Project Proposal for the. Inter-American Development Bank The Latin American Research Network. Discrimination and Economic Outcomes

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1 Project Proposal for the Inter-American Development Bank The Latin American Research Network Discrimination and Economic Outcomes The role of social networks in the economic opportunities of Bolivian women By: Dante Contreras 1, Diana Kruger 2, Daniela Zapata, 1 Marcelo Ochoa 3 1 Department of Economics, Universidad de Chile. 2 Department of Economics, Universidad Católica de Valparaíso. 3 Banco Central de Chile.

2 TABLE OF CONTENTS Contents Page No. 1. Motivation and justification of the study Methodology and Data Policy relevance Budget... 9 Bibliography Appendix: Curriculum Vitae

3 EXECUTIVE SUMMARY It has been widely documented that women don t have the same economic opportunities as men. Women tend to have higher unemployment rates, higher concentration on informal jobs and lower earnings than men. Research on the differences in labor market outcomes has conventionally focused on the role of gender-specific factors, particularly gender differences in qualifications and in labor market discrimination. An innovative feature of recent research of economists studying the labor market has been to recognize that many social interactions have economic implications. Particularly, these new insights highlight the role of social networks as an additional explanation to conventional market discrimination when explaining differences in labor market outcomes. These paper aims to examine which are some of the factors determining the participation of Bolivian women in income generating activities and which is the role of social networks in these economic decisions. The contribution of this investigation will be to explore the impact of this new social variable on the economic choices of women and its relative importance with respect to other individual characteristics, such as education or number of children in the household. By doing so, we will expand the traditional regression analysis that uses only personal characteristics to explain women s economic choices and we will be able to locate women in a social structure that relates her to her surroundings. 3

4 1. Motivation and justification of the study Bolivia is one of the poorest countries of Latin America, with a per capita GDP of less than 1,000 US$ and with one of highest levels of inequality in the region. 1 As a consequence, on the year 2001 nearly 64% of Bolivia s population was living with an income below the poverty line. Moreover, nearly 40% of the households headed by a woman were poor, reflecting the vulnerability of female-headed families (Cepal, 2005). The main component of households income is labor earnings, particularly in the case of poor households. Women are important contributors to their families income and in many cases carry the burden of raising their families alone, while earning categorically lower salaries. In Bolivia, about 52% of women supply more than half of family s income, whilst the average hourly wage of women with college education is 40% below of their male counterparts (Bravo and Zapata, 2005). In spite of this gender-gap, without the contribution of women to household income poverty rates would have been 11 percentage points higher by This evidence suggests that gender equality in Bolivia s labor market is long from being achieved. Economist s interest in gender issues has gone beyond the gender pay-gap and has also focused on women s labor force participation. Women s labor force participation has increased markedly in the last decade. For instance, in urban areas of Bolivia, women s labor force increased from 47% to 57% in the period. This increase is consistent with the increments observed in the rest of Latin America, as documented by Duryea, Cox and Ureta (2001). 2 Nevertheless, 75% of employed women in the rural areas of Bolivia did not receive any income from their work constraining their possibilities to escape out from poverty. 3 In Bolivia unemployment rates and low quality jobs have increased between 1989 and Women s unemployment rate is higher than their male s counterparts and increasing female s labor force participation has not translated into quality jobs. In fact, while 8 out of 10 employed women worked in the informal sector, only 6 out of every 10 men worked in this sector. Higher participation of women in the informal sector and higher unemployment rates are an expression of female s worse working opportunities. As women have come to represent a larger share of paid work force and as market work has become more important in the typical women s life, interest in the differences in labor market outcomes has also grown. Of these labor market outcomes, the potential to 1 According to the Economic Policy Department of Bolivia (UDAPE) the income of the richest 10% is 25 times the income of the poorest 40% (UDAPE, 2005). 2 Duryea, Cox and Ureta (2001) found that female labor force participation of women between 15 to 64 years old increased in eight Latin American countries, stayed practically constant in four cases and decreased in one case. 3 Similarly, Deutsch et. al. (2002) found that in Costa Rica, Ecuador and Uruguay women represented more than 50% of non-paid workers. 4

