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1. Confronting Rising Market Power

Author:
Jonathan B. Baker and Fiona Scott Morton
Publication Date:
05-2019
Content Type:
Policy Brief
Institution:
Economics for Inclusive Prosperity (EfIP)
Abstract:
Rising market power in the U.S. economy is not just a microeconomic problem, as the textbook analysis shows, creating allocative efficiency losses and transferring wealth away from victimized participants in the affected markets. Rising market power also undermines inclusive prosperity by contributing to inequality and slowed economic growth. Modern economic research points to multiple ways to attack market power and enhance competition, including ways of strengthening antitrust enforcement, improving antitrust rules and institutions, and deploying regulation to enhance competition.
Topic:
Economics, Economic Policy, Economic Theory, Macroeconomics, and Microeconomics
Political Geography:
United States

2. The Repercussions of War on Women in the Yemeni Workforce

Author:
Hannah Patchett and Dr. Fawziah Al-Ammar
Publication Date:
07-2019
Content Type:
Policy Brief
Institution:
Sana'a Center For Strategic Studies
Abstract:
This policy brief sheds light on how the ongoing conflict in Yemen has affected women’s participation in the workforce. It finds that the protracted conflict has, on the one hand, pushed more women into the workforce and new labor markets, in some cases into professions previously dominated by men. While some women have established new enterprises, often home-based businesses, others have engaged in poorly paid physical work in response to the economic crisis and the loss of male breadwinners. On the other hand, the war has imposed new constraints on an already low women’s participation rate. This policy brief recommends that micro-economic initiatives to bring women into the workforce must be accompanied by long-term efforts to address socio-economic structures that have historically constrained women’s access to the workforce. Interventions must be guided by local consultations with women and men from all demographics, and must promote work that is fairly paid and provides security and social protection. Quota systems could ensure that women play an active role in recovery and reconstruction efforts; women must also be engaged at all decision-making levels in peace building efforts and in post-conflict Yemen.
Topic:
Economics, Gender Issues, Women, Microeconomics, and Economic Development
Political Geography:
Asia, Yemen, and West Asia

3. American Gothic: How Chicago Economics Distorts “Consumer Welfare” in Antitrust

Author:
Mark Glick
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Since the publication of Robert Bork’s The Antitrust Paradox, lawyers, judges, and many economists have defended “Consumer welfare” (CW) as a standard for decisions about antitrust goals and enforcement priorities. This paper argues that the CW is actually an empty concept and is an inappropriate goal for antitrust. Welfare economists concede that there is no credible measurable link between price and output and human well-being. This means that the concept of CW does not legitimate limited antitrust enforcement, nor does it justify the exclusion of other antitrust goals that require more active enforcement practices. This paper contends that antitrust policy is not welfare based at all, and that if it were, antitrust policy and enforcement would differ significantly from the Chicago School vision. Without the fiction that economists can establish that in the short run lower price and higher output measurably increases welfare more than other goals, recent defenses of the CW standard resolve down to arguments based on unsupported assumptions.
Topic:
Economics, Law, Legal Theory, Economic Theory, Macroeconomics, Antitrust Law, and Microeconomics
Political Geography:
United States

4. Targeting credit through community members

Author:
Diego A. Vera-Cossio
Publication Date:
11-2017
Content Type:
Working Paper
Institution:
Institute for Advanced Development Studies (INESAD)
Abstract:
Delegating the allocation of public resources to community members is an increasingly popular form of delivering development programs and are associated with a tradeoff between improved information about potential beneficiaries and favoritism towards local elites. Unlike targeting cash transfers to the poor, the optimal targeting of credit is a more complex problem involving issues of productivity, repayment, and market responses: This paper analyzes this problem using a large-scale lending program, the Thai Million Baht Credit Fund, which decentralizes the allocation of loans to an elected group of community members, and provides three main results. First, exploiting a long and detailed panel, I recover pre-program structural estimates of household total factor productivity and find that resources from the program were not allocated to high-productivity, poor households, which is inconsistent with poverty and productive efficiency as targeting criteria. Second, using socioeconomic networks data, I show that actual targeting is strongly driven by connections to village elites and is related to lower program profitability, which suggests favoritism as a reason for mistargeting. Finally, I exploit quasi-experimental variation in the rollout of the program and uncover evidence that, in general equilibrium, informal credit markets compensate for targeting distortions by redirecting credit towards unconnected households, albeit at higher interest rates than those provided by the program. The results highlight the limitations of community-driven approaches to program delivery and the role of markets in attenuating potential targeting errors.
Topic:
Development, Economics, Microcredit, Public Sector, Local, Microeconomics, and Credit
Political Geography:
Thailand

