rafmacalaba/datause-encoder-data huggingface dataset:
given that the regressions in Table 6 are run in di¤erences, which likely tends to understate their explanatory power.

# 4.4 Has there been a ’deglobalization’post-crisis?

It seems plausible that the global trend towards ...nancial integration witnessed over the last quarter-century should be re‡ected in a growing e¤ect of common factors on capital ‡ows.<sup>25</sup> However, it has been argued that the rising trend was interrupted by the global crisis, and followed by what has been termed ’...nancial deglobalization’ – attributed to regulatory and other policy measures discouraging, in particular, cross-border bank lending (Rose and Wieladek 2014; Forbes, Reinhart and Wieladek 2017).

Our setting allows a straightforward assessment of changes in the reach of common factors over time, by examining the time pattern of their variance contribution. To do this, we reestimate the factor model over rolling time samples. Speci...cally, we use 20-year windows, starting with 1979-98, shifting them forward one year at a time, so that the ...nal estimation is done over the 1996-2015 sample. This yields eighteen di¤erent estimates of the factor model. For each one of them, we compute the variance decomposition as done above. Because the time samples underlying these estimates are short, the results need to be taken with some caution.

Figure 7 plots the time path of the respective variance contributions of global, group and local factors that results from these rolling estimates. The decomposition pertaining to each estimation window is denoted by the window’s ...nal year. Like in Table 5, for each window the ...gure reports group averages for advanced and emerging countries.

Among advanced countries, for both CIF and COD the role of common factors grows markedly over the ...rst ten windows. For CIF, the average variance contribution of common factors rises from 45 percent to just over 70 percent; for COD, from 55 percent also to just over 70 percent. Most of this increase is concentrated in the ...rst few years, and is attributable to the rising importance of the global factors, whose contribution grows partly at the expense of that of the group factors. For both in‡ows and out‡ows, the variance share of global factors peaks at over 60 percent in the window ending at the onset of the global crisis (2007). At its peak, the combined variance contribution of common factors reaches 72 percent for both CIF and COD. Thereafter, as the subsequent estimation windows start including post-crisis years, the share of the common factors –especially the global factors –in the variance of both CIF and COD enters a period of gradual decline. In the context of the factor model, this literally is a ’deglobalization’. In the ...nal window of the sample

> 25This was the case for FDI over the 1990s: Albuquerque, Loayza and Servén (2006) ...nd that external ...nancial liberalization was re‡ected in a rising contribution of global factors to the variation of FDI.

19
can then estimate total external debt by sector by adding<sup>�</sup> _XBS_ to _IDS_ for each sector. This will produce a longer series of external debt estimates by sector than the Quarterly External Debt Statistics (QEDS)<sup>82</sup> , and cover more countries.

Recently, the BIS has released its enhanced banking data, starting in 2013. This data contain more granular borrowing sector splits - Bank, Public, and Non-Bank Private. We use this short, recent series to judge the quality of our decomposition. Our methodology for estimating borrowing sector splits for the non-bank borrowing sector and the public sector generates estimates that are very close to the actual (reported) underlying figures.<sup>83</sup>

# **B.3.2 Borrowing Sector Splits for Outstanding Flows**

Obtaining exchange rate-adjusted flows to all sectors and to banks is straightforward since they are reported in the LBS data. However, as discussed above, the historical LBS data do not have a split of the non-banks sector into its public and private components. Thus, in order to get estimates for exchange rate-adjusted flows to the non-bank private sector and to the public sector, we rely on the estimated stocks for those sectors obtained in the previous section.<sup>84</sup> We assume that the currency compositions of claims on these sectors are the same as the currency composition of claims on the non-bank sector as a whole.

Using the above assumption, we can obtain estimates of the stock of bank lending to the non-bank private Sector denominated in currency _j_ as follows:

> 82The QEDS data starts in 2004, and provides data on stocks of external debt by institutional sector for a wide range of countries.

> 83Since not all LBS reporting countries have started providing the enhanced borrowing sector splits, these comparisons are based on the set of LBS reporting countries which had started reporting enhanced LBS data as of March 2016.

