Agricultural growth has long been recognized as an important instrument for poverty reduction. Yet, measurements of this relationship are still scarce and not always reliable. This paper presents additional evidence at both the sectoral and household levels based on recent data. Results show that rural poverty reduction has been associated with growth in yields and in agricultural labor productivity, but that this relation varies sharply across regional contexts. GDP growth originating in agriculture induces income growth among the 40% poorest which is on the order of three times larger than growth originating in the rest of the economy. The power of agriculture comes not only from its direct poverty reduction effect but also from its potentially strong growth linkage effects on the rest of the economy. Decomposing the aggregate decline in poverty into a rural contribution, an urban contribution, and a population shift component shows that rural areas contributed more than half the observed aggregate decline in poverty. Finally, using the example of Vietnam, we show that rapid growth in agriculture has opened pathways out of poverty for farming households. While the effectiveness of agricultural growth in reducing poverty is well established, the effectiveness of public investment in inducing agricultural growth is still incomplete and conditional on context.

In the midst of the global recession, how have national governments viewed the role of higher education in their evolving strategies for economic recovery? Demand for higher education generally goes up during economic downturns. Which nations have proactively protected funding for their universities and colleges to help maintain access, to help retrain workers, and to mitigate unemployment rates? And which nations have simply made large funding cuts for higher education in light of the severe downturn in tax revenues? This essay provides a moment-in-time review of the fate of higher education among a number of OECD nations and other countries, with a particular focus on the United States, and on California – the largest state in terms of population and in the size of its economy. Preliminary indicators show that most nations have not thus far resorted to uncoordinated cutting of funding for higher education that we generally see in US state systems. Their political leaders see higher education as a key to short-term economic recovery, long-term competitiveness, and often their own political viability – particularly in nations with upcoming elections. Further, although this is speculative, it appears that many nations are using the economic downturn to actually accelerate reform policies, some intended to promote efficiencies, but most focused on improving the quality of their university sector and promoting innovation in their economies. One might postulate that the decisions made today and in reaction to the “Great Recession” by nations will likely speed up global shifts in the race to develop human capital,with the US probably losing some ground. The Obama administration’s first stimulus package helped mitigate large state budget cuts to public services in 2009-10 and to support expanded enrollments largely at the community college level. But it was not enough to avoid having universities and colleges lay off faculty and staff, reduce salaries and benefits, often eliminating course offerings that slow student progress towards a degree, or making sizable reductions in access in states such as California. States have very limited ability to borrow funds for operating costs, making the federal government the last resort. In short, how state budgets go, so goes US higher education; whereas most national systems of higher education financing is tied to national budgets with an ability to borrow. Without the current stimulus funding, the impact on access and maintaining the health of America’s universities would have been even more devastating. But that money will be largely spent by the 2011 fiscal year (Oct 2010-Sept 2011), unless Congress and the White House renew funding support on a similar scale for states that are coping with projected large budget gaps. That now seems unlikely. The Obama administration announced its proposed 2011 budget in February, including $25 billion in state aid targeted for Medicaid. This is a modest contribution to states that face projected cumulative budget deficits of $142 billion in 2011, and there is uncertainty regarding the final federal budget. This is because Obama’s proposal will be debated and voted on in a Congress increasingly focused on stemming the tide of rising federal budget deficits. Without substantially more federal aid to state governments, many public colleges and universities will face another major round of budget cuts.   There is the prospect that higher education degree production rates in the US will dip in the near term, particularly in states like California that have substantially reduced access to higher education even as enrollment demand has gone up.

The EITC is intended to encourage work. But EITC-induced increases in labor supply may drive wages down. I simulate the economic incidence of the EITC. In each scenario that I consider, a large portion of low-income single mothers’ EITC payments is captured by employers through reduced wages. Workers who are EITC ineligible also see wage declines. By contrast, a traditional Negative Income Tax (NIT) discourages work, and so induces large transfers from employers to their workers. With my preferred parameters, $1 in EITC spending increases after-tax incomes by $0.73, while $1 spent on the NIT yields $1.39.

Despite extensive public infrastructure spending, surprisingly little is known
about its economic return. In this paper, we estimate the value of school facility
investments using housing markets: standard models of local public goods imply
that school districts should spend up to the point where marginal increases would
have zero effect on local housing prices. Our research design isolates exogenous
variation in investments by comparing school districts where referenda on bond
issues targeted to fund capital expenditures passed and failed by narrow margins. We extend this traditional regression discontinuity approach to identify the dynamic treatment effects of bond authorization on local housing prices, student
achievement, and district composition. Our results indicate that California school
districts underinvest in school facilities: passing a referendum causes immediate, sizable increases in home prices, implying a willingness to pay on the part of marginal homebuyers of $1.50 or more for each $1 of capital spending. These
effects do not appear to be driven by changes in the income or racial composition of
homeowners, and the impact on test scores appears to explain only a small portion
of the total housing price effect.

Growing concerns over the inadequate achievement of U.S. students have
led to proposals to reward good teachers and penalize (or fire) bad ones. The
leading method for assessing teacher quality is “value added” modeling (VAM),
which decomposes students’ test scores into components attributed to student
heterogeneity and to teacher quality. Implicit in the VAM approach are strong
assumptions about the nature of the educational production function and the
assignment of students to classrooms. In this paper, I develop falsification tests
for three widely used VAM specifications, based on the idea that future teachers
cannot influence students’ past achievement. In data from North Carolina, each
of the VAMs’ exclusion restrictions is dramatically violated. In particular, these
models indicate large “effects” of fifth grade teachers on fourth grade test score
gains. I also find that conventional measures of individual teachers’ value added
fade out very quickly and are at best weakly related to long-run effects. I discuss
implications for the use of VAMs as personnel tools.

The emergence of new information and communication technologies in the 1990s offered governments opportunities to deliver public services more effectively to their citizens.  Yet national and sub-national authorities have employed such technologies in highly uneven ways. Drawing on a new dataset of technology policy adoption by Indian states, I argue that political calculations drive variation in the timing and scope of technology policies. Politicians weigh the expected electoral benefits from providing new goods to citizens against the expected electoral costs of reduced access to corrupt funds due to increased transparency. I show that the level of bureaucratic corruption in a state is the best predictor of both when states implement policies promoting computer-enabled services and the number of services made available. This finding contrasts with arguments that posit economic or developmental conditions, or alternative electoral and institutional characteristics, as the major drivers of technology investment.