Poverty in Ghana from an Assets‐based Perspective: An Application of Probit Technique*

Abstract: This paper extends the existing literature on poverty in developing economies by examining the effects of human capital, financial capital and physical assets on the incidence of poverty in both urban and rural Ghana. The following is found: low stocks of assets appear to be a more prevalent problem associated with poverty; the returns to human capital are positive and rise with higher educational attainment, irrespective of gender; the correlation between income distribution and incidence of poverty is positive; and ownership of human, physical and financial assets reduces the probability of being poor. Against the backdrop of growth‐oriented policies, the paper calls for investments in schooling, provision of institutional credit and an enabling environment for labour market activities as strategies for the reduction of poverty.     

Can Social Capital Reduce Poverty? A Study of Rural Households in Eastern Bhutan

This study examines the impact of social capital on the poverty of rural households in eastern Bhutan, with a particular focus on households' participation in community groups, which can be a proxy for the structural aspect of social capital. Using a two‐stage probit least squares simultaneous equation model, the present study reveals that social capital positively contributes to poverty reduction in Bhutan. This study also finds that non‐farm income is important for poverty reduction in rural areas. Our results, however, indicate that poor households in remote areas are discouraged from participating in community groups.     

The progress of school education in India

This paper provides an overview of school education in India.First, it places India's educational achievements in internationalperspective, particularly against countries with which it isnow increasingly compared, especially China. Second, the paperexamines schooling access in terms of enrolment and school attendancerates, and schooling quality in terms of literacy rates, learningachievement levels, school resources, and teacher inputs. Third,the paper investigates the role of private schooling in India,examining the extent of growth of private schooling and surveyingevidence on the relative effectiveness and unit costs of privateand public schools. Last, the paper discusses some major publiceducation initiatives. The concluding section suggests a futureresearch agenda and appeals for rigorous evaluation of the impactsand costs of the numerous existing educational interventions,in order to learn about their relative cost-effectiveness forevidence-based policy-making.     

The impact of parental education on children’s outcomes in China

This paper exploits the exogenous shock to basic education during the Chinese Cultural Revolution to estimate the causal relationship between parental schooling and children’s educational attainment in China. Using deviations of cohort graduation rates from predicted education trends as instruments for parents’ education, the results indicate that an additional year of parental education increases children’s probability of completing junior and senior high schools by 7.94 and 9.76%, respectively. Parental education not only has positive and significant effects on children’s schooling outcomes, its importance also increases with children’s education level. These findings suggest that public investment in education has important long-term effects on individual’s educational achievement.     

Human Capital and Hours Worked of Children in Cambodia: Empirical Evidence for Policy Implications*

This study uses data from the Cambodian Child Labor Survey 2001/02 (CCLS‐2001/02) to investigate the trade‐off between child labor and their human capital formation. It also investigates the determinants of child schooling and that of the income earned from child labor. This study finds that children's education is a significant determinant of their wage rate, which implicitly explains the logic behind the household's decision to allow a child to both work and study, and thus explains why parents keep investing in their children's education. We also find that non‐poor households and fathers’ and mothers’ education have statistically significant effects on child schooling. Finally, this study has found that if children's average working hours are below the threshold level of 22 h per week, then education is not affected. These research findings have policy implications for the human capital development of children, as well as for broader social policy in Cambodia.     

Influence of a Wife's Working Status on Her Husband's Accumulation of Human Capital

Japanese household‐level data consisting of husband's earnings, wife's working status and their schooling levels are used to test three hypotheses, with particular consideration given to the time‐consuming process of human capital accumulation within marriages. The empirical results supports the following hypotheses: (i) a non‐working wife's schooling has a greater positive effect on her husband's earnings than a working wife's schooling; and (ii) the effect of a non‐working wife's schooling increases with the length of marriage, whereas the effect of a working wife's schooling does not change over the course of marriage.     