5 obtain market employment for women not currently employed is of fundamental importance. Research on labor gender gaps has traditionally focused on the role of gender-specific factors, particularly gender differences in qualifications (i.e. education, age, marital status, etc.) and in labor market discrimination (i.e. situations in which persons who provide labor market services and who are equally productive are treated unequally because of gender differences). 4 An innovative feature of recent research of economists studying the labor market has been to recognize that many social interactions have economic implications (Gibbons, 2005). Arrow (1998) argues that beliefs and preferences may be the product of social interactions unmediated by prices and markets. These non-market interactions have been studied by sociologists for a while, (e.g. Granoevetter 1974) they emphasize the role of social networks and norms in helping or inhibiting upward mobility among certain groups. Economists, on the other hand, have only recently begun to examine these topics (e.g. Bertrand, Erzo and Sendhil, 2000; Ioannides and Loury, 2004; Gibbons 2005; Contreras, Kruger and Zapata, 2005) and the results of these new insights indicate that there is more than conventional market discrimination when explaining differences in labor market outcomes among different groups and particularly between women and men. A social network is a social structure between individuals or organizations. It indicates a relationship among individuals, which can range from casual acquaintance to close familiar bonds. Research in various academic fields have demonstrated that social networks operate on many levels, from individuals up to the level of nations, and play a crucial role in determining the way problems are solved, organizations are run, and the degree to which individuals succeed in achieving their goals. 5 In particular, empirical evidence has shown that social networks are essential in the job matching process, since a very large fraction of the jobs are filled by referrals made by current employees. 6 Therefore, the importance of the social network theory stems from its difference of traditional studies which assume that only individual characteristics influence her economic decisions. In the social network context, we should care about personal characteristics as well as their relationships and ties with other actors within the network. Hence, the structure of the social network turns out to be a key determinant of (i) who gets a job and (ii) who gets which job, (ii) how patterns of unemployment relate to gender 4 A comprehensive survey of the literature can be found in Altonji and Blank (1999), while Moreno, Ñopo, Saavedra and Torero (2004), Ñopo (2004), Ochoa (2004) and Nuñez and Gutierrez (2005) are examples of more recent empirical work on discrimination for Latin America. 5 See, for example, Rees (1966), Granovetter (1973, 1974), Montgomery (1991), Bernhhardt, Morris and Handcock (1995), Stoloff, Glanville and Bienenstock (1999), Petersen, Saporta and Seidel (2000), Arrow and Borzekowski (2001), Bentolila, Michelacci and Suarez (2004), Sørensen (2004) and Calvo-Armengol and Jackson (2005). 6 The most cited studies are those of Granovetter (1973, 1974), and Montgomery (1991). The latter found that in the United States the share of workers reporting to have found their jobs through social contacts ranges from 24% to 74%, depending on the occupation and the locality of reference. 5

6 or ethnicity and (iii) the incentives that individuals have to educate themselves and to participate in the workforce (Jackson, 2003). In sum, it has been widely documented that women don t have the same economic opportunities as men. Women tend to have higher unemployment rates, higher concentration on informal jobs and lower earnings than men (Flabbi 2005, Cepal 2005, IADB 2004). All these facts lead us to conclude that women are an excluded and more vulnerable group to poverty. While there has been an extensive analysis of these differences, the role of social networks as a potential inclusion or exclusion mechanism has not yet been documented. The aim of this paper is to examine which are some of the factors determining the participation of Bolivian women in income generating activities and which is the role of social networks in these economic decisions. The contribution of this investigation will be to explore the impact of this new social variable on the economic choices of women and its relative importance with respect to other individual characteristics, such as education or number of children in the household. By doing so, we will expand the traditional regression analysis that uses only personal characteristics to explain women s economic choices and we will be able to locate women in a social structure that relates her to her surroundings. Additionally, we will depart from the recent work of Contreras, Kruger and Zapata (2005), which examines the role of social networks in the economic opportunities of indigenous people, by exploring gender differences. Exploring gender issues results of particular significance, as gender inequality is a widespread phenomenon that enhances poverty and decreases social mobility. Moreover, the existing empirical literature for the country has not been able to account for the main determinants of these inequalities thus; we intend to fill this gap. The relevance and impact of this work will also depend on activities intended to discuss and disseminate the preliminary and final results. We plan to present preliminary versions of the paper at the Department of Economics of the University of Chile Seminars and, more elaborated drafts at the LACEA/LAMES meetings, and at workshops in Bolivia organized jointly with the National Bureau of Statistics (INE) and UDAPE. These dissemination activities will help achieving a publication quality document. 2. Methodology and Data a. Methodology The goal of this study is to analyze the role of social networks in the economic choices of women and study whether the effects of this variable differs depending on the economic choice being analyzed. We also want to quantify the magnitude of the social network effect relative to other relevant individual characteristics, such as human capital. In order to understand the factors underlying the decisions of women to participate in different economic activities, we will perform estimations using several probit models of the form, 6

