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AN NBER PUBLICATION ISSUE: No. 7, July 2002

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
The family income of children whose parents divorce and remain divorced for at least six years falls by 40 to 45 percent. It is well known that two-parent families fare better financially than one-parent families. That is the reasoning behind the Bush Administration's recent proposal to Congress for $300 million a year for counseling and other efforts to encourage and support marriage. However, it is not easy to measure the effects of family structure on the economic...

Research Summaries

Article
Households appear to have taken advantage of higher income after the rice price increase to reduce child labor despite increased earning opportunities for children. In the ongoing debate about the wisdom of deliberately seeking a globalized marketplace, a recurring criticism is that for poor developing countries, integration inevitably will lead to an increase in child labor. The argument holds that globalization, by boosting demands for cheap exports from poor...
Article
The default rate on loans to related parties was 77.4 percent, compared to 32.1 percent for unrelated parties, while recovery rates were $0.30 per dollar lower for related borrowers than unrelated ones. In many countries, banks typically provide loans to so-called "related parties," that is, to shareholders of the lending bank, their family members, or the firms they control. In the past, some economists argued that related lending improves credit efficiency - bankers...
Article
The authors find that higher cigarette taxes are in fact associated with a large increase in self-reported well-being in both the United States and Canada. Eight out of ten smokers in America say they want to quit their habit. This type of response is consistent with descriptions of behavior suggesting that individuals have "self-control problems" and are not able to make long-term plans (such as quitting smoking) and consistently carry them out. At thesame time,...

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