rafmacalaba/datause-encoder-data huggingface dataset:
The labor market effects of
            foreign-owned firms
Foreign firms often have a more educated
            workforce and pay higher wages than domestic firms. This
            does not necessarily imply that foreign ownership translates
            into higher demand for educated workers or higher wages,
            since foreign investment may be guided by unobservable firm
            characteristics correlated with the demand for educated
            workers or wages. The author examines foreign acquisitions
            of domestic firms in Portugal in the 1990s and finds small
            changes in the workforce skill composition and wages
            following acquisition. Foreign investors "cherry
            pick" domestic firms that are already very similar to
            the group of existing foreign firms.
Convergence, dynamics, and geography
            of economic growth : The case of municipalities in Rio
            Grande do Norte, Brazil
Analyses of municipal GDP growth in Rio
            Grande do Norte in the Northeast of Brazil during 1970-96
            reveal that the cross-section dispersion of per capita
            income increased over time. Although the analysis indicates
            some spatial dependence in income, it is small and has a
            downward trend, indicating that the growth path is only
            weakly determined by geographical links in Rio Grande do
            Norte. Moreover, dynamic analyses based on the Markov chain
            transition matrix show that the probability of a
            municipality moving from a poor income class to a rich class
            is very small and vice-versa. Municipalities located in the
            middle-income class have high mobility, but there is no
            strong evidence indicating direction. Public policy should
            include assisting the rural families by providing them
            education and training that increases their opportunities
            for employment. There should also be policies to assist poor
            and unskilled migrants to integrate fully into the modern
            economy in the urban areas through skill development
            training and education.
On the conservation of distance in
            international trade
The volume of world trade has grown more
            than twice as fast as real world income since 1980.
            Surprisingly, the effect of distance on trade has increased
            during this period. It could be that countries are trading
            greater volumes of goods that are highly sensitive to
            distance. An alternative explanation is that distance has
            become more import for a significant share of goods. Using
            highly disaggregated bilateral trade data, the authors find
            that adjustment in the composition of trade has not
            influenced the way in which distance affects trade. In
            contrast, for about 25 percent of industries, distance has
            become more important. This implies that the increased
            distance sensitivity of trade is a result of a change in
            relative trade costs that affects many industries, as
            opposed to a shift to more distance-sensitive products. The
            authors also find that homogeneous products are twice as
            likely to have become more distance sensitive as compared
            with differentiated goods. This is consistent with the
            hypothesis that falling search costs, resulting from
            improvements in transport and communications, are relatively
            more important for differentiated goods. The results offer
            no evidence of the "death of distance." Rather,
            they suggest that distance-related relative trade costs have
            remained unchanged or shifted in favor of proximate markets.
Education and its poverty-reducing
            effects: The case of Paraiba, Brazil
Breaking the intergenerational
            transmission of poverty requires far-reaching actions in the
            education sector. Widespread poverty affects both
            students' performance and their availability to attend
            school. Low-quality education leads to low income, which in
            turn perpetuates poverty. Furthermore, low levels of
            education affect growth though low labor productivity.
            Although Paraiba, Brazil suffers from a history of
            educational neglect, the state has recently made significant
            gains in primary enrollment; 93 percent of the children aged
            7-14 are enrolled in school. However, 30 percent of the
            population aged 15 and older are illiterate and,
            unfortunately, it is not only the older generations that
            cannot read and write: 15 percent of children aged 10 to 15
            are illiterate. However, substantial achievements in
            education have helped the extremely poor segment of
            population as much as expected. Probit analyses reveal that
            education attainment is the single most important
            poverty-reducing factor. All levels of education from
            primary to tertiary are significant and negatively
            associated with the probability of being poor.
