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10/27/2014

Comments

Samantha Smith

Reading the first article on malaria and poverty from the perspective that malaria causes poverty was interesting and very relevant to me. I am currently looking at the Multidimensional Poverty Index’s indicators and their association to malaria incidence in children under age 5 in Ghana. While I focus on health, education, and living standard indicators of socioeconomic status as a potential “cause” of malaria, I found it interesting to see the other side, the “effects” of malaria in this piece. A hindrance to human capital, physical capital, and foreign direct investment, seem to be detrimental effects of the disease, thus proving that while it is valid that poorer socioeconomic status is associated with increased malaria incidence, there is dual causality and it does go the other way as well. The macroeconomic association between malaria and socioeconomic status exists both ways, so I look more specifically at the individual family level, but I think that the dual causality still holds.

I am not sure if it exists, but I wish there were a way to measure which way dual causality is stronger because obviously in this case and many other in development there exists cause on both sides of the equation. It would be beneficial to gain insight into which said had “greater” causality, thus helping us to understand which side to invest more time/effort/money in, as a start to attempting to solving the problem.

The beginning of the article states that malaria thrives where humans have not. This happens to be in tropical climates, which to me seems as though on whole haven’t had the opportunity to develop and obtain the income levels of HIC due to their climate and geographical conditions, so I think that this point would be important to include. Moving on to the end of the article, the author emphasizes the need for money for antimalarial programs. I agree with this, but I also think (largely in part to my research of the other side of the argument- and where I thought this paper was going) that we should address the micro socio-economic issues of each household in order to continue to eradicate this disease.

I think that while the paper on malaria is more specific to the one disease, the second paper on the economics of the poor ties in nicely as the author states that “While land per se is not a critical factor in being poor, the human agent is: investment in improving population quality can significantly enhance the economic prospects and the welfare of poor people” (Shultz & Lewis, 1979). This corresponds with my idea that in addition to funding malaria programs directly, the need to address the socio-economic issues of each household. I understand that this is much more difficult, but in a perfect world…

Callie Northrop

The affects of Malaria from just the private and non private medical costs , as well as the forgone wages are staggering. However, I am blown away by the many additional ways contributes to poverty, specifically fertility. As the likelihood that Malaria will kill a percentage of each family’s children increases, so does fertility. As we discussed in class today, the Solow Growth model helps to explain the effect of growing population rates. When populations rise, capital (and therefore output) decreases. However, I was interested to see another way in which rising fertility rates may slow down economic growth. Sachs explains, “When women have very high fertility rates, parents may choose to invest less in the education of their daughters, knowing that they are likely to spend a considerable portion of their working years involved in child-rearing activities rather than in the labour force where they would reap the economic returns to education”. This point to me highlighted that while the Solow model shows what will happen with either a rise or fall in population or savings rate, it might not show the reason behind that change. In this example, just one of the reasons is less investment in female human capital. Another reason reminds me of something Professor Casey also mentioned briefly at the end of the class: the idea that the Millenial generation is probably going to hurt the economy in the future, as the Millenials aren’t spending, which will slow down the economic cycle of expenditures and incomes. This article reminded me of that point when it discussed the dependency ratio--the larger number of dependents than providers due to the high fertility rates in hopes of the desired number of children surviving. The article mentions that this might change household saving behaviors, which, as we can see from Solow’s model, alters capital and output, too.

Jean Turlington

Like the Callie and Sam I was interested on the first articles perspective on Malaria. The article also reminded of a Ted Talk I saw last year, by Bill Gates about "Mosquitos, Malaria, and Education." In this Ted Talk, Gates talks about similar things to the article, as well as addresses some new ideas. One particular component that interested me was a series of maps that Gates showed where over time malaria was eradicated from the rich countries, but poor countries still have malaria. He argues that because rich countries are not pestered with malaria they are not concerned about it really anymore.

