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This is a collection of essays by Simon Kuznets, winner of the 1971 Nobel Memorial Prize in Economic Sciences, published posthumously. It represents the primary concerns of his research at a late phase of his career, as well as themes from his earlier work. The first four chapters deal with 'modern economic growth'. Chapters five to seven introduce the main theme of the remainder of the volume: interrelations between demographic change and income inequality. Chapters eight to ten draw on a wider set of data to make comparisons of income inequality among societies at widely different levels of development. Chapter eleven returns to data for the United States to develop more fully the importance of differing childbearing patterns for income inequality. In the introduction Professor Richard Easterlin discusses the relationship of the essays to the balance of Kuznets's writings. In the afterword Professor Robert Fogel discusses the methodologies favoured by Kuznets.
(cont.) The effect of treated friends comes primarily from bilateral ties, where both the child and his friend indicate that they spend time with each other. The third chapter, written jointly with Nava Ashraf and Jesse Shapiro, explores how households make decisions to purchase and use health products in developing countries. This study tests whether higher prices can increase use, either by targeting distribution to high-use households (a screening effect), or by stimulating use psychologically through a sunk-cost effect. We develop a methodology for separating these two effects. We implement the methodology in a field experiment in Zambia using door-to-door marketing of a home water purification solution. We find that higher prices screen out those who use the product less. By contrast, we find no consistent evidence of sunk-cost effects.
This dissertation consists of three essays in development economics. I explore various household behaviors in developing economies, using India and Tanzania as examples. The first two chapters focus on urban slums to capture the inequality within cities and to evaluate the impact of an intervention during urbanization. The third chapter investigates the influence of an inheritance law reform on child labor. The first chapter, which is a joint work with Claus Portner, examines the differences in child health across rural, urban non-slum and slum areas. The developing world is rapidly becoming more and more urban, but our understanding of the differences between urban and rural areas is still limited, especially in the important area of child health and its determinants. Simple averages show clearly that child health in India is worst in rural areas and best in urban areas---with slums in between---but it is unclear exactly what accounts for these differences. We examine the determinants of these differences and to what extent the same mechanisms affect child health in different areas using the 2005-06 National Family Health Survey (NFHS-3) data from India. Once we control for environmental conditions and wealth status, the urban advantage in child health disappears and slum children fare substantially worse than their rural counterparts. We also examine the impact of maternal education on child health across rural, urban, and slum areas and find that the positive effect of mother's education on child health is significantly stronger in rural areas than in cities and almost entirely absent in slums. Potential explanations for these results, such as school quality and migration, are explored, but these are unlikely to fully explain the differences in health. The second chapter, which is a joint work with Aidan Coville, evaluates the impact of a slum upgrading project in Tanzania. Developing countries spend significant amounts of their budgets annually on slum upgrading activities, with the broad objectives of alleviating poverty, improving health and well-being and strengthening the social fabric within these communities in a holistic and integrated manner. Rigorous evidence on the impact of these programs is sparse. Isolating the causal impact of these interventions presents a challenge, since the outcomes of interest are often correlated with the site selection for upgrading, and randomized controlled trials are not usually feasible for practical implementation reasons. While rigorous research is beginning to emerge on the effects of slum upgrading on diarrhea, acute respiratory illness (ARI) and the crowding out of private investments, very little is known about the broader impacts of the upgrading process that serve to motivate these interventions in the first place. This paper evaluates the Community Infrastructure Upgrading Program (CIUP) financed by the World Bank with the aim of improving the lives of slum dwellers in Dar es Salaam, Tanzania through targeted investments in community infrastructure such as roads, drainage systems and streetlights. We find that the CIUP interventions increased household sizes and decreased out-migration, halved diarrhea rates for children under 5, and increased female school enrollment rates, but did not have significant impacts on employment, business operations, income and expenditure, private investment or social cohesion. We review possible confounding factors that influence the reliability of these estimates and present the results in light of these methodological constraints. The third chapter examines the relationship between female autonomy and child labor in India. Many children in developing countries are engaged in various forms of child labor. It is important to understand the determinants of child labor and to evaluate its welfare implications. Intra-household bargaining has been considered an important factor in household decision-making for investment in children. This paper uses the Hindu Succession Act Amendment (HSAA) in India as a source of exogenous variation in woman's bargaining power and information from the 2005-06 National Family Health Survey (NFHS-3) to study the effect on child labor. I find that the increase in mothers' bargaining power is associated with a lower probability of child labor, and this negative impact is especially strong for teenage daughters. A daughter of 12 to 14 years old is less likely to be working by 30 percentage points and is less likely to do family work by 20.6 percentage points if her mother is exposed to the HSAA. The HSAA also shows differential impact on families with different sizes and wealth status.
Nations and Households in Economic Growth: Essays in Honor of Moses Abramovitz is a collection of papers that reflect the broad sweep of Moses Abramovitz’s interests within the disciplines of economics and economic history. This work is organized into two parts encompassing 14 chapters. The first part discusses the individual and social welfare significance of quantitative indices of economic growth. This part also deals with the mechanisms of economic-demographic interdependence and their bearing particularly upon “long swings in the rate of growth. The second part highlights the changing role of international relations in processes generating national economic development and domestic economic instability. This book will be of value to economists, historians, and researchers.
