Child labor,urban proximity,and household composition

Using detailed survey data from Nepal, this paper examines the determinants of child labor with a special emphasis on urban proximity. We find that children residing in or near urban centers attend school more and work less in total but are more likely to be involved in wage work or in a small business. The larger the urban center, the stronger the effect is. Urban proximity is found to reduce the workload of children and improve school attendance up to 3 h of travel time from the city. In areas of commercialized agriculture located 3 to 7 h from the city, children do more farm work. Urban proximity effects are accounted for by a combination of local labor supply and demand conditions, most notably the local importance of agriculture, the education level of the parents, and the local wage rate. Child servants, which represent a small proportion of all children, work much harder than other children and appear particularly at risk.     

Labor Market Effects of Economic Integration: The Impact of Re-Unification in German Border Regions

Abstract. This paper exploits the significant reduction in impediments to labor mobility in the process of German re-unification in order to identify labor supply shocks in the West German labor market. The focus is on the quasi-experiment of the border removal in the regions situated at the German–German border that faced a massive increase of cross-border labor supply. The results indicate that despite a gain in employment, the border removal was accompanied by a decline in wages and an increase in unemployment relative to other West German regions.     

The spatial sorting and matching of skills and firms

Abstract .  In this paper we make use of a matched employer-employee database for Italy to look at the spatial distribution of wages. Using this rich database we aim to open up the black box of agglomeration economies exploiting the micro dimension of interaction among economic agents, both individuals and firms. We provide evidence that firm size and, especially, skills are sorted across space and account for a large portion of the spatial wage variation. Our data also support the assortative matching hypothesis, which we show not to be driven by co-location of good workers and firms. Finally, we point out that assortative matching is negatively related to local market size.     

Explaining the variation in household recycling rates across the UK

Household waste recycling rates vary significantly both across and within regions of the UK. This paper attempts to explain the variation by using a new data set of waste recycling rates and policy determinants for all of the UK's 434 local authorities over the period 2006Q2 to 2008Q4. Our results suggest that the method of recycling collection chosen by policy makers is an important factor influencing the recycling rate. We also find an inverse relationship between the frequency of the residual waste collection and the recycling rate.     

Estimating the social return to transport infrastructure: A price-difference approach applied to a quasi-experiment

Using the price differences between two markets, this study proposes a method for inferring the social return to transport infrastructure (in the vein of Fogel (1964)). We apply this approach to an investment that increased the shipping capacity of a thousand-mile-long railroad in western China. The event was quasi-experimental: before the expansion, the railroad was congested in one direction, but not the other. We find that, after the investment, (1) the between-destination price differences of goods shipped in the congestion direction dropped by about 30% and (2) shipping volume increased by around 40%. In contrast, those of goods in the other direction were not affected. These estimates imply a sizable social return to this particular investment: 10% per year in the most conservative case considered.     

Housing price and entrepreneurship in China

Housing price has increased dramatically in China during the past decade. The appreciation of house value could relax credit constraint and thus encourage entrepreneurship. However, a house serves as both an important investment channel and a prerequisite for marriage in China. The continuous high return of investment in housing and intensified marriage market competition make house purchase a priority for young people and their parents, which would crowd out entrepreneurial activities. Using two large datasets, we find that high housing price in general discourages entrepreneurial activities for urban adults. For house owners, while house value appreciation has a positive wealth effect, the ratio of mortgage over income has a negative effect. For non-owners, a higher ratio of housing price over income corresponds to a lower probability of entrepreneurship. This study highlights the negative consequences of surging housing price on entrepreneurship in developing countries.     

Child labor and schooling response to changes in coca production in rural Peru

Coca eradication and interdiction are the most common policies aimed at reducing the production and distribution of cocaine in the Andes, but little is know about their impact on households. This paper uses the shift in the production of coca leaves from Peru to Colombia in 1995 to analyze the indirect effects of the anti-coca policy on children's allocation of time. After different sensitivity checks, the results indicate that a decrease in coca production is associated with increases in work and hours children living in coca-growing states devote to work within and outside the household, with no effects on schooling outcomes. These findings suggest a previously undocumented indirect effect of drug policies on household behavior.     