Jean Turlington

Like the Callie and Sam I was interested on the first articles perspective on Malaria. The article also reminded of a Ted Talk I saw last year, by Bill Gates about "Mosquitos, Malaria, and Education." In this Ted Talk, Gates talks about similar things to the article, as well as addresses some new ideas. One particular component that interested me was a series of maps that Gates showed where over time malaria was eradicated from the rich countries, but poor countries still have malaria. He argues that because rich countries are not pestered with malaria they are not concerned about it really anymore. This is discussed a little bit in the article too, which argues that more resources should be spent on ending malaria.

Right now bed nets are one of the most preventative measures of malaria, but Gates argues that more should be done. He argues that this disease will evolve, and malaria could increase in areas where it is prevalent. Instead of just preventing transmission of the disease, Gates argues the parasites that cause malaria in humans must be removed. Gates's perspective on malaria and its eradication are very interesting.

In the talk, he does not address some of the effects of malaria that the paper does. It would be hard to address the effects in a short talk, but they should be considered as significant consequences of malaria. Human and physical capital can be greatly decreased. I was surprised by the statistic that primary school students miss 11% of school days during the year because of malaria. That is a significant decrease in the amount of schooling and knowledge that students can receive. Not only are children affected in their health but they are affected in their education and these are longterm affects. I think Gates is right in working to eradicate malaria, but he has a significant uphill battle to achieve this.

Alexandra Butler

I found Shultz’s article interesting, as I was able to make many connections from his points to previous papers we have read. When he opened the paper discussing how it is often difficult for richer countries, and even economists, to understand how poor people behave, I was immediately reminded of Duflo’s paper The Economic Lives of the Poor. When I first read that article, I remember blogging about how surprised I was to find that poorer families purchased substantial amounts of tobacco and alcohol, and even spent money on leisure activities. However, after reading several more articles in this class and studying different models of rational decision-making, I feel as though I am able to approach these articles about low-income countries with a judgment-free attitude. Now when thinking about how poor households act and why they choose to have more children or not send children to school, I can see the rationale behind the decisions. This paper reminded me of how much I have learned since the beginning of this course. I also liked Shultz’s quote: “knowledge is the most powerful engine of production.” He reminds me of Romer, who emphasized the need for ideas to fuel long-term growth. I think Shultz provides a great example of how increased investment in research and development can increase a country’s production function (as modeled by the endogenous growth model). In India, investment in agricultural research produced a rate of return of 40%-a high return for the industry.

I’d also like to comment on Sachs and Malaney’s malaria paper. Like Callie, I was surprised to see how the disease can contribute to a cycle of poverty. Malaria has direct consequences on all the joint productivity variables we discussed in class (health, education, and nutrition) and on variables of human capital discussed in Shultz’s paper. What I found interesting, though, was malaria’s detrimental effects on women’s empowerment. We have discussed throughout this course how important it is to give women in developing countries equitable rights and opportunities. Malaria is a direct threat to female empowerment. The disease increases fertility rates in households, as families want to increase their chances of having a child survive to adulthood. Higher fertility rates mean women are less educated and will choose childcare over education. While previous papers we have read focus on improving women’s property rights or voting power, this article shows that disease can mitigate efforts to empower women. What is even more concerning is that containing the disease is infinitely harder than granting women access to property rights. The disease can reverse other attempts at empowering women, and no government policy can mitigate that. I think this article really digs deep into the issue of malaria and shows that it is much more than a disease that kills millions of people. It is also a disease that kills growth, women’s empowerment, and human capital.

Juan Cruz Mayol

Since everyone so far chose to talk about malaria, I am going to go ahead and write about the prize lecture for Schultz and Lewis (these guys might have done something cool if the won a Nobel prize for their work). So, while reading through their lecture, what they say seems to be obvious, especially after this morning's class where we talked about this, but it is important to highlight the historic moment in which they were saying this. Until then, and even in most of the models we use now, labor was/is considered to be a uniform unit; all the workers are the same no matter what, and they can be relocated from sector to sector, and their schooling or health or nutrition is not taken into account, especially in a world in which underdevelopment is majority. If these factors are added to the equation and improved, not only productivity and incentives would go up, but also they would be able to overcome adversity from other factors like land if it not fertile or if a natural disaster happens. That is why they say that land is overrated, providing the example of Europe, where knowledge and skills made the infertile soil extremely productive. In their lecture they also remark the active role of the government to promote research and development by working with firms to achieve the 'ideal level' and get the maximum social benefits (as we learnt in class, with the use of subsidies).

