published_or_final_version / Economics / Master / Master of Social Sciences

This thesis presents two applications of the incompleteness and one application of the imperfection of the market economy. The first application, Chapter 2, studies the decision making problem of an individual seeking to accumulate an optimal amount of human capital realizing that the wage income derived from the accumulated human capital is subject to incompletely insured uncertainty. In other words, the financial market that insures against wage income risk is not fully functional. We find that the individual's inability to diversify wage income risk tends to increase the need to accumulate more human capital in order to elevate wage path and compensate for the burden of its associated risk. This is particularly true when (i) the wage income risk is positively correlated with the rate-of-return risk in the financial market, resulting in an even greater risk burden to the individual, and (ii) the individual is more risk averse. There are two possibilities that no human capital is needed. The first possibility occurs when it is optimal to work as an unskilled worker because both the burden from wage income risk and the rate of return from education are low. The second possibility is the case where the risk burden is so high that the optimal time spent in school to acquire sufficient human capital to cover the risk is so long that the discounted rate of return from education is negative. In this case, the best strategy is to invest in financial assets alone and forfeit the opportunity to earn wage income - either as an educated or as an unskilled worker - to avoid its associated risk. Chapter 3 applies equilibrium unemployment theory with a frictional labor market to study the impact of immigration on the local labor market. Markets are imperfect in the sense that job matching takes time and recruitment is costly. We find that labor market outcomes of both the natives and existing immigrants depend crucially on how the economic surplus from successful matching is divided between the firms and the workers or, in other words, on the bargaining power of the workers. An arrival of immigrants with low bargaining power tends to benefit both the natives and the existing immigrants. A disparity between the two worker types in the matching efficiency also plays a major role. An inferior matching technology among the immigrants, interpreted here as reflecting their less established social network, lowers their wage rate and increases their unemployment rate. The natives are more likely to benefit from additional immigration than the existing immigrants and, when they do, the overall benefit can be decomposed into "job creation spillover" effect resulting from the immigrants' low bargaining power, and "job stealing" effect resulting from the immigrants' less efficient matching. The implications on the pattern of international migration flows are also discussed. In Chapter 4, a simple macroeconomic model is constructed and applied quantitatively to OECD countries, to analyze the effect of incomplete insurance on saving, growth and welfare in a closed economy. In this economy, precautionary saving motivated by uninsured idiosyncratic shocks raises growth rates but lowers risk-free returns. Welfare is measured by the sum of growth rates and risk-free rates of return, not growth rates alone. This welfare measure takes the negative impact of precautionary saving into consideration. Applied to the OECD data, three major results emerge: (i) the heterogeneous performance of growth and saving across the countries reflects different degrees of insurance incompleteness, (ii) since the externality of growth on productivity was very strong in the 1960's, the heavily constrained insurance market itself improves productivity by promoting growth, thereby enhancing welfare, (iii) while the externality of growth became weaker in the 1980's, the development of insurance markets lowered growth, but still contributed to a raise in welfare.

The study provides an econometric analysis of the impact of economic growth on the matric pass rate in South Africa. The model used provincial pass rates from the year 2008 to 2013 as well as the economic growth rates of each province from the same period. A panel data random effects model was used to run the model and produce the results. An extensive literature review was conducted to analyse the pass rate in the Eastern Cape which has been the lowest in South Africa for some years. The results of the model suggest that economic growth in the different provinces has a positive effect on the matric pass rate except for the Eastern Cape, Limpopo and Mpumalanga. The model also produced a low R2 indicating that economic growth does not sufficiently explain the matric pass rate in the different provinces and other factors which were not included in the model are important.

