Poor Economics

by Abhijit Banerjee

  15 David Card, “The Causal Effect of Education on Earnings,” in Orley Ashenfelter and David Card, eds., Handbook of Labor Economics, vol. 3 (Amsterdam: Elsevier Science B.V., 2010), pp. 1801–1863.

  16 Chris Spohr,“Formal Schooling and Workforce Participation in a Rapidly Developing Economy: Evidence from ‘Compulsory’ Junior High School in Taiwan,” Asian Development Bank 70 (2003): 291—327.

  17 Shin-Yi Chou, Jin-Tan Liu, Michael Grossman, and Theodore Joyce, “Parental Education and Child Health: Evidence from a Natural Experiment in Taiwan,” NBER Working Paper 13466 (2007).

  18 Owen Ozier, “The Impact of Secondary Schooling in Kenya: A Regression Discontinuity Analysis,” University of California at Berkeley Working Paper (2010).

  19 Tahir Andrabi, Jishnu Das, and Asim Khwaja, “Students Today, Teachers Tomorrow? The Rise of Affordable Private Schools,” working paper (2010).

  20 Sonalde Desai, Amaresh Dubey, Reeve Vanneman, and Rukmini Banerji, “Private Schooling in India: A New Educational Landscape,” Indian Human Development Survey, Working Paper No. 11 (2010).

  21 However, among applicants to a lottery for secondary school vouchers for private schools in the Colombian city of Bogotá, the difference persisted: The winners did better than the losers on standardized tests, were 10 percentage points more likely to graduate, and scored better on the graduation exam. See Joshua Angrist, Eric Bettinger, Erik Bloom, Elizabeth King, and Michael Kremer, “Vouchers for Private Schooling in Colombia: Evidence from a Randomized Natural Experiment,” American Economic Review 92 (5) (2002): 1535– 1558; and Joshua Angrist, Eric Bettinger, and Michael Kremer, “Long-Term Educational Consequences of Secondary School Vouchers: Evidence from Administrative Records in Colombia,” American Economic Review 96 (3) (2006): 847–862.

  22 Desai, Dubey,Vanneman, and Banerji, “Private Schooling in India.”

  23 Abhijit Banerjee, Shawn Cole, Esther Duflo, and Leigh Linden, “Remedying Education: Evidence from Two Randomized Experiments in India,” Quarterly Journal of Economics 122 (3) (August 2007): 1235–1264.

  24 Abhijit Banerjee, Rukmini Banerji, Esther Duflo, Rachel Glennerster, and Stuti Khemani, “Pitfalls of Participatory Programs: Evidence from a Randomized Evaluation in Education in India,” American Economic Journal: Economic Policy 2 (1) (February 2010): 1–30.

  25 Trang Nguyen, “Information, Role Models, and Perceived Returns to Education: Experimental Evidence from Madagascar,” MIT Working Paper (2008).

  26 Abhijit Banerjee and Esther Duflo, “Growth Theory Through the Lens of Development Economics,” in Steve Durlauf and Philippe Aghion, eds., Handbook of Economic Growth, vol. 1A (Amsterdam: Elsevier Science Ltd./North Holland, 2005), pp. 473–552.

  27 A. D. Foster and M. R. Rosenzweig, “Technical Change and Human Capital Returns and Investments: Evidence from the Green Revolution,” American Economic Review 86 (4) (September 1996): 931–953.

  28 Richard Akresh, Emilie Bagby, Damien de Walque, and Harounan Kazianga, “Child Ability and Household Human Capital Investment Decisions in Burkina Faso,” University of Illinois at Urbana–Champaign (2010), mimeo.

  29 Felipe Barrera-Osorio, Marianne Bertrand, Leigh Linden, and Francisco Perez Calle, “Conditional Cash Transfers in Education: Design Features, Peer and Sibling Effects—Evidence from a Randomized Experiment in Colombia,” NBER Working Paper W13890 (2008).

  30 Esther Duflo, Pascaline Dupas, and Michael Kremer, “Peer Effects, Teacher Incentives, and the Impact of Tracking: Evidence from a Randomized Evaluation in Kenya,” NBER Working Paper W14475 (2008).