> 84Note that since most bank credit is not traded in secondary markets (e.g. loans), fluctuations in market valuations should be negligible.

89
47 is problematical because person-level variables (family size, marital status, etc.) cannot be examined for their effect on behavior.

A wide variety of instruments can be modeled. In the paper, Ingram examines the cost-effectiveness of transit extensions, fare reductions, local licensing, traffic bans, parking charges, and reducing speeds in Boston. Links of these instruments to targets are made explicitly and in detail, with the primary targets being exposures to pollution and travel outcomes.

While, this model is unique is its explicit linkage of a traditional transportation model to a model capable of estimating population exposures to various pollutants, it would need wholesale updating to be useful today.

Cameron (1991). In contrast to the Ingram model and other classic transportation models, which operate on a zonal level of aggregation, the model used by Cameron, TRIPS, operates at the household level. This is preferred because the household is the relevant behavioral unit and equations can be estimated based on household choices and explained by household level variables rather than aggregations of population characteristics within a zone (an example of the aggregation problem). Using individual data also permits one to analyze and present results according to personal characteristics, such as income class, rather than only geographic characteristics.

The model itself was created in 1979 for Cambridge Systematics with the basic data drawn from a 1976 survey of 5,000 households in Los Angeles. Trip diaries, socio-demographic, and auto ownership information *as taken from each person. As in Ingram, this model incorporates an emissions component (NOx, ROG, CO, C02) differentiated by vehicle age-class and by
in that industry.<sup>20</sup> The CLA also entitles contract workers to minimum wages, workplace health and safety provisions, and social security cover such as Employee Provident Fund benefits. The provision of these minimum benefits is the primary responsibility of the contractor, but needs to be verified by the firm using the contract worker. Firm surveys suggest that the CLA is not wellenforced, with non-adherence to its provisions regarding minimum compensation and restricted use of contract workers for core activities being common (Rajeev (2009) and Singh, Das, Choudhury, Kukreja and Abhishek (2017)). For example, 82% of firms with 0-99 employees and 68% of those with 100-499 employees replied in the affirmative to the question “Do contract workers replace permanent workers?” in a recent survey (Singh et al. (2017)).

# **2.2 Rajasthan’s labor law amendments**

Rajasthan passed several amendments to industrial labor laws in November 2014.<sup>21</sup> Their highlight was a pro-employer amendment to IDA: the employment size threshold above which a factory requires government permission for retrenchment (Chapter V-B) was raised from 100 to 300 workers. Another pro-employer amendment to the IDA made unionization more difficult by mandating that union membership must reach at least 30 percent of the establishment’s total workforce, as opposed to the 15 percent required earlier. It was also mandated that workers who wish to raise an objection with the government regarding their discharge or retrenchment must do so within 3 years of being discharged. There was no time limit earlier.

Two other laws directly related to labor regulation were also amended. First, the Contract Labor (Regulation and Abolition) Act would now apply to establishments with 50 or more contract workers. It used to apply to establishments with 20 or more contract workers. Second, the threshold above which the Factories Act applies was raised from 10 to 20 workers (40 in case of units without power).

> 20Section 10 of the Act gives authority to the government to control the use of contract labor in any establishment. Some state governments have even made amendments to explicitly prohibit the use of contract labor for core activities.

> 21See G.o.Rajasthan (2014c), G.o.Rajasthan (2014a) and G.o.Rajasthan (2014b)