7 where, Y i = Pr( Y ) = F( ' β + ε ) (1) i X i 1 if the participates in certain economic activity. 0 if the woman does not participates. i The vector of parameters β can be estimated by maximum likelihood. The likelihood function will be: L = ( ε ) φ d ε Where φ is the normal distribution: φ [ ] ( ε ) [ 2σ ( 1 σ )] exp 1/ 2( 1 σ ) ( ε ) = (2) Therefore, we will estimate the probability that a woman participates in different economic activities. The types of economic outcomes that will be analyzed will include: woman s employment, woman s employment in the formal sector, woman s work as an employer, woman s work as a self employed and woman s work in non-agricultural activities. The vector of explanatory variables X i will include family and individual controls such as: age, education, household head status, home ownership, access of the household to basics services and demographic controls of the household members. Following Bertrand et al. (2000) the social network can be expressed as a unique variable summarizing -the product of- the quantity and the quality of the social network. In our study we will define the quantity of the social network for a woman as the percentage of women between 15 and 49 years old, living in the same municipio as her. The quality of the social network will be defined as the fraction of women, between 15 and 49 years old living in the same municipio, who are employed. The Social Network variable will be constructed using the information of the Bolivian Census for the year 2001; the variable will be constructed at the municipal level because this is the smaller geographical area that can be identified both in Bolivia s Census and Household Survey. We will only include women between 15 and 49 years old, because this is the range of age in which a larger fraction of women participate in the labor market. 7

8 In order to study which is the relevance of social networks in the economic choices of Bolivia s women we will perform estimations of the form: Pr( Y ) = F( X ' β + SN ' γ + ε ) (2) i i The economic outcomes that will be analyzed and the vector of exogenous variables X are the same as in (1) and SN is a measure of women s social network. In order to perform this estimation we will merge the Census data with the Household Survey data, therefore the individual control will come from the Household information whereas the social network variable will come from the Census data. The results from these estimations will provide evidence of the role of social networks, not only in employment opportunities of women but also in the quality of the employment she can access. The estimations will be performed separately for men and women and for urban and rural households as well. b. Data The household data used in this study comes from Bolivia s Household Survey (MECOVI) for the year 2001, which is administered by the National Bureau of Statistics (INE) during the months of November and December of each year. The MECOVI is a nationally representative survey that contains detailed characteristics for every person in the household. The survey interviewed 5,845 households with 25,166 individuals. The MECOVI survey is not representative at the municipality level; therefore the measure of the social network of the household will be constructed using information from the Census, which was administered by the INE during the year These two sources of information were already used in our own work and are readily available to start working (e.g., Ochoa, 2004; Contreras, Zapata and Kruger, 2004; Contreras, Kruger and Zapata, 2005). 3. Policy relevance From a policy perspective the many faces of Bolivia s poverty low income levels, high unemployment rates and low wages, among others affect harshly or more specifically to women and represent major obstacles to achieve gender equality. The results of this empirical investigation will help identify the economic activities were social network and peer effects have positive effects. These non-market factors may be very important to improve the welfare and economic opportunities for women. If women make effective use of her social network then, for instance, a limited number of women located in important labor positions will have a positive spill over effect in the rest of the women of her peer group. Consequently, it is possible that social networks may compensate for individual weakness in some market opportunities. On the contrary, negative spillover effects arising from social norms about behavior and obligations of women may contribute to the reproduction of inequality of opportunities and maintain the lack of empowerment for Bolivian women. i i 8

