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Tools of the Trade: Beyond mean decompositions (with an application to the gender wage gap in China)

Submitted by Jed Friedman on Wed, 2012-02-22 09:17

Suppose you were investigating the observed wage gap in urban China, where men are paid approximately 30% more than women. The first thing you would like to know is whether the higher wages paid to men are a result of the greater average years of schooling and years in the labor force that men have or whether, instead, men are paid more even after accounting for education and experience. If the latter situation is the case then the difference in wages may at least in part be due to labor market discrimination. One of the principle tools used in economics to decompose the wage gap into the portion of the gap explained by factors such as education and experience, and the portion explained by differences in returns to those factors, is the familiar Oaxaca-Blinder (OB) decomposition.

Borrowing with blinders on?

Submitted by Markus Goldstein on Tue, 2012-02-21 08:54

This week I would like to explore more something I saw during my recent visit to Ghana.   As I explained in a previous post, a conversation with a rural bank manager made me realize that in Ghana, just like in the United States, people take payday loans.  

What are we learning from better measurement?

Submitted by David McKenzie on Mon, 2012-02-20 12:04

Mark Rosenzweig and I have just written the preface for a special issue of the Journal of Development Economics focused on measurement and survey design. Rather than just summarize the papers, we tried to draw some lessons/themes of what the 13 papers in the special issue suggest. You can find the preface here.

Here are a couple of the points – read the preface for the full list of lessons:

Friday links: More cash less STIs, more advice on grants, the difficulties of microenterprise growth and more...

Submitted by David McKenzie, co-authors: Berk Ozler on Thu, 2012-02-16 21:30

·         People behave more generously in dictator games when there is a white foreigner observing – evidence from Sierra Leone.

·         Part II of David’s interview with Tim Ogden at Philanthropy Action discusses the difficulties of trying to measure microenterprise growth.

When it comes to female education, have we gotten it all backwards?

Submitted by Berk Ozler on Thu, 2012-02-16 06:40

To get children to attend school in developing countries, our approach has been primarily to assume that the schooling that is available is worth pursuing, meaning that the problem must be with some barrier to go to school despite a great desire to do so: perhaps the family cannot afford the costs of schooling; perhaps the schools are not good or too far; perhaps the children want to be in school but the parents prefer food today to educated daughter tomorrow; maybe people don’t know the value of schooling, etc. These ideas have been behind many popular development programs to improve education, such as building and improving schools, conditional cash transfers, information campaigns, etc. But, have we gotten this whole thing all backwards?

Are the Danes the happiest people in the world? Using vignettes to anchor subjective responses

Submitted by Jed Friedman on Wed, 2012-02-15 08:57

Quite often the popular press carries stories that compare happiness or life satisfaction across nations (for example see last October’s story: Denmark is Happiest Country). Regular readers of this blog will recognize these reports as summaries of research on subjective well-being (SWB) and would be somewhat skeptical of SWB comparisons across populations with very different characteristics and cultures. Why? Because these characteristics and cultures affect both how we interpret constructs like happiness or satisfaction, and how we report them.

When women are in charge

Submitted by Markus Goldstein on Tue, 2012-02-14 05:16

In 1993 India adopted gender quotas for local councils. In particular, the position of chief councilor (or Pradhan) was reserved for women in 1/3 of the village councils in any given election – and this 1/3 was selected at random.   As one might expect, this has led to a surge in the number of women holding this post. It also provides a ripe environment for impact evaluation work.  

Tips for writing Impact Evaluation Grant Proposals

Submitted by David McKenzie on Mon, 2012-02-13 10:13

Recently I’ve done more than my usual amount of reviewing of grant proposals for impact evaluation work – both for World Bank research funds and for several outside funders. Many of these have been very good, but I’ve noticed a number of common issues which have cropped up in reviewing a number of them – so thought I’d share some pet peeves/tips/suggestions for people preparing these types of proposals.

First, let me note that writing these types of proposals is a skill that takes work and practice. One thing I lacked as an assistant professor at Stanford was experienced senior colleagues to encourage and give advice on grant proposals- and it took a few attempts before I was successful in getting funding. Here are some things I find a lot of proposals lack:

Friday Links: tweets predict google citation, randomize regulations, fair trade coffee, and more

Submitted by David McKenzie on Fri, 2012-02-10 10:26


  • A new paper finds tweets about newly published articles in the Journal of Medical Internet Research can predict Google Scholar citations to these articles 17-29 months later.

  • A proposal for legislators to randomize regulations on the RegBlog.

  • Tim Ogden has the first part of an interview with me about microenterprise growth dynamics at Philanthropy Action.

  • The impact of fair trade coffee on James Choi’s blog (via @rovingbandit).

The stressful condition

Submitted by Berk Ozler on Thu, 2012-02-09 11:53

I came across this piece by Mullainathan and Datta in the Annual Report of the William Kellogg Foundation (HT Marginal Revolution), which is a behavioral economist’s take on the reasons why some parents are less likely than others to undertake actions beneficial to their children. The whole piece is worth your read, but here are some excerpts to set things up: