Development Economics 

Objective

In this course, we will study the role of human capital for economic development from a microeconomic perspective. We will examine decisions made by individuals and households in developing countries, in terms of preferences and constraints. We will learn a lot of facts about the lives of people in developing countries, in particular about the constraints that they face (lack of access to public goods, credit, information, markets, etc.). We will think about the causes and consequences of these constraints, to eventually assess what can be done to improve human capital in poor countries. We will review the evidence on what has been tried, what has been successful and what has failed, and importantly, why. We will see that not all evidence is good and learn how to tell good studies from the bad ones. We will make sure any statement we make in this course has theoretical foundations and is grounded in rigorous empirical evidence. By rigorous evidence, we mean empirical designs in which researchers are able to establish credible causal relationships. 

The intended learning outcomes of this course are the following:

• Summarize key facts about human capital in developing countries
• Analyze simple microeconomic models of human capital investment
• Criticize empirical studies
• Evaluate policies promoting human capital in developing countries

Planning

The course is divided into 3 parts, as detailed below. Each part consists of (i) a lecture and (ii) a discussion prepared and led by the students.

Part 1: the returns to education

Lecture: does higher education lead to higher GDP and GDP growth? How large are the returns to education in developing countries? What determines them?
Discussion: what can we learn from field experiments to improve educational policy in developing countries?

Part 2: the demand for education

Lecture: why do some children get an education and others do not? How can we model the way parents make educational decisions for their children? Based on the model, what programs can be effective at raising the demand for education?
Discussion: must conditional cash transfers be conditional?  

Part 3: gender gaps

Lecture: when/how does discrimination against women happen? Why are women valued less than men? What can be done to reduce gender inequality?
Discussion: is women’s empowerment good for development?

References

Part 1 – Lecture material
Hanushek, Eric and L. Woessman (2010). Education and Economic Growth.  In: Penelope Peterson, Eva Baker, Barry McGaw, (Editors), International Encyclopedia of Education. volume 2, pp. 245-252. Oxford: Elsevier.
Duflo, E (2001) “Schooling and labor market consequences of school construction in Indonesia: Evidence from an unusual policy experiment”, American Economic Review,Vol: 91 Iss 4,P: 795-813
Ozier Owen (2017) “The Impact of Secondary Schooling in Kenya: A Regression Discontinuity Analysis”, Journal of Human Resources.
World Development Report (2019) “Learning to realize education’s promise”, overview
Glewwe, Paul and Karthik Muralidharan (2015) “Improving School Education Outcomes in  Developing Countries: Evidence”, Knowledge Gaps, and Policy Implications RISE-WP-15/001

Part 1 – Discussion material
Baird, Sarah; Craig McIntosh and Berk Oezler. 2011. "Cash or Condition? Evidence from a Cash Transfer Experiment." Quarterly Journal of Economics, 126(4), 1709-53.
de Brauw, Alan and John Hoddinott. 2011. "Must Conditional Cash Transfer Programs Be Conditioned to Be Effective? The Impact of Conditioning Transfers on School Enrollment in Mexico." Journal of Development Economics, 96(2), 359-70.
de Janvry, A. and E. Sadoulet. 2006. "Making Conditional Cash Transfer Programs More Efficient: Designing for Maximum Effect of the Conditionality." World Bank Economic Review, 20(1), 1-29.
Fernald, Lia C. H.; Paul J. Gertler and Lynnette M. Neufeld. 2008b. "Role of Cash in Conditional Cash Transfer Programmes for Child Health, Growth, and Development: An Analysis of Mexico's Oportunidades." Lancet, 371(9615), 828-37.

Part 2 – Lecture material
Hoyt Bleakley (2003). “Disease and Development: Evidence from the American South.” Journal of the European Economic Association, April-May 2003 1(2-3):376-386. 
Acemoglu, Daron and Simon Johnson. (2007). “Disease and Development: The Effect of Life Expectancy on Economic Growth”, Journal of Political Economy 115(6), 925-985.

Part 2 – Discussion material
Pascaline Dupas (2014). “Getting Essential Health Products to Their End Users: Subsidize, but How Much?”, Science, 345(6202): 1279–1281.
Pascaline Dupas (2014). “Short-Run Subsidies and Long-Run Adoption of New Health Products: Evidence from a Field Experiment”. Econometrica 82(1), pp. 197-28.
Nava Ashraf; James Berry; and Jesse M. Shapiro (2010) “Can Higher Prices Stimulate Product Use? Evidence from a Field Experiment in Zambia”, American Economic Review no. 5: 2383–2413
Kremer, Michael, and Edward Miguel. 2007. "The Illusion of Sustainability." Quarterly Journal of Economics 112 (3): 1007-1065.

Part 3 – Lecture material 
Amartya Sen, “More Than 100 Million Women Are Missing,” New York Review of Books 37(2), December 20, 1990
Elaina Rose (1999). “Consumption Smoothing and Excess Female Mortality in Rural India.” Review of Economics and Statistics 81, no. 1: 41-49
Nancy Qian (2008). “Missing Women and the Price of Tea in China: The Effect of Sex-Specific Income on Sex Imbalance,” The Quarterly Journal of Economics, 123(3), August 2008.

Part 3 – Discussion material 
Chattopadhyay, Raghabendra and Esther Duflo. 2004. "Women as Policy Makers: Evidence from a Randomized Policy Experiment in India." Econometrica, 72(5), 1409-43.
Duflo Esther. 2003. “Grandmothers and Granddaughters: Old Age Pension and Intrahousehold Allocation in South Africa”. World Bank Economic Review, 17, 1-25.
Ashraf, Nava, Erica Field, and Jean Lee. 2014. “Household Bargaining and Excess Fertility: An Experimental Study in Zambia.” American Economic Review, 104(7): 2210–2237
Harari Mariaflavia. 2017. “Women’s Inheritance Rights and Bargaining Power: Evidence from Kenya”. Economic Development and Cultural Change, forthcoming.