rafmacalaba/datause-encoder-data huggingface dataset:
Overall, there are quite substantial differences in the degree of wage inequality both between country groups and within groups. This variation in wage inequality is depicted in Figure 12.<sup>11</sup>

# **Figure 12  Summary of wage distribution, 2002**

## **Summary of Wage Distribution, 2002**

<!-- Start of picture text --> 300 14<br>250<br>12<br>200<br>10<br>150<br>8<br>P10<br>100 P90<br>Decile Ratio<br>6<br>50<br>4<br>0<br>2<br>-50<br>-100 0<br>Source: UNICEF TransMONEE database; Bank staff calculation a) 2001<br>Azerbaijan RussiaKyrgyzstan SAMArmeniaEstonia a)Romania UkraineBulgaria BelarusLithnuaniaHungary a) Latvia PolandSloveniaCzech R.<br>percent<br><!-- End of picture text --> P10 = bottom decile/median P90 = top decile/median Decile ration = top decile/bottom decile In the European transition economies the wage distribution has widened especially at the upper tail, meaning the high wages have become more prevalent and also the emergence of very high wages, not seen under the previous regime. For example, in Poland before the transition a top-paid workers (top decile) was earning 60 percent more than the median worker. At present a top paid worker earns twice as much a the median worker. Thus, the earnings status of top paid workers has improved quite substantially.

Changes at the lower tail of the wage distribution were less pronounced in CEE. Sticking to the example of Poland, which is quite typical, before the transition a low-paid (bottom decile) worker was earning 35 percent less than the median worker. Currently, a low-paid worker earns

> 11  The measures of wage inequality shown in Figure 12 are defined as follows.  The decile ratio is the ratio of the top decile wage to the bottom decile wage, and can be thought of a ratio of “high” to “low” wages.  The P90 ratio is the ratio of the top decile wage to the median wage, and shows the relative wage position of top paid workers.  The P10 ratio is the ratio of bottom decile wage to the median wage and shows the relative wage position of low-paid workers.

33
# 1. **INTRODUCTION**

It is a subject of controversy whether the East Asian crisis-stricken countries are suffering from a credit crunch. While there is anecdotal evidence that even good firms are finding it difficult to obtain credit to finance production and investment, macroeconomic data on monetary and financial developments do not unequivocally support the assertion that a credit crunch is occurring. A better understanding of this issue is crucial for the designing of appropriate policy actions and for the recovery prospects for the East Asian countries. For example, it is widely held that after currency devaluation, recovery will be led by export-driven demand, entailing a relevant transfer of resources from the non-traded to the traded sectors.' Yet, a pervasive credit crunch could retard or even jeopardize such a transfer, thus undermining recovery prospects.

This paper aims to shed some light on whether and to what extent the East Asian countries are currently suffering from a credit crunch. First, we propose a systematic framework to evaluate the occurrence and the magnitude of the credit crunch. In particular, we make reference to well established literature studying the transmission of shocks through the credit channel, often referred to as the credit view.<sup>2</sup> We draw on this literature to help identify the channels through which the negative shocks hitting East Asia may have propagated the credit crunch in these economies. This framework allows us to deploy a consistent approach in analyzing the issue across all countries and to go beyond exclusively relying on macroeconomic indicators and anecdotal evidence, which are often in contradiction. The framework also enables us to assess how credit crunch affects differently across the various sectors of the economy. Second, we apply the framework to five East Asian countries: _Indonesia, Korea, Malaysia, the Philippines,_ and _Thailand._

> See JP Morgan Economic Research (1998) and IMF's World Economic Outlook (1998) for more on this.

> 2 Bernanke and Gertler (1995) provide a comprehensive discussion of the credit channel and its components. This type of literature is based on the assumption that informational asymmetries play a major role in financial markets. See also Mishkin (1991) who studies financial crises from an historical perspective

4
from citizens by reducing the uncertainty of their returns to monitoring (Devarajan et al., 2011). While this channel remains a possibility, it is difficult to rule out a countervailing mechanism, wherein dividends serve to acquiesce citizens and consequently reduce their oversight of government spending. Ultimately, the validity of this channel remains an empirical issue.

