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Author: Sidra Rehman
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Languages : en
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Therefore, if developing economies want to improve their growth prospects, they need to invest in education and provide buffers so that income shocks do not hinder the accumulation of human capital.
Author: Sidra Rehman
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Languages : en
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Therefore, if developing economies want to improve their growth prospects, they need to invest in education and provide buffers so that income shocks do not hinder the accumulation of human capital.
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Category : Households
Languages : en
Pages : 95
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This thesis explores issues related to public and private insurance of income shocks, and the importance of human capital accumulation. The first chapter argues that the intertemporal elasticity of substitution of labor supply is a state-dependent variable which strongly depends on the return to human capital accumulation. Estimating a life cycle model I find that the average i.e.s. is low (0.35), and comparable with micro estimates, even in the presence of human capital. However, the average i.e.s. hides important heterogeneity: for college graduates the i.e.s. more than doubles over the life cycle, whereas it increases by about 58 percent for workers without a college degree. The second chapter argues that heterogeneous returns to human capital accumulation affects the degree to which search effort of unemployed deviates from the socially optimal level, and the reason behind the deviation. I find that (i) the main social costs associated with unemployment insurance are not due to moral hazard problems, but are due to distortionary effects of labor income taxes needed to finance the insurance. (ii) The magnitude of the moral hazard problem and the tax distortion problem differs substantially by age and education. And, (iii) the degree of tax progressiveness and benefit regressiveness has important effects on the deviation of search effort. The third chapter studies the relation between co-movement of income shocks and precautionary asset holdings. If households perceive spousal labor supply as an insurance mechanism, it is evident that this mechanism should work better the lower the co-movement of income shocks. We find that (i) households in which both spouses have the same education level or work in the same industry have a higher correlation of income shocks compared to couples with different education/industry. And, (ii) households who face larger co-movements of income shocks hold larger precautionary buffers.
Author: Claudia Trentini
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Category : Economic development
Languages : en
Pages : 139
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Author: Neville Francis
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Category : Displaced workers
Languages : en
Pages : 334
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Author: Carl Jonathan Wojtaszek
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Category : Human capital
Languages : en
Pages : 133
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Author: Yibo Zhang
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Category : Electronic dissertations
Languages : en
Pages : 122
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First Chapter: Endogenous Skill Acquisition and Taxation (with James Bullard) This paper studies dynamic Mirrleesian-style taxation in a lifecycle economy. In contrast to the recent Mirrleesian dynamic optimal taxation literature, in which individual skills are subject to shocks but are otherwise fixed over time, agents in our model make a conscious decision about human capital acquisition (as well as when to retire) given their own aptitude for learning. This aptitude is private information. Human capital accumulation is the engine of growth in our model. We find that there will be no human capital accumulation, and hence no growth, in the economy when there is no taxation of any sort. We suggest a taxation scheme which will induce human capital accumulation and hence economic growth in this stylized environment. The key feature of the tax scheme is to provide incentives for human capital accumulation for those that have high aptitude by credibly transferring resources to them later in life, after they have revealed their aptitude. We show that only a moderate transfer is called for to induce growth in our calibrated economy. We also find that the timing of the tax-transfer may or may not matter for the income distribution depending on the exact form in which the taxation is levied (labor or capital income tax), but in general the tax-transfer scheme is highly non-monotonic. Second Chapter: Brain Drain and Brain Drain Reversal Departing from the previous theoretical studies on Brain Drain, which mainly focus on the welfare impact of the migration of skilled workers on the home country and on the foreign country, I build a theoretical model to study a somewhat different twin phenomena "brain drain" and "brain drain reversal". The brain drain and brain drain reversal of interest here is the trend that people from developing countries (most prominently from East Asian countries) who have studied in developed countries such as the U.S. go back to their home country sooner or later for good. I study these two phenomena in a two-period lifecycle economy where home country agents choose not only education location but also work location possibly multiple times in their lifetime. The model captures the crucial factors in agents' location choice decision including work-place premium, education-location premium, market opportunity gap (between home and foreign countries) as well as adaptability of skills. I solve the model analytically and conduct comparative statics analysis followed by calibration exercises based on data from Mainland China (1985-2006). Third Chapter: Human Capital Intensity, Education and Growth (with Jiaren Pang and Haibin Wu) Using the methodology of Rajan and Zingales (1998), we revisit the issue of human capital and economic growth by examining whether industries with higher human capital intensity tend to grow faster in countries with higher human capital stock. Not only are we able to avoid the many problems that have plagued the conventional cross-country growth regressions but the results are no longer mixed. We do not find that education improvement has a differential effect on industries with different human capital intensities. However, we have discovered that in countries with higher education levels and quality, high human capital intensity industries grow faster than low human capital intensity ones.
