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on Development |
| By: | Bruno Crépon; Florencia Devoto; Esther Duflo; William Pariente |
| Abstract: | This paper reports the results from a randomized evaluation of a microcredit program introduced in rural areas of Morocco starting in 2006 by Al Amana, the country’s largest microfinance institution. Al Amana was the only MFI operating in the study areas during the evaluation period. Thirteen percent of the households in treatment villages took a loan, and none in control villages. Among households identified as more likely to borrow based on ex-ante characteristics, microcredit access led to a significant rise in investment in assets used for self-employment activities (mainly animal husbandry and agriculture), and an increase in profit. But this increase in profit was offset by a reduction in income from casual labor, so overall there was no gain in measured income or consumption. We find suggestive evidence that these results are mainly driven by effects on borrowers, rather than by externalities on households that do not borrow. This implies that among those who chose to borrow, microcredit had large, albeit very heterogeneous, impacts on assets and profits from self-employment activities, but small impact on consumption: we can reject an increase in consumption of more than 10% among borrowers, two years after initial rollout. |
| JEL: | D21 G21 O16 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20144&r=dev |
| By: | Rafael La Porta; Andrei Shleifer |
| Abstract: | We establish five facts about the informal economy in developing countries. First, it is huge, reaching about half of the total in the poorest countries. Second, it has extremely low productivity compared to the formal economy: informal firms are typically small, inefficient, and run by poorly educated entrepreneurs. Third, although avoidance of taxes and regulations is an important reason for informality, the productivity of informal firms is too low for them to thrive in the formal sector. Lowering registration costs neither brings many informal firms into the formal sector, nor unleashes economic growth. Fourth, the informal economy is largely disconnected from the formal economy. Informal firms rarely transition to formality, and continue their existence, often for years or even decades, without much growth or improvement. Fifth, as countries grow and develop, the informal economy eventually shrinks, and the formal economy comes to dominate economic life. These five facts are most consistent with dual models of informality and economic development. |
| JEL: | O17 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20205&r=dev |
| By: | Dani Rodrik |
| Abstract: | Africa’s recent growth performance has raised expectations of a bright economic future for the continent after decades of decline. Yet there is a genuine question about whether Africa’s growth can be sustained, and if so, at what level. The balance of the evidence suggests caution on the prospects for high growth. While the region’s fundamentals have improved, the payoffs to macroeconomic stability and improved governance are mainly to foster resilience and lay the groundwork for growth, rather than to generate productivity growth on their own. The traditional engines behind rapid growth, structural change and industrialization, seem to be operating at less than full power. If African countries do achieve growth rates substantially higher, they will have to do so pursuing a growth model that is different from earlier miracles based on industrialization. This might be agriculture-led or services-led growth, but it will look quite different than what we have seen before. |
| JEL: | O11 O40 O55 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20188&r=dev |
| By: | Stefania Lovo (Legatum Institute, London); Marcella Veronesi (Department of Economics (University of Verona)) |
| Abstract: | Malnutrition is recognized as a major issue among low-income households in developing countries with long-term implications for economic development. Recently, agricultural diversification has been recognized as a strategy to improve nutrition and health, and a risk coping strategy used by farmers in the face of climate change. However, there is no systematic empirical evidence on the role played by crop diversification in improving human health. We use the Tanzania National Panel Survey for years 2008 and 2010, which includes about 3,700 children, to investigate the effect of crop diversification on child health. Using an instrumental variable approach we estimate the effect of crop diversification on child growth and control for unobserved heterogeneity. We show that crop diversification has a positive and significant impact on long-term child nutritional status, in particular for girls. An increase in crop diversification has a positive and significant effect on children’s height, while it has no effect on weight, and BMI. |
| Keywords: | agriculture, children, health, crop diversification, food security, nutrition, Tanzania |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:ver:wpaper:08/2014&r=dev |
| By: | Azomahou T.T.; Diallo F.L.; Raymond W. (UNU-MERIT) |
| Abstract: | This paper uses a unique and large-scale quasi-experimental data to study the effect of deworming and school meals programs as a package on educational outcomes pupils test scores aggregate, French or math; enrollment, promotion or dropout rates in rural Senegal. We extend the endogenous selection model la Heckman to incorporate a double-index selection mechanism. We also generalize the Roy model accordingly. We develop estimation strategies based on the full information maximum likelihood and the two-step method. We derive a wide and rich collection of treatment effects ranging from exclusive to relative effects including sequential and substitution effects. The results show that the combination of deworming and school meals programs is more beneficial to pupils achievements than taking programs separately. The sequence of implementation does matter. The two programs are complementary in increasing scores and promotion rates. However, they are substitutes in reducing dropouts. The cost-effectiveness analysis shows the deworming program is by far cheaper than the meals intervention. Implementing meals program before deworming is more cost-effective than the reverse. Lastly, unlike the deworming, meals program and the package deworming and meals have a welfare-enhancing effect on households. Key words Deworming programs; school meals programs; double-index selection; complementarity vs. substitutability; educational outcomes; quasi-experiment; social welfare; Africa; Senegal |