The second channel through which DDTs could improve governance is if a portion is subsequently taxed back by the government in order to fund public expenditure. This represents an explicit construction of the fiscal contract, and is more likely to result in keen citizen oversight of revenue management. Indeed, Devarajan et al. (2011) and Devarajan and Giugale (2012) even discuss the possibility that this mechanism could result in more public goods than the equivalent expenditure on direct public investments, as increased scrutiny may improve efficiency throughout the chain from public outlays to the end-point delivery of public goods. Conversely, direct expenditure on public investments would remain prone to leakage, a feature common in many institutionally weak African states (Reinikka and Svensson 2004).<sup>1</sup> Of the four broad options discussed above, only a combination of direct dividends and subsequent taxation is likely to mitigate rentier behavior, as no other option makes explicit demands of citizens to contribute to public revenues. Moreover, accountability mechanisms aside, there is good reason to believe that the DDT option may be the least exposed to political rent extraction, in part due to relative directness of the distribution channel. As Sandbu and Humphreys (2007) note, sovereign funds are prone to premature embezzlement unless accompanied by rigorous regulations. Government lending in poorly governed countries is also subject to corruption, (Khwaja and Mian 2005). To illustrate the case for DDTs, Moss (2011) observes that, in Ghana, Public Expenditure Tracking Surveys (PETS) found that between 50% and 80% of public spending was leaked through the system; by comparison, one million fraudulent recipients of direct transfers would represent the equivalent of only a 4% leakage. In addition, these

> 1 Reinikka and Svensson (2004) famously found that 87% of capitation grants for primary schools in Uganda did not reach the intended end-users.

6
Lipschitz L and D McDonald (1991), “Real Exchange Rates and Competitiveness: A Clarification of Concepts and Some Measurement for Europe” _IMF Working Papers._ Mandeng O (1991), “International Competitiveness and Specialization” _CEPAL Review_ 45, 39-52.

Magee (1968), “Theoretical and Empirical Studies of Competition in International Trade: a Review” _US Council of economic advisors._ Markusen J (1992), “Productivity, Competitiveness, Trade Performance and Real Income: The Nexus Among Four Concepts” Minister of Supply and Services, Canada.

Martin, J and Méjean, I (2011) "Low-Wage Countries' Competition, Reallocation Across Firms and the Quality Content of Exports," CEPR Discussion Papers 8231, C.E.P.R. Discussion Papers.

Melitz MJ and GIP Ottaviano (2008), "Market Size, Trade, and Productivity," _Review of Economic Studies_ 75(1), 295-316.

Milana C (1988), “Constant Market Shares Analysis and Index Number Theory” _European Journal of Political Economy_ , Vol. 4, No. 4, pp. 453-478.

Ottaviano G., D. Taglioni and F. Di Mauro (2008), “The Euro and the Competitiveness of European Firms”, _Economic Policy_ .

Panagiotis A, B Constantina and EA Georgiou (2010), “Export performance, competitiveness and commodity composition”, _Bank of Greece Working Papers_ 114.Porter M (1990), “The Competitive Advantage of Nations” _Harvard Business Rev_ iew, No. 2. March/April.

Ravallion M (2010), “Mash-up Indices of Development”, _Policy research Working Paper_ 5432, World Bank.

Richardson JD (1971a), “Constant Market Shares Analysis of Export Growth”, _Journal of International Economics_ 1 (1971), pp. 227-239.

Richardson JD (1971b), “Some sensitivity tests for a 'constant-market-shares' analysis of export growth”, _The Review of Economics and Statistics_ 53(3), 300-04.

