rafmacalaba/datause-encoder-data huggingface dataset:
| POLICY RESEARCH WORKING PAPER 2849

# Abstract

Using data collected **in** a survey on risk and social insurance in Chile, Packard finds that workers who entered the labor market after the pension reform of 1981 have a greater "contribution density" than those who contributed to the previous social security system. Further, the expectation of care from children and the amount spent on their education significantly lowers the likelihood of contribution to the pension system. Workers who have met the contributory requirements to qualify for the minimum pension guaranteed by the government are significantly less likely to continue making contributions. The likelihood of contributions beyond the eligibility threshold being lowered further, the greater the market rental value of respondents' homes. Furthermore, individuals with a greater tolerance for risk contribute, suggesting that there are retirement security investments **in** Chile that are perceived as relatively less risky than saving in the reformed pension system. The results indicate that housing could be one such investment.

This paper-a product of the Human Development Sector Unit, Latin America and the Caribbean Region-is part of a regional study on social security reform. Copies of the paper are available free from the World Bank, 1818 H Street NW, Washington, DC 20433. Please contactTruman Packard, room 17-151, telephone 202-547-5841, fax202-614-0832, email address tpackard@worldbank.org. Policy Research Working Papers are also posted on the Web at http://econ.worldbank.org. May 2002. (74 pages) _The Policy Research Working Paper Series disseminates the findings of work In progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished The papers carry the names of the authors and should be cited accordingly The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors They do not necessarily represent the view of the World Bank, its Executive Dtrectors, or the countries they represent_ Produced by the Research Advisory Staff
# **Impact of Oil Price Fluctuations on Financial Markets Since 2014**

1/24/2017 Ha Nguyen<sup>1</sup> The World Bank <u>hanguyen@worldbank.org</u> Huong Nguyen Tufts University <u>huong.nguyen@tufts.edu</u> Anh Pham George Mason University <u>apham16@gmu.edu</u> JEL: G15; Q41 Keywords: Oil prices, financial markets

> 1 We are grateful to Maya Eden, Roberto Fattal Jaef, Grace Li, Aart Kraay, Minh Thi Nguyen, Luis Serven and seminar participants at the World Bank and the IMF for comments and feedback..

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**Table 3: Infant and child mortality by birth cohort, location and education of the mother**

||**Survived first**|**Survived first**|**Survived first**|**Survived first**|**Survived first year**|**Survived first 5**|
|---|---|---|---|---|---|---|
||**year**<br>**Birth cohort**|**year**<br>**Urban**|**year**<br>**Rural**|**year**<br>**Mother**|**Mother < secondary**|**years**|
|||||**Secondary**|||
|70-74|0.871|0.867|0.872|0.8557|0.8724|0.7865|
||[0.0091]|[0.0231]|[0.0099]|[0.0414]|[0.0093]|[0.0112]|
||1334|216|1118|73|1261|1334|
|75-79|0.852|0.839|0.854|0.8874|0.8506|0.7806|
||[0.0071]|[0.0202]|[0.0075]|[0.0269]|[0.0073]|[0.0082]|
||2490|328|2162|138|2352|2490|
|80-84|0.902|0.935|0.896|0.9372|0.9|0.8669|
||[0.0035]|[0.0078]|[0.0039]|[0.0130]|[0.0037]|[0.0041]|
||6805|997|5808|344|6461|6805|
|85-89|0.912|0.944|0.907|0.9417|0.91|0.8848|
||[0.0029]|[0.0064]|[0.0032]|[0.0108]|[0.0030]|[0.0033]|
||9067|1258|7809|467|8600|9067|
|90-94|0.902|0.932|0.898|0.9278|0.899|0.8762|
||[0.0027]|[0.0063]|[0.0030]|[0.0079]|[0.0029]|[0.0030]|
||11714|1585|10129|1071|10643|11714|
|95-99|0.904|0.9117|0.903|0.9466|0.898|0.8921|
||[0.0031]|[0.0081]|[0.0033]|[0.0070]|[0.0034]|[0.0033]|
||8760|1224|7536|1007|7753|8760|

Standard errors in brackets, with sample sizes.

**_Source_ :** From birth histories, Cambodia Demographic and Health Survey (2000).

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the factories included in this paper, the highest-skilled operators earn approximately 10,000 Taka per month (about 125 USD at the time of the surveys).<sup>16</sup> Established supervisors on average earn approximately 14,000 Taka per month (about 175 USD). Note, however, that the income increase for newly promoted supervisors is smaller, as I find below.