Dynamics of income inequality and
            welfare in Latvia in the late 1990s
This paper analyzes the dynamics of
            poverty and income inequality during the recovery phase of
            the transition that characterized the Republic of Latvia in
            the late 1990s. Despite a continued rise in income
            inequality, empirical evidence suggests an improvement in
            living standards, owing largely to a significant surge in
            per capita income growth, particularly in urban areas. In a
            context of rising income inequality and widening urban-rural
            income and poverty gaps, the benefits of growth were not
            equally distributed, and poverty persisted in a number of
            regions (particularly the regions of Latgale and Vitzeme)
            and among some socioeconomic groups (particularly households
            deriving their main income from social benefits). In
            addition to income inequality and asset endowments, poverty
            appears to be highly correlated with a number of labor
            market-related variables, particularly unemployment,
            suggesting that the labor market could be an important
            transmission channel from growth to poverty. However, though
            positive, the association between poverty and unemployment
            is non linear, especially in urban areas, where the labor
            market and demand are the most important channels of
            transmission through which growth and macroeconomic
            development affect household income and living standards.
If you build it, will they come
            School availability and school enrollment in 21 poor countries
Increasing the supply of schools is
            commonly advocated as a policy intervention to promote
            schooling. Analysis of the relationship between the school
            enrollment of 6 to 14 year olds and the distance to primary
            and secondary schools in 21 rural areas in low-income
            countries (including some of the poorest countries in
            Sub-Saharan Africa) reveals that the two are often
            statistically significantly related. However, the magnitudes
            of the associations are small. Simulating big reductions in
            distance yields only small increases in average school
            participation, and only small reductions in within-country
            inequality. The data are mostly cross-sectional and
            therefore it is difficult to assess the degree to which
            results might be driven by endogenous school placement. Data
            can be geographically matched over time in three of the
            study countries and under some assumptions the results from
            these countries are consistent with no substantial bias in
            the cross-sectional estimates. Although increasing school
            availability by decreasing the average distance to schools
            can be a tool for increasing enrollments, it cannot be
            expected to have a substantial effect. Other interventions,
            such as those geared toward increasing the demand for
            schooling or increasing the quality of schooling should be prioritized.
Sometimes more equal than others :
            how health inequalities depend on the choice of welfare indicator
A large body of empirical work in recent
            years has focused on measuring and explaining socioeconomic
            inequalities in health outcomes and health service use. In
            any effort to address these questions, analysts must
            confront the issue of how to measure socioeconomic status.
            In developing countries, socioeconomic status has typically
            been measured by per capita consumption or an asset index.
            Currently, there is only limited information on how the
            choice of welfare indicators affects the analysis of health
            inequalities and the incidence of public spending. The
            purpose of this paper is to illustrate the potential
            sensitivity of the analysis of health-related inequalities
            to how socioeconomic status is measured. Using data from
            Mozambique, the paper focuses on five key health service
            indicators and tests whether measured inequality
            (concentration index) in the five health service variables
            is different depending on the choice of welfare indicator.
            The paper shows that, at least in some contexts, the choice
            of welfare indicator can have a large and significant impact
            on measured inequality in utilization of health service and
            on the perceived incidence of public spending. Consequently,
            we can reach very different conclusions about the
            "same" issue depending on how we define
            socioeconomic status. The results call for more clarity and
            care in the analysis of health-related inequalities and for
            explicit recognition of the potential sensitivity of
            findings to the choice of welfare measure. The results also
            point to the need for more careful research on how different
            dimensions of socioeconomic status are related, and on the
            pathways by which these dimensions affect health-related variables.
Education, information, and smoking
            decisions : evidence from smoking histories, 1940-2000
The author tests the hypothesis that
            education improves health and increases people's life
            expectancy. Smoking histories-reconstructed from
            retrospective data in the National Health Interview Surveys
            in the United States-show that after 1950, when information
            about the dangers associated with tobacco consumption
            started to diffuse, the prevalence of smoking declined
            earlier and most dramatically for college graduates. More
            educated individuals are also more likely to quit smoking:
            incidence analysis of smoking cessation shows a strong
            education effect. The instrumental variable approach, which
            relies on the fact that during the Vietnam War college
            attendance provided a strategy to avoid the draft, indicates
            that education does affect decisions about whether to smoke
            or stop smoking.
