Poverty and Economic Development_Syllabus_S2013_AM

Harris School of Public Policy Studies
The University of Chicago
PPHA 35501
Poverty and Economic Development
Fall 2013
Thursdays 3:00-5:50 pm - Room 140C
Alicia Menendez TA: Pedro Bernal

143 Harris School Harris School
menendez@uchicago.edu pbernal@uchicago.edu
This course will focus mainly on the microeconomic fundamentals of economic

development. We will study causes of poverty and underdevelopment, poverty
measurement issues, and policies to improve wellbeing. We will concentrate on
topics such as nutrition and health, education, labor markets, intra-household
allocation of resources and policies to alleviate poverty. Empirical evidence from
developing economies will be used extensively.
Requirements: this course requires the completion of 4 group assignments,

and one individual in class final exam. The weights in the final grade are as
follows:
Assignments 50%
Final 50%
Tentative Course Outline:

Class 1 Oct 3 Introduction -- Measuring Poverty
Class 2 Oct 10 Measuring Poverty & Determinants of Poverty
October 17 NO CLASS
Class 3 Oct 24 Fertility, Early Childhood, Education,
Class 4 Oct 25 Education & Provision of Education
Class 5 Oct 31 Nutrition, Labor Markets
Class 6 Nov 7 Health
Class 7 Nov 14 Intra-household Allocations & Child Labor
Class 8 Nov 21 Infrastructure
NO CLASS Nov 28 Thanksgiving
Class 9 Dec 5 Foreign Aid
FINAL Dec 9 Final Exam
Readings – All readings will be available at the CHALK course website:

https://chalk.uchicago.edu/webapps/portal/frameset.jsp
1
Material indicated with * are suggested readings
1. Measuring Poverty
How much poverty? Measurement difficulties
Debraj Ray, (1998) Development Economics, Princeton University Press,

Chapter 8, pp 250-267.
Deaton, Angus, (2004), “Measuring Poverty,” in Understanding Poverty,

Banerjee, Benabou and Mookherjee (eds.), Oxford University Press, Chapter 1
Deaton Angus (2001) Counting the World’s Poor: Problems and Possible
Solutions, World Bank Research Observer, v. 16, iss. 2, pp. 125-147
2. Determinants of Poverty
Proximate Causes, Underlying Causes - Institutions, Geography
Nunn, N., (2009), "The Importance of History for Economic Development" Annual
Rev. Econ. 1:65–92
*Acemoglu, D., S. Johnson, and J. Robinson, (2001), "The colonial origins of

comparative development: an empirical investigation," American Economic
Review, 91, pp1369-1401
*Acemoglu, D., S. Johnson and J. Robinson, (2002) “Reversal of Fortune:

Geography and Institutions in the Making of the Modern World Income
Distribution,” The Quarterly Journal of Economics, Vol. 117, No. 4, pp. 1231-
1294.
*Easterly, W. and R. Levine (2002) "Tropics, Germs, and Crops: How

Endowments Influence Economic Development," NBER Working Paper 9106
3. Fertility
Eswaran, M., (2006), “Fertility in Developing Countries,” in Understanding

Poverty, Banerjee, Benabou and Mookherjee (eds.), Oxford University Press,
Chapter 10
Lam, D. and L. Marteleto, (2005) Small Families and Large Cohorts: the Impact
of the Demographic Transition on Schooling in Brazil, in Growing Up Global: The
Changing Transitions to Adulthood in Developing Countries: Selected Studies,
C.B. Lloyd, et al., Editors. National Academies Press: Washington, DC. p. 56-83.
2
4. Investments in Human Capital
Early Childhood
Heckman, J. J. (2006). Skill Formation and the Economics of Investing in

Disadvantaged Children. Science, 312(5782), 1900–1902.
doi:10.1126/science.1128898
*Engle, P. L., Black, M. M., Behrman, J. R., Cabral de Mello, M., Gertler, P. J.,
Kapiriri, L.,… Young, M. E. (2007). Strategies to avoid the loss of developmental
potential in more than 200 million children in the developing world. The
Lancet, 369(9557), 229–242. doi:http://dx.doi.org/10.1016/S0140-
6736(07)60112-3
*Baker-Henningham, H., & Lopez Boo, F. (2010). Early Childhood Stimulation

