Journal Issue: World Bank Economic Review, Volume 16, Issue 3

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The Distributional Impacts of Indonesia's Financial Crisis on Household Welfare : A 'Rapid Response' Methodology
(Washington, DC: World Bank, 2002-09) Friedman, Jed ; Levinsohn, James
Analyzing the distributional impacts of economic crises is an ever more pressing need. If policymakers are to intervene to help those most adversely affected, they need to identify those who have been hurt most and estimate the magnitude of the harm they have suffered. They must also respond in a timely manner. This article develops a simple methodology for measuring these effects and applies it to analyze the impact of the Indonesian economic crisis on household welfare. Using only pre-crisis household information, it estimates the compensating variation for Indonesian households following the 1997 Asian currency crisis and then explores the results with flexible nonparametric methods. It finds that virtually every household was severely affected, although the urban poor fared the worst. The ability of poor rural households to produce food mitigated the worst consequences of the high inflation. The distributional consequences are the same whether or not households are permitted to substitute toward relatively cheaper goods. Households with young children may have suffered disproportionately large adverse effects.
Gender Effects of Social Security Reform in Chile
(Washington, DC: World Bank, 2002-09) Cox Edwards, Alejandra
In 1981 Chile replaced a mature government-run social security system that operated on a pay-as-you-go basis with a privately managed system based on individual retirement accounts. The new system is more fiscally sustainable because pension benefits are defined by contributions. The minimum pension guaranteed to beneficiaries with at least 20 years is funded from general taxes, preserving the tight matching between contributions and benefits. The new system also eliminates several cross-subsidies. Men and women with less than secondary education gain under the new system, but single women with more education lose. Comparison of the old and the new systems reveals a complex set of factors that cause gender effects given constant behavior or change behavior across genders.
Low Schooling for Girls, Slower Growth for All? Cross-Country Evidence on the Effect of Gender Inequality in Education on Economic Development
(Washington, DC: World Bank, 2002-09) Klasen, Stephan
Using cross-country and panel regressions, this article investigates how gender inequality in education affects long-term economic growth. Such inequality is found to have an effect on economic growth that is robust to changes in specifications and controls for potential endogeneities. The results suggest that gender inequality in education directly affects economic growth by lowering the average level of human capital. In addition, growth is indirectly affected through the impact of gender inequality on investment and population growth. Some 0.4-0.9 percentage points of differences in annual per capita growth rates between East Asia and Sub-Saharan Africa, South Asia, and the Middle East can be accounted for by differences in gender gaps in education between these regions.
Gender, Time Use, and Change : The Impact of the Cut Flower Industry in Ecuador
(Washington, DC: World Bank, 2002-09) Newman, Constance
This article uses survey data from Ecuador to examine the effects of women's employment on the allocation of paid and unpaid labor within the household. The reader compares a region with high demand for female labor with a similar region in which demand for female labor is low. The comparison suggests that market labor opportunities for women have no effect on women's total time in labor but increase men's time in unpaid labor. The increase in men's time in unpaid work reflects women's increased bargaining power in the home.
Density versus Quality in Health Care Provision : Using Household Data to Make Budgetary Choices in Ethiopia
(Washington, DC: World Bank, 2002-09) Collier, Paul ; Dercon, Stefan ; Mackinnon, John
Usage of health facilities in Ethiopia is among the lowest in the world; raising usage rates is probably critical for improving health outcomes. The government has diagnosed the principal problem as the lack of primary health facilities and is devoting a large share of the health budget to building more facilities. But household data suggest that usage of health facilities is sensitive not just to the distance to the nearest facility but also to the quality of health care provided. If the quality of weak facilities were raised to that currently provided by the majority of facilities in Ethiopia, usage would rise significantly. National data suggest that given the current density and quality of service provision, additional expenditure on improving the quality of service delivery will be more cost-effective than increasing the density of service provision. The budget allocation rule presented in the article can help local policymakers make decisions about how to allocate funds between improving the quality of care and decreasing the distance to the nearest health care facility.
A Firm's-Eye View of Commercial Policy and Fiscal Reforms in Cameroon
(Washington, DC: World Bank, 2002-09) Gauthier, Bernard ; Soloaga, Isidro ; Tybout, James
After decades of high trade restrictions, fiscal distortions, and currency overvaluation, Cameroon implemented important commercial and fiscal policy reforms in 1994. Almost simultaneously, a major devaluation cut the international price of Cameroon's currency in half. This article examines the effects of those reforms on the incentive structure faced by manufacturing firms. Did the reforms create a coherent new set of signals? Did they reduce dispersion in tax burdens? Was the net effect to stimulate the production of tradable goods? The results of applying a cost function decomposition to detailed firm-level panel data suggest that the reforms created clear new signals for manufacturers, as effective protection rates fell by 80 to 120 percentage points. In contrast, neither the tax reforms nor the devaluation had a major systematic effect on profit margins. The devaluation did shift relative prices dramatically in favor of exportable goods, causing exporters to grow relatively rapidly.