Health and the evolution of welfare across Brazilian municipalities

This paper describes the pattern of reductions in mortality across Brazilian municipalities between 1970 and 2000, and analyzes its causes and consequences. It shows that, as in the international context, the relationship between income and life expectancy has shifted consistently in the recent past. But reductions in mortality within Brazil have been more homogeneously distributed than across countries. We use a compensating differentials approach to estimate the value of the observed reductions in mortality. The results suggest that gains in life expectancy had a welfare value equivalent to 39% of the growth in income per capita, being therefore responsible for 28% of the overall improvement in welfare. We then use a dynamic panel to conduct a preliminary assessment of the potential determinants of these gains. We show that improvements in education, access to water, and sanitation seem to be important determinants of the dimension of changes in life expectancy not correlated with income.     

Search, migration, and urban land use: The case of transportation policies

We develop a search-matching model with rural-urban migration and an explicit land market. Wages, job creation, urban housing prices are endogenous and we characterize the steady-state equilibrium. We then consider three different policies: a transportation policy that improves the public transport system in the city, an entry-cost policy that encourages investment in the city and a restricting-migration policy that imposes some costs on migrants. We show that all these policies can increase urban employment but the transportation policy has much more drastic effects. This is because a decrease in commuting costs has both a direct positive effect on land rents, which discourages migrants to move to the city, and a direct negative effect on urban wages, which reduces job creation and thus migration. When these two effects are combined with search frictions, the interactions between the land and the labor markets have amplifying positive effects on urban employment. Thus, improving the transport infrastructure in cities can increase urban employment despite the induced migration from rural areas.     

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 microeconomic determinants of emigration and return migration of the best and brightest: Evidence from the Pacific

A unique survey which tracks worldwide the best and brightest academic performers from three Pacific countries is used to assess the extent of emigration and return migration among the very highly skilled, and to analyze, at the microeconomic level, the determinants of these migration choices. Although we estimate that the income gains from migration are very large, not everyone migrates and many return. Within this group of highly skilled individuals the emigration decision is found to be most strongly associated with preference variables such as risk aversion and patience, and choice of subjects in secondary school, and not strongly linked to either liquidity constraints or to the gain in income to be had from migrating. Likewise, the decision to return is strongly linked to family and lifestyle reasons, rather than to the income opportunities in different countries. Overall the data suggest a relatively limited role for income maximization in distinguishing migration propensities among the very highly skilled, and a need to pay more attention to other components of the utility maximization decision.     

Network effects and the dynamics of migration and inequality: Theory and evidence from Mexico

International migration is costly and initially only the middle class of the wealth distribution may have both the means and incentives to migrate, which can increase inequality in the sending community. However, the migration networks formed lower the costs for future migrants, which can in turn lower inequality. This paper shows both theoretically and empirically that wealth has a nonlinear effect on migration, and then examines the empirical evidence for an inverse U-shaped relationship between emigration and inequality in rural sending communities in Mexico. After instrumenting, we find that the overall impact of migration is to reduce inequality across communities with relatively high levels of past migration. We also find some suggestive evidence for an inverse U-shaped relationship among communities with a wider range of migration experiences.     

The mover’s advantage: The superior performance of migrant scientists

Migrant scientists outperform domestic scientists. The result persists after instrumenting migration for reasons of work or study with migration in childhood to minimize the effect of selection. The results are consistent with theories of knowledge recombination and specialty matching.     

