rafmacalaba/datause-encoder-data huggingface dataset:
Policy Research Working Paper 7917

# **Abstract**

Public financing of child care can allow for more equitable access to these services in places where public provision and capacity are low. However, the mechanisms of subsidy delivery will affect who benefits, and the overall cost effectiveness of such subsidies. This paper sets out an ex ante simulation model for estimating the benefit incidence of expanded capacity and enrollments resulting from different child care subsidy mechanisms. It uses a supply-side provider level and a demand-side household model, and combines the two models. The paper considers investment grants to providers, operational monthly grants to child care providers, combinations of the investment and operational grants, and demand-side vouchers to households. The model is applied to empirical data from child care centers and households in Turkey. The results reveal that the choice of the subsidy delivery model has a strong bearing on the benefit incidence and cost effectiveness of the subsidy. In the case of Turkey, where significant supply-side constraints exist in the market, a demand-side voucher system is shown to be the least cost-effective subsidy delivery model. A targeted demand-side voucher does not necessarily deliver the most “pro-poor results,” and combinations show different benefits and costs. The proposed simulation model can be applied in other country contexts, with the only data requirements being micro data on the costs and pricing structure of child care providers, as well as household data with variables on household welfare and child care utilization.

This paper is a product of the Poverty and Equity Global Practice Group. 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://econ.worldbank.org. The authors may be contacted at amunozboudet@worldbank.org.

_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
14 <!-- Start of picture text --> Ar2entina . . ..........I ..... .. ......... ................ ... I _1 . ................ ....... ..... . .......... .............I........... ............ ...I ......... I.... . . .. .I.... - .................. 13 2<br>Brazil 0 2 1 0 1 0 0 3<br>Chile 1 2 0<br>Colombia ....................... l ............... .... ...............-..... ..... ................ ..................................... 0 0 Ch ..................0 ..........1<br>Mexico Guatemala 0 2 1 7 3 2 _ 2 0 1 1<br>. ........................ .............................. ................ ........... .......... .... ........I.......... ..I... .............. ...... . ......... ..........I .. ....... ................I . . .....................<br>Peru ______ _ 1<br>Venezuela 1 3 1<br>U F LAC Total ................................. ............. 0 0 .. ........ .. .. .2 ......... 2 . .........3 .........3 . .. ....... ..8 .........8 . . . . ...3 ....3 . . . . ...... 3 3 6 6 - 2 21 ........ ,.........8 8<br>Intra-LAC % of LAC Total 0% 67% 20% 24% 11% 5% 14% 32% 17%<br>Source: Trade Policy Reviews, GATT/WTO, various years.<br><!-- End of picture text --> In addition to the adoption of GATT/WTO rules, many countries in the region established new trade policy making institutions that reflected national interest in trade policy making, moving away from the earlier institutions that were subject to more sectoral interests.<sup>8</sup> Antidumping came under these institutions. Argentina established a National Trade Commission in 1994 charged with the responsibility of advising the Government on trade policy making including the recourse to exceptional protection measures such as antidumping. Brazil closed down its highly protectionist institution CACEX and made trade policy making more responsive to national interests by creating a more neutral institution, DEXEX. Bolivia has the Ministry of Export and import Competition which decides on antidumping policies advised by a technical secretariat comprising staff from the Ministry of Finance, the Central Bank and representatives of private enterprises. Chile also established National Trade Commission in 1986 and which has been a much emulated model by other countries in the region. Colombia brought trade policy making under the aegis of the Ministry of Foreign trade and established stringent criteria for antidumping, safeguards and countervailing. Costa Rica, on the other hand, uses the Central American Common Market rules for deciding antidumping actions. Mexico also reformed its trade policy making institutions. Antidumping is administered by SECOFI with consultation with the Commission for Tariffs and Foreign Trade Controls. Despite its membership in NAFTA, Mexico

