rafmacalaba/datause-encoder-data huggingface dataset:
in order for the model to be identified statistically. In the developing country context, the Measuring Income Distribution Dynamics project conducted under the leadership of Bourguignon and Ferreira (2004) is but one example of a set of studies in which the Roy model is maintained for developing countries. More generally, models in which workers are assumed to be able to enter whichever economic sector, occupation, or employment status they wish predominate in the literature on labor markets in both developed and developing countries, and for this reason such models are called sector choice equations, occupational choice equations, and labor supply equations respectively.

From the empirical findings throughout the world that have shown conclusively that individuals with more education earn more in the labor market, it is very frequently argued that society should invest in more education. As I shall now argue, while there is no question that additional education produces benefits for the individuals who receive <u>the education, the case for additional education producing social benefits for all members of society including those who do not get the education</u> is much less compelling. In this subsection, I explain these doubts by considering two alternative underlying models that yield very different conclusions about the social benefits of education.

Take first the familiar human capital model (Becker, 1964; Mincer, 1974). The model makes a number of assumptions, usually implicitly: that educated workers are more productive than less educated workers; that the difference in productivity can be approximated by the difference in earnings; that better-educated workers earn more because of the additional education they have received; that there is full employment; and that if one more worker is educated, there will be one more educated worker employed in the educated workers’ labor market and one less less-educated worker employed in the less-educated workers’ labor market. The human capital model has been applied in general equilibrium contexts by, among others, Katz and Murphy (1992) and Heckman, Lochner, and Taber (1999).

An alternative to the human capital model is the screening model (Fields, 1972, 1974; Stiglitz, 1975, 2002). In screening models, the assumptions are different from those in the human capital model: the wage is set according to the job, employers seek to fill each job with the most productive worker available, and workers with more education are on average more productive than workers with less education. In such circumstances, 50
**Table 4. Responses of firms to the global financial crisis (proportion of firms)**

|||Cr<br>|edit constrai<br>|ned<br>|
|---|---|---|---|---|
||All|No|Yes|p-value|
|**Production**|||||
|Reduce salesprices|0.51|0.49|0.52|0.59|
|Reduce input costs|0.23|0.26|0.21|0.34|
|Reduce inventoryof raw materials|0.32|0.24|**0.38**|0.01|
|Reduce inventoryof finishedproducts|0.50|0.55|0.47|0.17|
|Lookingfor new customers / markets|0.83|0.77|**0.87**|0.03|
|**Finance**|||||
|Reduce trade credit to customers|0.34|0.31|0.36|0.49|
|Increase trade credit from suppliers|0.18|0.10|**0.23**|0.01|
|Lookingfor new finance (formal/ informal sources)|0.80|0.70|**0.86**|0.00|
|Lookingfor new businesspartners|0.58|0.50|**0.63**|0.03|
|**Labor**|||||
|Increase layingoff workers|0.23|0.19|0.26|0.19|
|Reduce hiringworkers|0.20|0.18|0.22|0.41|
|Reduce workinghours / overtimeper workers|0.11|0.10|0.11|0.72|
|Reduce wagesper worker|0.10|0.09|0.10|0.71|
|**Management**|||||
|Reduceproduction capacity|0.14|0.07|**0.19**|0.01|
|Reduce number of offices / branches /plants|0.05|0.04|0.06|0.45|
|Reduce investment|0.16|0.10|**0.20**|0.03|
|Exitproduct lines|0.14|0.10|0.17|0.11|
|Develop/ introduce newproducts / services|0.62|0.60|0.64|0.50|
|Develop/ introduce new technology|0.51|0.47|0.53|0.28|
|Intensify management (planning, review of budget<br>andplan, etc.)|0.84|0.79|**0.87**|0.07|

Note: the data are weighted. Mean responses which are larger and significantly different between firms that are and that are not credit constrained are reported in bold (at 10% significance level).

The table also suggests that credit constrained firms are more likely to reduce hiring and increase firing of workers (although the differences are not statistically significant in this bivariate comparison). This suggests that these firms are less able to hold on to their workers which could be costly if the negative shock is (expected to) be temporary. In the next section, we introduce a simple theoretical framework to show that the actual ability of a firm to smooth (or hoard) inputs is adversely affected by the presence of liquidity or credit constraints, and that this creates a welfare loss due to incomplete risk coping. Using this theoretical framework, we return to the survey data and analyze empirically whether credit constraints have indeed affected the ability of firms to smooth their labor (and other) inputs after the onset of the global financial crisis in Cambodia.