5. Promoting prenatal health care in poor rural areas through conditional cash transfers: evidence from JUNTOS in Peru

Author:
Juan Jose Diaz and Victor Saldarriaga
Publication Date:
01-2017
Content Type:
Working Paper
Institution:
Group for the Analysis of Development (GRADE)
Abstract:
The authors assess the effects of JUNTOS, a conditional cash transfer program targeted to poor rural households in Peru, on the utilization of prenatal health care by women exposed to the program during their most recent pregnancy. They implement a difference-in-differences estimation technique to uncover the effects of JUNTOS on the utilization of prenatal health care, the quality of prenatal health care, utilization of health care at birth, and obstetric complications at birth. Researchers use data from the publicly available Demographic and Health Surveys (DHS) from the period 2000-2014. Results suggest that the program has increased prenatal health care utilization. Even more salient, the results also suggest an improvement in the quality of health care received and a reduction of obstetric complications at birth.
Topic:
Development, Poverty, Children, Rural, Microeconomics, and Infants
Political Geography:
Latin America and Peru

6. An Analysis of Firm Characteristics as Earnings Determinants: The Urban Bolivia Case

Author:
Beatriz Muriel Hernández
Publication Date:
12-2016
Content Type:
Working Paper
Institution:
Institute for Advanced Development Studies (INESAD)
Abstract:
This article analyzes the importance of firm characteristics to explain earnings in urban Bolivia. Initially I propose a new simple theoretical model of segmented labor market where, in equilibrium, individual and firm variables jointly determine earnings at the worker level. The key for achieving this equilibrium is that workers have both specific preferences and heterogonous skills provided by years of schooling, which are in turn associated to certain firms. Given the household surveys information, I estimate two alternative earnings functions from this model, one for unsalaried workers, for which there is detailed firm data and one for salaried workers, in which sector, size and formality are used as firm proxies. I find not only that firm characteristics are fundamental determinants of earnings but that regressions that include only individual characteristics present highly overestimated coefficients.
Topic:
Development, Economics, Labor Issues, Urban, Microeconomics, and Private Sector
Political Geography:
Latin America and Bolivia

7. A History of Polyvalent Structural Parameters: the Case of Instrument Variable Estimato

Author:
Duo Qin and Yanqun Zhang
Publication Date:
09-2013
Content Type:
Working Paper
Institution:
School of Oriental and African Studies - University of London
Abstract:
This paper investigates the rise and fall of the IV method in macro-econometric models and its subsequent revival in micro-econometric models. The key findings are: (i) the IV method implicitly breaks the contemporaneously circular causality postulated in a simultaneous- equation model (SEM) by redefining the conditional variable concerned as a suboptimal conditional expectation of it; (ii) the IV method falls out of favour in macro-econometrics mainly because of lack of empirical validations for such redefinitions; (iii) the IV method wins its popularity in micro-econometrics by its capacity to produce multiple suboptimal conditional expectations of the latent conditional variables of interest under the disguise of an SEM consistent estimator; nevertheless, (iv) such suboptimal conditional expectations give rise to the insurmountable difficulty of credibly interpreting the IV-based parameter estimates, especially in the case of prognosticated omitted variable bias. The findings highlight the methodological drawback of the estimator-centric strategy of textbook econometrics.
Topic:
Economic Theory, Macroeconomics, and Microeconomics
Political Geography:
Global Focus