Human Capabilities Versus Human Capital: Guaging the Value of Education in Developing Countries

The purpose of this study is to defend the view that education should be evaluated in terms of the capability to achieve valued functionings, rather than mental satisfaction or resources. In keeping with Amartya Sen’s capabilities approach we argue that mental satisfaction provides an inaccurate metric of well-being because of the phenomenon of adaptive preferences. Equally, resources cannot be used as a metric of well-being because of inequalities in the ability to convert income and commodities into valued functionings. Hence, interpreting education as a means to create human capital is also impoverished because it evaluates education solely in terms of the accumulation of resources. In order to provide evidence in support of the human capabilities approach we statistically examine the channels through which educational attainment affects the health functionings implied by life expectancy. Using panel data analysis for 35 developing countries for the years 1990, 1995 and 2000 we compare the health functionings (as indicated by life expectancy) that are achieved by the income growth generated by educational attainment, with the total health functionings that are achieved by educational attainment. We find that educational attainment (as indicated by average years of schooling) has a significant effect on life expectancy independently of its effect by way of income growth. A 1% increase in per capita income increases life expectancy by 0.073954% while a 1% increase in average years of schooling directly increases life expectancy by 0.055324%. Because it shows that income underestimates the health functionings achieved by educational attainment, our empirical findings lend support to the claim that the value of education should be measured in terms of the capability for functioning, rather than resources.     

Tracking Poverty Reduction in Bhutan: Income Deprivation Alongside Deprivation in Other Sources of Happiness

This paper analyses poverty reduction in Bhutan between two points in time—2003 and 2007—from a multidimensional perspective. The measures estimated include consumption expenditure as well as other indicators which are directly (when possible) or indirectly associated to valuable functionings, namely, health, education, access to electricity, safe water, improved sanitation, enough room per person in dwelling, access to roads and land ownership. Interestingly, most of these indicators have been identified as sources of happiness in the 2007 Gross National Happiness Survey. Twelve different measures are estimated with a variety of values for the different parameters involved for robustness analysis. Also, estimates are bootstrapped creating 95 % confidence intervals. We find that over the study period there was an unambiguous reduction in multidimensional poverty regardless of the indicators’ weights, deprivation cutoffs and identification criterion of the poor. This reduction was mainly led by a reduction in the proportion of the poor which was accompanied by a reduction in the intensity of poverty among those who were less intensively poor, although not among those who were more intensively poor. Rather than accomplishing this poverty reduction by improving achievements in one or two indicators, there were significant reductions in several deprivations, especially in access to roads, electricity, water, sanitation, and education. We also find that when income alone is used to target the poor, inclusion errors are marginal but exclusion errors are sizeable. Despite Bhutan’s significant progress, challenges remain as poverty is still high in rural areas. A multidimensional measure in the lines proposed in this paper can prove useful for monitoring poverty reduction, prioritizing groups and evaluating upon investment.     

Trends in Child Poverty in Hong Kong Immigrant Families

In Hong Kong, child poverty is a serious social problem which may lead to intergenerational poverty, but nevertheless only a few studies have examined this issue, particularly for immigrant families. Using Census data (5 %) from 1981, 1991, 2001, and 2011, we assessed child poverty rates in the past three decades and identified key variables contributing to changes in the risk of child poverty for both immigrant and local families. Our results indicate that child poverty rates in Hong Kong-born families have fluctuated between 14.3 and 15.8 % over the past three decades, while for immigrant families they have increased steadily and substantially from 18.1 % in 1981 to 36.5 % in 2001 and then to 37.5 % in 2011. We show that the increase in immigrant child poverty is associated with changes in the Hong Kong economy that have made it more difficult for such families to adapt to the host society, especially in the 1990s and that this negative effect offset the positive influence of compositional changes among this group of immigrant families in terms of parental education levels and family size. The gap between immigrant and local families in terms of child poverty risk is mainly due to the fact that during the 1990s the negative effect of contextual changes in Hong Kong was cancelled out by the beneficial impact of compositional changes for local families, but not for immigrant families where the latter effect was minimal.     

Exploring Differences in National and International Poverty Estimates: Is Uganda on Track to Halve Poverty by 2015?