Poverty and health are two topics in the field of development economics that are of critical importance to both researchers and policy-makers. Despite advances in poverty alleviation and gains in health outcomes in many developing countries, many challenges remain. Two of these challenges include accurately measuring poverty and improving the quality of health care delivery systems. In this dissertation, I present three essays with theoretical, empirical, and policy-relevant insights into these two challenges. The first essay addresses the issue of accurate poverty measurement by developing a new asset index that captures long run household economic well-being. The accurate measurement of household well-being is necessary for measuring poverty levels and targeting poverty programs. However, since standard expenditure aggregates are costly to collect, relative well-being in developing countries is often measured using asset indices based on durable goods ownership. Although various methods exist to generate proxies for economic well-being (e.g., principal component analysis), the underlying theories associated with these methods have not been formalized. This makes it difficult to interpret the economic meaning of the resulting indices and can lead to inaccurate targeting and evaluation. In this paper, I develop a new asset index, the utility index, by modeling and structurally estimating household preferences over discrete assets. By drawing from economic theory, the utility index can be more directly interpreted as capturing long run household well-being. In contrast to existing asset indices, the utility index incorporates additional information on prices, demographics, and spatial and temporal variation and can therefore be used for policy simulations that are not otherwise possible. After developing the theoretical model, I describe a strategy to construct the utility index by structurally estimating the marginal utility associated with each asset. I then demonstrate how the utility index can be used by measuring changes in poverty in Nicaragua using data from the Living Standards Measurement Surveys. I also use the model to project changes in poverty under a constant income distribution but changing prices and find that about a third of the poverty decrease measured from 1998 to 2005 can be attributed to decreasing asset prices. In addition, I show through the empirical analysis that traditional asset indices are only moderate approximations for household well-being. Finally, I discuss and demonstrate the distinctions between asset and consumption measures, which point to the complementary nature of the two strands of measurement. The second essay presents an alternate approach for improving accurate poverty measurement in developing countries. Although the utility index developed in the first essay presents a method for measuring long run economic well-being, complementary measures of short run welfare are necessary for identifying households which are vulnerable to falling into transitory poverty. Again, given the expenses associated with collecting full consumption data, researchers have developed methods to construct wealth indices based on dichotomous asset and consumption indicators. This work provides guidance on generating such indices by comparing across various methods of construction and variable choices. Specifically, we assess the performance of alternate indices using data from the Living Standards Measurement Surveys in five countries in Sub-Saharan Africa--Ghana, Rwanda, Uganda, Tanzania, and Malawi. We compare indices against a benchmark of household per capita expenditure according to three criteria: rank correlation coefficients, sensitivity to identifying poor households, and accuracy of classifying households as poor or non-poor. Comparing across construction methods, we find that indices generated using principal components analysis correspond most closely with expenditure, though variation across construction methods is small. Comparing across variable inclusion groups, we find that indices generated using a combination of indicators drawn from the categories of staple food consumption, other food consumption, housing quality, semi-durables expenditure, and durables ownership tend to outperform indices generated using variables from only one or two categories. We also assess the various indices in urban and rural subsamples and in analyses of repeated cross-sections and find that index performance is similar to what we find in national, single wave analyses. The third essay turns to the challenge of improving the quality of health care delivery systems by looking at provider investment decisions. Pay-for-performance (P4P) programs, which aim to increase health service provision and quality using financial incentives, have been recently introduced in a number of developing countries. P4P programs contract directly on outputs without specifying the mechanisms for improvements, allowing providers to innovate and modify different aspects of health care delivery as needed. Characterizing these provider responses can help to identify successful mechanisms for quality improvement and enhance our understanding of the links between P4P and overall health systems strengthening. In this paper, we examine provider input responses to the Rwandan P4P program using facility-level data from the 2007 Demographic and Health Survey Service Provision Assessment (SPA) collected after the randomized program rollout to a subset of districts. We focus on facility-level incentives for institutional deliveries, which, as documented in earlier research, resulted in higher institutional delivery rates. Using the SPA facility data, we find that the program's effect on institutional delivery rates is comparable to results in previous studies that used household surveys. Comparing system inputs, we find positive treatment effects for a general management indicator and the daily presence of staff per capita providing maternity-related services. There are no differences in other delivery-specific and general health care delivery inputs. Additionally, we perform a mediation analysis to assess the link between inputs and outcomes and find that management and staffing differences explain a relatively small fraction of the P4P effect on institutional delivery rates. The small mediation effects indicate the potential importance of unobserved factors, such as recruitment effort, in the provider production function. Furthermore, the null results for the other analyzed inputs suggest a weaker link between P4P and overall health system strengthening.
