Solution or isolation: Is boarding school a good solution for left-behind children in rural China?

In recent decades, rural China has experienced a rapid increase in boarding school enrollment rates and in the population of left-behind children (LBC) (i.e., rural children whose parents migrate to urban areas for work). LBC tend to be worse off in numerous dimensions. At 61 million, China has the world's largest population of LBC. As it provides a different residential environment, boarding school can potentially exacerbate or mitigate the negative effects of parental migration. Using nationally representative data on Chinese families, we estimate the impact of parental migration and boarding school on child outcomes in cognition and physical and mental health. We find that while boarding school has no effect on LBC physical and mental health, it substantially improves performance on achievement tests for both LBC and non-LBC. Policies aimed at improving boarding school conditions in China, may improve not only cognitive outcomes, but also child physical and mental well-being.     

Effect of Parental Migration on the Academic Performance of Left‐behind Middle School Students in Rural China

China's rapid development and urbanization over the past 30 years have caused large numbers of rural residents to migrate to urban areas in search of work. This has created a generation of children who remain behind in rural areas when their parents migrate for work. Previous research has found mixed impacts of parental migration on the educational achievement of left‐behind children (LBC), perhaps because of methodological deficiencies and lack of recognition of the heterogeneity of this population of children. Our study attempts to examine the impact of six types of parental migration on the academic achievement of a rural junior high school sample. Our study uses a panel of 7148 junior high school students to implement a difference‐in‐difference analysis and finds that parental migration has a negative and significant impact on the academic achievement of junior high school students. Our study suggests that the Chinese Government should implement measures to dismantle barriers to the human capital accumulation of LBC to ensure sustainable economic growth and human capital development in China.     

Migrating for children’s better future: Intergenerational mobility of internal migrants’ children in Indonesia

Internal migration dominates population mobility in Indonesia; according to the 2010 census, there were almost 30 million permanent migrants, around 12.5 percent of the population. The effects of this internal migration on the second generation continue to be under-explored. This paper investigates the long-term impact of parents’ migration on their children’s intergenerational per capita expenditure when adults. We argue that parental migration affects the human capital investment on their children, which has a direct impact on the children’s outcomes when adults and on their deviation from the parents’ economic status, hence their intergenerational mobility. We pooled the five waves of data from the Indonesian Family Life Survey (IFLS), and we tackled the self-selection of parents’ migration using an endogenous treatment regression. Our findings show that despite the fact that parental migration increases the education level of children and their per capita expenditure, it increases intergenerational mobility of the children as adults compared with non-migrants’ children when they live in urban areas as adults, come from the poorest parents, or had migrated during childhood. The left-behind children have more intergenerational mobility only if their father migrated, while there is no significant impact on intergenerational mobility if their mother migrated. The results are consistent with the persistence of Indonesian individual inequality.     

China's economic development: does exchange rate and FDI nexus matter?

This study aims to investigate the relationship between China's exchange rate, foreign direct investment (FDI) inflows, and economic development. We applied the bound testing approach on aggregate level data from 1981 to 2013. The results showed that the Chinese economy benefitted from a lower exchange rate over this period, and that there was a direct link between FDI inflows and economic development on an aggregate level both in the long and short run. The results of the Granger causality test identified a long‐ and short‐run association among these variables. The GMM estimations with dummies for financial crises and RMB exchange rate policy fluctuations also confirmed the growth enhancing impact of the exchange rate and FDI inflows. To promote sustainable economic development in the future, China should focus on improving the levels of domestic investment and human capital, as well as supervising the level of openness and capital controls.     

Are Financial Development and Trade Openness Complements or Substitutes?

This article studies the long‐ and short‐run relationships between financial development and trade openness. Using the pooled mean group estimator of Pesaran, Shin, and Smith (1999) for unbalanced panel data for 87 countries over the 1960–2005 period, our empirical results indicate that long‐run complementarity between financial development and trade openness coexists with short‐run substitutionarity between the two policy variables. But when splitting the data into OECD and non‐OECD country groups, this finding can be observed only in non‐OECD countries. For OECD countries, financial development has negligible effects on trade. In addition, we find nonlinearity in the relationship in that long‐run responses of trade decrease with financial development. The article further finds coexistence of negative trade effects of financial fragility and positive trade impacts of financial depth.     