9 Bibliography Allen, D. (2000), Social Networks and Self-Employment, Journal of Socio-Economics vol. 29, pp Arrow, K. (1998), What Has Economics to Say About Racial Discrimination?, Journal of Economic Perspectives vol. 12 pp Arrow, K.J. and Borzekowski, R. (2000), Limited Network Connections and the Distribution of Wages, mimeo, Stanford University. Altonji, J. and R. Blank (1999), Race and Gender in the Labor Market, in O. Ashenfelter y D. Card (eds.), Handbook of Labor Economics Vol. 3c, Ch. 48. Bravo, R. and D. Zapata (2005), Las Metas del Milenio y la Desigualdad de Género, Economic Commission for Latin America and the Caribbean. Bentolila, S., C. Michelacci, and J. Suarez (2004), Social Contacts and Occupational Choice, mimeo, CEMFI. Berndhart, A., M. Morris and M. Handcock (1995), Women s Gains or men s Losses? A Closer Look at the Shrinking Gender Gap in Earnings, American Journal of Sociology vol. 101 pp Bertrand, M., L. Erzo and, M. Sendhil (2000), Network Effects and Welfare Cultures, Quarterly Journal of Economics. Calvo-Armengol, A. and M. Jackson (2005), Like Father, Like Son: Social Networks, Human Capital Investment, and Social Mobility, mimeo, Universitat Autònoma de Barcelona. CEPAL (2005), Objetivos de Desarrollo del Milenio. Una mirada desde América Latina y El Caribe, Santiago de Chile. Contreras, D., D. Kruger, and D. Zapata (2005), Economic Opportunities for Indigenous People in Bolivia, World Bank, mimeo. Contreras, D., D. Zapata and D. Kruger (2004), Child Labor in Bolivia: Schooling, Gender and Ethnc Groups, paper presented at the LACEA/LAMES meetings. Duryea, S., A. Cox and M. Ureta (2001), Women in the Latin American Labor Market: The Remarkable 1990 s, paper presented at the seminar Mujer en el Trabajo: Un Reto para el Desarrollo. Deutsch, R., A. Morrison, C. Piras and H. Ñopo (2002), Working Within Confines: Occupational Segregation by Gender in Three Latin American Countries, Inter- 10

10 American Development Bank, Sustainable Development Department, Technical Paper #126. Escobar Silvia (2003), Inequidades, pobreza y mercado de trabajo: Perú y Bolivia, in Género, Formación y Trabajo OIT, Lima Perú. Flabbi, Luca (2005), Gender Discrimination Estimation in a Search Model with Matching and Bargaining, Georgetown University, mimeo. Gibbons, R. (2005), What is Economic Sociology and Should any Economists Care?, Journal of Economic Perspectives vol. 19 pp Granovetter, M. (1973), The Strength of Weak Ties, American Journal of Sociology, vol. 78, pp Granovetter, M., (1974), Getting a Job: A Study of Contacts and Careers, Cambridge: Harvard University Press. Huffman, M. and L. Torres (2001), Job Search Methods: Consequences for Gender- Based Earnings Inequality, Journal of Vocational Behavior vol. 58, pp Inter-American Development Bank (2004), Se buscan buenos empleos. Los mercados laborales en América Latina, Washington D.C. Ioannides, Y.M. and L. Loury (2004), Job Information Networks, Neighborhood Effects and Inequality, Journal of Economic Literature, XLII, pp Jackson, M. (2003), A Survey of Models of Network Formation: Stability and Efficiency, in G. Demange and M. Wooders (eds.) Group Formation in Economics: Networks, Clubs, and Coalitions, Cambridge University: Press: Cambridge. Moreno, M., H. Ñopo, J. Saavedra and M. Torero (2004), Gender and Racial Discrimination in Hiring. A Pseudo-Audit Study for Three Selected Occupations in Metropolitan Lima. IZA Discussion Paper No Montgomery, J. (1991) Social Networks and Labor Market Outcomes, The American Economic Review, vol. 81, pp Ñopo, Hugo (2004). Matching as a Tool to Decompose Wage Gaps. IZA Discussion Paper No Nuñez, J. and R. Gutierrez (2004). Classism, Discrimination and Meritocracy in the Labor Market: The Case of Chile. University of Chile Working Paper no Ochoa M. (2004), Ethnic Groups and Gender: A decade of discrimination in Bolivia, mimeo, Universidad de Chile. 11

