A Conversation with Professor Behrman on Development Economics

Economics, Quick Reads, Quick Reads
Reading Time: 4 minutes

Professor Jere Behrman is the William R. Kenan Jr. Professor of Economics at the University of Pennsylvania. His work on the role of human capital in development has been incredibly influential, having served as the director of the Center for Analysis of Developing Economies in the past. It was a privilege and pleasure to speak to him about his research and its policy implications. (The interview is edited for clarity and brevity.)

Trevor Chow: Professor Behrman, thank you for coming – as someone ranked in the top 1% of economists worldwide in your influence on the literature according to IDEAS/RePEc, many of us are acutely aware of your contribution to development economics. I want to begin with your work in certain states in sub-Saharan Africa, where there is a preference towards having boys rather than girls. That is especially the case during famine – how can this be best resolved?

The first thing is to distinguish between preferences and incentives – that is, if markets reward men more than women, parents will be incentivised into having boys. This is exacerbated if public social security systems are weak, such that parents consider children to be providers after retirement. Likewise, if healthcare is more available for boys this is going to shift the decisions of parents. Another institution that affects incentives for having boys compared to girls is the marriage market, such as in India where large dowry payments may incentivise having boys. In the longer-run, we’d like these markets to be unbiased with respect to sex or gender such that this favouritism is reduced. There have been some conditional cash transfer programs for this purpose, the most famous of which is in Mexico, which was originally called Progresa in 1997. This gave money to children and their families if they attended class 85% of the time. It gave more to girls than to boys beyond a post-primary level of schooling. Another case was in Bangladesh with scholarships being made available only for girls, increasing the incentive for investing in education for girls. On the other hand, if it is merely preferences where parents care more about boys, this is a trickier problem – and requires campaigns that change norms about family structures. However, it is uncertain what the welfare implications of shifting norms might be, making this a less transparent issue.

TC: Another aspect of your research is finding that the correlation between income and nutrition weakens as income increases. Do you think there is a reason why families do not spend the same proportion of their income on nutrition and would some sort of subsidy be useful in this area?

The evidence suggesting that the response in nutrient intake is positive with income increases, but not very large, comes from looking at macronutrients, such as calories and proteins. Those are important for survival and basic growth, especially in terms of growth in body height. There are also micronutrients such as vitamins and minerals, important for overall and neural development. The responsiveness of these micronutrients to income increases is higher, and it is possible that as income increases, families stop buying more foodstuffs that merely increases the quantity of macronutrients and substitute to buying better foodstuffs with more micronutrients. Conditional cash transfers could be useful to correct for the fact that some parents may not be aware of the benefit improved nutrition can have on their children’s prospects. A study in Bangladesh found that combining unconditional cash transfers with information about the benefits and cooking methods of high nutrient foodstuffs was fairly effective.

TC: When we are considering improving the access to nutrition, do you think that there is a role for the direct provision of foodstuffs from governments to households?

Definitely – my work in Guatemala found that children who received protein-enhanced nutrient supplements when they were less than 2 years old had effects on their wage rates 30 to 40 years later, and continued to do better on cognitive tests. Coutries such as India and Egypt have tried to engage in large-scale food provision programs, but have often failed in providing poor people with higher quality food, due to waste and corruption. Another problem is seen in the tortilla subsidy program in Mexico, which was not targeted well, with much of the subsidies doing to upper and middle-income populations. 

TC: The development of human capital is affected by the schooling people receive. What do you think are some important considerations in order to maximize the returns from education? How is schooling inequality affected by the access to education of a child’s parents?

On the surface, improving the quantity of schooling is a good thing, since the disadvantaged would likely have been left behind without this expansion. However, it is unclear the extent to which people are learning in these poor learning environments if they are poorly funded. A large randomized controlled trial in Mexico provided incentives for high or improved results in mathematics. Comparing the provision of incentives, it was clear that the relatively small additional costs of providing incentives to both teachers and students, instead of only one party, led to large gains in attainment. With respect to the issue of intergenerational transfer, parents are typically the primary source of stimulation and learning early in a child’s life. Programs to educate parents on methods of raising children in more stimulating ways have proven to be cost-effective – one example is teaching parents to talk to children before they can themselves speak. Although this may unnecessary since they are not engaging in conversation, it has been seen to have benefits to their vocabulary and language learning later on in life. 

TC: Finally, a lot of your work has been done via twin studies and randomized controlled trials, with these techniques being increasingly popular especially due to the recent Nobel Prize winners. Do you think RCTs are the future of development economies and are there any particular flaws?

RCTs are an important tool within the toolkits of economists and social scientists. However, they have a number of limitations. Firstly, some bigger questions of exchange rate policy or trade openness are not investigatable very well by RCTs. Secondly, RCTs are primarily good at looking at well-defined and specific questions – for example, the previously mentioned RCT on mathematics attainment is useful in considering the incentives of students. However, it may not consider the broader picture of fostering an interest in learning outside of school, or any number of other factors involved in improving human capital. Thirdly, there is an inherent limit of extrapolating across different contexts, with varying cultural and economic practices varying across the world. The expansion of RCTs has been positive in the field, but they only illuminate specific questions in a black box sort of way – if I change variable A what happens to variable B. Indeed, there are many other tools available, such as constructing structural models and comparing counterfactual experiments. 

TC: I’d like to thank you for giving up your time to talk about development economics. It has been incredibly insightful to learn about some of the specific microeconomic studies you have done and how they shape current policy prescriptions.

Thank you very much.

Leave a Reply