rafmacalaba/datause-encoder-data huggingface dataset:
Table 2: Random Effects GLS Regression Results

|Rate of return to university education|Coefficient|SE|
|---|---|---|
|Economic growth|-0.679*|0.269|
|Economic growth-squared|-0.058*|0.031|
|Constant|24.790**|6.891|
|R squared within|0.02||
|R-squared between|0.81||
|R-squared overall|0.14||
|Number of observations|33||

Notes: (1) *p<0.1 and ** p<0.05. (2) Includes cluster-robust standard errors.

The interpretation of the random effects GLS regression coefficients is tricky since they include both the within-entity and between-entity effects. In the case of three-country data, the results represent the average effect of economic growth over returns to education when the returns change across time and between countries by one unit. Thus, we cannot use the coefficients for projections. Nevertheless, the fixed effects GLS results provide statistical evidence confirming the negative relationship between economic crises and the rate of return to university education.

For projections, we use the data from the crisis years of the 1990s and 2000s. Based on the simple analyses of percentage changes in the three countries, we can project that returns to university education will increase by 25 percent to 33 percent in the three countries during COVID-19. As mentioned earlier, the emerging data from the United States and Europe during COVID-19 provide further support for Schultz’s thesis: the unemployment rate for those with university degrees rose less than the unemployment rate for those without university degrees (Berube and Bateman 2020; Lund et al. 2020; Fuchs-Schundeln et al. 2020). These patterns are likely to be even stronger in low- and middle-income countries because of the larger differences in technology education provided in universities versus secondary schools. That is, university educated workers in low- and middle-income countries may be far better at adapting to work-from-home technologies or shifting to jobs that require technological skills compared to the secondary education graduates in their countries. Given the severity of the COVID-19 crisis, it is possible that the rates of return to university education will increase by even more than the levels suggested above.

# **5. Policy Implications and Conclusion**

If this increase in returns to university education persists beyond COVID-19, it will have profound implications on income inequality between those with and without a university degree. It will reflect that the incomes of university-educated workers will drop modestly while the incomes of less-educated workers will drop substantially. Research suggests that these widened income gaps persist and have inter-generational consequences on university attainment and income.

There are three possible policy actions. The first is to maintain government expenditure levels on education. The crisis is expected to lead to budget cuts, and education may lose out. This will jeopardize the gains that have been made globally in terms of access to 7
**<u>Table A1: Key household characteristics</u>**

||**Total**|**Qua**|**rtile of the w**|**ealth distrib**|**ution**|**Head’**|**s gender**|
|---|---|---|---|---|---|---|---|
|||**1**|**2**|**3**|**4**|**Male**|**Female**|
|**Head’s characteristics & size**||||||||
|Female head|0.32|0.52|0.36|0.24|0.17|0.00|1.00|
|Household size|4.68|3.79|4.51|4.94|5.48|5.20|3.58|
|Head’s age|49.78|53.42|49.51|48.47|47.69|46.99|55.62|
|Head with primary|0.87|0.92|0.90|0.88|0.79|0.87|0.85|
|Head with secondary/voc’l|0.10|0.04|0.07|0.11|0.17|0.10|0.11|
|**Asset endowments**||||||||
|Value of non-land assets, USD|297|8|29|79|1072|401|81|
|Owns land|0.94|0.92|0.94|0.95|0.95|0.95|0.92|
|Total land owned (ha)|0.68|0.31|0.43|0.76|1.22|0.78|0.46|
|**Income & its sources**||||||||
|Income from agric. (USD)|289|68|135|434|518|347|168|
|Head works in agriculture|1.00|1.00|1.00|1.00|1.00|1.00|1.00|
|Works off farm|0.12|0.20|0.16|0.09|0.04|0.12|0.12|
|Has non-farm business|0.25|0.12|0.22|0.27|0.40|0.30|0.16|
|... if yes, annual profit, USD|270|11|41|115|581|288|201|
|**Land market participation**||||||||
|Transacted in land|0.24|0.15|0.25|0.25|0.32|0.27|0.17|
|if yes, purchased|0.62|0.39|0.56|0.60|0.80|0.69|0.40|
|... if yes, size (ha)|0.12|0.06|0.08|0.10|0.20|0.14|0.05|
|if yes, inherited|0.46|0.66|0.50|0.48|0.30|0.39|0.67|
|... if yes, size (ha)|0.07|0.08|0.08|0.07|0.05|0.05|0.11|
|Transacted out land|0.28|0.27|0.29|0.27|0.30|0.29|0.27|
|... if yes, subdivision|0.29|0.32|0.29|0.31|0.24|0.26|0.34|
|... ifyes,size|0.18|0.13|0.15|0.19|0.25|0.19|0.15|
|No. of households|3348|839|831|835|834|2259|1078|

