nep-dev New Economics Papers
on Development
Issue of 2014‒06‒22
fifteen papers chosen by
Jacob A. Jordaan
Utrecht University

  1. Non-contributory pensions By Rosangela Bando; Paul Gertler; Sebastián Galiani
  2. Seasonal Credit Constraints and Agricultural Labor Supply: Evidence from Zambia By Günther Fink; B. Kelsey Jack; Felix Masiye
  3. Migration and Development Research Is Moving Far beyond Remittances - Working Paper 365 By Michael Clemens, Çaglar Özden, and Hillel Rapoport
  4. Encouraging health insurance for the informal sector : a cluster randomized trial By Wagstaff, Adam; Nguyen, Ha Thi Hong; Dao, Huyen; Balesd, Sarah
  5. Quality healthcare and health insurance retention: Evidence from a randomized experiment in the Kolkata slums: By Delavallade, Clara
  6. Inequality of opportunity and economic growth : a cross-country analysis By Ferreira, Francisco H. G.; Lakner, Christoph; Lugo, Maria Ana; Ozler, Berk
  7. Does Development Reduce Migration? - Working Paper 359 By Michael Clemens
  8. Development as Diffusion: Manufacturing Productivity and Sub-Saharan Africa’s Missing Middle - Working Paper 357 By Alan Gelb, Christian Meyer, and Vijaya Ramachandran
  9. Women’s individual and joint property ownership: Effects on household decisionmaking: By Doss, Cheryl; Kim, Sung Mi; Njuki, Jemimah; Hillenbrand, Emily; Miruka, Maureen
  10. The impact of cash and food transfers: Evidence from a randomized intervention in Niger: By Hoddinott, John F.; Sandström, Susanna; Upton, Joanna
  11. Why Don't Remittances Appear to Affect Growth? - Working Paper 366 By Michael Clemens and David McKenzie
  12. Saving More to Borrow Less: Experimental Evidence from Access to Formal Savings Accounts in Chile By Felipe Kast; Dina Pomeranz
  13. Inequality of Opportunity in Health in Indonesia By Florence Jusot; Sabine Mage; Marta Menendez
  14. Why don’t households invest in latrines: health, prestige, or safety? By Elena Gross; Isabel Günther
  15. Economic inequality in the Arab region By Hassine, Nadia Belhaj

  1. By: Rosangela Bando; Paul Gertler; Sebastián Galiani
    Abstract: The creation of non-contributory pension schemes is becoming increasingly common as countries struggle to reduce poverty. Drawing on data from Mexico's Adultos Mayores Program (Older Adults Program) --a cash transfer scheme aimed at rural adults over 70 years of age-- we evaluate the effects of this program on the well-being of the beneficiary population. Exploiting a quasi-experimental design whereby the program relies on exogenous geographical and age cutoffs to identify its target group, we find that the mental health of elderly adults in the program is significantly improved, as their score on the Geriatric Depression Scale decreases by 12%. We also find that the proportion of treated individuals doing paid work is reduced by 20%, with most of these people switching from their former activities to work in family businesses; treated households show higher levels of consumption expenditures (on average, an increase of 23%). Very importantly, we also rule out significant anticipation effects that might have been associated with the program transfers. Thus, overall, we find that non-contributory pension schemes target to the poor in developing countries can improve the well-being of poor older adults without having any indirect impact (through potential anticipation effects) on the earnings or savings of future program participants.
    Keywords: Poverty, Pension funds, Social Security, Income, Consumption & Saving, mental health, non-contributory pensions, poverty, mental health, well-being
    Date: 2014–06
  2. By: Günther Fink; B. Kelsey Jack; Felix Masiye
    Abstract: Small-scale farming remains the primary source of income for a majority of the population in developing countries. While most farmers primarily work on their own fields, off-farm labor is common among small-scale farmers. A growing literature suggests that off-farm labor is not the result of optimal labor allocation, but is instead driven by households’ inability to cover short-term consumption needs with savings or credit. We conduct a field experiment in rural Zambia to investigate the relationship between credit availability and rural labor supply. We find that providing households with access to credit during the growing season substantially alters the allocation of household labor, with households in villages randomly selected for a loan program selling on average 25 percent less off-farm labor. We also find that increased credit availability is associated with higher consumption and increases in local farming wages. Our results suggest that a substantial fraction of rural labor supply is driven by short-term constraints, and that access to credit markets may improve the efficiency of labor allocation overall.
