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Asian Development Review: Volume 38, Number 1 Asian Development Review Volume 38 2021 Number 1 Seasonal Labor Mobility in the Pacifi c: Past Impacts, Future Prospects John Gibson and Rochelle-Lee Bailey Population Aging and the Three Demographic Dividends in Asia Naohiro Ogawa, Norma Mansor, Sang-Hyop Lee, Michael R.M. Abrigo, and Tahir Aris What’s Happened to Poverty and Inequality in Indonesia over Half a Century? Hal Hill Does Computer-Aided Instruction Improve Children’s Cognitive and Noncognitive Skills? Hirotake Ito, Keiko Kasai, Hiromu Nishiuchi, and Makiko Nakamuro Education–Occupation Mismatch and Its Wage Penalties in Informal Employment in Thailand Tanthaka Vivatsurakit and Jessica Vechbanyongratana International Comparisons of Poverty in South Asia TM Tonmoy Islam, David Newhouse, and Monica Yanez-Pagans Government Intervention, Institutional Quality, and Income Inequality: Evidence from Asia and the Pacifi c, 1988–2014 Bertrand Blancheton and Dina Chhorn Social Capital and Innovation in East Asia Seo-Young Cho AADEV3801-Cover.inddDEV3801-Cover.indd 1 22/24/21/24/21 99:30:30 AAMM EDITOR YASUYUKI SAWADA, Asian Development Bank TETSUSHI SONOBE, Asian Development Bank Institute MANAGING EDITOR JESUS FELIPE, Asian Development Bank EDITORIAL TEAM GEMMA ESTHER B. ESTRADA, Asian Development Bank MARIA SUSAN M. TORRES, Asian Development Bank MARY ANN M. MAGADIA, Asian Development Bank EDITORIAL BOARD KYM ANDERSON, University of Adelaide AHMED MUSHFIQ MOBARAK, Yale University PREMA-CHANDRA ATHUKORALA, NANCY QIAN, Northwestern University Australian National University KRISLERT SAMPHANTHARAK, University of KLAUS DESMET, Southern Methodist University California, San Diego JESUS FELIPE, Asian Development Bank KUNAL SEN, UNU-WIDER and The University NEIL FOSTER-MCGREGOR, UNU-MERIT of Manchester SHIN-ICHI FUKUDA, The University of Tokyo AYA SUZUKI, The University of Tokyo RANA HASAN, Asian Development Bank MAISY WONG, University of Pennsylvania SUNG JIN KANG, Korea University JOSEPH ERNEST ZVEGLICH, JR., Asian HONGBIN LI, Stanford University Development Bank XIN MENG, Australian National University HONORARY BOARD Chair: MASATSUGU ASAKAWA, Asian Development Bank MONTEK SINGH AHLUWALIA, Former HAN SEUNG-SOO, UN Secretary-General’s Deputy Chairman of the Planning Special Envoy for Disaster Commission, India Risk Reduction and Water PETER DRYSDALE, Australian National University LAWRENCE SUMMERS, Harvard JUSTIN LIN, Peking University University, John F. Kennedy MARI ELKA PANGESTU, World Bank School of Government The Asian Development Review is a professional journal for disseminating the results of economic and development research relevant to Asia. The journal seeks high-quality papers done in an empirically rigorous way. Articles are intended for readership among economists and social scientists in government, private sector, academia, and international organizations. The views expressed in this publication are those of the authors and do not necessarily refl ect the views and policies of the Asian Development Bank (ADB), the Asian Development Bank Institute (ADBI), the ADB Board of Governors, or the governments they represent. ADB and ADBI do not guarantee the accuracy of the data included in this publication and accept no responsibility for any consequence of their use. By making any designation of or reference to a particular territory or geographic area, or by using the term “country” in this document, ADB and ADBI do not intend to make any judgments as to the legal or other status of any territory or area. Please direct all editorial correspondence to the Managing Editor, Asian Development Review, Economic Research and Regional Cooperation Department, Asian Development Bank, 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines. E-mail: [email protected]. Notes: In this publication, “$” refers to United States dollars, unless otherwise stated. ADB recognizes “Korea” as the Republic of Korea. For more information, please visit the website of the publication at www.adb.org/publications/series/asian-development-review. AADEV3801-Cover.inddDEV3801-Cover.indd 2 22/24/21/24/21 99:30:30 AAMM Asian Development Review Volume 38 • 2021 • Number 1 March 2021 Volume 38 2021 Number 1 Seasonal Labor Mobility in the Pacifi c: Past Impacts, Future Prospects 1 John Gibson and Rochelle-Lee Bailey Population Aging and the Three Demographic Dividends in Asia 32 Naohiro Ogawa, Norma Mansor, Sang-Hyop Lee, Michael R.M. Abrigo, and Tahir Aris What’s Happened to Poverty and Inequality in Indonesia over Half a Century? 68 Hal Hill Does Computer-Aided Instruction Improve Children’s Cognitive and Noncognitive Skills? 