T. Paul Schultz

Estimating a Household Production Function: Heterogeneity, the Demand for Health Inputs, and Their Effects on Birth Weight

The household production literature emphasizes that technical or biological processes condition input selection by households in their production activities, along with prices and income. Exogenous variations in health, to the extent that they are perceived by individuals (heterogeneity), lead to correlations between inputs and health outcomes that cannot be used to derive causal conclusions. Therefore, estimates of health technology must be obtained from a behavioral model in which health inputs are themselves choices. Consistent estimates are reported of the effect of endogenous inputs, such as medical care, smoking, and fertility, on birth weight and fetal growth in the presence of health heterogeneity.

Testing the Neoclassical Model of Family Labor Supply and Fertility

The McElroy-Horney Nash-bargaining model of family demand behavior relaxes the restriction that nonearned income of husband and wife had the identical effect on family labor supply and commodity demands. This restriction of the neoclassical model of family behavior is tested for the determination of husband and wife labor supply and fertility based on the 1981 Socioeconomic Survey of Thailand. The neoclassical restriction is rejected for female labor supply and fertility. Another unexplored limitation of family demand studies, due to the sample self selection of intact marriages, is empirically treated through alternative estimation strategies. In this case, a more sharply focused theory of marital behavior is needed to identify family demand models.

Why Governments Should Invest More to Educate Girls

Women and men often receive the same percentage increase in their wage rates with advances in schooling. Because these returns decline with more schooling, the marginal returns for women will tend to exceed those for men, especially in countries where women are much less educated. The health and schooling of children are more closely related to their mothers education than fathers. More educated women work more hours in the market labor force, broadening the tax base and thereby potentially reducing tax distortions. These three conditions, it is argued, justify the disproportionate allocation of public expenditures toward womens education.

Education investments and returns

Publisher Summary This chapter focuses on schooling, as an investment with market returns is not intended to detract from the importance of education as a public good and as a source of consumption benefits, but rather to review how economic concepts and statistical methods have recently progressed in quantifying the roles of education in economic development. This chapter surveys a small part of the extensive literature on the linkages among education, productivity, and development, and assesses several areas where concerted research might clarify important issues and potentially change policies. This chapter presents an economic interpretation of this educational explosion. Most of the growth in public expenditures on education is attributed to increases in growth of real income per adult. The chapter describes the expansion of the worlds educational system both in terms of its inputs of public and private resources and its output of students, and then estimates how income, price, and population constraints appear to govern this process. The chapter presents a contrast on causal frameworks proposed to explain the relationship between education and productivity, and discusses sources of data to measure the relationship and discriminate among causal interpretations. The chapter reviews evidence on the market returns to schooling measured for entrepreneurs and employees, men and women, and migrants and nonmigrants. The chapter also presents the evidence of schoolings effects on nonmarket production. The chapter discusses the policy issues for development that arise from the apparent effects of education on economic productivity and the mechanisms used to finance and manage the educational system.

Investments in the Schooling and Health of Women and Men: Quantities and Returns.

Womens years of school enrollment and health, measured by longevity, have increased by a greater amount than mens in this century in most countries. Private and social returns to schooling and health are reviewed to explain these trends in womens human capital. Sample selection bias caused by analyses of only wage earners does not appear to lower womens private returns to schooling relative to mens. Social returns to education, moreover, favor greater public investment in women than men, particularly in South and West Asia and Africa where school investments in women are much less than in men.

Wage and Labor Supply effects of Illness in Cote d'Ivoire and Ghana : Instrumental Variable Estimates for Days Disabled

Sickness should make individuals less productive, but there are problems in measuring this effect. First, how is adult morbidity measured in a household survey? Second, how is the impact of morbidity on productivity inferred, if earning is partly used to improve health? Self-reported functional activity limitation due to illness is considered as an indicator of morbidity for wage earners and self employed. To deal with both the measurement and joint determination problems, an instrumental variable estimation approach is used where local food prices and health services instrument for disability days that reduce wages by at least 10 percent and hours by 3 of more percent.

