nep-dev New Economics Papers
on Development
Issue of 2014‒11‒01
eight papers chosen by
Jacob A. Jordaan
Universitiet Utrecht

  1. Does Urbanization Help Poverty Reduction in Rural Areas? Evidence from Vietnam By Mohamed El Hedi Arouri; Adel Ben Youssef; Cuong Nguyen-Viet
  2. Non-farm enterprises in rural Africa : new empirical evidence By Nagler, Paula; Naude, Wim
  3. The impact of Ethiopia’s pilot community based health insurance scheme on healthcare utilization and cost of care By Mebratie, A.D.; Sparrow, R.A.; Debebe, Z.Y.; Abebaw Ejigie, D.; Alemu, G.; Bedi, A.S.
  4. The Health Costs of Ethnic Distance: Evidence from Sub-Saharan Africa By Gomes, Joseph
  5. The Long-Term Effects of the Printing Press in Sub-Saharan Africa By Julia Cage; Valeria Rueda
  6. Is the Glass Half Empty or Half Full? Enrollment, Graduation, and Dropout Rates in Latin America By Marina Bassi; Matias Busso; Juan Sebastián Muñoz
  7. Quasi-experimental evidence on the drivers of index-based livestock insurance demand in Southern Ethiopia By Takahashi, Kazushi; Ikegami, Munenobu; Sheahan, Megan; Barrett, Christopher B.
  8. Macroinsurance for microenterprises : a randomized experiment in post-revolution Egypt By Groh, Matthew; McKenzie, David

