Childbirth and poverty in Europe: A dynamic bivariate approach

We use the 2015–2018 European Union Statistics on Income and Living Conditions panel data and a dynamic bivariate probit model to estimate the impact of childbirth on the risk of poverty in 25 European countries. We model both poverty and childbirth mechanisms, identifying genuine state dependence and accounting for feedback effects from past poverty to childbirth. We find that childbirth slightly increases the risk of poverty in Europe, but some heterogeneities emerge at the country level. When disentangling the effects of childbirth conditional on past poverty status, it appears that childbirth determines redistributive effects possibly induced by welfare systems. We find evidence of genuine state dependence and suggests that discouraging factors induced by the experience of poverty itself has increased over time. The risk of poverty is triggered by the presence of dependent members in the household, while education and employment stability are helpful to combat poverty.     

A Reappraisal of the Virtues of Private Sector Employment Programmes*

This paper evaluates the employment effects of active labour market programmes for Danish welfare benefit recipients, focusing on private sector employment (PSE) programmes. Using a latent variable model that allows for heterogeneous treatment effects among observationally identical persons, we estimate commonly defined mean treatment effects and the distribution of treatment effects. We find no significant mean treatment effect of PSE programme participation as compared to participation in other programmes for PSE programme participants. However, we find substantial heterogeneity in the treatment effects, and those most likely to participate in PSE programmes are those who benefit the least from such programmes.     

The Dynamics of Poverty and the Promotion of Transition from Non‐Regular to Regular Employment in Japan: Economic Effects of Minimum Wage Revision and Job Training Support

Comparison between Japan and other advanced countries shows that the relative poverty rate is high in Japan, and that many of the poor households are those with a non‐regular worker. As for mobility between income classes, the proportion of households remaining in the poor class for a long period of time in Japan is close to the average for EU countries. The panel estimation of its effect on wages shows that the raising of the minimum wage is statistically significantly associated with an increase in wages of non‐regular workers, in particular, female, but does not seem to decrease employment. The result shows that for male non‐regular workers, firm‐provided training promotes their transition to regular employment, and that for female non‐regular workers, occupational training promotes their transition to regular employment at different firms.     

A Bayesian Measure of Poverty in the Developing World

We propose a new methodology to revise the international poverty line (IPL) after Ravallion et al . (2009) using the same database, but augmented with new variables to take into account social inclusion in the definition of poverty along the lines of Atkinson and Bourguignon (2001). We provide an estimation of the world income distribution and of the corresponding number of poor people in the developing world. Our revised IPL is based on an augmented two‐regime model estimated using a Bayesian approach, which allows us to take into account uncertainty when defining the reference group of countries where the IPL applies. The influence of weighting by population is discussed, as well as the IPL revision proposed in Deaton (2010). We also discuss the impact of using the new 2011 PPP and the recent IPL revision made by the World Bank.     

Poverty Dynamics,Violent Conflict,and Convergence in Rwanda

This paper analyzes the poverty impact of the violent events that affected Rwanda in the 1990s. The main objective of the paper is to identify systematically potential mechanisms linking violent conflict with changes in poverty across provinces and households in Rwanda before and after a decade of violence. In accordance with emerging literature on the long‐term economic effects of violent conflict, we find empirical evidence for economic convergence between richer and poorer Rwandan provinces and households following the conflict shocks. Using a small but unique panel of households surveyed before and after the conflict period, we find that households whose house was destroyed or who lost land ran a higher risk of falling into poverty. We do not find much evidence for an economic effect of violent deaths at the household level due to substitution effects of labor within the household. Non‐violent deaths however seem to increase income per adult equivalent for the survivors. Results are shown to be robust to sample selection and IV models.     

Poverty,undernutrition and vulnerability in rural India: role of rural public works and food for work programmes

This paper analyses the effects of access to Rural Public Works (RPW) or Food for Work programme (FFW) on consumption poverty, vulnerability and undernutrition in India using the large household data sets constructed by the National Sample Survey for 1993 and 2004. The treatment-effects model is used to take account of sample selection bias in evaluating the effects of RPW in 1993 or FFW in 2004 on poverty. We have found significant and negative effects of participation in RPW and the Food for Work Programme on poverty, undernutrition (e.g. protein) and vulnerability in 1993 and 2004.     

