Poverty and Aspirations Failure

December 21, 2011

By: Dalton, P.S. Ghosal, S. (Tilburg University, Center for Economic Research)

URL: http://d.repec.org/n?u=RePEc:dgr:kubcen:2011124&r=ltv

We develop a theoretical framework to study the psychology of poverty and ‘aspirations failure’. In our framework, the rich and the poor share the same preferences – and also a behavioral bias in setting aspirations. Greater downside risks imposed by poverty exacerbates the effects of this behavioral bias: the poor are more susceptible to both an aspirations failure and pessimism about the likelihood of achieving success. Poverty limits the set of people whose life experiences the poor consider relevant for forming their own beliefs and aspirations. Mitigating behavioral poverty traps require policies which go beyond reducing material deprivation.
Keywords: Reference-dependent Preferences;Aspirations;Persistent Poverty;Locus of control;Simillarity and Belief Formation.
JEL: O10

The measurement of educational inequality: Achievement and opportunity

December 16, 2011

By: Francisco H. G. Ferreira (The World Bank and IZA)
Jérémie Gignoux (Paris School of Economics)

URL: http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2011-240&r=ltv
This paper proposes two related measures of educational inequality: one for educational achievement and another for educational opportunity. The former is the simple variance (or standard deviation) of test scores. Its selection is informed by consideration of two measurement issues that have typically been overlooked in the literature: the implications of the standardization of test scores for inequality indices, and the possible sample selection biases arising from the Program of International Student Assessment (PISA) sampling frame. The measure of inequality of educational opportunity is given by the share of the variance in test scores that is explained by pre-determined circumstances. Both measures are computed for the 57 countries in which PISA surveys were conducted in 2006. Inequality of opportunity accounts for up to 35 percent of all disparities in educational achievement. It is greater in (most of) continental Europe and Latin America than in Asia, Scandinavia, and North America. It is uncorrelated with average educational achievement and only weakly negatively correlated with per capita gross domestic product. It correlates negatively with the share of spending in primary schooling, and positively with tracking in secondary schools.
Keywords: Educational inequality, educational achievement, inequality of opportunity.
JEL: D39

Understandings and Misunderstandings of Multidimensional Poverty Measurement

December 6, 2011

By: Sabina Alkire and James Foster

URL: http://d.repec.org/n?u=RePEc:qeh:ophiwp:ophiwp043&r=ltv

Multidimensional measures provide an alternative lens through which poverty may be viewed and understood. In recent work we have attempted to offer a practical approach to identifying the poor and measuring aggregate poverty (Alkire and Foster 2011). As this is quite a departure from traditional unidimensional and multidimensional poverty measurement – particularly with respect to the identification step – further elaboration may be warranted. In this paper we elucidate the strengths, limitations, and misunderstandings of multidimensional poverty measurement in order to clarify the debate and catalyse further research. We begin with general definitions of unidimensional and multidimensional methodologies for measuring poverty. We provide an intuitive description of our measurement approach, including a ‘dual cutoff’ identification step that views poverty as the state of being multiply deprived, and an aggregation step based on the traditional Foster Greer and Thorbecke (FGT) measures. We briefly discuss five characteristics of our methodology that are easily overlooked or mistaken and conclude with some brief remarks on the way forward.

The Intergenerational Transmission of Human Capital: Exploring the Role of Skills and Health Using Data on Adoptees and Twins

December 6, 2011

By: Lundborg, Petter (Lund University)
Nordin, Martin (Lund University)
Rooth, Dan-Olof (Linneaus University)

URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp6099&r=ltv

In this paper, we focus on possible causal mechanisms behind the intergenerational transmission of human capital. For this purpose, we use both an adoption and a twin design and study the effect of parents’ education on their children’s cognitive skills, non-cognitive skills, and health. Our results show that greater parental education increases children’s cognitive and non-cognitive skills, as well as their health. These results suggest that the effect of parents’ education on children’s education may work partly through the positive effect that parental education has on children’s skills and health.
Keywords: intergenerational transmission, human capital, education, health, cognitive skills, non-cognitive skills, adoptees, twins
JEL: I12