Maria Rebecca Valenzuela

Interrelationships between Income, Health and the Environment: Extending the Environmental Kuznets Curve Hypothesis

This study examines the link between the health indicators and the environmental variables for a cross-section of countries widely dispersed in the economic development spectrum. While the environment and income are seen to have an inverted U-shaped relationship (Environmental Kuznets Curve hypothesis), it is also well established that health and environment are positively related. Our study focuses on the implications of this for the relationship between health and income. In the early phases of income growth, the gains in health and the losses in environmental quality could cancel each other out and this challenges the idea that as incomes increase health would always improve. To empirically analyse these issues, we estimate a two-stage least squares model that focuses on the impact of income and the environment on health status, with environment being an endogenous variable. Our results show that the environmental stress variable has a significant negative effect on health status. At the same time, GNP levels and improvements in access to better sanitation and safe water are shown to vary positively with health status variables. We find that the health gains obtained through improved incomes can be negated to a significant extent if the indirect effect of income acting via the environment is ignored. Research findings in this regard would be a useful policy instrument towards maximising both the environmental and health gains that come with economic growth and development.

Measuring Poverty and Inequality from Highly Aggregated Small Area Data: The Changing Fortunes of Latrobe Valley Households

Using census data, we analyse inequality and poverty levels for the coal-rich region of Latrobe Valley between 1986 and 2006, a period incorporating industry restructuring, recession and subsequent growth. To enable the analysis using limited information, we propose a method for using grouped data to obtain income distributions for small areas. Unit record data are used to validate the methodology. We find that welfare in the Valley deteriorated between 1986 and 1996, in line with national and regional trends. However, between 1996 and 2006, when the economy grew strongly and many regions started to prosper again, welfare in the Valley continued to deteriorate.

Global financial network and liquidity risk

This article investigates the impact of global financial integration on liquidity risk. Using the network approach and bank-level data for 95 countries, we find weak asymmetry in the relationship between net stable funding and financial connectedness. Our results suggest that the degree of connectedness between banks is inversely related to funding stability. We also find that banks that are strongly connected to important lenders take on more risks relative to those that have independent access to finance in the financial network. Our results are consistent and invariant when either internal or external instruments are used to resolve econometric issues. JEL Classification: F21, F34, F36, G15, G33

HOW DOES SKILLS MISMATCH AFFECT REMITTANCES? A STUDY OF FILIPINO MIGRANT WORKERS

In this article, unit record data on Filipino migrants are used to analyze the issue of skills mismatch, its prevalence, and its impact on remittances sent back home. Results obtained using instrumental variable techniques reveal that significant proportions of highly educated Filipino workers are employed in low-skilled jobs overseas, with systematic variation by gender and by country of work. We find that skills mismatch impacts significantly on the migrants remittance behavior, with effects that are differentiated between genders. Specifically, where there is mismatch in the migrants educational attainment and the migrants job requirement, we find significant reductions in remittances for men but not for women. (JEL J240, J610, O150)