Daphine Mugayo

The readings we have been assigned most recently have really portrayed the difficulties of being a child in a poor family in a developing country. From child labor to high malaria rates, growing up in such environments emphasizes Nussbaum and Sen's ideas on capabilities, freedoms and choice.
Indeed malaria and poverty have a bidirectional causal relationship. Having grown up in a country with a high prevalence of malaria, I must say that deaths due to malaria have reduced but not been eliminated thanks to public sector efforts especially supplying of bed nets. A vast majority of the population has suffered from the disease atleast once but many, including myself, more than once.
I think its interesting high population growth rates evident in developing countries have affected malaria looking at the urban cities. With urban populations rapidly increasing, there has been increased crowding in housing facilities which has increased the spread of the disease. Additionally, with limited land for housing construction, settlements in swampy areas/wetlands has increased yet such areas are breeding grounds for the mosquito parasites. Third, high urban populations have resulted in the development of slums which due to poor sanitation have increased breeding grounds for these mosquitoes.
As tropical grounds breed these parasites, it seems a good intervention for this disease would be vaccination as its parasites cannot exactly just be rid of. In line with this is the flu, that is prevalent in temperate countries. With a flu shot, one is disease free and has an positive externality to the society. Malaria illness has a negative externality since once one's blood is infected, the parasite can transmit the disease to anyone in close proximity. But in the same context, investment in a vaccination would have a great positive externality creating a bigger marginal society benefit

Ferrell Carter

One of the main things that stood out to me in these papers is how both of them focused on the importance of human capital. In the paper by Sachs and Malaney, they stress that the effects of malaria greatly reduce the human capital in countries that have higher instances of the disease. This reduction in human capital undermines efforts for economic growth for a multitude of reasons, as those infected with malaria experience high costs associated with forgoing labor or even dying from the disease. I was startled by the numbers presented in the paper, like many of my classmates. Since malaria has been a persistent problem worldwide for so long, I can see where funding efforts have been abandoned, especially in tropic and sub-tropic regions were anti-malaria efforts rarely show success. Perhaps if developed countries understood the importance of malaria prevention as a means of sustaining economic growth for these countries, they would have more incentive to contribute.

Scultz and Lewis frame their entire paper around the importance of human capital. They argue that economists have misunderstood the fundamental problems in agricultural communities this whole time and that more incentives must be provided for farmers in low income countries to improve their quality. I thought it was interesting how they framed quality as a demanded good, and increasing the demand for quality will in turn lower the supply of children being born, decreasing fertility rates, which we have seen is positively associated with poverty reduction. This issue of higher fertility rates is also present in the Sachs and Malaney piece, as families bear more children when they expect the death rates to be higher. Just as we discussed in class yesterday, the push for quality over quantity will have positive effects on human capital, and thus economic growth.

I also thought it was interesting how Schultz and Lewis claimed that economists are taking the wrong approach to understanding the world’s poor. Duflo had a similar point in “The Economic Lives of the Poor.” I think it is important to understand that the poor make decisions just as any other rational agent would. Schultz and Lewis say that traditional economic models apply just as well to the poor- the fact that people respond to incentives and in order to improve quality in the agricultural sector, governments must get out of the way to provide the economic incentives to do so.