Previous work has found that women in the garment industry already possess a higher level of bargaining power than the average Bangladeshi woman (Asian Center for Development, 2015; Heath and Mobarak, 2015). There has been impressive progress in Bangladesh towards gender equality in the decades coinciding with the growth of the garment industry, and it has been argued that work in the sector has enabled women to have more say in decision-making in the household and to be more visible in the public sphere.<sup>17</sup> Since this paper is focused exclusively on women already working full-time outside the home in the garment industry, it is not immediately obvious whether women’s promotions to managerial positions can a priori be expected to have an additional positive effect on these women’s bargaining power in the household, considering the high initial bargaining power.

# **3 Study design and empirical strategy**

## **3.1 Promotion program**

I exploit variation created by a promotion program for women in the Bangladeshi garment industry, during which selected women were assigned to trial as production line supervisors for at least two months. The impacts of the program on factory outcomes are analyzed in Uckat and Woodruff (2020). The way in which female production line operators were selected for the program allows me to compare household outcomes of new female supervisors to outcomes of female operators who were short-listed for the program but did not make the cut because of space constraints.

Only skilled and experienced operators were considered for the program in which 27 large Bangladeshi garment factories participated. At the beginning of the program, the factories provided a ranking of female operators that they wanted to consider for new supervisor positions. Factories were instructed that those operators had to fulfil pre-set eligibility criteria in five areas.<sup>18</sup> These criteria mean that all short-listed women were skilled production line operators with significant experience in the garment industry and more than primary education. Factories also asked for eligible operators to be interested in becoming a supervisor and to have a family that supported this interest, though how exactly these criteria were implemented was up to the individual factories.

> 16These numbers represent net pay, which includes basic pay, overtime pay, and all allowances, minus any deductions, e.g. for absences.

> 17See e.g. The World Bank (2008) for a review of this progress and the drivers.

> 18See Panel A of Table C.1 in the Online Appendix for more details on these criteria and the diagnostic tests.

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Another study, by Dissou and Sun (2013), assesses the employment implications of carbon mitigation policies with labor market rigidity in the Canadian economy. They use tradable permits as policy instruments to reduce emissions and analyze the effects of different revenue-recycling options. They represent real-wage rigidity in the labor market using a wage curve and consider low-skilled and high-skilled workers, with the real wage rates of both types of workers being rigid. Using a CGE model, they assess the welfare and employment dividends of reducing CO2 through a cap-and-trade system.<sup>11</sup> They examine four alternative simulation scenarios of recycling the permit revenue: revenue is recycled as a lump-sum transfer to households; revenue is used to reduce payroll tax rates on skilled labor alone; revenue is used to reduce payroll tax rates of unskilled labor alone; and revenue is used to reduce payroll tax rates of both types of labor. By pairing welfare and employment dividends from all recycling schemes by higher wage rigidity, their results suggest that higher labor market rigidity leads to a stronger negative effect on the economy in terms of welfare and employment. The authors find that carbon policies are costlier in the presence of labor market imperfections and the negative effects of those policies could be offset with an appropriate revenue-recycling scheme that reduces wage taxes. They highlight that the use of permit revenue to reduce payroll taxes is better than a direct transfer of that revenue to households, as the former option has a positive effect on the employment level and makes it possible for households to enjoy higher welfare.

# **D. Sectoral Rigidities**

Sectoral rigidities have been used to prevent sudden reallocation across sectors in response to mitigation policies in CGE models. Babiker and Eckaus (2006), using the MIT Emissions Prediction and Policy Analysis<sup>12</sup> model, based on the GTAP data set, is a prime example. The sectoral immobility of labor is characterized in the following ways. First, it is assumed that there exists an exogenously determined amount of sector-specific labor that is unable to leave the sector in the same period in which the demand for that

> 11 They consider a cap-and-trade system where CO2 emissions are reduced by 20 percent in comparison to the benchmark, and where all emitters are required to buy emissions permits and the cost of the permits increases the user price of fossil fuel.

> 12 For a more detailed description of the MIT Emissions Prediction and Policy Analysis model, see Babiker et al. (2001) and Paltsev et al. (2005).

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distributors as well as wholesalers. A simplified representation of these channels is presented in Figure 1.

Figure 1. _A simplified representation of pesticide marketing channels in Bangladesh_ <!-- Start of picture text --> Pesticide companies<br>Distributors Wholesalers<br>Retailers Farmers<br><!-- End of picture text --> The survey, conducted in the summer 2003 by the World Bank, interviewed 110 pesticide traders (more or less equally divided between wholesalers and retailers) across 7 districts of Bangladesh. Table 1 and Figure 2 display the district distribution of traders in our sample. The survey collected detailed information from traders, including: 1) the name, location and nature of the shop; 2) trader’s characteristic: age, ownership, nutritional status: weight/height; 3) pesticide log & sales: trade name, chemical name, content quantity, price, best selling pesticides; 4) traders’ knowledge of pesticides: information and training received on use and safe handling of pesticides; 5) precautions and damage-averting behavior; and 6) health effects.<sup>6</sup> To minimize reporting bias, the survey was implemented under the agreement that the team would not reveal the identity of the trader companies surveyed on the respondents who participated.

