Prof. Shuaizhang Feng Department of Economics Spring 2014 Chinese University of Hong Kong
Econ 5460 – Development Economics
This course explores the framework and analytical methods commonly used in applied economic research, drawing most of the examples from development economics and labor economics. The main objective of this course is to examine how analytical tools of economics can be applied in studying simple models of individual, household, and market behavior.
The requirements for the course include class participation (10%), presentation (40%) and a term project report (50%). The project may be a small theoretical or empirical exploration; a discussion and critique of the existing literature on a specific topic; an extensive data exercise based on some data sets; or the project may take the form of a research prospectus. While this requirement may help students start exploring research ideas and gaining expertise in specific research areas, they may also use this opportunity to expand and deepen their research of an ongoing project.
An outline of the topics for study and a list of required readings are given below. This is a tentative plan, and as we go along, I will possibly specify other readings on which I want to lay emphasis. There are no required books for this course.
The nearest reading materials to a textbook are various volumes of economics handbooks, including the Handbook of Development Economics (Vols. I and II, edited by H. Chenery and T.N. Srinivasan, 1989; and Vol. IIIA-B, edited by J. Behrman and T.N. Srinivasan, 1995) and the Handbook of Labor Economics (Vols. I and II, edited by O. Ashenfelter and R. Layard, 1988; and Vol. IIIA-B, edited O. Ashenfelter and D. Card, 1999). These handbooks contain chapters written by leading specialists on methods and findings in important research areas.
Measures have been set in place to educate students about honesty in academic work. Disciplinary actions for dishonesty cases have been strengthened. Students are advised to read the guide at http://www.cuhk.edu.hk/policy/academichonesty/.
Part 1: Empirical strategies in applied research
(*)Duflo, E., R. Glennerster, and M. Kremer, 2007, “Using Randomization in Development Economics Research: A Tool Kit,” Handbook of Development Economics Volume 4, 3895-3962.
(*)Lee, David, and Thomas Lemieux, 2010, “Regression Discontinuity Designs in Economics” Journal of Economic Literature 48, 281-355.
(*)Bertrand, M., E. Duflo, and S. Mullainathan, 2004, “How Much Should We Trust Differences-in-Differences Estimates?” Quarterly Journal of Economics 119, 249-275. (*)Meyer, B. D., 1995, “Natural and Quasi-Experiments in Economics,” Journal of
Business and Economics Statistics 13, 151-161.
(*)Angrist, Joshua D. and Alan B. Krueger, 2001, “Instrumental Variables and the Search for Identification: From Supply and Demand to Natural Experiments”, Journal of Economic Perspectives 15(4), 69-85.
Angrist, J. D., and Pischke, J. S., Mostly Harmless Econometrics: An Empiricist’s Companion, Princeton University Press, 2009.
Jeffrey M. Wooldridge, 2002, Econometric Analysis of Cross Section and Panel Data. Cambridge, MA: MIT Press.
Heckman, James, 2000, “Causal Parameters and Policy Analysis in Economics: A Twentieth Century Retrospective,” Quarterly Journal of Economics 115, 45-97.
Murray, Michael P., 2006, “Avoid Invalid Instruments and Coping with Weak Instruments”, Journal of Economic Perspectives 20(4), 111-132.
Deaton, Angus, “Data and Econometric Tools for Development Analysis,” in Hollis Chenery and T. N. Srinivasan, Editors, Handbook of Development Economics (1995). Part 2: The agriculture sector and rural land market
(*)Yao, yang, 2000, “The Development of the Land Lease Market in Rural China”, Land Economics 76(2), 252-266.
(*)James Kai-sing Kung, 2002, “Off-Farm Labor Markets and the Emergence of Land Rental Markets in Rural China”, Journal of Comparative Economics 30, 395–414. (*)Deininger, Klaus, Songqing Jin, 2005, “The potential of land rental markets in the
process of economic development: Evidence from China”, Journal of Development Economics 78, 241– 270.