The Unintended Consequences of Education Policies on South African Participation and Unemployment

In the late 1990s, the South African Department of Education implemented two policies that were meant to reduce the large number of over‐aged learners in the school system: schools were no longer allowed to accept students who were more than two years older than the correct grade age, and students could not be held back more than once in each of four schooling phases. Our analysis uses school administrative data and household survey data to show that these policies coincided with a decrease in school enrolment of at least 400,000 and possibly more than 900,000 learners. These policies appear to have pushed many students into the labour market at earlier ages than was observed for previous generations, which explains much of the sudden increase in labour force participation and unemployment during this period. However, since these individuals would probably have entered the labour market sooner if not for their poor employment prospects, we argue that the resulting increase in unemployment signifies a more accurate reflection of disguised unemployment that already existed in the mid‐1990s rather than a deterioration of labour market conditions.     

Geography and educational inequality in China

Since the 1980s, educational reforms in China have decentralized administration and finance and privatized costs. These changes have emerged in the context of rapid economic growth and rising regional economic disparities. The reforms have mobilized new resources in support of education, but they have also exacerbated regional disparities in funding for schools. Analyses of trends in school finance and expenditures have emerged, but detailed studies of the shifting ties between geography and educational outcomes in the population have not.Using 2000 census data on year and location of birth and educational attainment, we begin to address this gap. We compare the links between birth province and educational outcomes across 5-year birth cohorts to illuminate trends in region-based inequalities. Results show that the percent of variation in years of schooling explained by birth province declined for cohorts born through the early 1960s, and then increased thereafter.Additional analyses use a dissimilarity index to characterize the strength of the link between geography and access to each level of schooling. This index indicates that the link between geography and access to primary school has greatly increased across cohorts, as the few without access to primary school are ever more concentrated in poor areas. The link between birth province and access to subsequent levels of schooling shows mixed trends through cohorts born in the early 1960s: stability for junior high school and a weakening trend for senior high school and college. Thereafter, the dissimilarity index increased, substantially for junior high school and slightly for senior high school and college.Results attest to the enduring significance of geography as an educational stratifier in China. More broadly, results suggest the importance of regional inequalities in conditioning the relationship between development and educational stratification.     

Poverty and Inequality in The Soeharto Era: An Assessment

This paper surveys the evidence on trends in poverty and inequality during the years of Soeharto's presidency. That Indonesia saw a decline in the incidence of poverty, and improvements in other welfare indicators such as infant mortality rates and literacy rates over these years, seems indisputable. Comparative studies show that by the latter part of the 1980s, the headcount measure of poverty in Indonesia was below that in the Philippines although above that in Malaysia and Thailand. But relative poverty has declined more slowly, and indeed increased in some urban areas between 1987 and 1996. The paper also examines evidence on the determinants of rural poverty in Indonesia in 1993, and suggests that rural development programs targeted to the specific needs of poor people in poor areas will be essential if rural poverty is to be further reduced in future years.     

Public Company Audits and City‐Specific Labor Characteristics

Prior research emphasizes the centrality of audit offices in understanding auditing practices, and documents significant interoffice variation in audit outcomes based on industry expertise and office size. Our study examines how two city‐specific labor characteristics also affect audit offices and local audit markets: the city's average educational attainment, and the number of accountants in a city, which proxy for a city's human capital. Our argument draws on the urban economics literature and predicts that the level of human capital in a city is positively associated with an audit office's ability to conduct high‐quality audits. As expected, there is a positive association between audit quality (quality of audited earnings and accuracy of going‐concern reports) and average education level in the city in which the lead engagement office is located. This association is generally significant for both Big 4 and non‐Big 4 offices, but is relatively stronger for non‐Big 4 firms that are more tied to local labor markets. A company is also more likely to choose a non‐Big 4 auditor in cities with higher educational levels and relatively more accountants, and there is evidence of higher non‐Big 4 audit fees as a city's education level increases. Collectively, these results suggest that local labor characteristics affect audit offices, audit quality, and the ability of non‐Big 4 auditors to compete with Big 4 auditors in the audits of public companies.     

