拉丁美洲與加勒比的出生率、所得不均與經濟發展; 以宏都拉斯為例 - 政大學術集成

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(1)International Master’s Program in International Studies National Chengchi University 國立政治大學國際研究英語碩士學位學程. ‧. ‧ 國. 學. Birth Rate, Income治Inequality, and 政大 in Latin Economic立Development America and the Caribbean Region: A Case of Honduras.. n. er. io. sit. y. Nat. 拉丁美洲與加勒比的出生率、所得不均與經濟發展; 以宏都拉斯為例. a v i l C n hengchi U. María Gabriela Alfaro Aguilera Advisor: Yen-Pin Su. June 2018 I. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(2) ABSTRACT. While many studies of economic development examine the effects of demographic factors, few take into account under what conditions certain demographic factors will affect economic development. This thesis aims to fill the empirical gap by focusing on the interactive effect of crude birthrate and income inequality. I argue that the effect of birth rate on economic development is conditional on income inequality. Based on data for 33 countries in Latin America and the. 政治大 rate tends to have a much lower level of economic development when that country suffers from 立. Caribbean from 1960 to 2015, the statistical results demonstrate that a country with a higher birth. ‧ 國. 學. serious income inequality. I also conduct a case study of Honduras to demonstrate the mechanism of my theory at the subnational level. The empirical analysis, based on both quantitative and. ‧. qualitative data, largely support my hypothesis, suggesting that a department tends to be less. Nat. er. io. al. 摘要. sit. y. developed when it has a high birthrate and a high level of income inequality.. n. v i n Ch 以往許多研究專注於人口對經濟發展的影響，然而這些研究大多未考量人口因素可能會與其他變數對於經 engchi U 濟發展造成交互作用。本論文探討出生率與收入不平等對於經濟發展的效應，試圖填補既有文獻的空缺。本論用使用拉丁美洲與加勒比 33 個國家從 1960 年至 2015 年的資料進行量化分析，實證結果顯示，當一個國家的出生率較高，而且其收入不平等的情況較嚴重時，其經濟發展程度將會較低。同時，本研究亦對於宏都拉斯進行案例研究，質化與量化的分析顯示，當一個行政區有較高的出生率與較嚴重的收入不平等情況，會對於該行政區的經濟發展造成負面影響。. II. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(3) Table of Contents Acknowledgement………………………………………………………………………………………………………….1 1.INTRODUCTION …..…………………………..………………………………………………….…………………………………2 2. THEORETICAL PERSPECTIVES…………………………………………………………………………………………………..6 2.1 Institutional Approaches .................................................................................................................. 6 2.2 Industrial Structures……………………………………………………………….……………………………………………..10 2.3 Education……………………………………………………………………………………………………………………………..13 2.4 Birth Rate, Income Inequality, and Economic Development………..………………………………………….. 16 3. THE COMBINED EFFECTS OF BIRTH RATE AND INCOME INEQUALITY ON ECONOMIC DEVELOPMENT………………………………………………………………………………………………………………………………….23 3.1 Data, Operationalization, and Measurement …………………………………………………..…………………..23. 政治大. 3.2 Empirical Results………………………………………………………………………………………………………………….30. 立. 4. CASE STUDY: HONDURAS.…………………………………………………………………………………………………….34. ‧ 國. 學. 4.1 Introduction………………………….…………………………………………………………………………………………..34 4.2 “Ellos No Tenían Televisor” …………………………………………………………………………………………….36. ‧. 4.3 The Religion Institution in Honduras and LAC……………………………….……………………………………42 4.4 Findings ………………………………..…………………………………………………………………………………………49. y. Nat. sit. 4.5 Elite Interview………………………………………………………………………………………………………………….66. n. al. er. io. 4.6 Discussion and Conclusions……………………………………………………………………………………………69. i n U. v. 5. CONCLUSIONS AND RECOMMENDATIONS………………………………………………………………………71. Ch. engchi. BIBLIOGRAPHY……………………………………………………………………………………………………………………….81 APPENDIX………………………………………………………………………………………………………………………………..85. III. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(4) List of Tables Table 1.1 Poverty estimates from the year 2013 (at $1.90 per day): Comparison of October 2016 and 2017…………………………………………………………………………………………..2 Table 3.1 Variables………………………………………………....……………………….24 Table 3.2 Observations included in the empirical analysis…………………………………29 Table 3.3 Effects of birth rate and income inequality on economic development in Latin America and the Caribbean……………………………………………………………………………….31 Table 4.1. Does this home have a TV? Source: Encuesta Permanente de Hogares de Propósitos Múltiples 2015. INE, Honduras………………………………………………………..38. 政治大. Table 4.2 Television possession * Poverty Classification. Source: Encuesta Permanente de Hogares de Propósitos Múltiples 2015. INE, Honduras…………………………………38. 立. Table 4.3 Access to Electricity in Honduras………………………………………………39. ‧ 國. 學. Table 4.4 E.N.E.E., Honduras: Coverage Index of Electrical Energy per Department. Source: ENEE, March 2017………………………………………………………………….40. ‧. Table 4.5 Marital status for mothers of children born in 2015 in 18 departments of Honduras…………………………………………………………………………………44. sit. y. Nat. Table 4.6 Type of birth of the children born in 2015 in 18 departments of Honduras….49. n. al. er. io. Table 4.7 Studies done by the mother of the children born in 2015 in 18 departments of Honduras…………………………………………………………………………………53. i n U. v. Table 4.8 Comparison of mothers and fathers studies of the children born in 2015 in 18 departments of Honduras…………………………………………………………………..59. Ch. engchi. Table 4.9 Comparison of mothers and father’s studies of the children born in 2015 in 18 departments of Honduras………………………………………………………………60. IV. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(5) Acknowledgement. First, I want to express all my gratitude to the Taiwan International Cooperation and Development Fund (Taiwan ICDF) for giving me the opportunity of achieving my master’s studies, also to my advisor, Professor Yen Pin Su 蘇彥斌, for the continuous support of my master’s research. Professor Su, has taught and guided me with immense patience and motivation throughout almost one year in the writing of the present thesis. I cannot imagine the completion of this work without the help and interest of my dear advisor, professor and mentor.. 政治大. Besides my advisor, I would like to thank the rest of my thesis committee: Professor Lee Pai-Po. 立. 李栢浡 and Professor Alex Hsueh 薛健吾 for their meticulous comments which helped me. ‧ 國. 學. comprehend the importance and impact of different points of view in my work. Their support and. ‧. lessons, not only towards my thesis, but also in class will forever be cherished.. y. Nat. sit. A deep thank you to my family, who have always supported me through every decision I take. For. n. al. er. io. their unconditional love and concern, I will be forever grateful. Also, thank you to Jose Zamora. i n U. v. for pushing me to do my best every time. Finally, and most importantly this thesis is dedicated. Ch. engchi. specially to my grandparents José Ismael Aguilera Campos and Maria Cristina Soto Martinez, thank you for raising me and providing me the education which led me to my studies in Taiwan.. 1. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(6) 1. INTRODUCTION Most countries in LAC continue to struggle with poverty. One out of every 4 Latin Americans suffer from “chronic poverty,” and it is possible that such a situation will continue as “GDP growth has slowed significantly, from about six percent in 2010 to an estimated 0.8 percent in 2014. As a result, improved labor market prospects may not prove to be sufficient for the chronic poor to escape poverty” (Vakis, Rigolini, Lucchetti 2016, 7). However, even though projections seem to dim our light instead of shining on it, the researcher would like to cooperate academically to contribute on the quest for the search of what is truncating the Latin American and Caribbean region’s economy.. 立. 政治大. ‧ 國. 學. The motivation of this research is to explore how birth rate and income inequality affect economic development in the region of Latin America and Caribbean (LAC hereafter). It is important to be. ‧. active and find a way to reduce poverty in LAC because most countries in the region have been. sit. y. Nat. plagued by severe poverty. The absolute poverty line implemented by the World Bank is set at. n. al. measure poverty across countries in a more consistent way.. Ch. engchi. er. io. USD 1.90 per person each day, this measure was implemented for us to be able to study and. i n U. v. 2. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(7) Table 1.1 Poverty estimates from the year 2013 (at $1.90 per day): Comparison of October 2016 and 2017. 政治大 of October 2016 and 2017 versions table, we can observe that for the year 2016 there were 33.6 立. Based on the World Bank, poverty estimates from the year 2013 (at $1.90 per day): Comparison. ‧ 國. 