(*)Schlenker, Wolfram, Michael J. Roberts 2009, “Nonlinear temperature effects indicates severe damages to U.S. crop yields under climate change”Proceedings of the National Academy of sciences of USA, 106(37): 15594-15598
Liu, Elaine 2013, “Time to change what to sow: risk preferences and technology adoption decisions of cotton farmers in China”. Review of economics and statistics. Volume 95(4), 1386-1403
Rozelle, Scott and Guo Li, 1998, “Village Leaders and Land-Rights Formation in China”. American Economic Review: papers and proceedings 88(2), 433-438.
Abdulai, Awudu, Victor Owusu, Renan Goetz, 2011, “Land tenure differences and investment in land improvement measures: Theoretical and empirical analyses”, Journal of Development Economics 96, 66–78.
Fenske, James, 2011, “Land tenure and investment incentives: Evidence from West Africa”, Journal of Development economics 95, 137-156.
Duflo, Esther, Michael Kremer, Jonathan Robinson, 2011, “nudging farmers to use fertilizer: theory and experimental evidence from Kenya”, American Economic Review 101, 2350-2390.
(*)S. Bertoli, J. Fernández-Huertas Moraga, F. Ortega, 2013, “Crossing the border: Self-selection, earnings and individual migration decisions”, Journal of Development Economics 101, 75-91.
(*)Cortes, Patricia, 2008, “The Effect of low-skilled Immigration on U.S. prices: Evidence from CPI data”, Journal of Political Economy 116(3), 381-422.
(*) Zhao, Yaohui, 1999, “Leaving the Countryside: Rural-To-Urban Migration Decisions in China”, American Economic Review: Papers and Proceedings 89(2), 281-286.
(*) Antman, Francisca M., 2011, “The intergenerational effects of paternal migration on schooling and work: what can we learn from Children’s time allocations?”, Journal of Development Economics 96, 200-208.
Hornbeck, Richard, 2012, “The Enduring Impact of the American Dust Bowl: Short- and Long-run Adjustments to Environmental Catastrophe”, American Economic Review 102(4), 1477-1507.
Munshi, Kaivan, 2003, “Networks in the Modern Economy: Mexican Migrants in the U. S. Labor Market”, Quarterly Journal of Economics 118(2): 549-599.
Liang, Zai and Michael J. White, 1996, “Internal Migration in China, 1950-1988” Demography 33(3), 375-384.
Carrington, William J., Enrica Detragiache and Tara Vishwanath, 1996, “Migration with Endogenous Moving Costs”, American Economic Review 86(4), 909-930.
Part 4: Inequality, wages and income distribution
(*) Kanbur, Ravi and Xiaobo Zhang 1999, “Which regional inequality? The evoluation of rural-urban and inland-coastal inequality in China from 1983 to 1995.”Journal of Comparative Economics 27, 686-701.
(*) Kanbur, Ravi and Xiaobo Zhang 2005, “Fifty years of regional inequality in China: A journey through central planning, reform and openness”Review of Development Economics 9(1), 87-106.
(*) Sicular, Terry, Ximing Yue, Bjorn Gustafsson, Shi Li 2007, “The urban-rural income gap and inequality in China” Review of Income and Wealth 53(1).
(*) Zhang, junsen, J. Han, P.W. Liu and Y Zhao, 2008, “Trends in the Gender Earnings Differential in Urban China, 1988-2004," Industrial & Labor Relations Review 61, 224-242.
(*) Meng, xin, kailing Shen, Sen Xue, forthcoming, “Economic reform, education expansion, and earnings inequality for urban males in China, 1988–2009”, Journal of Comparative Economics.
(*) Ge, Suqin and Dennis Tao Yang, fortcoming, “Changes in China’s wage structure”Journal of European Economic Association.
Meng, xin, 2012, “labor market outcomes and reforms in China” Journal of Economic Perspectives 26(4), 75-102.