Rodríguez A, G Pérez-Quirós and R Segura Cayuela (2012) “Competitiveness indicators: the importance of an efficient allocation of resources”, Banco de Espana, Economic Bulletin, (January) Sala-i-Martin, Xavier and Elsa V. Artadi, "The Global Competitiveness Index", _Global Competitiveness Report_ , Global Economic Forum 2004 Sharpe A (1985), “Can Canada Compete?” _Canadian Business Review_ , Winter.

Schott, P. (2004). Across-product versus within-product specialization in international trade. _Quarterly Journal of Economics_ 119, 2. 647-678.

Siggel E (2007), “International Competitiveness and Comparative Advantage: A Survey and Proposal for Measurement” in De Grauwe eds. _The Many Dimensions of Competitiveness_ , CESIFO.

Siggel E and J Cockburn (1995), “International Competitiveness and its Sources: A Method of Development Policy Analysis”, Concordia University Dept of Economics, Discussion Paper no. 9517.

Sinn H.W. (2012), "Wir sitzen in der Falle", FAZ, 18 February.

37
# 1 Introduction

High rates of child absenteeism from school are a serious impediment to economic growth in the developing world. In 2000, an estimated 88 million children were out of school, most of them in Southern Asia and Africa.<sup>1</sup> One of the measures that has been taken by governments in countries like India, Bangladesh, Brazil, Swaziland or Jamaica to encourage school attendance is the provision of government-subsidized school meals.<sup>2</sup> But despite the popularity and cost of school meals, there is little evidence on their impact on school participation and educational achievement. In this paper, I quantify the e¤ects of subsidized school meals on these outcomes using data from a randomized school meals program in preschools in Western Kenya. The program was implemented in 25 preschools between 2000 and 2002, and provided a fully subsidized in-school breakfast on every school day to all pupils attending preschool. The 25 schools that received the school meals program were randomly chosen from a pool of 50 schools, which allows causal inferences to be drawn.

We ...rst estimate the impact of the breakfast program on school participation using an intention-to-treat estimator. The intention-to-treat estimator assigns children to the treatment or comparison group before the start of the program. Presence in any school is counted and assigned to the original treatment status of the child. In the presence of transfers between schools, this estimator is appropriate because it avoids upward bias in the following way: children who transfer from a comparison school to a treatment school are not counted as new enrollments in the treatment school and not counted as absences in the comparison school. Similarly, children who transfer from outside the sample schools are not counted. Children in the treatment group participated in school 35.9 percent of the time, versus 27.4 percent in the comparison group. The di¤erence is slightly less than one-third of the level in the comparison group. The program increased participation of both children who were previously enrolled (intensive margin) and children who would not have gone to school in absence of the program (extensive margin).

The second result of the paper is that the program improved learning, but only for children in schools where the teachers were more experienced at the onset of the program. The di¤erence in test scores is approximately 0.4 of a standard deviation per standard deviation of teacher experience. The improvement in test scores for this group of children was in the area of curricular achievement. There was no impact on cognitive abilities. The program also bene...ted boys in terms of weight, but there was no e¤ect on girls (height or weight) or on boys’height. Hence school meals a¤ect learning in schools but the channel through which they do so is unlikely to be nutrition, otherwise

> 1 From the World Education Report (2000), Unesco.

> 2 From the Global School Feeding Report (2002), World Food Program.

1
**Table 13: Comparison of basic needs poverty estimates across the surveys rounds in Tanzania Mainland**

||**H**<br>|**BS**<br>||**NPS**<br>||
|---|---|---|---|---|---|
||**2007**|**2011/12**|**2008/09**|**2010/11**|**2012/13**|
|(a) Survey‐specific poverty line in survey year<br>prices|18,883|36,482|21,660|29,113|38,819|
|% individuals below thepovertyline|33|28.2|15.2|24.4|24.8|
|(b) Base year poverty line in survey year<br>prices(surveydeflators)|19,201|36,482|23,863|29,113|39,012|
|% individuals below poverty line (survey<br>deflators)|34.4|28.2|20.2|24.4|25.1|
|(c) Base year poverty line in survey year prices<br>(CPI)|22,004|36,482|24,323|29,113|36,609|
|% individuals belowpovertyline(CPI)|42.7|28.2|21.5|24.4|22.4|
|(d) US$1.90 poverty line (expressed per<br>month)|58|58|58|58|58|
|% individuals below the US$1.90 line|59.9|48.8|48.7|49.9|45.8|

Note: the survey price indices in line (b) are respectively 1.9 for the HBS and 1.22 and 1.34 for the NPS.

