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The macroeconomics of institutions, fertility and social capital
In order to distinguish essays and pre-prints from academic theses, we have a separate category. These are often much longer text based documents than a paper.
posted on 14.02.2017by Wang, Cong
This thesis consists of three empirical and theoretical chapters that aim to answer three main
economic questions. The first chapter of this thesis is motivated by theoretical arguments (see e.g.
Romer, 2010, Mokyr, 2007) that assert a positive impact of institutions on R&D, this paper aims to
provide some empirical analysis on the relationship between the two variables. In particular, using
a core sample of 98 countries over the period 1996-2009, this paper has found a significant direct
effect of institutions on R&D intensity. Countries with better institutions qualities as captured by
the World Banks’ Worldwide Governance Indicators (WGI) tend to attract more scientists and
engineers into the research field and to spend more on R&D as well. This paper has also found
evidence that the effect of institutions varies in different economies characterized by different
levels of financial development and human capital accumulation, but stays relatively unchanged
across countries with different levels of trade openness.
The second chapter is motivated by the fact that several developing countries are currently
experiencing a significant fertility decline; the advent of which is likely to bring these countries large
economic benefits since high fertility is considered to be among the most important causes of
underdevelopment. However, academic economists have paid very little attention to this transition.
This paper seeks to explain the transition by infant mortality, urbanization, income, culture and
educational attainment of females in their fertility age using annual data for 92 developing
countries over the period 1960-2010. External instruments are used to deal with endogeneity. The
reszults give intriguing insights into the demographic transition in the developing world.
The last chapter is motivated by theoretical arguments (see e.g. Putnam, 2007) that assert a
negative impact of ethnolinguistic diversity on social capital, this paper aims to provide some
empirical evidence on the relationship between the two variables. In particular, using a cross
section sample of 68 developed and developing countries, this paper has found a significant
negative effect of ethnolinguistic diversity on social capital. Countries with fractionalized ethnic and
linguistic groups as captured by both log number of languages and Desmet et al. (2012) and La
Porta et al. (1999)’s measures on linguistic diversity tend to have lower levels of social trust, fewer
memberships in social organizations, deteriorated social norms and structure, hence, lower overall
social capital stock.