學. million poor people estimated, and for 2017, there are 30.1 million poor people estimated in the LAC. Compared to 71.0 million poor in 2016 and 73.9 million poor people in 2017, estimated in. ‧. the East Asia and Pacific region. The European and Central Asia region stands with 10.3 million. Nat. sit. y. in 2016 and 10.4 million poor in 2017. The Middle East and North Africa region possess data. n. al. er. io. issues. Therefore, no result for the year 2016 was provided, but 8.3 million poor were estimated. i n U. v. for the year 2017. The South Asia region estimates for the year 2016 are 256.2 million poor and. Ch. engchi. results for 2017 are 249.1. Lastly, the Sub-Saharan Africa region portrays the following results: for 2016, 388.7 million poor were estimated, and for 2017 an increase to 390.2 million poor was stated. From these data, we can observe a decrease in millions of poor people living in poverty only in the LAC and South Asia region. But it is important also to point out the population factor in the table. In the year 2016, the LAC had a population of 622.0 million people, in contrast to its 33.6 million poor people estimation. In the other hand, in 2017 the LAC had a decrease in population of 612.9 million people, compared to the 30.1 million estimated poor. From these observations, 3. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(8) one could only assume that a vast majority of poor people in the LAC deceased in 2017. Therefore, population density reflecting on poverty results. Contrary findings are observed in the South Asia region when it had a population of 1698.1 in 2016 in hand with 256.2 million poor people estimated. In 2017, the population in South Asia increased to 1699.3 people in hand with a decrease of 249.1 million poor. Hence, from South Asia results we could assume that because population increased and poor people estimates decreased, it would mean that more people surpassed the poverty line implemented by the World Bank. In this investigation, the researcher seeks to provide explanations on the variation in poverty in. 治政大 and birth rates. The researcher LAC by focusing on the interactive effects of income inequality 立 would also like to address an important research question: Why do some countries have a higher. ‧ 國. 學. level of economic development than others in LAC? While existing studies, have focused on the. ‧. effects of history (Acemoglu, 2005 and 2008; Acemoglu, Johnson, and Robinson. 2002; Engerman. sit. y. Nat. and Sokoloff 1997; and Przerworski and Curvale 2008) and institutional factors (Acemoglu,. io. al. er. Johnson and Robinson 2000; Rodrik, Subramanian, and Trebbi, 2002; Gerring, Bond, Barndt, and. v. n. Moreno, 2005; and Martin, and Juarez, 1995). The researcher argues that the combined effects of. Ch. engchi. i n U. high-income inequality and high birth rate would reduce the level of economic development. To test the previous hypothesis, the researcher will conduct empirical analysis using quantitative data from 1960 to 2015 in LAC. The researcher will also conduct a case study of Honduras to show the importance of high-income inequality and birth rate on economic development. This investigation aims to provide important implications for making public policies for boosting economic development in developing countries. The research will be divided as follows: In the first section, the researcher will discuss the existing literature about the explanations of economic development, then the researcher will develop a 4. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(9) theoretical hypothesis for this study. Second, methodology and data will be explained, followed by a third section where the researcher will portray the statistical results. The fourth section is a case study of Honduras, which will provide a detailed discussion about the effects of birth rate, income inequality, and education on economic development. In this section, the researcher will also discuss about some reccomendations to boost economic development in Honduras. And the final section concludes.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. 5. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(10) 2. THEORETICAL PERSPECTIVES Regarding the ongoing search for the variables that can effectively boost or decline economic development, many studies have been done. Between them, we can find prominent and repeated factors that have been demonstrated to affect economic development like institutions, income inequality, education, and fertility. 2.1 Institutional Approaches An important factor to talk about is Institutions. Institutions in a country are important because. 政治大. they are the ones that will set the norm on the effectiveness of development. Weak institutions will. 立. affect the economy. Some authors, in between them Acemoglu, Johnson, and Robinson (2002), in. ‧ 國. 學. their study ¨exploit differences in European mortality rates to estimate the effect of institutions on. ‧. economic performance¨. The previously mentioned authors propose a theory of institutional differences among countries colonized by Europeans and argue that there existed different types. er. io. al. sit. y. Nat. of colonization policies which created different sets of institutions.. v. n. On the one hand, European powers set up "extractive states,” these institutions did not introduce. Ch. engchi. i n U. protection for private property, nor did they provide checks and balances against government expropriation. As explained by Acemoglu, Johnson, and Robinson (2002), the purpose of the extractive state was to transfer the resources of the colony to the colonizer. Practically steal. On the other hand, some Europeans migrated in the new territory and created some new European styled institutions, which did not happen in the Latin American and Caribbean Region. Therefore Latin-Americans were not benefitted from this. In their results, Acemoglu, Johnson, and Robinson (2002) find that “reducing expropriation risk (or improving other aspects of the "cluster of institutions") would result in significant gains in income per capita.” Acemoglu, Johnson, and 6. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(11) Robinson’s argument then tell us that colonization interfered with the type of Institutions the LAC Region have in present days. Although some authors believe that it is not about if institutions are weak or strong, but about how they manage to solve the conflicts that arise. Rodrik, Subramanian, and Trebbi (2004) argue that “Quality of Institutions trump everything else” referring to other factors that are argued to affect income (which we can use to measure economic development) like geography and integration. The authors conclude that “once institutions are controlled for, integration has no direct effect on income and geography has a weak effect.” La Porta et al. (1998) argues that it is essential to take into consideration the type of legal system. 治政大this has a significant bearing on adopted in a country or imported through colonization because 立 Institution development and income level. Similarly, Gerring, Bond, Barndt, and Moreno (2005),. ‧ 國. 學. state that the length of time democracy has been in existence serves as a rough indicator of its. ‧. degree of institutionalization.. Nat. sit. y. Many studies argue that democracy has a positive impact on economic development. Acemoglu,. n. al. er. io. Naidu, Restrepo, and Robinson (2014), argue that democracy does indeed have a positive effect. i n U. v. on gross domestic product per capita. The authors demonstrate that democratization increase gross. Ch. engchi. domestic product per capita by twenty percent in the following twenty-five years compared to a country that remains a non-democracy. Furthermore, Acemoglu, Naidu, Restrepo and Robinson, find that “democracy increases gross domestic product by investment encouragement, increasing schooling, inducing economic reforms, improving the provision of public goods, and reducing social unrest.” The effect of democracy does not depend on the initial level of economic development, although the authors find some evidence that democracy is more conducive to growth in countries with greater levels of secondary education. The previous argument, is just logical as a democracy should work better when the population has a higher literacy rate because 7. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(12) this will give them the chance to elect their leaders more carefully and be more aware of the effects that policies can cause in a national and personal perspective. Even though this study was not done with an exclusive sample of LAC, the same results could be expected for the LAC region. Democracy creates a stable atmosphere that attracts FDI and national investment. Robert J. Barro (1999), was also in favor of the hypothesis that democracy has a positive effect on growth, stating that “democratization came together with growth.” Barro, also proved in his study that a higher standard of living promotes democracy, and this high standard of living can only be achieved by economic development which gives rise to high quality services in the health and education sector.. 政治大. This general higher standard of living should then lower inequality.. 立. On the other hand, Gerring, Bond, Barndt, and Moreno (2005), in their study show that democracy. ‧ 國. 學. has no significant effect on economic growth, but when measured as a stock variable, democracy. ‧. appears to have a positive relationship on growth performance. They finally conclude that. sit. y. Nat. “democratic experience over the course of the twentieth century is positively associated with. io. al. er. growth in subsequent years. Long-term democracy leads to stronger economic performance”.. n. Acemoglu (2008), discusses the pros and cons of democracy on growth: the “PRO” is that higher. Ch. engchi. i n U. v. levels of democracy tend to be good for growth because it reduces the extent to which existing oligarchies can prevent entry by potential competitors. The “CON” states that democracy leads to higher tax rates in equilibrium, which in turn tends to discourage innovation. Other authors, will not even link the form of government, type of policies, and economic development like Mulligan, Gil, and Sala-I-Martin. (2004). Other authors argue that democracy constraints economic growth for countries with low levels of development, like Aghion, Alesina, and Trebbi (2007), who state that democracy affects productivity differently in different sectors. The authors also suggest that political rights are conducive to growth in more advanced sectors of 8. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(13) an economy, while they have a negative effect on growth in sectors far away from the technological frontier. Democracies tend to have much lower market entry barriers and cost of entry than autocracies. For our study this could imply that the LAC has a lower level of development, hence is not affected positively by democracy. Political accountability reduces the protection of personal interests (by the alternation of power and freedom of the press), and “entry, in turn, is known to be more growth-enhancing in sectors that are closer to the technological frontier.” Therefore, democracy is more beneficial to rich countries that do possess economic sectors that have an advanced value added per worker.. 治政大 argue that democracy has only On a more in-depth view, Cooper, Krieckhaus, and Lusztig (2006) 立 an indirect effect on growth, while corruption has a direct and negative impact on economic. ‧ 國. 學. performance. They say that “one of democracy’s indirect benefits is its ability to mitigate the. ‧. detrimental effect of corruption on economic growth.” The LAC region as every other region in. sit. y. Nat. the world suffers from corruption, but democracy, unlike autocracy, can provide the citizens a. io. al. er. pacific tool to “punish” corrupt leaders by not voting for them in the next elections. Of course,. v. n. only as long as there is an effective accountability system the citizens can rely on.. Ch. engchi. i n U. Branching from democracy and corruption, there is literature suggesting that leaders are important factors affecting development. These leaders through the policies they decide to implement can cause economic growth or stagnation in the country they rule. Jones and Olken (2004) support the leader theory by concluding in their work, that leadership transitions provoke persistent changes in the growth rate of a country. The authors suggest that the effects leaders produce through their policies are stronger in autocratic regimes than in the presence of democratic institutions. Therefore, showing us another benefit derived from institutions. In Przeworski and Curvale (2008), we can observe clearly the conviction of the authors that “Institutions are the key to development.” 9. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(14) The authors concluded that when political institutions managed conflicts according to law, the Researcher could expect economic development in Latin America. Because of the importance of the institutional figure, the Researcher will use institutions as our control variable.. 2.2 Industrial Structures Agricultural significant events like the introduction of the potato from South America to Europe after the discovery, have been proven to have an increase on population and urbanization in the. 政治大. European continent during the eighteenth and nineteenth centuries. Nunn and Qian (2009) study. 立. examined the effect of the introduction of potatoes on population and urbanization in the Old. ‧ 國. 學. World during the eighteenth and nineteenth centuries. The introduction of the potato explained 25–26 percent of the increase in Old World population between 1700 and 1900, and 27–34 percent. ‧. of the rise in urbanization. Data on French soldiers heights, who were born in the seventeenth and. y. Nat. io. sit. eighteenth centuries, made able to find that potatoes increased average adult heights by about half. n. al. er. an inch. The author's findings contribute to providing evidence that nutrition matters in explaining. Ch. i n U. v. part of the rapid population increase over the past three centuries. Nunn and Qian (2009) conclude. engchi. that the availability of potatoes in Europe and its spread to the rest of the world also played an essential role in boosting economic growth in the eighteenth and nineteenth centuries. The point is not to suggest that potatoes had a population boom in the LAC Region, but to point out the relevance of how agricultural products can affect economic development over time. It is no revolutionary thought or conclusion that the Agriculture based economy of LAC has constrained it from achieving the economic development, industrialized economy regions now have. Vakis, Rigolini, and Lucchetti, (2016), through an analysis of sectoral employment of the. 10. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(15) chronic poor, conclude that regions, where people are mostly employed in the agriculture sector, tend to have higher rates of chronic poverty. On the other hand, regions that base their concentration of employment in the high tech industry, services, construction, and retail are more likely to employ people in regions with lower rates of chronic poverty. All of the sections mentioned in this theoretical perspectives section are woven together; they affect each other. The low education in the region affects agriculture, I base myself on the argument of Thirtle, Lin, and Piesse (2003) “Literate farmers are more able to assimilate information and make effective use of the new technologies that become available.” Eclac, Fao, Iica (2015), in their report state that the. 政治大. main reason the LAC has improved in its agricultural productivity is due to the incorporation of. 立. technologies and innovations.. ‧ 國. 學. Consistent with Eclac, Fao, and Iica (2015), Ludena (2010) states that during the past two decades,. ‧. the LAC showed the highest agricultural productivity growth because of significant improvements. sit. y. Nat. in the efficiency and introduction of new technologies. Ludena (2010), states that countries that. io. al. er. have more land because of higher productivity rate outperform the ones with less land. Gollin,. n. Parente, and Rogerson (2002) provide a “model of structural transformation.” This model builds. Ch. engchi. i n U. v. on the works of John Laitner (2000) and Gary Hansen and Edward C. Prescott (2002), where development is associated with structural transformation. The authors show through their model that low agricultural productivity might delay industrialization. When industrialization is delayed Gollin, Parente, and Rogerson (2002) argue that poor agricultural technologies will result in a decrease of the countries income per capita. Therefore, by improving agricultural productivity, the process of industrializing can come faster, resulting this in larger income per capita in the countries.. 11. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(16) Staying behind on the implementation of new trends of agricultural technology affects the economy of countries as they will produce less than their competition. In Latin American countries rural areas, we can find a higher birth rate than in the urban areas, this is usually because of a belief that the more offsprings they have, the more labor work and assistance (for farming) they have at home. Following Thirtle, Lin, and Piesse (2003) work, we can observe that it quantifies the impact of agricultural productivity growth on the incidence of poverty in the Least Developed Countries (LDCs), measured by the percentage of the population living on less than USD 1 per day. His work demonstrates that agricultural growth seems to benefit the poor in Asia and Africa, except in Latin. 政治大. America where the high levels of inequality in income and land distribution forbid the poor sector. 立. from producing gains. The authors state that in Latin America, exports and gross domestic product. ‧ 國. 學. per capita are the factors that lower inequality, but in the region agriculture’s share in the gross. ‧. domestic product is less than in Asia and Africa. Having the right technology and supporting research in the sector will help the agriculture sector develop hence, reducing inequality by. y. Nat. al. er. io. sit. educating the rural population.. v. n. Morris and Adelman (1990) suggest that agricultural development is a precondition that promotes. Ch. engchi. i n U. industrialization. The authors exemplify this argument with United States, Japan, and other countries from the European Union. Furthermore, Bloom, Canning, and Sevilla (2004), state that the tropical factor has recently been viewed as a geographical disadvantage to growth because of the difficulty of diffusing agricultural technologies from temperate to tropical zones, drawbacks in food production, and infectious disease ecology. These difficulties can be solved with proper research and development. Thirtle, Lin, and Piesse (2003) provide an argument that explains that research and development need to be implemented to successfully defeat inequality and raise agricultural growth to increase economic development. In their study investment in agricultural. 12. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(17) research and development, raises agricultural value-added enough to give satisfactory rates of return within the agricultural sector. In Africa (22%) and Asia (31%), but less so in Latin America (10%). 2.3 Education Education is a factor that should not be ignored for understanding what drives economic development (United Nations 2003). Low-quality public education in most of the LAC countries is a variable that allows the cycle of poverty to continue. In UNESCO (2013) it is pointed out that “during the decade of 2,000 most of the LAC countries achieved considerable progress in areas. 治政大 extent poverty reduction.” The such as overall development, economic growth and to a lesser 立. report emphasizes that the achievements mentioned have not been a result in all countries of the. ‧ 國. 學. region, what is certainly replicated in all countries are the internal inequalities “with social class,. ‧. poverty status, and place of residence being the most common manifestations of such inequality.”. sit. y. Nat. Lastly, education progress should increasingly be judged according to new criteria relating to. io. al. er. quality, rather than the mere expansion of education. From the UNESCO (2013) study we can. v. n. conclude that the achievements made so far in education are not considered to help us increase our. Ch. engchi. i n U. economic development. If the quality of education remains low, there will be no reflection of improvement in the population no matter how many people you reach. Knowles, Lorgelly, and Owen (2002) address how educational gender gaps relate to economic development. The authors point out that “In developing countries, the economic gains from educating females are greater than those from educating males.” Their results suggest that educational gender gaps impede economic development, hence gender inequality in education significantly reduces gross domestic product per capita. This study has the advantage that it focuses on developing countries, although not exclusively to LAC. The above-stated results in their. 13. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(18) research give us a clear tested explanation of one of the educational factors truncating economic development in developing countries. Hence, we will test as well gender inequality in education in the LAC Region and compare our results. James Wolfensohn, President of the World Bank, in 1995 argued that “educating girls has a 'catalytic effect' on every dimension of economic development, including higher productivity and faster economic growth.” This argument was proven in the Knowles, Lorgelly, and Owen (2002), and as a disclaimer this does not mean that educating boys is not important, it is important to give them both good quality education to help them grow. But it is important to recognize that when a. 政治大. girl is educated, this education will not just rest in her, but as she becomes a woman and forms her. 立. own family her knowledge and thrive for her family to be educated will be passed on. Knowles,. ‧ 國. 學. Lorgelly, and Owen (2002), continue arguing that “There is evidence that female education,. ‧. especially in developing countries, also produces social gains by reducing fertility and infant mortality, improving family and child health, increasing life expectancy, and increasing the. y. Nat. io. sit. quantity and quality of children's educational attainment (Schultz, 1988; Behrm Deolalikar, 1988;. al. er. Subbarao and Raney, 1995).” The previous is one of the most significant contributions to my. n. v i n C h directly to the U research, because it relates female education reduction of fertility, hence reducing engchi the birth rate.. Martin, Castro, and Juarez (1995), portray how education can give women the advantage to even deal with institutions arguing that the school experience give women competence to interact with institutions, allowing them to benefit from a diverse range of services, including family planning. By educating girls and women, a whole set of opportunities come for them, which might make them delay the idea of starting a family and become economically productive. Hill and King (1993, 1995) present evidence that “the level of female education has a positive significant effect on gross. 14. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(19) national product and also that larger gender gaps in school enrolments reduce gross national product.” Klasen (2002) demonstrates that gender inequality in education affects long-term economic growth. His results show that “gender inequality in education directly affects economic growth by lowering the average level of human capital. Also, growth is indirectly affected by the impact of gender inequality on investment and population growth”. To sum up, the above studies have shown the importance of reducing the gender education gap to promote economic development. Adsera and Menendez (2011), find that urban, young, educated women tend to delay maternity. 政治大. especially when the economy is doing bad, or unemployment indexes are high in the urban area.. 立. By postponing motherhood and investing in their education or/and working become an active part. ‧ 國. 學. of the productive sector which will help raise the economy of their respective countries. Cochrane. ‧. (1979) like Adsera and Menendez (2011), suggest that education will decrease the demand for children in women. With better education, an extended list of variables should get impacted, and. y. Nat. er. io. sit. birth rate being one of them should have an evident decrease in the region. What about the type of education the LAC Region have? Stycos (1965), states that the population. al. n. v i n control issue has been overlooked dueCto arguments suggesting h e n g c h i U that it is only an economic or. political problem that will solve itself by industrialization and education, which will result in a lower fertility rate. Another suggestion is that overpopulation constitutes just a myth encouraged by the imperialists to maintain control of the region. We see and know that the LAC region is not industrialized, this region is still stagnated in the agricultural sector. Logically in the LAC region, education is not technical, and this is an educational demand in some labor areas in the region, Jacinto (2010). Stycos (1965), raises a question concerning if the lack of technical education affects the region’s economic development? Altimir (1996), argues that one of the factors that led. 15. