king and rebelo 1993 american economic review 83 908 931 are conducted when agents act as if they are infinitely lived interest rates are too high and the rise in school spending is too weak over the transitional growth path when schooling is inefficiently low due to binding intergenerational credit constraints interest rates deviate only moderately from the steady state level and the historical rise in school spending is fully explained

immigrant selectivity and wages the evidence for women in an effort to extend the analysis of selectivity to female immigrants this paper examines the impact of economic conditions at the time of migration on the subsequent wages of foreign born women in the united states in addition the variables chosen to describe the migration decision have been expanded to include the effects of household status and immigration policy these results are compared to previous results for men and provide additional evidence about how the context of the migration decision affects the subsequent success of immigrants in the united states the sample for this project comes from the april 1983 current population survey and consists of married native and foreign born women between the ages of 16 and 64 excerpt

why do diplomas pay an expanded mincerian framework applied to mexico we compare four explanations for the value of diplomas each of which has implications for unemployment and wage variation amongst graduates most of which have not previously been tested for when seeking to explain the effects of diplomas we test for these implications using a refined econometric framework exploiting idiosyncrasies in mexican labour market and educational institutions premiums in mexico appear to result from diplomas tied to jobs with downwards rigid wages an uncommon but simple explanation the standard explanations including screening are not suggested by mexican data our results illuminate how labour markets segmented by diplomas clear this depends upon the nature of the labour market rigidities exactly as predicted by neoclassical theory

farmer education and farm efficiency in nepal the role of schooling extension services and cognitive skills this paper reports on the analysis of data from nepal the farm households surveyed were chosen so that about half were in a region exposed to the newly introduced training and visit t v extension service while the other half were exposed to less intensive traditional extension services thus in addition to providing information on the mechanisms of education s effects on efficiency this study evaluates the impact of t v extension as introduced in nepal our study finds a positive effect of education on efficiency for the three major crops but only with wheat was the effect statistically significant at standard levels there is definite evidence of a threshold level of education 6 years below which education s impact is small and above which the effect is important the effect of education on efficiency is important only for adapting to changing circumstances we found no evidence that education s effects should be attributed even in part to family background correlates or to a measure we had of ability the farmer s numeracy did affect productivity in wheat production our measures of modernity and agricultural knowledge were uncorrelated with efficiency

heterogeneity in returns to schooling econometric evidence from ethiopia this paper investigates whether returns to schooling in ethiopia vary across the wage distribution of individuals to do so it adopts an instrumental variables quantile regression framework that allows for both endogeneity of schooling resulting from unmeasured ability and possible heterogeneity in the impact of schooling the empirical estimates indicate that education contributes more to the earnings of individuals at a lower end of the income distribution

poverty and the political economy of public education spending evidence from brazil a large body of literature has emphasized the elite capture of democratic institutions as the explanation for the low levels of spending on public education in many low income democracies this paper provides an alternative to that longstanding hypothesis motivated by new cross country facts and evidence from brazilian municipalities we hypothesize that many democratic developing countries might invest less in public education spending because poor decisive voters prefer the government to allocate resources elsewhere one possible explanation is that low income voters could instead favor redistributive programs that increase their incomes in the short run such as cash transfers to test for this possibility we design and implement an experimental survey and an incentivized choice experiment in brazil the findings from both interventions support our hypothesis

factors affecting the transmission of earnings across generations a quantile regression approach in this paper we estimate intergenerational earnings mobility models using quantile regressions quantile regression is a less restrictive estimation approach than more commonly used methods such as ordinary least squares and instrumental variables which only estimate the mean effects of intergenerational earnings correlation further we investigate the role of education as an intergenerational transmission mechanism for earnings we find that the intergenerational earnings correlation is greater at the bottom of the son s conditional earnings distribution than at the top and that controlling for son s education reduces the intergenerational earnings correlation we also find that education is relatively more valuable at the bottom of the conditional earnings distribution and thus tends to compress the distribution

are experience and schooling complementary evidence from migrants assimilation in the bangkok labor market abstract this paper models the assimilation process of migrants and shows evidence of the complementarity between their destination experience and upon arrival human capital bayesian learning is assessed using panel data of wages from bangkok thailand it is found that i schooling returns are lower for migrants than for natives ii the accumulation of destination experience raises wages for migrants iii the experience effect is greater for more educated agents and iv the complementarity increases as destination experience accumulates the results imply that more educated migrants have higher learning efficiency and can perform tasks of greater complexity ultimately yielding higher wage growth in the destination market

