Journal articles

We examine what happens to Sri Lankan men’s labour market outcomes when their wives emigrate to work and leave the husbands and their children at home in Sri Lanka—the effects of maternal migration on the husbands’ labour market decisions. We use nationally representative cross-sectional data and historical migration rates at the community level as an instrument for maternal migration in two-stage least-square estimations. We find maternal migration reduces the husbands’ labour supply. The husbands are more likely to exit the labour market and become unemployed; the employed are less likely to moonlight and have lower wages; those that exit the labour market are more likely to become stay-at-home dads. Using a second instrument, an indicator of whether a community has foreign-employment agencies, we also confirm our main results. Our findings indicate that policies that aim to promote female migration as an exogenous income source may fall short if they do not address the effects of the husbands’ labour market decisions.

To increase the use of healthcare services in Indonesia, the government of Indonesia introduced Askeskin, a subsidized social health insurance for the poor, in 2005. We examine the effects of this social health insurance on women’s healthcare use. Using propensity score matching, we find Askeskin induces women to use public healthcare facilities for birth delivery and antenatal checkup, discourages them from getting help from midwives for birth delivery, and makes them more likely to use contraceptives. The insurance seems to increase delivery care expenditure, however. We do not find evidence it increases women’s preventive and curative healthcare use.

 Studies show educated citizens are more likely to vote in elections but few papers look at the relationship in developing countries and even fewer analyze whether the relationship is causal. I examine whether education increases voter turnout and makes better-informed voters in Indonesia using an exogenous variation in education induced by an extension of Indonesia’s school term length, which fits a fuzzy regression discontinuity design. The longer school year increases education, but I do not find education increases voter turnout; it does not seem to affect voters’ views of political candidates’ religion, ethnicity, or gender when they vote either.

 We examine the effects of bigger rewards in individual multi-stage tournaments on efforts and risk taking using the three-point rule in chess. Most chess tournaments use the standard rule while some tournaments use the Bilbao rule, which is identical to the three-point rule in soccer: We observe the same pairs of chess players playing under both rules, a research design that fits fixed-effect models. We find the Bilbao rule makes games 33 percent more decisive, mostly to white players’ advantage who win 50 percent more games. We identify two mechanisms why the Bilbao rule works: It encourages players to play longer and discourages them from using drawish openings. These results suggest incentive schemes that provide bigger rewards for better performances work in individual multi-stage tournaments in which efforts and financial rewards are directly linked and strategic interactions among teammates and with competitors are less complex.

 I examine the effects of education on health in Indonesia using an exogenous variation in education induced by an extension of Indonesia’s school term length in 1978-1979, a natural experiment that fits a regression discontinuity design. I find the longer school year increases educational attainment and wages, but I do not find evidence that education improves health. I explore some mechanisms through which education may affect health, but education does not seem to promote healthy lifestyles, increase the use of modern healthcare services, or improve access to health insurance; if anything, education improves only cognitive capacity.

 Islamic banks, as their charters require, should share their profits and losses with their customers through equity financing; but they do mark-up financing instead, which is similar to bank loans. Theoretically, one of the reasons is Islamic banks operate in poor contracting environments where equity financing is very risky. Using fixed effects models, we examine what Islamic banks do when the countries they are in reform their economies. We do not find better contracting environments induce Islamic banks to do more equity financing, which suggests that Islamic banks are unlikely to shift from mark-up to equity financing in the near future—they are likely to remain similar to conventional banks.

 We examined the effects of parental emigration on the education of the children left behind in Sri Lanka. Using access to foreign employment agencies as a source of exogenous variation in parental migration, we estimated two-stage least squares models of the children’s school enrolment, access to private tuition, class-age gap (the difference between a child’s school year and the child’s age), and educational spending. Overall, parental migration had no statistically significant effect on any of the outcomes; however, analyses by migrant gender show that the effects of parental migration were heterogeneous. When the mother migrates and the father stays behind, the education of the children worsens; when the father migrates and the mother stays behind, it improves. There is also some evidence that boys, younger children, and children of less-educated parents gain more from parental migration.

 We examine whether the three-point rule—the increase in rewards for a win from two to three points that the Fédération Internationale de Football Association (FIFA) adopted in 1995—makes Bundesliga games become more exciting. Using regression discontinuity design as the empirical strategy, we do not find evidence that the three-point rule makes games more decisive, increases the number of goals, or decreases goal differences. We only find some evidence that the three-point rule increases the second-half goals of losing first-half teams. Overall, our results suggest that, in the case of Bundesliga games, the three-point rule does not work as FIFA intended.

 Both theoretically and empirically, childbearing decreases labour supply of females, but few papers examine the effect of children on whether women emigrate to work. Using exogenous variations in family size induced by parents’ preferences for mixed sibling-sex composition in instrumental variable estimations, we find that, in Sri Lanka where most migrants are women and mothers, children decrease labour participation of females in the domestic market but they increase the likelihood of females working abroad.