    JEL: J22 O16 Q12
    Date: 2014–06
  3. By: Michael Clemens, Çaglar Özden, and Hillel Rapoport
    Abstract: Research on migration and development has recently changed, in two ways. First, it has grown sharply in volume, emerging as a proper subfield. Second, while it once embraced principally rural-urban migration and international remittances, migration and development research has broadened to consider a range of international development processes. These include human capital investment, global diaspora networks, circular or temporary migration, and the transfer of technology and cultural norms. To introduce a special issue of World Development on migration and development, we present a selection of frontier migrant-and-development research that instantiates these trends.
    Keywords: migration, development, poverty, mobility, brain drain, skill, education, remittances, labor, overseas
    JEL: F22 O15
    Date: 2014–05
  4. By: Wagstaff, Adam; Nguyen, Ha Thi Hong; Dao, Huyen; Balesd, Sarah
    Abstract: Subsidized voluntary enrollment in government-run health insurance schemes is often proposed as a way of increasing coverage among informal sector workers and their families. This paper reports the results of a cluster randomized control trial in which 3,000 households in 20 communes in Vietnam were randomly assigned at baseline to a control group or one of three treatments: an information leaflet about Vietnam’s government-run scheme and the benefits of health insurance; a voucher entitling eligible household members to 25 percent off their annual premium; and both. The four groups were balanced at baseline. In the control group, 6.3 percent (82/1296) of individuals were enrolled in the endline, compared with 6.3 percent (79/1257), 7.2 percent (96/1327), and 7.0 percent (87/1245) in the information, subsidy, and combined intervention groups; the adjusted odds ratios were 0.94, 1.12, and 1.15, respectively. Only among those reporting poor health were any significant intervention effects found, and only for the combined intervention: an enrollment rate of 16.3 percent (33/202) compared with 8.3 percent (18/218) in the control group, and an adjusted odds ratio of 2.50. The results suggest limited opportunities to raise voluntary health insurance enrollment through information campaigns and subsidies, and that these interventions exacerbate adverse selection.
    Keywords: Health Monitoring&Evaluation,Health Economics&Finance,Health Systems Development&Reform,Health Law,Housing&Human Habitats
    Date: 2014–06–01
  5. By: Delavallade, Clara
    Abstract: This paper examines an innovative approach to access to and demand for quality health care from the poor. Using data from a field experiment in India, I examine the impact of high-quality care experiences in the form of a free medical consultation with a qualified nongovernmental organization doctor, randomly offered by a health insurance provider to a subset of its enrollees.
    Keywords: health care, Poverty, Insurance, health insurance, trust, insurance retention, micro health insurance, insurance demand,
    Date: 2014
  6. By: Ferreira, Francisco H. G.; Lakner, Christoph; Lugo, Maria Ana; Ozler, Berk
    Abstract: Income differences arise from many sources. While some kinds of inequality, caused by effort differences, might be associated with faster economic growth, other kinds, arising from unequal opportunities for investment, might be detrimental to economic progress. This study uses two new metadata sets, consisting of 118 household surveys and 134 Demographic and Health Surveys, to revisit the question of whether inequality is associated with economic growth and, in particular, to examine whether inequality of opportunity -- driven by circumstances at birth -- has a negative effect on subsequent growth. The results are suggestive but not robust: while overall income inequality is generally negatively associated with growth in the household survey sample, we find no evidence that this is due to the component associated with unequal opportunities. In the Demographic and Health Surveys sample, both overall wealth inequality and inequality of opportunity have a negative effect on growth in some of the preferred specifications, but the results are not robust to relatively minor changes. On balance, although the results are suggestive of a negative association between inequality and growth, the data do not permit robust conclusions as to whether inequality of opportunity is bad for growth.
    Keywords: Inequality,Equity and Development,Poverty Impact Evaluation,Services&Transfers to Poor,Achieving Shared Growth
    Date: 2014–06–01
  7. By: Michael Clemens
    Abstract: The most basic economic theory suggests that rising incomes in developing countries will deter emigration from those countries, an idea that captivates policymakers in international aid and trade diplomacy. A lengthy research literature and recent data suggest something quite different: that over the course of a “mobility transition”, emigration generally rises with economic development until countries reach upper-middle income—at least until countries reach upper-middle income level, like Algeria or El Salvador. Only thereafter, as countries become even richer, do emigration rates typically fall. This note quantifies the shape of the mobility transition in every decade since 1960. It then briefly surveys 45 years of research, which has yielded six classes of theory to explain the mobility transition and numerous tests of its existence and characteristics in both macro- and micro-level data. This evidence suggests that donors to low income countries have little hope of using assistance to deter migration, unless the determinants of migration undergo rapid change in the future. Policy research might be better directed toward understanding how to shape rising migration flows for mutual gain. The note concludes by suggesting five questions that require further study.