Bennett Henson

In their Nobel Prize speech, Schultz and Lewis state "People who are rich find it hard it understand the behavior of poor people." Normal people and economists from developed country don't understand the issues that someone in a poor country faces on a day to day basis. Schultz and Lewis believe that we have over estimated the differences between poor and rich countries. Traditional economic theory can, in fact, adequately explain low income countries' economies. Citizens in poor countries make rational decisions just like those in rich countries. Lower income farmers in LDCs maximize their land just like those in rich countries. In order to maximize their efficiency, though, we must eliminate the exogenous variables that they must deal with; namely Malaria. If developed countries helped poor countries get rid of these hindrances then those in poor countries would be able to develop just like current rich countries have developed in the past.

Raymond Monasterski

When I started reading the Sachs & Malaney article, it first reminded me of the article on child labor—both are “insidious evils.” But looking deeper than just the emotions attached to child labor and malaria, there are similar effects on education and health that then impact human capital. First, malaria affects mostly children, the group will benefit the mostfrom investment in human capital. But when these children can’t go to school because of the disease, they miss out on the opportunities of education and the development of human capital in the impoverished countries. Moreover, I found the affects on fertility rates because of malaria to be obvious, but astounding. Parents will have more children in hopes they make it to adulthood, yet with more children, they spend less per capita on investing in education. As a result of having more children, women also invest more time in child rearing and forgo possibilities of working on the market, thus affecting market productivity and consumption. This is magnified even more as more children survive past childhood and into adulthood. Clearly, the best solution is to eradicate the parasite that causes this disease. A vaccine would most likely be the solution to help prevent humans from acquiring the disease, while a cost-benefit analysis similar to the one we conducted in class on Tuesday would be able to help in analyzing the health outcomes of a vaccine. As previously mentioned, the vaccine would have positive externalities, as it would prevent not only the vaccinated individual, but also others from getting the disease.

In regards to the second article, I found what Schultz said about land to be particularly interesting. While much growth (and poverty) happens in the modern sector, the productivity of the traditional sector cannot just be forgotten, as there are very poor people in the traditional sector, too. It seems that from what Schultz is saying, there has been an economic decline in the importance of farmland as the importance of human capital has risen. In most high-income and some low-income countries, acreage of harvested land has decreased but productivity has increased over time. Yet, farmers are still poor. Maybe I’m misunderstanding this, but it seems like this article/speech is ironically critical, given the award’s co-recipient, of the Lewis two-sector model, which essentially reserves growth to the modern sector, when in fact productivity can increase in the traditional sector as a result of gains in human capital.

Andrew Riehl

The lecture by Schultz and Lewis talks about the importance of the quality of the population over that of the quantity. They emphasize investments in health and education over time in order to get to population quality, similar to what we talked about in class. This is important because it leads to economic growth in the long run. Malaria is significantly affecting sub-Saharan Africa’s ability to grow economically. Health and education, two of the most important aspects of human capital, are being hurt considerably. Huge numbers of children cannot go to school because of the virus. Studies also show that malaria can affect cognitive abilities of the brain. Malaria also keeps people from going to work because families have to stay home to take care of kids. These African families also have to spend a significant portion of their money on disease control and prevention. Being located in the tropics has significantly hurt Africa because the effecting mosquitos love this climate. Countries like the United States had to deal with malaria on a much smaller scale when trying to become more developed. It is unfair and I think safe to say that malaria has caused Africa’s poverty more than poverty has caused malaria.

Jacob Strauss

The introduction of the Nobel Prize lecture by Schultz and Lewis reminded me of a sentiment that I have heard many times in conversations with low-income high school classmates and students in China, which is that "it is expensive to be poor." The behavior of the poor can be difficult to understand for the rich, as the lecture points out, and it can be easy to see that saving money can be virtually impossible when you live month to month. The chapter on coordination behavior also rationalized their actions by making the point that their behavior isn't irrational because of the way everyone else acts, and it will continue to be rational as long as everyone acts the same way.

It seems that the points the lecture makes about the value of human capital are directly related to the consequences of malaria examined in the first article. As malaria continues to kill millions each year and weaken even more the overall human capital of these areas becomes worse, and the prospects for investment and improvement are low. It would be easy to see in a model that capital investments by the government will do little to improve the economy or ignite growth when human capital is low, and this is exactly what the article explains through examples like Mozambique.

