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Post-conflict economies are characterized by high, and often growing, levels of debt. At the same time, peace is particularly fragile in the aftermath of a conflict. This chapter studies how debt affects the risk of war in the 10 years that follow the end of a previous conflict. After controlling for per-capita income and other economic, political, and geographical factors, external debt is found to increase the risk of war. Conversely, the effect of domestic debt is negligible. The policy implication for the international community is clear: debt relief helps stabilize peace in war-torn economies.

The purpose of this paper is to examine the effect of savings mobilization on access to credit among smallholder farmers’ in the Birim central municipality of Ghana.

A cross-sectional primary data set was used to estimate the factors influencing smallholder farmers’ access to credit and size of loan to be borrowed using the IV-Probit and IV-Tobit model.

The results of the study revealed that savings mobilization has a positive significant impact on access to credit and the total amount of credit one can borrow as well. Other control variables such as transaction cost and farm size depicted a negative significant impact on access to credit. Land ownership, member of an association, household size, years of farming experience and education also showed a positive significant impact on access to credit.

The paper only examined the savings effect on credit accessibility among smallholder farmers in one of the municipality’s in the Eastern region of Ghana. Future research should consider all or many municipality for an informed generalization of findings.

This paper provides evidence that smallholder farmers knowledge on the financial market is poor and it would require the policymakers or NGOs to organize financial management training programs so that the farmers high ignorance of the financial market will significantly reduce.

Although existing studies have examined smallholder farmers’ access to credit, the unique contribution of this paper is the analysis of the impact of saving mobilization on credit accessibility in Ghana, a major access to credit determinant in the financial market. In addition, those researchers who factored in savings as an access to credit determinant did not also consider the casual relationship between these two variables, thus, the present of endogeneity of which this paper does.

The purpose of this paper is to examine key determinants of farm labor market development in rural China.

Probit, Logit, and IV-Probit model are used to provide pertinent empirical analysis.

Analysis of survey data establishes three facts about the farm labor market in rural China: first, households with high farm endowment are more likely to hire farm labor; second, because of the mismatch between farm ability and land size created by egalitarian land reallocation, households with more land reallocations are more likely to participate in farm labor market to adjust such mismatch; third, land rental market and farm labor market seem to be complementary. These results are robust to alternative model specifications, subsamples, alternative dependent variables, and additional controls. Welfare analysis demonstrates that the farm labor market is conducive to agricultural output.

The main contribution of this study is to lay out stylized facts in terms of the development of farm labor market using a unique survey data set.

The paper examines the effect of internal remittances on the employment choices of household heads in rural Ghana.

The paper employs data from the Ghana Living Standards Survey (GLSS 6) of the Ghana Statistical Service. Due to issues of endogeneity of remittances in relation to labor supply, the paper adopts an instrumental variable approach in the analysis. First, employment choices are categorized into three: (1) wage/salary employment, (2) self-employment and (3) domestic/family employment. The relationship is then modeled as instrumental variable multinomial probit (IV-MNP). Secondly, employment choices are recategorized into two: farm employment and otherwise and modeled as instrumental variable probit (IV-PROBIT). The models are estimated via the conditional mixed process (CMP) estimation technique.

The results indicate that remittances have a negative effect on self-employment and a positive effect on domestic/family employment. Thus, remittances reduce participation in self-employment but increase participation in domestic/family employment. Furthermore, remittances have a negative effect on participation in farm employment. The results are robust to different measures of remittances: receipt of remittances (dummy) and remittance income.

The results suggest that remittances are used for consumption rather than investing in earning activities. In general, engaging in earning type of employment, whether farm and nonfarm employment will decline with receipt of remittances in rural Ghana. There is a need for policy attention with the increasing migration of people out of rural areas.

Prior to this study, little was known on the effect of internal remittances on labor supply decisions of remittance recipients in Ghana, particularly rural Ghana. This paper contributes significantly to filling this knowledge gap.

