nep-dev New Economics Papers
on Development
Issue of 2013‒11‒09
nine papers chosen by
Jacob A. Jordaan
Utrecht University

  1. Is workfare cost-effective against poverty in a poor labor-surplus economy? By Murgai, Rinku; Ravallion, Martin; van de Walle, Dominique
  2. Escaping Famine through Seasonal Migration By Gharad Bryan; Shyamal Chowdhury; Ahmed Mushfiq Mobarak
  3. The livelihood effects of industrialization on displaced households: Evidence from falta special economic zone, West Bengal By Paul, Saumik; Sarma, Vengadeshvaran
  4. Health Insurance Coverage for Low-income Households: Consumption Smoothing and Investment. By Liu, Kai
  5. Substitution Bias and External Validity: Why an Innovative Anti-poverty Program Showed no Net Impact By Morduch, Jonathan; Ravi, Shamika; Bauchet, Jonathan
  6. Revisiting the Educational Effects of Fetal Iodine Deficiency By Bengtsson, Niklas; Peterson, Stefan; Sävje, Fredrik
  7. The Effects of Electrification on Employment in Rural Peru By Rosamaría Dasso; Fernando Fernandez
  8. Subjective wellbeing in Colombia : some insights on vulnerability, job security, and relative incomes By Krauss, Alexander; Graham, Carol
  9. Equity and Access to Tertiary Education: The Case of Vietnam By VU HOANG LINH; LE VIET THUY; GIANG THANH LONG

