nep-dev New Economics Papers
on Development
Issue of 2015‒09‒18
seven papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Shocks and child labor: the role of markets By Dumas, Christelle
  2. Gender Equality and Economic Growth in India: A Quantitative Framework By Pierre-Richard Agénor; Jan Mares; Piritta Sorsa
  3. Schooling Inequality, Returns to Schooling, and Earnings Inequality Evidence from Brazil and South Africa By Arden Finn; Murray Leibbrandt; David Lam
  4. The Impact of Educational and Gender Inequality on Income Inequality in South Asia By Kanwal, Ayesha; Munir, Kashif
  5. Workfare and Human Capital Investment: Evidence from India By Manisha Shah; Bryce Millett Steinberg
  6. Oil palm expansion among smallholder farmers in Sumatra, Indonesia By Euler, Michael; Schwarze, Stefan; Siregar, Hermanto; Qaim, Matin
  7. Spate irrigation and poverty in Ethiopia By Hagos, Fitsum; Erkossa, Teklu; Lefore, Nicole; Langan, Simon

  1. By: Dumas, Christelle
    Abstract: Economic shocks have been shown to affect child labor and particularly so when households fail to access credit. This paper endeavours to assess whether access toagricultural labor markets also reduce the impact of shocks on child labor. Using panel data from Tanzania, we confirm that households respond to transitory productivity shocks by changes in child labor, but that (1) child labor increases with increases in rainfall, (2) it increases less when households have access to a labor market and (3) the agricultural labor market seems more efficient than the credit market to smooth rainfall shocks. These findings are consistent with the theoretical model offered in the paper. They highlight that imperfect agricultural labor markets are important determinants of child labor.
    Keywords: child labor; labor market imperfections; credit market imperfections; Tanzania
    JEL: O12 O13 O15 J13 J43
    Date: 2015–09–07
  2. By: Pierre-Richard Agénor; Jan Mares; Piritta Sorsa
    Abstract: This paper studies how public policies, including pro-women interventions, can raise female labour force participation and promote economic growth in India. The first part provides a brief review of gender issues in the country. The second part presents a gender-based OLG model, based on Agénor (2015) and Agénor and Canuto (2015), that accounts for women’s time allocation between market work, child rearing, human capital accumulation, and home production. Bargaining between spouses depends on relative human capital stocks. The model is calibrated and various experiments are conducted, including investment in infrastructure, conditional cash transfers, and a reduction in gender bias in the market place. The analysis shows raising female labour force participation with a package of pro-growth and pro-women policies could boost the growth rate by about 2 percentage points over time.
    Keywords: gender equality, female labour force participation, gender, India
    JEL: I15 I25 J16 O41
    Date: 2015–09–07
  3. By: Arden Finn; Murray Leibbrandt; David Lam
    Abstract: Human capital models imply that both the distribution of education and returns to education affect earnings inequality. Decomposition of these â..quantityâ.. and â..priceâ.. components have been important in understanding changes in earnings inequality in developed and developing countries. This paper provides theoretical and empirical analysis of the interactions between schooling inequality, returns to schooling and earnings inequality. We focus on two main questions. What is the relationship between inequality in schooling and inequality in earnings? How do changes in returns to schooling affect earnings inequality when returns differ by schooling level? We derive new analytical results that are used to guide empirical analysis of changes in earnings inequality in Brazil and South Africa. While both countries have had declines in schooling inequality, only Brazil has translated those into declines in earnings inequality. In South Africa, rising returns to schooling at the top level have offset equalizing changes in the schooling distribution.
    Date: 2015
  4. By: Kanwal, Ayesha; Munir, Kashif
    Abstract: This paper examines the impact of educational and gender inequality in education on income inequality in South Asian countries for the time period of 1980 to 2010. Random effect model (REM) and fixed effect model (FEM) are used for estimation. Using the concept of education Gini the study find that there exist a positive relationship between educational and income inequality. The results also indicate that gender inequality in education at primary and tertiary level has positive and significant impact on income inequality but gender inequality at secondary level has negative and significant impact on income inequality. On the other hand, gender inequality at primary and tertiary level of education has negative impact on per capita income, while at secondary level has positive impact. The results also confirm that there exist U shaped Kuznets curve for the relationship between average year of schooling and inequality in education.
    Keywords: Income Inequality,Educational Inequality, Gender Inequality, Panel Data, South Asia
    JEL: I24 I25 I32 O15
    Date: 2015–09–16
  5. By: Manisha Shah; Bryce Millett Steinberg
    Abstract: We examine the effect of India's National Rural Employment Guarantee Scheme (NREGS), one of the largest workfare programs in the world, on human capital investment. Since NREGS increases labor demand, it could increase the opportunity cost of schooling, lowering human capital investment even as incomes increase. We exploit the staged rollout of the program across districts for causal identification. Using a household survey of test scores and schooling outcomes for approximately 2.5 million rural children in India, we show that each year of exposure to NREGS decreases school enrollment by 2 percentage points and math scores by 2% of a standard deviation amongst children aged 13-16. In addition, while the impacts of NREGS on human capital are similar for boys and girls, adolescent boys are primarily substituting into market work when they leave school while adolescent girls are substituting into unpaid domestic work. We find mixed results for younger children. We conclude that anti-poverty programs which raise wages could have the unintended effect of lowering human capital investment.
    JEL: I2 I38 J1 O12
    Date: 2015–09
  6. By: Euler, Michael; Schwarze, Stefan; Siregar, Hermanto; Qaim, Matin
    Abstract: Many tropical regions experience a rapid expansion of oil palm, causing massive land use changes and raising serious environmental and social concerns. Indonesia has recently become the largest palm oil producer worldwide. While much of the production in Indonesia comes from large-scale plantations, independently operating smallholders are increasing in importance and may domi-nate production in the future. In order to control the process of land use change, the micro level factors influencing smallholder decisions need to be better understood. We use data from a survey of farm households in Sumatra and a duration model to analyze the patterns and dynamics of oil palm adoption among smallholders. Initially, smallholders were primarily involved in government-supported out-grower schemes, but since the mid-1990s independently operating oil palm farmers have become much more important. In addition to farm and household characteristics, village level factors determine oil palm adoption significantly. Independent smallholders adopt oil palm especially in those villages that also have contracts and out-grower schemes, leading to a regional path-dependency of former government policies.
    Keywords: Oil palm expansion,Land use change,Indonesia,Duration models
    Date: 2015
  7. By: Hagos, Fitsum; Erkossa, Teklu; Lefore, Nicole; Langan, Simon
    Abstract: The study examined whether the use of spate irrigation in drought-prone areas of Ethiopia reduced poverty. Each of about 25 users of indigenous and modern spate irrigation schemes and an equal number of corresponding nonusers from the same peasant associations in Oromia and Tigray regional states were interviewed. The survey found that the poverty level of the spate irrigation users was significantly lower than that of the nonusers in terms incidence, depth and severity. Access to improved spate irrigation has led to reduced poverty, measured by all poverty indices, compared to traditional spate. Finally, the dominance test showed that the poverty comparison between users and nonusers was robust. From the study, it can be concluded that the use of spate irrigation in areas where access to other alternative water sources is limited, either by physical availability or by economic constraints, can significantly contribute to poverty reduction, and that modernizing the spate system strengthens the impact.
    Keywords: Irrigation schemes, Spate irrigation, Traditional farming, Poverty, Arid zones, Households, Income, Ethiopia, Africa, Agribusiness, Community/Rural/Urban Development, Consumer/Household Economics, Farm Management, Financial Economics, Public Economics,
    Date: 2014

This nep-dev issue is ©2015 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.