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Although forests have diminished globally over the past 400 years, forest cover has increased in some areas, including India in the last two decades. Aggregate time-series evidence on forest growth rates and income growth across countries and within India and a newly-assembled data set that combines national household survey data, census data and satellite images of land use in rural India at the village level over a 29-year period are used to explore the hypothesis that increases in the demand for forest products associated with income and population growth lead to forest growth. The evidence is consistent with this hypothesis, which also shows that neither the expansion of agricultural productivity nor rising wages in India increased local forest cover Download Paper
In this paper we exploit a unique panel data set describing village governance, public goods allocations, and economic circumstances in India over the past twenty years to examine the consequences of democratization and fiscal decentralization within a model that highlights landownership-based interest groups. We first construct a simple model of two-party representative democracy with probabilistic voting in which local governments must choose to allocate public resources among three different goods representing the principal local public goods in Indian villages: roads, which primarily benefit the poor by raising wages; irrigation facilities, which differentially benefit landowners; and schools which have neutral effects. We embed the voting model in a general-equilibrium model of the rural economy in order to capture the general-equilibrium effects of changes in the landless share on the economic returns to the public goods. The model yields predictions about how the landless share affects allocations of the specific public goods under democracy relative to an alternative regime in which the local elite have a disproportionate effect on outcomes relative to that dictated by democracy. The model also has implications for the effects of ceding revenue-generating authority to the local governing body that permit an assessment of the differential burden of taxation on the rich and poor. Based on specifications consistent with the model, we then find evidence consistent with the two-party model of democracy in which increasing the population weight of the poor induces public resource allocations that increase the welfare of the poor. However, we also find that local taxes, where they are permitted, are regressive - the (landless) poor pay a higher tax rate on consumption than do the rich. Finally, we assess the growth implications of local democratization. Our evidence is consistent with almost-perfect substitution of public and private irrigation investment. Our findings thus suggest that the shift in the portfolio of local public goods associated with local democratization in part represents a transformation of a local welfare program from one that serves the rich to one that increases the welfare of the poor with possibly a net gain in total output. Download Paper
The recent availability of longitudinal data from low-income countries makes possible for the first time the identification of the consequences of growth-augmenting innovations for household income change. However, it has become increasingly recognized that both the analysis and design of panel surveys is importantly affected by the break-up of households over time. In this paper we formulate, test, and estimate a structural model of household division. The model yields implications for how household size and intra-household inequality interact with exogenous income growth to affect (i) the amount of the household public good that is consumed, (ii) which households divide, (iii) the exact divisions of the assets among the new households and (iv) the evolution of the incomes of the new configurations of households. The model is estimated using panel data describing Indian farm households starting from the onset of the Indian "green revolution" in the late 1960's through 1982. The estimates indicate that inattention to the consequences of technical change for household division can lead to a substantial overestimate of the extent to which better-off households differentially benefit from technical change and demonstrate that the amount of within-household inequality can have important effects on the evolution of land assets over time and for the interhousehold distributional consequences of economic growth. Download Paper
In this paper we develop a two-strata general-equilibrium model of human capital acquisition with endogenous school construction that permits an assessment of the relative impacts of technological change and school availability on schooling investments in landless and landed households and illuminates how these choices interact through the adult and child labor markets. A key distinction is made between changes in current levels of agricultural productivity, which directly affect the demand for labor in both landless and landed households, and changes in expected agricultural technology, which only affect the contemporaneous schooling decisions and thus the labor supply of landed children. The implications of the model are assessed using a household-level panel data set which constitutes a representative sample of rural India during the peak period of agricultural innovation associated with the green revolution, 1968-1982. We establish that land prices capitalize expected future technologies and use the spatial and temporal variation in land prices to determine how household schooling decisions by land status are influenced by expected technological change. We find that higher expected future technology and increases in the number of schools, for given current productivity, raise schooling in landed households. However, although increased school availability also increases schooling in landless households we find that, consistent with the operation of a child labor market, high rates of expected technology for given school availability and for given current agricultural productivity tends to substantially decrease schooling investment in landless households. Download Paper
</p> A newly-assembled data set that combines national household survey data, census data and satellite images of land use in rural India over a 29-year period is used to obtain estimates of economic growth and population effects on forests, to identify the mechanisms by which these factors affect land use, and to address whether forest areas are efficiently managed where community land management is present.  The evidence suggests that increases in the returns to alternative uses of land induced by agricultural technical change and population growth, combined with the difficulty of monitoring forest-resource extraction, are the major contributing factors to deforestation.   Download Paper
Increased investment in schooling is often promoted as a key development strategy aimed at promoting economic growth. Most of the micro evidence that has been used to support the importance of schooling in augmenting incomes in low-income countries comes mainly from data describing the returns to schooling for men (e.g, Psacharopolous, 1994).  Given the relatively low rates of participation by women in formal-sector labor markets in such countries, information on the potential contribution of women’s schooling to income is less available and where found problematical to interpret due to labor market selectivity. Download Paper