Norbert Rüdiger Schady

"There is considerable evidence that young children in many developing countries suffer from profound deficits in nutrition, health, fine and gross motor skills, cognitive development, and socio-emotional development. Early childhood development (ECD) outcomes are important markers of the welfare of children. In addition, the deleterious effects of poor outcomes in early childhood can be long-lasting, affecting school attainment, employment, wages, criminality, and measures of social integration of adults. This paper considers the theoretical case to be made for investments in early childhood, selectively reviews the literature on the impact of ECD programs in the United States, discusses the evidence from Latin America and the Caribbean, and makes suggestions for future research. The focus is on the relation between outcomes in early childhood and measures of household socioeconomic status, child health, and parenting practices, as well as on the impact of specific policies and programs. The knowledge base on early childhood outcomes is still thin in Latin America and the Caribbean. There are therefore very high returns to comparative descriptive analysis in the region, as well as to careful evaluations of the impact of various programs. "--World Bank web site.

Early Childhood Development in Latin America and the Caribbean

José Luis Rosero

How cash transfers made to women are used has important implications for models of household behavior and for the design of social programs. In this paper, the authors use the randomized introduction of an unconditional cash transfer to poor women in rural Ecuador to analyze the effect of transfers on the food Engel curve. There are two main findings. First, the authors show that households randomly assigned to receive Bono de Desarrollo Humano (BDH) transfers have a significantly higher food share in expenditures than those that were randomly assigned to the control group. Second, they show that the rising food share among BDH beneficiaries is found among households that have both adult males and females, but not among households that only have adult females. Bargaining power between men and women is likely to be important in mixed-adult households, but not among female-only households, where there are no men to bargain with. Finally, the authors show that within mixed-adult households, program effects are only significant in households in which the initial bargaining capacity of women was likely to be weak. This pattern of results is consistent with an increase in the bargaining power of women in households that received BDH transfers.

Are Cash Transfers Made to Women Spent Like Other Sources of Income?

Carolina Sánchez-Páramo

Sánchez-Páramo and Schady describe the evolution of relative wages in five Latin American countries--Argentina, Brazil, Chile, Colombia, and Mexico. They use repeated cross-sections of household surveys, and decompose the evolution of relative wages into factors associated with changes in relative supply and relative demand. The authors have three main conclusions: * Increases in the relative wages of the most skilled (university-educated) workers took place concurrently with increases in their relative abundance in all of the countries except Brazil. This is strong evidence of increases in the demand for skilled workers. * Increases in the wage bill of skilled workers occurred largely within sectors, and in the same sectors in different countries, which is consistent with skill-biased technological change. * Trade appears to be an important transmission mechanism. Increases in the demand for the most skilled workers took place at a time when countries in Latin America considerably increased the penetration of imports, including imports of capital goods. The authors show that changes in the volume and research and development intensity of imports are significantly related to changes in the demand for more skilled workers in Latin America. Their research complements earlier work on the effects of technology transmitted through trade on productivity and on the demand for skilled labor. This paper--a product of Public Services, Development Research Group--is part of a larger effort in the group to understand the impact of globalization on human capital outcomes.

Norbert Rüdiger Schady

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