11 UDAPE (2005), Progreso de los Objetivos de Desarrollo del Milenio , La Paz, Bolivia. Petersen,., I. Saporta and M. Seidel (2000), Offering a Job: Meritocracy and Social Networks, American Journal of Sociology, vol. 106, pp Rees, A. (1966), Information Networks in Labor Markets, American Economic Review, vol. 56, pp Sørensen, J. (2004), The Organizational Demography of Racial Employment Segregation, American Journal of Sociology vol. 110, pp Stoloff, J., J. Glanville and B. Elisa (1999), Women s participation in the labor force: the role of social networks, Social Networks vol. 21, pp

12 Appendix: Curriculum Vitae 13

13 DANTE CONTRERAS Department of Economics, Universidad de Chile Diagonal Paraguay 257, Santiago Telephone: (562) PERSONAL INFORMATION Date of Birth: March 5 th 1965 Citizenship: Chilean EDUCATION Post Doctoral Fellow, Yale University (2000) Ph., Economics, University of California, Los Angeles (May 1996) M.A., University of California, Los Angeles (December 1993) Bachelor Economics, University of Chile, Santiago Chile (1989) ACADEMIC HONORS AND AWARDS Premio Mejor Docente de Pregrado, Universidad de Chile (Noviembre 2002). Rockefeller Grant (2000) FONDECYT, Chile (1998, 2000) Fullbright Fellowship (1992) Best Student Graduated, University of Chile (1990) University of California, Los Angeles Fellowship Beca Presidente de la República, Mideplan DISSERTATION Title: Household and Individual Welfare: Evidence from Less Developed Economies Chairperson: Duncan Thomas Completion Date: May 1996 FIELDS Research and Teaching: Labor Economics, Development Economics, Econometrics and Public Finance PUBLICATIONS OR RECENT RESEARCH PAPERS Books Competencias básicas de la población adulta. David Bravo Dante Contreras. CORFO. Universidad de Chile. Ministerio de Economía. Mayo 2001

14 Evaluación de impacto de los programas de capacitación: El caso de Fundes. Editores: David Bravo, Dante Contreras y Gustavo Crespi. McGraw Hill. Agosto, Chapters Le ombre del miracolo: banessere e povertà. Allende L'altro 11 settembre /30 anni fa. Quaderni dell'america Latina. Capitolo VI, Pag Meeting the Millennium Poverty Reduction Targets". CEPAL, IPEA, UNDP. Enero Economic Liberalization, Distribution and Poverty". In Rob Vos, Lance Taylor and Ricardo Paes de Barros Editors. Chapter five "Chile: Trade Liberalization, employment and Inequality. With José de Gregorio, David Bravo, Tomás Rau and Sergio Urzúa. UNDP Portrait of the Poor. An Asset-Based approach. In Orazio Attanasio and Miguel Székely Editors. Chapter four. With Osvaldo Larrañaga. IDB, Liberalización, desigualdad y pobreza. Enrique Ganuza, Ricardo Paes de Barros, Lance Taylor, Rob Vos (editores). Pp PNUD, La administración de los ingresos por exportaciones mineras en Bolivia, Chile y Perú. Pilar Romaguera G. y Dante Contreras G. Editor del libro: Alberto Pascó-Font. Grade-IDRC. Lima (1995). Academic Journal: Chile "Chilean labor market efficiency: an earnings frontier approach". Dante Contreras - Sergio Salas. Estudios de Economía. Vol. 30, Nº 1, pp (Junio 2003). "Desigualdad educacional en Chile: geografia y dependencia". Dante Contreras - Victor Macías. Estudios de Economía. Año 39, Nº 118, pp (Diciembre 2002). PAA, una prueba de inteligencia?. (co-author David Bravo, Claudia Sanhueza). Perspectivas, Volumen 4, Nº Poverty and income distribution in Chile New evidence. (co-authors Osvaldo Larrañaga, Julie Litchfield, Alberto Valdés). Cuadernos de Economía. Año 38, Nº114. Agosto Indicadores de Medición del impacto de la capacitación en la productividad. David Bravo, Dante Contreras y C. Montero. Relaciones del Trabajo. Año 11, Nº31, Asignación de recursos en los hogares pobres de Chile. (co-author Julio Cáceres). Cuadernos de Economía. Año 36 Nº108, pp Agosto Distribución del ingreso en Chile. Nueve hechos y algunos mitos. Perspectivas. Vol. 2, Nº2. Mayo.

