My colleague and (I hope still) friend, Chico Ferreira recently took the trouble to write a comment on my earlier LTD post on measuring inequality of opportunity in the context of human development. Early on in his comment, Chico also paid me the compliment of a being a “clever guy”, which was nice until I read on and found that while he agreed with some of what I said there was a lot he didn’t like. Now Chico is a really clever guy, and this is an area he knows a lot about. So I realize I’m treading on thin ice when I say I’m not completely convinced about his ripostes. But let me take the risk. Chico’s not just super-clever – he’s also very nice. So if the ice cracks and I fall in, I think there’s a good chance he’ll pull me out.
I was asked recently to advise on some ongoing work on human development, equal opportunities, and universal coverage. The work was building on previous work undertaken by the World Bank in its Latin America and the Caribbean (LAC) region that had developed a new index known as the Human Opportunity Index (HOI).
The core idea underlying the HOI isn’t new. The argument is that inequalities are inequitable insofar as they’re the result of circumstances beyond the individual’s control (inequality in opportunity), but not if they reflect factors that are within the individual’s control. The object of the exercise is to separate empirically the two.
From the World Development Report 2012.
For poor women and for women in very poor places, sizable gender gaps remain. In education, where gaps have narrowed in most countries, girls’ enrollment in primary and secondary school has improved little in many Sub-Saharan countries and some parts of South Asia. School enrollments for girls in Mali are comparable to those in the United States in 1810, and the situation in Ethiopia and Pakistan is not much better.
While education is one of the cornerstones of development and is enshrined in the Millennium Development Goals, the pay-offs from a Bachelor’s degree or higher do not enjoy the same confidence. In the wake of the global financial crisis, for some, a college degree is a “lousy investment.” (Read the Daily Beast article to know why). But new data prove otherwise. Adam Looney and Michael Greenstone at the Hamilton Project, through chart illustration, show that “the more income you earn, the more likely you are to have gone to college.” To find out more, read the post “College, still worth it” on the Economix blog here. While we are still discussing education, here’s another interesting finding from the OECD “Education at a Glance 2012” report. According to the report, a college education not only makes you wise and wealthy, it also makes you healthy. Curious? Read this Economist article to know how.
How does Serbia fare on gender equality in the labor market? Did it manage to sustain some of the achievements of the former socialist regime, such as equal access to education opportunities, equal treatment of men and women in the labor law and high employment rates of men and women? The analysis of the recent labor force and enterprise surveys shows that although men and women have similar education levels and enjoy equal treatment in the labor legislation, there are major gender disparities in access to economic opportunities:
Does an increase in household wealth decrease child labor in poorer households? Available literature in economics suggests that when poorer households need to make their ends meet, they tend not to dispense on child labor. And as households’ income increases, child labor declines in favor of schooling. However, if schools are few and far, and their infrastructure and teachers’ performance are deficient, there is less incentives for parents to send their children to school. Child labor would then appear as a sensible option, not only for increasing family’s current income but also for training children in skilled work. Thus, an appropriate question is: To what extent and under what conditions an increase in household wealth can either decrease or increase child labor in poor households?
The youth bulge is a common phenomenon in many developing countries, and in particular, in the least developed countries. It is often due to a stage of development where a country achieves success in reducing infant mortality but mothers still have a high fertility rate. The result is that a large share of the population is comprised of children and young adults, and today’s children are tomorrow’s young adults.
Figures 1 (a)-(b) provide some illustrative examples. Dividing the world into more and less developed groupings (by UN definitions) reveals a large difference in the age distribution of the population. The share of the population in the 15 to 29 age bracket is about 7 percentage points higher for the less developed world than the more developed regions. In Africa (both Sub-Saharan and North Africa), we see that about 40 percent of the population is under 15, and nearly 70 percent is under 30 (Figure 1(a)). In a decade, Africa’s share of the population between 15 and 29 years of age may reach 28 percent of its population. In some countries in “fragile situations” (by World Bank definitions), almost three-quarters of the population is under 30 (examples in Figure 1(b)), and a large share of 15-29 year olds will persist for decades to come (Figures 1(c) and (d)).
In analyzing returns to schooling and in evaluating educational policies, ‘soft skills’ – personality traits like conscientiousness, openness and diligence -- often get under-valued or neglected. This is in part because so much value is placed on standardized test scores in education systems. It’s also because soft skills that are valued in the labor market, in school, and in many other domains are considered too hard to quantify.
According to Nobel-winning economist Joseph Stiglitz, creating jobs amidst today’s low-demand, high-debt environment is a tall order. It will require viable structural employment policies, unemployment insurance for laid off people, and -- in the case of the US – facing up to the inevitable shift out of the manufacturing sector into services. Stiglitz, who delivered a DEC Lecture at the World Bank on September 26 on ‘The State of the Global Economy: An Agenda for Job Creation’, warned that far more is broken than the banking and financial systems in high income countries. He argues that a lack of aggregate demand is a huge problem that can only be fixed through smart public as well as private investment in education, infrastructure, and innovative technologies to protect the environment. He also described the current phenomenon whereby productivity in manufacturing is exceeding the rate of growth in demand in the sector, which means jobs on factory floors are being shed. In other words, technical change can induce large distributive consequences and lead to long term unemployment. Listen to my interview with him about what can be done to cure our current ills.
Development is about big systemic changes, complex tradeoffs, political choices and how the fruits of growth are channeled for the greater good. It is also about broadening opportunities – a goal that if neglected can result in frustrated citizens and tumult as we have seen in the North Africa and Middle East.
These were some of the many messages I took away from the ABCDE conference just held in Paris.