> **8** Sarath Rajapatirana "Post Trade Liberalization Policy and Institutional Challenges in Latin America **and** the Caribbean." In _Trade Policies in Latin American and the Caribbean: Priorities, Progress, and Prospects._ International Center for Economic Growth, San Francisco, 1997.
# **2.2 The Upper Secondary Education System in Mexico**

Mexico, like other middle-income countries, has reached almost universal enrollment rates in primary and lower secondary (grades 7 to 9), but its education system still faces important challenges, especially in high school (grades 10, 11 and 12). For instance, more than 35 of every 100 students who enroll in high school will never graduate. Among those who graduated from high school in 2015, more than half got insufficient achievement levels in math according to the national standardized test, PLANEA. Many of the students dropping out or finishing high school but with insufficient skills come from poor or marginalized households, replicating or even exacerbating existing inequalities. Therefore, upper secondary education dropouts and low achievement levels have important implications for Mexico's long-term economic growth and income disparities.

The upper secondary education or “educación media superior (EMS)” system in Mexico has 4.9 million students, typically between 15 and 18 years old, in grades 10th, 11th and 12th. EMS is offered by four different providers: 1) the federal government (accounting for 21.8 percent of total enrollment), 2) the state governments (47.4 percent), 3) publicly-financed autonomous universities (12.3 percent), and 4) private schools. EMS offers three types of degree programs: general, which prepares students for higher education; technological preparing students both for the labor market and higher education; and technical, which emphasizes technical and vocational education.

According to official statistics from the National Institute for the Evaluation of Education (Instituto Nacional para la Evaluación de la Educación, INEE) in 2015, only 67.3 percent of students graduated on time, usually three years after enrolling in EMS. On-time graduation rates vary across types of degree programs, with general schools showing the highest rate (69.2 percent), followed by technological schools with rates very close to the national average (67 percent) and technical schools showing the lowest (54.1 percent).

Table 1 compares the characteristics of 12th grade students from the four different providers of upper secondary using information from the context questionnaire of the national standardized test PLANEA. Students attending schools run by the federal government, the universe from which the sample of PODER was drawn, display levels of math achievement that are in between the levels observed by those attending schools run by states and autonomous universities. This is consistent with socio-economic indicators (parents’ education, books and computer at home), students in federal schools come from better-off households compared to students in state-run schools but are relatively poorer than students in EMS linked to autonomous universities.

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**Table 1.** Impacts of the Psychosocial Interventions on Psychosocial Outcomes in the Policy Experiment, and Their Associations with Women's Economic Outcomes