7
# **Table 2. Emigration rates by country group**

||||**2000**|||**1990**|||**2000/1990**||
|---|---|---|---|---|---|---|---|---|---|---|
||**Nb**|**Skilled**<br>**emigration**<br>**rate**|**Average**<br>**emigration**<br>**rate**|**Schooling**<br>**gap**|**Skilled**<br>**emigration**<br>**rate**|**Average**<br>**emigration**<br>**rate**|**Schooling**<br>**gap**|**Skilled**<br>**emigration**<br>**rate**|**Average**<br>**emigration**<br>**rate**|<br>**Schooling**<br>**gap**|
|**Small States (pop < 1.5**|**46**|**43.2%**|**15.3%**|**2.812**|**50.0%**|**15.0%**|**3.339**|**36.1%**|**16.2%**|**2.228**|
|**million)**<br>**_by population size_**|||||||||||
|_Population from 0 to 0.5 million_|32|41.7%|21.0%|1.984|46.0%|20.2%|2.274|35.9%|24.1%|1.491|
|_Population from 0.5 to 1 million_|8|47.2%|15.7%|3.007|45.8%|14.3%|3.213|49.3%|19.0%|2.591|
|_Population from 1 to 1.5 million_|6|40.9%|9.8%|4.198|68.9%|9.0%|7.646|28.3%|10.8%|2.617|
|**_by region / income_**|||||||||||
|East Asia and Pacific|12|50.8%|17.0%|2.986|74.2%|16.9%|4.381|32.6%|17.2%|1.900|
|Latin America and Caribbean|10|74.9%|35.0%|2.143|75.4%|30.0%|2.515|74.3%|51.4%|1.446|
|Sub-Saharan Africa|10|41.7%|6.0%|6.947|43.3%|5.2%|8.307|39.6%|8.5%|4.649|
|High-income countries|12|23.0%|10.7%|2.144|24.9%|12.0%|2.073|19.4%|5.3%|3.675|
|**Other Groups of Interest**|||||||||||
|Small Islands Developing States|37|42.4%|13.8%|3.073|45.0%|11.8%|3.808|39.4%|20.0%|1.965|
|Population from 1.5 to 3 million|15|20.9%|7.1%|2.960|25.0%|5.7%|4.366|18.5%|8.7%|2.125|
|Population from 3 to 4 million|13|18.5%|10.0%|1.849|20.7%|11.1%|1.874|16.7%|8.8%|1.904|
|_World average_|_192_|_5.3%_|_1.8%_|_2.993_|_5.2%_|_1.6%_|_3.316_|_5.4%_|_2.4%_|_2.309_|
|_Total high-income countries_|_41_|_3.5%_|_2.8%_|_1.264_|_3.8%_|_3.0%_|_1.258_|_2.9%_|_1.2%_|_2.529_|
|_Total developing countries_|_151_|_7.4%_|_1.5%_|_4.916_|_7.8%_|_1.1%_|_7.182_|_7.0%_|_2.5%_|_2.831_|

_Skilled emigration rates and average emigration rates are defined by equation (2). Schooling gap = Skilled emigration rate / Average emigration rate Source : Docquier and Marfouk (2006)_ 20
40 process. Before inserting this effect into the simulation model, a brief account of some of the other work of this qpe is offered.

Azariadis and Drazen (1990) construct a model that results in a multiplicity of locally stable balanced growth paths. In their model they introduce technological externalities featuring a threshold property. Thus for certain state variables like the quality of labor measured by literacy rates, when they reach a critical value then the externality impact becomes large."<sup>1</sup> In other words for increases in growth to take place it is necessary for an economy to reach a threshold level in labor quality, which means that education will play an important role in development.

The one sector approach of Diamond (1965) is used; population is constant; there is no national debt and no technical progress. As with Diamond a multiplicity of steady-states is shown to exist and it is argues that variations in social inputs (for example human capital) can affect the steady state. The model has a stronger microeconomic foundation than the Lucas framework. Within it agents choose the level of training that maximizes their utility, knowing that training when young improves productivity when old. They show that when individual yields to human capital investment rise with the average quality of labor, then there exist a multiplicity of balanced growth paths.

