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Deon Filmer

Bio: Deon Filmer is an academic researcher from World Bank. The author has contributed to research in topics: Poverty & Population. The author has an hindex of 43, co-authored 148 publications receiving 18682 citations. Previous affiliations of Deon Filmer include World Bank Group & International Monetary Fund.


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Journal Article
TL;DR: For example, this paper found that fertility response to the absence of sons is larger for women with more education and has been increasing over time in South Asia and Central Asia, and that a latent demand for sons is more likely to manifest itself when fertility levels are low.
Abstract: Does the sex composition of existing children in a family affect fertility behavior? An unusually large data set, covering 64 countries and some 5 million births, is used to show that fertility behavior responds to the presence—or absence—of sons in many regions of the developing world. The response to the absence of sons is particularly large in Central Asia and South Asia. Modernization does not appear to reduce this differential response. For example, in South Asia the fertility response to the absence of sons is larger for women with more education and has been increasing over time. The explanation appears to be that a latent demand for sons is more likely to manifest itself when fertility levels are low. As a result of this differential fertility behavior, girls tend to grow up with significantly more siblings than do boys, with potential implications for their well-being when quantity–quality tradeoffs result in fewer material and emotional resources allocated to children in larger families.

2 citations

Posted Content
TL;DR: Learning-Adjusted Years of Schooling (LAYS) as mentioned in this paper is a summary measure that combines quantity and quality of schooling into a single easy-to-understand metric of progress.
Abstract: The standard summary metric of education-based human capital used in macro analyses?the average number of years of schooling in a population?is based only on quantity. But ignoring schooling quality turns out to be a major omission. As recent research shows, students in different countries who have completed the same number of years of school often have vastly different learning outcomes. This paper therefore proposes a new summary measure, Learning-Adjusted Years of Schooling (LAYS), that combines quantity and quality of schooling into a single easy-to-understand metric of progress. The cross-country comparisons produced by this measure are robust to different ways of adjusting for learning (for example, by using different international assessments or different summary learning indicators), and the assumptions and implications of LAYS are consistent with other evidence, including other approaches to quality adjustment. The paper argues that (1) LAYS improves on the standard metric, because it is a better predictor of important outcomes, and it improves incentives for policymakers; and (2) its virtues of simplicity and transparency make it a good candidate summary measure of education.