There have been very few attempts in the economics literature to empirically study the link between criminal and corrupt behaviour due to lack of data sets on simultaneous information on both types of illegitimate activities. The paper aims to discuss these issues.

The present study uses a large cross-country data set containing individual responses to questions on crime and corruption along with information on the respondents' characteristics. These micro-level data are supplemented by country-level macro and institutional indicators. A methodological contribution of this study is the estimation of an ordered probit model based on outcomes defined as combinations of crime and bribe victimisation.

The authors find that: a crime victim is more likely to face bribe demands, males are more likely victims of corruption while females are of serious crime, older individuals and those living in the smaller towns are less exposed to crime and corruption, increasing levels of income and education increase the likelihood of crime and bribe victimisation to be reported and a stronger legal system and a happier society reduce both crime and corruption. However, the authors find no evidence of a strong and uniformly negative impact of either crime or corruption on a country's growth rate.

This paper is, to the authors' knowledge, the first in the literature to explore the nexus between crime and corruption, their magnitudes, determinants and their effects on growth rates.

Given the ongoing attention surrounding public sector defined benefit pensions, the participating plan sponsors such as local units of government may be tempted to reduce their future pension liabilities, possibly at the expense of their former employees. Alternatively, public sector employees may act to withdraw their pension contributions if they have concerns related to the sustainability of their employer's pension plan. Nonvested, terminated employees have the option of leaving their contributions on account or taking them as a distribution in the form of a rollover to a qualifying retirement account, or a cash-out. Because a cash distribution carries with it the potential for retirement savings ‘leakage,’ it continues to be of public concern.

This study contributes to the literature by examining determinants of the distribution decisions of terminated employees and is first to specifically explore the association of pension funding levels as a determinant of such decision. Decisions of 46,608 employees who separated employment between 2010 and 2013 were examined. The results suggest that a decrease in the employer's pension funding is associated with increased probability that the terminated employee will take a refund of their contributions. Additionally, the data reveal that 88% of the terminating employees who took a refund requested to receive it in the form of a cash-out, totaling about $38 million of cash distributions. Lastly, about 1,000 of those employees each cashed out more than $8,000, thus suggesting the pension leakage problem warrants further research and perhaps policy changes.

The primary purpose of this study is to investigate the effects of bank competition on SMEs' access to finance in selected Indian states. Using 9,281 firm-level observations from World Bank Enterprises Survey (WBES), this study tests the market power hypothesis versus the information hypothesis to determine whether bank competition promotes access to finance for financially constrained firms.

The authors measure state-level bank competition using two structural indicators: the Herfindahl Hirschman Index (HHI) and three bank concentration ratios (CR3). The authors apply simple probit regression, probit model with sample selection (PSS) and two-stage least squares (2SLS) to examine the effects of bank competition on firms' financing constraints.

The results obtained through PSS and 2SLS indicate that bank competition alleviates firm's financing constraints and positively impacts its need for a bank loan and the decision to apply for bank credit. However, the prevalence of bank competition in promoting access to finance is more pronounced for small and medium-sized firms than for large firms. Higher bank competition also alleviates the credit constraints faced by female entrepreneurs.

Reserve Bank of India (RBI) and other government stakeholders should ensure bank competition without hampering the agenda of bank consolidation to facilitate access to credit for SMEs. Regulators should also identify and monitor the financial institutions that make an insignificant contribution to promoting competitiveness in the financial system.

Previous studies primarily investigate the effect of bank competition on a firm's access to finance from advanced and cross-country perspectives. This study contributes to the literature on bank competition by examining its role in promoting access to finance from an emerging economy standpoint. Measurement of bank competition indicators at the state level is an additional contribution.

Purpose – To estimate the impact of diabetic drug adherence on hospitalizations, emergency room (ER) visits, and hospital costs.

Methods – It is often difficult to measure the impact of drug adherence on hospitalizations since both adherence and hospitalizations may be correlated with unobservable patient severity. We control for such unobservables using propensity score methods and instrumental variables for adherence such as drug coinsurance levels and direct-to-consumer advertising.