This paper explores causes of differences in estimates of poverty incidence in Uganda since the early 1990s as measured by the Uganda Bureau of Statistics and the World Bank. While both sets of estimates from the two organisations show a declining trend in poverty incidence there are important differences in the levels of poverty, the speed of the decline and the direction of change in the early 2000s. Methodological differences linked to the determination of the poverty line and adjustments for household composition are found to play a role. Assessing the effect of other potential causes is complicated by limitations in the World Bank’s meta-data.     

The increasing risk of poverty across the American life course

This article extends the emerging body of life course research on poverty by empirically identifying the incidence, chronicity, and age pattern of American poverty and how these dimensions have changed during the period 1968-2000. Using the Panel Study of Income Dynamics, we construct a series of life tables that estimate the risk of poverty for adults during their 20s, 30s, 40s, 50s, 60s, and 70s, and compare these estimates for Americans in the 1970s, 1980s, and 1990s. Our empirical results suggest that the risk of acute poverty increased substantially, particularly in the 1990s. This observed increase was especially pronounced for individuals in their 20s, 30s, and 40s; for all age groups with respect to extreme poverty; and for white males. On the other hand, the risk of chronic poverty declined during the 1990s (as measured by the percentage of the poor who experienced five or more years of poverty within a 10-year interval). The results in this article tell a very different story than the Census Bureau's yearly cross-sectional rates, which have shown little overall change in the U.S. poverty rate during this 30-year period. In contrast, a life course approach reveals a rising economic risk of acute poverty for individuals, one that is consistent with recent observations and research suggesting that a growing number of Americans will eventually find themselves in an economically precarious position.     

Population Trends in Metropolitan and Nonmetropolitan America: Selective Deconcentration and the Rural Rebound

This study uses revised annual population estimates that incorporate adjustments from the 2000 Census to backcast demographic change for U.S. counties during the 1990s. These data are supplemented with new post-censal population estimates for 2001–2003. We use these data to examine demographic trends in the late 1990s and first years of the new century. Our findings are consistent with a model suggesting that a selective deconcentration of the U.S. population is underway. Our findings also confirm the occurrence of the rural rebound in the first half of the 1990s and a waning of this rebound in the late 1990s. Post-censal data also suggest a modest upturn in nonmetropolitan population growth rates in 2001–2003.     

A decomaosition of trends in poverty among children of immigrants

Poverty levels among all children in the United States have tended to fluctuate in the past 30 years. However, among the children of immigrants, child poverty increased steadily and rapidly from about 12% in 1970 to 33% in the late 1990s before declining to about 21% in 2000. Using 1970, 1980, 1990, and 2000 Public Use Microdata Samples data, we identified key factors that underlie the fluctuations in immigrant child poverty from 1969 to 1999 and the divergence from children of natives. We found that roughly half the absolute increase in immigrant child poverty can be linked to changing conditions in the U.S. economy that make it more difficult to lift a family out of poverty than 30 years ago. These changes occurred disproportionately among children of parents with lower levels of education, employment, and U.S. experience but not among racial/ethnic minorities. Poverty risks among various racial and ethnic groups converged over time. The relative increase in poverty for immigrant versus native children owes largely to the divergence between immigrant and native families in racial/ethnic composition, parental education, and employment.     

Recent Trends in Coverage of the Mexican-Born Population of the United States: Results From Applying Multiple Methods Across Time

The accuracy of counts of U.S. racial/ethnic and immigrant groups depends on the coverage of the foreign-born in official data. Because Mexicans constitute by far the largest single national-origin group among the foreign-born in the United States, we compile new evidence about the coverage of the Mexican-born population in the 2000 census and 2001–2010 American Community Survey (ACS) using three techniques: a death registration, a birth registration, and a net migration method. For the late 1990s and first half of the 2000–2010 decade, results indicate that coverage error was somewhat higher than currently assumed but had substantially declined by the latter half of the 2000–2010 decade. Additionally, we find evidence that U.S. census and ACS data miss substantial numbers of children of Mexican immigrants, as well as people who are most likely to be unauthorized: namely, working-aged Mexican immigrants (ages 15–64), especially males. The findings highlight the heterogeneity of the Mexican foreign-born population and the ways in which migration dynamics may affect population coverage.     

