Essays in Development Economics and Applied Microeconomics
2017-12
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Essays in Development Economics and Applied Microeconomics
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2017-12
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Human capital is gained throughout a person’s life. Most of those human capital investments are made in childhood, because the returns to these investments take time to materialize. There are different activities, conditions, and policies that can either boost or reduce human capital investments. Schooling is a fundamental dimension of human capital formation, and the activities that children perform during their school years yield consequences throughout their adult lives. School-age children residing in poor households in developing countries spend their time not only attending school, studying, and doing homework, but also performing additional activities such as work. The time devoted to work activities might have effects on these children’s learning (negative or positive), and will affect their human capital accumulation. The first two essays of this dissertation (Chapters 2 and 3) study two aspects of children’s acquisition of human capital in Ethiopia. Chapter 2 begins by exploring the effects of child work on academic achievement in Ethiopia. The goal of this chapter is to measure the effects of different types of work on test scores for children aged 8, 12, and 15 years old. Child work should be treated as endogenous in the process of human capital formation, so in Chapter 2, I propose to instrument child work with a set of variables related to sibling composition and household and environmental shocks faced by the child’s household. This analysis is performed using three rounds of data from the Young Lives study for Ethiopia. The Young Lives data are publicly available and well documented. This study has followed two cohorts of children since 2002. Since 2006 (Round 2 of the study), time use data have been collected as part of the survey, including the time spent in a typical day performing different activities that can be classified as domestic work or market work. In addition, the Young Lives study includes very detailed data on child, household, and community characteristics. The results of Chapter 2 show that child work negatively affects vocabulary test scores and that it has no effect on mathematics test scores. Chapter 3 analyzes the urban-rural test score gap in Ethiopia. Currently, more than 80 percent of the population of Ethiopia resides in rural areas, and there is very little rural to urban migration. This chapter is the first study that decomposes this educational gap for Ethiopia. The decomposition of the test score gap follows the Blinder-Oaxaca decomposition method. This method allows one to decompose the test score gap between an explained portion (differences in endowments) and an unexplained portion (differences in coefficients). The main contributors to the explained portion of the test score gap are identified (hours of child work, parental education and socioeconomic status of the household). The chapter also presents some policies that could be implemented to increase the human capital accumulation process of the vast majority of the Ethiopian population that lives in rural areas. The last chapter of this dissertation is quite different from the first two, although it continues to examine social sector policies in developing countries. More specifically, it explores the impact of gaining access to health insurance on different types on investments in Mexico. The program studied in Chapter 4 is Seguro Popular, a large subsidized health insurance program that currently covers more than 55 million persons. The study focuses on the impact of this program on human capital investment decisions. The chapter develops a model of consumption under uncertainty that is used to interpret the empirical results. It distinguishes between household expenditures that are liquid investments, which are useful for insurance purposes, and other, less liquid investments. The main hypothesis of the paper is that, upon obtaining access to public health insurance, households will adjust their investment decisions. This analysis was performed using data from Mexico’s ENIGH household survey from 2008 to 2012 and suggests that there is a statistically significant increase in the allocation of savings to illiquid, high return investments, relative to liquid, low return investments for households that gained access to Seguro Popular compared to uninsured Mexican households.
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University of Minnesota Ph.D. dissertation.December 2017. Major: Applied Economics. Advisor: Paul Glewwe. 1 computer file (PDF); ii, 149 pages.
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Cuesta, Ana. (2017). Essays in Development Economics and Applied Microeconomics. Retrieved from the University Digital Conservancy, https://hdl.handle.net/11299/194625.
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