  31 The Probe Team, Public Report on Basic Education in India (New Delhi: Oxford University Press, 1999).

  32 Rema Hanna and Leigh Linden, “Measuring Discrimination in Education,” NBER Working Paper W15057 (2009).

  33 Steven Spencer, Claude Steele, and Diane Quinn, “Stereotype Threat and Women’s Math Performance,” Journal of Experimental Social Psychology 35 (1999): 4–28; and Claude Steele and Joshua Aronson, “Stereotype Threat and the Test Performance of Academically Successful African Americans,” Journal of Personality and Social Psychology 69 (5) (1995): 797–811.

  34 Karla Hoff and Priyank Pandey, “Belief Systems and Durable Inequalities: An Experimental Investigation of Indian Caste,” World Bank Policy Research Working Paper No. 3351 (2004).

  35 Paul Glewwe, Michael Kremer, and Sylvie Moulin, “Textbooks and Test Scores: Evidence from a Prospective Evaluation in Kenya,” BREAD Working Paper (2000).

  36 Eric Gould,Victor Lavy, and Daniele Paserman, “Fifty-Five Years After the Magic Carpet Ride: The Long-Run Effect of the Early Childhood Environment on Social and Economic Outcome,” Review of Economic Studies (2010), forthcoming.

  37 Joshua Angrist, Susan Dynarski, Thomas Kane, Parag Pathak, and Christopher Walters, “Who Benefits from KIPP?” NBER Working Paper 15740 (2010); Atila Abdulkadiroglu, Joshua Angrist, Susan Dynarski, Thomas Kane, and Parag Pathak, “Accountability and Flexibility in Public Schools: Evidence from Boston’s Charters and Pilots,” NBER Working Paper 15549 (2009); Will Dobbie and Roland Fryer, “Are High Quality Schools Enough to Close the Achievement Gap? Evidence from a Social Experiment in Harlem,” NBER Working Paper 15473 (2009).

  38 C. Walters, “Urban Charter Schools and Racial Achievement Gaps,” MIT (2010), mimeo.

  39 Pascaline Dupas, Esther Duflo, and Michael Kremer, “Peer Effects, Teacher Incentives, and the Impact of Tracking: Evidence from a Randomized Evaluation in Kenya,” American Economic Review, forthcoming.

  40 Trang Nguyen, “Information, Role Models and Perceived Returns to Education: Experimental Evidence from Madagascar,” MIT Working Paper (2008).

  41 Robert Jensen, “The (Perceived) Returns to Education and the Demand for Schooling,” Quarterly Journal of Economics 125 (2) (2010): 515–548.

  42 Michael Kremer, Edward Miguel, and Rebecca Thornton, “Incentives to Learn,” Review of Economics and Statistics, forthcoming.

  43 Roland Fryer, “Financial Incentives and Student Achievement: Evidence from Randomized Trials,” Harvard University, manuscript (2010).

  44 Abhijit Banerjee, Shawn Cole, Esther Duflo, and Leigh Linden, “Remedying Education: Evidence from Two Randomized Experiments in India,” Quarterly Journal of Economics 122 (3) (August 2007): 1235–1264.

  45 This may be helped by making sure that money is never a factor in a student’s decision to attend the best schools and that there is a way to make it happen. In Chile, in a largely voucher-based system, the poorest students are given an extra voucher, but any school that accepts voucher students (all but a handful of elite schools) must admit these students at no additional cost. To make this system fully operational, students and parents should, however, be better informed that they have this option, and the results of regular standardized assessments should be regularly examined to identify the most promising students everywhere in the country.

  Chapter 5

  1 Cited in Davidson R. Gwatkin,“Political Will and Family Planning:The Implications of India’s Emergency Experience,” Population and Development Review 5 (1): 29–59 (1979), which is the source of this account of the forced sterilization episode during the Emergency.

  2 John Bongaarts, “Population Policy Options in the Developing World,” Science 263 (5148) (1994): 771—776.

  3 Jeffrey Sachs, Common Wealth: Economics for a Crowded Planet (New York: Allen Lane/Penguin, 2008).

  4 World Health Organization, Water Scarcity Fact File, 2009, available at http://www.who.int/features/factfiles/water/en/.

