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Abstract:
Without broad-based public pension schemes, the majority of the elderly in developing countries are left to rely on their own current and accumulated earnings and support from children as means of old-age support. We develop a cooperative bargaining model that allows us to jointly estimate the determinants of coresidency, financial transfers from non-coresiding children, and the labor-supply of elderly Indonesians. We find that many Indonesians, especially men, continue to work well into old age even if they are living with their adult children. There is little evidence that transfers are a substitute for the income support provided by the elderly parent's own labor supply. Transfers are associated with a decline in hours of work only for non-coresiding mothers. Furthermore, transfers are not strongly related to parental need or the ability of the child to give.

Aging, Intergenerational Transfers, Labor Supply, Coresidency, Development, Indonesia

Abstract:
This paper examines cultural differences in attitudes towards corruption by analysing individual-decision making in a corrupt experimental environment. Attitudes towards corruption play a critical role in the persistence of corruption. Our experiments differentiate between the incentives to engage in corrupt behaviour and the incentives to punish corrupt behaviour and allow us to explore whether, in environments characterized by lower levels of corruption, there is both a lower propensity to engage in corrupt behaviour and a higher propensity to punish corrupt behaviour. Based on experiments run in Australia Melbourne), India (Delhi), Indonesia (Jakarta) and Singapore, we find that there is more variation in the propensities to punish corrupt behaviour than in the propensities to engage in corrupt behaviour across cultures. The results reveal that the subjects in India exhibit a higher tolerance towards corruption than the subjects in Australia while the subjects in Indonesia behave similarly to those in Australia. The subjects in Singapore have a higher propensity to engage in corruption than the subjects in Australia. We also vary our experimental design to examine the impact of a more effective punishment system and the effect of the perceived cost of bribery.

Corruption, experiments, punishment, cultural analysis

Abstract:
The low level of minimum wages in developing countries has been the source of much international controversy. Raising these wages will only benefit the workers in these countries if there are not large subsequent job losses. Unlike the well-developed literature on the employment impact of the minimum wage in industrial nations, very little is known about minimum wage effects in low-income countries. Minimum wages increased sharply in Indonesia between 1990 and 1996 and by more in some provinces than in others. We exploit the large difference in the rate of increase on either side of the Jakarta-West Java border. Household level labor market data are used to establish compliance with the legislation. Matched difference-in-difference estimates of the employment impact in the clothing, textiles, footwear and leather industries are then calculated from a census of all large and medium-sized firms. We find no evidence of a negative employment impact for large firms, both foreign and domestic, but some evidence that workers in small, domestic firms may lose their jobs.

minimum wages, natural experiment, developing country, Indonesia

Abstract:
Unlike the well-developed literature on the employment impact of the minimum wage in industrial nations, very little is known about minimum wage effects in low income countries. Minimum wages increased sharply in Indonesia between 1990 and 1996 and by more in some provinces than in others. Following Card and Krueger (1994) the authors exploit the large geographic variation in the rate of increase and compare changes in employment in the clothing, textile, footwear, and leather industries on either side of the Jakarta-West Java border. They use household level labor market data to establish compliance with the legislation. They obtain matched difference-in-difference estimates of the employment impact using a census of all large and medium-size firms in the clothing, textile, leather, and footwear industries. Alatas and Cameron find some evidence of a negative employment impact for small, domestic firms but no employment impact for large firms, foreign or domestic.

This paper - a product of the Environment and Social Development Sector Unit, East Asia and the Pacific Region - is part of a larger effort in the region to assess the poverty situation and related issues.

Abstract:
This Paper estimates the agglomeration benefits that arise from vertical linkages between firms. The analysis is based on international trade and economic geography theory developed by Krugman and Venables (1995). We identify the agglomeration benefits of the spatial variation in firm level nominal wages. Unusually detailed intermediate input data allow us to capture more accurately spatial input/output linkages than in previous studies. We take account of the location of input suppliers to estimate cost linkages; and the location of demand from final consumers and other firms to estimate demand linkages. The results show that the externalities that arise from demand and cost linkages are quantitatively important and highly localized. An understanding of the extent and strength of spatial linkages is crucial in shaping policies that seek to influence regional development.

Agglomeration, vertical linkages, economic geography

Abstract:
This paper estimates the agglomeration benefits that arise from vertical linkages between firms. The analysis is based on international trade and economic geography theory developed by Krugman and Venables (1995). We identify the agglomeration benefits off the spatial variation in firm level nominal wages. Unusually detailed intermediate input data allow us to more accurately capture spatial input/output linkages than in previous studies. We take account of the location of input suppliers to estimate cost linkages; and the location of demand from final consumers and other firms to estimate demand linkages. The results show that the externalities that arise from demand and cost linkages are quantitatively important and highly localized. An understanding of the extent and strength of spatial linkages is crucial in shaping policies that seek to influence regional development.

agglomeration, economic geography, vertical linkages

Abstract:
This paper uses regression and matching techniques to evaluate Indonesia's Social Safety Net Scholarships Program. The scholarships program was developed to try and prevent large numbers of children from dropping out of school as a result of the Asian crisis. The expectation was that many families would find it difficult to keep their children in school and drop out rates would be high like they were during the 1980's recession. Drop-outs however have not increased markedly and enrollment rates have remained relatively steady. This paper examines the role played by the scholarship program in producing this result. The scholarships were found to have been effective in reducing dropouts at the lower secondary school level by about 2.4 percentage points but had no discernible impact at the primary and upper secondary school levels. We also examine how well the program adhered to its documented targeting design and how effective this design was in reaching the poor. The targeting criteria appear to have been followed quite closely but this did not prevent some households with high reported per capita expenditures receiving the scholarship.