Does parental migration impede the development of the cooperative preferences in their left-behind children? Evidence from a large-scale field experiment in China

In human capital theory, noncognitive abilities play an essential role in individual and societal success. Parents' migration for work purposes may inhibit the development of children's noncognitive abilities, but its influence on children's cooperation preferences remains unclear. Using three one-shot public goods games, we examine the impacts of parental migration on the development of children's cooperation preferences and whether introducing punishment mechanisms could partly exacerbate or offset the effects. We conducted a large-scale field experiment with more than 1600 rural students aged 6–16. Our main findings are as follows. First, the cooperation level of non-left-behind children increases significantly with age, while being left behind may affect this stable development track. Specifically, we find that paternal migration significantly decreases children's cooperation levels, while maternal or both parents' migration does not. Second, punishment mechanisms can significantly promote children's cooperation levels and offset the negative effect of paternal migration. Exogenous punishments work across ages, while endogenous punishments work only among middle school students. However, as the extent to which children were left-behind deepens, the offsetting effects of the punishment mechanisms gradually weaken.     

Does wealth matter? An assessment of China's rural-urban migration on the education of left-behind children

This paper decomposes the impact of parental migration on the education of children left behind. In particular, we examine whether children are enrolled in school on a timely basis according to their age when their parents are away. We found both theoretical and empirical evidence to support that parental migration generates a strong positive impact on timely enrollment if a child is from a less wealthy background. However, the effect decreases with family wealth, and reverses after reaching a threshold; we find this point using family house size as our proxy and the turning point occurs at a moderate size of approximately 148 square meters. In addition, we find a compensating effect that migrants tend to spend more on a child's education investment to offset for the loss of parental time care. Lastly, we found the overall impact of parental migration is negative on the timely enrollment of child. Thus, with the important heterogeneities attributed to wealth, our results suggest that the left behind children of more affluent parents may be pushed into worse human capital outcomes; given the rapid development of China, it may be the case that the current cohort of left behind children is less likely to be enrolled in school than earlier cohorts.     

Parental socioeconomic status and children’s cognitive ability in China

It is widely recognized that intergenerational transmission is one of the primary causes of persistent social inequality. Using nationally representative data, the China Family Panel Studies, this paper is one of the first to comprehensively investigate parental SES and children’s cognitive outcomes in China and moves beyond existing work by accounting for the direct intergenerational transmission of cognitive ability and by examining various novel mechanisms. Our results show that parents’ education rather than income is positively associated with their children’s cognitive abilities. The analysis of mechanisms shows that educational disparity widens the gap in parental investment, as well as parental beliefs regarding education and expectations for their children. Nevertheless, we do not find differences in parenting productivity. In addition, we find that the impact is more prominent in rural areas where education resources are much more limited. Various tests have been performed to prove the robustness of our findings.     

Getting a job when times are bad: recruitment practices in Sweden before,during and after the Great Recession

Research on recruitment shows that networks matter and are effective as search channels. The aim of this article is to analyse how recruitment practices varies over time, and specifically, how it has varied before, during, and after the Great Recession 2008–2009. The findings are that recruitment practices change both in the short term, in relation to labour supply, which we can call a cyclical effect, but also in accordance to a long-term, structural effects. Informal recruitment practices, such as recruitment through ‘friends and acquaintances’ and ‘employer made contact’, seem to increase during bad times. In the long run, the recruitment practices ‘direct application’, ‘friends and acquaintances’ and ‘formal private’ increase in relation to recruitment through the Swedish Public Employment Agency (SPEA). A reason for this may be that the labour market in the new knowledge economy demands a heterogenic workforce with high demands on non-cognitive skills and customisation. Here the new network recruitment practices seem to fit in.     

