nep-afr New Economics Papers
on Africa
Issue of 2019‒04‒01
three papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Wealth and health in South Africa By Julien Albertini; Anthony Terriau
  2. Synopsis: Ethiopia's spatial and structural transformation: Public policy and drivers of change By Schmidt, Emily; Dorosh, Paul A.; Kedir Jemal, Mekamu; Smart, Jenny
  3. Foreign aid and structural transformation: Micro-level evidence from Uganda By Ahlerup, Pelle

  1. By: Julien Albertini (Univ Lyon, Université Lyon 2, GATE UMR 5824, F-69130 Ecully, France); Anthony Terriau (Univ Lyon, Université Lyon 2, GATE UMR 5824, F-69130 Ecully, France)
    Abstract: In this paper, we investigate the impact of wealth on health in South Africa using the National Income Dynamics Study (NIDS). We estimate a two-stage probit model with inheritance as an instrumental variable for wealth. We find no significant effect of wealth on health at the individual level, consistent with most of the results found for developed countries. Alternative specifications to the health outcomes (self-reported health versus reported diseases) as well as the introduction of gifts as an additional instrumental variable delivers similar results. In addition, we decompose wealth into liquid and illiquid wealth. Despite the health effect being higher for liquid than for non-liquid wealth, none of these measures involve substantial or significant effects on health.
    Keywords: Wealth, Health, Inheritance, South Africa
    JEL: C26 D31 I14 I15
    Date: 2019
  2. By: Schmidt, Emily; Dorosh, Paul A.; Kedir Jemal, Mekamu; Smart, Jenny
    Abstract: This research note evaluates Ethiopia’s demographic shift over the last four decades while also evaluating potential urbanization trends 20 years into the future.1 Propelling Ethiopia’s urban growth is new secondary city development, ongoing population growth in small towns, and improved access to markets. In order to understand how secondary city growth is contributing to urbanization, we update the agglomeration index for the country. In addition, we look at recent patterns of domestic migration. Reviewing the government’s investment strategy in industrial parks and sugar factories, we explore current plans for industrial zones in Ethiopia. In examining the scope for their success, we consider the key role that government policy will need to play in terms of overall investment in infrastructure, as well as the major implications of macro-economic and trade policies to motivate increased private sector investment in Ethiopia’s industrial sector.
    Keywords: ETHIOPIA, EAST AFRICA, AFRICA SOUTH OF SAHARA, AFRICA,urbanization; public policy; industrialization; urban population; labor; public investment; rural urban migration; gricultural labor; industrial parks; structural transformation
    Date: 2018
  3. By: Ahlerup, Pelle (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: History tells us that sustained economic growth, necessary to alleviate poverty in sub-Saharan Africa, requires growth in the fundamentals, such as infrastructure and human capital, but also structural transformation, i.e., a reallocation of labor from low-productivity to high-productivity sectors. I study whether foreign aid is a factor that helps or hinders structural transformation. I use a dataset on aid projects with precise coordinates from all major donors and match it to panel data with extensive information on labor market activities for a large representative sample of individuals in Uganda. I find consistent evidence that foreign aid reverses the process of structural transformation. More specifically, the local short-term effect of foreign aid is that people in areas with ongoing aid projects work more in agriculture and less in non-agricultural sectors. There are no significant effects on wages or household expenditures for people in the agricultural sector, but the effects on people in non-agricultural sectors are negative.
    Keywords: foreign aid; structural transformation; Africa; AidData; LSMS
    JEL: F35 O14 O55
    Date: 2019–03

This nep-afr issue is ©2019 by Sam Sarpong. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.