GARTH FRAZER

Home Address:   521 Prospect Street, Apt. 1   New Haven, CT 06511-2129   Tel: (203) 782-9326 Office Address:   Department of Economics   Box 208268   Yale University   New Haven, CT 06520-8268   Fax: (203) 432-5779 Birth Date: December 14, 1968 Citizenship: Canadian

Fields of Concentration

Economic Development Industrial Organization Labor Economics Applied Econometrics

Desired Teaching:

Economic Development Microeconomics Labor Economics Industrial Organization International Trade Environmental Economics

Comprehensive Examinations Completed:

May 1999 (Orals) Economic Development and Economics of the Public Sector and the Environment May 1998 (Written) Microeconomic Theory and Macroeconomic Theory

Dissertation Title:

Firms, Workers and Human Capital in Ghanaian Manufacturing

Committee:

Professor Christopher Udry Professor Steven Berry Professor Patrick Bayer

Expected Completion Date:

May 2001

Degrees:

M.Phil., Yale University, May 2000 M.A., Yale University, May 1999 M.A., University of Toronto, June 1994 B.Ed., University of Western Ontario, June 1992 B.Math (Honours, Co-op) University of Waterloo, May 1992, Dean's Honour List

Fellowships, Honors and Awards:

Yale University MacArthur Network on Inequality and Economic Performance Graduate Fellowship, 2001-02 John F. Enders Fellowship, 2001 Ryoichi Sasakawa Fellowship, 1999-2000 Yale University Graduate Fellowship, 1997-2001 Social Sciences and Humanities Research Council of Canada Doctoral Fellowship 1997-2001 University of Toronto University of Toronto Open Fellowship, 1993-94 University of Waterloo W.I. Miller Scholarship, 1991-92 William Gartrell Memorial Scholarship, 1989-90 Trent University (1987-88) Champlain Scholarship, 1987-88 Prizes for highest marks in first-year algebra, calculus, economics, psychology, development

Teaching Experience:

Teaching Assistant, Department of Economics, Yale University European Economic History, Spring 2001 Introductory Microeconomics, Fall 2000 Teaching Assistant, Department of Economics, University of Toronto Principles of Economics, 1993-94 Secondary School Mathematics Teacher (Fully Qualified) Taught virtually all high school mathematics courses at schools in Cambridge and Toronto, Ontario Received the W.I. Miller Scholarship for "promise of leadership in the mathematics teaching profession"

Research Experience:

Research Assistant, Professor Gerald K. Helleiner, University of Toronto, 1996-97, on the project, "Growth, External Sector and the Role of Non-Traditional Exports in Sub-Saharan Africa" Research Assistant, Professors Albert Berry, Susan Horton, and Dipak Mazumdar, University of Toronto, 1994-95, on the project, "Globalization, Adjustment, Inequality and Poverty"

Papers:

"Linking Firms and Workers: Heterogeneous Labor and Returns to Education," September 2001. [Job Market Paper] "The Firm and the Family Network: Measuring the Relative Productivity of Relatives," September 2001. "Formal versus Informal Training for the Manufacturing Sector: An Examination of Apprenticeship in Ghana," in progress. "Income Distribution and Development: A Parametric and Semiparametric Inquiry into Kuznets' Curve," June 1999.

References:

Professor Christopher Udry, Director Economic Growth Center Department of Economics Yale University Box 208269 New Haven, CT 06520-8269 Tel: (203) 432-3637 Fax: (203) 432-3635 E-mail: udry@yale.edu Professor Patrick Bayer Department of Economics Yale University Box 208264 New Haven, CT 06520-8264 Tel: (203) 432-6292 Fax: (203) 432-6323 E-mail: patrick.bayer@yale.edu Professor Steven Berry Department of Economics Yale University Box 208264 New Haven, CT 06520-8264 Tel: (203) 432-3556 Fax: (203) 432-6323 E-mail: steven.berry@yale.edu

Dissertation Abstract:

