Hadia Majid

Child Endowments and Parental Investments: Intra-Household Allocation in Oportunidades Families in Mexico

This paper estimates a family fixed†effects model to test whether parental educational investments are reinforcing or compensating differences in child height and body mass index (BMI) within Oportunidades households. The results indicate that allocations are not made in response to endowment differences in isolation, but depend on the interaction of child endowment, gender, and beneficiary status. Moreover, investments are made so as to counterbalance efficiency and equity considerations: widening differences in height but closing gaps in BMI, where both strategies maximize returns given the earnings–endowment function for height and BMI in Mexico. Finally, household socio†economic status matters. Thus, discriminatory responses within the better†off urban beneficiary households are smaller. In contrast, indigenous beneficiary households, which have the lowest average endowment z†scores and fraction spent on education, see the largest differences in educational outlay between child subgroups. While the economic effects seem small, these are measured relative to the mean of the base category. In some cases, then, parents are dedicating nearly a quarter of all expenditures to education for a standard deviation increase in endowment over mean sibling endowment. Hence, it seems that the success of the Oportunidades program in improving overall human capital formation may be masking rising inequalities within recipient households.

Pakistan-India Bilateral Trade in Sports Goods Sector

Using the gravity model to estimate the trade flows for the major trading partners of Pakistan and India in the sports goods sector, we find, as expected, that the distance between the two countries has a negative impact on exports, while the exporter and importer GDPs affect exports positively. For Pakistan and India, specifically, we find that trade between Pakistan and India is 288 % lower (according to the pooled OLS) and 249 % lower (according to random effects model) than trade between any two similar countries. The trade that is already taking place between the sports goods sectors of the two countries is in accordance with their revealed comparative advantage. However, there is a need for the two countries to export sports goods in which they have higher RCAs. We also found that both countries export the same product lines, so there is a need for further disaggregated analysis within product lines. When we calculated the trade concentration index, we found that Pakistan’s exports to India have become more diversified, but Indian exports to Pakistan are more concentrated in terms of product lines. We also found evidence for the presence of both inter- and intra-industry trade in the sports goods sector of Pakistan.

Drought and Farm Output: An Analysis of Common-Pool Water and the Role of Ethnic Fractionalization in Rural Pakistan

This paper posits that when hit with drought, a household’s ability to cope with the shock will be affected by its use of canal water and that any adverse effects will be exacerbated if the farm is located in an ethnically fractionalized community. Using indicator variables to represent use of canal water and to categorize villages where only one language is spoken as homogeneous, the paper performs an OLS analysis. The results first establish that drought has a significant and negative impact on standardized farm output, and that this effect is higher when considering the proportion of sampled households in the village affected by drought. The results also consistently show that headenders tend to see significant positive effects, and that households using canal water tend to be significantly worse off than non-irrigated households during drought conditions. Finally, for the sub-sample of irrigated farmlands, those situated in heterogeneous communities that are inhabited by drought affectees tend to see a greater negative impact on standardized crop yield than those irrigated farmlands located in homogenous communities with drought affectees. The main results then suggest that farmers using canal water and living in heterogeneous communities are hit hardest when water becomes scarce.

Cluster Based Industrialization and its Effect on Firm Productivity in Pakistan

This paper examines the effect of externalities associated with agglomeration on firm level productivity in Pakistan. We begin our analysis by calculating six measures of agglomeration which give us the pattern of spatial concentration across the country. To calculate these six measures we use data at the country level and for Punjab between 1988-89 and 2005-06. The data is derived from the Census of Establishments for 1988-89, and the Census of Manufacturing Industries for the years 1995-96, 2000-01 and 2005-06. Our agglomeration measures show that although 59.5% of the industries in the country are highly agglomerated, the results are varied, with no one industry consistently emerging as a concentrated industry in either the country or in Punjab for the several years examined. Similarly, patterns of regional specialization tend to vary considerably over the length of time under examination with areas identified as specialized in the first round of data not ranking as most specialized in the next wave. Finally, the data shows that localization economies are typically stronger than urbanization economies in the Pakistani context, indicating that firms tend to benefit from intra industry externalities rather than inter industry externalities. Our analysis also considers development indicators which may be affecting the firm location decision. Specifically, we examine human capital development, crime, road density, and agricultural output. Overall, we find that human capital development is fairly low in the country, with large urban districts such as Karachi staying at the top of the ranking regardless of the year examined, and lower ranked districts failing to catch up. At the same time, crime in these urban districts remains high while road density is high in most of the large urban districts, with the exception of Karachi district, whose lower rank may be explained by its large size, and by considering that district includes less developed surrounding areas around Karachi city proper. Finally, districts in the agricultural heartland of the country, namely Multan, Rahim Yar Khan and Bahawalpur remain the highest in terms of agricultural produce, with Karachi and Karak ranked among the lowest. Having established the patterns of agglomeration and development across the country we next examine the impact of these location and industry concentration indexes on productivity in manufacturing firms through a plant level production function across all districts of Pakistan, while also identifying the impact of firm inputs such as capital and labor. Our regression specification includes controls for connectivity through a road density variable, human capital levels through an education index, and working environment through crime statistics. Our results indicate a strong role for agglomeration economies and the associated externalities in firm output over a long time horizon, and a significant role for development indicators like road density and human capital over a shorter time frame.

Pakistan-India Trade: An Analysis of the Health Sector

This study explores Pak-India trade in commodities and services within the health sector. We investigate existing trading patterns (by calculating a Trade Intensity Index) along with the potential for trade between Pakistan and India (through a Trade Complementarity Index) in three commodities: Medical Equipment, Pharmaceutical Products, and Surgical Instruments. We find that between 2003 and 2011, Pak-India trade intensity (as measured in relation to Pakistan’s total trade) was extremely low. At the same time there is high potential for trade in all three commodities, especially at the intra-industry level. Furthermore, upon identification of the drivers of trade in each of the three commodities, Pakistan’s top imports from the world feature commodities that are leading exports of India to the world. This is equally true for Pakistan for the surgical and pharmaceutical sectors. Gains would be much higher if trade in these sectors were liberalized on both sides, by removal of key Indian exports from Pakistan’s negative list and easier access for Pakistani exports in the Indian market. Our paper also examines if there is any evidence of trading in health services, particularly, research and collaborative work in medicine and pharmaceuticals, documented movement of medical personnel and patients at the institutional level, and student exchange or training programs. On average, our qualitative analysis indicates that there is evidence of medical tourism, particularly of Pakistani patients travelling to India on an individual basis. But there is no institutional bilateral mechanism though which collaborative research can be undertaken.

School Choice and the Role of Cognitive and Non-Cognitive Ability: Evidence from Pakistan

This paper investigates the effect of parental perceptions of child cognitive and non-cognitive ability on enrollment and the type of primary school (public or private) attended. Using data from rural Pakistan I find that parents value (relative) intelligence and diligence differently: children ranked as more intelligent than their siblings attend private schools while more diligent children attend public schools, where public schools exhibit lower average achievement scores than private schools. The primary results of this paper are consistent with a differential investment framework – parents reward those children perceived as more intelligent than their siblings by investing in a higher quality of education for them. Moreover, while parents are rewarding children who exhibit greater diligence than their siblings by enrolling them in school, diligent children are not being placed in the higher quality private schools. The results then suggest that parents value cognitive skills more than non-cognitive skills.