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Current
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Demography and International Savings Rates Differences (click to link to pdf file)
Abstract:
This paper quantitatively investigates the extent to
which demography can explain the large differences in
cross-country savings rates. The paper includes both
dependency thesis, which is embodied in fertility rates, and
pension motive for savings, which is captured by survival
rates of the working-age agents. High fertility rates
increase the expenditure burden of children and lower
savings, while high longevity induces individuals to
discount the future less heavily and consequently
encourage savings. The two demographic factors are
incorporated into an over-lapping generations model and the
steady state savings rates for a sample of 109 countries are
computed. It shows that the two demographic factors can
explain up to 68% of the dispersion in the cross-country
savings rates. Furthermore, if the expenditure burden is
sufficiently high, fertility has a greater impact on
cross-country
savings rates differences than longevity does. The model
developed is also satisfactory in explaining the large gap
in savings rates between the high and low income countries.
Taxation, Human Capital Formation and Long-run Growth with
Private Investment in Education
(click to link to pdf file)
Abstract:
Privately financed education is introduced into the
standard endogenous growth model along the lines of Lucas
(1990) to examine the effects of tax reform on growth rate
and human capital accumulation. Using parameters calibrated
to match the features of the Indonesian economy, this study
finds that tax reform affects the growth rate
non-negligibly, which is different from the well-established
evidence from the US data. Under plausible parameter values,
eliminating capital income tax rate can an increase growth
rate by 8 to 14 percentage change. While private
spending on education changes considerably in response to
changes in both tax rate and public spending on education,
learning time remains relatively constant. Results also show
that the growth effects of changes in public spending on
education are stronger than those of taxation.
The Health and Wealth of Nations: Explaining
Cross-country Income Differences (work in progress)
Abstract:
Two schools of thought are trying to explain the vast
differences in output per capita across countries. First,
output differences are due to the differences in inputs.
Second, it is total factor productivity, not input, that
really matters. In both cases, health has often been left
out notwithstanding the considerable amount of research
indicating its positive effect on productivity. Here I
incorporate health into the analysis of the first case and
then carry out output level accounting to investigate the
contribution of health to the differences in the
cross-country output per capita. Incorporating health
capital into the production of output can increase the
explanatory power of the input differences by 10% to 15%.
Take for example the case of US and Indonesia where the
average ratio of output per capita during the period of
1965-1996 is 10. Under reasonable parameters of production
function, the differences in physical and human capital in
two countries only produce an income ratio of 5. By adding
health capital, the ratio increases to 7-8. The
investigation is extended for cross-country data.
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Schooling and Labor Market Consequences of School
Construction in Indonesia: Evidence from
an Unusual Policy Experiment, (2001) Esther Duflo |
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Abstract:
Between
1973 and 1978, the Indonesian government engaged in one
of the largest school construction programs on record.
Combining differences across regions in the number of
schools constructed with differences across cohorts
induced by the timing of the program suggests that each
primary school constructed per 1,000 children led to an
average increase of 0.12 to 0.19 years of education, as
well as a 1.5 to 2.7 percent increase in wages. This
implies estimates of economic returns to education
ranging from 6.8 to 10.6 percent. |
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Foreign Firms And Indonesian Manufacturing Wages: An
Analysis With Panel Data (2002), Robert E. Lipsey
and Frederik Sjöholm |
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Abstract:
Wages
in domestically- owned Indonesian manufacturing plants
taken over by foreign firms increased sharply between
the year before takeover and two years after takeover,
relative to plants remaining in domestic ownership.