  5 Thomas Malthus, Population: The First Essay (Ann Arbor: University of Michigan Press, 1978).

  6 Alywn Young, “The Gift of the Dying: The Tragedy of AIDS and the Welfare of Future African Generations,” Quarterly Journal of Economics 120 (2) (2005): 243–266.

  7 Jane Forston, “HIV/AIDS and Fertility,” American Economic Journal: Applied Economics 1 (3) (July 2009): 170–194; and Sebnem Kalemli-Ozcan, “AIDS, ‘Reversal’ of the Demographic Transition
and Economic Development: Evidence from Africa,” NBER Working Paper W12181 (2006).

  8 Michael Kremer, “Population Growth and Technological Change: One Million B.C. to 1990,” Quarterly Journal of Economics 108 (3) (1993): 681–716.

  9 Gary Becker, “An Economic Analysis of Fertility,” Demographic and Economic Change in Developed Countries (Princeton: National Bureau of Economic Research, 1960).

  10 Sachs, Common Wealth.

  11 Vida Maralani, “Family Size and Educational Attainment in Indonesia: A Cohort Perspective,” California Center for Population Research Working Paper CCPR-17-04 (2004).

  12 Mark Montgomery, Aka Kouamle, and Raylynn Oliver, The Tradeoff Between Number of Children and Child Schooling: Evidence from Côte d’Ivoire and Ghana (Washington, DC: World Bank, 1995).

  13 Joshua Angrist and William Evans, “Children and Their Parents’ Labor Supply: Evidence from Exogenous Variation in Family Size,” American Economic Review 88 (3) (1998): 450–477.

  14 Joshua Angrist, Victor Lavy, and Analia Schlosser, “New Evidence on the Causal Link Between the Quantity and Quality of Children,” NBER Working Paper W11835 (2005).

  15 Nancy Qian, “Quantity-Quality and the One Child Policy: The Positive Effect of Family Size on School Enrollment in China,” NBER Working Paper W14973 (2009).

  16 T. Paul Schultz and Shareen Joshi, “Family Planning as an Investment in Female Human Capital: Evaluating the Long Term Consequences in Matlab, Bangladesh,” Yale Center for Economic Growth Working Paper No. 951 (2007).

  17 Grant Miller, “Contraception as Development? New Evidence from Family Planning in Colombia,” Economic Journal 120 (545) (2010): 709–736.

  18 Kristof and WuDunn, Half the Sky.

  19 See, for example, Attila Ambrus and Erica Field, “Early Marriage, Age of Menarche, and Female Schooling Attainment in Bangladesh,” Journal of Political Economy 116 (5) (2008): 881–930; and Esther Duflo, Pascaline Dupas, Michael Kremer, and Samuel Sinei, “Education and HIV/AIDS Prevention: Evidence from a Randomized Evaluation in Western Kenya,” World Bank Policy Research Working Paper 4024 (2006).

  20 The Millennium Development Goals Report, 2010, United Nations.

  21 Mark Pitt, Mark Rosenzweig, and Donna Gibbons, “The Determinants and Consequences of the Placement of Government Programs in Indonesia,” World Bank Economic Review 7 (3) (1993): 319—348.

  22 Lant H. Pritchett, “Desired Fertility and the Impact of Population Policies,” Population and Development Review 20 (1) (1994): 1–55.

  23 Mizanur Rahman, Julie Da Vanzo, and Abdur Razzaque, “When Will Bangladesh Reach Replacement-Level Fertility? The Role of Education and Family Planning Services,” working paper, Department of Economic and Social Affairs, Population Division, United Nations, available at http://www.un.org/esa/population/.

  24 Available at http://apps.who.int/ghodata/ under the heading MDG 5, adolescent fertility.

  25 Esther Duflo, Pascaline Dupas, Michael Kremer, and Samuel Sinei, “Education and HIV/AIDS Prevention: Evidence from a Randomized Evaluation in Western Kenya,” World Bank Policy Research Working Paper 4024 (2006).