|**(1) Index**|**(2) Example item**<br>**in index**|**What were the la**<br>**psychosocial i**<br>**psychosocial outc**<br>**(3) Main Effect**<br>**of Psychosocial**<br>**vs Control arm**<br>**_Standardized_**<br>**_effect size (SE)_**|**rgest impacts of the**<br>**nterventions on**<br>**omes at follow-up?**<br>**(4) Marginal Effect**<br>**of Psychosocial**<br>**Interventions**<br>**(Full – Capital arms)**<br>**_Standardized_**<br>**_effect size (SE)_**|**How much do**<br>**psychosocial factors**<br>**predict women’s**<br>**business**<br>**development?**<br>**(5) Bivariate**<br>**correlations with**<br>**women’s business**<br>**revenues**<br>**_Correlations_**<br>**(****_r)_**|
|---|---|---|---|---|
|**Panel A. Variab**<br>**Positively Predi**|**les that Show Main a**<br>**ct Women’s Business**<br>|**nd Marginal Treatm**<br>**Revenues**|**ent Impacts of Psychoso**|<br>**cial Interventions and**|
|Collective<br>action|Membership in<br>community<br>associations|**0.34*****<br>**(0.05)**|**0.12***<br>**(0.05)**|0.05<sup>†</sup>|
|Social<br>standing|Current subjective<br>socio-economic<br>standing|**0.18*****<br>**(0.04)**|**0.14****<br>**(0.04)**|**0.14*****|
|Self-efficacy|Feels they can find<br>multiple solutions<br>to problems|**0.16*****<br>**(0.04)**|**0.17*****<br>**(0.04)**|**0.11*****|
|Future<br>expectations|Expected socio-<br>economic standing<br>in 2 years|**0.15*****<br>**(0.04)**|**0.16*****<br>**(0.04)**|**0.07***|
|Control over<br>earnings<sup>‡</sup>|Has influence in<br>business decisions|**0.13****<br>**(0.04)**|0.06<sup>†</sup><br>(0.04)|**0.17*****|
|Mental health|Feels peaceful|**0.10***<br>**(0.04)**|**0.10***<br>**(0.04)**|0.05<sup>†</sup>|
|**Panel B. Variab**<br>**Positively Predi**|**les that Show Main b**<br>**ct Women’s Business**|<br>**ut not Marginal Trea**<br>**Revenues**|<br>**tment Impacts of Psych**|**osocial Interventions and**|
|Social|Number of|**0.24*****|0.05|*******|
|support|business mentees|**(0.04)**|(0.06)|**0.11**|
|Perceived<br>social norms|Perceived norms of<br>women having<br>businesses|**0.19*****<br>**(0.04)**|0.04<br>(0.04)|**0.13*****|
|Intra-<br>|Trusts partner to|0.07<sup>†</sup>|-0.00|<sup>†</sup>|
|household|<br>i ’ i|||0.05|
|dynamics|act n ones nterest|(0.04)|(0.04)||
|**Panel C. Variab**<br>**Significantly Pr**|**les that Show Main a**<br>**edict Women’s Busine**|**nd/or Marginal Impa**<br>**ss Revenues**|**cts of Psychosocial Inter**|**ventions but Do Not**|

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in Africa and Asia at the end of the data period. The issue is most relevant for Africa because 10 out of 22 countries were still autocracies, whereas only 3 out of 11 were still autocracies in Asia. A simple prediction based on average effects (an increase from 14 percent to 18 percent for _NRA_ ) and the use of 2000 as the base year (the year for which we have the largest recent country sample) yields the following: with an average _NRA_ of −15 percent in Africa in 2000, _ceteris paribus_ , a hypothetical democratization wave would induce a reduction in the average level of taxation of 6 to 8 percentage points, resulting in an average _NRA_ of −7 percent to −9 percent and effectively halving agricultural taxation. In Asia, the average effect of hypothetical democratization is smaller because fewer autocracies remain. The effect depends on whether a simple average or a weighted average is used; China is one of three remaining autocracies in the data set. The simple average effect on _NRA_ is an increase of between 4 and 5 percentage points for Asia, whereas the population weighted average protection effect is an increase of 7 to 9 percentage points (from a weighted average _NRA_ of approximately 9 percent).

# **<<A>>** _VI. EXTENSIONS AND ROBUSTNESS CHECKS_

To further test whether our results capture a causal effect of democratization on agricultural policies, we run several extensions of the model and robustness checks. Specifically, in this section, we analyze how the results are affected by considering or using (a) disaggregated commodities, (b) different indicators to capture the timing of political reforms, (c) alternative estimation models (matching, dynamic panels, feedback effects), (d) alternative definitions of regime changes, and (e) additional indicators of economic and political crises. For brevity, some of these additional regression results are reported in the supplemental appendix.

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one antenatal consultation during their most recent pregnancy and the rate has increased to 96 percent in the follow-up survey. However, the rates of pregnant women who received the recommended number of antenatal consultations and timely initiation of care are substantially lower. In the follow up survey, 77 percent reported having received their first consultation during the first trimester and 70 reported having received at least four consultations. We do not find significant impacts of the PBF program on either of these outcomes.

