Lorenzo Rotunno

Affiliated member ,  Aix-Marseille Université , Faculté d'économie et de gestion (FEG) , (on secondment at International Monetary Fund - IMF)

Macro, labor and international economics
Rotunno
Status
Professor
Research domain(s)
Development economics, International economics and economic geography
Thesis
2013, The Graduate Institute of International and Development Studies
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Contact
lrotunno[at]imf.org
Abstract How to allocate limited resources among children is a crucial household decision, especially in developing countries where it can have strong implications for children and family survival. We provide the first large scale study linking variations in parental income in the early life of children to subsequent child health and parental investments across siblings in developing countries, using data from multiple waves of the Demographic and Health Surveys spanning 54 countries. Variations in the world prices of locally suitable crops are used as measures of local income. We find that children born in periods of higher income receive better health investments and display persistently higher levels of health than their siblings. Children whose siblings were born during favourable income periods receive less investment and exhibit worse health. These findings are consistent with a model of sibling rivalry where parents invest in the child with the highest returns and complementarities in investment across periods. We also provide evidence that other investments (education, parental time use and child labour) react to sibling rivalry. Our results suggest that income shocks can enlarge disparities within households.
Keywords Intra-household allocations, Parental investments, Income, Health
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Abstract Introduction There is a lack of quantitative evidence on the role of food innovations—new food ingredients and processing techniques—in the nutrition transition. Objective Document the distribution of food innovations across 67 high-income (HIC) and middle-income (MIC) countries between 1970 and 2010, and its association with the nutritional composition of food supply. Methods We used all available data on food patents, as compiled by the European Patent Office, to measure food innovations. We considered innovations directly received by countries from inventors seeking protection in their territories, and those embedded in processed food imports. Food and Agricultural Organization data were used to estimate the associations between international diffusion of food innovations and trends in total food supply and its macronutrient composition, after adjusting for confounding trends in demand-side factors. We identified the role of trade by simulating the changes in average diet due to innovations embedded in food imports. Results Trends in food innovations were positively and significantly associated with changes in daily per capita calorie supply available for human consumption in MIC between 1990 and 2010 (elasticity of 0.027, 95% CI 0.019 to 0.036). Food innovations were positively correlated with the share of animal and free fats in total food supply (elasticities of 0.044, 95% CI 0.030 to 0.058 for MIC between 1970 and 1989 and 0.023, 95% CI 0.003 to 0.043 for HIC between 1990 and 2010). Food innovations were associated with substitutions from complex carbohydrates towards sugars in total food supply for MIC after 1990 (elasticities of −0.037, 95% CI −0.045 to −0.029 for complex carbs, 0.082, 95% CI 0.066 to 0.098 for sugars). For these countries, the trade channel capturing access to innovations through imports of processed food played a key role. Conclusion Policy-makers should consider the impacts of the international diffusion of food innovations in assessing the costs and benefits of international trade regulations.
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Abstract Declines in marriage and fertility rates in many developed countries have fostered research debate and increasing policy attention. Using longitudinal data from the German Socio-Economic Panel, we analyze the effects of exposure to globalization on fertility and marital behavior in Germany, which was a lowest-low fertility setting until recently. We find that exposure to greater import competition from Eastern Europe led to worse labor market outcomes and lower fertility rates. In contrast, workers in industries that benefited from increased exports had better employment prospects and higher fertility. These effects are driven by low-educated individuals, married men, and full-time workers and reflect changes in the likelihood of having any child (the extensive margin). We find evidence of some fertility postponement and significant effects on completed fertility, but we see little evidence of a significant impact on marital behavior. Our results inform the public debate on fertility rates in settings with lowest-low fertility, such as Germany, during the period under investigation.
Keywords Marriage, Fertility, Labor mar ket out comes, Globalization
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Abstract This paper estimates trade barriers in government procurement, a market that accounts for 12 percent of world GDP. Using data from inter-country input-output tables in a gravity model, we find that home bias in government procurement is significantly higher than in trade between firms. However, this difference has decreased over time. Results also show that trade agreements with provisions on government procurement increase cross-border flows of services, whereas the effect on goods is small and not different from that in private markets. Provisions on transparency and procedural requirements are particularly instrumental in increasing cross-border government procurement.
Keywords Government procurement, Trade agreements, Gravity equation
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Abstract This paper estimates trade barriers in government procurement, a market that accounts for 12% of world GDP. Using data from inter-country input-output tables in a gravity model, we find that home bias in government procurement is significantly higher than in trade between firms. However, this difference has been shrinking over time. Results also show that trade agreements with provisions on government procurement increase cross-border flows of services, whereas the effect on goods is small and not different from that in private markets. Provisions containing transparency and procedural requirements drive the liberalizing effect of trade agreements.
Keywords Government procurement, Trade agreements, Gravity equation
HAL Google Scholar
Abstract We investigate empirically, and explain theoretically, how the relative wages of skilled and unskilled workers vary with their relative supplies in open economies. Our results combine the insights of simple labour market and trade models. In countries that trade, relative wages respond inversely to variation in skill supplies, but the response decreases with the degree of openness to trade and is small in very open countries. To reconcile our results with standard estimates of the elasticity of substitution between skilled and unskilled workers, we allow also for the influence of directed technical change and income elasticity of demand for skill-intensive goods.
Keywords Wage inequality Labour markets Heckscher–Ohlin Trade and wages Directed technical change
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Abstract In this paper, we investigate the effects of trade in foods on obesity in Mexico. To do so, we match data on Mexican food imports from the U.S. with anthropometric and food expenditure data. Our findings suggest that exposure to food imports from the U.S. can explain up to 20% of the rise in obesity prevalence among Mexican women between 1988 and 2012. Pro-obesity effects are driven by areas more exposed to unhealthy food imports. We also find evidence in favour of a price mechanism. By linking trade flows to obesity, the paper sheds light on an important channel through which globalisation may affect health. (C) 2019 Elsevier B.V. All rights reserved.