Poverty and macroeconomic performance across space,race, and family structure

We examined the effects of macroeconomic performance and social policy on the extent and depth of poverty in America using state-level panel data from the 1981-2000 waves of the Current Population Survey. We found that a strong macroeconomy at both the state and national levels reduced both the number of families who were living in poverty and the severity of poverty. The magnitude and source of these antipoverty effects, however, were not uniform across family structures and racial groups or necessarily over time. While gains in the eradication of poverty, in general, were tempered by rising wage inequality, simulations indicated that female-headed families and families that were headed by black persons experienced substantial reductions in poverty in the 1990s largely because of the growth in median wages. An auxiliary time-series analysis suggests that the expansions in the federal Earned Income Tax Credit of the 1990s accounted for upward of 50% of the reduction in after-tax income deprivation.     

Measuring and Understanding Urban Parks’ Contribution to Quality of Life in Istanbul

This study details an application of an improved Water Poverty Index (iWPI) to investigate and assess state of water resources in 53 African countries for the period 2000–2012 with a special focus on an international comparison of water poverty among northern and sub-Saharan countries. A multi-faceted approach that combines physical estimates of water availability with socio-economic drivers of poverty and environmental factors, has been used to do such comparison. It is with this in mind that the iWPI was developed based on the theoretical foundations and recent development of the water poverty approach. This would permit an inclusive comprehension of the crosscutting nature of water issues and their impacts on human wellbeing and environment. The results highlight an obvious dissimilarity of water poverty situation between more developed, but water-poor countries located principally in North Africa with that of lower-income and water-rich countries in sub-Saharan region. This can be used to inform policy makers, governments, donors and other stakeholders to assist in prioritization of appropriate policies to be taken towards better service delivery and sustainable water management across space and time.     

Globalization and Inequality: A Norwegian Report

Is global inequality increasing? Some authoritative voices—for example, from the United Nations Development Programme—assert unequivocally that it is, and have carried popular belief with them. Others see a more nuanced and on balance a positive picture. Any attempt to answer the question must grapple with many conceptual and measurement difficulties. These are not wholly eliminated even if the inequality in question is narrowed to that among the per capita incomes of countries, ignoring intracountry differences in income. Disagreement about the empirical record has not impeded argument over causes. Globalization—the expansion of trade, investment, and technology flows among states that is making for a more integrated world economy—is invoked on both sides: seen by some as further marginalizing the world's poor, by others as offering a route out of poverty. The starkly different positions surface in the heated debates that have surrounded the World Trade Organization and the proposal for a Multilateral Agreement on Investment. The nature of trends in international inequality and the role in them of globalization are explored in a recent report issued by the Norwegian Ministry of Foreign Affairs, Globalisation and Inequality: World Income Distribution and Living Standards, 1960–1998 (October 2000), the summary from which is reproduced below. The report finds that global inequality between countries has decreased over the last four decades. Globalization may or may not have contributed to that outcome, but at least does not appear to work against it. In sum, “not everything has turned out badly; in fact there has—in spite of the setbacks in some regions and in spite of population growth—been considerable global progress during the last decades.” Given the chosen focus on inequality, there is little discussion in the report of that other dimension of global progress: changes in absolute income levels. But in assessing the implications of development for human welfare, the issue of economic growth and its relationship to globalization is clearly pertinent. Footnote 4 offers a passing glimpse of that dimension, referring to changes in absolute poverty. The World Bank's World Development Report 2000/2001 estimates that the number of people in absolute poverty (living on less than $1 a day) changed little between 1987 and 1998: it went from 1.18 billion to 1.20 billion. As the population grew, this meant a modest reduction in the proportion in absolute poverty in the world population (excluding the rich countries): from 28.3 percent to 24.0 percent. But in the East Asia and Pacific region—a region characterized by both rapid overall economic growth and increasing integration into the global economy—the number of poor dropped from 418 million to 278 million during the same period, with the proportion dropping from 26.6 percent to 15.3 percent. The report was commissioned from the Norwegian Institute of International Affairs (NUPI), and prepared by Ame Melchior, Kjetil Telle. and Henrik Wiig. It is available online both in its English version and in its original (and longer) Norwegian version—the former at http://odin.dep.no/ud/engelsk/publ/rapporter/index‐b‐n‐a.html , the latter through the Ministry's parallel Norwegian‐language site.     