We find a significant difference between the treatment arms in receiving postnatal care within the three days after being discharged after delivery. The baseline survey questionnaire did not distinguish between care received while women were still in the maternity ward and care received after they returned to their homes. Therefore, the results presented in the table come from an analysis using propensity score weighting approach. We find an effect of 18 percentage points that is statistically significant at the 99% level.

We do not find any impact of the PBF program on family planning. It is important to keep in mind that our sample is not representative of women of reproductive age. Households were selected if women were pregnant in the preceding two years. Family planning preferences and choices in this sample may be distinct from those of the general population of women of reproductive age. In the baseline survey, 60 percent of the women reported to use a family planning method or to be exclusively breastfeeding an infant. Twenty-seven percent of women reported using a modern method of contraception. Out of the women who wanted to stop or delay fertility, 67 percent were using any family planning method (including exclusive breastfeeding) and 34 percent used a modern method. As can be seen in Panel C of Table 6, the PBF intervention was not successful in reducing this unmet need for family planning. We tested the impact separately for all methods and for modern methods. We also conducted a separate test for the full sample and only those wishing to delay or stop fertility. None of the impact coefficients is statistically significant.

Lastly, we find a significant impact of the PBF intervention on the rate of adults aged 40 and above who have had their blood pressure measured in the preceding 12 months. The baseline rate in the PBF group was 50 percent and increased to 65 percent in the follow up survey. We estimate an impact of three percentage points, statistically significant at the 95% level.

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# Introduction

1. The Industry and Finance Division of che India Department of the World Bank (AS4IF) undertook in 1989-1990 an in-depth review and analysis of the Trade Regime of India and of its effects and implications on the performance of India's manufacturing sector. Vast amounts of statistics, other analyses and literature were assembled to that purpose, with a view to recapitulate and synthesize the available knowledge on the subject and to draw a relatively comprehensive picture of the protection structure, growth, cost competitiveness, external trade and structural evolution in each of the major subsectors of Indian manufacturing. Prominent among the available sources of information and prior analysis were the Bank's 1987 CEM, Garry Pursell's Review of Effective Protection of Indian Industry (mimeo, unpublished), and ICICI's 1985 study of export-performance of ICICI-financed companies.

2. A significant obstacle, however, in carrying out the AS4IF's **review was** the scarcity of updated data on prices, costs and profitability in Indian industries relative to international markets and comparators. The most recent years for which the other available analyses and data were providing reasonable estimates of prices, protection and profitability in industry were covezing the period 1980-1986. Moreover, in computing their estimates with the best possible accuracy, these other studies paid less attention to the analysis of the internal workings and dynamics of the protection structure, i.e. the degree to which protection feeds upon itself and calls for further protection when one group or category of products (e.g. , intermediates, capital goods) is used or further processed by a downstream subsector. The purpose of this Working Paper is to contribute further to the existing studies by analyzing the internal dynamics of the protection structure on the basis of recent data valid for the Late 1980s.

# General Purpose and ADDroach

3. Up-to-date information and data of the type required for estimating the Competitiveness and the Effective Protection (in particular, relative domestic to international prices for inputs and outputs) of industry normally requires lengthy and extensive surveys of a representative sample of manufacturing enterprises. Due to time constraints principally, such survey could not be undertaken. As the best substitute, detailed data of the type required were extracted fro- a sample of some 60 appraisal reports prepared by ICICI and IDBI for projects which they finaneed in 1988 and 1989. These projects were made in 25 manufacturing subsectors (as ciefined in the 115 - subsector classification of the Indian economy, which comprises a total of 66 manufacturing subsectors), focussing principally on the metal and engineering industries (including electronics) and to a lesser extent on the chemical and related inoustries (synthetic fibers and textiles, phrrmaceuticals).

4. The project data were assembled with a view to providing quantitative indications, and whenever possible answers, to the following questions:
_To improve business training interventions for entrepreneurs_

**Identify the specific gaps in business knowledge.** Apart from a few FinScope studies, we have little systematic survey evidence of the business literacy needs of entrepreneurs in developing countries. Although it can be difficult to design an instrument to assess business knowledge, doing so would allows us to better tailor the curriculum of business training programs to fit the needs and abilities of local entrepreneurs.