Did Muhammad Ali foster industrialization in early nineteenth‐century Egypt?

Muhammad Ali, who ruled Egypt between 1805 and 1849, intervened in Egyptian markets in an attempt to foster industrialization, especially between 1812 and 1840. Like a modern marketing board, the state purchased agricultural commodities (cotton and wheat) at low prices and sold them on world markets at much higher prices, a policy equivalent to an export tax. Ali also replaced tax farming with his own land taxes. The revenues so derived were used in part to finance manufacturing investment and to build irrigation canals. In addition, Ali supplied flax and cotton at those cheap purchase prices to domestic textile manufacturing, thus subsidizing the industry. He also used non‐tariff barriers to exclude foreign competition from domestic markets. Were Ali's state‐led policies successful in fostering industry? The answer is no easier to extract from this phase of Egyptian history than from that of other poor countries at that time. This is because Egypt faced the same terms of trade boom typical of most poor commodity exporters, which was causing de‐industrialization everywhere else in the poor periphery. Ali picked a very difficult time to pursue his agenda, but we show that his policies were successful.     

Home Schooling: An Alternative School Choice

There is a fairly large, evolving literature on school choice. This literature addresses the factors that influence the choice between schools in the public and private sectors. Overlooked by this literature, however, is the growing segment of school enrollment in home schools. This article empirically examines the decision to educate children at home. The empirical results suggest that the decision to home school depends on the expected quality of schooling the home unit can produce relative to that available from alternatives. More specifically, our results indicate that women's educational attainment helps explain home school enrollment, that greater heterogeneity of income within a public school district increases home enrollment, and that stricter regulations decrease home school enrollment.     

Children’s Work in Nigeria: Exploring the Implications of Gender, Urban–Rural Residence, and Household Socioeconomic Status

Child labor in developing countries continues to be a topic of policy and academic concern, particularly in Africa where there are more working children than in any other region. Scholarly attention has been drawn in part to gender, place of residence, and socioeconomic status as factors that shape the type of work that children perform and whether it impacts educational attainment. I explore these issues in the context of Nigeria through analysis of data from the 2004 Nigeria Demographic and Health Survey EdData Survey. A series of logistic regression models of child labor confirm the existence of gender and, especially, socioeconomic disparities in children??s work. The data also indicate that girls and rural children face a double risk of working if they belong to poor households. A policy implication is that poverty alleviation programs??such as Mexico??s Oportunidades program (the erstwhile PROGRESA)??may help to reduce those forms of child labor that interfere with schooling. That this program has been found to more beneficial for girls suggests it may be particularly appropriate for Nigeria where gender disparities persist.     

Can school centralization foster human capital accumulation? A quasi-experiment from early twentieth-century Italy

This article shows that a shift towards a more centralized school system can benefit countries that are characterized by poor levels of human capital and large regional disparities in education. In 1911, Italy moved from a fully decentralized primary school system towards centralization through the Daneo-Credaro Reform. The design of the Reform allows us to compare treated municipalities with those that retained school autonomy. Our quasi-experiment, based on propensity score matching (PSM), shows that centralization substantially increased the pace of human capital accumulation. Treated municipalities were characterized by a 0.43 percentage-point premium on the average annual growth of literacy between 1911 and 1921. We discuss some of the channels through which the new legislation affected primary schooling and literacy, with important implications for long-term economic growth.     

Dietary Diversity,Food Security and Undernourishment: The Vietnamese Evidence*

As is widely known, Vietnam experienced a rise in living standards and a decline in expenditure poverty during the first half of the 1990s. This paper extends this knowledge by providing evidence on the Vietnamese experience of food security, undernourishment and poverty from the late 1990s to the early part of the new millennium. The results suggest that poor households did not experience increases in food consumption, calorie intake and dietary diversity of the same magnitude as non‐poor households. Nevertheless, Vietnam experienced impressive reductions in both calorie deprivation and expenditure poverty at the turn of the century. Non‐poor households, in particular, experienced spectacular increases in calorie intake and dietary diversity during the period 1997/1998–2004. This paper also reports regression results which point to the role of urbanization and improvement in education levels in promoting dietary diversity and nutrient intake. The present study finds evidence of sharp regional differences in calorie intake and calorie costs, which suggests that the authorities should set provincial poverty lines, contrary to the current practice adopted by Vietnam's General Statistical Office.     