    Keywords: emigration, mobility, economic growth
    JEL: F22 J61 O15
    Date: 2014–03
  8. By: Alan Gelb, Christian Meyer, and Vijaya Ramachandran
    Abstract: We consider economic development of Sub-Saharan Africa from the perspective of slow convergence of productivity, both across sectors and across firms within sectors. Why have “productivity enclaves”, islands of high productivity in a sea of smaller low-productivity firms, not diffused more rapidly? We summarize and analyze three sets of factors: First, the poor business climate, which constrains the allocation of production factors between sectors and firms. Second, the complex political economy of business-government relations in Africa’s small economies. Third, the distribution of firm capabilities. The roots of these factors lie in Africa’s geography and its distinctive history, including the legacy of its colonial period on state formation and market structure.
    Keywords: Productivity, Manufacturing, Dualism, Firms, Africa
    JEL: D24 L25 O11 O14
    Date: 2014–02
  9. By: Doss, Cheryl; Kim, Sung Mi; Njuki, Jemimah; Hillenbrand, Emily; Miruka, Maureen
    Abstract: In this paper, the relationship of women’s individual and joint property ownership and the level of women’s input into household decisionmaking is explored with data from India, Mali, Malawi, and Tanzania. In the three African countries, women with individual landownership have greater input into household decisionmaking than women whose landownership is joint; both have more input than women who are not landowners.
    Keywords: Property rights, Land, Gender, Women, Decision making,
    Date: 2014
  10. By: Hoddinott, John F.; Sandström, Susanna; Upton, Joanna
    Abstract: There is little rigorous evidence on the comparative impacts of cash and food transfers on food security and food-related outcomes. We assess the relative impacts of receiving cash versus food transfers using a randomized design. Drawing on data collected in eastern Niger, we find that households randomized to receive a food basket experienced larger, positive impacts on measures of food consumption and diet quality than those receiving the cash transfer.
    Keywords: food security, social policies, Nutrition, cash transfers, social protection, social safety nets,
    Date: 2014
  11. By: Michael Clemens and David McKenzie
    Abstract: While measured remittances by migrant workers have soared in recent years, macroeconomic studies have difficulty detecting their effect on economic growth. We review existing explanations for this puzzle and propose three new ones. First, we offer evidence that a large majority of the recent rise in measured remittances may be illusory—arising from changes in measurement, not changes in real financial flows. Second, we show that even if these increases were correctly measured, cross-country regressions would have too little power to detect their effects on growth. Third, we point out that the greatest driver of rising remittances is rising migration, which has an opportunity cost to economic product at the origin. Net of that cost, there is little reason to expect large growth effects of remittances in the origin economy. Migration and remittances clearly have first-order effects on poverty at the origin, on the welfare of migrants and their families, and on global GDP; but detecting their effects on growth of the origin economy is likely to remain elusive.
    Keywords: remittances, growth, migration, measurement
    JEL: F24 F22 E01 O15
    Date: 2014–05
  12. By: Felipe Kast (Centro de Estudios Horizontal); Dina Pomeranz (Harvard Business School, Entrepreneurial Management Unit)
    Abstract: Poverty is often characterized not only by low and unstable income, but also by heavy debt burdens. We find that reducing barriers to saving through access to free savings accounts decreases participants' short-term debt by about 20%. In addition, participants who experience an economic shock have less need to reduce consumption, and subjective well-being improves significantly. Precautionary savings and credit therefore act as substitutes in providing self-insurance, and participants prefer borrowing less when a free formal savings account is available. Take-up patterns suggest that requests by others for participants to share their resources may be a key obstacle to saving.