An Evaluation of Persons per Household (PPH) Estimates Generated by the American Community Survey: A Demographic Perspective

The American Community Survey (ACS) is a U.S. Census Bureau product designed to provide accurate and timely demographic and economic indicators on an annual basis for both large and small geographic areas within the United States. Operational plans call for ACS to serve not only as a substitute for the decennial census long-form, but as a means of providing annual data at the national, state, county, and subcounty levels. In addition to being highly ambitious, this approach represents a major change in how data are collected and interpreted. Two of the major questions facing the ACS are its functionality and usability. This paper explores the latter of these two questions by examining “persons per household (PPH),” a variable of high interest to demographers and others preparing regular post-censal population estimates. The data used in this exploration are taken from 18 of the counties that formed the set of 1999 ACS test sites. The examination proceeds by first comparing 1-year ACS PPH estimates to Census 2010 PPH values along with extrapolated estimates generated using a geometric model based on PPH change between the 1990 and 2000 census counts. Both sets of estimates are then compared to annual 2001–2009 PPH interpolated estimates generated by a geometric model based on PPH from the 2000 census to the 2010 census. The ACS PPH estimates represent what could be called the “statistical perspective” because variations in the estimates of specific variables over time and space are viewed largely by statisticians with an eye toward sample error. The model-based PPH estimates represent a “demographic perspective” because PPH estimates are largely viewed by demographers as varying systematically and changing relatively slowly over time, an orientation stemming from theory and empirical evidence that PPH estimates respond to demographic and related determinants. The comparisons suggest that the ACS PPH estimates exhibit too much “noisy” variation for a given area over time to be usable by demographers and others preparing post-censal population estimates. These findings should be confirmed through further analysis and suggestions are provided for the directions this research could take. We conclude by noting that the statistical and demographic perspectives are not incompatible and that one of the aims of our paper is to encourage the U.S. Census Bureau to consider ways to improve the usability of the 1-year ACS PPH estimates.     

Disentangling the Circularity in Sen’s Capability Approach: An Analysis of the Co-Evolution of Functioning Achievement and Resources

There is an ambiguity in Amartya Sen’s capability approach as to what constitutes an individual’s resources, conversion factors and valuable functionings. What we here call the “circularity problem” points to the fact that all three concepts seem to be mutually endogenous and interdependent. To econometrically account for this entanglement we suggest a panel vector autoregression approach. We analyze the intertemporal interplay of the above factors over a time horizon of 15 years using the BHPS data set for Great Britain, measuring individual well-being in functionings space with a set of basic functionings, comprising “being happy”, “being healthy”, “being nourished”, “moving about freely”, “being well-sheltered” and “having satisfying social relations”. We find that there are indeed functionings that are resources for many other functionings (viz. “being happy”) while other functionings (“being well-sheltered” and “having satisfying social relations”) are by and large independent, thus shedding light on a facet of the capability approach that has been neglected so far.     

An Application of Bayesian Methods to Small Area Poverty Rate Estimates

Efforts to estimate various sociodemographic variables in small geographic areas are proving difficult with the replacement of the Census long-form with the American Community Survey (ACS). Researchers interested in subnational demographic processes have previously relied on Census 2000 long-form data products in order to answer research questions. ACS data products promise to begin providing up-to-date profiles of the nation’s population and economy; however, unit- and item-level nonresponse in the ACS have left researchers with gaps in subnational coverage resulting in unstable and unreliable estimates for basic demographic measures. Borrowing information from neighboring areas and across time with a spatiotemporal smoothing process based on Bayesian statistical methods, it is possible to generate more stable and accurate estimates of rates for geographic areas not represented in the ACS. This research evaluates this spatiotemporal smoothing process in its ability to derive estimates of poverty rates at the county level for the contiguous United States. These estimates are then compared to more traditional estimates produced by the US Census Bureau, and comparisons between the two methods of estimation are carried out to evaluate the practical application of this smoothing method. Our findings suggest that by using available data from the ACS only, we are able to recreate temporal and spatial patterns of poverty in US counties even in years where data are sparse. Results show that the Bayesian methodology strongly agrees with the estimates produced by the SAIPE program, even in years with little data. This methodology can be expanded to other demographic and socioeconomic data with ease.     

Estimates of Regional and Global Life Expectancy, 1800–2001

Historians and demographers have gone to considerable trouble to reconstruct life expectancy in the past in individual countries. This overview collects information from a large body of that work and links estimates for historical populations to those provided by the United Nations, the World Bank, and other sources for 1950–2001. The result is a picture of regional and global life expectancy at birth for selected years from 1800 to 2001. The bibliography of more than 700 sources is published separately on the web.     

