THE WELFARE IMPACT OF TRADE LIBERALIZATION

This paper analyzes the distributional welfare impact of trade liberalization reforms on heterogeneous households. We develop a static applied general equilibrium model, and using a Social Accounting Matrix and Household Expenditure Survey, we calibrate it to match Slovenian data. We simulate the case of Slovenia joining the EU and quantify its welfare impact on households that differ in terms of age, income, and education. Additionally, we compare this benchmark case with two alternative scenarios: (1) a free trade agreement between Slovenia and the EU and (2) a custom union arrangement where tariff revenues are rebated proportionally to the households. We find that while trade liberalization leads to falling consumer prices, increased production in the export sectors, and aggregate welfare gains, the differentiated welfare impacts across heterogeneous households vary in their degrees. (JEL D58, F14, F15)     

THE IMPACT OF MACROECONOMIC CONDITIONS IN CHILDHOOD ON ADULT LABOR MARKET OUTCOMES

This study examines the influence of business cycles in childhood on economic performance later in life. I relate unemployment rates between the year before one's birth and the year of one's 15th birthday to schooling, employment, and income as an adult. The analysis exploits variation in macroeconomic conditions across states over time. I address a number of identification challenges related to cohort effects, linear trends, current events, and economic persistence. The caregiving behaviors and background characteristics of parents are also studied. The average unemployment rate in childhood normally has a negative effect on human capital in adulthood. (JEL J11, J24, J31)     

THE ASSOCIATION OF POVERTY WITH CHILD WELFARE SERVICE AND CHILD AND FAMILY CLINICAL OUTCOMES

The influences of poverty, family status and violence in the lives of children and families seen at a large urban children's aid society are investigated. Rates of social assistance dependency of child welfare families in 1995 and 2001 are compared. While the rate of poverty of child welfare families is stable across the two time periods, the ability of families to cope with poverty has dramatically changed, with the percentage of children from impoverished families being admitted into care nearly doubling across the six-year period. Violence as a mitigating factor in the relationship between poverty, the extent of child welfare service and child and family outcomes is also reported. Suggestions for enabling women who are caught in the complexity of choosing between physical safety and poverty are reported.

Les influences de la pauvreté, de la position sociale de la famille et de la violence sur la vie des enfants et des familles vues à une grande société urbaine d'aide à l'enfance sont examinées. Les taux de dépendance des familles vis-à-vis des programmes de protection de l'enfance en 1995 et 2001 sont comparés. Tandis que le taux de pauvreté des familles qui se servent du système de protection de l'enfance est stable à travers les deux périodes de temps, la capacité des familles de faire face à la pauvreté a radicalement changé, le pourcentage d'enfants de familles appauvries qui sont placés dans des familles d'accueil ayant presque doublé à travers la période de six ans. On fait aussi compte-rendu de la violence comme facteur atténuant dans le rapport entre la pauvreté, l’étendue du service de protection des enfants et les résultats pour les enfants et les familles. On résume aussi des suggestions favorisant l'habilitation des femmes qui se trouvent coincées dans la complexité de choisir entre la sûreté physique et la pauvreté.     

THE IMPACT OF LABOR CONTRACTS: EVIDENCE FROM BRAZIL

The conventional Keynesian model suggests that frictions created by nominal wage contracts generate a positive relationship between inflation and output. On the other hand, the New Classical/Real Business Cycle theory claims that firms and workers base their employment behavior, and hence output, on the marginal product of labor ignoring the efficiencies of fixed nominal wage contracts. Using Brazilian data, where nominal wages were indexed by law, tests show that fixed nominal wage contracts insignificantly affected output. Thus, the data support the view that fixed nominal wages play an insignificant role in determining the evolution of output. ( JEL E31)     

THE LONG‐TERM EFFECTS OF CONDITIONAL CASH TRANSFERS ON CHILD LABOR AND SCHOOL ENROLLMENT

This paper investigates the long‐term effects of conditional cash transfers on school attainment and child labor. To this end, we construct a dynamic heterogeneous agent model, calibrate it with Brazilian data, and introduce a policy similar to the Brazilian Bolsa Família. Our results suggest that this type of policy has a very strong impact on educational outcomes, sharply increasing primary school completion. The conditional transfer is also able to reduce the share of working children from 22% to 17%. We then compute the transition to the new steady state and show that the program actually increases child labor over the short run, because the transfer is not enough to completely cover the schooling costs, so children have to work to be able to comply with the program's schooling eligibility requirement. We also evaluate the impacts on poverty, inequality, and welfare. (JEL O11, I25, J24)     