15 Cómo medir la distribución de ingresos en Chile? Son distintas nuestras regiones? Son distintas nuestras familias?. Centro de Estudios Públicos. Nº65 (1997). Pobreza y desigualdad en Chile: Discurso, metodología y evidencia empírica. Centro de Estudios Públicos. Nº64 (1996). Restricciones al crecimiento: Aplicación de un modelo de brechas a la economía Chilena. Colección Estudios Cieplan. Nº36 (1992). Academic Journal: International Political Economic Regime and the Wage Curve: Evidence from Chile, ". Janine Berg and Dante Contreras. International Review of Applied Economics. Vol. 18, Nº 2, Págs April Water subsidy policies: A comparison of the Chilean and the Colombian Schemes. The World Bank Economic Review. Vol. 17 Nº3. Págs Diciembre Poverty and inequality in a rapid growth economy: Chile Journal of Development Studies. Vol. 39 Nº3, February Wage inequality in Chile. Does education really matter?. Journal of Income Distribution. Volume 11, Issue 1-2, Spring- Summer Crisis, Ingresos y Mercado de Trabajo en Ecuador. Dante Contreras. María Luisa Granda. Bulletin de I'Institut Francais d'etudes Andines. 2002, Vol. 31 Nº 3, Pág Subsidy policies for the utility industries: a comparison of the Chilean and Colombian water subsidy schemes. Andrés Gómez-Lobo. Dante Contreras. World Bank Economic Review. Forthcoming. Distribution of power within the household and Child health, jointly with Duncan Thomas and Elizabeth Frankenberg. World Bank Economic Review. Forthcoming. Economic growth and poverty alleviation. A regional analysis in a rapid growth economy: Chile Development Policy Review. Volume 19, Number 3, September Does gender and birth order matter when parent specialize in child s nutrition?. Evidence from Chile. (co-author Luis Rubalcava). Journal of Applied Economics. Vol. III, Nº2. November. Activos y recursos de la población en Chile. El Trimestre económico. Vol. LXVI (3), Nº 263, Julio-Septiembre Unpublished papers

16 Vouchers, school choice and the access to higher education. Economic Growth Center. Yale University. Center Discussion Paper Nº Inequality, segregation and the Chilean labour market. Dante Contreras, Piergiuseppe Morone. Documento de Trabajo Nº 193, Departamento de Economía, Universidad de Chile, Julio Are gender and ethnic wage discrimination decreasing in Bolivia? Evidence of Dante Contreras, Marco Antonio Galván. UDAPE, Chilean labor market efficiency: an earning frontier approach. Sergio Salas, Dante Contreras. Departamento de Economía, Universidad de Chile. Abril Designing a system to evaluate training for small-scale entrepreneurs: a pilot study. David Bravo, Dante Contreras y Gustavo Crespi. Mimeo, Departamento de Economía, Universidad de Chile. NBER, In search of gold: The determinants of success in international sports competitions. Dante Contreras, Andrés Gómez-Lobo. Documento de Trabajo Nº168, Departamento de Trabajo, Universidad de Chile. Marzo The impact o financial incentives to training providers: the case of Chile joven. David Bravo, Dante Contreras. Mimeo, Departamento de Economía, Universidad de Chile. NBER Female labor force participation in Chile: A synthetic cohort analysis. Dante Contreras, David Bravo y Esteban Puentes. Abril Wage inequality and labor market in Chile: A non-parametric approach. David Bravo, Dante Contreras y Tomás Rau. Departamento de Economía, Universidad de Chile. Abril The return to computer in Chile: does it change after controlling by skill bias. Dante Contreras, David Bravo y Patricia Medrano. Marzo Educational achievement, inequalities and private / public gap: Chile David Bravo, Dante Contreras y Claudia Sanhueza. Documento de Trabajo Nº 163, Departamento de Economía, Universidad de Chile. Enero Los pobres y sus activos, Banco Interamericano de Desarrollo. Existe alguna relación entre salario mínimo y empleo? Teoría, dogma y evidencia empírica. David Bravo, Dante Contreras. Documento de Trabajo Nº 157, Departamento de Economía, Universidad de Chile. Octubre Chile. Poverty and income distribution in a high-growth economy: Banco Mundial EMPLOYMENT HISTORY