Education, information, and smoking
            decisions : evidence from smoking histories, 1940-2000
# WPS3362

# Education, Information, and Smoking Decisions Evidence from Smoking Histories, 1940-2000

## Damien de Walque

Development Research Group, World Bank <u>ddewalque@worldbank.org</u>

### World Bank Policy Research Working Paper 3362, July 2004

_The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the view of the World Bank, its Executive Directors, or the countries they represent. Policy Research Working Papers are available online at http://econ.worldbank.org._ The author thanks Gary Becker, Mark Duggan, Michael Greenstone, Steven Levitt and Tomas Philipson for useful comments, suggestions and encouragements. I am grateful to Daniel Parent for suggesting the Vietnam draft as an instrumental variable for college education. I also thank Raphael De Coninck, Michael Grossman, Ted Joyce, Fabian Lange, Ellen Meara, Chris Rohlfs and participants of the Applications Workshop (May 5, 2003) at the University of Chicago, as well as participants at a NBER Health economics seminar for helpful comments and discussions.
Trade and financial development
The differences in financial development
            between advanced and developing countries are pronounced. It
            has been observed, both theoretically and empirically, that
            these differences in countries' financial systems are a
            source of comparative advantage and trade. This paper points
            out that to the extent a country's financial
            development is endogenous, it will in turn be influenced by
            trade. The paper builds a model in which a country's
            financial development is an equilibrium outcome of the
            economy's productive structure: in countries with large
            financially intensive sectors financial systems are more
            developed. When a wealthy and a poor country open to trade,
            the financially dependent sectors grow in the wealthy
            country, and so does the financial system. By contrast, as
            the financially intensive sectors shrink in the poor
            country, demand for external finance decreases and the
            domestic financial system deteriorates. This paper describes
            the authors' test model using data on financial
            development for a sample of 77 countries. The authors find
            that the main predictions of the model are borne out in the
            data: trade openness is associated with faster financial
            development in wealthier countries, and with slower
            financial development in poorer ones.
Financing small and medium-size
            enterprises with factoring: global growth and its potential
            in eastern Europe
Factoring is a form of asset-based
            finance where the credit is extended based on the value of
            the borrower's accounts receivable. In recent years
            factoring has experienced phenomenal growth and has become
            an important source of financing-especially short-term
            working capital-for small and medium-size enterprises and
            corporations, reaching a worldwide volume of 760 billion
            euro in 2003. Although the importance of factoring varies
            considerably around the world, it occurs in most countries
            and is growing especially quickly in many developing
            countries. The authors explore the advantages of factoring
            over other types of lending for firms in developing
            economies, and discuss the informational, legal, tax, and
            regulatory barriers to its growth. They also examine the
            role of factoring in the eight Eastern European countries
            that became EU members on May 1, 2004-the Czech Republic,
            Estonia, Hungary, Latvia, Lithuania, Poland, the Slovak
            Republic, and Slovenia, referred to as the EU 8. The authors
            conclude that factoring offers key advantages over other
            lending products and is likely to become more important in
            these countries, and suggest policies to accelerate its development.
Fuelwood consumption and
            participation in community forestry in India
Decentralized forest management is an
            important policy issue in India and elsewhere. Yet there are
            few careful studies of the impacts of community forestry.
            The authors try to fill this gap by analyzing National
            Sample Survey data from 524 villages in five states in
            India. Their analysis seeks to answer two key questions: (1)
            Who participates in community forestry and what are the
            determinants of participation? (2) What is the impact of
            participation on household fuelwood consumption? The authors
            find that proximity to forests, leadership, and fuelwood
            dependence are significant factors in explaining village
            participation in community forestry. Household participation
            is strongly correlated with scarcity, a result that has
            implications for a recent policy to expand community
            forestry from degraded to less degraded forests. The
            authors' most important findings are that fuelwood
            consumption and participation are linked, and household
            participation has a significant positive impact on
            consumption. However, the presence of a village level
            forestry institution does not have a direct effect.