Line (a) uses the poverty line constructed for each survey round that is unadjusted for inter‐year price differences in cost of living. These poverty lines yield an increasing trend in poverty. Line (b) takes the poverty line constructed in the base year and uses the Fisher price indices constructed from survey unit values to adjust for inter‐year price variations. While the adjustment of the NPS poverty line seems to have helped attenuate the mismatch in poverty levels between the HBS and NPS, we still observe an upward poverty trend. While the NPS data show an increase from 20.2 percent in 2008/09 to 24.4 percent in 2010/11 and 25.1 percent in 2012/13, the HBS shows a decline in poverty from 34.4 percent to 28.2 percent between 2007 and 2011/12.

In contrast, adjusting the poverty line for inter‐year price differences using the CPI rather than the survey unit values appears to partly resolve the discrepancy in poverty trends between the HBS and NPS. In line (c), the NPS indicates an increase in poverty from 21.5 percent in 2008/09 to 24.4 percent in 2010/11 and then a decline to 22.4 percent in 2012/13. We continue however to observe a slight increase in poverty between NPS 2008/09 and NPS 2012/13, while HBS data show a quite significant decline. We also continue to observe a significantly lower level of poverty in NPS 2008/09 compared to HBS 2007.

39
Policy Research Working Paper 10691

# **Abstract**

This paper uses the context of the Islamic Republic of IranIraq war in 1980–88 to study the long-term impacts of exposure to the war during school years on educational attainment and labor market outcomes in Iraq. The analysis uses an event study and the Iraq Household Socio-Economic Surveys 2006–2007. The findings show that the Islamic Republic of Iran-Iraq conflict had a negative impact on the social welfare of men who were exposed to the war, including on social security, pension plan, health care, paid leave, and job permanence, while little impact on women is found. Additionally, the conflict reduced wages for both men and women. Furthermore, men who were exposed to the conflict were more likely to work in dangerous jobs or without air conditioning, while no evidence on this is found for women. The paper also shows the impact of the intensity of the Islamic Republic of Iran-Iraq war on educational attainment and labor market outcomes. It documents the education channel through which the war affects labor market outcomes, showing that the war decreased the educational levels of men and women born between 1971 and 1981. The findings are robust to a variety of robustness checks and falsification tests.

This paper is a product of the Office of the Chief Economist, Middle East and North Africa Region. It is part of a larger effort by the World Bank to provide open access to its research and make a contribution to development policy discussions around the world. Policy Research Working Papers are also posted on the Web at http://www.worldbank.org/prwp. The author may be contacted at hoangxuantrung3012@gmail.com.

_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 views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent._ Produced by the Research Support Team
up, and after other liquidity crunch episodes. The rest of the paper will show that these findings are not driven by particular model choices or alternative explanations.

# **5 Robustness**

This section explores in detail the robustness of the findings to changes in the event dates and to controlling for other bank level characteristics associated with potentially different transmission channels. Standard robustness checks to changes in the estimates of the abnormal returns, the measures of wholesale dependence, the sample of countries and banks, and the event and estimation windows are reported in the Appendix.