10
In particular, we study the height of all children under five in a randomly selected 75 percent of households in the villages surveyed. This age group is the focus of WHO growth reference charts, and is a commonly selected population in height studies. In our main results, we transform height into _z_ -scores using the 2006 WHO reference population,<sup>13</sup> but we will show – that our results are robust to using log of height in centimeters unrelated to an external – standard as the dependent variable instead.

Our preferred specification is a difference-in-differences at the individual child level, using only data from Ahmednagar district: _zivt_ = _β_ 1 _treatmentv_ + _β_ 2 _treatmentv×midlinet_ + _β_ 3 _treatmentv×endlinet_ + _Aivt_ Γ+ _αv_ + _γt_ + _εivt,_ (1) where _i_ indexes individual children, _v_ indexes villages, and _t_ indexes the three survey rounds: baseline, midline, and endline. The dependent variable _z_ is the child’s height-for-age _z_ score, _treatmentv_ is an indicator for living in a village assigned to the treatment group (notice it is only indexed by village), and _midlinet_ and _endlinet_ indicators for survey round. Survey round fixed effects _γt_ will always be included, and to this a set of 120 age-in-months-timessex indicators _Aivt_ and village fixed effects _αv_ will be added in stages to demonstrate that they do not change the result. We replicate the result using a similar specification where the _midlinet_ and _endlinet_ indicators have been collapsed into the single variable _aftert_ , which is 1 for observations in the midline or endline survey round and 0 for observations in the baseline survey round.

Because the experimental treatment was assigned at the village level, in all regression

> 13The international reference population used to create these standards includes a population of Indian children raised in healthy environments in south Delhi. Such Indian children grow, on average, to the WHO reference mean heights (Bhandari et al., 2002).

12
plays a role. We created institutional tiles based on the average government effectiveness index by country from the World Governance Indicator database. Government effectiveness measures the quality of public services, the civil service, policy formulation and implementation, and the credibility of a government’s commitment to improving or maintaining these aspects (Kaufmann, Kraay and Mastruzzi, 2010). Our general intuition is that developing countries with low government effectiveness are not only less able to engage in BLAs but also less able to enforce the BLAs they do sign with partner countries. This likely translates into less effective BLAs and, consequently, lower migration flows.

To test this hypothesis, we created two, three, and four tiles corresponding to halves, terciles, and quartiles. Countries in the top tiles are characterized by more effective government. Results reported in table 5 strongly suggest that, although the migration response to BLAs in Africa is null, African countries belonging to the upper tiers of the government indicators do experience a positive migration response to BLAs. Conversely, African countries with poor governance indicators show no significant migration response to BLAs.

# **4.3 Persistence of the impacts**

We now turn our attention to the timing of the effect of BLAs on migration flows using an event study design. It is worth noting that one of the key advantages of the event study design is the possibility to check if the estimated effect is long lasting or if it quickly vanishes after a certain period of time. Figure 1 depicts the benchmark estimate timing of the effect of BLAs on migration flows. First, there is no pre-trend prior to the treatment. Second, it appears that the positive effect of BLAs on migration flows lasts up to 3 decades after BLAs are signed before vanishing.

Consistently, heterogeneity results show that this positive effect is driven by non-African origins (panel 2a of figure 2). An interesting result of this event study design emerges when comparing the effects on GCC and non-GCC destinations. Essentially, non-GCC destinations replicate the average timing of the effects of BLAs on migration, while GCC destinations show a persistent effect of BLAs on migration flows. A simple explanation is that most BLAs signed in the aftermath of 1990 involve GCC countries. This is also why there is a smaller number of decades in the post treatment period for GCC destinations. Moreover, BLAs are almost the only channel through which migrant workers enter the GCC.

18
# 3.2 Business Cycle Asymmetries: Excess Cyclicality during Expansions?

To further examine the potential asymmetries in the response of wages and employment to output, we calculate the difference in the cyclicality of each variable between expansions and recessions.<sup>6</sup> If downward nominal wage rigidities are important, we may expect excess cyclicality of wages during expansions.

Specifically let ρ<sup>j,y</sup> t be the correlation between variable j (which is either employment (l) or wages (w)) and output (y). Define the differential cyclicality between expansions and recessions �DC<sup>j,y�</sup> as where T1 is the number of quarters of expansion and T2 the number of periods of recession.