FISCAL POLICY, EXPECTATION TRAPS, AND CHILD LABOR

This paper develops a dynamic model with overlapping generations where there are two possible equilibria: one without child labor, and one with it. It is shown that intergenerational transfers can eliminate the child labor equilibrium and that this intervention is Pareto improving. However, if society does not believe that the government will implement the transfer program, it won't, reinforcing society's expectations. This is true even if the transfer program would have been implemented in the absence of uncertainty. Thus a government may be powerless to prevent the child labor equilibrium if it does not command the confidence of their populace, leaving the country in an expectations trap. ( JEL D91, E60, J20, O20)     

LABOR MARKETS, INDUSTRIAL MONOPOLIZATION, WELFARE, AND IMPRISONMENT:

Various theorists posit that the rate of unemployment is linked to the rates of both welfare and imprisonment. This assumes a competitive labor market tied to specific controls of surplus populations. This article argues that contemporary labor markets lie on a continuum between competitive (secondary) and relatively non-competitive (primary) structures which creates a pattern of labor market segmentation. Such segmentation is linked with specific policies of incarceration or welfare, depending on the competitiveness of the labor market. Data from a cross-section of urban, industrial U.S. counties test the relationship between labor market segmentation, monopolization of industries, and the rates of welfare and imprisonment, controlling for a variety of other relevant variables. Regression analyses results suggest that as labor market structures become less competitive (i.e., move from predominantly secondary toward predominantly primary labor market characteristics), rates of welfare recipients and welfare benefits rise and rates of imprisonment fall. They also suggest that increasing industrial monopolization raises rates of imprisonment and lowers rates of welfare benefits. These findings indicate that the two major dimensions of economic segmentation (industrial competition and labor market competition) oppositely affect levels of welfare benefits and rates of imprisonment.     

EFFECTS OF WELFARE REFORM ON WOMEN'S VOTING PARTICIPATION

This study investigates the effects of welfare reform in the United States in the 1990s on voting among low‐income women. Using the November Current Population Surveys with the added Voting and Registration Supplement for the years 1990 through 2004 and exploiting changes in welfare policy across states and over time, we estimate the causal effects of welfare reform on women's voting registration and voting participation during the period in which welfare reform unfolded. During this time period, voter turnout was decreasing in the United States. We find robust evidence that welfare reform led to smaller declines in voting (about 3 to 4 percentage points, which translates to about 10% relative to the baseline mean) for women who were exposed to welfare reform compared to several different comparison groups of similar women who were much less exposed. The robust findings suggest that welfare reform had prosocial effects on civic participation, as characterized by voting. The effects were largely confined to presidential elections, were stronger in Democratic than Republican states, were stronger in states with stronger work incentive policies, and appeared to operate through employment, education, and income. (JEL D72, H53, I38, J21)     

THAT WHICH WE CALL WELFARE BY ANY OTHER NAME WOULD SMELL SWEETER AN ANALYSIS OF THE IMPACT OF QUESTION WORDING ON RESPONSE PATTERNS

Responses to survey questions are dependent on the words usedin the questions. Sometimes the alteration of words can completelychange the response distribution without obviously changingthe meaning or intent of the question. This situation occurswhen "welfare" is used instead of "poor." In all contexts examined"welfare" produced much more negative and less generous responsesthan "poor." In addition the two terms appear to tap slightlydifferent dimensions with "welfare" accessing notions of wasteand bureaucracy that are untapped or tapped much less by "poor."     

ON SOME RECENT EXPLANATIONS OF WHY CAPITAL HIRES LABOR

Conventional microeconomics contains no explanation of why capital hires labor (and not the reverse). In view of some surprisingly positive results in the theoretical analysis of worker-run enterprise systems, recent contributions to the theory of the firm have attempted to explain the dominance of capitalist production relations in efficiency terms. The present paper critically reviews works in this area by Alchian and Demsetz (1972), Williamson (1975, 1980), and Jensen and Meckling (1979), and contends that a convincing efficiency argument for the general superiority of capital owners' over workers' control of enterprises still is lacking.     

