Jyotsna Jalan

Does piped water reduce diarrhea for children in rural India

This brief summarizes the results of a gender impact evaluation study, entitled Does piped water reduce diarrhea for children in rural India?, conducted between 1993 and 1994 in India. The study observed the impact of piped water in reduction of diarrhea among children under five in rural India on the child level. There is a significant positive impact of piped water on diarrhea prevalence and duration in children under five. There are no health gains from piped water amongst the poorest 40 percent of the population. Health gains also are smaller for households with less-educated mothers. Funding for the study derived from the Banks Research Support Budget.

Are the Poor Less Well-Insured? Evidence on Vulnerability to Income Risk in Rural China

The authors test how well consumption is insured against income risk in a panel of sampled households in rural China. They estimate the risk insurance models by Generalized Method of Moments, treating income and household size as endogenous. Insurance exists for all wealth groups, although the hypothesis of perfect insurance is universally rejected. Those in the poorest wealth decile are the least well-insured, with 40 percent of an income shock being passed on to current consumption. By contrast, consumption by the richest third of households is protected from almost 90 percent of an income shock. The extent of insurance in a given wealth stratum varies little between poor and nonpoor areas.

Is transient poverty different? Evidence for rural China

We define ‘transient poverty’ as the component of time‐mean consumption poverty at household level that is directly attributable to variability in consumption; this can be thought of as a measure of vulnerability to falling consumption. The non‐transient component then depends solely on mean consumption over time, and we call this ‘chronic poverty’. Using robust semi‐parametric methods and household panel data for rural China, we test whether transient poverty is determined by a process that is similar to chronic poverty. Commonly identified causes of poverty in this setting have weak explanatory power for transient poverty and some of the factors determining transient poverty do not matter to chronic poverty, or even have the opposite effect. Successful policy responses to chronic poverty may still leave considerable transient poverty.

Behavioral responses to risk in rural China

Does risk perpetuate poverty in a credit-constrained economy? Jalan and Ravallion study portfolio and other behavioral responses to measured risk using household panel data for rural China. One-quarter of wealth is held in unproductive liquid forms. But only a small share of this appears to be a precaution against income risk. The authors estimate that eliminating income risk would reduce the share of wealth held in liquid form by less than 1 percentage point. Moreover, that effect is confined largely to middle-income groups; high-income households do not, it seems, need to hold unproductive cautionary wealth, and the poor probably cannot afford to do so. The authors find no evidence that income risk discourages schooling, but risk does inhibit the out- migration of labor. Generally, the results provide only limited support for the idea that uninsured risks promote unproductive portfolio behavior in this setting. There is such an effect, but it is small in magnitude and cannot be deemed an important cause of poverty.

Are there dynamic gains from a poor-area development program?

Poor-area development programs- in which the government transfers extra resources to unusually poor areas -have been widely used to fight poverty. There has been some research on such programs, but little is known about their impact on household living standards over time. The authors address the issue for a sizable poor-area development program in rural China. Chinas program had a significant impact on rural living standards in the targeted areas of the sample. The consumption-growth model suggests that households living in the targeted areas had a higher rate of consumption growth than one would have otherwise expected. Nonetheless the authors found that while the gains in growth were enough to prevent an absolute decline in average living standards, they were not enough to reverse the strong underlying divergent tendencies in the rural economy.

Growth divergence due to spatial externalities

Abstract On using household-level panel data to unpack a regional growth regression for rural China we find that aggregate divergence at the regional level is entirely due to external effects of community wealth at the household level.