A central question in development economics concerns how to encourage growth within the manufacturing sector. This question is particularly important for many African nations considering their relatively undeveloped manufacturing sectors. Given the importance of human capital in many recent models of growth, this dissertation attempts to understand the role of human capital in manufacturing productivity in Africa. The first paper begins the inquiry by measuring the productive and wage returns to education in the manufacturing sector, while developing a new method to handle ability bias in the wage equation. Accurate measurement of returns to education is particularly important in a country where government resources are extremely limited, and education's competition for budget dollars is intense. The second paper reflects the context of Ghanaian manufacturing, where on average sixteen percent of employees are related to the firm owner. It measures whether these related employees are a burden to the manufacturing firm, as is sometimes suggested, by comparing the productivity and remuneration of these related employees to their non-related counterparts. The final paper seeks to determine what methods of education or training best serve the needs of the Ghanaian manufacturing sector, by comparing the productivity and remunerative benefits and costs of informal apprenticeship and formal education in Ghana. In order to examine these questions, I use a panel dataset with detailed information about Ghanaian manufacturing firms, and the employees at these firms. This data comes from a survey organized by Oxford University and the Ghana Statistical Service, and I participated throughout the most recent round of interviewing for this survey in the Fall of 2000. The first paper addresses the problem of ability bias in the measurement of returns to education. The vast majority of papers which have attempted to measure returns to education in the past twenty-five years have used a wage regression based on Mincer's human capital earnings function (1974). The chief problem which these studies have attempted to address is that of ability bias. A worker's ability is typically part of the residual, and yet is correlated with an individual's schooling, resulting in biased parameter estimates. This study takes a new perspective, by using information from the firms where these workers work. It begins by specifying a production function that is consistent with the Mincerian wage equation. The production function is estimated consistently, taking into account the simultaneity of labor demand and output decisions (Olley and Pakes, 1996; Levinsohn and Petrin, 2000). A result of including worker schooling, experience and ability in the production function specification is that a measure of worker ability, defined as the worker's contribution to firm product after controlling for schooling and experience, is acquired. This measure of ability is exactly that which the firm cares about, and therefore that which should be remunerated by the firm. The ability measure can be used in a wage equation in order to control directly for worker ability to obtain a consistent estimate of the returns to schooling. The model is estimated using data from the manufacturing sector in Ghana, but is replicable to other countries and datasets, given the recent increase in available linked employer-employee datasets. The second paper examines whether employees who are related to the firm owner are more or less productive than non-relatives. In developing countries in general, and in Africa in particular, the extended family is an important institution, often serving as a locus of risk-sharing and redistribution. Manufacturing firm owners are typically among the wealthier members within an extended family and therefore are sometimes forced to share their profits with their extended family instead of re-investing in the business. Moreover, firm owners have felt pressure to give jobs to relatives as part of the obligation to the extended family. This paper tests whether this employment of relatives is in fact a burden in the case of manufacturing firms in Ghana. Specifically, it tests whether employees who are related to the firm owner receive a higher wage, conditional on other factors, and are more productive, conditional on other factors, than non-relatives of the firm owner. It then compares their relative productivity to their relative remuneration. Testing this hypothesis requires careful estimation of both a production function and a wage equation for the firm, and the format for the production function and wage equation follow from the first paper. A term for heterogeneous labor in the firm production function arises out of the implications of the wage equations of the Mincer model. The third paper, in progress, is an examination of appropriate education and training for the manufacturing sector in Ghana. Other than formal education, apprenticeships are the major form of training within the Ghanaian manufacturing sector. A substantial fraction of firms, particularly smaller firms, train apprentices in the trade in which the firm is engaged, such as carpentry, metal-working, or tailoring. These apprentices are paid very low (or no) wages, and typically pay fees at the beginning and end of the apprenticeship, which often lasts three years. In the dataset of Ghanaian manufacturing firms forming the basis of this study, information is collected for a sub-sample of apprentices, as well as the non-apprentice workers at the firm, including whether the workers ever completed an apprenticeship at this or another firm. Using the information about the apprentices, workers, and the firm itself, the productive and wage returns to the training of the apprenticeship can be calculated and compared. These returns can also be compared to the (productive and wage) returns to schooling within the manufacturing sector in order to understand the type of training which is found most valuable by firms--the formal training of schooling, or the informal training of apprenticeships. An important part of this story will involve examining the degree to which firms fund apprenticeships. This can be calculated because information on the timing and amount of payments to and from the apprentices and the firm is known. Given that apprenticeships involve no government expenditure, while schooling does, understanding the effectiveness of apprenticeship versus schooling is important for crafting appropriate education and training policy in Ghana.