A dynamic spatial panel data approach to the German wage curve

A wage curve is a decreasing function of wages on the regional unemployment rate. Most empirical studies on the wage curve ignore possible spatial interaction effects between the regions which are the primary units of research. This paper reconsiders the western German wage curve with a special focus on the geography of labour markets. Spillovers between regions are taken into account. The paper tests whether the unemployment rate in the larger surrounding region also affects wages. In addition, agglomeration effects and effects of local monopsony are assessed.The main database is a random sample of 974,179 employees observed over the period 1980-2004 and covering 326 NUTS3 units (districts). This rich data set is used to estimate a dynamic wage curve according to the two-step approach of Bell et al. (2002). In the first step one controls for individual heterogeneity and in the second step one allows for spatial effects of unemployment across regions on wages. We check the sensitivity of this wage elasticity to various spatial weight matrices as well as allowing for the endogeneity of unemployment. We also estimate the wage elasticity for various population groups.     

Estimating returns to education using twins in urban China

This paper empirically estimates the return to education using twins data that the authors collected from urban China. Our ordinary least-squares estimate shows that one year of schooling increases an individual's earnings by 8.4%. If we use a within-twin fixed effects model, the return is reduced to 2.7%, but rises to 3.8% after the correction of measurement error. These results suggest that a large portion of the estimated returns to education is due to omitted ability or the family effect. We further investigate why the true return is low and the omitted ability bias high, and find evidence showing that it may be a consequence of China's education system, which is highly selective and exam oriented. More specifically, we find that high school education may mainly serve as a mechanism to select college students, but as a human capital investment per se it has low returns in terms of earnings. In contrast, both vocational school education and college education have a large return that is comparable to that found in the United States.     

A healthier start: The effect of conditional cash transfers on neonatal and infant mortality in rural Mexico

Conditional cash transfer programs seek to break the intergenerational transmission of poverty by building the human capital of poor children. Despite their popularity throughout the developing world, relatively little is known about their effect on children's health outcomes. This paper evaluates the impact of the Mexican conditional cash transfer program, Progresa, on two important health outcomes: infant and neonatal mortality. It exploits the phasing-in of Progresa over time throughout rural Mexico to identify the impact of the program. The paper shows that Progresa led to a large 17% decline in rural infant mortality among the treated, but did not reduce neonatal mortality on average. The benefit-cost ratio is between 1.3 and 3.6. Tests for heterogeneity show larger declines for some groups including those municipalities whose pre-program levels of mortality were above the median, and those that prior to the program had higher illiteracy rates, and less access to electricity.     

What a Difference Immigration Policy Makes: A Comparison of PISA Scores in Europe and Traditional Countries of Immigration

Abstract. The purpose of this article is to evaluate the importance of different immigration policies associated with corresponding migration backgrounds, command of national languages and intergenerational mobility, for the PISA school performance of teenagers living in European countries (France, Finland, Germany, United Kingdom and Sweden) and traditional countries of immigration (Australia, Canada, New Zealand and the US). Econometric results show that the influence of the socioeconomic background of parents differs strongly across nations, with the highest impact found for Germany, the UK and US, whereas intergenerational transmission of educational attainment is less likely in Scandinavian countries and in Canada. Moreover, for all countries our estimations imply that for students with a migration background a key for catching up is the language spoken at home. We conclude that educational policy should focus on integration of immigrant children in schools and preschools, with particular emphasis on language skills at the early stage of childhood.     

Quality of life,firm productivity,and the value of amenities across Canadian cities

We estimate quality‐of‐life and productivity differences across Canada's metropolitan areas in a hedonic general‐equilibrium framework. These are based on the estimated willingness‐to‐pay of heterogeneous households and firms to locate in various cities, which differ in their wage levels, housing costs, and land values. Using 2006 Canadian Census data, our metropolitan quality‐of‐life estimates are somewhat consistent with popular rankings, yet find Canadians care more about climate and culture. Quality of life is highest in Victoria for anglophones, Montreal for francophones, and Vancouver for allophones, and lowest in more remote cities. Toronto is Canada's most productive city; Vancouver is the overall most valuable city.