  1. By: Mohamed El Hedi Arouri (LEO - Laboratoire d'économie d'Orleans - CNRS : UMR6221 - Université d'Orléans); Adel Ben Youssef (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS)); Cuong Nguyen-Viet (Chercheur Indépendant - Aucune)
    Abstract: Urbanization and poverty have a two-way relationship. Using fixed-effects regression andpanel data from household surveys, we estimate the effect of urbanization on welfare andpoverty of rural households in Vietnam. We find that urbanization tends to increaselandlessness of rural households and to reduce their farm income. However, urbanizationhelps rural households increase their wages and non-farm incomes. As a result, totalincome and consumption expenditure of rural households tend to be increased withurbanization. Then we find that urbanization also helps rural households decrease theexpenditure poverty rate, albeit at a small magnitude.
    Keywords: urbanization; household welfare; rural poverty; impact evaluation; household surveys; Vietnam, Asia
    Date: 2014–09–25
  2. By: Nagler, Paula; Naude, Wim
    Abstract: Although non-farm enterprises are ubiquitous in rural Sub-Saharan Africa, little is yet known about them. The motivation for households to operate enterprises, how productive they are, and why they exit the market are neglected questions. Drawing on the Living Standards Measurement Study -- Integrated Surveys on Agriculture and using discrete choice, selection model and panel data estimators, this paper provide answers using data from Ethiopia, Niger, Nigeria, Malawi, Tanzania, and Uganda. The necessity to cope following shocks, seasonality in agriculture, and household size can push rural households into operating a non-farm enterprise. Households are also pulled into entrepreneurship to exploit opportunities. Access to credit and markets, household wealth, and the education and age of the household head are positively associated with the likelihood of operating an enterprise. The characteristics are also associated with the type of business activity a household operates. Rural and female-headed enterprises and enterprises with young enterprise owners are less productive than urban and male-owned enterprises and enterprises with older owners. Shocks have a negative association with enterprise operation and productivity and a large share of rural enterprises does not operate continuously over a year. Enterprises cease operations because of low profits, a lack of finance, or the effects of idiosyncratic shocks. Overall the findings are indicative that rural enterprises are"small businesses in a big continent"where large distances, rural isolation, low population density, and farming risks limit productivity and growth.
    Keywords: Access to Finance,Microfinance,Labor Policies,Rural Poverty Reduction,E-Business
    Date: 2014–10–01
  3. By: Mebratie, A.D.; Sparrow, R.A.; Debebe, Z.Y.; Abebaw Ejigie, D.; Alemu, G.; Bedi, A.S.
    Abstract: In recent years there has been a proliferation of Community Based Health Insurance (CBHI) schemes designed to enhance access to modern health care services and provide financial protection to workers in the informal and rural sectors. In June 2011, the Government of Ethiopia introduced a pilot CBHI scheme in rural parts of the country. This paper assesses the impact of the scheme on utilization of modern health care and the cost of accessing health care. It adds to the relatively small body of work that provides a rigorous evaluation of CBHI schemes. We find that enrolment leads to a 30 to 41 percent increase in utilization of outpatient care at public facilities, a 45 to 64 percent increase in the frequency of visits to public facilities and at least a 56 percent decline in the cost per visit to public facilities. The effects of the scheme on out-of-pocket spending are not as clear. The impact on utilization and costs combined with a high uptake rate of almost 50 percent within two years of scheme establishment, suggests that this scheme has the potential to meet the goal of universal access to health care.
    Keywords: community based health insurance, outpatient healthcare utilization, out-of-pocket expenditure, Ethiopia
    Date: 2014–10–16
  4. By: Gomes, Joseph
    Abstract: We show that ethnic distances can explain the ethnic inequalities in child mortality rates in Africa. Using individual level micro data from DHS surveys for fourteen Sub-Saharan African countries combined with a novel high resolution dataset on the spatial distribution of ethnic groups we show that children whose mothers have a higher linguistic distance from their neighbours have a higher probability of dying. Fractionalization reduces the probability of child death. We argue that fractionalization re ects a higher stock of knowledge and information leading to better health outcomes. Knowledge does not ow smoothly to linguistically distant groups. Linguistically distant mothers also have a lower probability of knowing about the oral rehydration product (ORS) for treating children with diarrhoea.
    Date: 2014–10–17
  5. By: Julia Cage (Département d'économie); Valeria Rueda (Département d'économie (ECON))
    Abstract: This article delves into the relationship between newspaper readership and civic attitudes, and its effect on economic development. To this end, we investigate the long-term consequences of the introduction of the printing press in the 19th century. In sub-Saharan Africa, Protestant missionaries were the first both to import the printing press technology and to allow the indigenous population to use it. We build a new geocoded dataset locating Protestant missions in 1903. This dataset includes, for each mission station, the geographic location and its characteristics, as well as the educational and health-related investments undertaken by the mission. We show that, within regions located close to missions, proximity to a printing press significantly increases newspaper readership today. We also document a strong association between proximity to a printing press and contemporary economic development. Our results are robust to a variety of identification strategies.
    Keywords: historical persistence, printing press, Protestant missions, newspaper readership, political participation, economic development.
    JEL: D72 N37 N77 O33 Z12 Z13
    Date: 2014–10
  6. By: Marina Bassi (Inter-American Development Bank); Matias Busso (Inter-American Development Bank); Juan Sebastián Muñoz (University of Illinois at Urbana-Champaign)
    Abstract: We use 292 household surveys from 18 Latin American countries to document patterns in secondary school graduation rates over the period 1990-2010. We find that enrollment and graduation rates increased during that period while dropout rates decreased. We provide two types of explanations for these patterns. Countries implemented changes on the supply side to increase access, by increasing the resources allocated to education and designing policies to help students staying in school. Despite this progress, graduation rates are still generally low, there still persist remarkable gaps in educational outcomes in terms of gender, income quintiles, and regions within countries, and the quality of education is generally low.
    JEL: I21 I24 O54
    Date: 2014–10
  7. By: Takahashi, Kazushi; Ikegami, Munenobu; Sheahan, Megan; Barrett, Christopher B.
    Abstract: Microinsurance is widely considered an important tool for sustainable poverty reduction, especially in the face of increasing climate risk. Although index-based microinsurance, which should be free from the classical incentive problems, has attracted considerable attention, uptake rates have generally been weak in low-income rural communities. We explore the purchase patterns of index-based livestock insurance in southern Ethiopia, focusing in particular on the role of accurate product comprehension and price, including the prospective impact of temporary discount coupons on subsequent period demand due to price anchoring effects. We find that randomly distributed learning kits contribute to improving subjects' knowledge of the products; however, we do not find strong evidence that the improved knowledge per se induces greater uptake. We also find that reduced price due to randomly distributed discount coupons has an immediate, positive impact on uptake, without dampening subsequent period demand due to reference-dependence associated with price anchoring effects.
    Keywords: Ethiopia, Insurance, Livestock, Rural economy, Poverty, Climate, Index-Based Livestock Insurance, Quasi-Experiment, Uptake
    JEL: D12 G22 O12
    Date: 2014–09
  8. By: Groh, Matthew; McKenzie, David
    Abstract: Firms in many developing countries cite macroeconomic instability and political uncertainty as major constraints to their growth. Economic theory suggests uncertainty can cause firms to delay investments until uncertainty is resolved. A randomized experiment was conducted in post-revolution Egypt to measure the impact of insuring microenterprises against macroeconomic and political uncertainty. Demand for macroeconomic shock insurance was high; 36.7 percent of microentrepreneurs in the treatment group purchased insurance. However, purchasing insurance does not change the likelihood that a business takes a new loan, the size of the loan, or how the loan is invested. This lack of effect is attributed to microenterprises largely investing in inventories and raw materials rather than irreversible investments like equipment. These results suggest that, contrary to what some firms profess, macroeconomic and political risk is not inhibiting the investment behavior of microenterprises. However, insurance may still be of value to help firms cope with shocks when they do occur, but the paper is unable to examine this dimension, because the insurance product did not pay out over the course of the pilot.
    Keywords: Debt Markets,Climate Change Economics,Access to Finance,Bankruptcy and Resolution of Financial Distress,Insurance Law
    Date: 2014–09–01

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