  1. By: Murgai, Rinku; Ravallion, Martin; van de Walle, Dominique
    Abstract: Workfare schemes impose work requirements on beneficiaries. This has seemed an attractive idea for self-targeting transfers to poor people. This incentive argument does not imply, however, that workfare is more cost-effective against poverty than even poorly-targeted options, given hidden costs of participation. In particular, even poor workfare participants in a labor-surplus economy can be expected to have some forgone income when they take up such a scheme. A survey-based method is used to assess the cost-effectiveness of India's Employment Guarantee Scheme in Bihar. Participants are found to have forgone earnings, although these fall well short of market wages on average. Factoring in these hidden costs, the paper finds that for the same budget, workfare has less impact on poverty than either a basic-income scheme (providing the same transfer to all) or uniform transfers based on the government's below-poverty-line ration cards. For workfare to dominate other options, it would have to work better in practice. Reforms would need to reduce the substantial unmet demand for work, close the gap between stipulated wages and wages received, and ensure that workfare is productive -- that the assets created are of value to poor people. Cost-effectiveness would need to be reassessed at the implied higher levels of funding.
    Keywords: Rural Poverty Reduction,Labor Markets,Labor Policies,Banks&Banking Reform,Income
    Date: 2013–10–01
  2. By: Gharad Bryan (London School of Economics); Shyamal Chowdhury (University of Sydney); Ahmed Mushfiq Mobarak (School of Management, Yale University)
    Abstract: Hunger during pre-harvest lean seasons is widespread in the agrarian areas of Asia and Sub-Saharan Africa. We randomly assign an $8.50 incentive to households in rural Bangladesh to out-migrate during the lean season. The incentive induces 22% of households to send a seasonal migrant, their consumption at the origin increases significantly, and treated households are 8-10 percentage points more likely to re-migrate 1 and 3 years after the incentive is removed. These facts can be explained qualitatively by a model in which migration is risky, mitigating risk requires individual-specific learning, and some migrants are sufficiently close to subsistence such that failed migration is very costly. We document evidence consistent with this model using heterogeneity analysis and additional experimental variation, but calibrations with forward-looking households that can save up to migrate suggest that it is difficult for the model to quantitatively match the data. We conclude with extensions to the model that could provide a better quantitative accounting of the behavior.
    Keywords: Seasonal Migration, Bangladesh, Risk
    JEL: O1 O15 J61 R23
    Date: 2013–11
  3. By: Paul, Saumik; Sarma, Vengadeshvaran
    Abstract: Much of the debate on industrialization and displacement has, so far, focused on the optimum compensation for affected households. Our recently concluded study, comprising of a sample of 1017 households including 630 affected (displaced and land acquired) and 387 unaffected households, looks at the long-term livelihood effects of the Falta Special Economic Zone in West Bengal, India. The main findings indicate a lower labour market participation rate among affected household members. However, members of displaced households show the highest work participation rate in the industrial zone but with a lower return to education than others. Women earn about 17 percentage points less compared to men after controlling for education and experience and this gap is 5 to 10 percentage points higher for FSEZ employees; but this gap is narrowing over time likewise the gender education gap. --
    Keywords: Industrialization,Special Economic Zones,Rural livelihoods,West Bengal,India
    JEL: O14 J16 J21 J31
    Date: 2013
  4. By: Liu, Kai (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: I estimate the effects of public health insurance on consumption smoothing and investigate the extent to which the public insurance interacts with private arrangements of self-insurance. Exploiting a dramatic expansion in health insurance coverage in rural China, I find that the introduction of public health insurance helps households completely insure against severe health shocks. The health insurance also reduces the magnitude of decline during a health shock in investments in children's education, agricultural activities and durable goods. The evidence suggests that the benefit of social insurance for low-income households could also come from reducing the use of costly smoothing mechanisms.
    Keywords: Public health insurance; Rural China
    JEL: D10 I10 O10
    Date: 2013–10–24
  5. By: Morduch, Jonathan; Ravi, Shamika; Bauchet, Jonathan
    Abstract: The net impact of development interventions can depend on the availability of close substitutes to the intervention. We analyze a randomized trial of an innovative anti-poverty program in South India which provides “ultra-poor” households with inputs to create a new, sustainable livelihood. We find no statistically significant evidence of lasting net impact on consumption, income or asset accumulation. Instead, income from the new livelihood substituted for earnings from wage labor. A very similar intervention made a large difference elsewhere in South Asia, however, where wage labor alternatives were less compelling. The analysis highlights the roles of substitution bias and dropout bias in shaping evaluation results and delimiting external validity.
    JEL: O1 J2 C1 I3
    Date: 2013–07
  6. By: Bengtsson, Niklas (Uppsala Center for Labor Studies); Peterson, Stefan (Department of Public Health Sciences, Karolinska Institutet); Sävje, Fredrik (Uppsala Center for Labor Studies)
    Abstract: Recent research has reported positive effects on schooling due to in utero protection from iodine deficiency resulting from iodized oil capsule distribution in Tanzania. We revisit the Tanzanian experience by investigating how these effects differ over time and across surveys; across different treatment specifications; and across additional educational outcome measures. Contrary to previous studies, we find that the estimated effects tend to be small and not robust across specifications or samples. Using all available data and a medically motivated iodine depletion function, we find no evidence of a positive long-run effect of iodine deficiency protection on educational attainment.
    Keywords: Iodine de ciency; Education; Prenatal exposure; Multiple outcomes; Replication; Field; Robles; Torero
    JEL: I12 I21 J16 O15
    Date: 2013–10–25
  7. By: Rosamaría Dasso (IFPRI); Fernando Fernandez (IADB)
    Abstract: We examine the effects of a rural electrification program on employment in Peru. Exploiting the roll-out of the program across districts over time, we adopt differences-in-differences and fixedeffects strategies to estimate the impact of the program on labor market outcomes. The results from our preferred specification suggest that, among males, providing electrification increases hours of work and diminishes the likelihood of having a second occupation. Among females, the treatment rises earnings and these gains seem to be driven by a shift towards non-agricultural jobs. Then, we construct a measure of treatment intensity and show that each additional electrification project increases the magnitude of the estimated impacts (in absolute terms).
    JEL: J22 O13
    Date: 2013–10
  8. By: Krauss, Alexander; Graham, Carol
    Abstract: A burgeoning literature explores the extent to which consumption or income inadequately reflect people's subjective wellbeing, just as GDP at times can provide an incomplete and misleading picture of national wellbeing. Scholars are increasingly using data on subjective wellbeing to complement traditional welfare indicators and to enrich our understanding of wellbeing and quality of life. The paper builds on the present research but it analyzes a much broader, more interdisciplinary, and more policy-relevant range of potential determinants simultaneously than currently existing in the literature on subjective wellbeing. It first analyzes the relative importance of a wide range of characteristics and conditions at the individual, household, regional and macro levels on levels of subjective wellbeing in Colombia in 2010/11; and second, assesses the marginal effects of a number of factors on perceived changes in levels of subjective wellbeing over time for the same respondents from 2008/09 to 2010/11. Findings show that increasing the quality of life of Colombians is largely conditional on minimizing risks and vulnerabilities: reducing the rate and duration of unemployment; improving the delivery of public health services; increasing the share of people with health and pension plans; enhancing safety and security in communities; and reducing levels of discrimination. It finds that job loss has particularly strong effects on levels of satisfaction that are larger than those for increased income, while also controlling for a decrease in income that is often related to being unemployed, suggesting that the human welfare (non-pecuniary) costs of unemployment are driving the strong effects. Moreover, any job, even a low-quality job, is overall better for one's subjective wellbeing than being unemployed. Finally, policy aimed at improving people's subjective wellbeing will likely have the greatest impact if focused on mitigating vulnerabilities and negative shocks that people face.
    Keywords: Health Monitoring&Evaluation,Population Policies,Poverty Impact Evaluation,Rural Poverty Reduction,Labor Markets
    Date: 2013–10–01
  9. By: VU HOANG LINH (Indochina Research & Consulting (IRC), Hanoi); LE VIET THUY (Department of Education Management, National Economics University, Hanoi); GIANG THANH LONG (Indochina Research & Consulting (IRC), Hanoi)
    Abstract: The objectives of this case study of equity and access to tertiary education in Vietnam are to (i) document the significance and consequences of disparities in tertiary education opportunities, particularly in specific instances and areas of Vietnam, (ii) investigate the results and lessons of efforts to expand access to tertiary education, and (iii) offer concrete recommendations for effective policies directed toward the ideas of widening participation. To pursue these research objectives, we evaluate students at three periods of their study life, i.e. access to universities; performance in universities; and completion from universities, using a number of individual and household characteristics. Our data include the Vietnam Household Living Standard Survey (VHLSS) in 2006 and a survey conducted at the National Economics University (NEU), Hanoi in late 2009. An important contribution of this paper is to highlight cases, in which equity provisions in tertiary education policies might have had detrimental effects on the quality of the tertiary system and on the capacity for a government to maximize the potential of tertiary education in stimulating economic growth and development.
    Date: 2012

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