I demonstrate that household investments in children's education in Ethiopia are affected by parents' self-beliefs (such as their locus of control), parents' aspirations for children's educational attainment, children's conceptions of their roles and identities in the household and at school, and children's own preferences, all concepts not widely studied in development economics. Two empirical chapters report on a field experiment in which randomly selected adults watched documentaries about role models who were poor but succeeded in agriculture or small business. Six months later, parents' self-beliefs and aspirations for children's education were higher in the treatment than in the placebo and control groups. Enrolment of children in school, spending on education, saving and use of credit also increased. A third empirical chapter draws on longitudinal qualitative research to argue that children's preferences for their time allocation between work and school are strongly influenced by the desire to comply with valued identities as students and as independent earners and contributors to the household. The fourth chapter suggests that understanding children's preferences might improve predictions about their reaction to education policies. The literature predicts an increase in time in school will not improve test scores: children will reduce effort because they desire a limited amount of learning. I find a reform to lengthen the Ethiopian primary school day improves test scores. Although this could occur through many mechanisms, one possibility is that children do not prefer to limit their desired amount of learning. This suggests that better evidence on children's preferences might improve prediction of the effects of policies to alter school inputs. The conclusion reflects on whether the empirical relevance of concepts of self-beliefs, aspirations and identities implies that assumptions in standard models of decision-making in economics about the characteristics of beliefs and preferences ought to be rejected. I argue that these ideas can be captured by existing economic concepts of beliefs and preferences and by standard assumptions about these concepts. I suggest that, contrary to recent accounts building on human capital theory, self-beliefs should be viewed as beliefs, not non-cognitive skills. I consider aspirations as a type of preference, shaped by both objective constraints and self-beliefs. I consider identity as a preference for complying with a social role, but highlight that such preferences are often altruistic, rather than self-interested. In conclusion, I argue that economics should draw further on other social sciences, including psychology, to develop substantive theories of the formation and characteristics of beliefs and preferences. Doing so will suggest when it is appropriate to apply standard models and how their assumptions can be modified if their predictions do not hold.

Submitted by Maria de Lourdes Mariano (lmariano@ufscar.br) on 2017-01-04T12:44:26Z No. of bitstreams: 1 SOUZA_Ricardo_2015.pdf: 2772481 bytes, checksum: 842eaac28984f488013761f80e6c7c8a (MD5) / Approved for entry into archive by Maria de Lourdes Mariano (lmariano@ufscar.br) on 2017-01-04T12:44:41Z (GMT) No. of bitstreams: 1 SOUZA_Ricardo_2015.pdf: 2772481 bytes, checksum: 842eaac28984f488013761f80e6c7c8a (MD5) / Approved for entry into archive by Maria de Lourdes Mariano (lmariano@ufscar.br) on 2017-01-04T12:44:48Z (GMT) No. of bitstreams: 1 SOUZA_Ricardo_2015.pdf: 2772481 bytes, checksum: 842eaac28984f488013761f80e6c7c8a (MD5) / Made available in DSpace on 2017-01-04T12:44:56Z (GMT). No. of bitstreams: 1 SOUZA_Ricardo_2015.pdf: 2772481 bytes, checksum: 842eaac28984f488013761f80e6c7c8a (MD5) Previous issue date: 2015-11-24 / Coordenação de Aperfeiçoamento de Pessoal de Nível Superior (CAPES) / The object of this research is to work was analyze the spending cof individuals that consume goods and educational services, and school performance. The comparison of these two quantities was motivated by the expectations created by individuals in the acquisition of the such good in relation to the pursuit of their economic product that according Buckhan and Hannun (2001), is defined by mobility, occupational status and income. The product happens from the evolution of the individual through the gain or technical, academic and knowledge improvement, based on theories such as human capital (Schultz, 1973), market segmentation (Doering and Piore, 1971) and reproduction (Bordieu, 1978). From the empirical theories surveyed by Pinheiro and Fontoura (2007), Carvalho and Kassouf (2008), Santana and Menezes (2008), among others, which analyzed characteristics of individual or the individual’s families such as gender, color, inclusion of elderly, the and size of families that have influenced the distribution of funds for allocation of expenses and, indirectly, the expectations. In this context, a model for the evaluation of these characteristics associated with per capita income over expenditure using data from the Consumer Expenditure Survey (POF) was built. The model showed that the characteristics affect the educational spendings. The POF data about the expenditure data were compared to the data of educational performance of the tests conducted by the National Institute for Research Studies (INEP) such as Prova Brasil and ENEM, by geography region. The data for this comparsion showed similarities between five of six possible comparisons in relation to the Brazil average. These similarities may indicate in order to answers that satisfy the expectations of the individuals about educational products / Nesta pesquisa objetivou-se analisar as despesas dos indivíduos consumidores de bens e serviços educacionais e o desempenho escolar. A comparação dessas duas grandezas foi motivada a partir das expectativas criadas pelos indivíduos na aquisição de tais bens em relação à busca do produto econômico que, segundo Buckhan e Hannun (2001), é definido por mobilidade, status ocupacional e renda. O produto acontece a partir da evolução do indivíduo por meio do ganho ou aprimoramento técnico, acadêmico e de conhecimento, baseado em teorias como o capital humano (Schultz, 1973), da segmentação do mercado (Doeringer e Piore, 1971) e da reprodução (Bordieu, 1978). A partir das teorias empíricas pesquisadas por Pinheiro e Fontoura (2007), Carvalho e Kassouf (2008), Santana e Menezes (2008), entre outros, analisaram-se quais características do indivíduo ou da família do indivíduo tais como gênero, cor, inclusão da pessoa idosa, região da residência do indivíduo, além da característica do tamanho das famílias, que afetam a distribuição de recursos para alocação das despesas com bens e serviços educacionais e, indiretamente, as expectativas. Deste contexto, foi construído um modelo que principia as ideias referentes às características associadas à renda per capita em relação às despesas, utilizando os dados da Pesquisa de Orçamentos Familiares (POF). O modelo apresentou que as características estudadas interferem nas despesas com bens e serviços educacionais. Os dados da POF sobre as despesas foram comparados aos dados de desempenho educacional, das provas realizadas pelo Instituto Nacional de Estudos Pesquisas (INEP) como a Prova Brasil e o ENEM, por região geográfica e restrita ao nível de ensino (fundamental ou médio). Os dados referentes a esta comparação apresentaram semelhanças entre cinco das seis comparações possíveis em relação à média brasileira. As semelhanças indicam respostas que satisfazem as expectativas dos indivíduos sobre os produtos educacionais.