**Pay attention to the curriculum.** Drexler et al. (2010) demonstrates that teaching ―rule-ofthumb‖ accounting concepts (in this case, the separation of household and business accounts) can be more effective than teaching accounting in a more traditional way. It may be that it is easier to teach certain types of knowledge and practices than others, in which case further investigation is needed. In addition, while this study highlights the low hanging fruit of teaching financial education in simpler terms, the saturation point of such interventions likely arrives quickly, beyond which perhaps a more comprehensive intervention would be necessary. An interesting area of extending this existing study the add-on effects of structured business training among individuals who earlier received rule-of-thumb training. Perhaps they would benefit more from formal training if they have had time to absorb lessons from the basic training and established a higher baseline level of financial knowledge.

# **Keep in mind that female entrepreneurs have often failed to benefit from existing**

**interventions.** This has been widely observed across a number of studies, although there are exceptions. Berge et al. (2011) and Field et al. (2010) suggest that behavioral and social constraints on women may explain why business training programs do not work as well for female entrepreneurs as they do for male entrepreneurs. Relatedly, Giné and Mansuri (forthcoming) show that women in their study in Pakistan tend to allocate far less time to their business, and more to household activities. More work needs to be done on what motivates females to enter entrepreneurship and what external constraints they face, and how if at all to alleviate them.

**Take into account other sources of heterogeneity** . Participants in business training programs also tend to vary in their level of education, financial literacy, sector, work experience and other

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governments and economic activity and by increasing the incentives to migrate to another municipality.

To mitigate concerns about this form of reverse causality, we construct an instrumental variable that is correlated with changes in local inequality but that is not associated with changes in local crime rates. Specifically, we follow Boustan et al. (2012) and predict the income distribution of a municipality based on the area’s initial income distribution and national patterns of income growth; we then use the Gini coefficient for this predicted distribution as an instrument for the actual Gini coefficient.

In particular, we start with the initial (1990) average household income by _local_ decile and municipality. We then estimate to which _national_ percentile of the income distribution each _local_ income decile belongs to in the initial year. For example, a household in the tenth (first) decile of a poor (rich) municipality might belong to the first (ninetieth) percentile at the national income distribution. Then, we allow the income of each local decile to grow over time as the income of its corresponding national percentile. By design, this instrument cannot be influenced by local factors such as the homicide rate or regional migration; rather, it isolates the component of change in the local income distribution (welfare variables) that is driven by national trends, such as changes in the return to skills and labor market institutions. In sum, this instrument allow us to isolate the change in the local income that is driven by national shifts and so, allows us to build 'counterfactual' welfare indicators, which should be correlated with municipal welfare indicators but not with local homicide rates or any other changes at the municipality level.

The instrumental variable approach will also help mitigate another potential source of bias. As the Gini coefficients at the local level were estimated using the poverty-mapping methodology (Elbers et al. 2003), they could be affected by measurement error, which may introduce the so-called _attenuation bias_ in the OLS estimates. Since most of the time variation exhibited by our instrumental variable comes from national trends in the distribution of income, this helps mitigate measurement error biases in our municipal level income measures.

# **6. Results**

A naïve OLS regression of equation (2), without addressing the reverse causality problem between income inequality and crime, leads one to conclude that higher inequality deters crime (see Table 2). In other words, increasing income inequality would be associated with lower crime rates in Mexican municipalities. According to the first column, a one-point increase in the Gini coefficient between 2006 and 2010 would be associated with a decrease of one drug-related murder per 100,000 inhabitants. That result holds in sign but differs in magnitude across all of our specifications. The main substantive conclusion, however, remains unchanged: i.e., increasing income inequality is correlated with lower crime rates, a counterintuitive result when compared with our hypothesized effect.

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