Income composition, endogenous fertility and schooling investments in children

This paper studies how the eomposition of ineome between mothers and fathers affeets fertility and sehooling investments in ehildren, using data from the 1976 and 1996 PNAD, a Brazilian household survey. Ineome composition affeets the time eost of fertility because mothers and fathers alloeate different amounts of time to child-rearing. These effects are in turn transmitted to investments in ehildren through a tradeoffbetween quantity and quality of ehildren. The main contribution of this paper is twofold. First, it derives new implications about the relationship between household ineome composition and schooling investments in ehildren. Seeond, this paper devises and implements an empirieal approaeh to assess these implieations, using two eross-seetions of fertility and schooling data from Brazil. The main empirical findings of the paper ean be summarized as follows. First, the empirical analysis shows that a larger negative effect of the mother's labor in come on fertility in 1996 is associated with a larger positive effect on the adult child's schooling, refleeting the interaction between quantity and quality of children. Second, the larger negative effect of the mother's labor income on fertility in 1996 is associated with a reduction in the effect of other determinants of number of children. This suggests that an increase in the relative importanee of time costs of fertility may be an important determinant of variations in fertility over time in Brazil and other developing countries .

Technology adoption and effects of transfers across locations

This paper develops a two-period model with heterogeneous agents to analyze the e¤ects of transfers across locations on convergence, growth and welfare. The model has two important features. First, locations are asymmetric as it is assumed that there are more specialized occupations in the more developed one. Second, the returns on the investment to acquire new technology depend positively on the level of each region’s knowledge and on the level of the world knowledge assumed to be available to all. In one hand, the poor region has a disadvantage as it has a lower stock of knowledge. On the other hand, it has the advantage of not having yet exploited a greater stock of useable knowledge available in the world. Hence, there are two possible cases. When the returns are greater in the poor region, we obtain the following results: (i) the rich location grows slower; (ii) the transfers to the poor location enhances the country’s growth rate; and (iii) there is a positive amount of transfers to the poor region that is welfare improving. When the returns are greater in the rich region, the …rst two results are reversed and transfers to the rich region are welfare improving. In both cases, the optimal amount of transfer increases with the level of income disparity across regions and is not dependent on the level of the country’s economic development (measured by its income per capita). Barriers to the adoption of new technology available in the world can constrain the convergence process as it harms in greater length the poor region. The results do not change whether migration is allowed or not.

Generalists versus specialists in organizations

In this paper, we discuss the trade-o¤ between specialization and coordination in an organizational design problem. Most papers on the assignment of heterogeneous managers to di¤erent hierarchic levels emphasize the role of talent: better managers should be on top of hierarchies. However, this requires talent to be measured on an one-dimensional scale. In this paper, we explore the implications of allowing talent to have two dimensions: breadth and depth. Specialists have deep knowledge of few areas while generalists have narrow knowledge of many areas. When perfect communication is impossible, hierarchies arise in which generalists are at the top and specialists are at the bottom. We propose a model of imperfect communication and discuss its implications for organizational design, the optimal degree of centralization and the depth of hierarchies. We show that our model also implies plausible organizational structures, like balanced hierarchies and pyramidal structures.

Technical change and factor shares

The implications of technical change that directly alters factor shares are examined. Such change can lower the income of some factors of production even when it raises total output, thus offering a possible explanation for episodes of social conflict such as the Luddite uprisings in 19th century England and the recent divergence in the U. S. between wages for skilled and unskilled labor. An explanation also why underdeveloped countries do not adopt the latest technology but continue to use outmoded production methods. Total factor productivity is shown to be a misleading measure of technical progress. Share-altering technical change brings into question the plausibility of a wide class of endogenous growth models.

Monopoly rights can reduce income big time

We study a two–sector version of the neoclassical growth model with coalitions of factor suppliers in the capital producing sectors. We show that if the coalitions have monopoly rights, then they block the adoption of the efficient technology. We also show that blocking leads to a decrease in the productivity of each capital producing sector and to an increase in the relative price of capital; as a result the capital stock and the production fall in each sector. We finally show that the implied fall in the level of per–capita income can be large quantitatively.

Environmental policy and growth when inputs are differentiated in pollution intensity

Environmental policy affects the distribution of market shares if intermediate goods are differentiated in their pollution intensity. When innovations are environment-friendly, a tax on emissions skews demand towards new goods which are the most productive. In this case, the tax has to increase along a balanced growth path to keep the market shares of goods of different vintages constant. Comparing balanced growth paths, we find that an increase in the burden of environmental taxation spurs innovation because it increases the market share of recent vintages. As a result the cost of environmental policy in terms of slower growth is weaker and may even be absent.