    JEL: D14 D91 G22 O16
    Date: 2013–07
  13. By: Florence Jusot (Université de Rouen, CREAM, Université Paris-Dauphine and PSL Research University,); Sabine Mage (PSL, Université Paris-Dauphine, LEDa, IRD UMR DIAL); Marta Menendez (PSL, Université Paris-Dauphine, LEDa, IRD UMR DIAL)
    Abstract: Whereas health equity issues are undoubtedly more relevant in developing countries, research on health inequalities and, more specifically, on inequality of opportunity in the health dimension, remains scarce in this context. This paper explores the degree of inequality of opportunity in health in a developing country, using the 2007 Indonesian Family Life Survey, a large-scale survey with extremely rich information about individual health outcomes (biomarkers and self-reports) and individual circumstances. We compute a continuous synthetic index of global health status based on a comprehensive set of health indicators and subsequently implement non-parametric and parametric methods in order to quantify the level of inequality of opportunity in the health dimension. Our results show large inequality of opportunities in health in Indonesia, compared to European countries. Concerning transmission mechanisms, parental (particularly maternal) vital status appears as the main channel. Compared to what has been observed in more developed countries, the effect of parental education on health is relatively smaller, and mainly indirect (passing through descendants’ socioeconomic, marital and migration statuses), while the existence of long-term differences in health related to religion, language spoken and particularly province of location suggest a relatively higher relevance of community belonging variables for health equity in the context of a developing country as Indonesia. _________________________________ Les pays en développement sont particulièrement concernés par la question des inégalités de santé et notamment celle de l’inégalité des chances. Néanmoins, très peu de travaux sont proposés dans le cadre des économies en développement. Cet article étudie l’ampleur des inégalités des chances en matière de santé en Indonésie à partir de données recueillies par l’enquête IFLS (Indonesian Family Life Survey) de 2007 qui propose une information individuelle détaillée sur l’état de santé (bio-marqueurs et auto-évaluation) mais aussi sur l’environnement socio- économique. Un indicateur synthétique continu de l’état de santé global calculé à partir d’un ensemble complet d’informations sur la santé est dans un premier temps proposé. Des méthodes paramétriques et non paramétriques sont ensuite mobilisées pour mesurer le niveau de l’inégalité des chances dans le domaine de la santé. Les résultats mettent en évidence une importante inégalité des chances relative à l’état de santé en Indonésie par rapport au niveau d’inégalité observée dans les pays européens. Le principal vecteur de transmission de l’inégalité est le statut de santé des parents (statut vital) et en particulier celui de la mère. L’impact du niveau d’éducation des parents est indirect (agissant sur l’environnement socio-économique, le statut marital et la migration des descendants) et est beaucoup plus faible que celui généralement observé dans des économies plus développées. Les disparités à long terme de l’état de santé liées à la religion, à la langue pratiquée et plus encore à la région d’habitation suggèrent que les variables d’appartenance communautaire sont prépondérantes pour analyser la question de l’équité en santé dans un pays en développement comme l’Indonésie.
    Keywords: Equality of opportunity; health, Indonesia, stochastic dominance, continuous health index, Egalité des chances ; santé ; Indonésie ; dominance stochastique ; indicateur continu de santé
    JEL: D63 I14 O15
    Date: 2014–05
  14. By: Elena Gross (University of Bayreuth); Isabel Günther (ETH Zurich)
    Abstract: 70 percent of the rural population in sub-Saharan Africa does not use adequate sanitation facilities. In rural Benin, as much as 95 percent of the population has no access to improved sanitation. This paper explores why households remain without latrines analyzing a representative sample of 2000 rural households. Our results show that wealth and latrine prices play the most decisive role for sanitation demand and ownership. At current income levels, sanitation coverage will only increase to 50 percent if costs for construction are reduced from currently $200 USD to $50 USD per latrine. Our analysis also suggests that previous sanitation promotion campaigns, which were based on prestige and modern lifestyle as motives for latrine construction, have had no success in increasing sanitation coverage. Moreover, improved public health, which is the objective of public policies promoting sanitation, is also difficult to achieve at low sanitation coverage rates. Fear at night, especially of animals, and personal harassment, are stated as the most important motivational factors for latrine ownership and the intention to build one. We therefore suggest that new low cost technologies should be introduced on rural markets and that social marketing strategies should be adjusted accordingly.
    Keywords: Sanitation; Sanitation Demand; Willingness to pay; Motivational factors
    JEL: D12 O12 O31 O55
    Date: 2014–06–18
  15. By: Hassine, Nadia Belhaj
    Abstract: The paper uses harmonized household survey micro-data to assess the levels and determinants of economic inequality in 12 Arab countries. It focuses on the sources of rural-urban, as well as metropolitan-nonmetropolitan, inequalities and applies the unconditional quantile regression decomposition technique to analyze the welfare gaps across the entire distribution. The analysis finds moderate inequality levels, with the Gini coefficient for the distribution of household real per capita total expenditures ranging between 30.7 in Libya and 45 in Mauritania. Differences in households'endowments, such as demographic composition, human capital, and community characteristics, appear as the main sources of the urban-rural welfare gap. There is inequality between metropolitan and non-metropolitan regions in many countries, mainly because of differences in returns to households'characteristics and particularly returns to human capital.
    Keywords: Rural Poverty Reduction,Inequality,Regional Economic Development,Economic Theory&Research,Debt Markets
    Date: 2014–06–01

This nep-dev issue is ©2014 by Jacob A. Jordaan. 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.