Inder J. Ruprah

The Pedagogy of Science and Environment: Experimental Evidence from Peru

In todays knowledge-based societies, understanding basic scientific concepts and the capacity to structure and solve scientific questions is more critical than ever. Accordingly, in this article we test an innovative methodology for teaching science and environment in public primary schools where traditional (teacher-centred) teaching was replaced with student-centred activities using LEGO kits. We document positive and significant improvements of 0.18 standard deviations in standardised test scores. Such positive results are mainly concentrated within boys that were located above the median of baseline academic performance.

Incapacity to Pay or Moral Hazard?: Public Mortgage Delinquency Rates in Chile

High delinquency rate of publicly provided mortgages in social housing programmes are often interpreted to be due to moral hazard. In this article we show that the typically used parametric approaches give misleading results because of overlooked confounding and selection biases. We show that using the more appropriate impact or treatment nonparametric approach the problem of high delinquency rate in publicly provided mortgages is due to the incapacity to pay and not due to moral hazard. The results caution against public policies to encourage private mortgage providers to move down market, and suggest eliminating mortgages and correspondingly increasing the grant component of the programmes.

Does Technical Assistance Matter?: An Impact Evaluation Approach to Estimate its Value Added

Many public programmes include technical assistance to the direct beneficiaries of the programme in addition to pure financing. However, there is no body of studies that calculates the additional impact of technical assistance on the outcome of interest. The authors use multi-treatment propensity score – with exact matching for dosage. The impact calculations reveal that technical assistance does matter as it has an impact over and above that of only financing. Given the small dollar value of technical assistance relative to the dollar value of transfers, not only does technical assistance matter but it is a way of getting more for less.

Do remittances help smooth consumption during health shocks?: Evidence from Jamaica

Remittances represent about 15 percent of Jamaica’s GDP; being the 16th country worldwide in terms of economic significance of remittances. Therefore, assessing to what extent and through what mechanisms remittances are useful for development is highly relevant. Accordingly, we identify whether remittances facilitate consumption smoothing during health shocks in Jamaica. In addition, we investigate whether remittances are subject to moral hazard by receivers, how the informal insurance provided by remittances interacts with formal health insurance, and whether there are differential effects by gender of the household head. Disentangling causality between remittances and household income or consumption is problematic as a result of reverse causation. Therefore, identifying whether remittances serve as a social insurance mechanism toward consumption smoothing would require the existence of an exogenous and unexpected shock suffered by nonreceivers and receivers. In this article, we exploit health shocks (accidents and illnesses) suffered by household members to identify the relevance of remittances as social insurance toward consumption smoothing. After showing that these shocks are as good as randomly assigned, we assess the relevance and significance of remittances as a social insurance mechanism in Jamaica. Our main findings show that health shocks adversely affect total household expenditures by an average of 19 percent. However, remittances totally offset these adverse effects, indicating that in light of idiosyncratic shocks, remittances serve as a social insurance mechanism that offers full protection. We also find that moral hazard concerns are low given that remittances are not used to smooth consumption of presumably undesirable goods for senders such as alcohol. Furthermore, we find that remittances are not relevant as an insurance mechanism against health shocks when private health insurance is present. By contrast, remittances constitute a powerful form of insurance in the absence of private health insurance. In terms of policymaking, our findings identify a particularly vulnerable population: persons without private health insurance who do not receive remittances. Therefore, developing mechanisms to identify this population could serve for targeting complementary safety nets towards this particularly vulnerable group.

The Labor Share Squeeze in Latin America: A Dynamic Heterogeneous Approach

Abstract This paper analyzes the long-run relationship between labor share and its determinants for 20 Latin American countries from 1980 to 2014. Using the pooled mean group estimator, we find evidence that technological change, the globalization process, and financial integration, have contributed to the decline of labor share in Latin America. We also find evidence of the importance of institutional factors and public spending for the labor share. Finally, we discuss the role of the informal sector on the dynamics of the decline. Our key findings are robust to various specifications and methodologies.