Table 1 displays the median and the 68 percent confidence interval for the difference between the average correlation coeffi cient in booms and recessions. DC<sup>w,y</sup> refers to the comovement of real wages and output and DC<sup>l,y</sup> to the comovement of employment and output.

Perhaps not surprisingly, wages tend to be more responsive to output during expansions in the three countries that exhibit highly procyclical wages. The median excess procyclicality of wages (difference in the cyclicality between expansions and recessions) is 0.13 in Brazil, 0.09 in Mexico, and 0.27 in Colombia. This is indicative of asymmetries in wage setting, whereby wage gains during expansions are more easily obtained than real wage cuts during recessions. As for employment, we find a mild excess of procyclicality during expansions in all countries except Chile. Interestingly, in all countries, the excess procyclicality of wages during expansions exceeds that of employment, suggesting again a role for downward real wage rigidities during recessions.

> 6 The turning points to date expansions and recessions are obtained from the series of industrial production with the Bry—Boschan Quarterly (BBQ) algorithm (Hardin and Pagan, 2002).

15
# **E. Principal Personality and Political Skills and SBM**

This section presents empirical evidence using the SBM measure generated from the previous section to test hypotheses regarding the personality types and political skills of the principals. As outlined in Section B, the BFI and PSI instruments have become accepted in the literature. A similar research agenda is possible with regard to SBM as well which would enable for checking the presence or absence of the relationship between SBM and the other constructs. This section sketches the application in context of the sample of 150 schools in the Philippines. The issue of impact of SBM on school performance requires a much larger longitudinal sample size and a dynamic context that allows testing against a counter-factual – presented in another working paper related to this study (Yamauchi, 2012).

The hypotheses here are drawn from the huge literature on leadership and personality. In this paper, we posit that the principals of schools which have higher level of SBM implementation are effective in exercising leadership of this important reform effort and we can derive some insights from empirical analysis. In this section, there is no attempt being made to draw a causal link from the correlation – it is possible that principals possessing certain traits were early adopters of SBM and the correlations merely represent a self-selection of principals. It should be noted that at the time of the survey data collection, all the schools in the Philippines had already been converted to adopt the SBM model, so any self-selection would have occurred only with respect to the timing of the SBM in a school.

_H1: Extraversion is positively associated with SBM implementation._ Extraversion is the tendency to be outgoing and possess positive energy that is used in social situations to exercise assertiveness. Extraverted individuals tend to be expressive and talk a lot. This is the one BFI trait that is fairly consistent in the literature as a positive marker for leadership.

_H2: Agreeableness and SBM implementation is not be correlated._ Agreeable individuals are described as ‘nice’- they are compliant and passive and they like to get along with others. On the positive side, agreeable individuals display empathy and in a collegial school atmosphere it is possible that trusting and nurturing would work in a principal’s favor. On the negative side, agreeableness tends to be a follower rather than a leader’s trait – a leader needs to set a direction and bring about change.

_H3: Conscientiousness and SBM implementation are positively correlated._ The literature exploring BFI and managerial performance including entrepreneurship and BFI and academic achievement indicates a high correlation with conscientiousness. Conscientious individuals are hard-working and persevering in their effort for results. For implementation of SBM, even though stated claims from the principals could be a biased positive self-image for some individuals, hard-working principals would probably be more commonly found in high SBM schools.

22
organizations; (2) development, in which the scheme is designed and the rural community is prepared to take ownership; and (3) implementation, involving construction, establishment of a community action plan, and transfer of ownership to the rural community (Alsop 2004).

# _Measuring Empowerment in RWSS_

RWSS communities are organized into “batches” that are brought into the project, following the three phases above. Subsequent batches incorporate the lessons learned from previous ones. Focusing on a sample of RWSS I Batch IV and Batch V schemes that will be completed during the first two years of RWSS II, MESI research seeks to assess whether and how the RWSS project has empowered communities in relation to government and NGO service providers, and asks whether women, Dalits, and Janajatis, as previously marginalized groups, have been empowered and experience greater social inclusion due to the RWSS intervention (Bennett and Gajurel, 2004).