2 citations

Book ChapterDOI
17 May 2017
TL;DR: In this paper, the authors present an economic rationale for investing in human capital in resource-rich countries, where the need for human capital and infrastructure investments is large and the indirect effects of enhancing human capital on reducing the incidence and cost of conflict are also a large part of the story.
Abstract: There are compelling economic arguments for governments to invest in the human capital of their people—limited access to credit narrows household choices, information failures distort investments, and spillover effects lead to suboptimal family investments. Lack of access to capital is one reason for governments to invest little in human capital—a problem that natural resource revenues can help to overcome. Investing in human capital should be an important part of the portfolio of investments using resource revenues—along with investing in infrastructure and saving through mechanisms, such as sovereign wealth funds, that allow countries to earn international rates of return on investments. A balanced portfolio is desirable, and investing in human capital has a special role to play in resource-rich settings— especially in poor countries—where the need for human capital and infrastructure investments is large. The indirect effects of enhancing human capital on reducing the incidence and cost of conflict are also a large part of the story. Why Governments Should Invest in Human Capital “Perfect Markets” as a Reference Point When markets are functioning perfectly, households have a full range of choices about how to invest their disposable income. They can use their cash for consumption, savings, investing in education and training, and various other types of spending or investing. Since each type of spending has diminishing benefits, at least eventually, people would adjust their spending so that, as economists put it, the marginal returns are equalized across different types of spending. If markets were “perfect,” an additional dollar spent on building human capital would yield the same return as the interest rate obtained through savings. If it were higher, households would increase their spending on skills acquisition (perhaps financed 60 An Economic Rationale for Investing in Human Capital From Mines and Wells to Well-Built Minds • http://dx.doi.org/10.1596/978-1-4648-1005-3 by borrowing) until the marginal return were equalized—and the ultimate household level of investment in human capital would be optimal. In such perfect and complete markets, there would typically be no scope for the government to invest in building human capital, since households would behave optimally. However, markets are rarely perfect or complete. Indeed, the economic literature has identified several market “failures” that motivate public investments in human capital. This chapter reviews capital market failures, incomplete information, behavioral biases, and externalities. Credit Constraints Since private returns to human capital are high (box 2.1), it would seem inconceivable that households might choose not to send children to school. Even for very poor households, borrowing to invest in at least some years of education would be optimal. But financial markets are obviously not perfect, and studies Box 2.1 Private Returns to Human Capital While human capital is a broad concept that encompasses not only formal education but also skills, capabilities, and even health, estimating the effects of formal schooling has received the lion’s share of scholarly attention. The literature on returns to education gives solid support to the notion that private returns are meaningful. A long economic tradition estimates private returns to education following a human capital approach and estimating so-called “Mincer regressions” that relate earnings to schooling and experience while controlling for a battery of factors (Becker 1975; Mincer 1958, 1974; Schultz 1960, 1961). Mincer regressions typically show large returns from education. For example, Psacharopoulos and Patrinos (2004) found that the average rate of return on an additional year of schooling is 10 percent and that the returns are especially high for primary education in lowand middle-income countries. Schultz (2004) and Filmer and Fox (2014), focusing specifically on Africa, found that returns increase at higher levels of education. It is difficult to separate the effects of schooling on productivity from its signaling value. It could be that graduates of higher education do not earn more because of the productivityenhancing skills they have learned but because their admission to prestigious schools acts as a signaling device for classifying whether individuals have high or low innate ability (Brown and Sessions 2004; Spence 1973). The use of “natural experiments” allows analysts to distinguish the two effects. Card (2001) surveyed the growing literature that draws on natural experiments for estimating the return to schooling and found that, in many cases, the returns are similar to those of traditional Mincer regressions. For example, the estimate of Leigh and Ryan (2008) for Australia is about 