Fatal fluctuations? Cyclicality in infant mortality in India

This paper investigates the impact of aggregate income shocks on infant mortality in India and investigates likely mechanisms. A recent OECD-dominated literature reports the provocative finding that mortality at most ages is pro-cyclical. Similar analyses for poorer countries are scarce, and both income risk and mortality risk are greater in poor countries. This paper uses data and methods designed to avoid some of the specification problems in previous studies and it explores mechanisms and extensions that have not been previously considered. It uses individual data on infant mortality for about 150,000 children born in 1970-1997, merged by cohort and state of birth with a state panel containing information on aggregate income. Identification rests upon comparing the effects of annual deviations in income from trend on the mortality risks of children born at different times to the same mother, conditional upon a number of state-time varying covariates including rainshocks and state social expenditure. Rural infant mortality is counter-cyclical, the elasticity being about − 0.33. This is despite the finding that relatively high-risk women avert birth or suffer fetal loss in recessions. It seems in part related to recessions stimulating distress labor amongst mothers, in contrast to the case in richer countries, where they discourage labor market participation. Health-care seeking declines in recessions, and this appears to be related to the opportunity cost of maternal time. Disaggregation reveals that the average results are driven by rural households in which the mother is uneducated or had her first birth in teenage, and that it is only girls that are at risk; boys are protected from income shocks. Exposure to poor conditions in the fetal and neonatal period appears to have a larger effect on infant mortality than similar exposure in the postneonatal period.     

Birth-spacing,fertility and neonatal mortality in India: Dynamics,frailty, and fecundity

Using microdata on 30,000 childbirths in India and dynamic panel data models, we analyse causal effects of birth-spacing on subsequent neonatal mortality and of mortality on subsequent birth intervals, controlling for unobserved heterogeneity. Right censoring is accounted for by jointly estimating a fertility equation, identified by using data on sterilization. We find evidence of frailty, fecundity, and causal effects in both directions. Birth intervals explain only a limited share of the correlation between neonatal mortality of successive children in a family. We predict that for every neonatal death, 0.37 additional children are born, of whom 0.30 survive.     

Near rationality in wage setting

This study argues that it is interesting to examine near rational behaviour in the context of an efficiency wage model, where there are positive if decreasing returns to increasing the wage beyond the efficient level. Previous research has found it difficult to distinguish between efficiency wage and bargaining models, which have similar empirical predictions. But unions are a priori more likely to develop in environments in which the technology favours efficiency wage payments. This makes it interesting to investigate what it costs the firm to deviate from the efficiency wage. If it does not cost a lot, firms may give in to union demands. This study derives expressions for the wage deviation and for the associated profit loss. For illustrative purposes, these are calibrated for UK, US and Indian manufacturing, taking a plausible parameterization of the effort-wage function and using available estimates of the wage and employment elasticities of output. While there is evidence of positive effort returns to wages in the UK and India, the results are consistent with wage bargaining pushing the wage above the efficient level. The associated profit loss is considerably larger in the UK than in India. In contrast, US firms pay wages that are insignificantly different from the efficiency wage.     

The Puzzle of Jobless Growth in Indian Manufacturing

In the 1980's, India experimented with deregulation in industry and trade. Manufacturing output accelerated but employment declined, raising doubts about the desirability of the policy reforms. This paper proposes an explanation of employment behaviour in terms of increases in total factor productivity, in actual hours worked, and in the product wage. Using robust methods, it is shown that neglect of hours worked results in a substantial upward bias in estimates of the wage elasticity. Growth in productivity and hours appears to be associated with the reform process, with the increase in hours worked reflecting recovery of lost time. To the extent that hours must hit a ceiling, the drop in employment on this count is expected to be temporary. Other things being equal, employment prospects appear to depend considerably on the course of productivity growth.     

Is Child Work Necessary?*

This article investigates the hypothesis that child labour is compelled by poverty. It shows that a testable implication of this hypothesis is that the wage elasticity of child labour supply is negative. Using a large household survey for rural Pakistan, labour supply models for boys and girls in wage work are estimated. Conditioning on non-labour income and a range of demographic variables, the article finds a negative wage elasticity for boys and an elasticity that is insignificantly different from zero for girls. Thus, while boys appear to work on account of poverty compulsions, the evidence for girls is ambiguous.     

Child Farm Labor: The Wealth Paradox

This article is motivated by the remarkable observation thatchildren of land-rich households are often more likely to bein work than the children of land-poor households. The vastmajority of working children in developing economies are inagricultural work, predominantly on farms operated by theirfamilies. Land is the most important store of wealth in agrariansocieties, and it is typically distributed very unequally. Thesefacts challenge the common presumption that child labor emergesfrom the poorest households. This article suggests that thisapparent paradox can be explained by failures of the marketsfor labor and land. Credit market failure will tend to weakenthe force of this paradox. These effects are modeled and estimatesobtained using survey data from rural Pakistan and Ghana. Themain result is that the wealth paradox persists for girls inboth countries, whereas for boys it disappears after conditioningon other covariates.