Blue- collar wage levels in these plants had been less
than 10 per cent above and white- collar wages more than
10 per cent below those in their industries a year
before takeover. Two years after takeover both were more
than 50 per cent above average. Wages in foreign plants
taken over by domestic owners tended to rise less than
average for their industries, although they remained
above the domestic average. Thus, foreign firms did not
select particularly high- wage plants to take over and
it was foreign takeovers, rather than takeovers in
general, that led to large wage increases and high
wages. An econometric analysis of the whole panel found
that both foreign ownership throughout the period and
foreign takeover resulted in higher wages relative to
domestically- owned plants. The wage effects for white-
collar employees were typically around twice those for
blue- collar employees. Foreign takeovers were
associated with large increases in blue- collar
employment and both foreign and domestic takeovers with
declines in white- collar employment. However, the
employment changes were not strongly related to the wage
changes. |
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The Impact of Economic Crisis |
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Impacts of the Indonesian Economic Crisis: Price
Changes and the Poor,
(1999), James Levinsohn, Steven Berry, and Jed
Friedman |
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Macro Shocks and Micro(scopic) Outcomes: Child
Nutrition
During Indonesia’s Crisis (2003),
Steven A. Block, et. al. |
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Abstract: This study uses a new survey of
households in rural Java to assess the nutritional
impact of Indonesia’s drought and financial crisis
of 1997/98. A time/age/cohort decomposition reveals
significant nutritional impacts. While child
weight-for-age remained stable in the face of
sharply rising food prices and declining real
incomes, consumption of micronutrient-rich foods
fell, and there were sharp declines in children’s
blood hemoglobin concentration. We present
suggestive evidence that the protection of child
caloric intake came at the expense of increased
maternal wasting, which, in turn, negatively
affected the subsequent hemoglobin concentrations of
cohorts conceived and weaned during the crisis. |
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Crises and Child Health Outcomes: The Impacts of
Economic and Drought/smoke Crises on Infant
Mortality and Birthweight in Indonesia, (2003)
Pungpond Rukumnuaykit |
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Abstract: This paper examines the impacts of the
recent Asian financial crisis on infant mortality
and birthweight in Indonesia. There have been a
number of economic and policy studies focusing on
impacts of economic crises on finance and
production. Although some studies provide
evidence of negative impacts of economic crises on
real outcomes, little is known about the impact of
economic crises on child health outcomes such as
changes in nutrition, child health, and mortality.
Often, the association between financial and
production disturbances and these outcomes are
assumed (e.g. an adverse shock to production is
thought to be associated with worse child health
outcomes.). This paper utilizes data from the
Indonesian Family Life Survey (IFLS) to examine
impacts of the crises on child health outcomes
directly. Specifically, we study the impacts of the
crises on birthweight and infant mortality. |
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The Economic Crisis and Regional Income Inequality
in Indonesia, (2001) Takahiro Akita And
Armida S. Alisjahbana |
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Abstract: This paper estimates regional income
inequality in
Indonesia
during 1993-1998 using a Theil index based upon
district- level GDP and population data. The overall
regional income inequality increased significantly
over the 1993-1997 period (from 0.262 to 0.287),
during which Indonesia achieved an annual average
growth rate of more than 7%. According to the
two-stage nested inequality decomposition analysis,
the increase is due mostly to the increase in the
within-province inequality component, especially in
the provinces of Riau, Jakarta, West Java, and East
Java. In 1997, the within-province inequality
component accounted for about a half of overall
regional income inequality. In terms of per capita
GDP, the economic crisis caused the Indonesian
economy to revert to the 1995 level. The impact was,
however, very uneven across provinces and districts.
The overall regional income inequality declined to
0.266 in 1998, which corresponded to the level
prevailing in 1993-94. Contrary to the 1993-1997
period, about three-quarters of the decline was due
to the decrease in the between-province inequality
component, in which the Java-Bali region played a
prominent role through a significant decrease in its
between-province inequality. The economic crisis
appears to have been a crisis afflicting urban Java
and urban
Sumatra. |
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The Impact of the Regional Economic Crisis on
Employment and an Evaluation of Public Work
Programmes in Indonesia,
(2002), Carunia Mulya Firdausy |
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The Indonesian Economic Crisis and its Impact on
Educational Enrolment and Quality,
(2001),
Djoko Hartono and David Ehrmann |
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Last updated 11/16/04
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