## **5.1 Changes in the event dates**

An alternative interpretation of the findings is that the returns of banks with high wholesale dependence are more responsive to turmoil. For instance, these banks may be more opaque and tend to over-react to bad news. To check for this possibility I repeated the event study at dates at which the main events did not coincide with a liquidity crunch, that is, when there was no clear spike of the TED spread: the collapse of Bear Stearns on March 14, 2008, and the announcement of the bailout plan by the US government on October 2, 2008. Figure 8 reports the evolution of the cumulative differential returns __ 1, __ in these two episodes. It clearly shows that there is no obvious differential return response of banks with high wholesale dependence in any direction (positive or negative) in each of these episodes. None of the estimated differential abnormal returns is statistically different from zero in the days immediately after the event. In the Bear Stearns’ collapse, the only significant differential return occurs eight days after the event, and in the case of the bailout, it occurs 10 days after. This shows that the immediate decline in returns observed during the Lehman episode, and to a lesser extent after August 9, 2007, is neither a usual pattern of the data nor the response of these banks to any turmoil episode.

## **5.2 Controlling for other bank characteristics and transmission channels**

Although the baseline results are robust to standard checks, it may be the case that banks with high and low dependence on wholesale funds are systematically different in other characteristics that are the true determinants of their differential response, and relate to different transmission mechanisms. To discard this possibility, I sequentially added to _Xi c_ , several bank level characteristics that could be behind the differential response of banks to Lehman, as described 19
# **The Real Exchange Rate and Export Growth: Are Services Different?**

# **Barry Eichengreen and Poonam Gupta**<sup>**1**</sup>

Keywords: Real Exchange Rate, Exports, Services, Traditional Services, Modern Services JEL Classification: F15; F43 1 University of California, Berkeley and the World Bank respectively. We thank seminar participants at the National Institute of Public Finance and Policy, Delhi, National Council of Applied Economic Research, Delhi, Peterson Institute of International Economics, Washington DC, and the International Monetary Fund for many useful comments; and Honey Karun for excellent research assistance. Comments are welcome at <u>eichengr@econ.berkeley.edu and pgupta5@worldbank.org.</u>
<!-- Start of picture text --> Figure 5. EU oilseeds imports<br>(Index 2000=100)<br>180<br>Meal<br>160 Oil<br>Oilseeds<br>140<br>120<br>100<br>80<br>60<br>2000 2001 2002 2003 2004 2005 2006 2007<br>Source: DECPG calculations based on USDA data.<br><!-- End of picture text -->

**Brazilian ethanol production from sugar cane has not contributed appreciably to the recent increase in food commodities prices,** because Brazilian sugar cane production has increased rapidly and sugar exports have nearly tripled since 2000. Brazil uses approximately half of its sugar cane to produce ethanol for domestic consumption and exports and the other half to produce sugar. The increase in cane production has been large enough to allow sugar production to increase from 17.1 million tons in 2000 to 32.1 million tons in 2007 and exports to increase from 7.7 million tons to 20.6 million tons. Brazil’s share of global sugar exports increased from 20 percent in 2000 to 40 percent in 2007, and that was sufficient to keep sugar price increases small except for 2005 and early 2006 when Brazil and Thailand had poor crops due to drought.

**The increases in biofuels production in the EU, U.S. and most other biofuelproducing countries have been driven by subsidies and mandates.** The U.S. has a tax credit available to blenders of ethanol of $0.51 per gallon and an import tariff of $0.54 per gallon, as well as a biodiesel blenders tax credit $1.00 per gallon. The U.S. mandated 7.5 billion gallons of renewable fuels by 2012 in its 2005 legislation and raised the mandate to 15 billion gallons of ethanol from conventional sources (maize) by 2022 and 1.0 billion gallons of biodiesel by 2012 in energy legislation passed in late-2007. The new U.S. mandates will require ethanol production to more than double and biodiesel production to triple if they are met from domestic production. The EU has a specific tariff of €0.192/liter of ethanol (€0.727 or about $1.10 per gallon) and an ad valorem duty of 6.5 percent on biodiesel. EU member states are permitted to exempt or reduce excise taxes on biofuels, and several EU member states have introduced mandatory blending

9