Interventions in Developing Countries: A Comprehensive Literature Review, 1–
71. Retrieved from papers2://publication/uuid/54FD61A9-84D5-4BF8-BF59-
F629C6174D42
Education and Income Generation
Case, Anne (2005), “The Primacy of Education,” in Understanding Poverty,

Banerjee, Benabou and Mookherjee (eds.), Oxford University Press, Chapter 19
Psacharopoulos, George. 1994. “Returns to investment in education: a global

update,” World Development, 22, 1325-1343.
Resources and Outcomes
Duflo, E. 2001. “Schooling and Labor Market Consequences of School

Construction in Indonesia: Evidence from an Unusual Policy Experiment,”
American Economic Review, 91, 795-813.
Banerjee, A. et al. (2007) “Remedying Education: Evidence from Two

Randomized Experiments in India,” Quarterly Journal of Economics, Vol. 122,
No. 3, Pages 1235-1264
Provision of Education
Duflo, E. and R. Hanna, S. Ryan (2006), “Monitoring Works: Getting Teachers to

Come to School,” NBER Working Paper No. W11880
3
Chaudhury N. et al., (2006), “Missing in Action: Teacher and Health Worker
Absence in Developing Countries,” Journal of Economic Perspectives, Vol. 20,
No. 1, pp 91–116
5. Nutrition and Labor Markets

Chapter 8, pp 272-290

Chapter 13
6. Investments in Health
Thomas, Duncan, Elizabeth Frankenberg et al. (2003). “Iron Deficiency and the
Well-Being of Older Adults: Early Results from a Randomized Nutrition
Intervention,” mimeo
Disease and Investments in Education

Fortson Jane, (2008), Mortality Risk and Human Capital Investment: the Impact
of HIV/AIDS in Sub-Saharan Africa,” The University of Chicago, mimeo
Economic Consequences of Illness and death
*Case, Anne, Anu Garrib, Alicia Menendez and Analia Olgiati (2013), “Paying the
Piper: The High Cost of Funerals in South Africa , Economic Development and
Cultural Change, October, 62:1-20
*Case, Anne and Alicia Menendez (2009), “Requiescat in Pace? The

Consequences of High Priced Funerals in South Africa.” 2011, in Explorations in
the Economics of Aging, University of Chicago Press, D. Wise (ed)
*Ardington, C., T. Barnighausen, A. Case, and A. Menendez (2012), “The

Economic Consequences of Death in South Africa,” SALDRU Working Paper
No.91, Revise and Resubmit Journal of Development Economics
7. Intra-household Allocation
Case A. and A. Menendez, (2007), “Does Money Empower the Elderly?

Evidence from the Agincourt Demographic Surveillance Area,” Scandinavian
Journal of Public Health, Volume 35, Issue S69, pages 157 - 164
Duflo, E. (2003) “Grandmothers and Granddaughters: Old Age Pension and

Intra-household Allocation in South Africa,” World Bank Economic Review 17(1):
1-25.
4
Garg, A. and J. Morduch (1998),"Sibling Rivalry and the Gender Gap: Evidence
from Child Health Outcomes in Ghana," Journal of Population Economics, Vol.11
(4),pp.471-493.
8. Child Labor
Edmonds, E. and N. Pavcnik, (2005), "Child Labor in the Global Economy,"

Journal of Economic Perspectives, Winter
Basu, K., (2006),”Policy Dilemmas for Controlling Child Labor,” in Understanding

Poverty, Banerjee, Benabou and Mookherjee (eds.), Oxford University Press,
Chapter 17
Genicot, G., (2008), "Child Bonded Labor" entry for the Child Labor World Atlas,
Hugh Hindman ed., ME Sharpe
9. Infrastructure
Galiani, S., P. Gertler and E. Schargrodsky, (2003) “Water for Life: The Impact of
the Privatization of Water Services on Child Mortality in Argentina”
Dinkelman Taryn, (2011) “The effects of rural electrification on employment: New

evidence from South Africa” American Economic Review, December, Vol. 101
No. 7: 3078–3108
10. Foreign Aid
World Bank, “Assessing Aid: What Works, What Doesn’t, and Why,” 1998,
Oxford University Press, Overview.
Sachs, Jeffrey, “Can Extreme Poverty Be Eliminated?” Scientific American,