17 Assistant Professor, University of Chile Labor Economics. Research Assistant, UCLA and RAND Corporation, Topics: Migration, Intrahousehold Allocation Models. Professor: Duncan Thomas. Teaching Assistant, UCLA Microeconomics, Macroeconomics. Junior Researcher, CIEPLAN Applied Macroeconometric Models for the Chilean Economy. Junior Professor, University of Chile, Teaching Assistant, University of Chile Price Theory, Macroeconomics and Development. REFERENCES James Heckman. Professor. Premio Nobel de Economía (2000). The University of Chicago. Duncan Thomas, Associate Professor University of California, Los Angeles. Telephone: , Arnold Harberger, Professor University of California, Los Angeles. Telephone: Andres Velasco, Associate Professor Economics. Kennedy School. Harvard University. Osvaldo Larrañaga. Vicedecano, Facultad de Ciencias Económicas y Administrativas. Universidad de Chile. Patricio Meller, Profesor Universidad de Chile (Ing. Industrial). Tel.: (562) Paul Schultz, Profesor Yale University. Tel: (203)

18 CURRICULUM VITAE DIANA I. KRÜGER Pontificia Universidad Catolica de Valparaiso Escuela de Ingenieria Comercial Avenida Brasil 2830, Piso 7 Valparaiso, Chile Phone: (56-32) Phone-direct: (56-32) Mobile: (56) address: EDUCATION Ph.D. Economics, University of Maryland, College Park, December 2003 M.A. Economics, University of Maryland, College Park, May 1999 M.B.A. Finance, University of Texas, Austin, May 1992 B.A. Economics, University of Texas, Austin, August 1990 PH.D. DISSERTATION The Effects of Economic Opportunities on Child Labor and Schooling FIELDS OF SPECIALIZATION Development Economics, Labor Economics, Applied Microeconomics. PUBLICATIONS Child labor and schooling during a Coffee Sector Boom: Nicaragua , in: Trabjo Infantil: Teoría y Evidencia desde Latinoamerica, Luis F. Lopez Calva, ed., Mexico, D.F., Fondo de Cultura Económica de México, Mexico, Forthcoming. The Coffee Crisis in Central America, joint article with Andrew Mason and Renos Vakis, in SPectrum: Volatility, Risk and Innovation: Social Protection in Latin America and the Caribbean, The World Bank, Fall How Household Economic Opportunities Affect Child Labor and Schooling in Nicaragua: Differential Effects by Gender, joint with Matias Berthelon, The Georgetown Public Policy Review, Vol. 9, No.1, Fall Rates of Return to Education in Nicaragua, Background paper for Nicaragua Poverty Assessment, Vol. II, Report No NI, The World Bank, Washington, D.C The Determinants of Educational Enrollment in Nicaragua, Background paper for Nicaragua Poverty Assessment, Vol. II, Report No NI, The World Bank, Washington, D.C The Distributional Effect of Rural Incentive Policies, Background paper for Nicaragua Poverty Assessment, Vol. II, Report No NI, The World Bank, Washington, D.C