The long-run economic impact of AIDS

This paper studies the long-run impact of HIV / AIDS on per capita income and education. We introduce a channel from HIV / AIDS to long-run income that has been overlooked by the literature, the reduction of the incentives to study due to shorter expected longevity. We work with a continuous time overlapping generations mo deI in which life cycle features of savings and education decision play key roles. The simulations predict that the most affected countries in Sub-Saharan Africa will be in the future, on average, a quarter poorer than they would be without AIDS, due only to the direct (human capital reduction) and indirect (decline in savings and investment) effects of life-expectancy reductions. Schooling will decline on average by half. These findings are well above previous results in the literature and indicate that, as pessimistic as they may be, at least in economic terms the worst could be yet to come.

Optimal water use: is anyone getting the right incentives in California?

This paper discusses ~he widespread inefficiency in water pricing today and uses the State of California as an example. After solving the Planner' s Problem I conclude that water for irrigation should cost more than for domestic use. The optimal price leveI can be calculated from a correct measure of the true marginal cost of supply.

On the efficiency of the Argentinean electricity wholesale market

This paper discusses two key aspects regarding the efficiency of the Argentinean Electricity Market. Using hourly data on prices, marginal costs, and operational status of generators, it will be argued that, unlike the former British and Californian electricity spot markets, this market is not subject to the conventional forms of exercise of market power by generators. We then use Chao's (1983) model of optimal configuation of electricity supply to evaluate the social desirability of the change in the supply pattern of the Argentinean electricity industry, which took place throughout the last ten years.

Essays on household taxation and competition between heterogeneous firms

Essa tese é constituída por três artigos: "Tax Filing Choices for the Household", "Optimal Tax for the Household: Collective and Unitary Approaches" e "Vertical Differentiation and Heterogeneous Firms".

Accountability and yardstick competition in the public provision of education

This paper explores the institutional change introduced by the public disclosure of an education development index (IDEB, Basic Education Development Index) in 2007 to identify the e ect of education accountability on yardstick competition in education spending for Brazilian municipalities. Our results are threefold. First, political incentives are pervasive in setting the education expenditures. The spatial strategic behavior on education spending is estimated lower for lame-ducks and for those incumbents with majority support at the city council. This suggests a strong relation between commitment and accountability which reinforces yardstick competition theory. Second, we nd a minor reduction (20%) in spatial interaction for public education spending after IDEB's disclosure | compared to the spatial correlation before the disclosure of the index. This suggests that public release of information may decrease the importance of the neighbors` counterpart information on voter`s decision. Third, exploring the discontinuity of IDEB`s disclosure rule around the cut-o of 30 students enrolled in the grade under assessment, our estimates suggest that the spatial autocorrelation | and hence yardstick competition | is reduced in 54%. Finally, an unforeseen result suggests that the disclosure of IDEB increases expenditures, more than 100% according to our estimates.

A Theory of voter experimentation in repeated elections

Nesse artigo, eu desenvolvo e analiso um modelo de dois perí odos em que dois polí ticos competem pela preferência de um eleitor representativo, que sabe quão benevolente é um dos polí ticos mas é imperfeitamente informado sobre quão benevolente é o segundo polí tico. O polí tico conhecido é interpretado como um incumbente de longo prazo, ao passo que o polí tico desconhecido é interpretado como um desa fiante menos conhecido. É estabelecido que o mecanismo de provisão de incentivos inerente às elei cões - que surge através da possibilidade de não reeleger um incumbente - e considerações acerca de aquisi cão de informa cão por parte do eleitor se combinam de modo a determinar que em qualquer equilí brio desse jogo o eleitor escolhe o polí tico desconhecido no per íodo inicial do modelo - uma a cão à qual me refi ro como experimenta cão -, fornecendo assim uma racionaliza cão para a não reelei cão de incumbentes longevos. Especifi camente, eu mostro que a decisão do eleitor quanto a quem eleger no per odo inicial se reduz à compara cão entre os benefí cios informacionais de escolher o polí tico desconhecido e as perdas econômicas de fazê-lo. Os primeiros, que capturam as considera cões relacionadas à aquisi cão de informa cão, são mostrados serem sempre positivos, ao passo que as últimas, que capturam o incentivo à boa performance, são sempre não-negativas, implicando que é sempre ótimo para o eleitor escolher o polí tico desconhecido no per íodo inicial.