Becker, Murphy and Tamura (1990) come to similar conclusions. They present a model in which fertility is endogenous, being chosen as described in the model set out in section 3 with households maximizing a dynastic utility function. Households choose the level of expenditure on education so as to maximize their welfare through the effects of education on their offspring's income. The return to education is assumed to be low for small levels of education and then to rise for increasing amounts of education before falling off again for very high levels. This means that when human capital is scarce, the return to investing in human capital is low compared to the effect of investing in children. There are in fact two steady states to the model, one with high fertility, little education and a small capital stock, and the other with low fertility, a large capital stock and a high level of education. However, this result is crucially dependent on the structure of the function describing the return to education. Of the externalities described by Lucas, the results of Mankiw, Romer and Weil (1992) suggest one can reject the spatial externality. But the intertemporal extemality cannot be so controversial. No one doubts that knowledge is passed on "Bowman and Anderson (1963) formalised the threshold argument in this context, using 1950s data to suggest that a literacy rate of between 30 and 40 percent is a precondition for take-off in growth. Easterlin (1981) discusses the role of primary education in economic take-off from a historical perspective. In fact the average developing country, with over 90% of the relevant age group now receiving primary education, ought to have crossed the sort of threshold which Easterlin identifies.
holds.

One qualification is in order. So far we have assumed that misappropriation of FPE funds was uniform across schools. However, public expenditure tracking surveys in neighboring Uganda showed that leakage of funds to schools was higher in poorer areas(Ritva Reinikka & Jakob Svensson 2005). This would clearly undermine the apparently progressive direction of the funding shift under FPE. To take a very extreme assumption, if the 15% national leakage came entirely from the poorest localities, this would open the possibility that the absolute change in funding was negative for all socio-economic groups. In reality, because the alleged embezzlement occurred at the national level and wire transfers were made in bulk to all schools nationwide, there is reason to suspect that any skimming affected all schools uniformly, and the conclusions of the previous paragraph hold.

These patterns in funding changes may go some way toward explaining changes in public and private school enrollment across socio-economic groups after FPE. The changes are of the correct sign, and vary over the distribution of households (small increases at the bottom, big declines at the top) in a way that is consistent with observed enrollment changes. But unfortunately, given our data, we have no way of testing directly whether the magnitude of these effects is sufficient to explaining the full enrollment change. Thus it is important to also consider evidence for alternative explanations, to which we turn in the next section.

Furthermore, it is impossible analyze funding changes in isolation of social interactions in enrollment decisions. The changes in funding we have documented are driven largely by changes in enrollment affecting pupil-teacher ratios. The net change in school funding experienced by one household is determined directly by their neighbors’ choices between public and private schooling, and vice versa. Thus understanding the effect of class sizes and per-pupil funding on individual enrollment decisions requires modeling social interactions in individuals’ simultaneous enrollment decisions. This rather technical challenge is the focus of the next section.

28
**1S**

liberlizadon In Tanzaia, Nigeria and Madagascar and only modest liberalization in the three Franc Zone

# counrias.

Theao roults are corroborated by a series of inairect indicators of import liberalization.<sup>Usually,</sup> the best test of an economic policy change Is its impact on real economic activity.<sup>Consequently, the</sup> extent to which trde liberalization has effetvely occurrod can be judged<sup>by its impact on import</sup> penetratloL Table 4 reports the extent of the change in import penetration during<sup>the three years after</sup> the adustment progm and during the most recent years in our saunple of countries.<sup>Ihe first two</sup> columns in the ume Table also show the change in the real effectiv **e** xchai<sup>rate (REER) and the black</sup> market premium on the exchange rate. Although the first variable is a policy variable<sup>in the short run,</sup> in thke mium trm, "the sustainabl **e** quilibrium level of the REER is determined, among other things, by trade policy; _ceteris parLbus,_ the more open the regime, the more depreciated<sup>the equilibrium</sup> REEl u16 h reauts in Table 4 once again show thonet contrast between Ghana<sup>on the one hand and</sup> Kenya and Zambia on the other. The real exchange rate depreciates the most in the post reform<sup>era in</sup> Ghana, Nigeria, Tanzania and Madagascar, in that order, and black market premia<sup>decrease sharply in</sup> all four countries as well as in Uganda. Similarly, in all these countries import<sup>penetration shows a</sup> positive and substandal increase in the post reform period. Although the real<sup>exchange rate depreciates</sup> in Kenya and Zambia, the black market premium rises in the post-reform period, thus indicating<sup>that the</sup> real depreciation was not clearly sufficient to suppress excess demand. Moreover,<sup>almost by any measure,</sup> import penetration in Zambia decreases. In Kenya, however, although total imports<sup>as tshare of GDP</sup> fall, the share of various **types** of consumer imports in total imports increasa. This<sup>indicates that the</sup> second episode of import liberalization, before it began to be partially reversed again<sup>in 1992, did have</sup> an impact on the level of competin imports. In the Franc Zone countries, real depreciation<sup>is modest</sup> 161bid, p. 27.
- Muralidharan, K. and K. Sheth (2016). Bridging education gender gaps in developing countries: The role of female teachers. _Journal of Human Resources 51_ (2), 269–297.

