Pushkar Maitra

The effect of transfers on household expenditure patterns and poverty in South Africa

Abstract This paper uses household level unit record data from South Africa to examine the behavioural and welfare impacts of private and public transfers. We allow for joint endogeneity of resource variables and the expenditure shares. Our results show that crowding out of private transfers as a result of the introduction of public pensions holds only for poor households and not for the non-poor. Both private transfers and public pensions significantly reduce poverty but private transfers have a larger impact on expenditure patterns. The results also reject the hypothesis of income pooling underlying the conventional unitary model by finding that the marginal impact on expenditures are different for public pension received, private transfer received and other resources flowing into the household. The principal conclusions are robust to changes in specification.

The Joint Estimation of Child Participation in Schooling and Employment: Comparative Evidence from Three Continents

This paper uses data from Peru, Pakistan and Ghana to analyse simultaneously child labour and child schooling, and compares them between these countries. We use a multinomial logit estimation procedure that analyses the participation and non-participation of children in schooling and in employment and, in particular, allows the possibility that a child combines schooling with employment or does neither. We also use an ordered probit estimation procedure based on a ranking of the various child schooling/employment/non-schooling/non-employment outcomes. The results point to both similarities and striking dissimilarities in the nature of child labour and child schooling between the chosen countries. For example, in Pakistan, but not in Peru, the girl childs ordering of schooling/employment outcomes shows her at a position of extreme disadvantage. Household poverty discourages a child from achieving superior outcomes, but the effect varies markedly across the three countries.

Social Learning and Norms in a Public Goods Experiment with Inter-Generational Advice

We adopt an inter-generational approach to the public goods game where one generation of subjects leave advice for the succeeding generation via free form messages. Such advice can be private knowledge (advice left by one player in generation t is given only to her immediate successor in generation t+1), almost common knowledge (advice left by players of generation t is made available to all members of generation t+1) and common knowledge (where the advice from the preceding generation is not only made public but also read aloud by the experimenter). We find that when advice is common knowledge it generates a process of social learning and norm creation that leads to high contributions over time and also mitigates problems of free riding. Such high contributions are sustained by advice that is generally exhortative, suggesting high contributions, which in turn create optimistic beliefs, especially among conditional co-operators, about the contributions to be made by other subjects. Our results suggest that socially connected communities may be able to achieve high contributions to a public good even in the absence of any punishment opportunities of norm violators.

Schooling and Educational Attainment: Evidence from Bangladesh.

Education and human capital accumulation are essential components of economic development. The present paper attempts to identify some of the individual and household level characteristics that affect the demand for schooling in Bangladesh. I examine the current enrolment status of children aged 6-12 and the highest grade attained for children aged 13-24. The first is estimated using a standard probit model and the second using a censored ordered probit model. Estimation results show that there is no gender differential in current enrolment status but grade attainment is higher for girls, relative to boys. An increase in the permanent income of the household is always associated with an increase in educational attainment. Parental education has a positive and statistically significant effect on the educational attainment of children, and mothers education has a stronger effect on both school enrolment and grade attainment of children compared with fathers education.

Endogenous Intra-household Balance of Power and its Impact on Expenditure Patterns: Evidence from India

This paper extends the collective approach to household behaviour by proposing and estimating a model in which the weights attached to individual members are endogenously determined. The estimation is conducted using two different data-sets from three Indian states. We find that relative bargaining power of the adult decision-makers has a statistically significant effect on the budget share of an item and that the effects are typically nonlinear and vary significantly across items. This implies that household welfare is better protected in households where bargaining power is spread evenly between the spouses than where one partner enjoys a dominant position.

Gender Wage Discrimination in Rural and Urban Labour Markets of Bangladesh

Female wages in Bangladesh are significantly lower than male wages. This paper quantifies the extent to which discrimination can explain this gender wage gap across the rural and urban labour markets of Bangladesh, using unit record data from the 1999–2000 Labour Force Survey. The gender wage differential is decomposed into a component that can be explained by differences in productive characteristics and a component not explained by observable productive differences, which is attributed to discrimination. An attempt is also made to improve on the standard methodology by implementing a wage-gap decomposition method that accounts for selectivity bias, on top of the usual “explained” and “unexplained” components. Analytical results from this paper show that gender wage differentials are considerably larger in urban areas than in rural areas and a significant portion of this wage differential can be attributed to discrimination against women. The results also show that selectivity bias is an important component of total discrimination.

Household Expenditure Patterns and Gender Bias: Evidence from Selected Indian States

This paper uses Indian data to investigate the existence and nature of gender bias in the intra-household allocation of expenditure. An extended version of the collective household model is estimated where the welfare weights, i.e. the bargaining power of the adult decision-makers, are simultaneously determined with the households expenditure outcomes. Significant gender bias is detected in some items, most notably in education, and it is found that the bias is considerably stronger in the more economically backward regions of the country. It is also found that the results of the test of gender bias vary sharply between households at different levels of adult literacy. This is particularly true of household spending on education. The gender bias in the case of this item is, generally, more likely to prevail in households with low levels of adult educational attainment than in more literate households. This result is of considerable policy importance given the strong role that education plays in human capital formation.

Birth Spacing, Fertility Selection and Child Survival: Analysis Using a Correlated Hazard Model

If fertility reflects the choice of households, results of their choice (duration between successive births and health of the children) cannot be considered to be determined randomly. Most existing studies of child health, however, tend to overlook the effects of fertility selection on child health. This paper argues that not accounting for this selection issue yields biased estimates and it is difficult a priori to predict the direction of this bias. We find that the estimates of birth spacing on child mortality are different when we do not account for fertility selection. Additionally, the correlated hazard estimates that we present here better fit our samples than the corresponding bivariate probit estimates used in the literature. A comparison of the fertility behaviour of households in the Indian and the Pakistani Punjab highlights the differential nature of institutions on demographic transition in these neighbouring regions.

Firm Compliance With Social Insurance Obligations Where There Is A Weak Surveillance And Enforcement Mechanism: Empirical Evidence From Shanghai

This paper draws on a unique data set collected in audits in 2001 and 2002 by the Bureau of Labour and Social Security in Shanghai to examine why firms in Shanghai comply or over-comply with social insurance obligations in a regulatory environment where the expected punishment for non-compliance is low. Drawing on Harrington (1988), we test two hypotheses. The first hypothesis is that based on the first audit, the BOLSS will segment firms into low (non-aggressive) and high (aggressive) categories and those in the high category will be more likely to be re-audited. The second hypothesis is that if the identified non-complier is re-audited, it will be more likely to comply with its social insurance obligations in order to be returned from the high (aggressive) category into the low (non aggressive) category. Our first main finding is that firms found to be in non-compliance in the first audit in 2001 were moved into a separate violation category and the probability of being reaudited in 2002 was significantly higher if the firm was in that category. Our second main result is that across the board, firms which were reaudited continued to underpay in 2002 but the extent of underpayment was significantly reduced.

Is consumption smooth at the cost of volatile leisure? An investigation of rural India

This study examines the institutions in rural India that enable households to insure against unanticipated idiosyncratic shocks to income. Using a decentralized general equilibrium model it tests for consumption and leisure insurance against unanticipated income shocks. It is found that differential access to markets (particularly financial markets) force villagers to differ in their response to similar shocks. Medium and large farmers have unrestricted access to credit markets and are unaffected by unanticipated changes in household income. The small farmers are excluded from credit markets. However, some of the small farmers are able to insure consumption against unanticipated income shocks through compensating changes in labour market participation and reducing own farm work.