Essays on poverty, microfinance and labor economics

Date

2006-08

Journal Title

Journal ISSN

Volume Title

Publisher

Texas Tech University

Abstract

This dissertation presents three essays examining some of the issues concerning poverty, microfinance and returns to education. The first essay examines the micro-level determinants and correlates of poverty, and presents a poverty profile for Sri Lanka. This is the first study that examines the probable determinants and correlates of Sri Lankan poverty in a multivariate framework employing both logit and quantile regressions. The empirical findings are broadly encouraging. The estimation results show that the education of the household head, being salary employed and being engaged in business to have a significant positive effect on the standard of living. The probability of being poor increases with the household size, household head being female, living in a rural area, and being a casual wage earner.

The second essay applied recent advances in propensity score matching to assess the impact of microfinance on household per-capita income and savings. Microfinance for the poor has become a focus of attention in the development community over the last several years. To date, there has been no comprehensive investigation of their impact on household income and savings. The results for the mean impact indicate that program participation significantly increases household per capita savings for the bottom four quintiles, though the magnitude varies by matching method. Even though there are sizable gains in household per capita savings for program participants, this is not evident for household per capita income. Results suggest that there is no impact on household per capita income across all quintiles.

The third essay investigates the returns to education in Sri Lankan labor market using the latest Consumer Finance and Socio-economic Survey. This essay employs the quantile regression technique for each conditional quantile wage group rather than mean regression analysis used in most labor market analysis. Quantile regression results suggest that returns to education are positive and significant across all quantiles. However, a comparison of wage returns to education between ethnic groups reveals that returns are higher for Sinhalese workers than for Tamil Workers.

Description

Citation