ISSUES ECON DEVELOP
ISSUES ECON DEVELOP ECON 491
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This 37 page Class Notes was uploaded by Miss Adeline Weimann on Wednesday September 9, 2015. The Class Notes belongs to ECON 491 at University of Washington taught by Claus Portner in Fall. Since its upload, it has received 21 views. For similar materials see /class/192466/econ-491-university-of-washington in Economcs at University of Washington.
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Date Created: 09/09/15
Labour and Nutrition Econ 491 Labour and Nutrition Econ 491 Department of Economics University of Washington 18 October Autumn 2007 Labour and Nutrition Em 491 Outline 0 The Standard SupplyDemand Model 9 Nutrition and Productivity Energy Balance 9 The Labour Market and Nutrition Labour and Numuon Econ 491 S andard Mode Wage Supply Demand Labour Labour and Nutrition Econ 491 Standard Model Issues with the Standard Model 0 Different types of labour 0 Productivity 0 Monitoring 0 Involuntary unemployment o Uncertainty and contracts Labour and Nutrltlol r Emmet Energy Balance Nutrition and the human body 0 Energy input 0 Resting metabolism 0 Energy expended 0 Storage and borrowing Problem with undernutrition is lower work capacity Labour and Nutrition Emu Relation between Nutrition and Productivity Important interaction between nutrition and labour markets 0 Income from working buys nutrition 0 Nutrition affects productivity income 0 Potential for vicious cycle Issues 0 Why not developed countries 0 Borrow to escape 0 Creation of longrun contracts 0 Effect of longrun contracts on nutrition Labour and Numuon Econ 491 Ene gv Eahnce The Labour Marke and Nmrmon Work Output Q 1 5 Q Total Income Labour and Numuon Econ 491 Ene gv The Labour Marke and Nmrmon Work Capacity Income Labour and Nulrilion Emu Equilibrium The Labour Markel and Nulrilion Labour supply Figure 136 Equilibrium Figure 137 Efficiency wage theory Functional Impact of Poverty Econ 491 Department of Economics University of Washington 4 October Autumn 2007 Outline 0 Market Access 0 Credit 0 Insurance 9 Nutrition 0 Poverty and Nutritional Intake 0 Nutrition and Labour Markets 3 Poverty within the Household The Problem with being Poor Lack of access to markets 0 Credit 0 Insurance 0 Labour markets 0 Land Important questions 0 How do the poor deal with lack of access 0 Implications for informal mechanisms Collateral and Repayment Incentives Why is credit important What prevents the poor from lending a Collateral default informal 0 May have additional disincentives to repay The impact of credit rationing o Informal credit 0 Opportunities not exploited 0 Human capital Tim M m me Proble mswith Formal Insurance Why no formal insurance 0 Veritiability o Moral hazard 0 Legal system 0 Transaction cost and small insurances Alternative Informal insurance Informal Insurance Advantages o Observable effort and impacts 0 Mutual advantage Who 0 Village 0 Tribe 0 Family How effective Effect of Poverty on Nutrition Inequality and Poverty Econ 491 Hunger One of the worst effects of poverty Effects of undernutrition o Wasting o Stunting o Decreased immunity 9 Lower cognitive skills 0 Less able to work Measuring poverty 0 Nutrition important part a Does nutrition therefore respond to income flow Mimi Does With not to lrmme Pin Potential effects of income increases Positive Negative 0 Increased utility 0 Taste 0 More productive 0 Social norms What do we know 0 Strong response Elasticity of 06 to 08 0 Table 84 Does that hold The role of seasons Behrman et al 0 061 in planting stage even higher when little land 0 Essentially no effect during harvest Energy Balance Nutrition and the human body 0 Energy input 0 Resting metabolism 0 Energy expended 0 Storage and borrowing 39The39 Work Capacity Curve Work Capacity NutritionIncome Important interaction between nutrition and labour markets 0 Income from working buys nutrition 0 Nutrition affects productivity income 9 Potential for vicious cycle Issues 0 Why not developed countries 0 Borrow to escape 0 Creation of longrun contracts 0 Effect of longrun contracts on nutrition Unequal Distribution Possible Explanations o Discrimination 0 Cannot afford Fig 83 Who are affected 0 Women girls the old 0 Widows Table 86 0 Women Table 87 0 Girls South Asia vs Africa ls discrimination driven by poverty Credit Markets Econ 491 Department of Economics University of Washington 1 November Autumn 2007 u tdmne lnterlinkages in Credit Markets 0 Repayment in Labour 0 Repayment in Output Alternative Credit Policies lVlicrolinance Third Assignment 0 Formal Requirements 0 Credit Programs Walt teatime lm How and W y 0 Very common Table 141 0 Hidden interests laws and religion 0 Information 0 Enforcement 0 Reduce strategic default incentive Employment is available only in the harvest season and there is not enough savings to make it through the slack season Model 0 Going harvest wage W o Lender39s opportunity cost i o Offered wage W o Offered interest rate i Outcome 0 All interest payment made in labour WL 39H r m m uwpm Graph of contracts A farmer needs working capital to finance inputs A loan is available from the trader who buys the farmer39s output Model 0 Price on output p o Lender39s opportunity cost i o Offered price p o Offered interest rate i 0 Farmer best alternative A Outcome 0 Offered price lower than original price 0 Offered interest lower than opportunity cost Graph of combined operationsquot Graph of pure credit How can the trader do better 0 Want to get backto Z e How Make 1T 1 0 Change both price and interest Formally o p 71il 0 Introduce tax I so 13 A 013 tp0711i o Detinef12ptand1i1it 0 Note f1ltpandilti 0 Farmer makes A and trader 3 7 A How to overcome the issues faced by formal lenders Possible answers o Encourage formal institutions Thailand o Set up rural government banks 0 Make funds available for informal moneylenders o Microfinance institutions 0 Assignment is due on Sunday 18 November at 500 PM PST 0 Name and student number on the assignment 0 A standard word processing document or a pdt tile 0 The analysis cannot be longer than 1500 word 0 The written analysis must be your own 0 Quote additional material used 0 Please add page numbers mamas Your country is concerned that it is failing to make much progress in reducing poverty It is believed that a substantial impediment to increasing people39s income is their lack of credit although there has been no serious studies of whether this holds in your country 983 MEth iht mamas It is your responsibility to find a way to improve access to credit Your Minister of Finance has heard a lot of talk about microcredit and while she does not want you to rule out other options she would like to know more about how that can be implemented and what the effects of different implementations might be tarsal MEth ill DH Question 1r ls lack of credit really a problem Question 2 Other options than microcredit What are their problems Question 3 How can the lending be organised 0 Restrictions on participation 0 Lend to groups It so who selects the groups 0 What interest rate should be charged 0 Should a borrower put up collateral Mimm l a L39 Wm 4 E Pros and cons of organising mechanisms 0 Still people who would be excluded Is that a problem 0 Will it be financially sustainable 0 Interaction with other credit institutions and programs be Q39U sti h 53 How can we measure the effect of our program MWHWM