  26 See the description in Kristof and WuDunn, Half the Sky, p. 137.

  27 Pascaline Dupas, “Do Teenagers Respond to HIV Risk Information? Evidence from a Field Experiment in Kenya,” American Economic Journal: Applied Economics 3 (1) (January 2011): 1—36.

  28 Erica Field, “Fertility Responses to Urban Land Titling Programs: The Roles of Ownership Security and the Distribution of Household Assets,” Harvard University (2004), mimeo.

  29 Nava Ashraf, Erica Field, and Jean Lee, “Household Bargaining and Excess Fertility: An Experimental Study in Zambia,” Harvard University (2009), mimeo.

  30 Kaivan Munshi and Jacques Myaux, “Social Norms and the Fertility Transition,” Journal of Development Economics 80 (1) (2005): 1–38.

  31 Eliana La Ferrara, Alberto Chong, and Suzanne Duryea, “Soap Operas and Fertility: Evidence from Brazil,” BREAD Working Paper 172 (2008).

  32 Abhijit Banerjee, Xin Meng, and Nancy Qian, “Fertility and Savings: Micro-Evidence for the Life-Cycle Hypothesis from Family Planning in China,” working paper (2010).

  33 Ibid.

  34 Ummul Ruthbah, “Are Children Substitutes for Assets: Evidence from Rural Bangladesh,” MIT Ph.D. dissertation (2007).

  35 Seema Jayachandran and Ilyana Kuziemko, “Why Do Mothers Breastfeed Girls Less Than Boys? Evidence and Implications for Child Health in India,” NBER Working Paper W15041 (2009).

  36 Amartya Sen, “More Than 100 Million Women Are Missing,” New York Review of Books 37 (20) (1990).

  37 Fred Arnold, Sunita Kishor, and T. K. Roy, “Sex-Selective Abortions in India,” Population and Development Review 28 (4) (December 2002): 759–784.

  38 Andrew Foster and Mark Rosenzweig, “Missing Women, the Marriage Market and Economic Growth,” working paper (1999).

  39 Nancy Qian, “Missing Women and the Price of Tea in China: The Effect of Sex-Specific Income on Sex Imbalance,” Quarterly Journal of Economics 122 (3) (2008): 1251–1285.

  40 Some of the key research in this area was conducted by François Bourguignon, Pierre-André Chiapori, Marjorie McElroy, and Duncan Thomas.

  41 Christopher Udry, “Gender, Agricultural Production and the Theory of the Household,” Journal of Political Economy 104 (5) (1996): 1010–1046.

  42 Esther Duflo and Christopher Udry, “Intrahousehold Resource Allocation in Côte d’Ivoire: Social Norms, Separate Accounts and Consumption Choices,” NBER Working Paper W10489 (2004).

  43 Franque Grimard, “Household Consumption Smoothing Through Ethnicities: Evidence from Côte d’Ivoire,” Journal of Development Economics 53 (1997): 391—422.

  44 Claude Meillassoux, Anthropologie économique des Gouros de Côte d’Ivoire (Paris: F. Maspero, 1965).

  45 Esther Duflo, “Grandmothers and Granddaughters: Old Age Pension and Intra-Household Allocation in South Africa,” World Bank Economic Review 17 (1) (2003): 1–25.

  Chapter 6

  1 Jeemol Unni and Uma Rani, “Social Protection for Informal Workers in India: Insecurities, Instruments and Institutional Mechanisms,” Development and Change 34 (1) (2003): 127–161.

  2 Mohiuddin Alamgir, Famine in South Asia: Political Economy of Mass Starvation (Cambridge, MA: Oelgeschlager, Gunn and Hain, 1980).

  3 Martin Ravallion, Markets and Famines (Oxford: Clarendon, 1987).

  4 Seema Jayachandran, “Selling Labor Low: Wage Responses to Productivity Shocks in Developing Countries,” Journal of Political Economy 114 (3) (2006): 538–575.

  5 “Crisis Hitting Poor Hard in Developing World, World Bank Says,” World Bank Press Release, 2009/220/EXC, February 12, 2009.