Doctorat en sciences sociales, politiques et économiques / info:eu-repo/semantics/nonPublished

From introduction: In this thesis some of the economic theory underlying the application of cost-benefit analysis to education is considered with the view to discussing its relevance to the field of educational provision for Black people in South Africa. The fact that educational facilities available to Blacks are so vastly inferior to those of the Whites has given rise to virtual consensus that more has to be provided for the Black population. The economic implications of education are frequently cited to support this viewpoint. Using (a ) the theoretical bases established in chapters 1 and 2, (b) the review of the rate of return to education studies in chapter 3 and (c) the broader socio-economic considerations introduced in chapter 4, it is concluded that this viewpoint is not necessarily well founded in South Africa and that the potential for greater use of the techniques described, is far from exhausted.

This thesis presents two applications of the incompleteness and one application of the imperfection of the market economy. The first application, Chapter 2, studies the decision making problem of an individual seeking to accumulate an optimal amount of human capital realizing that the wage income derived from the accumulated human capital is subject to incompletely insured uncertainty. In other words, the financial market that insures against wage income risk is not fully functional. We find that the individual's inability to diversify wage income risk tends to increase the need to accumulate more human capital in order to elevate wage path and compensate for the burden of its associated risk. This is particularly true when (i) the wage income risk is positively correlated with the rate-of-return risk in the financial market, resulting in an even greater risk burden to the individual, and (ii) the individual is more risk averse. There are two possibilities that no human capital is needed. The first possibility occurs when it is optimal to work as an unskilled worker because both the burden from wage income risk and the rate of return from education are low. The second possibility is the case where the risk burden is so high that the optimal time spent in school to acquire sufficient human capital to cover the risk is so long that the discounted rate of return from education is negative. In this case, the best strategy is to invest in financial assets alone and forfeit the opportunity to earn wage income - either as an educated or as an unskilled worker - to avoid its associated risk. Chapter 3 applies equilibrium unemployment theory with a frictional labor market to study the impact of immigration on the local labor market. Markets are imperfect in the sense that job matching takes time and recruitment is costly. We find that labor market outcomes of both the natives and existing immigrants depend crucially on how the economic surplus from successful matching is divided between the firms and the workers or, in other words, on the bargaining power of the workers. An arrival of immigrants with low bargaining power tends to benefit both the natives and the existing immigrants. A disparity between the two worker types in the matching efficiency also plays a major role. An inferior matching technology among the immigrants, interpreted here as reflecting their less established social network, lowers their wage rate and increases their unemployment rate. The natives are more likely to benefit from additional immigration than the existing immigrants and, when they do, the overall benefit can be decomposed into "job creation spillover" effect resulting from the immigrants' low bargaining power, and "job stealing" effect resulting from the immigrants' less efficient matching. The implications on the pattern of international migration flows are also discussed. In Chapter 4, a simple macroeconomic model is constructed and applied quantitatively to OECD countries, to analyze the effect of incomplete insurance on saving, growth and welfare in a closed economy. In this economy, precautionary saving motivated by uninsured idiosyncratic shocks raises growth rates but lowers risk-free returns. Welfare is measured by the sum of growth rates and risk-free rates of return, not growth rates alone. This welfare measure takes the negative impact of precautionary saving into consideration. Applied to the OECD data, three major results emerge: (i) the heterogeneous performance of growth and saving across the countries reflects different degrees of insurance incompleteness, (ii) since the externality of growth on productivity was very strong in the 1960's, the heavily constrained insurance market itself improves productivity by promoting growth, thereby enhancing welfare, (iii) while the externality of growth became weaker in the 1980's, the development of insurance markets lowered growth, but still contributed to a raise in welfare. / Arts, Faculty of / Vancouver School of Economics / Graduate