| Keywords: | Multiple or Simultaneous Equation Models: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models; Multiple or Simultaneous Equation Models: Truncated and Censored Models; Switching Regression Models; Education and Economic Development; |
| JEL: | I25 C31 C34 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2014026&r=dev |
| By: | Capuno, Joseph J.; Kraft, Aleli D.; Quimbo, Stella; Tan, Jr. Carlos R.; Wagstaff, Adam |
| Keywords: | Health Monitoring&Evaluation,Health Systems Development&Reform,Health Economics&Finance,Housing&Human Habitats,Health Law |
| Date: | 2014–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6893&r=dev |
| By: | Wagstaff, Adam; Bredenkamp, Caryn; Buisman, Leander R. |
| Abstract: | This paper looks at differential progress on the health Millennium Development Goals between the poor and better-off within countries. The findings are based on original analysis of 235 Demographic and Health Surveys and Multiple Indicator Cluster Surveys, spanning 64 developing countries over the period 1990-2011. Five health status indicators and seven intervention indicators are tracked for all the health Millennium Development Goals. In most countries, the poorest 40 percent have made faster progress than the richest 60 percent. On average, relative inequality in the Millennium Development Goal indicators has been falling. However, the opposite is true in a sizable minority of countries, especially on child health status indicators (40-50 percent in the cases of child malnutrition and mortality), and on some intervention indicators (almost 40 percent in the case of immunizations). Absolute inequality has been rising in a larger fraction of countries and in around one-quarter of countries, the poorest 40 percent have been slipping backward in absolute terms. Despite reductions in most countries, relative inequalities in the Millennium Development Goal health indicators are still appreciable, with the poor facing higher risks of malnutrition and death in childhood and lower odds of receiving key health interventions. |
| Keywords: | Health Monitoring&Evaluation,Population Policies,Disease Control&Prevention,Achieving Shared Growth,Health Systems Development&Reform |
| Date: | 2014–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6894&r=dev |
| By: | De Arcangelis, Giuseppe; Joxhe, Majlinda; McKenzie, David; Tiongson, Erwin; Yang, Dean |
| Abstract: | This paper tests how migrants'willingness to remit changes when given the ability to direct remittances to educational purposes using different forms of commitment. Variants of a dictator game in a lab-in-the-field experiment with Filipino migrants in Rome are used to examine remitting behavior under varying degrees of commitment. These range from the soft commitment of simply labeling remittances as being for education, to the hard commitment of having funds directly paid to a school and the student's educational performance monitored. The analysis finds that the introduction of simple labeling for education raises remittances by more than 15 percent. Adding the ability to directly send this funding to the school adds only a further 2.2 percent. The information asymmetry between migrants and their most closely connected household is randomly varied, but no significant change is found in the remittance response to these forms of commitment as information varies. Behavior in these games is shown to be predictive of take-up of a new financial product called EduPay, designed to allow migrants to pay remittances directly to schools in the Philippines. This take-up seems largely driven by a response to the ability to label remittances for education, rather than to the hard commitment feature of directly paying schools. |
| Keywords: | Remittances,Tertiary Education,Access&Equity in Basic Education,Rural Development Knowledge&Information Systems,Debt Markets |
| Date: | 2014–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6896&r=dev |
| By: | Carl Grekou; Romain Perez |
| Abstract: | Since 2000, child mortality has dramatically decreased in Africa. Based on an econometrical analysis over 45 sub-Saharan African countries, this paper analyses the determinants of such evolution, and shows that urbanization, sanitation improvement and GDP growth per capita played a critical role in this overall improvement over 2000-2011. The increase in public health expenditures proved to be also decisive, though the elasticity with mortality rate is much weaker. Reaching the Abuja target of 15% of public health expenditure in total public expenditures would have decreased the under-5 child mortality rate by 9% over 2001-2011. It could further reduce this rate by 14% over 2012-2021, and allow Africa to save 19.8 million of children lives. It would also help the region to achieve the Millennium Development Goal on child mortality (reduce by two thirds under-5 child mortality over 1990-2015) by 2022-23, while it would not be reached before 2027 otherwise, according to our estimates. |
| Keywords: | Millennium Development Goals, MDGs, Under-5 mortality rate, sub-Saharan Africa, Public expenditure on health. |
| JEL: | H51 I12 I18 O15 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2014-28&r=dev |
| By: | Emerson, Patrick M.; Ponczek, Vladimir; Portela Souza, Andre |