Keywords Trade Obesity Nutrition transition Mexico
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Abstract The fragmentation of production chains across borders has been one of the most distinctive features of globalization since the 1980s. Nonetheless, our understanding of its implications for trade theory and policy is only in its infancy. We suggest that trade in value added should follow theories of comparative advantage more closely than gross trade, as value-added flows capture where factors of production, e.g. skilled and unskilled labor, are used along the global value chain. We find empirical evidence that Heckscher–Ohlin theory does predict manufacturing trade in value-added, and it does so better than for gross shipment flows. While countries export across a broad range of sectors, they contribute more value-added in techniques using their abundant factor intensively.
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Abstract Abstract This paper uncovers and quantifies Israel's exports to countries that ban trade with Israel. Israel exported a total of \6.4 billion worth of merchandise to boycott countries between 1962 and 2012, and most of this trade is illicit, i.e. not recorded by the importers. We find that electronic exports to Malaysia account for the lion's share of this trade but it also includes a wide array of products from footwear to fruit and vegetables. Our estimates suggest Israel's exports to these countries would be 10 times larger without the boycott. On top of providing further evidence on the unintended consequences of unilateral trade bans, this paper provides a case study on the role of politics in international trade.
Keywords Illegal trade, Israel, Trade policy
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Abstract This paper empirically examines the idea that Free Trade Agreements (FTAs) are more likely to be signed by governments playing ‘endgames’; that is, when governments are about to lose power. Two empirical strategies shed light on this hypothesis. One relies on events that increase the probability of political turnover, the other on term limits. I find that countries are more likely to sign FTAs after the unexpected exit of their leaders, when political instability is high. The key finding is partly confirmed in the term-limits strategy as governments are found to form more FTAs during their last term in office.
Keywords Trade agreements, Political Turnover, Political Rents
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Abstract How to allocate limited resources among children is a crucial household decision, especially in developing countries where it might have strong implications for children and family survival. We provide the first systematic study linking variations in parental income in the early life of children to subsequent child health and parental investments across siblings in developing countries, using data from multiple waves of the Demographic and Health Surveys spanning 54 countries. Variations in the world prices of locally produced crops are used as measures of local income. We find that children born in periods of higher income receive better human capital (health and education) investments and durably enjoy better health than their siblings. Children whose siblings were born during favourable income periods receive less investment and exhibit worse health. We also provide evidence that other investments (education, fertility) react to sibling rivalry, and show that these within-households adjustments matter at the aggregate level.
Keywords Health, Income, Parental investments, Intra-household allocations
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Abstract This paper estimates trade barriers in government procurement, a market that accounts for 12% of world GDP. Using data from inter-country input-output tables in a gravity model, we find that home bias in government procurement is significantly higher than in trade between firms. However, this difference has been shrinking over time. Results also show that trade agreements with provisions on government procurement increase cross-border flows of services, whereas the effect on goods is small and not different from that in private markets. Provisions containing transparency and procedural requirements drive the liberalizing effect of trade agreements.
Keywords Government procurement, Trade agreements, Gravity equation
HAL Google Scholar
Abstract This paper estimates trade barriers in government procurement, a market that accounts for 12% of world GDP. Using data from inter-country input-output tables in a gravity model, we find that home bias in government procurement is significantly higher than in trade between firms. However, this difference has been shrinking over time. Results also show that trade agreements with provisions on government procurement increase cross-border flows of services, whereas the effect on goods is small and not different from that in private markets. Provisions containing transparency and procedural requirements drive the liberalizing effect of trade agreements.
Keywords Government procurement, Trade agreements, Gravity equation
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Abstract Using longitudinal data from the German SocioEconomic Panel, we analyze the effects of exposure to trade on the fertility and marital behavior of German workers. We find that individuals working in sectors that were more affected by import competition from Eastern Europe and suffered worse labor market outcomes were less likely to have children. In contrast, workers in sectors that benefited from increased exports had better employment prospects and higher fertility. These effects are driven by low-educated and married men, and reflect changes in the likelihood of having any child (extensive margin). While among workers exposed to import competition there is evidence of some fertility postponement, we find a significant reduction of completed fertility. There is instead little evidence of any significant effect on marital behavior.
Keywords International trade, Labor market outcomes, Fertility, Marriage
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Abstract We investigate empirically, and explain theoretically, how the relative wages of skilled and unskilled workers vary with their relative supplies in open economies. Our results resolve a conflict between the predictions of standard trade theory and experience of how labour markets work. We show that relative wages respond to variation in relative skill supplies in countries that trade, as intuition and much other evidence suggest, but also that the wage response decreases as trade barriers fall and that, as trade theory suggests, is weak in very open economies.
Keywords Heckscher-Ohlin, Trade and wages, Wage inequality, Labour markets
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Abstract This paper uncovers and quantifies Israel’s exports to countries that ban trade with Israel. Israel exported a total of $6.4 billion worth of merchandise to boycott countries between 1962 and 2012, and most of this trade is illicit, i.e. not recorded by the importers. We find that electronic exports to Malaysia account for the lion’s share of this trade but it also includes a wide array of products from footwear to fruit and vegetables. Our estimates suggest Israel’s exports to these countries would be 10 times larger without the boycott. On top of providing further evidence on the unintended consequences of unilateral trade bans, this paper provides a case study on the role of politics in international trade.
Keywords Trade policy, Israel, Illegal trade
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