risks and rewards gary becker s contributions to economics gary becker is one of the most original and influential economists of our age his originality lies in extending the frontiers of economics and broadening the range of important social science problems that are amenable to economic analysis he has gone against the grain of establishment thinking in the economics profession invariably choosing to work on problems that were considered beyond the boundaries of modem economics yet this work made close contact with many of the great economists of the past and many of the concepts he invented and developed are now widely if not routinely used in modem economics several of the approaches to problems he pioneered have evolved into fields and specialities in their own right that becker has had an immense intellectual impact and influence in the economics profession is supported empirically by the voluminous citations to his work over the years and in other ways obviously citation counts have well known difficulties and cannot prove anything by themselves but if used in conjunction with more fundamental evidence they do have the virtue of being quantifiable marshall medoff s 1989 1 recent citation study is one of the best available because citations are weighted by the importance of the journals in which articles appear among non nobel prize economists working in u s universities under 65 years of age becker ranks first in total citations over the 1971 85 period to which medoff s study refers and he is first by a very wide margin though the study is limited to economists in the united states it is clear that becker would rank at or very close to the top of any worldwide list furthermore becker s work is virtually all substantive economic analysis hardly any of it is devoted to the development of methodological tools or to surveys both of which gamer citations more easily and many concepts

education and off farm work an investigation is presented of the determinants of educational selectivity in a framework that emphasizes the coordination of household members sectoral time allocation is based on members comparative advantage which in turn depends on the utilization and returns to schooling in the farm and nonfarm sectors central to the model is a knowledge spillover hypothesis that workers who participate in off farm work may still contribute knowledge to farm management estimation of the model is based on cross sectional chinese farm household data collected in 1990 from 204 households in sichuan province it is concluded that schooling does not enhance labour productivity when carrying out routine tasks that the contribution to farm efficiency by the most educated members is not affected by their non farm participation and that schooling increases labour market wage rates these empirical results give comparative advantage for the better educated farmers to work off the farm

education as a deterrent to crime education conveys a civic externality a benefit to society over and above the benefit to the student in enhancing his future earning power students are taught not only to be productive but to be law abiding and loyal to their country the civic externality is incorporated into an anarchy model where people choose to be farmers or bandits and schooling inculcates a distaste for a life of crime estimates of the return to education are biased down when the civic externality is overlooked public schooling can sometimes convey public benefits that private schooling even with a voucher scheme cannot

trust membership in groups and household welfare evidence from kwazulu natal south africa unfortunately these two literatures have remained largely unconnected the group and network literature concludes that participation has important economic benefits even when the stated function of the group is noneconomic in most cases however the mechanisms by which groups and networks achieve this are unclear the determinants of trust and participation in groups literature highlights the importance of income and social homogeneity what remains less understood is whether and how trust can be generated for example via participation in groups this article links the empirical literatures referenced above by exploring the relationship between membership in groups and trust specifically using longitudinal data from kwazulu natal province south africa we examine 1 the importance of trust in the decision to join groups 2 the subsequent ability of groups to generate trust and 3 the effect of group membership and trust on a measure of well being per capita household income in addition we disaggregate groups into financial and nonfinancial and we categorize trust in people by agent or actor therefore we can explore whether trust in different kinds of actors is important for participation in different kinds of groups and whether participation in different kinds of groups is important for generating trust in different kinds of actors excerpt

education experience and earnings in the labor market of a developing economy the case of urban khartoum abstract this paper examines the relevance of the human capital approach to explaining the variance in workers productivity and earnings in the labor market or urban khartoum the analysis produces two principal findings first the rate of return to education in sudan is relatively low compared with the rate of return in other developing countries perhaps a reflection of poor quality of education in the sudan second while returns to primary education are lower than average returns to college education are higher this creates an interesting paradox because the sudan educates a higher percentage of children at the secondary and tertiary levels than most sub saharan african countries the most likely explanation is that the emigration of skilled manpower to other arab states combined with an influx of unskilled labor into khartoum has created a situation where skilled manpower is relatively scarce the paper also examines the temporal relationship between education and the labor market and identifies how sudan s rapid expansion of the education system has led to the filtering down of the educational qualifications and job competition a process that may well stimulate dynamic growth throughout the economy

education employment and earnings of secondary school and university leavers in tanzania evidence from a tracer study this study uses a tracer survey of secondary school completers in tanzania to analyse the impact of educational qualifications on labour market earnings we show that the rates of return to the highest educational qualifications for wage employees are not negligible and at the margin provide an investment incentive however we find little evidence of human capital effects in the earnings determination process for the self employment sector introducing controls for father s educational background and a set of school fixed effects designed to proxy for school quality and potential labour market network effects reduces the estimated rates of return to educational qualifications a comparison of our results with the available evidence from other countries in the region suggest that despite an extremely small secondary and university education system the private rates of return to education in the tanzanian wage employment sector are comparatively low

does cash crop adoption detract from child care provision evidence from rural nepal this document addresses the issues of agricultural commercialization using data from fieldwork conducted in nepal it aimed to examine the impact of a project designed to commercialize vegetables and fruit the vegetable and fruit cash crop program vcf on male and female time allocation the goal of vfc program was to increase the commercial production of vegetables and fruits in farm households that were heavily dependent on the production of cereal and livestock for home consumption findings from multivariate analysis suggest that for households with one preschooler vfc participation results in more time to agricultural production of the cash crop for both men and women but also a decrease in care time to preschoolers from both men and women meanwhile for households with more than one preschooler this trade off is not so apparent the analysis also suggests that behavior change initiatives to protect time to child care might be feasible in that vfc participation does not decrease the overall nonwork time of men or women with preschool children in residence

