The ADB Economics Working Paper Series is a forum for stimulating discussion and eliciting feedback on ongoing and recently completed research and policy studies undertaken by the Asian Development Bank (ADB) staff, consultants, or resource persons. The series deals with key economic and development problems, particularly those facing the Asia and Pacific region; as well as conceptual, analytical, or methodological issues relating to project/program economic analysis, and statistical data and measurement. The series aims to enhance the knowledge on Asia's development and policy challenges; strengthen analytical rigor and quality of ADB's country partnership strategies, and its subregional and country operations; and improve the quality and availability of statistical data and development indicators for monitoring development effectiveness.
Asian FTAs: Trends, Prospects, and Challenges
Although a latecomer, economically important Asia has emerged at the forefront of global free trade agreement (FTA) activity. This has sparked concerns about the negative effects of Asian FTAs, including the 'noodle bowl' problem. Amid slow progress in the World Trade Organization's (WTO) Doha negotiations and the global financial crisis, however, Asian regionalism seems to be here to stay. The focus for policy makers should then be how best to minimize the costs of FTAs while maximizing their benefits.
Who are the Middle Class and What Values do They Hold? Evidence from the World Values Survey
This paper examines key determinants of class status and the relationship between class status and values. We show that class status is largely determined by factors related to higher incomes, but is highly divergent among regions. Higher class status is significantly correlated with values that are more likely to foster economic growth. However, political activism is to a greater degree driven by the middle class rather than the upper class or the lower class. This indicates that the middle class may have special importance in demanding greater political accountability.
Economic Growth in Asia: Determinants and Prospects
Using a growth accounting framework, we find that developing Asia grew rapidly over the past 3 decades mainly due to robust growth in capital accumulation. The contributions of education and total factor productivity in the region's past economic growth remain relatively limited. Our baseline projections based on the model of conditional convergence show that the gross domestic product (GDP) growth rates of the 12 developing Asian economies covered by this paper will be consistently lower for the next 2 decades than their historical performance.
Past and Future of the Labor Force in Emerging Asian Economies
This paper investigates the determinants of past changes in the labor force of 12 emerging Asian countries, and attempts to make projections of the labor force in those countries for the period 2010-2030. Results from the regression analysis indicate that the labor force has grown faster than the population, has an inverted U-shape relationship with per capita gross domestic product, and is smaller in more capital-intensive countries.
Human Capital Accumulation in Emerging Asia, 1970-2030
Emerging Asian economies have made strong progress in improving educational capital in the past 40 years. High educational attainment, especially at the secondary level, has significantly improved emerging Asia's educational achievement. Regressions show that better parental education and income, lower income inequality, declining fertility, and higher public educational expenditures account for higher educational enrollment.
The Role of Fiscal Policy in Rebalancing Developing Asia's Growth
Rebalancing growth toward domestic demand has emerged as a key postcrisis challenge for sustaining developing Asia's rapid growth in the medium and long term. The central objective of this paper is to explore the role of fiscal policy in the region's rebalancing process. What matters most for rebalancing are specific fiscal measures tailored to each country's unique circumstances. In this context, the paper examines the potential contribution of fiscal policy to rebalancing growth in the People's Republic of China, the Republic of Korea, the Philippines, and Singapore.
How Can Food Subsidies Work Better? Answers from India and the Philippines
The study explores the outcomes of food subsidies to the poor in the case of India and the Philippines. Both countries operate in-kind food subsidy programs with similar mandates, commonalities in functioning, and substantial budgetary outlays. The goal of the study is to quantify the gains to the poor from an additional unit of public spending on food subsidies. We find the expected income impacts on the poor are not more than 5% of incremental spending in either country. Part of the reason for such a low impact is poor participation in the program.
Impact of Labor Market Institutions on Unemployment: Results from a Global Panel
Policies and programs designed to protect workers may, paradoxically, have a negative impact on labor as a whole by increasing unemployment. A key question is which policies have this effect. Using a 3-year panel of 90 countries, the study finds that the unemployment rate is affected by the existence, duration, and replacement rate of unemployment insurance. Hiring and retrenchment regulations and the nature of collective bargaining, however, are not significantly correlated with unemployment.
Middle Class Size in the Past, Present, and Future: A Description of Trends in Asia
This paper describes the size of the middle class in developing Asia across countries and over time. Based on an absolute measure of the middle class of $2-$20 (2005 purchasing power parity United States dollars), it finds that between 1990 and 2008, the size of the middle class in developing Asia has grown dramatically in percentage share, absolute size, and purchasing power. However, there are large variations in the size and growth of the middle class across countries, with the primary growth of the middle class largely driven by the People's Republic of China (PRC).
Fiscal Policy and Crowding Out in Developing Asia
Fiscal stimulus programs have contributed substantially to developing Asia's faster and stronger than expected recovery from the global financial crisis. This may lead to political pressures for greater use of countercyclical fiscal policy in the postcrisis period. However, the countercyclical effectiveness of fiscal policy depends critically on the extent to which it crowds out private investment and consumption. In the medium term, the use of fiscal policy to promote rebalancing toward domestic demand may require a moderate fiscal expansion.