Source: Own computation from 2015 round of Rwanda Land Tenure Regularization Survey
Thomas, Alban, 1995, "Regulating Pollution under Asymmetric Information: The Case of Industrial Wastewater Treatment," J _of Environmental Economics and Management,_ vol. 28.

Pargal, Sheoli and David Wheeler, 1996, "Informal Regulation of Industrial Pollution in Developing Countries: Evidence from Indonesia," _J Political Economy,_ Vol. 104, 1996.

Pargal, S., H. Hettige, M Singh, and D. Wheeler, 1997, "Formal and Informal Regulation of Industrial Pollution: Comparative Evidence from Indonesia and the United States," World Bank Policy Working Paper #1797, 1997.

Pashigian, B. Peter. 1982, "A Theory of Prevention and Legal Defense with an Application to the Legal Costs of Companies ". _Journal of Law & Economics, Vol._ XXV, Oct 1982.

Porter, R.C, 1974, "The Long-Run Asymmetry of Subsidies and Taxes as Antipollution Policies," _Water Resources Research, Vol._ 10.

SEPA, 1994, Pollution Levy System, China Environmental Science Press.

SEPA, 1998, Proceedings of International Workshop on China's Pollution Levy System, China Environmental Science Press.

Shah, Farhed, David Zilberman and Erik Lichtenberg, 1995, "Optimal Combination of Pollution Prevention and Abatement Policies: The Case of Agricultural Drainage." _Environmental and Resource Economics_ 5:29-49, 1995.

Smith, J.B. and W.A. Sims, 1985, "The Impact of Pollution Charges on Productivity Growth in Canadian Brewing," _Rand Journal of Economics,_ vol. 16(3).

Wang, Hua, and David Wheeler. 1996. "Pricing Industrial Pollution in China." Policy Research Working Paper 1644. World Bank, Washington, D.C.

White, H. 1980. "A Heteroscedastic-consistent Covariance matrix and a Direct Test for Heteroscedasticity". _Econometrica:_ 48 817-838.

World Bank. 1997. _Clear Water, Blue skies: China's Environment in the New Century._ Washington D.C.

23
that returns to labor and capital are lower in agriculture than in non-agriculture. Labor allocation wedge starts at around 0.2 suggesting a 5-fold relative gap in favor of non-agricultural labor returns. This is a well-known characteristic of developing countries – low value marginal product in agriculture (see recent work by Restuccia, Yang and Zhu, 2008; Gollin, Lagakos and Waugh, 2012; and others). Interestingly, the gap remained relatively stable throughout our sample, showing a small increase only after 2005. This suggests some recent improvements in workers’ returns in agriculture, but the gap relative to non-agricultural workers remains significant.

**Figure 1.9: Sectoral Allocation Wedges Between Agri and Non-Agri**

<!-- Start of picture text --> 1990 1995 2000 2005 2010<br>wage rental rate<br>.8<br>.6<br>.4<br>.2<br><!-- End of picture text --> _Source_ : authors.

The wedge in the sectoral capital allocation shows more variability than the sectoral labor allocation wedge. It is around 0.6 in the early 1990s, increases to about 0.8 in the first half of the 1990s, but then shows a secular decline through the second half of the 1990s and early 2000s. During the 2004-2010 period the gap stabilizes at around 0.55 on average. This implies that, while volatile, the gap in average returns to capital remained in favor of non-agricultural sector.

Overall our results on sectoral labor and capital allocation wedges suggest that factor mobility remains limited in Paraguay, preventing the equalization of value marginal products across sectors. These frictions reduce efficiency and thus may contribute negatively to the performance of the Paraguayan economy.