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(20) Latin America to slow its development is that it did not industrialize due to its type of education. He believes education should be technical for it to be innovative and have hope to catch up with the developed countries. Furthermore, he states that from East Asia we could learn that increasing the number of school years and providing adequate job training of the labor force is vital. Therefore, he suggests an education strategy with five components: First, universal access to public education at the basic level. Second, some adequate curricula for secondary education should be implemented. Third, inciting teaching and quality research at universities. Fourth, teaching and research that interacts with other segments of the national system of innovation. Finally, fifth,. 政治大. overall improvement of every level of education. These five components should go hand in hand. 立. with retraining programs for workers. Technical education should be something to consider in. ‧ 國. 學. Latin America as education in every aspect is something that will dictate if a country will thrive. ‧. or no.. 2.4 Birth Rate, Income Inequality, and Economic Development. sit. y. Nat. io. al. er. The researcher considers that the high indexes of birth rate in the LAC are one of the main reasons. v. n. that impede its economic development. Some academic work testing the relation of these variables. Ch. engchi. i n U. have been done, but it is important to point out that the majority of the literature review found, examines fertility and not birth rate as a variable. I chose to test birth rate instead of fertility because birth rate provides us with an accurate number of live children born at a determined time, not restricted to any specific age, group, or ethnicity. In one hand, general fertility rate portrays the total number of live births of a determined age group, usually in the reproductive stage from population age 15 to 44. On the other hand, total fertility rate provides us with a hypothetical number of birth rates woman between age 10 to 49 could have in 5-year age groups. That is if they do follow a trend.. 16. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(21) Therefore, I believe the independent variable “birth rate” to be more accurate and specific for this research. Yet, a study done explicitly testing for a sample that is exclusively from the LAC is an essential need for the region. Therefore, this will be the primary contribution of this study. A particular research, tests both birth rate and economic development to see whether economic development used as an independent variable, will prevent excessive population growth using birth rate as the dependent variable (Weintraub, 1962). Although this study is of great importance, it is necessary to state that this research differentiates from Weintraub’s in its research design. In this research, I will be using economic development as the dependent variable and birth rate as the. 政治大. independent variable.. 立. Weintraub wisely argues that “If our plans to permanently raise living standards in underdeveloped. ‧ 國. 學. nations above the subsistence level are to succeed, preventive checks to family reproductivity are. ‧. necessary.” This argument reflects light on the big problem family reproductivity pose on our. sit. y. Nat. dependent variable. Weintraub used 30 nations as a sample, of which only six are originally from. io. al. er. the LAC region. He uses data retrieved from the UN in the 1950’s and provides three basic. v. n. measures of economic development: per capita income, the ratio of population in farming, and. Ch. engchi. i n U. infant mortality. Weintraub’s results go on and confirm the Malthus, Thomas R. (1798) “Malthusian hypothesis that income increments generate birth rate increases as well as the more widely held hypotheses that birth rates decline with urbanization and decreases in infant mortality.” His final contribution in the article infatuates the importance in policies, stating that “Policies must be devised to assure that continuing high birth rates do not offset or impede efforts to develop underdeveloped economies.” Fifty decades after Weintraub’s study, LAC seems unable to provide effective policies. As per the year, this study was made, I aim to contribute to more modern results with a sample that extends 17. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(22) from 1960 to the year 2015. Although the already confirmed Malthusian hypothesis that states that “income increments generate birth rate increases,” I want to note that education and high-income inequality are important variables, which were completely relegated from this study. Hence, closer attention should be paid to the segment of the population that cannot access education and to the significant income differences between the population. I believe my research for the LAC region can be highly beneficial to the academic community and the LAC governments. Ahituv, A. (2001), created an empirical model to test between fertility and economic development. This important study shows that when population growth decreases by one percent, gross domestic. 治政大 explains that families with low product per capita grows by more than three percent. The research 立 levels of human capital decide to have more children, therefore, income per capita is observed to. ‧ 國. 學. grow faster in developed countries compared to developing countries, in contrast to the Malthusian. ‧. hypothesis.. Nat. sit. y. Brander, James A., and Dowrick, Steve (1994), re-examinded the effects between fertility and. n. al. er. io. popoulation growth on economic growth. Similar results to Ahituv, Avner (2001) are observed.. i n U. v. Brander, James A., and Dowrick, Steve (1994), find that a high number of birth rates reduce. Ch. engchi. economic growth through promoting investment and also could be through capital dilution, on the other hand, a birth rate decline can produce “strong mediun-term positive imapct” on per capita income growth through the means of labor supply, therefore favoring a “Neo-Malthusian” view yet not a classical Malthusian one. To conclude in a clear statement Brander, James A., and Dowrick, Steve. (1994) when birth rate declines we can expect income growth to increase. Doing a more in-depth research on the income subject, I find income inequality explicitly affecting economic development. Persson and Tabellini (1994), notice that in eight developed democracies, inequality has a negative and significant relationship with growth. To test this, the authors used a 18. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(23) general equilibrium model which showed that the greater income inequality is, the lower is equilibrium growth. Although this study was performed on a sample of only developed countries, we should expect the same results in developing countries. The previous argument based on the Kuznets curve, which argues that income inequality first increases and then decreases development. The reason for the severe impact income inequality possess over growth is because income inequality leads to policies that do not protect property rights. Therefore, not allowing a complete private appropriation of returns from investment and “growth-promoting activities” that would redistribute income.. 治政大 and Rodrik (1994). Alesina and Supporting Persson and Tabellini’s (1994) work, we find Alesina 立 Rodrik (1994), see a negative and significant relationship between income and land ownership. ‧ 國. 