10 percent, in line with Mincer regression estimates for comparable countries. Ozier (2015) found that attaining secondary school in Kenya causally leads to a decrease in the probability of low-skill (and low-earning) self-employment and an increase in the probability of (higher-earning) formal employment. Formal schooling is, of course, not the only way to raise human capital and earnings. A substantial literature shows that better nutrition for pregnant women and infants raises schooling box continues next page An Economic Rationale for Investing in Human Capital 61 From Mines and Wells to Well-Built Minds • http://dx.doi.org/10.1596/978-1-4648-1005-3 show that households underinvest in education when capital markets are imperfect (Becker 1967; Cordoba and Ripoll 2013; Fiszbein and others 2009; Lochner and Monge-Naranjo 2012). Because poverty and inequality today can breed poverty and inequality tomorrow, state intervention may be desirable (Banerjee and Newman 1993; Galor and Zeira 1993). The evidence is not only theoretical. Empirically, capital market frictions have been found to drive underinvestment in education (Lochner and Monge-Naranjo 2011). This has been shown for the United States (Carneiro and Heckman 2002) and for Mexico (Attanasio and Kaufmann 2009; Kaufmann 2014), as well as in an analysis of cross-country data (Flug, Spilimbergo, and Wachtenheim 1998). Borrowing constraints are a significant factor contributing to the large schoolingwealth gap in developing countries, with children from rich families much more likely to be enrolled at all levels of education (Filmer and Prichett 1999). Incomplete Information Though important, capital constraints are not likely to be the whole story. Even when returns on human capital are high, people may be reluctant to invest in it levels and economic productivity (Victora and others 2008). Strauss (1986), for example, found a very substantial positive impact of caloric intake on labor productivity in Sierra Leone. Further, comparing twins, Behrman and Rosenzweig (2004) and Black, Devereux, and Salvanes (2007) found that lower birthweight has a serious impact on future educational attainment and earnings. These findings suggest that government programs to promote sufficient and balanced nutrition during pregnancy can help to boost human capital and economic output. Weil (2007) used such microeconomic estimates from various sources to estimate aggregate returns to health. He found that eliminating health differences between countries would reduce the variance of gross domestic product (GDP) per worker by nearly a tenth. Substantial scholarly attention has also been devoted to early childhood development. It has been found that both cognitive and noncognitive skills acquired in preschool significantly shape later education and labor market outcomes (Almond and Currie 2011). Several preschool intervention programs have had very high returns (Heckman 2006). For example, the Perry Preschool Program in the United States, which enrolled disadvantaged children starting at ages 3–4 and included both school programs and home visits, resulted in laterlife higher scores on achievement tests, high school graduation, and homeownership and lower rates of receipt of welfare assistance, out-of-wedlock births, and arrests for crime. The economic return rates for the program were 15–17 percent. The Abecedarian Program, also in the United States, enrolled participants at only 4 months of age and provided intensive day-long child care. It was found to permanently raise intelligence quotient (IQ) scores and noncognitive skills. A long-run study in Jamaica showed that cognitive stimulation in early childhood resulted in substantial increases in earnings in adulthood (Gertler and others 2014), as did a nutritional intervention among severely stunted children in Guatemala (Hoddinott and others 2008). Box 2.1 Private Returns to Human Capital (continued) 62 An Economic Rationale for Investing in Human Capital From Mines and Wells to Well-Built Minds • http://dx.doi.org/10.1596/978-1-4648-1005-3 if they are poorly informed about its benefits. Indeed, inaccurate beliefs about the average returns to education seem to play a major role. For example, studies in Madagascar (Nguyen 2008) and the Dominican Republic (Jensen 2010) found that many young people drastically underestimate the returns to schooling, and this reduces school attendance. Disseminating information to correct this underestimate was effective at boosting enrollment rates in both countries. Behavioral Biases Even with appropriate information, people have behavioral biases that help account for underinvestment in human capital (see Fiszbein and others 2009 for a comprehensive discussion). An extreme case, “hyperbolic discounting,” gives rise to a wide range of time-inconsistent behavior and self-control problems, such as procrastination. More concretely, when individuals put a much higher value on the present and a much lower value on the future, they tend to defer all actions that have high short-run costs and long-run gains, such as saving or investing in education. When tomorrow comes, the same distinctio