# **7. Conclusions**

In this paper we document and analyze the sources of macroeconomic volatility in Paraguay during 1991-2012. We employ two approaches in our study. The first is a structural vector autoregression (SVAR) approach which allows us to assess the role played by both external factors and domestic shocks in driving GDP fluctuations in Paraguay using impulse response functions and variance decompositions. We find that external shocks, including shocks to terms of trade, world interest rate and foreign output, account for over 50 percent of aggregate GDP volatility in Paraguay, while
where <u>wjt</u> =<sup><u>1</u></sup> 2 � EXPEXPjtt<sup>+EXP</sup> EXP<sup><u>j</u></sup> t<sup>t</sup> �<sup>�</sup> 1<sup>1</sup> <u>�</u> is the average share of industry j in total exports over year t � 1 and t, while DV ARjt =<sup><u>1</u></sup> 2<sup>(DV ARjt + DV ARjt�1)isthesimpleaverageofindustry</sup> j’s DVAR over year t � 1 and t. Figure 3 shows that the increase in the aggregate DVAR over the sample period is all driven by within-industry increases in the DVAR rather than a between-industry reallocation of resources from the low-DVAR industries to the high-DVAR industries.

With these estimates, we further construct the bilateral DVAR with respect to China’s major trading partners. For each country-year, we compute the weighted average of the DVAR across industries, with weights equal to each industry’s share in total exports to the destination. Figure 4 shows that in all top 5 trading partners (i.e., the U.S., Hong Kong SAR, China, Japan, the Republic of Korea, and Germany), there is a clear upward trend in the bilateral DVAR. In particular, the DVAR of Chinese processing exports to the US has increased from 0.47 to 0.55 between 2000 and 2007.

# 3.2 Firm Heterogeneity and Aggregation Bias

How may ...rm heterogeneity a¤ect the aggregate DVAR estimates? In a nutshell, ...rm heterogeneity may lead to aggregation bias when the underlying sample used to construct the aggregate DVAR is not representative. This could happen if the following two conditions hold: (i) ...rm size is used as the sample selection criteria and (ii) there is a systematic relationship between ...rm size and import intensity.

The above two conditions may hold in the samples used to construct IO tables in general, and speci...cally for China. According to the United Nations Handbook of Input-Output Table Compilation and Analysis (1999, section V: Compilation of Production Accounts of Industries), the intermediate input consumption and input structure of large establishments could be applied to small establishments, given that they are often not covered by industry 14
renewables, as with CDM, is unlikely to significantly expand the deployment of decentralized renewable electricity sources under this scenario, although it could alter the speed with which large-scale power producers adopt renewable options for the grid.

# **5. Summary and Conclusions**

In this paper, we have tested the conventional view that renewable power remains too costly for large-scale applications in countries where poverty alleviation is the primary objective. To provide a more realistic test, we explicitly recognize the importance of spatial relations in power markets. Current power grids draw heavily on fossil power sources and are clustered in densely-populated areas, where fixed costs can be amortized over large numbers of consumers. However, the incremental cost of electric service rises rapidly as the grid is extended to settlements whose population falls along a standard rank-size distribution. In contrast, wind and solar power, exploitable in stand-alone units or minigrids, may be broadly distributed across rural areas. Diesel generator power is potentially available anywhere, at a cost that is affected by the distance from points of production or importation. Under these conditions, centralized grids are always subject to potential cost competition from local renewable or diesel power.

The implication is clear and cautionary: Generalizations about fossil power versus renewable power are inherently untrustworthy. Determining the scope for decentralized electricity production depends on information about the distributions of specific resources and populations, along with accurate representation of power production costs with alternative technologies, transmission costs, and distribution costs.

charge that rises over time. At present, most damages are in the relatively distant future and there are plentiful high-return opportunities for conventional investment. Investment should become more intensive in emissions reduction as climate-related damage rises, and rising charges will provide the requisite incentive to reduce emissions. The optimal “ramp” for charges depends on factors such as the discount rate, abatement costs, the potential for technological learning, and the scale and irreversibility of damage from climate change (Nordhaus, 2007a). These factors remain contentious, so it is not surprising that different studies establish very different ramps. Nordhaus’ preferred path begins at about $8/ton of CO2, rising to about $23/ton by 2050. Stern’s initial charge is 10 times higher -- $82/ton – and his ramp is steeper. IPCC IV (2007) cites a variety of studies whose initial values average $12/ton, distributed across a range from $3-$95/ton.