Lucy Ortiz

After reading about Malaria and the importance of human capital in regards to poverty, it just made me think about other diseases and their overall effect on economic development. We discuss health as an input to human development on a broad level but it is also important to look at shocks to the health of countries and how these might effect economic development differently. On the surface one could think of the cost of Ebola as lives lost, resources spent on eradicating the disease, and the lost wages and output of those sick and quarantined. These articles bring to light a lot of other economic development costs as well though. Most may not be realized in the moment. First off, like malaria, the presence of Ebola will decrease foreign investment in the area as firms will be afraid of contracting the disease, as well as will shy away from the increased costs associated. Tourism in these areas will also decrease significantly, and also in the surrounding areas, which decreases all the jobs associated with the industry. I know my mother is not too happy about the Ghana spring term trip, even though there have been zero cases of Ebola in the country yet. Also, development projects lead by outside organizations and volunteer programs such as the Peace Corps have had to be stopped due to the outbreak. Restarting all of these programs will have significant costs involved starting with simply regaining interest. Ebola has put development on hold in affected countries as they focus simply on containing the disease. The issue is that there is not just a pause button that can be pushed again and development will continue as it had been before. Ebola and other outbreaks cause countries to have to restart many aspects of economic development and recover many of the steps that they had previously gained.

Juan Cruz Mayol

I don't know why the second half of my post is missing. But here it is:
I found really interesting the fact that developing nations are aware of the importance of human capital, as they mention the example of India. Going back to chapter 8 on the book, I want to point out one of the main difficulties that these countries experience when they invest in human capital, and this is brain drain. I don't remember exactly when, but the German government would go up to recent college graduates in Argentina and offer them to move to Germany doubling their paycheck and teaching them German. They justified this policy by explaining that the Argentine government had already invested about a million dollars in their education (public education is free), so it was cheaper for them to import engineers than having to train them. To counteract this measure, the government is trying to repatriate some of the scientists by offering them subsidies. Other policies include the scholarships to study abroad with the condition to go back and work in the country for a certain amount of years.

Bobby DeStefano

Prior to reading this article by Sachs and Malaney, I truly did not understand how horrible malaria is in tropical countries. Set aside the fact that “every 40 seconds a child dies of malaria, resulting in a daily loss of more than 2,000 young lives worldwide”, the negative impact that malaria has had on tropical countries’ economies is shocking; with GNP of malarious countries about half that of non-malarious countries. The effect on human capital, and the quality of human capital alone is eye opening. Schultz and Lewis stated in their Nobel Prize lecture, increasing population quality is one of the most important parts of developing the economies of poorer countries. Malaria effects human capital both directly and indirectly. Countries with high malaria rates also have high fertility rates. As stated in class and in this article, higher fertilely rates generally have negative impact on the quality of human capital. Also, studies have shown that children miss anywhere from 4.3-11% of school days a year due to malaria. This means that children’s education, a factor in human capital quality, is also being negatively effected be malaria. It has also been shown that malaria may possible effect cognitive abilities in those that have been infected. This article shows gives evidence to the belief that if malaria were to be eradicated, or even limited, in tropical countries, these countries would experience large economic growth.

Brett

Like Ferrell, I was also interested in the importance that both papers place on improvements in human capital. As Schulz and Lewis argue, "population quality and knowledge matter." The speech claims that in order to increase quality (human capital), there will be an economic cost. In other words, significant investment is necessary to increase the quality and baseline knowledge of each individual. However, as argued, investment in human capital will pay off in the end. Throughout this argument, I was reminded of Kremer's O-Ring theory and the "brain drain" that sometimes occurs. By increasing the overall quality of workers (and matching these workers with appropriate co-workers and firms) not only will production (and ultimately development) increase, but high-skilled workers might be less likely to move on to more developed nations.

