Human Capital Investment and Poverty Reduction over Generations: A Case from the Rural Philippines, 1979-2003

This paper attempts to identify a pathway out of poverty over generations in the rural Philippines, based on long-term panel data spanning for nearly a quarter of a century. Specifically, it sequentially examines the determinants of schooling, subsequent occupational choices, and current non-farm earnings for the same individuals. We found that an initial rise in parental income, brought about by the land reform and the Green Revolution, among other things, improves the schooling of children, which later allows them to obtain remunerative non-farm jobs. These results suggest that the increased agricultural income, improved human capital through schooling and the development of non-farm sectors are the keys to reducing poverty in the long run. It must be also pointed out that the recent development of the rural non-farm sector offers ample employment opportunities for the less educated, which also significantly contributed to the poverty reduction.

Effects of birth order and sibling sex composition on human capital investment in children in India

The paper explores the effects of birth order and sibling sex composition on human capital investment in children in India using the Indian Human Development Survey (IHDS). Endogeneity of fertility is addressed using instruments and controlling for household fixed effects. Family size effect is also distinguished from the sibling sex composition effect. Previous literature has often failed to take endogeneity into account and shows a negative birth order effect for girls in India. Once endogeneity of fertility is addressed, there is no evidence for a negative birth order effect or sibling sex composition effect for girls. Results show that boys are worse off in households that have a higher proportion of boys specifically when they have older brothers.

Skill sorting, inter-industry skill wage premium, and production chains: evidence from India 1999-2000

This paper proposes a mechanism that links industry’s technological characteristics (i.e. quality of non-labor inputs, which is proxied by the length of industry production chains), industry-specific skill wage premium, and skill sorting across industries. It is hypothesized that high-skilled workers are sorted into industries where they can receive a higher skill wage premium, by working with better quality non-labor input. The quality of non-labor inputs is assumed to be worse in industries with longer production chains due to the increased involvement of low-skilled labor and poor infrastructure over the sequential production. By examining Indian wage and employment data for 1999-2000, empirical evidence to support this mechanism can be obtained: First, the skill wage premium is lower [higher] in industries with longer [shorter] production chains. Second, the skill wage premium is lower [higher] in industries with a higher [lower] proportion of low-skilled workers producing inputs outside their own industry. Third, the proportion of high-skilled workers is larger in industries with shorter production chains and lower ratio of low-skilled labor involved, i.e., a skill sorting trend can be observed.

Ramadan school holidays as a natural experiment : impacts of seasonality on school dropout in Bangladesh

In 2000, Ramadan school vacation coincided with the original annual exam period of December in Bangladesh. This forced schools to pre-pone their final exam schedules in November, which was the month before the harvest begins. 'Ramadan 2000' is a natural experiment that reduced the labor demand for children during the exam period. Using household level panel data of 2000 and 2003, and after controlling for various unobservable variations including individual fixed effects, aggregate year effects, and subdistrict-level year effects, this paper finds evidence of statistically significant impact of seasonal labor demand on school dropout in Bangladesh among the children from agricultural households.

Toiling children in India : the gender dimension

Child labour in several low income households is rather pursued for gaining experience and at times for meagre incomes, which are possibly spent on household food expenditure. Though the contribution made by the child labour to the overall wellbeing does not turn out to be substantial, without child labour these households would have been much worse off than the households which can afford not to have child labour. The probability of working is higher for a male child compared to a girl child. This is because the girl children are often engaged in household activities and even when they are engaged in income earning jobs they are shown as helpers. Parents' income as such may not be having a positive impact on child's education rather it is the educational level of the parents which matters in determining whether the child would go to school and continue her/his education. To substantiate the gender bias, the probability of falling ill among the girl children is found to be higher compared to the boys. Parents' educational attainments beyond a certain level again tend to reduce the probability of falling ill.

Skill sorting and production chains : evidence from India

This study proposes a new mechanism that explains skill-sorting patterns and skill wage differentials across industries based on the length of the industry's production chain. A simple simultaneous production model shows that when the quality of intermediate inputs deteriorates rapidly along the production chains, high-skilled individuals choose to work in industries with shorter production chains because of higher returns to skill. I empirically confirm this skill-sorting pattern and these inter-industry skill wage differentials in India, where the quality of intermediate inputs is likely to degrade rapidly because of the high number of unskilled laborers, poor infrastructure, and less-advantaged technology. The results remain robust even when considering selection bias, alternative reasons for inter-industry skill wage differentials, and a different period. The results of this study have important implications when considering countries' industrial development patterns.