2 citations

Posted Content
TL;DR: In this paper, the authors present an approach to public policy in health that comes directly from the literature on public economics, and identify two characteristic market failures in health: the existence of large externalities in the control of many infectious diseases that are mostly addressed by standard public health interventions and the widespread breakdown of insurance markets that leave people exposed to catastrophic financial losses.
Abstract: In an earlier article, the authors outline some reasons for the disappointingly small effects of primary health care programs and identified two weak links standing between spending and increased health care. The first was the inability to translate public expenditure on health care into real services due to inherent difficulties of monitoring and controlling the behavior of public employees. The second was the crowding out of private markets for health care, markets that exist predominantly at the primary health care level. This article presents an approach to public policy in health that comes directly from the literature on public economics. It identifies two characteristic market failures in health. The first is the existence of large externalities in the control of many infectious diseases that are mostly addressed by standard public health interventions. The second is the widespread breakdown of insurance markets that leave people exposed to catastrophic financial losses. Other essential considerations in setting priorities in health are the degree to which policies address poverty and inequality and the practicality of implementing policies given limited administrative capacities. Priorities based on these criteria tend to differ substantially from those commonly prescribed by the international community.

2 citations


Cited by
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TL;DR: This work estimates the relationship between household wealth and children’s school enrollment in India by constructing a linear index from asset ownership indicators, using principal-components analysis to derive weights, and shows that this index is robust to the assets included, and produces internally coherent results.
Abstract: The relationship between household wealth and educational enrollment of children can be estimated without expenditure data. A method for doing so - which uses an index based on household asset ownership indicators - is proposed and defended in this paper. In India, children from the wealthiest households are over 30 percentage points more likely to be in school than those from the poorest households, although this gap varies considerably across states. To estimate the relationship between household wealth and the probability that a child (aged 6 to 14) is enrolled in school, Filmer and Pritchett use National Family Health Survey (NFHS) data collected in Indian states in 1992 and 1993. In developing their estimate Filmer and Pritchett had to overcome a methodological difficulty: The NFHS, modeled closely on the Demographic and Health Surveys, measures neither household income nor consumption expenditures. As a proxy for long-run household wealth, they constructed a linear asset index from a set of asset indicators, using principal components analysis to derive the weights. This asset index is robust, produces internally coherent results, and provides a close correspondence with data on state domestic product and on state level poverty rates. They validate the asset index using data on consumption spending and asset ownership from Indonesia, Nepal, and Pakistan. The asset index has reasonable coherence with current consumption expenditures and, more importantly, works as well as - or better than - traditional expenditure-based measures in predicting enrollment status. The authors find that on average a child from a wealthy household (in the top 20 percent on the asset index developed for this analysis) is 31 percent more likely to be enrolled in school than a child from a poor household (in the bottom 40 percent). This paper - a product of Poverty and Human Resources, Development Research Group - is part of a larger effort in the group to inform educational policy. The study was funded by the Bank`s Research Support Budget under the research project Educational Enrollment and Dropout (RPO 682-11).

4,966 citations

Journal Article
TL;DR: A Treatise on the Family by G. S. Becker as discussed by the authors is one of the most famous and influential economists of the second half of the 20th century, a fervent contributor to and expounder of the University of Chicago free-market philosophy, and winner of the 1992 Nobel Prize in economics.
Abstract: A Treatise on the Family. G. S. Becker. Cambridge, MA: Harvard University Press. 1981. Gary Becker is one of the most famous and influential economists of the second half of the 20th century, a fervent contributor to and expounder of the University of Chicago free-market philosophy, and winner of the 1992 Nobel Prize in economics. Although any book with the word "treatise" in its title is clearly intended to have an impact, one coming from someone as brilliant and controversial as Becker certainly had such a lofty goal. It has received many article-length reviews in several disciplines (Ben-Porath, 1982; Bergmann, 1995; Foster, 1993; Hannan, 1982), which is one measure of its scholarly importance, and yet its impact is, I think, less than it may have initially appeared, especially for scholars with substantive interests in the family. This book is, its title notwithstanding, more about economics and the economic approach to behavior than about the family. In the first sentence of the preface, Becker writes "In this book, I develop an economic or rational choice approach to the family." Lest anyone accuse him of focusing on traditional (i.e., material) economics topics, such as family income, poverty, and labor supply, he immediately emphasizes that those topics are not his focus. "My intent is more ambitious: to analyze marriage, births, divorce, division of labor in households, prestige, and other non-material behavior with the tools and framework developed for material behavior." Indeed, the book includes chapters on many of these issues. One chapter examines the principles of the efficient division of labor in households, three analyze marriage and divorce, three analyze various child-related issues (fertility and intergenerational mobility), and others focus on broader family issues, such as intrafamily resource allocation. His analysis is not, he believes, constrained by time or place. His intention is "to present a comprehensive analysis that is applicable, at least in part, to families in the past as well as the present, in primitive as well as modern societies, and in Eastern as well as Western cultures." His tone is profoundly conservative and utterly skeptical of any constructive role for government programs. There is a clear sense of how much better things were in the old days of a genderbased division of labor and low market-work rates for married women. Indeed, Becker is ready and able to show in Chapter 2 that such a state of affairs was efficient and induced not by market or societal discrimination (although he allows that it might exist) but by small underlying household productivity differences that arise primarily from what he refers to as "complementarities" between caring for young children while carrying another to term. Most family scholars would probably find that an unconvincingly simple explanation for a profound and complex phenomenon. What, then, is the salient contribution of Treatise on the Family? It is not literally the idea that economics could be applied to the nonmarket sector and to family life because Becker had already established that with considerable success and influence. At its core, microeconomics is simple, characterized by a belief in the importance of prices and markets, the role of self-interested or rational behavior, and, somewhat less centrally, the stability of preferences. It was Becker's singular and invaluable contribution to appreciate that the behaviors potentially amenable to the economic approach were not limited to phenomenon with explicit monetary prices and formal markets. Indeed, during the late 1950s and throughout the 1960s, he did undeniably important and pioneering work extending the domain of economics to such topics as labor market discrimination, fertility, crime, human capital, household production, and the allocation of time. Nor is Becker's contribution the detailed analyses themselves. Many of them are, frankly, odd, idiosyncratic, and off-putting. …

