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21. The Place Premium: Wage Differences for Identical Workers across the U.S. Border - Working Paper 148

Author:
Michael Clemens, Lant Pritchett, and Claudio E. Montenegro
Publication Date:
07-2008
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
We compare the wages of workers inside the United States to the wages of observably identical workers outside the United States—controlling for country of birth, country of education, years of education, work experience, sex, and rural-urban residence. This is made possible by new and uniquely rich microdata on the wages of over two million individual formal-sector wage-earners in 43 countries. We then use five independent methods to correct these estimates for unobserved differences between the productivity of migrants and non-migrants, as well as for the wage effects of natural barriers to international movement in the absence of policy barriers. We also introduce a selection model to estimate how migrants' wage gains depend on their position in the distribution of unobserved wage determinants both at the origin and at the destination, as well as the relationship between these positions. For example, in the median wage gap country, a typical Bolivian-born, Bolivian-educated, prime-age urban male formal-sector wage worker with moderate schooling makes 4 times as much in the US as in Bolivia. Following all adjustments for selectivity and compensating differentials we estimate that the wages of a Bolivian worker of equal intrinsic productivity, willing to move, would be higher by a factor of 2.7 solely by working in the United States. While this is the median, this ratio is as high as 8.4 (for Nigeria). We document that (1) for many countries, the wage gaps caused by barriers to movement across international borders are among the largest known forms of wage discrimination; (2) these gaps represent one of the largest remaining price distortions in any global market; and (3) these gaps imply that imply allowing labor mobility can reduce a given household's poverty to a much greater degree than most known in situ antipoverty interventions.
Topic:
Development, Economics, and Industrial Policy
Political Geography:
United States, Nigeria, and Bolivia

22. A Millennium Learning Goal: Measuring Real Progress in Education

Author:
Lant Pritchett, Amer Hasan, and Deon Filmer
Publication Date:
08-2006
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The Millennium Development Goal for primary schooling completion has focused attention on a measurable output indicator to monitor increases in schooling in poor countries. We argue the next step, which moves towards the even more important Millennium Learning Goal, is to monitor outcomes of learning achievement. We demonstrate that even in countries meeting the MDG of primary completion, the majority of youth are not reaching even minimal competency levels, let alone the competencies demanded in a globalized environment. Even though Brazil is on track to the meet the MDG, our estimates are that 78 percent of Brazilian youth lack even minimally adequate competencies in mathematics and 96 percent do not reach what we posit as a reasonable global standard of adequacy. Mexico has reached the MDG—but 50 percent of youth are not minimally competent in math and 91 percent do not reach a global standard. While nearly all countries' education systems are expanding quantitatively nearly all are failing in their fundamental purpose. Policymakers, educators and citizens need to focus on the real target of schooling: adequately equipping their nation's youth for full participation as adults in economic, political and social roles. A goal of school completion alone is an increasingly inadequate guide for action. With a Millennium Learning Goal, progress of the education system will be judged on the outcomes of the system: the assessed mastery of the desired competencies of an entire age cohort—both those in school and out of school. By focusing on the learning achievement of all children in a cohort an MLG eliminates the false dichotomy between “access/enrollment” and “quality of those in school”: reaching an MLG depends on both.
Topic:
International Relations, Development, Economics, and Education
Political Geography:
Brazil and Mexico