Author: Alexandros T. Mourmouras
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Category :
Languages : en
Pages : 190
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Author: Osaretin Olurotimi
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Category :
Languages : en
Pages : 0
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The broad goal of this dissertation is to quantify the effect of shocks, policies, and programs on human capital, firms, and communities, especially in Africa. This is motivated by the need to provide empirical estimates of the impact of humanitarian crises and policy to undergird effective development policy and praxis. In my dissertation, I show how conflict and climate shocks affect children's human capital in Uganda and how foreign direct investment impacts domestic firms in Cote D'Ivoire. My dissertation papers share three themes. First, I provide improved (or initial) micro-level estimates of the impact of some shocks on economic agents in two African countries. Second, all three of my dissertation chapters attempt to answer questions about developing countries in Africa by unearthing and exploring new data sources. Third, the findings from my research have clear implications for contemporaneous education, industrial and climate policy in developing economies that grapple with similar challenges. My research on human capital is motivated by human capital's centrality to livelihoods and national economic growth and the crisis of learning poverty many African countries face. Learning poverty is the inability of children who have completed particular schooling levels to demonstrate cognitive outcomes related to that level. For instance, data from the World Bank showed that up to 83% of children in Uganda of primary completion age were below the minimum proficiency level, while over 95% of children in Chad and Niger were unable to read. This crisis deserves attention to understand the drivers and causes, potentially highlighting solutions. In this dissertation, I look at the role of exogenous factors such as conflict and climate and weather shocks in affecting human capital. For example, in Chapter 1, I examine the effect of historical exposure to an East African insurgency group-The Lord's Resistance Army (LRA)-and contemporaneous exposure to armed conflict on children's learning outcomes. Although there has been a decline in the number of civil wars in Africa since the 1990s, there has been a rise in itinerant and cross-border terrorist groups like Boko-Haram and Al-Shabaab. The LRA has been noted as one of the terrorist groups that have elicited the most humanitarian damage in East Africa. Empirically, I combine data from UWEZO's citizen-led household survey of learning outcomes in Uganda with geo-located conflict data from the Armed Conflict Location & Event Data Project (ACLED). Using a model with fixed effects estimation approach, I find that exposure to the LRA reduced children's learning outcomes in Math and English but did not affect their schooling. The cohort exposed to LRA did not have worse dropout rates or nonenrolment than their peers who were not exposed to LRA conflict. My contributions to the literature on conflict and educational outcomes include the first specific estimates of how exposure to a conflict in childhood impacts learning and schooling differently in an East African context. Also, I provide results on the impact of conflict on out-of-school children, who are overlooked in studies that only consider schooling outcomes. Exposure to LRA is worse for out-of-school children in English. Asides from measuring the medium-term effect of exposure to terrorism. I also measure the impact of contemporaneous conflict, i.e., the conflict that happened in the year children were surveyed and which is more likely to comprise riots and protests than violence against civilians. I use variation in the timing of first exposure to conflict by comparing children exposed in one year to those not yet treated by conflict. The effects of these contemporary conflicts are relatively muted in size and statistical significance compared to the effect of LRA. The results of this work imply a need to measure to impact of the same shock on schooling and learning differently and beyond the short term, as learning could be impacted even after schooling has recovered. Although I provide evidence that schooling quality via teacher absenteeism is affected by conflict in this context, future related work could explore the first-order effects of LRA on parental outcomes to elucidate the mechanisms through exposure to terrorism that affected children's learning in Uganda. Along similar lines, Chapter 3 uses remote sensing data to examine how abnormal rainfall and temperature patterns in early childhood affect human capital outcomes, including children's educational outcomes. I also document how unusually high test date temperatures impact test performance. Analytically, I combine learning outcome data from the UWEZO learning assessments in East Africa with the CHIRTS and CHIRPS temperature and rainfall data from the Climate Hazards Centre at UC Santa Barbara. I find that high test date temperature harms only the learning outcomes of girls and children under 10, while rainfall shocks in-utero have adverse effects. However, positive rainfall shocks at ages 1-4 positively impact learning outcomes. The paper also provides suggestive evidence that possessing some adaption technology like electricity may make children more likely to experience thermal stress when the technology is not in use. Thus, this paper provides an essential accounting of the effects of climate change on African children and highlights the need