Social and Behavioral Sciences Commons^™

Modeling Labor Market Policy In Developing Countries: A Selective Review Of The Literature And Needs For The Future, Gary S. Fields

Gary S Fields

[Excerpt] Sound labor market policy requires sound labor market models. Sound models have three characteristics. First, from a welfare economic point of view, the policy judgments are explicit, mutually consistent, and thoroughly worked out. Second, from a theoretical point of view, the models are sufficiently detailed and suitably rigorous. And third, from an empirical point of view, the models guide and are guided by solid quantitative evidence. This paper reviews models of labor markets in developing countries from both a positive and a normative point of view. The survey is selective in that it exposits only some of the more …

On The Rise Of Health Spending And Longevity, Raquel Fonseca, Pierre-Carl Michaud, Titus Galama, Arie Kapteyn

Titus Galama

We use a calibrated stochastic life-cycle model of endogenous health spending, asset accumulation and retirement to investigate the causes behind the increase in health spending and life expectancy over the period 1965-2005. We estimate that technological change along with the increase in the generosity of health insurance may explain independently 53% of the rise in health spending (insurance 29% and technology 24%) while income less than 10%. By simultaneously occurring over this period, these changes may have lead to a “synergy” or interaction effect which helps explain an additional 37% increase in health spending. We estimate that technological change, taking …

Earning Their Way Out Of Poverty (Outline And Sample Chapter), Gary Fields

Gary S Fields

[Excerpt] According to the latest figures, today an estimated 3.1 billion people still live in absolute poverty, essentially all of them in the low- and middle-income countries of Asia, Latin America, and Africa and none of them in what are traditionally called the “developed economies” of North America (excluding Mexico), Western Europe, and selected parts of Asia and Oceania. This book is about how the poor live and work and what actions the world community could take to improve poor people’s earning opportunities as a central component of a multifaceted program aimed at ending the scourge of absolute economic misery.

A Brief Review Of The Literature On Earnings Mobility In Developing Countries, Gary Fields

Gary S Fields

[Excerpt] The literature on income and earnings mobility falls into three categories:

1. Macro mobility studies address the entire economy. They ask the question, how much income mobility and/or earnings mobility is there in the economy?
2. A second group of studies, micro mobility studies, examines patterns of income and earnings change over time for different individuals or groups. They ask the questions, which individuals or households experience movements of what magnitudes, and what are the correlates and determinants of these movements?
3. Within the micro mobility studies are a number of studies that look specifically at poverty dynamics …

Grossman’S Missing Health Threshold, Titus Galama, Arie Kapteyn

Titus Galama

We present a generalized solution to Grossman’s model of health capital (1972), relaxing the widely used assumption that individuals can adjust their health stock instantaneously to an “optimal” level without adjustment costs. The Grossman model then predicts the existence of a health threshold above which individuals do not demand medical care. Our generalized solution addresses a significant criticism: the model’s prediction that health and medical care are positively related is consistently rejected by the data. We suggest structural and reduced form equations to test our generalized solution and contrast the predictions of the model with the empirical literature.

A Guide To Multisector Labor Market Models, Gary Fields

Gary S Fields

[Excerpt] This is a paper on labor markets. Why are labor markets important to economic development? Many individuals and institutions, including the World Bank and the regional development banks, seek “a world free of poverty.” Broadly speaking, those who are poor are poor because 1) they earn little from the work they do, 2) the societies in which they live are too poor to provide them with substantial goods and services by virtue of their citizenship or residency, and 3) the poor are not permitted to move to richer countries. Thus, anti-poverty efforts can be focused on 1) helping people …

Employment In Low-Income Countries: Beyond Labor Market Segmentation?, Gary S. Fields

Gary S Fields

No abstract provided.

U.S. Earnings Mobility: Comparing Survey-Based And Administrative-Based Estimates, Lisa M. Dragoset, Gary S. Fields

Gary S Fields

Earnings mobility has been studied both at the macro level (how much of a certain kind of mobility is there in the economy?) and at the micro level (what are the correlates of change in income or position?). Many empirical mobility studies provide estimates of the amount of mobility in a country over time and the correlates of individual mobility within the income distribution. While measurement error is recognized as potentially important at both these levels, very little is known about the degree to which earnings mobility estimates are affected by measurement error. In this paper, we use a new …

Group Diversity And Salience: A Natural Experiment From A Television Game Show, Gabriella A. Bucci, Rafael A. Tenorio

Gabriella A. Bucci

We take advantage of a naturally occurring experiment in a television game show to study the impact of group characteristics on their ability to select salient solutions in a matching game. The Family Feud features families seeking to earn prizes by matching the results of public opinion surveys on various subjects. Our main result is that, controlling for task difficulty, families that are more diverse, as measured by the relatedness of their members, are more successful at matching wider ranges of survey responses. This highlights the importance of member diversity in expanding information and decision frames of reference within a …

Grossman's Health Threshold And Retirement, Titus Galama, Arie Kapteyn, Raquel Fonseca, Pierre-Carl Michaud

Titus Galama

We formulate a stylized structural model of health, wealth accumulation and retirement decisions building on the human capital framework of health provided by Grossman. We explicitly assume a functional form of the utility function and carefully account for initial conditions, which allow us to derive analytic solutions for the time paths of consumption, health, health investment, savings and retirement. We argue that the Grossman literature has been unnecessarily restrictive in assuming that health is always at Grossman’s “optimal” health level. Exploring the properties of corner solutions we find that advances in population health (health capital) can explain the paradox that …