The MESI and the ME studies have collaborated on developing the overall framework for measurement, and both have used the same broad set of domains in operationalizing the concepts of empowerment and social inclusion. The MESI study is designed as two phases of research on empowerment and inclusion, integrated into the RWSS project cycle. Each phase includes a qualitative and quantitative component. The first phase spanned nine months, and the second phase will span three years. The first phase was a self-contained research design that established the baseline of the longitudinal study that is the keystone of this research. The quantitative portion of the design involved a comparison among communities that had already received an intervention with communities that have not. The use of control communities reduced the possibility of threats to the internal and external validity of the findings (Bennett and Gajurel, 2004).

Empowerment indicators used for the MESI study that apply to this framework are listed in table 2 of annex 2. The state and society domains are covered, and the research concentrates on the intermediary and local levels. Data are collected on wide range of assets hypothesized to have a relationship with empowerment outcomes. Assets include standard measures such as literacy and land ownership, as well as group membership, participation in training, and knowledge of rights. Indicators of opportunity structure focus on the rules that govern social positioning, social interaction, physical mobility, violence, and economic security or vulnerability. Degrees of empowerment indicators range from the ease with which people can approach legal services, to voting behavior, to the degree of control over various aspects of domestic life that different household members enjoy. There are also indicators of intra-community engagement and the manner in which people behave or are able to behave in that setting.

20
determines the level to which foreign debt will converge to in the long run. This link between the long run value of the endogenous variables and the long run value of debt is the result of a feasibility constraint that holds independently of the methodology used to perform debt sustainability analysis.

One could argue that it is strange to implicitly x the long run level of debt through the choice of the country xed eect in an exercise whose objective is precisely to analyze the sustainability of debt. The estimates obtained in the next section, however, imply that external debt tends to converge to its long run value in 70 years or more. During the relevant horizon (20 years or, preferably, less), the forecast levels of foreign debt are usually quite dierent from those long run values.

The analyst also needs to estimate projections for the exogenous variables based on the process (3.2). This specication could be dicult to estimate for each country of interest due to data limitations. The following assumptions are imposed. First, I assume that the (log) of the terms of trade follow a univariate autoregressive process independent of the other exogenous variables. To perform the analysis for countries with minimal or no data on the terms of trade, the analyst could use estimates from similar countries or simply assume a process for it. Second, I assume that world GDP growth and the U.S. interest rate follow a bivariate vector autoregression and that (log) oil prices follow a separate autoregressive process. This is done for convenience and not necessarily for realism. In eect, oil prices behave quite dierently before and after the mid 1970s. Thus, I use relatively long time series (starting in 1962) to estimate a VAR for world GDP growth and the U.S. interest rate, and a shorter time series to estimate the process for the price of oil and the terms of trade.

A standard augmented Dickey Fuller test rejects the null hypothesis of a unit root in the logarithm of the price of oil over 1974-2010. According to the SIC and AIC information criteria, an autoregressive process with one lag is enough to describe the dynamics of the price of oil. The points estimates of the constant and coecient on lagged oil price are 0.33 and 0.91 respectively. The estimated standard deviation of the residuals is 0.27 and the 16
The more likely explanation, and one that we intend to explore further in our follow-up surveys, is that financial literacy and knowledge is simply harder to teach and individual cognitive constraints are a significant barrier to improving financial knowledge. Health training may be easier to understand for a couple of important reasons: (a) it does not involve numeric computation; and (b) it is likely more salient in peoples’ lives, for example participants themselves may have experienced preventable sickness in the past or know someone who gave birth with an untrained midwife.

# **VI. Conclusion**

In this paper, we report experimental results of a study to measure the impact of financial education on three layers of financial knowledge – numeracy skills, basic financial awareness, and attitudes towards financial decisions – among low-income urban households in India. Our findings suggest that financial education has limited effects in increasing financial numeracy. Specifically, we do not find that financial literacy training fosters individual abilities to calculate and compare interest returns, insurance costs, or household income and expenses. Even when provided with monetary incentives, respondents are unable to answer these questions correctly. We find, however, that financial education influences participants’ awareness of and attitudes towards financial products and financial planning tools available to them.

Our results have important implications for advancing both research and policy. While many financial choices we face in the real world require calculating interest rates or estimating returns, our findings indicate that measuring financial literacy should not exclusively focus on questions that require high numeracy skills. Financial education programs may affect financial decision making through channels other than financial numeracy, for instance by making individuals and households more aware about the details of financial products, or changing their attitudes towards purchasing and recommending formal financial products and services. These alternate channels may be as important, if not more, than enhancing numeracy skills.

16