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on Central and Western Asia |
| By: | Davide Luca (London School of Economics) |
| Abstract: | While there is systematic evidence of how governments affect policy outputs for strategic reasons, a limited amount of studies has assessed whether these distortions are consequential for economic growth. Using data from Turkey over the period 2004-2013, the current paper measures the effect of voting for the national incumbent party on local economic performance. New instrumental variable estimates suggest that provinces where the electoral race for the Justice and Development Party (AKP) was closer have experienced faster per-capita GVA and employment growth rates. The effect is economically substantive and increases in election years. Results also provide evidence that the government has affected growth through the selective provision of state goods. |
| Date: | 2018–10–10 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1232&r=all |
| By: | Mohammad Reza Farzanegan (Philipps-University Marburg); Tim Krieger |
| Abstract: | We study the responses of income inequality to positive per capita oil and gas revenues shocks in Iran. Using historical data from 1973 to 2016 and vector autoregression (VAR) -based impulse response functions, we find a positive and statistically significant response of income inequality to oil booms. Our analysis can help policymakers evaluate and accommodate the possible positive or negative effects on inequality in Iran resulting from the 2016 lifting of the embargo against the country. |
| Date: | 2018–09–18 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1226&r=all |
| By: | Mahdi Majbouri (Babson College) |
| Abstract: | Conscription is a popular method of army recruitment for governments of developing countries that are particularly prone to conflict. This study examines the largely under-researched issues of military service by looking at an unintended consequence of a military service exemption policy and answering a principal question: is there a fear of conscription among the youth? It uses a discontinuity in the military service law in an under-studied country, Iran, and offers causal evidence that fear of conscription entices young men to go to college by 13 percentage points (20%) more. This exogenous increase in college attendance has no impact on labor market outcomes. This further strengthens the argument that it was the fear of conscription motivating demand for attending college. |
| Date: | 2018–10–21 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1244&r=all |
| By: | Burhan Can Karahasan (Piri Reis University); Firat Bilgel |
| Abstract: | This study explores the endogenous relationship among market access, wages and human capital accumulation in Turkey. Our first set of analyses tests the impact of market access on human capital development using regional data at the NUTS III level. Results, robust to the inclusion of spatial spillovers, regional structural differences in production, possible endogeneity issues and the unobserved regional heterogeneities, validate that regions with better access to markets are the ones that accumulate more human capital in Turkey. Our second set of analyses aims to explore the background of human capital accumulation by using individual level data, which allows us to combine market accessibility, returns to education (wages) and human capital development. Remarkably, once we include wages and treat it as endogenous, we find evidence that the impact of market access on human capital development diminishes. Overall, the findings of this study validate that background of the NEG model does not work in line with the expectations. Rather the influence of geographical proximity on wages and individual’s decision on human capital investment are not identical. |
| Date: | 2018–10–10 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1233&r=all |