21
**23**

# IV. Searching for Determinants of Financial Intermediary Development

The last two sections presented evidence consistent with the view that financial intermediation exerts a positive, economically large impact on long-run economic growth. This section undertakes a limited **--** more speculative **--** search of potential legal and accounting determinants of financial intermediary development. **'9** This exploratory search shows that newly available information on particular features of national legal systems and accounting standards are closely associated with crosscountry differences in financial intermediary development. Alter describing the empirical measures of the legal and accounting environment, we study the connection between the legal environment and financial intermediary development and then trace this link through to long-run growth.

# **A. The legal and accounting environment**

This paper uses three indicators to characterize differences in national legal and regulatory systems: the legal rights of creditors, the soundness of contract enforcement, and the level of corporate accounting standards.<sup>20</sup>

**_1._** _Creditor rights_

> The ability of financial intermediaries to persuade firms to pay their loans differs across national

legal systems. Legal systems differ in terms of the rights of financial institutions to repossess collateral or liquidate firms in the case of default. Legal systems vary in terms of the rights of creditors to remove

> **19** Also, note that evidence on the determinants of financial intermediary development is informative regardless of

> causality. Financial intermediaries may affect business-cycles [Bernanke and Gertler **1989,1990;** Williamson **1987]** and North **(1981)** notes that understanding the evolution of key institutions, such as financial institutions, is critical for

> understanding the complex process of economic development.

> 20 The legal data are available for 44 countries in our sample. In section II, we did not use these as instrumental variables because legal codes, enforcement quality, and accounting standards may be influenced **by** economic development. Thus, we feel comfortable arguing **-** and specification tests did not reject this argument **-** that legal origin is an exogenous endowment. We feel a bit less comfortable arguing that economic growth does not affect accounting standards. Nonetheless, we employ these legal data as instruments below to show that particular features of the legal environment are

> strongly linked with both financial sector performance and long-run growth.
Table 2: PISA management index and student performance: Latin America

||(1)|(2)|(3)|(4)|(5)|(6)|(7)|(8)|(9)|
|---|---|---|---|---|---|---|---|---|---|
||**Readin**|**g PISA **|**points**|**Math**|**PISA p**|**oints**|**Scienc**|**e PISA **|**points**|
|Management Index|8.255|2.681|2.212|7.442|2.432|1.764|7.859|3.092|2.509|
||(1.610)|(1.252)|(1.008)|(1.576)|(1.230)|(1.039)|(1.421)|(1.144)|(0.973)|
||[0.000]|[0.032]|[0.028]|[0.000]|[0.048]|[0.089]|[0.000]|[0.006]|[0.009]|
|Private||56.807|31.921||55.695|32.589|0.000|55.428|33.077|
|||(3.301)|(2.956)||(3.713)|(3.121)||(3.735)|(3.327)|
|||[0.000]|[0.000]||[0.000]|[0.000]||[8.161]|[2.736]|
|_R-squared_|0.032|0.173|0.342|0.041|0.185|0.350|0.040|0.172|0.312|
|# Observations|78144|78144|78144|78144|78144|78144|78144|78144|78144|
|# Schools|3075|3075|3075|3075|3075|3075|3075|3075|3075|
|# Countries|8|8|8|8|8|8|8|8|8|
|Country FE|Y|Y|Y|Y|Y|Y|Y|Y|Y|
|School controls||Y|Y||Y|Y||Y|Y|
|Student controls|||Y|||Y|||Y|

Notes: Standard errors in parentheses, p-values in square brackets. OLS regressions for PISA were run with the student-level PISA dataset for 8 Latin American countries using the OECD’s repest Stata command. Standard errors clustered at the school level and use all 5 plausible values for each subject and _student final weights_ . All specifications include country fixed effects. School controls include school location, student-teacher ratio, log of the number of students, share of government funding relative to total school funding, and ratio of computers connected to the web as a proxy for school resources. Student controls include gender, grade, socio-economic status and immigration status. For control variables, missing variables are replaced with a value of -99 and we include an indicator variable with a value of 1 for each imputed value, for each variable with imputed values.