> 6 The survey was designed and supervised by the World Bank team, and conducted by the Development Policy Group in Bangladesh.

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(2.3) must also be indexed by country _i_ , or It is well known that xed-eect least squares estimators of dynamic panel models (also called least squares dummy variables estimator, or LSDV) lead to inconsistent estimates when the time dimension _Ti_ is short and xed, even if the cross-section dimension _N_ increases to innity (Nickell, 1981). As _Ti_ grows large, however, the bias decreases and disappears as _Ti_ goes to innity. In practical terms, however, _Ti_ of the order of 20-30 is usually enough to make the bias small. The basic data set used in this paper includes 76 low income countries with data going back to 1971. The panel, however, is unbalanced. Thus, whether the sample is long enough is an empirical question. To cope with this issue, I implement a version of the bootstrap bias correction algorithm originally proposed by Pesaran and Zhao (1999) and recently extended by Tanizaki, Hamori, and Matsubayashi (2006), Everaert and Pozzi (2007), and Fomby, Ikeda, and Loayza (Forthcoming). The interested reader is referred to these papers for more details on the bias correction procedure.<sup>9</sup>

# 3.1 Data

The data consist of an unbalanced panel of 76 low income countries over the period 19712007 for which there is enough information to construct uninterrupted time series for the endogenous variables _Yit_ . Table 1 provides a list of the countries and the years for which there are data for the entire vector of endogenous variables. Data are obtained from the World Bank's World Development Indicators and the IMF's World Economic Outlook databases.

> 9Fomby, Ikeda, and Loayza (Forthcoming) implement and extend a version of the bias correction method proposed by Pesaran and Zhao (1999) to Panel VARs. In this paper, instead, I use an iterative procedure similar to those proposed by Tanizaki, Hamori, and Matsubayashi (2006) and Everaert and Pozzi (2007). The basic dierence between the two approaches is in the number of iterations in the bias correction algorithm: while Pesaran and Zhao propose a single iteration on the procedure, Tanizaki, Hamori, and Matsubayashi and Everaert and Pozzi propose iterating on an equation mapping regression coecients into updated regression coecients. The bias corrected estimator is the xed point of that equation.

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# **1 Introduction**

In modern economies, higher education is crucial to the formation of skilled human capital. Not only can higher education raise a country’s productivity; it can also lower income inequality. By subsidizing access to higher education, policymakers can contribute to these two roles. The question, of course, is how large a subsidy they should provide. Advocates of free college argue that policymakers should provide a full subsidy, resulting in zero tuition for students. While free college has existed for years in a number of countries,<sup>1</sup> free college proposals have sprouted recently in other countries, including the United States, Chile, and Colombia.

Free college advocates claim that only when college is free can it realize its promise, particularly that of lowering inequality. Given Latin America’s distinction of being the most unequal region of the world (World Bank 2016), many in the region view free college as the ultimate solution to persistent inequality and lack of social mobility. The existing evidence on government spending in higher education in the region, however, does not bode well for free college. As Figure 1 shows, countries in the region that finance a greater share of higher education spending do have higher enrollment rates (panel a) yet fail to have higher graduation rates (panel b).

**Figure 1: Higher Education Enrollment and Graduation by Public Spending Share in Latin America.**

<!-- Start of picture text --> 100 70<br>Mexico<br>Chile Argentina<br>80 60 Peru<br>Peru Paraguay Chile<br>60<br>Colombia 50<br>Costa Rica<br>Colombia<br>40<br>Paraguay Mexico 40 Argentina<br>El Salvador<br>20 Honduras El Salvador Costa Rica Honduras<br>30<br>Guyana<br>20 40 60 80 100 20 40 60 80 100<br>Share of public spending (%) Share of public spending (%)<br>a. Enrollment b. Graduation<br>Enrollment rate (%) Graduation rate (%)<br><!-- End of picture text --> _Source_ : UNESCO for 2017 enrollment rates (panel a); own calculations based on SEDLAC (household surveys) for 2017 graduation rates (panel b) and on UNESCO for 2017 share of public spending in higher education. _Notes_ : Panel a shows gross enrollment rate, defined as the ratio between higher education enrollment and the number of individuals ages 18-24. Panel b shows graduation rate, defined as the ratio of number of individuals ages 25-29 who have graduated from higher education, and number of individuals ages 25-29 who have ever started higher education. Share of public spending is defined as government spending in higher education relative to total higher education spending.