 This paper examines the association between the intensity, timing, and persistence of personal history of mobility on individual support for redistribution. Using both rounds of the Life in Transition Survey,the paper builds measures of downward mobility for about 57,000 individuals from 27 countries in Eastern Europe and Central Asia. The analysis finds that more intensive, recent, and persistent downward mobility increases support for redistribution more. A number of extensions and checks are done by, among others, taking into account systematic bias in perceived mobility experience, considering an alternative definition of redistributive preferences, and exploring the severity of omitted variable bias problems. Overall, the results are robust.

 This paper examines whether education empowers women. We exploit an exogenous variation in education induced by a longer school year in Indonesia in 1978, which fits a fuzzy regression discontinuity design. We find education reduces the number of live births, increases contraceptive use, and promotes reproductive health practices. However, except for a few outcome measures, we do not find evidence that education improves women’s decision-making authority within households, asset ownership, or community participation. These results suggest that, to some extent, education does empower women in middle-income countries like Indonesia.

 I examine the effects of a longer school year in Indonesia on grade repetition, educational attainment, employability, and earnings. I exploit an arbitrary rule that assigned students to a longer school year in Indonesia in 1978–1979, which fits a fuzzy regression discontinuity design. I find the longer school year decreases the probability of grade repetition and increases educational attainment; it also increases the probability of working in formal sectors and wages later in life. These results suggest the length of school years in Indonesia is not too long.

 I examine what happens to the total assets of micro and small firms in Indonesia when their owners experience hardship such as the death or sickness of family members, crop losses, or natural disasters. Using a representative sample of firm owners, I find that deaths of family members reduce the assets of such firms, that the adverse effects of these are long-lasting and economically large, and that the smaller the firms the greater the magnitude of these effects. There is no evidence, however, that the sickness of family members, crop losses, or natural disasters reduce firms’ assets. These results suggest that only severe family hardship impedes the growth of micro and small firms.

 This paper examines the relationship between types of ownership of banks and their efficiency in the aftermath of a financial crisis using Greene’s “true” panel data stochastic frontier model, which takes into account unobserved heterogeneity among banks. The Indonesian banking sector is analyzed using financial data of 144 banks operating in Indonesia over the period of 2000Q4–2005Q2. In the aftermath of the 1997 Asian financial crisis, the cost efficiency of all banks improves over time on average. However, there is some evidence that, as these banks improve their efficiency, state-owned banks are the least efficient banks while joint-venture and foreign-owned banks are the most efficient.

 We examine the effects of the United States–Singapore Free Trade Agreement (FTA) on the value of firms listed in the Singapore Exchange using event study analysis. Despite the predictability of the FTA negotiations, we find that one event – the removal of the last obstacle to the free trade deal in January 2003 – increases the value of firms in some industries by 1–11% on average. These results indicate that trade liberalization and FTAs do increase the value of firms.

 This paper examines the effect of publishing hospital charges on healthcare costs. We compare hospital charges before and after Singapore’s Ministry of Health started publishing the statistics of hospital charges on its website in the late 2003. After controlling for health-condition-, hospital-, and room-type time-invariant factors, both observed and unobserved, we do not find evidence of a decrease in healthcare costs. However, we find some evidence of an increase in cost dispersion, a decrease in patients’ length of stay at hospitals, and an increase in hospital care cost per day.

 We examine the effect of strategic sale, which is the sale of banks to strategic foreign investors, on bank performance. The Government of Indonesia implemented such a policy as part of a bank restructuring in the aftermath of the 1998 banking crisis. Using difference-in-differences models, we find that strategic sale leads to a 12–15% cost reduction. These results are robust to the use of other estimators such as difference-in-differences matching estimators and stochastic-frontier analysis, to that of other performance measures such as return on assets and net interest margin, and to that of different sample types. These results suggest that strategic sale could play an important role in restructuring troubled banks in developing countries.

 This paper provides an empirical explanation to the observed disparity in cross-border merger and acquisition inflows to developing and developed countries over the past two decades. We show two main results. First, the disparity can be attributed to the difference in the quality of institutions between the two groups of countries. Second, the gain from reforming institutions in developing countries is smaller than that in developed countries. These findings suggest that, with the current speed of institutional reforms in some developing countries, the disparity in cross-border merger and acquisition inflows is likely to persist.

 Using dynamic panel data models, and addressing a common inappropriate use of simultaneous equation models in the literature, we examine the effect of capital requirements on banks’ behaviour in Indonesia. We find that banks tend to comply with capital requirements by increasing their capital ratios when the ratios are lower than, or falling towards, the 8% regulatory minimum. However, our results are mostly driven by large private-domestic banks and heavily undercapitalized banks that were closely monitored by the regulator in the aftermath of the 1998 crisis. Therefore, whether in normal circumstances banks in Indonesia comply with capital requirements remains questionable.