Negative skill sorting across production chains

Previous literature generally predicts that individuals with higher skills work in industries with longer production chains. However, the opposite skill-sorting pattern, a "negative skill-sorting" phenomenon, is also observed in reality. This paper proposes a possible mechanism by which both cases can happen and shows that negative skill sorting is more likely to occur when the quality of intermediate inputs degrade rapidly (or improves slowly) along the production chain. We empirically confirm our theoretical prediction by using country-industry panel data. The results are robust regardless of estimation method, control variables, and industry coverage. This study has important implications for understanding countries' comparative advantages and development patterns.

Cuba's social policy after the disintegration of the Soviet Union -- social development as legitimacy of regime and its economy effectiveness

Since the disintegration of the Soviet Union, Cuba has experienced a severe economic crisis, and the country's social policy has played an important role in showing the people a raison-d'etre for the revolution. This role has become even stronger in recent years, as internal and external actors demand political reforms and economic liberalization. This article first examines the Cuban government's use of social development to counter the demands for changes. It then looks at the extent that government social policy contributes economically to improving the Cuban living standard. The article demonstrates empirically how the leadership emphasizes their social accomplishments whenever demands for change come, and then shows that after the suspension of Soviet aid, Cuban social policy has been able to provide services mainly by relying on human capital and reducing quality materially because of the shortage of foreign reserves. This has limited the economic effectiveness of the services.

Sources of Regional Income Disparity in Rural Vietnam: Oaxaca-Blinder Decomposition

This paper investigates determinants of regional income disparity in rural Vietnam, with special emphasis placed on the roles of human capital and land. We apply a decomposition method, suggested by Oaxaca and Blinder. We found that returns to assets rather than endowments, especially those of human capital, are one of the leading factors to account for income differences across regions. We also found that substantial improvements of returns to human capital in the Red River delta region are a driving force to catch up with Mekong River delta region. Unexpectedly, differences in land endowment do not strongly correlate with regional income disparity because better access to land in a region was partially offset by lower returns.

能力は有限、知識は無限

1993年にアメリカのロチェスター大学でSergio Rebelo準教授（当時）の経済成長論を履修した。ある授業でRebelo教授に「しばしば人的資本と技術は混同されがちだけれども、両者は財の性質上、大きく異なっている。技術、中でも他人に簡単に伝達できるように文書や設計図に記されている知識は公共財的性質を持っているが、人的資本はむしろ通常の財に似ている。知識は他人に簡単に漏洩し盗用されやすいが、人的資本はその所有者が専有可能である。その上、人的資本はその所有者が死んでしまえば消失するが、知識は記録として残る。この意味で、人的資本蓄積は有限だが、知識の蓄積は無限に可能である」と教わった。自分はそれまで、新古典派成長理論で仮定される「労働に体化された技術進歩」ばかり勉強していたので、技術と人的資本を同一視していた。それだけにこの説明は非常に新鮮であった。（以下略）

Infrastructure development and economic growth in China

China is the fastest growing country in the world for last few decades and one of the defining features of China's growth has been investment-led growth. China's sustained high economic growth and increased competitiveness in manufacturing has been underpinned by a massive development of physical infrastructure. In this context, we investigate the role of infrastructure in promoting economic growth in China for the period 1975 to 2007. Overall, the results reveal that infrastructure stock, labour force, public and private investments have played an important role in economic growth in China. More importantly, we find that Infrastructure development in China has significant positive contribution to growth than both private and public investment. Further, there is unidirectional causality from infrastructure development to output growth justifying China's high spending on infrastructure development since the early nineties. The experience from China suggests that it is necessary to design an economic policy that improves the physical infrastructure as well as human capital formation for sustainable economic growth in developing countries.

The source of sustainable growth in Costa Rica

Costa Rica has some concerns for the "middle income trap" stemming from her perceived weakening export competitiveness, intensifying competition in attracting FDI inflow; and apparent lack of innovation capabilities. Quantitative analyses on the impact of recent FTAs suggest only large firms benefit from FTAs suggesting the need for improving utilization by smaller firms. Continuing attraction of potential MNCs backed by human capital development is necessary. In pursuing its development goals, Costa Rica should be mindful of its reputation as an environmentally friendly place.