nep-dev New Economics Papers
on Development
Issue of 2017‒02‒26
twelve papers chosen by
Jacob A. Jordaan
Universiteit Utrecht

  1. Linking risk aversion, time preference and fertilizer use in Burkina Faso By Le Cotty, T.; Maître d’Hôtel, E.; Soubeyran, R.; Subervie, J.
  2. Illusory Gains from Chile's Targeted School Voucher Experiment By Benjamin Feigenberg; Steven Rivkin; Rui Yan
  3. Impact of Violent Crime on Risk Aversion: Evidence from the Mexican Drug War By Ryan Brown; Verónica Montalva; Duncan Thomas; Andrea Velásquez
  4. Family Size, Sibling Rivalry and Migration: Evidence from Mexico By Bratti, Massimiliano; Fiore, Simona; Mendola, Mariapia
  5. The Inequality-Growth Relationship - An Empirical Reassessment By Kolev, Galina; Niehues, Judith
  6. Gender Disparities in Employment and Earnings in Sub-Saharan Africa: Evidence from Swaziland By Brixiova, Zuzana; Kangoye, Thierry
  7. The Impact of Migration on Child Labor: Theory and Evidence from Brazil By Genicot, Garance; Mayda, Anna Maria; Mendola, Mariapia
  8. Does democracy reduce the HIV epidemic? Evidence from Kenya By Antoine MARSAUDON; Josselin THUILLIEZ
  9. Teen Fertility and Labor Market Segmentation: Evidence from Madagascar By Herrera, Catalina; Sahn, David E.; Villa, Kira M.
  10. Missing from the Market: Purdah Norm and Women's Paid Work Participation in Bangladesh By Asadullah, Niaz; Wahhaj, Zaki
  11. Impacts of Large Scale Foreign Land Acquisitions on Rural Households: Evidence from Ethiopia By Emma Aisbett; Giulia Barbanente
  12. Linking taxation and social protection: Evidence on redistribution and poverty reduction in Ethiopia By Hirvonen, Kalle; Mascagni, Giulia; Roelen , Keetie

  1. By: Le Cotty, T.; Maître d’Hôtel, E.; Soubeyran, R.; Subervie, J.
    Abstract: This paper investigates whether Burkinabe maize farmers’ fertilizer-use decisions are correlated with their risk and time preferences. We conducted a survey and a series of hypothetical experiments on a sample of 1,500 farmers. We ?nd that more patient farmers do use more fertilizer, but it is only because they plant more maize (a fertilizer-intensive crop) rather than because they use more fertilizer per hectare of maize planted. Conversely, we ?nd no statistically signi?cant link between risk aversion and fertilizer use. We use a simple two-period model, which suggests that risk aversion may indeed have an ambiguous effect on fertilizer use. ....French Abstract: Ce papier analyse la relation entre les décisions d'utilisation d'engrais des producteurs de maïs au Burkina Faso et les caractéristiques de ces producteurs en termes d'impatience et d'aversion au risque. 1500 producteurs ont été enquêtés sur leurs activités agricoles et ont participé à un dispositif expérimental basé sur des paiements hypothétiques. Notre principal résultat est sur la relation entre l'impatience et l'utilisation d'engrais : nous établissons que les producteurs les plus patients utilisent davantage d'engrais, et plantent davantage de maïs, qui est une plante qui requiert de l'engrais, sans pour autant intensifier leur production de maïs. Nous ne trouvons pas de relation significative entre l'aversion au risque et l'utilisation d'engrais.
    JEL: D13 D14 D91 O12
    Date: 2017
  2. By: Benjamin Feigenberg; Steven Rivkin; Rui Yan
    Abstract: In 2008, Chile implemented a targeted voucher program that increased voucher values for disadvantaged students at participating schools by approximately 50%. Although disadvantaged students made substantial fourth grade test score gains that other studies have attributed to the program, our analysis raises serious doubts that the program had a substantial effect on cognitive skills. First, there was only a minor reduction in class size and little evidence of increases in any inputs. An audit showed that many schools were not using additional revenues for permitted expenditures, and estimates that exploit a discontinuity in the revenues allocated to schools show no evidence of positive effects of allocated funds on achievement growth. In addition, there is limited evidence of competitive or incentive effects on school quality or that disadvantaged students transitioned to higher quality schools. The much smaller gains made by disadvantaged students in low-stakes eighth grade test scores along with an increased rate of missing scores on fourth grade tests is consistent with extensive strategic behavior by schools. In contrast, increases in parental education and income among disadvantaged children indicate a primary role for improvements in family circumstances of tested students in explaining the meaningful decline in the achievement gap.