While Schulz and Lewis illustrate the importance of building human capital, Sachs and Malaney express how devastating the loss of or stagnation in human capital can be. Whether through less investment in human capital (because of higher infant mortality rates and, thus, higher fertility rates, more children and less money to spend per child) or biological responses to malaria itself (impediment to cognitive ability and even fetal development), it is clear that the disease has a devastating and sometimes lasting impact on the accumulation of human capital.

Truly, while I was aware of the shocking infection and death rates of malaria, I was not aware of many indirect effects listed in the article. The data suggests that malaria negatively affects not only human capital, but leads to less acquisition of physical capital, less movement of people (e.g. individuals not moving to areas with higher demand for labor because of higher risk of infection), decreased trade and foreign investment, and even an increased possibility of attracting other diseases (e.g. anaemia and lymphoma). Besides the implications for human capital that I previously discussed, the most salient point that I took away from this article is that--despite all of these adverse effects of the disease and the relative success of anti-malaria programs--levels of international spending to combat malaria are "dismal." Perhaps increased spending to combat the disease is the key to development in regions strongly affected by it.

Wilson Hallett

The Nobel Prize Lecture by Shultz and Lewis is insightful even though most of what is articulated seems to be common sense once put on paper. That may be the hallmark of a good speech, research topic, paper, or Nobel Prize; insights that haven’t really been analyzed or identified but that make entirely too much sense once acknowledged. The crux of the paper suggests that poor people who work in agriculture are economic agents that do respond to stimulus and incentives and that poor people actually do want to improve their lives, their lot, and their children’s lives, hence why quality is more important than much of the previous developmental economic work that focused on quantity. If poor, agrarian workers are economic agents, which Shultz argues they are, then they respond positively to improved qualities of healthcare, education, etc. This is an idea that wasn’t widely believed for much of the poor.

Just like rational actors, poor farmers respond to incentives, Shultz argues. This, we may remember, is true in the case of Chinese farmers upon the slight liberalization of markets that gave the workers the ability to share whatever wasn’t destined for the quota. Productivity increased rapidly. Farmers saw an ability to improve their lives and reacted on incentives. This makes sense.

Urban bias also makes sense. Government favor the urban sector, which they believe is synonymous with development. Distortionary measures are placed on the food markets to keep product prices low, which hurts the farmers. This makes sense.

When people live longer, they will invest in more education because they will receive benefits over a longer time frame. This improves the lives of the poor. This makes sense.

There were a number of other points made in the article that just make sense when we read them. Shultz and Lewis appear to shake off preconceived norms of poor farmers and present a nuanced view that is brilliant in its simplicity and understandability.

HeeJu Jang

What particularly interested me in Shultz’s article was his criticism of political distortion which discriminates agriculture.

In his Nobel prize lecture, Shultz states that the potential productivity of agriculture has not been fully realized due to the price and cost distortion. He asserts that this mismatch is a deliberate political decision that favors urban population. They reason on the grounds that "agriculture is inherently backward and that its economic contribution is of little importance". As a result, price of agricultural products have been significantly reduced in order to feed the urban consumers whereas the price of manufactured goods remained relatively high.

I believe that such political action only exacerbates the poverty, especially in the developing countries. As Shultz says in the beginning of the lecture, majority of the world's poor reside in the rural countryside. Unless their situation is addressed, the country can never truly make progress in social welfare.

As demonstrated in the first article about malaria, one negative social impact can engender a broad social cost. Let's connect the idea of persisting rural poverty with what we talked about last week: migration. Because of the distortion, peasant farmers would be inclined to move to the cities in search of jobs. The mass migration to urban area can also bring about overpopulation, pollution, and other negative consequences in the city. In other words, such policy decision can induce a vicious cycle of migration.

Madison Smith

A side note to add to Jean’s description of the Gates Ted Talk and Lucy's post: I also think that the Gates talk could definitely be used to describe what is going on right now with the Ebola Crisis. As soon as Ebola hit America, it became breaking news. When we think that it is possible that someone we know could contract a disease (and then possibly we could as well) everyone freaks out, but when it is somewhere else, I think it is so easy to forget about it. The first time I had to put up a bed net, I realized two things. First, it is much harder than you would think to put that thing up. And second, there are individuals who sleep under a net every night in order to try to stay safe from such a terrible disease. There are also millions of people who should be sleeping under a net who can’t afford one.