98 Hirotake Ito, Keiko Kasai, Hiromu Nishiuchi, and Makiko Nakamuro Education–Occupation Mismatch and Its Wage Penalties in Informal Employment in Thailand 119 Tanthaka Vivatsurakit and Jessica Vechbanyongratana International Comparisons of Poverty in South Asia 142 TM Tonmoy Islam, David Newhouse, and Monica Yanez-Pagans Government Intervention, Institutional Quality, and Income Inequality: Evidence from Asia and the Pacifi c, 1988–2014 176 Bertrand Blancheton and Dina Chhorn Social Capital and Innovation in East Asia 207 Seo-Young Cho Seasonal Labor Mobility in the Pacific: Past Impacts, Future Prospects John Gibson and Rochelle-Lee Bailey∗ The Pacific islands have weak economic growth and limited structural change compared to the rest of developing Asia. Remoteness and low economic density are two causes. To mitigate these constraints, bilateral arrangements with Australia and New Zealand let Pacific workers seasonally migrate to access higher-paying, more dynamic labor markets. Managed circular schemes are designed to benefit employers in labor-intensive sectors like horticulture, Pacific workers with limited employment opportunities in their own countries, and the communities providing workers. Several studies show large, positive impacts, but more general development impacts have been harder to find. Likewise, clear quantitative evidence of positive impacts in host countries has been hard to obtain. In this paper, we review the main seasonal labor mobility schemes in the Pacific and provide new evidence on community-level and aggregate impacts. Keywords: development impacts, labor mobility, Pacific economies, seasonal migration JEL codes: F22, J61, O12 I. Introduction The island economies in the Pacific have experienced weak economic growth and limited structural change compared to the typical economy in the rest of developing Asia.1 Remoteness from major centers of population and economic activity, and low economic density, have contributed to these poor outcomes (Gibson 2007). To mitigate the impact of these constraints, bilateral arrangements with Australia and New Zealand over the last decade have given workers from these countries an opportunity to use seasonal labor migration to access higher-paying, more dynamic and diverse labor markets. These managed circular migration schemes are designed to benefit employers in labor-intensive sectors, ∗John Gibson (corresponding author): Department of Economics, University of Waikato, Hamilton, New Zealand. E-mail: [email protected]; Rochelle-Lee Bailey: Department of Pacific Affairs, Coral Bell School of Asia Pacific Affairs, Australian National University, Canberra, Australia. E-mail: [email protected]. This paper draws on more than a decade of research on Pacific seasonal labor mobility. Among our many collaborators and supporters, we especially thank Halahingano Rohorua, David McKenzie, John Corcoran, Richard Bedford, Charlotte Bedford, Geua Boe-Gibson, Manjula Luthria, and Lionel Kaluat, and the many migrants, employers, and government officials who have assisted with our research. We are also grateful to the managing editor and an anonymous referee for helpful comments and suggestions. The usual Asian Development Bank (ADB) disclaimer applies. 1Developing Asia refers to the 46 developing member economies of ADB. Asian Development Review, vol. 38, no. 1, pp. 1–31 © 2021 Asian Development Bank and https://doi.org/10.1162/adev_a_00156 Asian Development Bank Institute. Published under a Creative Commons Attribution 3.0 International (CC BY 3.0) license. 2 Asian Development Review the workers from the Pacific that have limited opportunities for wage-earning employment in their own countries, and the communities that send the workers. As seen around the world, any discussion of temporary migration programs can become highly charged in public debate due to the issues of human trafficking, overstaying and other forms of illegal migration, employer exploitation of immigrants, and misunderstandings stemming from differences in cultural and legal traditions between source and host countries. Yet, labor mobility has played a key role in ensuring efficient and equitable development, particularly when youthful populations—such as in Melanesian countries like Papua New Guinea and Vanuatu—are adjacent to countries like Australia, New Zealand, and many Asian countries with aging populations. The recently introduced seasonal migration schemes recognize the need to let employers in the labor-intensive accommodation, agriculture, horticulture, and viticulture (wine) industries recruit workers from Pacific countries for several months per year, letting workers who comply with migration regulations return for future seasons. A balance between the needs of these industries for seasonal labor to help expand production and exports, and the need to provide employment opportunities for workers from the Pacific, all while preserving border integrity,
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