  6 Daniel Chen, “Club Goods and Group Identity: Evidence from Islamic Resurgence During the Indonesian Financial Crisis,” Journal of Political Economy 118 (2) (2010): 300—354.

  7 Mauro Alem and Robert Townsend, “An Evaluation of Financial Institutions: Impact on Consumption and Investment Using Panel Data and the Theory of Risk-Bearing,” working paper (2010).

  8 B. P. Ramos and A. F. T. Arnsten, “Adrenergic Pharmacology and Cognition: Focus on the Prefrontal Cortex,” Pharmacology and Therapeutics 113 (2007): 523–536; D. Knoch, A. Pascual-Leone, K. Meyer, V. Treyer, and E. Fehr, “Diminishing Reciprocal Fairness by Disrupting the Right Prefrontal Cortex,” Science 314 (2006): 829–832; T. A. Hare, C. F. Camerer, and A. Rangel, “Self-Control in Decision-Making Involves Modulation of the vmPFC Valuation System,” Science 324 (2009): 646–648; A. J. Porcelli and M. R. Delgado, “Acute Stress Modulates Risk Taking in Financial Decision Making,” Psychological Science: A Journal of the American Psychological Society/APS 20 (2009): 278–283; and R. van den Bos, M. Harteveld, and H. Stoop, “Stress and Decision-Making in Humans: Performance Is Related to Cortisol Reactivity, Albeit Differently in Men and Women,” Psychoneuroendocrinology 34 (2009): 1449–1458.

  9 Seema Jayachandran, “Selling Labor Low: Wage Responses to Prod
uctivity Shocks in Developing Countries,” Journal of Political Economy 114 (3) (2006): 538–575.

  10 Nirmala Banerjee, “A Survey of Occupations and Livelihoods of Households in West Bengal,” Sachetana, Kolkata (2006), mimeo.

  11 Mark Rosenzweig and Oded Stark, “Consumption Smoothing, Migration, and Marriage: Evidence from Rural India,” Journal of Political Economy 97 (4) (1989): 905–926.

  12 Hans Binswanger and Mark Rosenzweig, “Wealth, Weather Risk and the Composition and Profitability of Agricultural Investments,” Economic Journal 103 (416) (1993): 56–78.

  13 Radwan Shaban, “Testing Between Competing Models of Sharecropping,” Journal of Political Economy 95 (5) (1987): 893–920.

  14 Christopher Udry, “Risk and Insurance in a Rural Credit Market: An Empirical Investigation in Northern Nigeria,” Review of Economic Studies 61 (3) (1994): 495–526.

  15 Paul Gertler and Jonathan Gruber, “Insuring Consumption Against Illness,” American Economic Review 92 (1) (March 2002): 51–70.

  16 Marcel Fafchamps and Susan Lund: “Risk-Sharing Networks in Rural Philippines,” Journal of Development Economics 71 (2) (2003): 261–287.

  17 Betsy Hartman and James Boyce, Quiet Violence: View from a Bangladesh Village (San Francisco: Food First Books, 1985).

  18 Andrew Kuper, “From Microfinance into Microinsurance,” Forbes, November 26, 2008.

  19 Shawn Cole, Xavier Gine, Jeremy Tobacman, Petia Topalova, Robert Townsend, and James Vickery, “Barriers to Household Risk Management: Evidence from India,” Harvard Business School Working Paper 09-116 (2009).

  20 Ibid.

  21 Alix Zwane, Jonathan Zinman, Eric Van Dusen, William Pariente, Clair Null, Edward Miguel, Michael Kremer, Dean S. Karlan, Richard Hornbeck, Xavier Giné, Esther Duflo, Florencia Devoto, Bruno Crepon, and Abhijit Banerjee, “The Risk of Asking: Being Surveyed Can Affect Later Behavior,” Proceedings of the National Academy of Sciences, forthcoming (2010).

  22 Dean Karlan, Isaac Osei-Akoto, Robert Osei, and Christopher Udry, “Examining Underinvestment in Agriculture: Measuring Returns to Capital and Insurance,” Yale University (2010), mimeo.