Poverty Alleviation in the People's Republic of China: The Implications for Sino–African Cooperation in Poverty Reduction

Abstract: In the last thirty years, remarkable achievements have been made in China's poverty reduction course. The dramatic fall in China's poor can be attributed mainly to a high rate of economic growth, government poverty reduction policies and targeted programmes and pro‐poor macroeconomic and industrial policies. This paper focuses on China's poverty reduction policies and programmes and their impact on the poor regions and poor households. Lessons are drawn for poverty reduction and economic development in African countries. The paper also explores the potential for collaboration in poverty reduction between China and African countries and recommendations are made for the governments and donor agencies.     

Multidimensional Poverty and Perceived Happiness: Evidence from China,Japan and Korea*

We compare multidimensional poverty and its associations with perceived happiness in China, Japan and Korea. Using largely comparable nationwide survey data, we focus on multidimensional poverty in terms of income, schooling, health and social protection. We find multidimensional poverty to be more prevalent in China than in Japan or Korea; sex and age‐based differences are largest in Korea. We further confirm significant associations between multidimensional poverty and perceived happiness. For all three countries, the aggregated poverty dimensions could largely identify unhappy individuals, with both wider coverage and higher odds than is possible through unidimensional analyses.     

Distributional Impact of Globalization‐induced Migration: Evidence from a Nigerian Village

Abstract: One of the contentious issues about the globalization process is the mechanism by which globalization affects poverty and inequality. This paper explores one of the various strands of the globalization–inequality–poverty nexus. Using microlevel survey data from over 300 poor households in the small village of Umuluwe (about 30 miles west of the regional capital of Owerri) in south‐east Nigeria, the paper investigates whether individuals who migrate from the village to take advantage of the urban‐biased globalization process do better than non‐migrant villagers. The paper concludes that, while the migrant villagers tend to earn slightly higher incomes than the non‐migrant villagers, the poverty profiles of both categories of households are essentially the same. In other words, and contrary to conventional wisdom, globalization has not succeeded in alleviating poverty amongst the poor villagers who explicitly took advantage of the process. The paper argues that, by changing relative prices in the urban areas, structural adjustment appears to have eliminated any advantage that globalization may have bequeathed to the migrant villagers.     

Unexpected opportunity for girls: Earthquake,disaster relief and female education in China's poor counties

The Wenchuan earthquake in 2008 devastated poverty-stricken areas in Sichuan Province, China. This paper examines the long-term effect of a disastrous earthquake on children's educational attainment using China's 2015 Population Census. Our cohort difference-in-differences results show that exposure to an earthquake has an unexpected significant positive impact on girls’ educational attainment in poor counties, but not on boys. We suggest that this surprising educational gain may be attributable to the reconstruction of schools and the reduction in school fees after disaster. In the long run, girls in poor affected counties are more likely to delay marriage, postpone childbearing and become self-employed compared with girls in poor unaffected counties. These findings potentially exhibit the unintended benefits in education from post-disaster interventions in poor areas.     

Labor market segmentation and relative black/white teenage birth rates

Teenage mothers typically have lower educational attainment than other women. Most observers have argued that this is a major reason for their greater risk of poverty. This article takes the opposite view: that circumstances associated with poverty contribute to a greater likelihood of teenage childbearing. In particular, poor educational quality and the chances of secondary sector employment are more common for black women, regardless of their age at first birth. Hence the payoffs to education may be quite low for these women, which may be the reason for early motherhood. This argument is presented in terms of segmented labor market theory. Data to support it is presented from the National Longitudinal Survey of Youth. Other common explanations of teenage motherhood are critiqued.