wage inequality and the distribution of education abstract this paper analyzes the relationship between education and wage inequality in metropolitan brazil the study is based on data from ten brazilian annual household surveys pnads which are available for the period 1976 1986 the universe of analysis is limited to occupied prime age males the inequality measure used was theil s second measure which is analytically convenient for a study of the determinants of inequality it is shown that there exist sharp differences in wage inequality across metropolitan areas to identify whether these large regional differences in inequality are directly associated with differences in educational levels or with differences in the steepness of the wage education profiles some simulations are conducted the results indicate that regional differences in the distribution of education are not able to explain much of the regional differences in wage inequality as a matter of fact the differences in wage inequality were shown to be intrinsically associated with differences in the steepness of the wage education profiles

schooling and earnings distributions with endogenous labour force participation marital status and family size this paper investigates the impact of various schooling investment strategies on family and per capita earnings within a framework that integrates effects on earnings family size marital status and labour force participation data are from a 1977 1978 survey of urban nicaraguan women aged 15 45 excerpt

credit constraints and human capital accumulation in the open economy abstract this paper analyzes the implications of capital market imperfections for understanding the causes and consequences of international trade credit constraints in financing education and exogenous income distribution affect patterns of comparative advantage and are crucial in determining the impact of international trade unlike the standard results in the trade literature in the model here trade liberalization in a skill scarce country leads to higher investments in human capital

distribution and growth cross country evidence an endogenous growth model is presented to examine the determinants of economic growth and income distribution and their relationship three major findings from a cross country analysis of 45 countries are 1 a higher level of educational attainment of the labour force has an equalizing effect on income distribution while the larger the dispersion of schooling among the labour force the greater the income inequality 2 human capital investment as well as physical capital investment are significant factors contributing to economic growth and 3 income inequality has a negative effect on economic growth supporting the existence of a complementary relationship between equity and growth

education earnings and the canadian g i bill canadian second world war veterans benefited from an extensive educational pro gram similar to the u s g i bill because of differences in military enlistment rates how ever a much lower fraction of quebec men were eligible for these benefits than men from other provinces building on this fact we analyse inter cohort patterns of education and earnings for english speaking men from ontario using french speaking men from quebec as a control group we find that the instrumental variables estimates of the return to school ing are typically as big or bigger than the corresponding ols estimates jel classification j24 i21

a simple model of the taxable and tax exempt yield curves i examine the anomalous behavior of the taxable and tax exempt yield curves long municipal yields appear too high relative to the equivalent after tax yield that can be earned in treasury or corporate bonds i discuss existing explanations of the problem and propose a simple model that relates the yields of taxable bonds to the yield curve for par tax exempts the ratio of the tax exempt yield to the taxable yield increases with maturity in the model so it is consistent with observed phenomena such as inverted yield curves for taxables and contemporaneous rising yield curves for tax exempts statistical and descriptive comparisons between the yields predicted by the model and observed yields on par bonds that the model has some promise in explaining the apparent anomalies in the behaviors of the two yield curves article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

nobel lecture the economic way of looking at behavior an important step in extending the traditional theory of individual rational choice to analyze social issues beyond those usually considered by economists is to incorporate into the theory a much richer class of attitudes preferences and calculations while this approach to behavior builds on an expanded theory of individual choice it is not mainly concerned with individuals it uses theory at the micro level as a powerful tool to derive implications at the group or macro level the lecture describes the approach and illustrates it with examples drawn from my past and current work

returns to investment in education a global update the author updates compilations of rate of return estimates to investment in education published since 1985 and discusses methodological issues surrounding those estimates some key patterns among the three main levels of education primary education continues to exhibit the highest social profitability in all world regions private returns are considerably higher than social returns because of the public subsidization of education the degree of public subsidy increases with the level of education which is regressive social and private returns at all levels generally decline by the level of a country s per capita income overall the returns to female education are higher than those to male education but at individual levels of education the pattern is more mixed the returns to the academic secondary school track are higher than the vocational track since unit cost of vocational education is much higher and the returns for those who work in the private competitive sector of the economy are higher than in the public noncompetitive sector and the returns in the self employment unregulated sector of the economy are higher than in the dependent employment sector controversies in the literature are discussed in the light of the new evidence the undisputable and universal positive correlation between education and earnings can be interpreted in many ways the causation issue on whether education really affects earnings can be answered only with experimental data generated by randomly exposing different people to various amounts of education given the fact that moral and pragmatic considerations prevent the generation of such pure data researchers have to make do with indirect inferences or natural experiments some have been attempted the author looks at the research on overeducation or surplus schooling the conclusions reinforce earlier patterns they confirm that primary education continues to be the number one investment priority in developing countries they also show that educating females is marginally more profitable than educating males that the academic secondary school curriculum is a better investment than the technical vocational tract and that the returns to education obey the same rules as investment in conventional capital that is they decline as investment is expanded