I really enjoyed Schultz’ refreshing take on the importance of quality humans. I think that a lot of times, its easy to look at structural problems and try to fix them, and I don’t think that Schultz would deny that we need to do so, but I also think that investment in health and education are two of the most important factors to improving the lives of individuals. “Investment”, however, is a vague word that can have many different connotations. I would think that policy such as the conditional cash transfers would be a great way to invest in human capital.

I also think that Schultz brings up a good point about the discrimination of rural workers. I never thought of the implications of the urban populations' pull in the political sphere. I would be interested to learn more about this phenomenon, and what sort of impacts it has on the levels of poverty we see in rural areas versus urban areas.

Curtis Jay Correll

Shultz and Lewis’ article was very interesting to me. Like HeeJu, I found the concept of political favoritism towards the urban poor to be interesting. Of course urban poor are easier to reach and must be fed, but it seems harsh to sacrifice one group to take care of the other. When we looked at the Lewis’ Two-Sector Model, we discussed how a country can make the first assumption hold by enriching the traditional sector. These sorts of policies rather discriminate against the traditional sector and remove incentives, causing the assumption to be even farther from the truth. Essentially this ought to strip the traditional sector of much needed investment and cause a need for even more price caps and quotas.

I also found the statement that “longer life spans provide additional incentives to acquire more education, as investments in future earnings,” to be very interesting. I had not thought about the fact that longer life expectancy reduces the opportunity cost of one year of education. This means that it is a more sensible choice to choose a lower amount of education when you have a lower life expectancy. It takes some time for the investment in education to pay itself off, and in many cases of shorter life spans, it may never fully pay itself off. Thinking about education choices in this light gave me a whole new perspective on why people might choose to invest less in their education in the developing world.

Stephen Moore

I found the comments on "population quality" and how the value of human capital derives from the additional wellbeing people gain from it in the Schultz and Lewis article interesting. This piece also tied in well with our discussion from class on Tuesday. I found the connection the article makes between healthcare and education particularly interesting; longer lifespans incentivize more education. I have always thought about the connection as higher education encourages better healthcare, but the opposite story also makes sense. The section on education reminded me of a discussion on the marginal returns to education I had in a Labor Economics class at Washington and Lee; the marginal returns to education are significantly higher at the primary level than at later levels of education. For example, the marginal returns of learning to read are significantly higher than the marginal returns to learning calculus. I would be interested to what level of education, if any, citizens of developing countries choose to end their education. I would also be interested to see if is possible to measure the marginal return to education in developing countries compares to the United States. Would the skills we learn in the American school system contribute to a similar marginal rate of return in a developing country? I imagine skills, such as reading and basic arithmetic, would, but would a similar emphasis on subjects such as history and english experience the same marginal rate of return?

C Wood

The more articles and perspectives I read in this class the more I come to understand things that are logical that I had simply never thought of before. Additionally, certain seemingly inaccurate or severely lacking versions of stories that have been told to me are becoming more obvious.

The first idea that I had not intuitively thought much about was Schultz's section on how land is overrated. It seemed common sense for me (as Professor Casey talked about it class with the graphs that he never will use) that simply increasing land or workers increases output when they are products of output. Sadly I had not ever given as much thought to this as chapter 8, and these two articles explain the huge significance of human quality over quantity. Thinking about land it makes sense, as any other input to production, that as there is more scarcity, greater advances in technology will inevitably occur. This is logical and also ties in with the fact that when more kids are surviving until adulthood and also living longer, (weighing costs and benefits) parents will substitute quantity for quality.

