Essays on poverty, education and food price increases in developing countries.

Abstract

My dissertation is composed of two essays that investigate whether conditional cash transfer (CCT) programs affect the educational outcomes of non-targeted children in targeted households and the impacts of the global food crisis on household welfare and poverty. In the first essay, to investigate this issue, panel data are used from a randomized experiment conducted in Nicaragua to evaluate the Red de Proteccion Social program. Spillover effects on school enrollment are estimated separately for three types of non-target siblings: older, less-educated siblings; younger siblings; and older, more-educated siblings. Large, positive spillover effects are found for enrollment rates (27.1 and 29.3 percentage points in the first and second years, respectively) only for older, less-educated non-target children. Surprisingly, the estimated effects on enrollment rates are as large as the estimated increases in enrollment rates for target siblings (24.5 and 20.6 percentage points), although they are not directly comparable because of differences in initial enrollment rates. These empirical results are consistent with the predictions from a simple model of the demand for education. It also suggests that an accompanying supply-side intervention could raise schooling outcomes for non-target siblings although the data did not support this hypothesis. The main policy implication of this study is that neglecting spillover effects for non-target siblings underestimates the actual benefits of CCT programs. The second essay evaluates the impacts of the 2007-2008 food price crisis, especially price increases of rice, on household welfare and poverty in Lao PDR (Laos). Households benefit from an increase in the price of rice if they are net sellers of rice, and they suffer reduced welfare from a price increase if they are net buyers of rice. Laos is atypical in that glutinous rice is the main staple, while ordinary (non-glutinous) rice, which is predominately consumed, and traded internationally, in the rest of Southeast Asia, is much less important in the Lao diet. The impact on household welfare in Laos of increases in the price of ordinary rice, the price of which was strongly affected by the food price crisis in 2007-2008, was negligible. This is mainly because the role of ordinary rice in sales and purchases in Laos is not as significant as in other Southeast Asian countries. In addition, during the crisis, price increases for ordinary rice in Laos were lower than those for other countries in Southeast Asia. The estimated effects of the growth rates of glutinous rice prices were not significant, mostly because the price increase in glutinous rice in 2008 was not as large as that of ordinary rice and of those of glutinous rice in the previous years. With (hypothetical) higher price increases of glutinous rice, the change in household welfare for the average Lao household is neutral, yet this average hides the fact that welfare changes are positive in rural areas and negative in urban areas. The sizes of the negative welfare changes among urban households do not vary much by expenditure quintiles or regions, but the size of the positive welfare increases in rural areas are concentrated in Vientiane and the Central region, which have relatively wealthy households. The increases in the national poverty rates due to a sharp hypothetical increase in the price of glutinous rice (40 percent) are less than about 0.5 percentage points. The changes in poverty rates are larger in the Vientiane region, where the poverty rates increase by 1.3 percentage points in urban areas and decrease by 1.8 percentage points in rural areas.