Wage Gains Associated with Height as a Form of Health Human Capital

Height is consulted as a latent indicator of early nutrition and lifetime health status. Height is observed to increase in recent decades in populations where per capita national income has increased and public health activities have grown. Height is determined by genetic make up and realized in part through satisfactory nutrition and health related care and conditions. Alternative instrumental variables (IV) are explored which proxy price and income constraints which are expected to influence the latter reproducible human capital investments in height. I report OLS and IV estimates of the partial effect of height on log hourly wages in recent national surveys from three countries: Ghana, Brazil and the United States. I conclude that the human capital productivity effect of height estimated by parent education IVs in the US and Ghana are many times larger than the OLS estimates, and in Ghana and Brazil the regional price IVs estimates also imply a substantially larger human capital wage effects of height compared with the OLS estimates. The OLS estimates of height effects on wages are dominated by the genetic variation in height, and appear to understate substantially the human capital returns to health and nutrition inputs which increase adult height.

Women's changing participation in the labor force : a world perspective

This paper describes how the composition of the labor force changes with economic development. It considers recent trends in womens labor force participation and the type of jobs held in various sectors as national per capita income increases. The paper notes that women are more likely to work in the family or informal labor market if the labor costs to firms exceed the opportunity costs of female labor to family enterprises. Firms are at a relative disadvantage compared with families in the employment of less experienced and less skilled labor, presumably because their labor costs are affected by such regulations as minimum wage, social insurance premiums and limits on firing. In Asia and Africa, an increase in the proportion of employment in firms within the major sectors accounts for most of the rapid growth in womens overall share of wage employment. In Latin America, however, growth in the proportion of firm employment has been slower than elsewhere, and the share of women in wage employment has even fallen overall in several countries. It is not unreasonable to assume that women have lost more than men from market regulations and distortions, but little research has addressed this proposition. If it is true, however, these interventions in the labor market may be responsible for slowing womens transition from nonmarket and family work to firm employment. This in turn may affect the rate and structure of economic growth.

Child mortality and fertility in Colombia: Individual and community effects

The education of a mother is strongly and positively correlated with the survival rate of her children. This paper combines household data from the Colombian Census of 1973 and characteristics of the 900 residential areas in Colombia, to test various hypotheses concerning the mechanism by which mothers education and public policies affect child survival and the distribution of health benefits resulting from policy interventions. The hypothesis is advanced that education provides people with skills in acquiring and decoding new information and thus effectively lowers the costs of using more beneficial child health and contraceptive technologies. Since a primary function of health and family planning programs is to disseminate information on these same technologies, the hypothesis is tested that mothers education and these program interventions may substitute for each other in improving child health and reducing family size. The empirical analysis confirms that in urban areas the availability of medical services, family planning activities, transportational infrastructure and climate, in addition to mothers education, are associated with child mortality ratios and fertility within a birth cohort of mothers. The least educated mothers are the most strongly affected, in terms of their reduced fertility and increased child survival rates, by the local urban health programs. The evidence is, thus, consistent with the substitution hypothesis. No effects of program interventions and medical facilities are found on rural populations, though both child mortality ratios and fertility are lower for more educated rural women.

The economic consequences of reproductive health and family planning

We consider the evidence for the effect of access to reproductive health services on the achievement of Millennium Development Goals 1, 2, and 3, which aim to eradicate extreme poverty and hunger, achieve universal primary education, and promote gender equality and empower women. At the household level, controlled trials in Matlab, Bangladesh, and Navrongo, Ghana, have shown that increasing access to family planning services reduces fertility and improves birth spacing. In the Matlab study, findings from long-term follow-up showed that womens earnings, assets, and body-mass indexes, and childrens schooling and body-mass indexes, substantially improved in areas with improved access to family planning services compared with outcomes in control areas. At the macroeconomic level, reductions in fertility enhance economic growth as a result of reduced youth dependency and an increased number of women participating in paid labour.