4,817 citations

Journal ArticleDOI
TL;DR: In this paper, a method for estimating the effect of household economic status on educational outcomes without direct survey information on income or expenditures is proposed and defended, which uses an index based on household asset ownership indicators.
Abstract: This paper has an empirical and overtly methodological goal. The authors propose and defend a method for estimating the effect of household economic status on educational outcomes without direct survey information on income or expenditures. They construct an index based on indicators of household assets, solving the vexing problem of choosing the appropriate weights by allowing them to be determined by the statistical procedure of principal components. While the data for India cannot be used to compare alternative approaches they use data from Indonesia, Nepal, and Pakistan which have both expenditures and asset variables for the same households. With these data the authors show that not only is there a correspondence between a classification of households based on the asset index and consumption expenditures but also that the evidence is consistent with the asset index being a better proxy for predicting enrollments--apparently less subject to measurement error for this purpose--than consumption expenditures. The relationship between household wealth and educational enrollment of children can be estimated without expenditure data. A method for doing so - which uses an index based on household asset ownership indicators- is proposed and defended in this paper. In India, children from the wealthiest households are over 30 percentage points more likely to be in school than those from the poorest households.

4,661 citations

Posted Content
David Dollar1, Aart Kraay1
TL;DR: Dollar and Kraay as mentioned in this paper found that the share of income accruing to the bottom quintile does not vary systematically with the average income, and that when average incomes rise, the average incomes of the poorest fifth of society rise proportionately.
Abstract: When average incomes rise, the average incomes of the poorest fifth of society rise proportionately. This holds across regions, periods, income levels, and growth rates. But relatively little is known about the broad forces that account for the variations across countries and across time in the share of income accruing to the poorest fifth. When average incomes rise, the average incomes of the poorest fifth of society rise proportionately. This is a consequence of the strong empirical regularity that the share of income accruing to the bottom quintile does not vary systematically with average income. Dollar and Kraay document this empirical regularity in a sample of 92 countries spanning the past four decades and show that it holds across regions, periods, income levels, and growth rates. Dollar and Kraay next ask whether the factors that explain cross-country differences in the growth rates of average incomes have differential effects on the poorest fifth of society. They find that several determinants of growth - such as good rule of law, openness to international trade, and developed financial markets - have little systematic effect on the share of income that accrues to the bottom quintile. Consequently, these factors benefit the poorest fifth of society as much as everyone else. There is some weak evidence that stabilization from high inflation and reductions in the overall size of government not only increase growth but also increase the income share of the poorest fifth in society. Finally, Dollar and Kraay examine several factors commonly thought to disproportionately benefit the poorest in society, but find little evidence of their effects. The absence of robust findings emphasizes that relatively little is known about the broad forces that account for the cross-country and intertemporal variation in the share of income accruing to the poorest fifth of society. This paper - a product of Macroeconomics and Growth, Development Research Group - is part of a larger effort in the group to study growth and poverty reduction. The authors may be contacted at ddollar@worldbank.org or akraay@worldbank.org.

3,407 citations