No description available.

This dissertation utilizes insights from economics and child development science to examine how trauma transmits across generations from mother to child. The first chapter consists of a literature review in which I survey the existing literature across multiple disciplines on maternal trauma and the early childhood home environment. Specifically, I investigate psychosocial pathways through which maternal trauma may affect maternal capacities and investment decisions, particularly through a mother’s behavioral responses to trauma, and its consequential effects on the early childhood home environment for children. I identify methodological challenges to estimating the effects of maternal trauma on the early childhood home environment, and discuss policy implications and possible avenues for future research. In my second chapter, I take an intergenerational perspective and review research across disciplines to demonstrate that childhood trauma should be conceptualized as an intergenerational phenomenon that plays a role in the dynamics of inequality. In doing so, I develop a conceptual framework for studying how a mother’s childhood trauma affects her future capacities as a mother and the early developmental outcomes of the next generation. To understand how traumatic environments affect early childhood development, scholars previously have concentrated on two processes: (1) how early adversity and potentially traumatic experiences affect the immediate cognitive and socio-emotional development of children, and (2) the extent to which caregivers, and mothers in particular, can buffer against the potentially detrimental effects of these early experiences. These frameworks acknowledge the importance of environmental influences on both processes, parenting practices and early childhood development. However, they largely ignore the intergenerational dynamics of traumatic experiences, and the consequences of the mother’s own previous traumas on the early childhood home environment she shapes for her children. I focus on the mother as the primary caregiver in the early years of a child’s development, and examine behavioral mechanisms, and specifically parenting, as a potential pathway for the intergenerational transmission of a mother’s childhood trauma. I conclude by discussing future avenues for research and implications for public policy. Finally, in my third chapter, I present empirical evidence on the intergenerational effects of childhood trauma using the specific case of a mother’s childhood exposure to armed conflict in Sub-Saharan Africa. A mother’s nurturing care is a critical input to early development, particularly for children at elevated risk of early adversity. Little is known, however, about how a mother’s own childhood adversity affects her ability to provide such nurturing care. In this chapter, I use geo-located data on armed conflicts in three countries in Sub-Saharan Africa combined with geo- located household level data on parenting practices and early childhood development to estimate the intergenerational effects of a mother’s childhood exposure to armed conflict on her parent- ing practices and the early developmental outcomes of her children. Difference-in-differences estimates use identifying variation in geographic differences in exposure to conflict across sub- national regions and temporal variation across maternal birth cohorts. I find that mothers exposed to conflict in their early childhood are more likely to use abusive disciplinary practices. They are also less likely to stimulate their children through educational activities, material investments, or sending their children to early childhood education centers. These mothers are also more likely to experience intimate partner violence, and engage in early marriage and early sex, which may be mechanisms by which a mother’s childhood exposure to conflict affects her future maternal capacities and investments, and the early developmental outcomes of her children. Together, these essays advance our conceptual understanding of the potential long run and intergenerational effects of childhood trauma, and provide causal evidence on aspects of its inter- generational consequences in a specific context in Sub-Saharan Africa.