    JEL: I21 I24 I25 O15
    Date: 2017–02
  3. By: Ryan Brown; Verónica Montalva; Duncan Thomas; Andrea Velásquez
    Abstract: Whereas attitudes towards risk are thought to play an important role in many decisions over the life-course, factors that affect those attitudes are not fully understood. Using longitudinal survey data collected in Mexico before and during the Mexican war on drugs, we investigate how an individual’s risk attitudes change with variation in levels of insecurity and uncertainty brought on by unprecedented changes in local-area violent crime due to the war on drugs. Exploiting the fact that the timing, virulence and spatial distribution of changes in violent crime were unanticipated, we establish the changes can plausibly be treated as exogenous in models that also take into account unobserved characteristics of individuals that are fixed over time. As local-area violent crime increases, there is a rise in risk aversion that is distributed through the entire local population.
    JEL: D81 I3 O15
    Date: 2017–02
  4. By: Bratti, Massimiliano (University of Milan); Fiore, Simona (University of Bologna); Mendola, Mariapia (University of Milan Bicocca)
    Abstract: This paper examines the causal effects of family size and demographic structure on offspring's international migration. We use rich survey data from Mexico to estimate the impact of sibship size, birth order and sibling composition on teenagers' and young adults' migration outcomes. We find no empirical support for the hypothesis that high fertility drives migration. The positive correlation between sibship size and migration disappears when endogeneity of family size is addressed using biological fertility (miscarriages) and infertility shocks. Yet, the chances to migrate are not equally distributed across children within the family. Older siblings, especially firstborn males, are more likely to migrate, while having more sisters than brothers may increase the chances of migration, particularly among girls.
    Keywords: international migration, Mexico, family size, birth order, sibling rivalry
    JEL: J13 F22 O15
    Date: 2016–12
  5. By: Kolev, Galina; Niehues, Judith
    Abstract: Recently, some influential empirical studies found evidence in favor of a negative relationship between income inequality and economic growth, implying the conclusion that inequality reducing policies will foster economic growth. The studies have in common that they all rely on the System GMM dynamic panel estimator. We argue that this estimator is most likely to suffer from a severe weak instrument problem in the inequality-growth setting because lagged differences of inequality have practically no explanatory power for currrent inequality levels. Thus, it is biased in the direction of OLS and fails to control for country heterogeneity. Using traditional Fixed Effects models or Difference GMM estimators yields positive coefficents on the inequality variable. Furthermore, we find evidence for a non-linear relationship between inequality and growth when considering a sample of developed and developing economies. Thus, the effect of net income inequality on growth seems to be negative only for less-developed countries and for countries with high levels of inequality.
    JEL: O15 O47 H23
    Date: 2016
  6. By: Brixiova, Zuzana (University of Cape Town); Kangoye, Thierry (African Development Bank)
    Abstract: In this paper we provide first systematic evidence on the gender disparities in the labor market in Swaziland, drawing on the country's first two (2007 and 2010) Labor Force Surveys. We find that even though the global financial crisis had a less severe effect on the labor market outcomes of women than those of men, women continue to have lower employment and labor force participation rates. Utilizing the Heckman probit selection model shows that while women account for a disproportionate share of the self-employed, they are more often than men involved in low-productivity activities and rely less on formal finance. We conclude with policies that could help Swaziland – and other middle income countries in Sub-Saharan Africa – narrow these disparities and embark on a more inclusive growth path.
    Keywords: gender gap in the labor market, skills, credit, multivariate analysis, policies
    JEL: J16 J21 L26 O12
    Date: 2016–12
  7. By: Genicot, Garance (Georgetown University); Mayda, Anna Maria (Georgetown University); Mendola, Mariapia (University of Milan Bicocca)
    Abstract: This paper investigates the impact of internal migration on child labor outcomes in Brazil. We develop a theoretical model and evaluate it on children aged 10 to 14 using two decades of Census data. In our model, migration impacts child labor through changes in the local labor market, which is made up of both adults and children. Thus we complement the individual-level child-labor analysis with an empirical study of the labor-market impact of internal migration within Brazil. We exploit variation in the concentration of both skilled and unskilled immigrants at the municipality level and employ an instrumental variable strategy that relies on the historical (1980) distribution of immigrants within the country. Our results show that internal migration of a given skill level has a negative impact on corresponding adults' labor market outcomes. We also find that unskilled (skilled) immigration has a negative (positive) and significant impact on child labor. Finally, unskilled immigration increases children school attendance and decreases their likelihood of being idle.
    Keywords: child labor, migration
    JEL: F22 J61 O12
    Date: 2016–12
  8. By: Antoine MARSAUDON (Université Paris I Panthéon-Sorbonne); Josselin THUILLIEZ (Centre d'Economie de la Sorbonne - Université de Paris I)
    Abstract: Does democracy help Kenyan citizens to struggle against the HIV epidemic? Yet, very little attention has been devoted to establish whether political regimes react differently to the HIV infection. Using an electoral definition of democracy makes a contribution in understanding which aspects of political rules matter to manage the disease. Using a difference-in-difference design that draws upon pre-existing variations in HIV intensity and cohort’s exposure to democracy, we find that a person living under democracy is less likely to have a HIV infection. Further, we present some evidence of ethnic favoritism and gender disparities during periods of non-democracy.
