Who stays,who goes,who returns?

We study the determinants of East–West migration within Germany during the period 1990–2006, using administrative data, the German Microcensus and the German Socio‐Economic Panel. We find that in addition to income prospects and employment status, two well‐known determinants of migration, psychological and social factors play an important role in determining the migration decision. Men and women move from East to West in proportionate numbers, but among individuals who lived in the East in 1989 women are more likely to migrate. The migrant body in the second wave of migration, starting in the late 1990s, is increasingly composed of young, educated people. By focusing on differences between temporary and permanent migrants, we find that older and single individuals are more likely to return East than stay permanently in the West, compared with younger and married individuals. Finally, the life satisfaction of permanent migrants increases significantly after a move, while that of temporary migrants remains essentially flat.     

The Neolithic Revolution from a price-theoretic perspective

The adoption of agriculture during the Neolithic period triggered the first demographic explosion in history. When fertility returned to its original level, agriculturalists were more numerous, more poorly nourished, and worked longer hours than their hunter-gatherer ancestors. We develop a dynamic price-theoretic model that rationalizes these events. In the short run, people are lured into agriculture by the increased labor productivity of both adults and children. In the long run, the growth in population overrides the productivity gains, and the later generations of agriculturalists end up being worse-off than the hunter-gatherers. Counter-intuitively, the increase in the labor productivity of children causes the long-run reduction in welfare. In the long run, the increase in adult labor productivity only contributes to population growth.     

The price effect of tariff liberalization: Measuring the impact on household welfare

Trade policy literature has for many years emphasized open policies positive impact on economic growth and development. While these results generally hold when measured on averages, empirical evidence suggests that trade liberalization is unlikely to produce beneficial results across all households. This study adds to the literature by providing an analysis of the distributive effects of tariff liberalization in Mexico. The paper examines the effect of tariff liberalization from the perspective of households both as consumers and factor owners allowing for imperfect domestic price transmission. The results indicate the overall positive effect of tariff liberalization masks significant differences in the distribution of gains both across income levels and across geographic regions. Richer households are found to have gained relatively more. Urban areas, as well as Mexican states closest to the United States border, are also found to be larger beneficiaries while southernmost states have been largely bypassed by the effects of tariff liberalization. Those results can be explained not only in relation to the different endowments of the households, but also by the diverse effects on local prices that has resulted from Mexican trade liberalization.     

Spatial growth and industry age

Between 1970 and 2000 employment growth across U.S. counties exhibited very different patterns in manufacturing and services. Whereas manufacturing employment growth was negatively related to initial manufacturing employment across the entire distribution of counties, service employment growth was positively related to initial service employment for intermediate sized counties. This paper presents a theory to rationalize these facts. Local sectoral growth is driven by technological diffusion across space and depends on the age of the sector. The theory correctly predicts the relation between county employment growth and initial county employment in manufacturing at the turn of the 20th century.     

Reversal of gender gaps in child development: Evidence from young children in India

This paper provides unique evidence of a reversal of gender gaps in cognitive development in early childhood. We find steep caste and gender gradients and few substantive changes once children enter school. The gender gap, however, reverses its sign for the upper caste, with girls performing better than boys at age 5 but thereafter following the general pattern in India of boys performing better.     

The cost of imperfect agency in health care: Evidence from rural Cameroun

Health is a pressing problem facing Africans today, yet health care systems in Africa are inadequate and under-funded. We show that pervasive imperfect agency means that they are also inefficient. Imperfect agency (due to unobservable medical effort) is a recognized market failure in health care, but its impact is difficult to measure. We take an indirect approach to estimation and infer the cost of unobservable effort from the behavior of utility-maximizing patients, specifically their willingness to incur measurable costs to avoid practitioners who shirk. We use a unique data set from rural Cameroun where patients choose between the government health system, church-operated (mission) health facilities and, importantly, traditional healers. Traditional healers provide health services on an outcome–contingent basis where patients pay only if they are cured. Both government and mission facilities, in contrast, are paid on a fee-for-service basis. Patients' choices of practitioners, combined with quantitative information about patients' illnesses, permit a structural estimation of the value of unobservable medical effort. The results allow investigation into the nature of agency, its costs, and the manner in which contracts reduce and patient behavior mitigates those costs. We estimate that in the absence of imperfect agency, utility from health care would increase by at least 160%. Even in the face of imperfect agency, the sophistication of patients in choosing between existing contracts for different illnesses increases utility by up to 20%.     

