Ambar Narayan

Is Literacy Shared Within Households? Theory and Evidence from Bangladesh

A member of a collective-action household may or may not share the benefits of literacy with others in that household; the shared gains from doing so may well be offset by a shift in the balance of power within the family. Using household survey data for Bangladesh we find strong external effects of education on individual earnings. Holding a range of personal attributes constant, an illiterate adult earns significantly more in the non-farm economy when living in a family with at least one literate member. These effects are strongest, and most robust, for women. Omitted-variable bias cannot be ruled out, but would also be consistent with an intra-household externality of literacy.

Electoral Accountability, Fiscal Decentralization and Service Delivery in Indonesia

This paper takes advantage of the exogenous phasing of direct elections in districts and applies the double difference estimator to: (i) measure impacts on the pattern of public spending and revenue generation at the district level; and (ii) investigate the heterogeneity of the impacts on public spending. The authors confirm that the electoral reforms had positive effects on district expenditures and these effects were mainly due to the increases in expenditures in the districts outside Java and Bali and the changes in expenditures brought about by non-incumbents elected in the districts. Electoral reforms also led to higher revenue generation from own sources and to higher budget surplus. Finally, the analysis finds that in anticipation of the forthcoming direct elections, district governments tend to have higher current expenditures on public works.

Assessing Ex Ante the Poverty and Distributional Impact of the Global Crisis in a Developing Country: A Micro-Simulation Approach with Application to Bangladesh

Measuring the poverty and distributional impact of the global crisis for developing countries is not easy, given the multiple channels of impact and the limited availability of real-time data. Commonly-used approaches are of limited use in addressing questions like who are being affected by the crisis and by how much, and who are vulnerable to falling into poverty if the crisis deepens? This paper develops a simple micro-simulation method, modifying models from existing economic literature, to measure the poverty and distributional impact of macroeconomic shocks by linking macro projections with pre-crisis household data. The approach is then applied to Bangladesh to assess the potential impact of the slowdown on poverty and income distribution across different groups and regions. A validation exercise using past data from Bangladesh finds that the model generates projections that compare well with actual estimates from household data. The results can inform the design of crisis monitoring tools and policies in Bangladesh, and also illustrate the kind of analysis that is possible in other developing countries with similar data availability.

Inequality of Opportunities in the Labor Market: Evidence from Life in Transition Surveys in Europe and Central Asia

In this paper we quantify inequality of opportunity in labor market outcomes in Europe and Central Asia using the Human Opportunity Index (HOI) methodology. Using data from the 2006 Life in Transition Survey we also compare HOI-based measures of inequality with expenditure-based measures and examine the extent to which these measures resonate with perceptions of life satisfaction and fairness. Findings show substantial inequality of opportunity in employment status and large variations across countries. Correlations between measures and perceptions of inequality suggest that inequality between groups as opposed to overall inequality has stronger association with perceptions of fairness in society.JELO11, O12

Assessing Poverty and Distributional Impacts of the Global Crisis in the Philippines : A Microsimulation Approach

As the financial crisis has spread through the world, the lack of real-time data has made it difficult to track its impact in developing countries. This paper uses a micro-simulation approach to assess the poverty and distributional effects of the crisis in the Philippines. The authors find increases in both the level and the depth of aggregate poverty. Income shocks are relatively large in the middle part of the income distribution. They also find that characteristics of people who become poor because of the crisis are different from those of both chronically poor people and the general population. The findings can be useful for policy makers wishing to identify leading monitoring indicators to track the impact of macroeconomic shocks and to design policies that protect vulnerable groups.

A Global Count of the Extreme Poor in 2012

The 2014 release of a new set of purchasing power parity conversion factors (PPPs) for 2011 has prompted a revision of the international poverty line. In order to preserve the integrity of the goalposts for international targets such as the Sustainable Development Goals and the World Banks twin goals, the new poverty line was chosen so as to preserve the definition and real purchasing power of the earlier

Inequality of opportunities among children : how much does gender matter?

1.25 line (in 2005 PPPs) in poor countries. Using the new 2011 PPPs, the new line equals

Knowing, When You Do Not Know : Simulating the Poverty and Distributional Impacts of an Economic Crisis

1.90 per person per day. The higher value of the line in US dollars reflects the fact that the new PPPs yield a relatively lower purchasing power of that currency vis-à-vis those of most poor countries. Because the line was designed to preserve real purchasing power in poor countries, the revisions lead to relatively small changes in global poverty incidence: from 14.5 percent in the old method to 14.1 percent in the new method for 2011.In 2012, the new reference year for the global count, we find 12.7 percent of the worlds population, or 897 million people, are living in extreme poverty. There are changes in the regional composition of poverty, but they are also relatively small. This paper documents the detailed methodological decisions taken in the process of updating both the poverty line and the consumption and income distributions at the country level, including issues of inter-temporal and spatial price adjustments. It also describes various caveats, limitations, perils and pitfalls of the approach taken.

To What Extent are Bangladesh's Recent Gains in Poverty Reduction Different from the Past?

Authors apply a decomposition method to a measure of inequality of opportunities among children (the human opportunity index) to examine the question of how much does gender of a child contribute to inequality in access to critical services that should be available as basic minimum opportunities to all children. Authors use a database of 47 countries for which Demographic and Health Survey (DHS) data is available during 2003-2010, four indicators for opportunities and a limited set of circumstances or characteristics of the child. On the average and for most countries, the contribution of gender of the child to inequality of opportunity in two measures of school attendance and immunization tends to be low and much below the contribution of household factors such as economic status and urban/rural location. In a few countries, however, gender still plays a more substantial role in influencing a childs access to a particular service. Preliminary evidence also suggests that inequalities and contributions of gender to inequality across opportunities are correlated, particularly for opportunities in the same sector.

How Do Ex Ante Simulations Compare with Ex Post Evaluations? Evidence from the Impact of Conditional Cash Transfer Programs

Economists have long sought to predict how macroeconomic shocks will affect individual welfare. Macroeconomic data and forecasts are easily available when crises strike. But policy action requires not only understanding the magnitude of a macro shock, but also identifying which households or individuals are being hurt by (or benefit from) the crisis. Moreover, in many cases, impacts on the ground might be already occurring as macro developments become known, while micro level evidence is still unavailable because of paucity of data. Because of these reasons, a comprehensive real-time understanding of how the aggregate changes will translate to impacts at the micro level remains elusive. This problem is particularly acute when dealing with developing countries where household data is sporadic or out of date. This volume outlines a more comprehensive approach to the problem, showcasing a micro simulation model, developed in response to demand from World Bank staff working in countries and country governments in the wake of the global financial crisis of 2008-09. During the growing catastrophe in a few industrialized countries, there was rising concern about how the crisis would affect the developing world and how to respond to it through public policies. World Bank staff s was scrambling to help countries design such policies; this in turn required information on which groups of the population, sectors and regions the crisis would likely affect and to what extent. The volume is organized as follows. Chapter 1 summarizes the methodology underlying the micro simulation model to predict distributional impacts of the crisis, along with several case studies that highlight how the model can be used in different country contexts. Chapters 2 to 4 are written by experts external to the Bank, two of whom participated as discussants at a workshop on the micro simulation work organized in May, 2010 at the World Bank headquarters. Chapter 2 comments on the broader implications and shortcomings of applying the technique described in Chapter 1 and the ability or willingness of governments to respond adequately to its results. Chapter 3 draws parallels between the United States and developing countries to discuss the lessons that can be learned for mitigating the impacts of future crises. Chapter 4 discusses how the micro simulation approach can be sharpened to make it a better tool for distributional analysis moving forward.