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Sage Timberline
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I thought Christine summarized this paper brilliantly, with four spot-on conclusions at the end. Her fourth caught my attention in particular - that investments in human capital allow a virtuous cycle of more investment, which could ultimately help break the agonizing poverty cycle we read about every week. I think it is important to note that, in the same way desperately poor families should borrow money now so that their children can be educated and potentially escape the deadly poverty cycle later, we should undertake the cost of lending money to these families so that society can ultimately benefit from better educated citizens and continuously lower poverty rates. Of course, we have to make sure the current cost doesn't overwhelm the future benefit, but with the prospect of a healthier, more educated, more satisfied, more productive populace, I think that is unlikely. One thing I found interesting is that boys are more likely to work than girls (page 2, second paragraph). In several of the past readings, we discussed how families tend to allocate resources to ensure their male children's health above female children's. In a situation of dire need when children are forced to be laborers, I would think it would be more likely that families would send their female children to the workplace and allow their male children to continue going to school, because of higher future benefits for males. I can only guess in this case that male children at a pre-teen or young teen age have the potential to be bigger and stronger than girls of the same age, and may possibly have a greater output in a working position. I would be very interested to see the relationship between family composition and amount of child labor. Udry mentions several times that turning to child labor is a desperate measure that only occurs when families can't make ends meet otherwise. I wonder what specifically the "ends" are that need meeting - i.e. is part of what is contributing to the lack of family resources the fact that there are too many children in the family? Is the problem a burden of older relatives who cannot work? Or is it not a problem of family composition, but simply that resources are scarce and two working parents is not enough to provide, indicating a broader economic problem? We've discussed before that families in extreme poverty often have many children to ensure that enough of them live to reproduce further. But this could also be a contributing factor to lack of resources. What might these extremely impoverished families look like with free and accessible birth control? Would that cause them to have fewer children and experience less resource shortage? Or would it have no effect, if they are having children out of pure necessity? One more thing - how healthy are children who are going to school vs those prematurely in the workforce? Undoubtedly, this would vary a lot depending on quality of school and quality of workplace. Still, I think it would be interesting data to consider, because if sending children to the workforce makes them prone to injuries or sickness, this would be another serious cost to child labor.
Toggle Commented Nov 5, 2013 on Corel Office Document at Jolly Green General
One of the things that interests me most about the concept of microfinance is the idea that by simply making microloans and credit available to the impoverished, we are giving them enough to jumpstart a small business and be successful. Though the data shows that there are some effects of making those available, I wonder if there might be greater effects if some guidance was offered along with the loans. In other words, what if we offered impoverished people both a loan and guidance on how to use it? What if we offered them a loan, guidance on how to use it, and small incentives to use it well? Building off of Ester Duflo's TED Talk, I wonder if we could put together some data on the results of these treatments, instead of simply making microfinance options available and hoping for the best. The other thing that interests me is the observed difference in how men and women use microloans. Is it truly an inherent, chemical difference among sexes that causes this difference? Or is it a gender difference, meaning a difference in societal roles for men and women? Do men feel pressure to provide for the family in the form of a business, causing them to invest more there, while women feel pressure to be a caregiver, causing them to be more likely to consumption-smooth with loans? I can't think of a research technique that would make this apparent, but I am curious about the driving force of this behavior. Overall, the randomized evaluations are clearly a very effective research method, giving economics the edge that medical research has, with the existence of a control group.
Toggle Commented Oct 24, 2013 on Microfinance (econ 280) at Jolly Green General
I found this to be a remarkably well-written piece and I was impressed with the combination of fact-driven economic data and thoughtful analysis - the perfect combo for studying economics, as we've discussed! Duflo's conclusions in this paper remind me slightly of The Rise and Fall of Development Economics, and Krugman's "evolution of ignorance" theory. In both, there is a goal that most economists (and the general public) feel a very strong, almost obligatory pull to accomplish. In Krugman's piece, it is improving economic methods, in Duflo's: improving equality. However, when it comes to carrying these goals to fruition, we hesitate for fear of the negative consequences. This is where the papers differ, in my opinion, because I find gender equality to be a more pressing issue than economic methods. To rephrase: I think the consequences of NOT acting to promote gender equality are worse than the consequences of not improving methods. The data show that educating and empowering women has a net positive impact across the board. The tremendous devastation that occurs in cultures with harsh inequality, and the huge potential gains for our entire PLANET that could come from affirmative action are enough to make anyone devote their life to trying to resolve this issue. But as Duflo points out, the consequence at times is negative for men. She poses the question again and again in different ways throughout the paper: is it worth the (hopefully) short term consequences for the long term benefits? I have looked at Duflo's research backwards and forwards and I come to the same unsatisfying but responsible conclusion that I came to with Krugman's piece: we need to be carefully aware of the negative side effects, and proceed with cautious passion towards our long term goal.
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Oct 2, 2013