Multidimensional Poverty in China: Findings Based on the CHNS

This paper estimates multidimensional poverty in China by applying the Alkire-Foster methodology to the China Health and Nutrition Survey 2000–2009 data. Five dimensions are included: income, living standard, education, health and social security. Results suggest that rapid economic growth has resulted not only in a reduction in income poverty but also in a reduction in multidimensional poverty in the last decade, both in terms of its prevalence and intensity. However, many challenges remain. There are wide disparities across provinces and between urban and rural areas, with poverty being 1.5 times higher in rural areas than in urban ones in 2009. Moreover, rising deprivation in education in rural and less developed provinces should also be a policymaking concern.     

Non-poor Components of Population Growth and Immigration in the U.S., 1990–2010

Traditional measures of poverty are informative in indicating the degree of economic deprivation in a population at a cross-sectional point in time, but they do not consider growth in the size of the non-poverty population. We develop a measure of non-poverty population growth in order to explore whether it constitutes a useful indicator of an important demographic dynamic. We illustrate our approach with an analysis of the U.S. states using Census and American Community Survey data from 1990, 2000, and 2010. The results indicate that the extent to which the non-poor population increased across states is uncorrelated with the initial poverty rate as conventionally measured. Broken down by nativity, the findings further show that some states with official poverty rates above the national average (e.g., Arizona, Georgia, and Texas) nonetheless had some of the highest rates of non-poor population growth among less skilled immigrants. By contrast, other states with official poverty rates below the national average (e.g., Connecticut, New Hampshire, and Vermont) often had low rates of non-poor population growth among less skilled immigrants. These findings suggest that low initial poverty rates do not necessarily contribute substantially to the alleviation of global poverty through the immigration of less skilled persons from less developed nations. However, the rate of non-poor population growth among less skilled immigrants also appears to be uncorrelated with state variation in minimum wages even after taking into account population density and median home value.     

Reassessing and Revising Commuting Zones for 2010: History,Assessment, and Updates for U.S. ‘Labor-Sheds’ 1990–2010

This paper employs commuter flow data from the 1990 and 2000 Decennial Censuses, and the 2006–2010 American Community Survey to replicate, evaluate, and extend the delineation of commuting zones first proposed by Tolbert and Killian (Labor Market Areas for the United States, 1987). Commuting zones offer a valuable tool for research on regional economies and have long served rural sociologists, economists, and geographers interested in a representation of the economy that acknowledges a connection between urban and rural areas and the capacity of economic systems to cross state lines. Our delineations provide both an update in the form of new delineations for 2010 and a revised set of 1990 and 2000 delineations that benefit from a consistent methodology across decades. We also provide a set of tools for comparing delineations across methods and over time. In presenting our revised delineations, we shed light on the role of expert opinion in the original delineations, the strengths and weaknesses of the original method, and offer suggestions for further revision of this tool that may better reflect the theoretical conception of commuting zones.     

Estimating historic population data for small geographies using census housing information

Historical population data for small geographies (e.g. blocks, block-groups, and census tracts) are not available for periods earlier than 1980. In this research note, we propose a geographically-constrained housing unit method (GHUM) to estimate historic population for small geographies using housing age data available in the 1980–2000 censuses. The GHUM is a two-stage method. The first stage follows a traditional housing unit method and provides initial household and group quarter population estimates for small geographies. The second stage takes advantage of the availability of historic data for larger geographies (e.g. counties, states) to adjust the first stage estimates and to provide final estimates. The GHUM is used to estimate 1940–1990 county population and census tract population in Kentucky. The quality of the population estimates is assessed. A two-sample Kolmogorov–Smirnov test indicates that these estimates are statistically reliable at the 10 % significance level.     

Institutions and Poverty: A Critical Comment Based on Evolving Currents and Debates

Tebaldi and Mohan (Journal of Development Studies 46:1047–1066, 2010) have established an empirical relationship between institutions and monetary poverty. We first, reflect their findings in the light of recent development models, debates and currents in post-2010 literature. We then re-examine their results with a non-monetary and multidimensional poverty indicator first published in 2010. Our findings confirm the negative relationship and the nexus disappears with control for average income. Hence, confirming the conclusions of the underlying study that institutions could have an indirect effect on multidimensional poverty. In other words, the poverty eradication effect of institutions is through average income as opposed to income inequality. We discuss how the findings provide insights into: (1) the Chinese model versus sustainable development; (2) debates over preferences in economic rights; (3) China’s development and outlook; (4) the Fosu conjectures and (5) Piketty’s and Kuznets’ literatures.