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Standard poverty measures may drastically understate the problem; the collective household model can help
A key element of anti-poverty policy is the accurate identification of poor individuals. However, measuring poverty at the individual level is difficult since consumption data are typically collected at the household level. Per capita measures based on household-level data ignore both inequality within the household and economies of scale in consumption. The collective household model offers an alternative and promising framework to estimate poverty at the individual level while accounting for both inequality within the household and economies of scale in consumption.
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Studying abroad benefits the students, the host
country, and those remaining at home
In knowledge-based economies, attracting and
retaining international students can help expand the skilled workforce.
Empirical evidence suggests that open migration policies and labor markets,
whereby students can remain in the host country post-study, as well as good
quality higher education institutions are crucial for successfully
attracting international students. Student migration can positively affect
economic growth in both sending and receiving countries, even though
migrants themselves reap most of the gains, mainly through higher
earnings.
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Working when sick is a widespread phenomenon
with serious consequences for workers, firms, and society
Many workers admit that at times they show up
for work even though they feel sick. This behavior, termed “presenteeism,”
is puzzling since most workers do not incur financial losses when staying
home sick. The various reasons behind presenteeism are person-related (e.g.
individuals’ health or job attitude) or work-related (e.g. job demands and
constraints on absence from work). Working when sick can have positive and
negative consequences for workers’ performance and health, but it also
affects co-workers’ well-being and firms’ productivity. There are various
strategies as to how firms can address presenteeism.
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GDP summarizes only one aspect of a country’s
condition; other measures in addition to GDP would be valuable
Gross domestic product (GDP) is the key
indicator of the health of an economy and can be easily compared across
countries. But it has limitations. GDP tells what is going on today, but
does not inform about sustainability of growth. The majority of time is
spent in home production, yet the value of this time is not included in GDP.
GDP does not measure happiness, so residents can be dissatisfied even when
GDP is rising. In addition, GDP does not consider environmental factors,
reflect what individuals do outside paid employment, or even measure the
current or future potential human capital of a country. Hence, complementary
measures may help to show a more comprehensive picture of an economy.
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Natural disasters cause significant short-term
disruptions, but longer-term economic impacts are more complex
Extreme weather events are increasing in
frequency and intensity, threatening lives and livelihoods around the world.
Understanding the short- and long-term effects of such events is necessary
for crafting optimal policy. The short-term economic impacts of natural
disasters can be severe, suggesting that policies that better insure against
consumption losses during this time would be beneficial. Longer-term
economic impacts are more complex and depend on the characteristics of the
affected population and the affected area, changes in migration patterns,
and public policy.
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Sectoral collective contracts reduce
inequality but may lead to job losses among workers with earnings close to
the wage floors
In many countries, the wage floors and
working conditions set in collective contracts negotiated by a subset of
employers and unions are subsequently extended to all employees in an
industry. Those extensions ensure common working conditions within the
industry, mitigate wage inequality, and reduce gender wage gaps. However,
little is known about the so-called bite of collective contracts and whether
they limit wage adjustments for all workers. Evidence suggests that
collective contract benefits come at the cost of reduced employment levels,
though typically only for workers earning close to the wage floors.
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It depends: older children perform better on
standardized tests, but evidence of older school starting ages on long-term
outcomes is mixed
There is a widely held belief that older
students, by virtue of being more mature and readier to learn at school
entry, may have better academic, employment, and earnings outcomes compared
to their younger counterparts. There are understated, albeit important,
costs to starting school later, however. Compulsory school-attendance laws
may allow these same older pupils to drop out of high school earlier, which
could adversely impact their employment; entering the workforce later also
has implications for lifetime earnings and remittances to governments.
Overall, research suggests that school-age entry policies can improve
student achievement in the short term, but the long-term impacts are
currently not well-understood.
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Social skills developed during extracurricular
activities in adolescence can be highly valuable in managerial
occupations
Youth participation in extracurricular
activities is associated with a variety of benefits, ranging from higher
concurrent academic performance to better labor market outcomes. In
particular, these activities provide avenues through which youth can develop
the interpersonal and leadership skills that are crucial to succeed as a
manager. A lack of opportunity to participate in extracurricular activities
for many youths, particularly those from lower-income backgrounds, may have
negative consequences for developing the next generation of managers and
business leaders.
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Emigration can increase the wages of
non-emigrants, but may eventually lead to lower productivity and wage
losses
How migration affects labor markets in receiving
countries is well understood, but less is known about how migration affects
labor markets in sending countries, particularly the wages of workers who do
not emigrate. Most studies find that emigration increases wages in the
sending country but only for non-emigrants with substitutable skills similar
to those of emigrants; non-emigrants with different (complementary) skills
lose. These wage reactions are short-term effects, however. If a country
loses many highly educated workers, the economy can become less productive
altogether, leading to lower wages for everyone in the long term.
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Policies to reduce fertility in developing
countries generally boost education levels, but only slightly
At the national level, it has long been observed
that a country's average education level is negatively associated with its
total fertility rate. At the household level, it has also been well
documented that children's education is negatively associated with the
number of children in the family. Do these observations imply a causal
relationship between the number of children and the average education level
(the quantity–quality trade-off)? A clear answer to this question will help
both policymakers and researchers evaluate the total benefit of family
planning policies, both policies to lower fertility and policies to boost
it.
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