學. inequality and economic development. The authors use a model of endogenous growth, which. ‧. results show that the higher the rates of taxation are, the lower the economic growth will be.. sit. y. Nat. Alesina and Rodrik state that inequality conduces to the implementation of growth-retarding. io. al. er. policies because problems with distribution that are harmful to growth tend to take place when. v. n. there is resource distribution inequality. Therefore, society would make popular demands which. Ch. engchi. i n U. would be difficult for the governments to ignore without repercussions. Hence, to conclude land distribution and income inequality have a negative effect on growth. Two years later Perotti (1996), further investigates the relationship between income distribution, democratic institutions, and economic growth. Perotti evaluates specific channels of operation of income distribution: endogenous fiscal policy, socio-political instability, borrowing constraints, and endogenous fertility. His sample contains 67 countries of which 17 are LAC countries. The author finds strong support in his data when linking income distribution to socio-political instability and the education/fertility decision. When socio-political instability decreases, 19. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(24) investment and growth increase. Logically, equality increases when socio-political instability decreases. Regarding fertility, Perotti takes into consideration the reviewed Malthusian hypothesis that more income implies a higher demand for children. Yet, he argues against this hypothesis with the “substitution effect” which explains that as the cost of raising children increases, demand for procreation decreases. This effect will remain constant at high levels of human capital because the cost of raising children is a small part of the total costs. Hence, high levels of human capital, lead to less fertility and higher investment in human capital. This result states that “Growth increases. 治政大 Perotti’s results are in line as an investment in human capital increases and fertility decreases.” 立. with Persson and Tabellini(1994) and Alesina and Rodrik (1994) concluding that equality has a. ‧ 國. 學. positive significant effect on growth.. ‧. On the other hand, there are challengers to the arguments detailed before, that explained that. Nat. sit. y. income inequality has a negative effect on economic growth. Between them we can find Forbes. n. al. er. io. (2000), who argues that by using a panel technique she can control for “time-invariant country-. i n U. v. specific effects, therefore eliminating a potential source of omitted-variable bias.” The author uses. Ch. engchi. 45 countries in her sample, of which only nine are from the LAC region. Forbes, claims that in short and medium term, an increase in inequality has a boost in economic growth. Forbes uses Latin America’s high inequality levels as an example, showing that despite them it grew at a fraction of the average East Asian rate. In Forbes study, it is important to note that when country effects are included in her pooled model, the relationship between inequality and growth is positive and significant. Also, despite the author’s robust results, it should not be forgotten that her findings do not apply on the long-run term because of lack of data availability. Most importantly, Forbes does not investigate the interconnectivity between inequality and economic development. 20. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(25) Banerjee and Duflo (2013), follow Forbes line of argument and by using non-parametric methods show that changes in inequality are associated with reduced growth in the subsequent period. The authors agree that this can be caused by a variety of non-observed or unobservable factors related to growth. Banerjee and Duflo, also raise attention on the consistent use of linear relationships on the research of income inequality and growth. They argue that results coming from these linear tests should be doubted. To conclude, Banerjee and Duflo state that their data has “little to say” about the answer to whether inequality is bad for growth. Therefore, the studies done in this thesis could help enrich with arguments on the inequality and growth debate.. 治政大with a theoretical model intend to Lastly, Halter, Oechslin, and Zweimüller (2013), by working 立 show how changes in inequality affect economic growth over time. The author’s consistent with. ‧ 國. 學. Forbes(2000), find that higher inequality boosts economic performance in the short term. On the. ‧. other hand, the authors find that higher inequality reduces GDP per capita growth in the long-run.. sit. y. Nat. Some of the answers to this argued by Halter, Oechslin, and Zweimüller are that it might be that. io. al. er. the growth-reducing effects on economy involve factors that take a long time to settle in. Such as. v. n. institutional change, socio-political movement rising, and education. Therefore, in a non-. Ch. engchi. i n U. shortsighted manner, one should state that inequality is bad for economic development. Indeed, some factors influence economic development, but there exists a logical nexus between the levels of income inequality and high indexes of birth rates affecting economic development. This because income inequality by itself will determine every aspect of human life, including quality of nutrition, quality of education, quality of medical services and the type information we can access. A domino effect could be hoped to be observed when tackling income inequality and birth rates. Other essential variables like education could be impacted as a result of the interaction of income 21. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(26) inequality and birth rates. If we have a reduction of birth rate indexes, there could exist a possibility of governments having more money, which could be used to improve areas that have special needs in a country, like increasing the quality of education. If this optimistic scenario was to happen, then this better-educated people could help in the reduction of income inequality due to the better opportunities they will have in becoming part of a more qualified labor force or a more significant opportunity of saving capital and becoming entrepreneurs. Also, more women in the labor force in both urban and rural areas, can help decrease both birth rates and income inequality. In the same line of thought of what I discussed previously, the rise in income and reduction of the. 治政 income gap between the urban and rural population, should, 大 therefore, increase the quality of life 立 of the population. These people might delay parenthood in order to work, study, or simply to invest. ‧ 國. 學. time in themselves. The longer the population delays parenthood, the more time they have to invest. ‧. in increasing their capital, this giving them the opportunity of being more prepared for the moment. sit. y. Nat. when they decide to start families. These families will, therefore, have better access to education,. io. al. er. health, and every other human need leading to economic development. Hence, we could hope that. v. n. in a place where birth rate indexes and income inequality levels are low, economic development should increase.. Ch. engchi. i n U. Therefore, having reviewed the discussion of the different studies regarding birth rate and economic development, income inequality has to be taken into consideration to have a broader perspective of how economic development is affected by the discussed variables. A testable hypothesis derived from this discussion is that a country that has a high birth rate should have an even lower level of economic development if the country has a high level of income inequality. Thus, the interaction of these two variables affects the level of economic development.. 22. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(27) 3. THE COMBINED EFFECTS OF BIRTH RATE AND INCOME INEQUALITY ON ECONOMIC DEVELOPMENT 3.1 Data, Operationalization, and Measurement In this investigation, the researcher seeks to provide explanations on the variation in poverty in LAC by focusing on the interactive effects of income inequality and birth rates. The researcher will conduct empirical analysis using quantitative data from 1960 to 2015 in LAC. The researcher will also conduct a case study of Honduras to show the importance of income inequality and birth. 政治大 interviews to review the opinion of the elites regarding the researcher’s hypothesis. 立. rate on economic development. In the case study of Honduras, the researcher will perform. ‧ 國. 學. The 33 LAC countries used this investigations as sample are the following:. ‧. Antigua and Barbuda, Argentina, Bahamas, Barbados, Belize, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Dominica, Dominican Republic, Ecuador, El Salvador, Grenada, Guatemala,. y. Nat. er. io. sit. Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname, Trinidad and Tobago, Uruguay,. n. al. and Venezuela.. Ch. engchi. i n U. v. The researcher purposefully does not include the overseas territories located in the LAC region such as Anguilla, Aruba, British Virgin Islands, Cayman Islands, Curaçao, Montserrat, and Sint Maarten. Data from the LAC countries was retrieved from the World Development Indicators provided by the World Bank. These data consist of the most actual global development time series data.. 23. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(28) Variables The following is a table that represents in a simple and clear manner the variables that the researcher used to test her hypothesis. The table is divided into three different kinds of variables. The first one: dependent variable, the second one: independent variable, and the third one: control variables. In each cell of the columns, we can find the indicator used by the researcher to measure the type of variable to which it corresponds.. 政治大. Following this table, a more detailed description of each of the variables and its indicators can be. 立. found.. Economic Development. Independent Variables. Control Variable. Birth Rate. Industrial Structure. ‧. ‧ 國. Dependent Variable. 學. Table 3.1 Variables. y. Nat. GDP per Capita (constant Birth Rate.. n. al. 2010 US$).. Ch. er. io. sit. The indicator used: Log of The indicator used: Crude Indicator used:. n U i engch. Income Inequality. Employment in agriculture. iv. sector as a percentage of total employment. Institutions. The indicator used: Gini index The Indicator used: polity2 of inequality in equivalized household disposable income using Luxembourg Income Study data as the standard. 24. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(29) Interaction of Birth Rate Education and Income Inequality. Government expenditure on education, total (% of GDP). Corruption The Indicator used: Political risk. section. from. the. International Country Risk. 立. 政治大 Guide (ICRG). Remittances. ‧ 國. 學. The Indicator used: Received. ‧. personal remittances as a percentage of total GDP.. er. io. sit. y. Nat. Population. n. al. Dependent Variable. Ch. n U i engch. iv. The dependent variable for this research is economic development. The Cambridge dictionary defines economic development as “the process in which an economy grows or changes and becomes more advanced, especially when both economic and social conditions are improved.” The indicator used to measure economic development in this research is the Log of GDP per capita (constant 2010 US$). The variable is operationalized by dividing gross domestic product by midyear population, resulting in GDP per capita. Data are in constant 2010 U.S. dollars. These. 25. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(30) constant series show the data for each year in the value of 2010 as the base year. Data for GDP per capita constant at 2010 US$ was retrieved from the World Development Indicators in the World Bank. Independent Variables My research will have three independent variables: birth rate, income inequality and the interaction of birth rate and income inequality. The first independent variable, birth rate was used by Weintraub (1962), in a study of birth rate and economic development. Subsequent studies about. 政治大 and methods (1991), defined the crude birth rate as “the number of live births occurring among the 立. this topic changed their variable birth rate for fertility. The Handbook of Vital Statistics Systems. ‧ 國. 學. population of a given geographical area during a given year, per 1,000 mid-year total population of the given geographical area during the same year”, the same reference also defined fertility as. ‧. “the number of children ever born alive during the entire reproductive period of the woman.”. y. Nat. io. sit. I chose birth rate instead of fertility because birth rate provides us with an actual number of births. n. al. er. in the population of a determined country in a given year instead of providing us a number of how. Ch. i n U. v. many births women could have during their reproductive age. This differentiation will allow us to. engchi. test more accurately if there is any correlation between birth rate and economic development in the LAC region. The indicator for birth rate is crude birth rate. Crude birth rate tells us the number of live births in a given year, per 1,000 population estimated midyear. Data for crude birth rate was collected from the World Development Indicators from the World Bank. My second independent variable is income inequality; it is operationalized as the estimate of Gini index of inequality in equivalized household disposable income using Luxembourg Income Study data as the standard. Data on the Gini index of inequality was gathered from the Standardized. 26. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(31) World Income Inequality Database (SWIID) which provides the most-comparable data available on income inequality for cross-national research. From the interaction of birth rate and income inequality, we get our third independent variable. Control Variables In this research, I use three main control variables which are the following: education, industrial structure, and institutions. For the education variable, I use the indicator government expenditure on education which is operationalized as the government expenditure on education as a percentage. 政治大 international sources to the government. The data was collected from the World Development 立. of total GDP. Data for government expenditure on education also includes expenditure funded by. ‧ 國. 學. Indicators of the World Bank.. Regarding the second control variable which is industrial structure, I use employment in. ‧. agriculture sector as a percentage of total employment as an indicator. The data is operationalized. y. Nat. io. sit. by including persons of working age engaged in the agriculture sector which consists of hunting,. n. al. er. forestry, fishing, and of course agriculture. These productions of goods or services should always. Ch. i n U. v. be in exchange for pay or profit. This data was also retrieved from the World Development Indicators of the World Bank.. engchi. The third control variable is the institutional variable. I use the variable polity2, which consists of a modified version of the polity variable for easier use of polity regime measures in time series analyses. This variable is operationalized by modifying the combined annual polity scores (the subtraction of autocracy scores to democracy scores, which results would be from strongly autocratic -10 to strongly democratic +10) and applying a fix to convert instances of standardized authority scores to polity scores. So in a simpler manner, transforming standardized authority. 27. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(32) scores like the following: -66, -77, and -88, to conventional polity scores within the range, -10 to +10. Polity2 data was collected from the Polity IV project. This research will use another set of two complementary control variables including corruption, and remittances. The fourth control variable corruption, is withdrawn from the political risk section from the International Country Risk Guide (ICRG). The variables include financial corruption, excessive patronage, nepotism, job reservations, favor-for-favors, close ties between politicians and businesses, and secret party funding. The corruption variable in the ICRG ranges from 0-6, higher values indicate lower levels of corruption. But to help on the better comprehension of my. 治政 research and provide a more intuitive sense, the variable was 大 transformed by subtracting it from 6. 立. Therefore, higher values now indicate higher levels of corruption. The data for corruption was. ‧ 國. 學. collected from the International Country Risk Guide (ICRG) database.. ‧. Lastly, our fifth control variable is the received personal remittances as a percentage of total GDP.. Nat. sit. y. The variable is operationalized as the sum of personal transfers and compensation of employees.. n. al. er. io. Personal transfers refer to all transfers made or received by resident households to or from. i n U. v. nonresident households, in cash or in kind. On the other hand, compensation of employees refers. Ch. engchi. to the income of border, seasonal, and other short-term workers employed in an economy where they are non-resident, and of residents employed by non-resident entities. Data on personal remittances as a percentage of total GDP was also retrieved from World Development Indicators of the World Bank. Originally, the researcher wanted to cover 1,848 observations, which consisted of 33 countries with 55 years from the year 1960 to the year 2015. However, due to missing data for some of the variables included in the model, the research ends up with 255 observations.. 28. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(33) A limitation experienced by the researcher in this study was the unavailability of data. This data unavailability is what reduced the observations to only 255. In order to aid the reader to have a clearer view about the observations available for each country per every variable, a table is provided below. Therefore, the table shows: in the first column the LAC country being observed and in the second column: the years the data is available for observation. Despite this big limitation, the researcher believes important to observe the results this data can provide. If we were to ignore the LAC’s region problematic every time due to data insufficiency, then no study that could serve as a starting guide to help the region would be developed.. 學. Table 3.2 Observations included in the empirical analysis. Country. Years. Argentina. 1996-2013. Colombia Costa Rica. y. sit. 1995, 1998 -2013. al. iv n 1998-2013 U. 2000, 2002-2013. n. Chile. 1994-2003, 2006, 2008-2013. er. io. Brazil. Nat. Bolivia. ‧. ‧ 國. 立. 政治大. Ch. engchi. 1995-1996, 1999-2004, 2006-2013. Dominican Republic. 1993-1996, 2000-2003, 2007. Ecuador. 1995, 1998-2000, 2009-2013. Guatemala. 1993-1996, 2006-2013. Guyana. 1994-1995, 1999-2007. Honduras. 1994-1995, 2013. Jamaica. 1991-1997, 2000-2004. Mexico. 1991-1992, 1994-1995, 1998-2013. Nicaragua. 1998-2000, 2002-2003, 2010 29. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(34) Panama. 1994-1997, 1999-2004, 2008, 2011. Peru. 1993, 1995-2012. Paraguay. 1998-2004, 2007, 2010-2012. El Salvador. 1993-1995, 1997-1998, 2000-2010. Trinidad y Tobago. 1994-2003. Uruguay. 2001-2006, 2011. Venezuela. 1992-1994, 2006-2007, 2009. 立. 政治大 3.2 Empirical Results. ‧ 國. 學. In my empirical analysis, I will use as my estimation method the ordinary least squares (OLS) regression with robust standard rrors to estimate the combined effect of birth rate and income. ‧. inequality on economic development. Table 4.1 exhibits the results for the empirical models that. y. Nat. al. er. io. sit. show the variables that affect economic development in Latin America and the Caribbean. In Model 1, the coefficient of the birth rate is negative and statistically significant. This result is. n. v i n C h and DowrickU1994; Ahituv 2001) that suggests that consistent with the previous literature (Brander engchi a country with a higher birth rates tends to have a lower level of economic development. In addition, the coefficient of the inequality is also negative and statistically significant. This finding is consistent with Persson and Tabellini (1994), suggesting that a country’s economic development decreases with a higher level of income inequality. More importantly, Model 2, shows that the coefficient of the interaction of birth rate and* level of inequality is negative and statistically significant. This indicates that, in a country with a high birth rate, the level of economic development tends to be much lower when this country has a higher 30. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(35) level of income inequality. Put it differently, this result suggests that a country that has a low birth rate and a low level of inequality will have better economic development. This evidence suggests that it is necessary to consider the multiplicative effects of birth rate and income inequality when examining the factors that drive economic development. The coefficient of birth rate and that of income inequality are positive and statistically significant in Model 2. The interpretation of these results is less straightforward because of the inclusion of the interaction term. Technically, the results suggest that a positive change of birth rate has a positive effect on economic development when income inequality equals zero, and a positive. 治政 change of income inequality has a positive effect on economic大 development when birth rate equals 立 zero.. ‧ 國. 學. Employment in the agriculture sector, is negative and statistically significant in both models. This. ‧. result suggests that as employment in agriculture increases, economic development decreases. In. Nat. sit. y. other words, economic development is slower when there are more people working in the. n. al. er. io. agriculture sector. This result is consistent with studies that argue that the poverty reducing effects. i n U. v. of agriculture declines as countries get richer (Christiaensen and Demery, 2007; Ligon and Sadoulet, 2007).. Ch. engchi. Table 3.3 Effects of birth rate and income inequality on economic development in Latin America and the Caribbean. Variable Birth Rate Level of Inequality Birth Rate * Level of Inequality Government Expenditure on Education (%GDP) Employment in Agriculture Sector. Model 1 -0.633*** (0.007) -0.026*** (0.007) — -0.010 (0.015) -0.012***. Model 2 0.152* (0.067) 0.072** (0.027) -0.005*** (0.001) -0.005 (0.015) -0.014*** 31. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(36) Corruption Level of Democracy Received Personal Remittances (%GDP) Population (log) Constant R-squared N Note: *p<0.1; **p<0.05; ***p<0.01. (0.003). (0.003). -0.008 (0.026) 0.011 (0.010) -0.023*** (0.004) 0.106*** (0.012) 9.718*** (0.317) 0.762 255. -0.013 (0.025) 0.012 (0.010) -0.028*** (0.004) 0.083*** (0.012) 5.450*** (1.320) 0.773 255. 政治大 Models 1 and 2. This result suggests 立that as the amount of personal remittances as a percentage of Also, received personal remittances (%GDP) is negative and statistically significant in both. ‧ 國. 學. gross domestic product increases, the economic development of a country will decrease. In other words, the more a countries economy rely on received personal remittances, the slower its. ‧. economic development will be. This result opposes the new economics of labor migration. Nat. sit. y. (NELM). “NELM” argues that migration and remittances have positive indirect effects on incomes. n. al. er. io. in migrant sending households, easing capital and risk constraints on local production. On the other. i n U. v. hand, it supports Taylor, E.J. (1,999) argument, who explains that “economic environments that. Ch. engchi. encourage out-migration also limit the potential for migrant remittances to stimulate development in migrant sending areas.” This result may be due to immigrant remittances truncating selfsustaining growth in the immigrant’s home county. For the rest of the control variables, we find that the result for population is positive and statistically significant, suggesting that larger countries tend to have a higher level of economic development. In addition, corruption does not have a statistically significant effect on economic development. In other words, a country could have a higher or lower level of economic development regardless of its level of corruption. Moreover, we find that the coefficient of the level of democracy is 32. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.

(37) statistically insignificant, suggesting that a country’s level of democracy does not have a statistically significant effect on economic development. The results also show that the coefficient of government expenditure on education (%GDP) does not reach statistical significance. It is possible that this education variable might be an intervening variable between my independent variable and dependent variable. However, the finding suggests that the coefficient of the interaction term is theoretically expected and statistically significant. In fact, the result does not alter much with or without the inclusion of the education variable in the model. Therefore, the education variable should not be an intervening variable that could greatly. 治政大 statistics in model 1 is of 0.762, affect the result of my independent variable. Finally, the R-squared 立 and that in Model 2 is 0.773. Therefore, the models fit my data pretty well.. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. 33. DOI:10.6814/THE.NCCU.IMPIS.004.2018.A06.