Decomposing Poverty Change: Deciphering Change in Total Population and Beyond

In the understanding of decomposing poverty change, the growth effect of mean income is replaced with the growth effect of total income and the impact of change in total population. These two, along with changes in inequality, form the three broader effects that can be computed in multiple ways depending upon the base period and the sequence of calculation. Changing the base does not alter the broader effects while specific attributions within each effect get interchanged. For a given base, there will be six possible sequences and we take an average of these to compute the three broad effects. Finally, poverty change on account of the three broad effects comprising growth of total income, change in inequality, and change in total population are shown as part of the within‐group effect while change in population shares, which is different from change in total population, is a between‐group effect. We provide empirical illustrations with data from India.     

Mark-ups, economies of scale and the role of knowledge spillovers in OECD industries

Using R&D-based models of economic growth as a foundation, this paper argues that market-driven knowledge creation is necessarily linked as an engine of productivity growth to economies of scale and market-power. A cost function and factor demand model is applied to a cross-country industry data set to study market-power, economies of scale and the role of knowledge in an integrated approach. Empirical results reveal the presence of market-power and economies of scale in all of the industries investigated. R&D and spillovers explain some of the productivity growth observed. Spillovers are identified as an external source of economies of scale.     

Employment fluctuations and dynamics of the aggregate average wage in Poland, 1996–20031

The aggregate average wage is often used as an indicator of economic performance and welfare, and as such often serves as a benchmark for changes in the generosity of public transfers and for wage negotiations. Yet if economies experience a high degree of (non‐random) fluctuation in employment, the composition of the employed population will have a considerable effect on the computed average. In this paper we demonstrate the extent of this problem using data for Poland for the period 1996–2003. During these years the employment rate in Poland fell from 51.2 percent to 44.2 percent and most of this fall occurred between the end of 1998 and the end of 2002. We show that about a quarter of the growth in the average wage during this period could be attributed purely to changes in employment.     

The treatment effect, the cross difference, and the interaction term in nonlinear “difference-in-differences” models

In any nonlinear “difference-in-differences” model with strictly monotonic transformation function, the treatment effect is the cross difference of the observed outcome minus the cross difference of the potential non-treatment outcome, which equals the incremental effect of the interaction term coefficient.     

Disentangling the Poverty Effects of Sectoral Output,Prices, and Policies in India

This paper attempts to disentangle the poverty effects of key policy variables that directly affect the poor (namely the government‐led channel of development spending and financing) in both agricultural and non‐agricultural sectors after accounting for the effect of respective sectoral per capita income and prices, using data from India over five decades. The paper emphasizes the sectoral composition of income and prices as mechanisms influencing the level of poverty and establishes empirically that it is the rise in non‐agricultural per capita income that reduces rural poverty via the channel of internal migration, after having controlled for the variation in key components of fiscal spending and monetary/financial policy via the availability of credit. Uneven sectoral growth pattern explains why urban poverty becomes a spill‐over of persistent rural poverty when the agricultural sector shrinks. While checking for robustness, there is evidence that the rise in non‐agricultural income alone may not reduce rural poverty, when measured in terms of rural infant mortality rate as a non‐income indicator of well‐being.     

Fiscal devaluation and economic activity in the EU

In the aftermath of the global financial crisis, a fiscal devaluation (hereafter, FD), understood as a shift in taxation from labour to consumption, has been debated as a possible tool for restoring competitiveness, particularly in peripheral countries of the Eurozone. We contribute to this debate. Based on a set of panel and spatial panel models for the EU 27 over the period 1995–2014, we find that FD works, especially where economic activity is heavily subdued and in sectors more exposed on external competition. FD increases value added in exports, improves net exports, accelerates GDP and employment growth, and decelerates growth in labour costs. These effects are nonlinear; they are stronger in the members of the Eurozone and weaker in countries with either more coordinated or more centralised wage bargaining processes or more generous unemployment benefits. The magnitude of these effects is dampened by strict regulatory barriers: they are weaker in countries with higher barriers to entrepreneurship, trade and investment. Most importantly, FD is not a beggar thy neighbour policy, at least in the EU. In our sample, the aggregate demand (‘cooperative’) effect of unilateral FD, which is beneficial for neighbouring countries, outweighs by far the expenditure switching (‘competitive’) effect, which comes at the expense of other countries’ competitiveness. FD implemented in one country can benefit other countries, provided that they are strongly integrated in global value chains. These findings are robust to changes in the estimation methods, the sample composition, the set of explanatory variables and the selection of a spatial weight matrix.