Findings – We find a significant bias due to unobservable severity in that patients with more severe health are more apt to comply with medications. Thus, the relationship between adherence and hospitalization will be underestimated if one does not control for unobservable severity. Overall, we find that increasing diabetic drug adherence from 50% to 100% reduces the hospitalization rate by 23.3% from 15% to 11.5%. ER visits reduce by 46.2% from 17.3% to 9.3%. Although such an increase in adherence increases diabetic drug spending by $776 a year per diabetic, the cost savings for averted hospitalizations and ER visits are $886 per diabetic, a cost offset of $1.14 per $1.00 spent on diabetic drugs.

Originality – Most of the drug cost-offset literature focuses only on the impact of cost-sharing and drug spending on cost-offsets, making it impossible to back-out the empirical impact of actual drug adherence on cost-offsets. In this chapter, we estimate the direct impact of adherence on hospitalizations and costs.

International empirical evidence suggests that immigrants have a significantly higher risk than their native counterparts of being on welfare due to their observed characteristics. Nevertheless, it remains unclear if immigrants are also more prone to take-up benefits, conditional on being eligible. The authors explicitly focus on this potential explanation for higher welfare take-up rates. Therefore, the purpose of this paper is to analyze the take-up of social assistance in Germany by immigrants and natives, conditional on being eligible, and hence focus on take-up behavior rather than on determinants of eligibility.

To simulate welfare entitlements, the authors employ a Tax-Transfer Microsimulation Model. It is a static microsimulation model that consists of a detailed implementation of the German tax and transfer system as well as an econometrically estimated labor supply model. After the simulation of welfare entitlements, the authors analyze take-up behavior within a discrete choice framework. The authors estimate probit models of observed welfare benefit take-up for the sample of eligible households taking into account unobserved heterogeneity.

The estimation results do not reveal a significant effect of being a migrant on the probability of taking-up entitlements. The authors found a significant negative effect for citizens from European countries on the take-up probability, which disappeared after controlling for unobserved heterogeneity.

The authors find that it is worthwhile to focus on different groups of immigrants. Although not statistically significant, the rates of non-take-up of welfare benefits differ between different immigrant groups. The analysis further shows that controlling for unobserved heterogeneity is important when analyzing welfare differences between immigrants and natives.

The higher welfare rates of immigrants are explained mainly by their higher risk of welfare dependence. Thus, given that reducing the welfare dependence of immigrants is a political goal, social policy measures to improve welfare recipients’ labor market prospects are contested. However, restricting eligibility rules to reduce entitlements does not seem to be the appropriate measure, because the take-up probability does not differ between immigrants and natives after controlling for individual characteristics.

The authors build on Castronova et al. (2001) and analyze the take-up behavior of individuals who are entitled to basic means-tested welfare benefits for employable persons in Germany. The analysis differs from Castronova et al. (2001) in four points. First, the authors provide first evidence of immigrant-native differences in welfare benefit take-up under the new welfare system in Germany after its reorganization in 2005. Second, the authors apply a microsimulation model of the comlete tax and transfer system in Germany to determine welfare eligibility. Third, the authors extend the analysis to a panel framework and take into account individual unobserved heterogeneity. Fourth, the authors distinguish between different groups of immigrants.

The purpose of this paper is to examine the impacts of off-farm labor employments on household land rental behavior in rural China.

IV-Probit and IV-Tobit model are used to identify the estimate of interest.

The results indicate that households with more members participating in either migration or local off-farm work are more/less likely to rent out/in land. Moreover, the effect of migration on household land rental behavior is much larger than the effect of local off-farm work.

These results suggest that ensuring benefits of migrants in urban cities can automatically promote household land rental behavior in rural China.

The authors provide a rigorous and careful empirical analysis on the effect of off-farm employment on household land rental behavior and pay special attention to the endogeneity issue tackled using separable instruments.