program evaluation, matching, development, Indonesia, education, human capital

Abstract:
In recent years, a substantial body of work has explored the differences in the behavior of men and women in a variety of economic transactions. We contribute to this literature by investigating gender differences in behavior when confronted with a common bribery problem. Our study departs from the previous literature on gender and corruption by using economic experiments. Based on data collected in Australia (Melbourne), India (Delhi), Indonesia (Jakarta) and Singapore, we show that while women in Australia are less tolerant of corruption than men in Australia, there are no significant gender differences in the propensities to engage in and punish corrupt behavior in India, Indonesia and Singapore. Hence, our findings suggest that the gender differences reported in the previous studies may not be nearly as universal as stated and may be more culture-specific. We also explore behavioral differences by gender across countries and find that there are larger variations in women's behavior towards corruption than in men's across the countries in our sample.

Gender, Corruption, Experiments, Punishment, Multicultural Analysis

Abstract:
School attendance in Indonesia dropped slightly after the onset of the Asian crisis but then rebounded to higher-than-pre-crisis levels. Fewer children are now working, although the older children who are working and are not attending school seem to be working longer hours. Children's health status appears to be relatively stable.

Cameron examines the Asian crisis's impact on children in 100 Indonesian villages, based on data from four rounds of the 100 Villages survey that was used to examine changes in health status, school attendance rates, and children's participation in the labor force.

She finds little evidence that the crisis had a dramatically negative impact on children. School attendance dropped slightly after the onset of the crisis but then rebounded to higher-than-pre-crisis levels. Fewer children are now working, although the older children who are working and are not attending school seem to be working longer hours.

Children's health status appears to be relatively stable, although comparisons of indicators of children's health status over time are complicated by changes in the questionnaire used.

Cameron also examines ways households reported they were coping with the crisis.

This paper - a product of the Poverty Team, Development Research Group - is part of a larger effort in the group to study the welfare impact of the East Asian crisis. The author may be contacted at lcameron@unimelb.edu.au.

Abstract:
This paper estimates the agglomeration benefits that arise from vertical linkages between firms. The analysis is based on international trade and economic geography theory developed by Krugman and Venables (1995). We identify the agglomeration benefits off the spatial variation in firm-level nominal wages. Unusually detailed intermediate input data allow us to capture spatial input/output linkages more accurately than in previous studies. We take account of the location of input suppliers to estimate cost linkages, and the location of demand from final consumers and other firms to estimate demand linkages. The results show that the externalities that arise from demand and cost linkages are quantitatively important and highly localized. An understanding of the extent and strength of spatial linkages is crucial in shaping policies that seek to influence regional development.

Agglomeration, vertical linkages, economic geography, cost linkages, demand linkages

Abstract:
Preliminary evidence favors focusing safety net scholarships - designed to reduce dropout rates during an economic crisis - on lower secondary schools, continuing to target children (especially older students) from large families, scaling back scholarships to private schools at the lower secondary level, or targeting the households hurt most by the crisis. Cameron uses regression and matching techniques to evaluate Indonesia's Social Safety Net Scholarships Program, which was developed to keep large numbers of children from dropping out of school as a result of the Asian crisis. It was expected that many families would find it difficult to keep their children in school and that dropout rates would be high, as they were during a recession in the 1980s. But dropouts did not increase markedly and enrollment rates remained relatively steady. Cameron examines the role the scholarship program played in producing this result. She found the scholarships to have been effective in reducing dropouts in the lower secondary school (where students are more susceptible to dropping out) by about 3 percentage points. They had no discernible impact in primary and upper secondary schools.

Cameron also examines how well the program adhered to its documented targeting design and how effective that design was in reaching the poor. Committees that allocated the scholarships followed the criteria diligently, but a significant percentage of scholarships did go to students from households with high reported per capita expenditures, if household expenditure data are reliable.

It is unclear how targeting can be improved, giving the scarcity of accurate local household data in most countries. Using local monitoring could help but then monitoring for accountability would be more difficult. Preliminary evidence favors focusing safety net scholarships - designed to reduce dropout rates during an economic crisis - on lower secondary schools, continuing to target children (especially older students) from large families, scaling back scholarships to private schools at the lower secondary level, or targeting the households hurt most by the crisis.

This paper - a product of the Poverty Team, Development Research Group - is part of a larger effort in the group to study the welfare impact of the East Asian crisis.

Abstract:
The paper studies the way in which labor supply responses enable households to smooth consumption in the face of crop loss. The 1993 Indonesian Family Life Survey is unusual because it contains self-reported information on crop loss and on household responses to crop loss. Of those households that report a crop loss, 41.6% also report that they responded by taking an extra job. Using these self-reported measures, the authors find evidence which suggests that the income associated with this shock-induced labor supply is important in allowing the household to avoid reducing consumption expenditure. Household members, however, do not seem to increase their total hours of work. They appear to just reallocate their time from household farming to other labor market activities.

Abstract:
This paper draws on the work of DiNardo, Fortin and Lemieux (1996) and presents a new method for examining the distribution of the benefits of growth in developing countries. The method allows one to present decompositions in the form of cumulative distribution functions, Lorenz curves and generalised Lorenz curves. The presentation of changes in the entire distribution is an advantage over the traditional methods of decomposing opaque summary statistics.