Belton Fleisher, Haizheng Li, Min Qiang Zhao, 2010, “Human capital, economic growth and regional inequality in China”, Journal of Development Economics 92, 215–231"
Zhang, Junsen, Zhao, Yaohui, Park, Albert, and Song, Xiaoqing. “Economic Returns to Schooling in Urban China, 1988-2001,” Journal of Comparative Economics 33 (2005), 730-752.
Card, David. 2001. “Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems,” Econometrica 69 (5): 1127-1160.
Angrist, J. D. and A. B. Krueger. 1991. “Does Compulsory Schooling Attendance Affect Schooling and Earnings?” Quarterly Journal of Economics 106 (4): 979-1,014.
Zang, xiaowei, 2002, “Labor market segmentation and income inequality in China”, the sociological quarterly 43(1), 27-44.
Li Hongbin, Lei Li, Binzhen Wu and Yanyan Xiong, 2012, “The end of cheap Chinese labor”, Journal of Economic Perspectives 26(4), 57-74.
Part 5: The Chinese savings puzzle
(*) Chamon, Marcos, Kai Liu and Eswar Prasad 2013, “Income uncertainty and household savings in China”, Journal of Development Economics 105, 164-177.,
(*) Modigliani, Franco, Shi Larry Cao, 2004, “The Chinese saving puzzle and the life-cycle hypothesis”, Journal of Economic Literature XLII, 145-170.
Taha Choukhmane, Nicolas Coeurdacier, Keyu Jin, The one child policy and household savings. Working paper.
(*) Feng, Jin, Lixin He, Hiroshi Sato 2011, “Public pension and household savings: evidence from urban China”Journal of Comparative Economics 39, 470-485.
(*) Marcos D. Chamon and Eswar S. Prasad 2010. Why are savings rates of urban households in China rising? American Economic Journal: Macroeconomics 2(1), 93-130. Wei, Shang-jin and Xiaobo Zhang , The competitive saving motive: Evidence from rising
sex ratios and savings rates in China. Journal of Political Economy.
Song, Zheng, and Dennis Tao Yang, 2010“Life Cycle Earnings and the Household Saving Puzzle in a Fast-Growing Economy”. Working paper.
Yang, Dennis Tao, Junsen Zhang, Shaojie Zhou 2011, “Why are savings rate so high in China”, working paper.
Part 6: globalization & labor market
(*)Verhoogen, Eric A., 2008, “Trade, Quality Upgrading, and Wage Inequality in the Mexican Manufacturing Sector.” Quarterly Journal of Economics 123 (2), 489–530. (*)Han J. , R. Liu, junsen zhang, 2012, “Globalization and Wage Inequality: Evidence
from Urban China", Journal of International Economics 87(2), 288-297.
(*)David H. Autor, David Dorn, Gordon H. Hanson, forthcoming, “The China Syndrome: Local Labor Market Effects of Import Competition in the United States”, American Economic Review.
(*)Cortes, Patricia, Jessica Pan, forthcoming. “Outsourcing Household Production: Effects of Foreign Domestic Helpers on Native Labor Supply in Hong Kong”, Journal of Labor Economics.
(*) Hering, Laura, Sandra Poncet, 2010, “market access and individual wages: evidence from China”, Review of Economics and Statistics 92(1), 145-159.
Krishna, Pravin, Jennifer P. Poole, and Mine Zeynep Senses, 2012, “Trade, Labor Market Frictions, and Residual Wage Inequality across Worker Groups”, American Economic Review: Papers and Proceedings 102(3), 417-423.
Amiti, Mary, Beata Smarzynska Javorcik. 2008. “Trade costs and location of foreign firms in China”, Journal of Development Economics 85(1-2),129-149.
Hsieh, C. T. and Woo, K. T. (2005): The Impact of Outsourcing to China on Hong Kong’s Labor Market,” American Economic Review, 1673-87.
Fally, Thibault, Rodrigo Paillacar, Cristina Terra, 2010, “Economic geography and wages in Brazil: evidence from micro-data”, Journal of Development Economics 91, 155-168.
