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This paper investigates whether agricultural households in the rural Philippines insure their consumption against income shocks and whether they use migration, remittances, informal loans, or assets as ex post risk-coping mechanisms. Since these households have limited access to formal insurance and credit markets, any shocks to their volatile income can have substantial impacts. Using panel data, and rainfall shocks as the instrumental variable for income shocks, this paper finds little evidence of effective risk-sharing within the networks of family and friends. 2SLS, OLS, and SUR estimates show that only about 16 percent of consumption is insured. While domestic remittances from other families replace about 51 percent of income decline, informal loans decrease by about 34 percent. Additional tests, however, reveal that agricultural households
engage in entrepreneurial activity when rainfall increases and children are somehow protected from the adverse effects of rainfall shocks. Hours spent on own family-operated businesses likewise increase.

Published:  Pajaron, Marjorie C. Remittances, informal loans, and assets as risk-coping mechanisms: evidence from agricultural households in rural Philippines. No. 2014-16. Discussion Paper, School of Economics, University of the Philippines, 2014.

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Asia Health Policy Program working paper # 32
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Education, fundamental to economic growth and development, has become an arena for global competition in the digital information age. As in the United States, many Asian policymakers are now pushing for higher education reform in the belief that strong, innovative higher education systems will pave the way for their countries’ future economic and political strength.

Looking comparatively at situations across Asia and in the United States, the fourth annual Stanford Kyoto Trans-Asian Dialogue considered possible solutions to the challenges of reforming higher education today.

Scholars and top-level administrators from Stanford and universities across Asia, as well as policymakers, journalists, and business professionals, met in Kyoto on September 6 and 7, 2012. In the discussion sessions following the presentations, participants raised a number of key, policy-relevant points, which are highlighted in the Dialogue’s final report. These include:

All countries face the challenge of preparing students to find meaningful employment, yet there is a lack of clarity in educational goals. Several participants felt the political expediency of government funding aiming for world university rankings must be balanced with the less politically attractive but potentially more critical vocational needs of economic development.

University administrators and government policymakers need to define their goals for “globalization” or “internationalization” as they launch new initiatives and policies. Participants noted that, while few are opposed to the principle of internationalization, without a sense of concrete and realistic goals, the cost-benefit of various measures may not make sense.

Online education promises great potential innovation in education, but it is still at a very early stage. While potentially valuable in enhancing traditional learning and research, serious challenges remain. There was a sense that far more needs to be done than simply taking existing forms of education and putting them online in order to truly harness the potential offered by online education.

The Stanford Kyoto Trans-Asian Dialogue series is made possible through the generosity of the City of Kyoto, the Freeman Spogli Institute for International Studies at Stanford University, and Yumi and Yasunori Kaneko. The final report from the 2012 Dialogue, and previous years, is available for download from the Shorenstein APARC website.

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Activists in Wukan, in Guangdong province, have discovered there are limits to grassroots democracy. New research by Jean C. Oi, showing a high percentage of upper-level government overseers in China's villages, highlights the boundaries of the power of local elected officials.
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Students in Wukan's downtown area, June 2012.
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How do jihadists and militant Papuan pro-independence groups in Indonesia analyze each other's behavior? How do government policies toward the two groups differ? Why does the murder of a policeman warrant a murder charge when committed by a Papuan guerrilla but a terrorism charge when committed by a jihadist? Why is speech in favor of independence banned but speech exhorting the killing of deviants allowed? Why are "deradicalisation" programs, such as they are, aimed only at jihadists and not at Papuan militants? Why is the Papuan independence flag banned while flags that promise an Islamic caliphate are allowed? Some inconsistencies may be unavoidable, but when "terrorists" are not producing mass casualties and some "rebels" are beginning to target civilians, it may be time to rethink policies toward both. Sidney Jones will address these disparities using evidence drawn from interviews and from these groups’ own statements and actions.

Sidney Jones is a globally acclaimed expert on inter-group conflict in Southeast Asia. Topics she has covered for ICG include radical Islamism and communal violence in Indonesia and the Philippines. Previously she held positions with Human Rights Watch, Amnesty International, and the Ford Foundation. Her writings in 2011–12 have appeared in Southeast Asian Affairs 2011, The Straits Times, and Strategic Review among other outlets. Her earlier work includes Making Money Off Migrants: The Indonesian Exodus to Malaysia (2000). A frequent media interviewee, she also lectures widely—most recently in Sydney on extremism and democracy in Indonesia at the Australian Institute of International Affairs. Based in Jakarta, she has spent Fall 2012 as a visiting scholar at the University of California, Berkeley.

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Sidney Jones Senior Adviser, Asia Program Speaker International Crisis Group (ICG)
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Providing people with safe drinking water is one of the most important health-related infrastructure programs in the world. The first part of our research investigates the effect of a major water quality improvement program in rural China on the health of adults and children. Using panel data covering about 4500 households from 1989 to 2006, we estimate the impact of introducing village-level access to water from water plants on various measures of health. The regression results imply that the illness incidence of adults decreased by 11 percent and their weight-for-height increased by 0.835 kg/m, and that children's weight-for-height and height itself both rose by 0.446 kg/m and 0.962 cm respectively, as a result of the program. And these estimates are quite stable across different robustness checks.

While the previous research has shown health benefit of safe drinking water program, we know little about the longer-term benefits such as education. The second part of our research examines the youth education benefits of this major drinking water infrastructure program. By employing a longitudinal dataset with around 12,000 individual observations aged between 16 and 25, we find that this health program has benefited their education substantially: increasing the grades of education completed by 0.9 years and their probabilities of graduating from a lower and upper middle schools by around 18 and 89 percent, respectively. These estimation results are robust to a host of robustness checks, such as controlling for educational policy and local resources (by including county-year fixed effects), village distance to schools, local labor market conditions, educational demand, instrumenting the water treatment dummy with topographic variables, among others. Our estimates suggest that this program is highly cost-effective.

Jing Zhang, an assistant professor, received her PhD from the University of Maryland in 2011, and joined Renmin University of China in the same year. Prior to that, she worked at the World Bank from 2010 to 2011. The focus of her research lies in health economics and public finance. Her publications include: “The Impact of Water Quality on Health: Evidence from the Drinking Water Infrastructure Program in Rural China,” Journal of Health Economics (2012) and “Soft Budget Constraints in China: Evidence from the Guangdong Hospital Industry,” International Journal of Healthcare Finance and Economics (2009).

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Jing Zhang Assistant Professor Speaker Renmin University of China
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