30
with weak contracting environments (Demirgüç-Kunt and Kane, 2002), public interest theory predicts that countries with poor contracting environments are less likely to have high levels of deposit insurance coverage. Since countries with poor contracting environments tend to have weaker banks, private interest theory predicts that countries with poor contracting environments are more likely to have high coverage levels, as a result of the lobby of the constituents representing these weak banks. As a proxy for the contracting environment in the country, we use an index of property rights from the Index of Economic Freedom developed by the Heritage Foundation. PROPERTY is the score of this index of property rights for the year 1999. The index ranges from 1 to 5 with a lower score indicating a better protection of private property. The score is based on the degree of legal protection of private property, the probability that the government will expropriate private property, and the country’s legal protection of private property. This broad index of property rights is available for a large set of countries and has been used by other researchers (e.g., La Porta, Lopez-de-Silanes, Shleifer, and Vishny, 1999).

Data on the adoption and coverage of explicit deposit insurance come from Garcia (2000), Demirgüç-Kunt and Sobaci (2001) and Laeven (2002b). Because the data are missing for a number of countries that recently adopted deposit insurance and because the data on coverage is outdated for a number of countries, we update and supplement the data for a number of countries using country sources (mainly deposit insurance laws obtained from central banks and official deposit insurance agencies). Our analysis will use two variables. The first variable, COVGDP, measures the size of deposit insurance coverage and is calculated as the ratio of coverage limit per deposit to GDP per capita at year-end 2000. We express coverage limits in terms of per capita GDP to enhance 16
# Research Components of World Bank Education Projects, since 1982.

|!Areatt<br>__|§Country and Loan/Credit<br>Number<br>_<br>__<br>___|rResea<br>A<br>_____|rch<br>Components<br>|<br>___<br>__<br>**_**__|Current<br>Status of Studies,<br>including<br>ov Corpleted Documents/Data<br>_<br>_<br>_________|
|---|---|---|---|---|
|ASIA|Bangladesh CR 1396-BD|1983|Second Agricultural<br>Training.<br>No research<br>component.|Confirmed.|
|ASIA|BangI rOesh CR 1318-BD|1983<br>1|Business Manaqeme_t Training and Education.<br>No<br>research components, although Bank funded<br> project<br>and case developments at institutions.|250case studies<br>and190research projects<br>underway.|
|ASIA|Bangladesh CR 1490-BD|1984|Technical Education.<br>No research conponent.|Confirmed.|
|ASIA|Bangladesh CR 1574-RD|1985<br>j|SeconJ Primary Education. Studies to review the<br>efficacy<br>of existing<br>non-formal<br>programs and<br>to develop commtnity support (para.<br>2.04 p.10);<br>lii)<br>to determinecosts and b~-~fits of<br>l<br>(ii) to determine costs and benefits<br>of<br>Liberalized<br>promotion(2.05);<br>(iii)<br>financing,<br>pricing,<br>distribution<br>and<br>publishing<br>of textbooks (2.08);|(i)<br>study completed (1988);<br>Noreport<br>found<br>(ii)<br>Division<br>of Planning,<br>MOE (1987) "Report on the<br>study of the implementation<br>of the promotion policy."<br>(doc. # F23824)<br>(iii)<br>Rapport Bangladesh Ltd.<br>(1988).<br>"Study on<br>universal<br>primary education textbook policy"<br>(doc. 4 F19987)|
||||<br>l|(iv)<br>pre-servi<br>e and inservice<br>training<br> <br>(Annex 4, 7);<br>(v) effectiveness<br>of policy changes<br>(Annex 4, 14);<br> <br>(vi)<br>HISsystem to collect<br>and analyze data.|I(iv)<br>S.Rehmun(1986). "Profile<br>of priwary teachers"<br>(doc. # F00548)<br>M.Haq4e (1986).<br>"Teacher Effectiveness"<br>(doc.#F00549)<br>**(v)**not ini t iated<br>Also A. Jabber (1986).<br>"Survey of Unewptoyed_PTI_<br>graduates"<br>(BBEIS)(doc.<br># F00550)|
|ASIA|Bhutan CR 1899-BHU|1988|Primary Education. Within the educational<br>adninistration<br>conponent therewillbe studies<br>to assess the effectiveness<br>of the extended<br>classroom program<br>(i)<br>ability<br>of program to<br>encourage comliunity involvement,<br>and efficiency<br>as feeder s.hools;<br>( ii)<br>understand needs of female students and,<br>to encourage<br>their<br>attendance;<br>(iii)<br>effectiveness<br>of using English asfediun|Studies to be scheduled later<br>in project<br>period.|

37