THE IMPACT OF RETURN ON COLLATERAL IN A CHANNEL SYSTEM

We empirically investigate the relationship between the return on collateral and monetary policy implementation in the channel system. Recent developments in monetary theory suggest that the return on government assets which measures the opportunity cost of holding collateral should have negative impacts on the interest-rate spread and the interbank market rate. The central bank should set a higher spread when the return on collateral is below a cutoff but implements a lower spread when the return on collateral is higher than the cutoff. The interbank market rate tends to lie above the policy target rate when the return on collateral is low and vice versa. We use data from Eurozone area and six industrialized countries to test these theoretical implications. We propose two econometric models: one is more structural and closely related to the monetary model to test the negative relationships, and the other is based on the threshold autoregression model to detect the potential cutoffs. Our findings provide conditional support for the negative impact of return on collateral. (JEL E40, E52, E58)     

THE IMPACT OF OWI ON BROADCASTING

A MARKED difference between the public opinion situation facinginformation specialists in this war and that in 1917 is thefact that during the last twenty-five years radio has come ofage. Never before have governments had available for use suchan important instrument of propaganda. Has the OWI taken fulladvantage of its potentialities? Mr. Landry was asked to appraiseAmerica's use of this weapon since Pearl Harbor. For ten years the author has been observing American radio fromthe platform of the radio editorship of Variety. He has listenedto and analyzed thousands of radio broadcasts. At present heis director of program writing for CBS and also a member ofthe Writers War Board.     

THE EFFECT OF A NEGATIVE INCOME TAX ON RISK-TAKING IN THE LABOR MARKET

Theory argues that negative income taxes will increase the economic risks that workers take in the labor market. Data from the income maintenance experiments is analyzed to reveal that those workers subject to a NIT seemed to bear more risks than their control group counterparts. Implications and reservations about this finding are offered.     

EFFECTS OF WELFARE REFORM ON ILLICIT DRUG USE OF ADULT WOMEN

Exploiting changes in welfare policy across states and over time and comparing relevant population subgroups within an econometric difference‐in‐differences framework, we estimate the effects of welfare reform on adult women's illicit drug use from 1992 to 2002, the period during which welfare reform unfolded in the United States. The analyses are based on all available and appropriate national data sets, each offering unique strengths and measuring a different drug‐related outcome. We investigate self‐reported illicit drug use (from the National Household Surveys on Drug Abuse and National Surveys on Drug Use and Health), drug‐related prison admissions (from the National Corrections Reporting Program), drug‐related arrests (from Federal Bureau of Investigation Uniform Crime Reports), and drug‐related emergency department episodes (from the Drug Abuse Warning Network). We find robust evidence that welfare reform led to a 10%–21% decline in illicit drug use among women at risk of relying on welfare, as well as associated declines in drug‐related arrests (6%–7%), drug‐related hospital emergency department episodes (7%–11%), and possibly drug‐related prison admissions (11%–19%). The findings indicate that an appropriately designed welfare system with sufficient job opportunities for those who are able to work can result in both increases in employment and decreases in drug use. (JEL I38, K42, J21)     

ON BEING A POOR CHILD IN AMERICA

This exploratory qualitative study probed the experiences of fourteen 7–12-year-old children living in poverty. Child-centered activity-based interviewing methods were utilized. Three universal themes with eight life area specific categories emerged from qualitative data analysis. This study's findings suggest that children perceive poverty as a hurtful and detrimental factor in their lives. The findings also suggest, however, that some children living in poverty may not view their current financial situation as limiting to their future prospects, and that in spite of the hardships they themselves face, children living in poverty have tremendous compassion for children less fortunate than themselves. Finally, the study concludes that the child-centered research methods allow for children to make valuable contributions to childhood poverty research.     

CHILD LABOR AND SCHOOLING RESPONSES TO ACCESS TO MICROCREDIT IN RURAL BANGLADESH

Microcredit has been shown to be effective in reducing poverty in many developing countries. However, less is known about its effect on human capital formation. In this article, we examine the impact of access to microcredit on children's education and child labor using a new and large data set from rural Bangladesh. The results show that household participation in a microcredit program may increase child labor and reduce school enrollment. The adverse effects are more pronounced for girls than boys. Younger children are more adversely affected than their older siblings and the children of poorer and less educated households are affected most adversely. Our findings remain robust to different specifications and methods, and when corrected for various sources of selection bias. (JEL H43, I21, J13, J24, L30, O12)     

PARENTAL ALTRUISM AND SELF-INTEREST: CHILD LABOR AMONG LATE NINETEENTH-CENTURY AMERICAN FAMILIES

Intergenerational relationships within late nineteenth-century industrial families are analyzed using several large-scale, contemporary household surveys. Nonaltruistic behavior by parents was pervasive. Even among families with positive assets, child labor was common in certain industrial settings, suggesting that child labor (or nonschooling) did not simply reflect parental borrowing constraints. Neither did physical asset transfers offset human capital losses among working youth. A quantitative estimate of parental nonaltruism is derived from an equilibrium labor market model: approximately 90 percent of all child earnings was implicitly competed away through lower adult wages as families migrated to areas with abundant child labor opportunities.