To capture this evidence and investigate the potential effects of free college, in this paper we develop a dynamic model of college enrollment, performance, and graduation. In the model, a college student faces risks that may prevent her from completing a class or remaining in college,

> 1Among the countries surveyed by OECD (2018), college is free at public institutions in Argentina, Brazil, Cuba, Czech Republic, Denmark, Ecuador, Estonia, Egypt, Finland, Germany, Greece, Iceland, Mexico, Norway, Panama, Poland, Slovenia, Sweden, Turkey, and Uruguay.

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e.a. (1992). If the PPWWS was in fact incurred but not paid. it obviously would not have a moderating influence on wage settlements that managers granted. Whether the PPWW scheme in fact acted as a break nn wage settlements is obviously a hard question to answer categorically; we do not know what wage settlementis would have been without this scheme. But the evidence from our survey does not support the critical view of observers like Coricelli e.a. (1992).

Consider first the wage regression presented below (Table 9)- The equation estimates quarterly percentage wage increases in excess of peTTnissible percentage norm wage increases (defined exogenously under indexation) as a function of the percentage increase in real value added during the same quarter. the real increase in bank credit to the enterprise granting the wage increase- and, importantly, to the real. stock of ouEstandirn PPWNW liabilities (proxied by the cumulative excess of the wage bill over the norm since Januarv 1 of the ongoing calendar year upto the start of the quarter, divided by employment to eliminate spurious firm size effects). Significance of the latter variable (labeled LTX IEMPL irI the regression) would indicate that the PPWVW scheme indeed did contribute to wage restraint. In addition to results for the whole period. Table 9 below splts the sample period into to parts. the break point being 1991.4. when banking reform was introduced (described below during the discussion on banks).

The results are strong. Increases in the available surplus, as measured by the increase in real value added, did not have a si2nificanc impact in either period nor in the p_riod as a whole. Increases in the real value of available bank credit gets a positive and significanr cefficient in the period prior to the banking reform in 91.4 but switches sign and is almost significant at conventional levels from 1991.4 onwards. This confirms the suspicion often expressed that there was a wage-credit link prior to the banking reforms and is one indication (more will follow in Section _3.2)_ that banks simply provided. relatively open-ended funding before these reforms but tightened up significantly afterwards.

**_(WPC,- WPC)_** =a _+_ p **_l(LT)h_** _i+p,GVAPCZ.+ pf3BBPCi2 +eie._ **_EMPL_**
identifies their holders. The column "Not Held" refers to areas where the decision right did not exist altogether.

**Table 4.4: Centralized decision rights allocations governing public hospitals pre1996**

||_Ministry_<br>_:_**_of Financ_**|_Civil Service_<br>**_e I_**_Board_<br>|_Ministy_<br>**_I_**_ofHealth_|_Public_<br>_Hospitas_|_Not_<br>_Held_|
|---|---|---|---|---|---|
|_Finance_<br>||||||
|Solicitation of outsidefunds|||||X|
|Allocation of outside funds|||||x|
|Fee setting for services|||||x|
|Exemption policy|_||||x|
|Fee collection<br>|||I<br>X*|I<br>X*|I|
|Allocati**o**n<br>f fee revenue|||||x|
|**_Human Resource M_**<br>|**_a agement_**|||||
|Hiring||_X_||||
|Promotion<br>||X||**_**||
|Discipline|L|x<br>|I|||
|Firing|I<br>_|r<br>x|_|||
|<br>**_Procurement_**||||||
|Medical consumables<br>|1|_|X|||
|Other<br>consumables|_||x|X||
|Major medicalequipment|x||X|||
|Other fixed equipment|x||x<br>X|||
|<br>**_Service Delivery_**<br>||||||
|Range of services|||x|_||
|Quality control|||x|x|_|
|Community outreach|||||x|
|Coordination<br>with other<br>hospitals||I<br>|I||x|

Note: The presence of two Xs in one row indicates that a decision right was co-held.

*This decision right existed (and was co-held) but was generally not implemented.

Source: Author's construction based on Law #14969, Decrees #112, #8377, #325 and the discussion in Section 4.

# **5. Mapping of HDB decision rights reallocations, post-corporatization**

For each of the areas below, this section will describe: (i) the decision rights allocations adopted by HDB and; (ii) the manner in which decision rights were distributed to create complementarities in certain areas.<sup>25</sup> This part of the analysis will take into consideration decision rights changes considered, but not adopted and will evaluate why this occurred.

**25** To illustrate the notion of complementarity, take two types of assets, al and a2 (located in firm I and firm 2 respectively). These assets are strictly complementary either if access to al alone has no effect on the manager of firms I's marginal return from investment (i.e., if he needs a2 as well), or if access to a2 alone has no effect on the manager of firm 2's marginal return from investment (i.e., he needs al as well). Assets al and a2 are independent if access to a2 will not increase the manager of firm l's marginal return from investment if he already has access to al, and if access to al will not increase the manager of firm2's marginal return from investment if he already has access to a2. This paper adopts the same logic for decision rights complementarities.

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