Fiscal responsibility laws for
            subnational discipline : the Latin American experience
This paper discusses fiscal
            responsibility laws in Latin America, with special attention
            to their provisions for fiscal discipline by subnational
            governments. It discusses why and when such laws might be
            useful-to help resolve the coordination problem in getting
            diverse governments to avoid overusing the common national
            credit market and to help individual governments make a
            time-consistent commitment for fiscal prudence. It examines
            the cases of Brazil, Colombia, Peru, and Argentina, as well
            as the case of Mexico where other types of laws and
            regulations aim to achieve the same objectives of
            solidifying incentives for fiscal discipline at all levels
            of government. Fiscal responsibility laws are found to be
            useful in some cases, although the experience is not long
            enough to be certain, but they are clearly not necessary in
            every case, nor always sufficient to assure fiscal stability.
The case for tradable remedies in
            WTO dispute settlement
In response to concerns over the
            efficacy of the WTO dispute settlement system, especially in
            regard to its use by developing countries, Mexico has tabled
            a proposal to introduce tradable remedies within the Dispute
            Settlement Understanding. The idea is that a country that
            has won cause before the WTO, and who is facing
            non-implementation by the author of the illegal act but
            feels that its own capacity to exercise its right to impose
            countermeasures is unlikely to lead to compliance, can
            auction off that right. The attractiveness of this idea is
            that it offers an additional possibility to injured WTO
            members to get something from the dispute settlement
            mechanism without putting into question the legal nature of
            the existing contract, that is, the predominantly
            decentralized system of enforcement in the WTO. Examining
            all disputes brought to the WTO since its inception, the
            authors find some support for Mexico's perception that
            developing countries face a practical problem when they
            attempt to carry through with effective retaliation within
            the WTO system. And based on the formal results of Bagwell,
            Mavroidis, and Staiger (2003), they describe arguments that
            lend some support to the efficacy of Mexico's proposed
            solution from the perspective of formal economic theory.
Tango with the Gringo: the hard peg
            and real misalignment in Argentina
Between 1990 and 2001 the Argentine peso
            appreciated by 80 percent in real terms, and its
            overvaluation has been singled out as one of the main
            suspects in the debate on the causes of the Argentina
            collapse of late 2001. This paper assesses the degree of
            real misalignment in Argentina over the Convertibility
            period using a model in which the equilibrium real exchange
            rate is defined as the value consistent with (i) a balance
            of payments position where any current account imbalance is
            financed by a sustainable flow of international capital
            (external equilibrium), and (ii) traded/nontraded sector
            productivity differentials (internal equilibrium). Empirical
            implementation of the model suggests that the initial real
            appreciation of the peso, between 1990 and 1993, was
            consistent with the productivity increases that Argentina
            enjoyed following the stabilization of the economy after the
            hyperinflation of the late 1980s. But after 1996 a widening
            gap opened between the observed real exchange rate and that
            consistent with a sustainable net foreign asset position.
            Our estimates indicate that in 2001 the peso was overvalued
            by over 50 percent. The model allows us to assess how much
            of the overvaluation resulted from Argentina's
            inadequate choice of anchor currency and how much from a
            divergence of fundamentals between the U.S. and Argentina,
            ultimately due to the maintenance of policies inconsistent
            with the peg. We find that both factors played a role in the
            overvaluation accumulated between 1977 and 2001 that
            preceded the collapse of the Convertibility regime.
Infrastructure, competition regimes,
            and air transport costs: cross-country evidence
The relevance of transport costs has
            increased as liberalization continues to reduce artificial
            barriers to trade. Countries need to adopt policies to get
            closer to global markets. Can improvements in infrastructure
            and regulation reduce transport costs? Is it worthwhile to
            implement policies designed to increase competition in
            transport markets? Focusing on air transport, which has
            increased its share in US imports from 24 percent in 1990 to
            35 percent in 2000, this paper quantifies the effects of
            infrastructure, regulatory quality and liberalization of air
            cargo markets on transport costs. During the 1990s, the
            United States implemented a series of Open Skies Agreements,
            providing a unique opportunity to assess the effect that a
            change in the competition regime has on prices. We find that
            infrastructure, quality of regulation and competition
            matter. In our sample, an improvement in airport
            infrastructure from the 25th to 75th percentiles reduces air
            transport costs by 15 percent. A similar improvement in the
            quality of regulation reduces air transport costs by 14
            percent. Open Skies Agreements further reduce air transport
            costs by 8 percent.