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Technology, Computers, and Wages
Increasing returns to schooling and rising inequality are well documented for industrial countries and for some developing countries. The growing demand for skills is associated with recent technological developments. The authors argue that computers in the workplace represent one manifestation of these changes. Research in the United States and industrial countries documents a premium for computer use. But there is recent evidence suggesting that computer skills by themselves do not command a wage premium. The authors review the literature and use data from a survey of higher education graduates in Vietnam. The results support the unobserved heterogeneity explanation for computer wage premiums. They suggest that computers may make the productive workers even more productive. However, given the scarcity of computers in low-income countries, an operational strategy of increasing computer availability and skills would seem to offer considerable hope for increasing the incomes of the poor.
Economic Volatility and Returns to Education in Venezuela
"Preliminary evidence suggests that the rates of return to education in Venezuela have been declining since the 1970s. Patrinos and Sakellariou rigorously estimate the returns to education in Venezuela for the period 1992-2002 and link them to earlier available estimates from the 1980s. They use consistent cross-sections from the Encuesta de Hogares por Muestro to document falling returns to schooling and educational levels until the mid-1990s, followed by increasing returns thereafter. The authors use quantile regression analysis to provide further insight into the within skill group changes in returns over time"--Abstract.
Credit Policies
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Worker Displacement During the Transition
"The transition to market in Slovenia created labor displacements that were on par or greater than that experienced in North America in the 1980s. A simple theoretical model suggests that factors which raise the probability of layoff should also increase the probability of a quit, predictions that are borne out in data. Probability of both layoffs and quits fell with worker tenure, firm profitability and expected severance costs. Individuals facing a higher probability of displacement accepted slower wage growth than otherwise comparable workers. The incentives to avoid displacement were strong -- workers that actually were displaced faced a slow process of transiting out of unemployment with only one-third finding reemployment. Correcting for selection, real wage losses for displaced workers are comparable to those reported for displaced workers in North America"--Forschungsinstitut zur Zukunft der Arbeit web site.
child labor
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Does Decentralization Increase Spending on Public Infrastructure?
May 1995 Decentralization tends to increase both total and subnational spending on public infrastructure. Why this is so is not clear -- possibly because subnational governments' choices in terms of quality and quantity of infrastructure differ from central governments' choices. It is commonly argued that when the benefits of an infrastructure service are mostly local and there is little scope for economies of scale -- as in urban transit, road maintenance, water supply, and solid waste management -- decentralization is the most effective way to deliver service. Those services have been decentralized in many countries, and many others are rapidly decentralizing. The central government is sti...