for additional demographic considerations in testing environments. Another theme that my research examines is the role of Foreign Direct Investment (FDI) in improving the performance of domestically connected local firms. According to the United Nations Conference on Trade and Development (UNCTAD), African countries only received about 4% and 5% of global Foreign Direct Investment in 2020 and 2021, respectively. However, despite its meager share of global FDI, African governments have high hopes for the role that FDI can play in their local economies, evidenced by the growth in the number of investment promotion agencies, incentives, and bilateral and multilateral treaties. Therefore, in Chapter 2, coauthored with Jeremy Foltz and Nohoum Traore, using new, high-quality panel data on firms in Ivory Coast, we revisit an open question on the impact of FDI on productivity and other relevant outcomes among domestic firms in Africa. Africa has not yet experienced the kind of industrial revolution that has supercharged the economies of, for example, South Asian countries. Accordingly, various African countries have initiated policy initiatives such as tax holidays for foreign firms to encourage industrialization. However, our research shows that horizontal FDI reduces domestic firm productivity in Ivory Coast, especially for domestic firms operating in the Service, Commerce, and Manufacturing sectors.In contrast, downstream FDI reduces the likelihood that firms export and the intensity of exports only for firms located in Abidjan, the defacto economic capital. The results of this work are essential for similar African countries as they develop their investment and tax policies. A natural extension of this work is research that accounts more fully for the general equilibrium effects of FDI on the whole economy, including government revenue and community welfare.
Author: Mercy Laita Palamuleni
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Languages : en
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This dissertation encompasses three essays on the macroeconomics of human capital and economic growth. Below are the individual abstracts for each essay. Essay 1: Does Public Education Spending Increase Human Capital? I investigate the effect of public education spending on the quality of human capital as measured by international student test scores in science and mathematics, conditional on the efficiency of a country's governance. Combining World Bank country level data on government efficiency with rich micro data from the OECD PISA-2009, I estimate a human capital production function from student level data. Prior work suggests that public education expenditures are inconsequential for student achievement. I illustrate that public education spending matters for student test scores when one uses student level data instead of aggregate country level data. These results are robust to controlling for governance measures such as corruption control and regulatory quality. An implication is that less efficient government does not preclude improving test scores through education spending. Essay 2: Inequality of Opportunity in Education: International Evidence from PISA. I provide lower-bound estimates of inequality of opportunity in education (IEO) using micro-data from the Programme for International Student Assessment (PISA). The measure represents variation in student mathematics test scores which can be explained by predetermined circumstances (including parental education, gender, and additional community variables). I explore the heterogeneity of the measure at the top and bottom of the test score distribution, and demonstrate that IEO accounts for 10 percent of the variation in test scores for students at the top and bottom of the test score distribution. Using this inequality measure I establish three main conclusions. (1) IEO decreases overall in response to an increase in preprimary enrollment rates. An implication here is that improvements in early childhood education might mitigate the effects of IEO factors for some students. (2) IEO increases in a manner which relates to overall inequality. This indicates the possibility of a more general persistence to inequality factors. An implication is that equity-based education policies can be a key tool for reducing income inequality. (3) There is evidence of an equity-efficiency tradeoff in education. An implication here is that public education policies aimed at reducing IEO might hinder overall education efficiency, in that it decreases academic achievement for some groups of students. Essay 3: Public Education Spending and Economic Growth: The Role of Governance. Although the theoretical literature often connects public education spending to growth, individual empirical findings sometimes conflict. In this paper I propose that inefficiencies in public education spending might explain these inconsistencies. Using a dataset from both developed and developing countries observed over the period of 1995 to 2010, I demonstrate that the efficiency of public education spending on growth depends on a country's level and quality of governance. I also find evidence that increasing educational spending is associated with higher economic growth only in countries that are less corrupt. These findings have important implications for the formation of effective education policies in developing countries. They illustrate that efficient public education spending augments economic growth in a way that increased spending alone does not match.
Author: Daehaeng Kim
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Category :
Languages : en
Pages : 282
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