| Abstract: | This paper uses a unique micro panel dataset of Brazilian students to investigate the impact of working while in school on learning outcomes. The potential endogeneity is addressed through the use of difference-in-difference and instrumental variable estimators. A negative effect of working on learning outcomes in math and Portuguese is found. The effects of child work range from 3 to 8 percent of a standard deviation decline in test score, which represents a loss of about a quarter to a half of a year of learning on average. |
| Keywords: | Tertiary Education,Youth and Governance,Labor Markets,Street Children,Primary Education |
| Date: | 2014–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6904&r=dev |
| By: | Elizabeth Kaletski (University of Connecticut); Nishith Prakash (University of Connecticut) |
| Abstract: | This paper examines the impact of state level political reservation for two minority groups- Scheduled Castes and Scheduled Tribes-on child labor in India. We estimate the effect of political reservation on child labor by exploiting the state variation in the share of seats reserved for the two groups in state legislative assemblies mandated by the Constitution of India. Using data from state and household level surveys on fifteen major Indian states, we find that at the household level, Schedule Tribe reservation decreases the incidence of child labor, while Scheduled Caste reservation increases the total number of children working. Our results survive a variety of robustness checks and potential explanations for the differential impact of SC and ST political reservation are also explored, including geographic isolation, caste fragmentation, support for the Congress Party, and decentralization of power. |
| Keywords: | Affirmative action, Minorities, Child labor, India |
| JEL: | I38 J15 J22 J78 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2014-12&r=dev |
| By: | Ali, Daniel Ayalew; Collin, Matthew; Deininger, Klaus; Dercon, Stefan; Sandefur, Justin; Zeitlin, Andrew |
| Abstract: | This paper reports on a randomized field experiment that uses price incentives to address economic and gender inequality in land tenure formalization. During the 1990s and 2000s, nearly two dozen African countries proposed de jure land reforms extending access to formal, freehold land tenure to millions of poor households. Many of these reforms stalled. Titled land remains the de facto preserve of wealthy households and, within households, men. Beginning in 2010, the study tested whether price instruments alone can generate greater inclusion by offering formal titles to residents of a low-income, unplanned settlement in Dar es Salaam at a range of subsidized prices, as well as additional price incentives to include women as owners or co-owners of household land. Estimated price elasticities of demand confirm that prices -- rather than other implementation failures or features of the titling regime -- are a key obstacle to broader inclusion in the land registry, and that some degree of pro-poor price discrimination is justified even from a narrow budgetary perspective. In terms of gender inequality, the study finds that even small price incentives for female co-titling achieve almost complete gender parity in land ownership with no reduction in demand. |
| Keywords: | Markets and Market Access,Economic Theory&Research,Banks&Banking Reform,Municipal Housing and Land,Political Economy |
| Date: | 2014–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6908&r=dev |
| By: | Ginja, Rita (Department of Economics); Carneiro, Pedro (University College London, CEMMAP, IFS.); Galasso, Emanuela (World Bank.) |
| Abstract: | We study an innovative welfare program in Chile which combines a period of frequent home visits to households in extreme poverty, with guaranteed access to social services. Program impacts are identi ed using a regression discontinuity design, exploring the fact that program eligibility is a discontinuous function of an index of family income and assets. We nd strong and lasting impacts of the program on the take up of subsidies and employment services. These impacts are important only for families who had little access to the welfare system prior to the intervention. |
| Keywords: | Social Exclusion; Social Protection; Chile; Extreme Poverty |
| JEL: | C26 I38 J08 |
| Date: | 2014–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2014_003&r=dev |
| By: | Malla, Sunil; Timilsina, Govinda R |
| Abstract: | Improving access to affordable and reliable energy services for cooking is essential for developing countries in reducing adverse human health and environmental impacts hitherto caused by burning of traditional biomass. This paper reviews empirical studies that analyze choices of fuel and adoption of improved stoves for cooking in countries where biomass is still the predominant cooking fuel. The review highlights the wide range of factors that influence households’ cooking fuel choices and adoption of improved stoves, including socioeconomic (access and availability, collection costs and fuel prices, household income, education and awareness), behavioral (food tastes, lifestyle), and cultural and external factors (indoor air pollution, government policies). The paper also summarizes the evidence on the significant adverse health impacts from exposure to indoor smoke, especially among women and young children. In low-income households, perceived health benefits of adopting improved stoves and financial benefits from fuel savings tend to be outweighed by the costs of improved stoves, even after accounting for the opportunity cost of time spent collecting biomass fuel. The paper identifies knowledge and evidence gaps on the success of policies and programs designed to scale up the adoption of improved cookstoves. |
| Keywords: | Energy Production and Transportation,Climate Change Mitigation and Green House Gases,Renewable Energy,Energy and Environment,Environment and Energy Efficiency |
| Date: | 2014–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6903&r=dev |