Development

Human capital and income inequality

Amparo Castelló-Climent, Rafael Doménech, 23 April 2014

Most developing countries have made a great effort to eradicate illiteracy. As a result, the inequality in the distribution of education has been reduced by more than half from 1950 to 2010. However, inequality in the distribution of income has hardly changed. This column presents evidence from a new dataset on human capital inequality. The authors find that increasing returns to education, globalisation, and skill-biased technological change can explain why the fall in human capital inequality has not been sufficient to reduce income inequality.

Microentrepreneurial reinvestments: Evidence from Tanzania

Thorsten Beck, Haki Pamuk, Burak Uras, 21 April 2014

A recent literature shows that access to formal savings devices improves entrepreneurial outcomes in developing economies. This column presents research comparing the effect of saving in formal accounts with alternative, less formal measures. Findings suggest that entrepreneurs use formal saving to insulate themselves from household consumption commitments.

Making global value chains work for developing nations

Demián Dalle, Verónica Fossati, Federico Lavopa, 13 April 2014

Discussions of global value chains (GVCs) have permeated international organisations’ research and policy agendas. This column presents a critical view on some of the recent policy recommendations that urge for as much liberalisation of trade in goods and services as possible. These proposals cannot be automatically applied to developing countries without some type of government intervention.

Economic liberty in the long run: Evidence from OECD countries

Leandro Prados de la Escosura, 7 April 2014

Measures of economic freedom provide useful cross-country comparisons, but lack the time dimension to track intertemporal progress. This column presents a new measure and extends it back in time to tell a history of economic freedom over the course of the twentieth century.

The great escape from death and deprivation

Angus Deaton, 20 March 2014

The world has become healthier and wealthier since 1960, as measured by life expectancy and GDP per capita. In this column Angus Deaton introduces his new book and argues that the world is indeed a better place than it used to be, albeit with big setbacks, and that progress opens up vast inequalities.

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