One thing that the articles stress is the reinforcing cycle that parents will feel more comfortable having less kids AND investing in each of them more if child mortality rates are lower (if malaria contraction in not a significant factor) and life expectancies are higher. Thinking about things in terms of just incentives and opportunity costs this makes perfect sense. The reality of parents having so many kids (to compensate for many of them dieing to malaria) and more surviving than expected leads to failures that are reinforcing. If developing nations with less security and health problems can be brought up to a point where parents can safely know that most of their children will survive, this actually creates a positively reinforcing cycle rather than the previously negative one. The reoccurring pattern of an initial push which spins a positive cycle is an important theme throughout development economics that I hadn't given as much thought to as was warranted. For example changing the pattern in sub sahara Africa from a poverty trap and low human capital to one that enables greater investment in human capital over generations is an ideal reinforcing goal. These are just some of multiple ideas that seem to be common sense but that I had not actually ever thought through.

Kate LeMasters

I think it’s important to further tie in the discussion of political accountability and choice that HeeJu and the authors from The Economics of Being Poor raise. Shultz and Lewis state that investments in human capital in low-income countries are successful in improving economic prospects if they are not dissipated by political instability. They also state that, in regards to agriculture, incentives set by governments are often not compatible with increasing agricultural quality.
Sachs and Malaney’s piece mentions at the end the Global Fund to Fight HIV/AIDS, Tuberculosis, and Malaria, which had just been started when the article was published in 2002. The Global Fund is largely underway and has seen great success. However, what is not shown on their website or in many reports is the fact that many countries have had to refund money that was mismanaged in the political and health systems. While in Ghana, I learned that they had to return much of their grant due to embezzlement, and Ghana is often considered one of Africa’s most developed and stable nations. Uganda had to repay close to $1 million (USD).
This is not meant in any way to say there should be less international investment in these projects. But, when we begin to think about the micro-level issues that many students have raised regarding malaria’s debilitating effects, including lower worker productivity, higher fertility, lack of women’s empowerment, etc., it is important to remember that these micro-level changes may not come about if governments continue to misappropriate funding for these diseases. As Daphine mentioned, these articles are primarily concerned with improving peoples’ capabilities, but, if governments continually misuse funds, is there a way to ensure everyone reaches a dignified level of capability?

Andrew Winter

Earlier a few people mentioned being surprised about the potentially causal relationship of malaria on poverty. I too thought this was interesting although not necessarily surprising. I'm skeptical that either of these relationships could be causal, not just because of reverse causality but mainly because there are so many other factors that it would be nearly impossible to measure the impact of them all. However, like Callie, I never considered all the ways that malaria specifically leads to poverty and essentially just figured that poor health makes it harder to get out of poverty. The article pointed out how the presence of malaria drastically reduces human capital which I hadn't thought about but now it makes perfect sense. Children and families surrounded by malaria are so stuck it's sad. The chances of receiving a quality education are close to 0 and the household is forced to live paycheck to paycheck, so the cycle continues.

Chandler Moody

In his speech Schultz notes a study done by Usher, in which he determined the amount of utility that people get from increased life expectancy. He found that the additional utility from each year added to life expectancy increases the value of personal income. It makes sense, for both poor and wealthy people, that having a longer life span would make someone want to make more money during their lives. This indicates that improving health should push people to pursue education, knowing that education would give them greater incomes in their future. While we have discussed the health increases education in the way that it improves school attendance, this point by Shultz is one that I don’t think we’ve discussed yet. Longer life spans provide additional incentive to get more education as an investment in future earnings. They increase human capital in this way, by improving the quality of each worker. This connects directly to the malaria story. Getting rid of malaria can improve the quality of each worker (and thus productivity) by increasing life spans.
Increasing life spans are interesting to me because our health depreciates over time and at an increasing rate later in life. So increasing life span has diminishing marginal returns. An extra five years to a 90 year old is less valuable than to a 20 year old. Similarly, the utility gained in increasing life expectancy would be much greater for a person in an LDC whose current life expectancy is lower than a person in an HDC whose current life expectancy is higher. I would be interested to know what factors Usher used to determine the utility a person gets from an added year of life.

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