September 2005, pp. 56-65.
Chen, S., R. Mu and M. Ravallion, “Are There Lasting Impacts of Aid to Poor
Areas? Evidence for Rural China,” World Bank Working Paper 4084
*Rajan, Raghuram J. and Arvind Subramanian, 2008, “Aid and growth: what
does the cross-country evidence really show?” Review of Economics and
Statistics, 90(4), 643-65
*Boone, Peter, “Politics and the Effectiveness of Foreign Aid,” European

Economic Review, 1996, 40: 289-329.
5
Burnside, Craig and David Dollar, “Aid, Policies and Growth,” American
Economic Review, Sept. 2000, 90(4): 847-868.
*Easterly, William, Ross Levine and David Roodman, “Aid, Policies and Growth:
Comment,” American Economic Review, June 2004, 94(3): 774-780.
*Burnside, Craig and David Dollar, “Aid, Policies and Growth: Reply,” American
Economic Review, June 2004, 94(3): 781-784.
Easterly, William, “Can Foreign Aid Buy Growth?” Journal of Economic

Perspectives. Summer 2003, 17(3): 23-48.
*Alesina, Alberto and Beatrice Weder, “Do Corrupt Governments Receive less
Foreign Aid?” American Economic Review, Sept. 2002, 92(4): 1126-1137.
*Easterly, William, “The Cartel of Good Intentions: The Problem of Bureaucracy

in Foreign Aid,” Policy Reform, 2002, 54(4): 223-250.
*Djankov, Simeon, Jose Montalvo and Marta Reynal-Querol, “The Curse of Aid”,
Journal of Economic Growth, June 2009.

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Harris School of Public Policy Studies

The University of Chicago

Thursdays 3:00-5:50 pm - Room 140C

Alicia Menendez TA: Pedro Bernal

This course will focus mainly on the microeconomic fundamentals of economic

Requirements: this course requires the completion of 4 group assignments,

Tentative Course Outline:

FINAL Dec 9 Final Exam

Readings – All readings will be available at the CHALK course website:

Debraj Ray, (1998) Development Economics, Princeton University Press,

Deaton, Angus, (2004), “Measuring Poverty,” in Understanding Poverty,

*Acemoglu, D., S. Johnson, and J. Robinson, (2001), "The colonial origins of

*Acemoglu, D., S. Johnson and J. Robinson, (2002) “Reversal of Fortune:

*Easterly, W. and R. Levine (2002) "Tropics, Germs, and Crops: How

Eswaran, M., (2006), “Fertility in Developing Countries,” in Understanding

Heckman, J. J. (2006). Skill Formation and the Economics of Investing in

*Baker-Henningham, H., & Lopez Boo, F. (2010). Early Childhood Stimulation

Education and Income Generation

Case, Anne (2005), “The Primacy of Education,” in Understanding Poverty,

Psacharopoulos, George. 1994. “Returns to investment in education: a global

Resources and Outcomes

Duflo, E. 2001. “Schooling and Labor Market Consequences of School

Banerjee, A. et al. (2007) “Remedying Education: Evidence from Two

Duflo, E. and R. Hanna, S. Ryan (2006), “Monitoring Works: Getting Teachers to

5. Nutrition and Labor Markets

Debraj Ray, (1998) Development Economics, Princeton University Press,

Debraj Ray, (1998) Development Economics, Princeton University Press,

Disease and Investments in Education

Economic Consequences of Illness and death

*Case, Anne and Alicia Menendez (2009), “Requiescat in Pace? The

*Ardington, C., T. Barnighausen, A. Case, and A. Menendez (2012), “The

Case A. and A. Menendez, (2007), “Does Money Empower the Elderly?

Duflo, E. (2003) “Grandmothers and Granddaughters: Old Age Pension and

Edmonds, E. and N. Pavcnik, (2005), "Child Labor in the Global Economy,"

Basu, K., (2006),”Policy Dilemmas for Controlling Child Labor,” in Understanding

Dinkelman Taryn, (2011) “The effects of rural electrification on employment: New

10. Foreign Aid

Sachs, Jeffrey, “Can Extreme Poverty Be Eliminated?” Scientific American,

*Boone, Peter, “Politics and the Effectiveness of Foreign Aid,” European

Easterly, William, “Can Foreign Aid Buy Growth?” Journal of Economic

*Easterly, William, “The Cartel of Good Intentions: The Problem of Bureaucracy

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