    Keywords: institution, democracy, HIV, Health, Kenya
    JEL: I15 I18 O15 O38 P51
    Date: 2016–10
  9. By: Herrera, Catalina (Northeastern University); Sahn, David E. (Cornell University); Villa, Kira M. (University of New Mexico)
    Abstract: Women represent the majority of informal sector workers in developing countries, especially in Sub-Saharan Africa where adolescent pregnancy rates are high. Little empirical evidence exists concerning the relationship between teen fertility and the likelihood that a woman will be employed in the informal sector. Using a panel survey in Madagascar designed to capture the transition from adolescence to adulthood, we estimate a multinomial logit model to capture the effect of the timing of first birth on female selection into four categories: non-participation, informal, formal, and student. To address the endogeneity of fertility and labor market outcomes, we instrument the timing of first birth using young women's community-level access, and duration of exposure to family planning. Our results suggest that motherhood increases the probability of employment for young women and that women whose first birth occurs during adolescence largely select into low-quality informal jobs. This effect is partially, but not entirely, mediated by the effect of teen pregnancy on schooling.
    Keywords: fertility, informal sector, adolescence, female labor force participation, Madagascar
    JEL: J13 J24 O1
    Date: 2016–12
  10. By: Asadullah, Niaz (University of Malaya); Wahhaj, Zaki (University of Kent)
    Abstract: Despite significant improvement in female schooling over the last two decades, only a small proportion of women in South Asia are in wage employment. We revisit this puzzle using a nationally representative data set from Bangladesh. Probit regression results show that even after accounting for human capital endowments, women are systematically less likely to participate in paid work than men. Oaxaca decomposition of the gender gap confirms that most of it (i.e. 95%) is unexplained by endowment differences. Instead, community norms such as the practice of purdah (i.e. female seclusion) have a statistically significant and negative effect on women's participation in paid work. We do not find any evidence that purdah norm variable affect paid work participation indirectly, via determining the labor force participation decision. The correlation between current work participation and purdah norm in natal household is insignificant confirming that the result is not driven by omitted individual-specific socio-economic factors. We also use data on past purdah practice of the current community to estimate an instrumental variable Probit regression model and rule out the possibility of reverse causality. Detailed decomposition analysis reveals that community purdah norm accounts for a quarter of the total unexplained gap. The findings are robust to controls for the influence of co-resident in-laws, household structure, marital status, and a wide range of community characteristics such as ecological factors, presence of NGOs, provision of public infrastructure, remoteness and local labor market conditions including the norm of unacceptability of unmarried women's outside work in the community.
    Keywords: Purdah norm, gender inequality, labor market participation, poverty, Bangladesh
    JEL: I26 I28 J12 J16 O12
    Date: 2016–12
  11. By: Emma Aisbett; Giulia Barbanente
    Abstract: The impact of large-scale foreign land acquisitions (“landgrabs”) on rural households in developing countries has proven a highly contentious question in public discourse. Similarly, in the academic literature, "evolutionary" theories of property rights and "enclosure" models make diametrically opposed predictions about the impacts on holders of informal property rights of increased demand for land. The current paper uses a multi-method approach to provide much-needed empirical evidence on the impacts of large-scale land acquisitions in Ethiopia. We use basic economic theory to structure evidence from disparate sources, including: a survey of existing qualitative evidence; original legal analysis of specific foreign land-acquisition contracts; and original econometric analysis of new World Bank household survey data. The evidence from all three methods suggests large-scale foreign land acquisitions are associated with losses of land and resource rights for rural households. While there is some compensating evidence of increased household expenditure, it is difficult to say whether this increase is caused by growth in incomes or in implicit prices.
    Keywords: Ethiopia, large-scale land acquisitions, LSMS-ISA, smallholder farmers, coarsened exact matching
    Date: 2016–11
  12. By: Hirvonen, Kalle; Mascagni, Giulia; Roelen , Keetie
    Abstract: The reduction of poverty, and more recently inequality, are pressing concerns in many low- and middle-income countries, not in the least as a result of the Sustainable Development Goals committing countries to significant improvements by 2030. Redistribution is important for reaching these goals, and is shaped by countries’ tax and welfare systems. Despite redistribution resulting from the simultaneous effect of revenue collection and public expenditures, policies and analyses of their distributional effects have largely been undertaken from narrow and singular perspectives. In this paper, we aim to jointly assess the distributional effect of taxes and transfers (through social protection) using Ethiopia as a case study. We find that currently Ethiopia’s flagship social protection programme is more effective than income taxation in achieving poverty reduction, while neither policy achieves a sizeable reduction in overall inequality. Overall, our findings provide support for the common belief that social spending is more suitable than taxation to achieve redistribution. We also assessed whether Ethiopia would have the capacity to achieve the desired level of redistribution by applying higher marginal rates on relatively high incomes. Our results suggest that Ethiopia does not currently have the capacity to close the poverty gap, or to fully fund its main safety net programme using domestic income sources alone.
    Keywords: Development Policy, Economic Development, Governance,
    Date: 2017

This nep-dev issue is ©2017 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.
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