This Ph.D. thesis explores barriers to gender equality in developing countries. It is composed of three essays. The first essay (chapter 1) explores the roots of gender inequality favoring boys in education. It analyzes the effect of culture interaction with poor household economic on the school dropout probabilities of boys' and girls', using Malawi data. Malawi's suitability for this analysis stems from the coexistence in its territory of two different customs of post-marital residence for couples: patrilocal and matrilocal customs. Estimation results show that gender inequality in education is rooted in the interaction of household economic conditions and the custom of patrilocality—when a married couple settles near or with the husband's family after marriage. The essay concludes that public policies that make it unnecessary for parents to rely on traditional customs to organize their family life can eliminate gender inequality favoring boys' education. The last two essays analyze the issue of polygyny—when a man can have multiples wives simultaneously. This marriage institution has disappeared globally but remains confined in a cluster of sub-Saharan African countries, particularly in the Sahel region. Economic theory predicts that increasing women's education leads to the disappearance of polygyny. Still, empirical evidence is yet to establish this causal link, settling instead for a negative correlation between education and women's polygyny probabilities. The second essay examines the effect of education on women's polygyny probabilities, using primarily Uganda data. For identification, we use an estimation approach that jointly addresses sample selection and education endogeneity problems. We estimate a three-equation model comprising a polygyny (main) equation, a marriage (selection), and an education (endogeneity) equation. Estimation results confirm economic theory's prediction that increasing women's education leads to the disappearance of polygyny. The third and final essay provides evidence on the cause of the clustering of polygyny in drought-prone countries. Evidence shows that in village economies dependent on rainfed agriculture, the breakdown of informal risk-sharing arrangements following covariate shocks such as droughts increases the value of having a large family, both in size and composition, as a lever of resilience strategies. We find that polygyny allows households to build resilience to the adverse effects of drought on crop yields. These three essays contribute to advancing our knowledge of the barriers to gender inequalityin sub-Saharan Africa. It mainly draws attention to the importance for developing countries to invest in girls' schooling (Essay 2) and promote public policies that make it less attractive for parents to resort to traditional institutions to support their livelihoods (Essay 1). Additionally, policies such as those promoting smallholder farmers as a development strategy can contribute to the persistence of polygyny in drought-prone communities if done without weaning the rural population of its dependence on rainfed agriculture. In these settings, promoting resilience and adaptation strategies independent of household size can lead to polygyny and child marriage's disappearance (Essay 3).
This dissertation is composed of three chapters. All three deal with topics in development economics. The first chapter examines the effects on village institutions of introducing formal financial institution options into the village. The second addresses the effects of government policy on educational investment and crime. The third tests the explanatory power of various explanations of the gender gap in math test scores. The first chapter examines the effects of a transition from a ``traditional'' economy based on an uncertain source of income, with risk fully insured away by one's neighbors in a social network through costly network ties, to a ``modern'' economy in which some agents have access to partial insurance at a lower cost. A theoretical model is used to show that village social networks can break down as some members of the village no longer need the insurance the social network provides, producing a reduction in welfare (if the costs of reducing moral hazard are not too high) for at least some individuals and possibly the village as a whole. This loss of welfare can occur even when networks provide other benefits to those belonging to them and is likely to be heterogeneous, depending on the opportunities and networks available to individuals. This paper tests these predictions using Indonesian data to examine the effect of a change in the banking institutions available to a community on the strength of social networks (measured by community participation) and welfare (measured by household expenditure and by child health). The analysis finds that changing financial institution availability in general does not influence community participation or welfare, but that financial institutions that primarily serve certain groups do relatively reduce the welfare of households not in those groups, which is consistent with the hypotheses generated by the model. Crime is an important feature of economic life in many countries, especially in the developing world. Crime distorts many economic decisions because it acts like an unpredictable tax on earnings. In particular, the threat of crime may influence people's willingness to invest in schooling or physical capital. The second chapter explores the questions "What influence do crime rates and levels of investment have on one another?" and "How do government policies affect the relationship between investment and crime?" by creating a simple structural model of crime and educational investment and attempting to fit this model to Mexican data. A method of simulated moments procedure is used to estimate parameters of the model and the estimated parameters are then used to carry out policy simulations. The simulations show that increasing spending on police or increasing the severity of punishment reduces crime but has little effect on educational investment. Increased educational subsidies increase educational investment but reduce crime only slightly. Thus, one type of policy is insufficient to accomplish the goals of both reducing crime and increasing education. The third chapter is joint work with Prashant Bharadwaj, Giacomo De Giorgi, and Christopher Neilson. Boys tend to have better performances than girls in mathematical testing; in particular, there are significantly more boys than girls among high achievers and the score distribution appears to have a longer right tail for boys. We confirm such results on several low- and middle-income countries. In particular we find that the gender gap is already present by age 10 and substantially increases by age 14 and 15. We propose and try to test a series of explanations for such a gap: (i) parental investment, (ii) ability, (iii) school resources, (iv) individual investment and effort (not tested directly), (v) competitive environment, and (vi) cultural norms. We conclude that none of our proposed explanations can account for a substantial portion of the gap.