Using the Hawthorne effect to examine the gap between a doctor's best possible practice and actual performance

Many doctors in developing countries provide considerably lower quality care to their patients than they have been trained to provide. The gap between best possible practice and actual performance (often referred to as the know-do gap) is difficult to measure among doctors who differ in levels of training and experience and who face very different types of patients. We exploit the Hawthorne effect-in which doctors change their behavior when a researcher comes to observe their practices-to measure the gap between best and actual performance. We analyze this gap for a sample of doctors and also examine the impact of the organization for which doctors work on their performance. We find that some organizations succeed in motivating doctors to work at levels of performance that are close to their best possible practice. This paper adds to recent evidence that motivation can be as important to health care quality as training and knowledge.     

Gender,productive ability and the perceived returns to education: Evidence from rural India

Recent research has established the importance of perceived (as opposed to actual) returns as a determinant of educational investments. We analyze data from India to highlight gender disparities in the perceived returns to education and the salience of productive characteristics.     

Economic transition and gender differentials in wages and productivity: Evidence from Chinese manufacturing enterprises

We use firm-level data to analyze male–female wage differences in Chinese industry in the late 1990s. Our estimates indicate that employers' discrimination against women was not a significant source of the gender wage gap in Chinese state-owned enterprises. Instead, we find that the relative wage of unskilled female to male workers was higher than their relative productivity. This result indicates that unskilled female workers in the state sector had historically received wage premiums and consequently accounted for a disproportionate share of the sector's labor surplus.     

Socioeconomic status or noise? Tradeoffs in the generation of school quality information

This paper calculates a time series of simple, standard measures of schools' relative performance. These are drawn from a 1997–2004 panel of Chilean schools, using individual-level information on test scores and student characteristics for each year. The results suggest there is a stark tradeoff in the extent to which rankings generated using these measures: i) can be shown to be very similar to rankings based purely on students' socioeconomic status, and ii) are very volatile from year to year. At least in Chile, therefore, producing a meaningful ranking of schools that may inform parents and policymakers may be harder than is commonly assumed.     

Causal effects of sex preference on sex-blind and sex-selective child avoidance and substitution across birth years: Evidence from the Japanese year of the fire horse

This paper examines the effect of a short-term change in preference for male offspring on couples' childbearing and child-avoidance behaviors. We exploit a natural experiment in Japan in which girls born in a specific astrological year are regarded as less desirable. We relate this superstition to an economic model of child avoidance. We measure the relative importance of sex-selective and sex-blind child avoidance responses nationwide and across geographic areas and the degree of substitutability of children across birth years in Japan in 1846, 1906, and 1966, and we examine how these responses interacted with the economic and social development of Japan over this period.     

The social economic impact of AIDS: Accounting for intergenerational transmission,productivity and fertility

In this paper we develop a model that aims to investigate the economic and demographic impacts of three effects of the HIV-AIDS epidemic in developing countries. The direct effect of the HIV epidemic is that it increases mortality and morbidity. The two indirect effects, resulting from the first, are the reduction in productivity of adults and the transmission of the disease to their offsprings. We allow these different effects to act either separately or together, and we investigate the marginal efficiency of health expenditures on the survival probability of individuals and demographics. The direct effect of the HIV virus is that it leads adults to increase their own health expenditure and to decrease that of their children. On the contrary, the transmission effect of the HIV virus leads parents to spend more on their children than on their own. We show that the reduction in productivity of young adults decreases health expenditures for themselves and their children. Furthermore, we find that the productivity effect dominates by large the two others. Moreover, when adults decide to have fewer children because of HIV, we show that the ratio of low to high skilled workers increases. This demographic impact impoverishes the economy in the short and medium run.     

The migration of professionals within the EU: Any barriers left?

As shown by the intense legislative effort at the European Union level, the mutual recognition of professional qualifications represents an important step towards the completion of the single EU labor market. In this paper we provide the first empirical evidence on the link between intra‐EU mobility and mutual recognition of professional qualifications. Our results show that bilateral EU migration is positively affected by the destination country's rate of recognition of professional qualifications obtained in another EU member state.