Short and Long Effects of Productivity on Unemployment

Okun’s (1962) seminal paper is an important study on economic growth and unemployment but a detailed exploration of the effect of productivity growth on unemployment has been left aside. Yet, the relationship between productivity growth and unemployment has been debated since long. In this paper we present stylized facts on the link between productivity growth and unemployment for the short and long run, and present model variants that demonstrate that in the short run productivity growth may increase unemployment while in the long run the relationship between productivity growth and unemployment are likely to co-vary negatively. Using US data, empirically we decompose the time series of unemployment rate and productivity growth into long run and short run components and show empirical evidence that the long run and short run components co-vary as predicted by some theories.     

The Long‐run and Short‐run Effects of Foreign Direct Investment on Financial Development in African Countries

This paper contributes to the understanding of the other neglected effects of foreign direct investment (FDI) by analysing how FDI affects financial development in the short run and long run for a panel of 49 African countries over the period 1990–2016. The empirical evidence is based on a pooled mean group approach. With three panels differentiated by income level, the following findings are established: first, while there is a positive and significant long‐run relationship between FDI and financial development in Africa, in the short run the effect of FDI on financial development is negative. Second, the effect of FDI is positive and significant in the long run in the three sub‐samples. However, in the short run, the effect of FDI is negative and significant in lower‐income countries and non‐significant in lower‐middle‐income and upper‐middle‐income countries. Overall we find strong evidence supporting the view that FDI promotes financial development in African countries in the long run.     

Strategic interaction between inter vivos gifts and housing acquisition

This paper models the interdependence of parental inter vivos gifts and children’s home purchases when informal care affects decision making. We use data from Japanese households who purchased a detached house in an urban area to test this strategic interaction. Considering both censoring and endogeneity of inter vivos gifts, which are identified by information on formal care, our preferred results demonstrate that inter vivos gifts do not significantly increase the purchase price of housing. Theory suggests that this occurs when informal care tends to be a heavy burden for children. However, subsample analysis of young home buyers indicates that the empirical results are consistent with the literature: children who receive parental gifts tend to purchase a higher-priced dwelling. One potential explanation is that relatively young adult children are less likely to take charge of care obligations, and accordingly, parental gifts are only expected to relax their liquidity constraints. Subsample analysis appears to indicate that the underlying motivation of parental gifts is influenced by the timing of children’s home purchase decisions.     

Parental migration,educational achievement,and mental health of junior high school students in rural China

China's rapid development has led to an unprecedented increase in migration rates as an ever-growing number of rural residents migrate to urban areas to seek better job opportunities and help alleviate family poverty. Economic pressures and structural restrictions force many of these migrant workers to leave their children behind in their rural homes, which has led to the emergence and expansion of a new subpopulation in China: left-behind children (LBCs). This study examines the impacts of parental migration on the educational outcomes (specifically math achievement) and mental health (specifically anxiety) of LBCs using data covering 7495 children in a prefecture of Shaanxi Province (from three surveys conducted between 2012 and 2014). We distinguish between “both parents migrating,” “one parent migrating,” “only a father migrating,” and “only a mother migrating.” We also explore the impacts on male versus female LBCs. We find no significant impact of parental migration on the math achievement of LBCs. In terms of mental health, however, our results indicate that left-behind girls were negatively affected by one parent migrating, especially if the migrating parent was the father. The findings suggest that it may not be necessary for policy makers to design special programs to improve educational outcomes of LBCs in general. However, local committees, schools, and parents should pay particular attention to left-behind girls living with only one parent, as they may be more vulnerable to mental health problems than their peers.     

Impact of financial development on domestic investment: Evidence from West African countries

This paper investigates the effect of financial development on domestic investment in West African countries. The study uses data from 1985 to 2019 and employs the pooled mean group technique. The main finding of the study is that financial development has a positive effect on domestic investment in the long run but an insignificant effect in the short run. Furthermore, remittances, real GDP per capita and trade openness increase investment rate. The results of causality tests support the view that investment is a channel through which financial development stimulates economic growth. Therefore, it is reasonable for the selected countries to formulate policies that promote domestic credit to the private sector in order to ease liquidity constraints and increase investment and economic growth.     