- Muralidharan, K. and V. Sundararaman (2013). Contract teachers: Experimental evidence from India. _NBER Working Paper #19440_ . Cambridge, MA.

- Muralidharan, K. and V. Sundararaman (2015). The aggregate effect of school choice: Evidence from a two-stage experiment in India. _Quarterly Journal of Economics 130_ (3), 1011–1066.

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- Pritchett, L. and D. Filmer (1999). What education production functions really show: A positive theory of education expenditures. _Economics of Education review 18_ (2), 223–239.

- Rivkin, S. G., E. A. Hanushek, and J. F. Kain (2005). Teachers, schools, and academic achievement. _Econometrica_ , 417–458.

- Rockoff, J. E. (2004). The impact of individual teachers on student achievement: Evidence from panel data. _American Economic Review P & P_ , 247–252.

- Rothstein, J. (2010). Teacher quality in educational production: Tracking, decay, and student achievement. _Quarterly Journal of Economics 125_ (1).

- Sass, T. R., A. Semykina, and D. N. Harris (2014). Value-added models and the measurement of teacher productivity. _Economics of Education Review 38_ , 9–23.

- Siniscalco, M. T. (2004). Teachers’ salaries. _Education for All Global Monitoring Report_ .

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- UNESCO Islamabad (2013). Education budgets: A study of selected districts of Pakistan.

- Weissman, J. (2011). Are teachers paid too much: How 4 studies answered 1 big question. _The Atlantic_ .

34
if, in other contexts, there is a shift in quality in the wake of a pay hike, it may take years to hire new teachers and improve the overall quality of the teaching force. Because of this, de Ree et al. (2018) make the argument that since the total stock of teachers turns over slowly, paying current teachers much more in the hopes of slowly achieving a more effective overall body of teachers may not be a cost-effective education investment.

The third explores cross-country differences in teacher salaries and their association with other outcomes. Finan, Olken and Pande (2017) document that low-income countries provide higher wage premiums to public sector employees. Mizala and Ñopo (2016) conduct an analysis of teacher relative pay using data from 13 Latin American countries and find that teachers earn less than “other professionals and technicians” with similar observable characteristics. Our analysis on low- and middle-income countries in Sub-Saharan Africa also finds that earnings premiums are higher in countries with lower incomes, but we also observe substantial variation in teacher earnings premiums given the income level.<sup>7</sup> The rest of this paper is structured as follows: Section 2 describes the data and our analytical and empirical strategy. Section 3 describes our results. Section 4 concludes.

# **2. Data, analytical strategy, and empirical strategy**

# **<u>2.1. Data</u>**

We draw on several sources of data. Our principal analysis of teachers and their earnings is based on household and labor force surveys conducted in 15 low- and middle-income countries in Sub-Saharan Africa (Table 1).<sup>8</sup> We chose these countries and surveys based on three criteria:

- (1) The surveys included detailed information on occupation, working hours, earnings, educational attainment and other basic demographic characteristics of surveyed household members or individuals.

> 7 One recent report examines teacher pay across 13 countries in Sub-Saharan Africa and finds that primary school teachers are underpaid by the hour, compared to other professionals, and secondary school teachers are comparably paid. However, the analysis is pooled for the 13 countries, with no indication of country-by-country variation (see Bashir et al. 2018, Figure 4.7).

> 8 We use the World Bank 2019-2020 income and regional classifications (World Bank, 2019b).

5