19 D. KRUGER Page 2 PAPERS IN PROGRESS Economic Opportunities for Indigenous People in Bolivia, with Dante Contreras and Daniela Zapata, Mimeo, November Household Choices of Schooling and Child Labor: A Simple Structural Model with Application to Brazil, with Matias Berthelon and Rodrigo Soares, Mimeo, November Child labor in Bolivia: schooling, gender and ethnic groups, with Daniela Zapata and Dante Contreras, Mimeo, November The Effects of Coffee Production on Child Labor and Schooling in Rural Brazil, re-submitted to The Journal of Development Economics, September Shocks and Coffee: Lessons from Nicaragua, joint with Andrew Mason and Renos Vakis, The World Bank, Social Protection Discussion Paper Series No. 0415, July Consumption Risk And Smoothing During Disasters: The Case Of Hurricane Mitch In Nicaragua, joint with Jeni Klugman and Kate Withers, The World Bank, Poverty Reduction and Economic Management Network, mimeo, TEACHING EXPERIENCE Professor-Researcher, Pontificia Universidad Católica de Valparaíso Valparaiso, Chile May 2004 Present Teach undergraduate course in Principles of Economics. Conduct academic research with objective of publishing in academic journals. Taught course in Latin American Economic Development to exchange students from Villa Nova University. Part-time Professor, Pontificia Universidad Católica de Chile Santiago, Chile July 2004 Present Teach undergraduate course in Economic Development of Agriculture, at the Agricultural Economics Department. Thesis advisor to three graduate students of the Masters program. Instructor, University of Maryland College Park, Maryland Fall 2000 Summer Taught course in Economic Development of Under-developed Areas Part-time Professor, Universidad Católica March-December 1994 Taught course in Principles of Economics Managua, Nicaragua

20 D. KRUGER Page 3 RESEARCH/WORK EXPERIENCE Consultant, The World Bank, Washington, D.C., December 2002 August 2003 Co-authored report titled Shocks and Coffee: Lessons from Nicaragua and an article titled The Coffee Crisis in Central America. Performed panel data analysis of the 1998 and 2001 Living Standards Measurement Surveys (LSMS) for Nicaragua, and wrote sections of the report on coffee sector households ability to cope with economic shocks. Consultant, The World Bank, Washington, D.C., March 2001 April 2002 Co-authored a paper on the effects of informal safety nets on consumption smoothing, using Nicaraguan household panel data. Consultant, The World Bank, Managua, Nicaragua, June 1999 June 2000 Wrote three technical background papers for the Bank s Nicaragua Poverty Assessment based on data from the 1998 LSMS. Participated directly with the Task Manager in writing sections of the Poverty Assessment, coordinated the databases of the 1998 and 1993 LSMS. Provided technical assistance to the Nicaraguan Government team responsible for elaborating Nicaragua s Poverty Reduction Strategy Paper (PRSP), a pre-requisite for Nicaragua s acceptance into the Highly Indebted Poor Country Initiative (HIPC). Consultant, Inter-American Development Bank, Washington, D.C., March 1999 June 1999 Generated statistical tables for 22 Latin American countries as inputs in the publication Social Protection for Equity and Growth. Contributed to the selection and design of socio-economic indicators relevant for the study, including statistics on: average household income, income inequality, household demographic characteristics, education, sources of income, labor force participation, unemployment, occupation and access to social programs. Director of Open Market Operations, Central Bank of Nicaragua, Managua, June 1995 June 1996 Managed the new OMO division of the Central Bank, coordinated the sale of the new Central Bank titles in the financial market, directed research projects and statistical analysis by the division s specialists. Credit Analyst, Banco De Exportación, Managua, Nicaragua, July 1993 December 1994 Designed a consumer loans program. Analyzed and presented consumer loans projects to the bank s investment committee. Consultant, United Nations Development Program, Managua, Nicaragua, October 1992 July 1993 Coordinated the preparation of the official document presented by Nicaragua s Government at its annual meeting with the International Donating Community. Provided technical support to monetary research division of the Central Bank. AWARDS Department of Economics, University of Maryland, Undergraduate Teaching Award, May 2002 Graduate School Fellowship, University of Maryland, Fall 1996-Spring 1998 Graduate School of Business Scholarship, University of Texas, September 1990-May 1992 Texas Achievement Award, Scholarship awarded by the State of Texas, September 1987-August 1990 National Hispanic Scholar Award, Honorable Mention, Andrew W. Mellon Foundation, May 1987 Honors Colloquium Award, University of Texas Presidential Scholarship, February 1987

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