A model of ideological transmission with endogenous parental preferences

Under what conditions can a given trait, such as religion or language, be preserved in the long run? To answer this question I develop a dynamic framework of ideological transmission in families in which parents are biased towards children’s traits and socioeconomic activities are modeled in the shape of a trust‐matching process. I model how children are educated to a specific ideological trait that later in life will influence the well‐being of the family. Compared to the existing literature, my model yields two new results. First, paternalistic preferences in children’s education at time t are a necessary but not a sufficient condition to ensure the preservation of heterogeneity in the long‐run distribution of traits. Second, my model is able to reproduce historical events in which a reversal of parents’ evaluation of traits has been observed. Assuming myopic agents does not change the qualitative results of the model.     

开放经济条件下财政政策有效性的研究

随着经济开放度的日益提高,外部经济的冲击加剧了国内外经济均衡的矛盾,不确定的外部影响因素越来越多,财政当局难以及时掌控这些因素的变化,财政政策的有效性明显降低,处于一种趋于减弱的状态。从短期看,财政政策是有效的,但长期来看,财政政策的有效性越来越小甚至呈中性特质。     

美国国债危机的根源及出路

虽然美国债务危机还没有爆发,但目前的财政赤字和国债规模过大、财政收支结构的刚性特征均阻碍了其财政赤字状况的改善、美元的国际货币地位也非可以永久持续,这使美国国债的可持续性问题面临挑战。在解决方案上,短期内美国政府可以通过技术性违约或者债务货币化将政府债务延后或者隐性处理,但是其代价是巨大的。因此美国应当从中长期根本上解决债务问题,中期需要建立严格的财政制度;长期上则需要协调好各个产业的发展,寻找新的经济增长点。     

The importance of being earners: why women in South Africa need well-paid jobs

The ‘children fare better’ viewpoint claims that children tend to be better fed if their mother (as opposed to father) has sufficient income of her own for food. This paper assesses this claim for South Africa, using data from household surveys. It considers the possibility that this issue is related to domestic violence between husband and wife, and finds an apparent link between wife's earnings, child nutrition and domestic violence. Children's well-being seems more assured if mothers have an adequate income; but there is more risk of inadequate nutrition in households where there is domestic violence against wives.     

The trade-growth nexus in the developing countries: a quantile regression approach

This paper applies quantile regression techniques to investigate how the impact of trade openness on the growth rate of per capita income varies with the conditional distribution of growth. Using formal robustness analyses, we first identify robust variables affecting economic growth (investment, government balance, terms of trade, inflation, and population growth) which we then use as controls in the quantile regression estimations. Our findings suggest a heterogeneous trade-growth nexus: for both the short and the long run, the effect of openness on growth is higher in countries with low growth rates compared to those with high growth rates.     

The Effects of Fiscal Policy in a Small Open Economy with a Fixed Exchange Rate

We study the empirical effects of fiscal policy in Denmark since the adoption of a fixed exchange rate policy in 1982. Denmark’s fixed exchange rate implies that the nominal interest rate remains fixed after a fiscal expansion, facilitating a substantial impact of the fiscal stimulus on the real economy. On the other hand, the large degree of openness of the Danish economy means that a sizeable share of the fiscal stimulus will be directed towards imported goods. Our results suggest that the ‘monetary accomodation channel’ dominates the ‘leakage effect’ in the short run. We demonstrate that fiscal stimulus has a rather large impact on economic activity in the very short run, with a government spending multiplier of 1.1 on impact in our preferred specification. We also find that the effects of fiscal stimulus are rather short-lived in Denmark, with the effect on output becoming insignificant after around two years. The fiscal multiplier is above 1 only in the first quarter, and drops to 0.6 one year after the shock. We also find that in the short run, the government spending multiplier is larger than the tax multiplier. Finally, we demonstrate that exogenous shocks to government spending account for less than 10 % of the movements in output over the business cycle in Denmark.